Mandy Corporation realized $1,000,000 taxable income from the sales of its products in States X and Z.Mandy's activities establish nexus for income tax purposes only in Z.Mandy's sales, payroll, and property among the states include the following. X utilizes a sales-only factor in its three-factor apportionment formula.How much of Mandy's taxable income is apportioned to X?

Question

Mandy Corporation realized $1,000,000 taxable income from the sales of its products in States X and Z.Mandy's activities establish nexus for income tax purposes only in Z.Mandy's sales, payroll, and property among the states include the following.  X utilizes a sales-only factor in its three-factor apportionment formula.How much of Mandy's taxable income is apportioned to X?

Quizplus · Accepted Answer

Since Mandy only has nexus for income tax purposes in state Z, only state Z's apportionment formula will be used to determine how much of Mandy's taxable income is apportioned to that state. Therefore, state X's sales-only factor is not relevant and Mandy's taxable income apportioned to state X is $0.

Mandy Corporation Realized $1,000,000 Taxable Income from the Sales of Its