Comprehension Case Read the text below and answer the questions. Lamitz organize

Question

Comprehension Case

Read the text below and answer the questions.

Lamitz organizes her information technology ("IT") business as a corporation, named TekServ, Inc., which is organized under the laws of Indiana. TekServ has a client, Gramon Associates, in Franklin, Kentucky. On behalf of TekServ, Lamitz sells IT hardware and software to Gramon. Lamitz drives a vehicle owned by TekServ to Gramon's place of business in Kentucky to deliver the hardware and software and to set up Gramon's IT system. The set up in Kentucky takes three days. TekServ has no other clients in Kentucky and has no other contacts with Kentucky.

1. Is TekServ required to qualify to do business in Kentucky? Why or why not?

2. Can Kentucky validly apply a 24% use tax on transactions like this involving a foreign corporation, if it would only subject the same transaction involving a domestic corporation to a 7% sales tax? Why or why not? State the law and the facts that justify your conclusions.

Explanation / Answer

1. it can not do business with Kentucky, because geopraphically both are running in different nations, where the laws and regulations are not allow to do business in the given form. it can be get licence and later they can do business, but now it can not do.

2.it will comes under 24% tax of foreign corportation, where it was established and running the business from another nation. untill it got licence from local government it can not do business with foreign nations. even if it got licence it only treats as a foreign corporation and as per tax regulation it has to pay 24% tax.

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