Dott Corporation generated $300,000 of state taxable income from selling its mapping software in States A and B. For the taxable year, the corporation's activities within the two states were as follows.
$$\begin{array} { l r r r }
& \text { State A } & \text { State B } & \text { Total } \
\text { Sales } & \$ 500,000 & \$ 1,500,000 & \$ 2,000,000 \
\text { Property } & 250,000 & - 0 - & 250,000 \
\text { Payroll } & 200,000 & 300,000 & 500,000
\end{array}$$
Dott has determined that it is subject to tax in both A and B. Both states utilize a three-factor apportionment formula which equally weights sales, property, and payroll. The rates of corporate income tax imposed in A and B are 7% and 10%, respectively. Determine Dott's state income tax liability.

Question

Dott Corporation generated $300,000 of state taxable income from selling its mapping software in States A and B. For the taxable year, the corporation's activities within the two states were as follows.
​ $$\begin{array} { l r r r } 
& \text { State A } & \text { State B } & \text { Total } \
\text { Sales } & \$ 500,000 & \$ 1,500,000 & \$ 2,000,000 \
\text { Property } & 250,000 & - 0 - & 250,000 \
\text { Payroll } & 200,000 & 300,000 & 500,000
\end{array}$$ ​
Dott has determined that it is subject to tax in both A and B. Both states utilize a three-factor apportionment formula which equally weights sales, property, and payroll. The rates of corporate income tax imposed in A and B are 7% and 10%, respectively. Determine Dott's state income tax liability.

Quizplus · Accepted Answer

The Answer of Dott Corporation generated $300,000 of state taxable income from selling its mapping software in States A and B. For the taxable year, the corporation's activities within the two states were as follows.
​ $$\begin{array} { l r r r } 
& \text { State A } & \text { State B } & \text { Total } \
\text { Sales } & \$ 500,000 & \$ 1,500,000 & \$ 2,000,000 \
\text { Property } & 250,000 & - 0 - & 250,000 \
\text { Payroll } & 200,000 & 300,000 & 500,000
\end{array}$$ ​
Dott has determined that it is subject to tax in both A and B. Both states utilize a three-factor apportionment formula which equally weights sales, property, and payroll. The rates of corporate income tax imposed in A and B are 7% and 10%, respectively. Determine Dott's state income tax liability.

Dott Corporation Generated $300,000 of State Taxable Income from Selling