José Corporation realized $600,000 taxable income from the sales of its products in States X and Z.José's activities in both states establish nexus for income tax purposes.José's sales,payroll,and property among the states include the following. X utilizes an equally weighted three-factor apportionment formula.How much of José's taxable income is apportioned to X?

Question

José Corporation realized $600,000 taxable income from the sales of its products in States X and Z.José's activities in both states establish nexus for income tax purposes.José's sales,payroll,and property among the states include the following.  X utilizes an equally weighted three-factor apportionment formula.How much of José's taxable income is apportioned to X?

Quizplus · Accepted Answer

Since State X uses an equally weighted three-factor apportionment formula, the taxable income apportioned to X can be calculated using the sales factor, property factor, and payroll factor. From the table given, we can see that José had $300,000 of sales, $200,000 of property, and $100,000 of payroll in State X. Therefore, the sales factor is 0.5 (since sales in X are 50% of total sales), the property factor is 0.5 (since property in X is 50% of total property), and the payroll factor is 0.2 (since payroll in X is 20% of total payroll).

The apportioned taxable income to X can be calculated using the following formula:
Apportioned taxable income to X = $600,000 x (0.5 + 0.5 + 0.2) / 3 = $520,200

Therefore, the correct answer is B) $520,200.

José Corporation Realized $600,000 Taxable Income from the Sales of Its