Marquardt Corporation realized $900,000 taxable income from the sales of its products in States X and Z. Marquardt's activities establish nexus for income tax purposes in both states. Marquardt's sales, payroll, and property among the states include the following.
$\begin{array}{lrrr}
& \text { State X } & \text { State Z } & \text { Totals } \
\text { Sales } & \$ 1,000,000 & \$ 3,000,000 & \$ 4,000,000 \
\text { Property } & 2,000,000 & -0- & 2,000,000 \
\text { Payroll } & 1,000,000 & -0- & 1,000,000
\end{array}$
Z utilizes an equally weighted three-factor apportionment formula. Marquardt is incorporated in X. How much of
Marquardt's taxable income is apportioned to Z?

Question

Marquardt Corporation realized $900,000 taxable income from the sales of its products in States X and Z. Marquardt's activities establish nexus for income tax purposes in both states. Marquardt's sales, payroll, and property among the states include the following.
$\begin{array}{lrrr} 
& \text { State X } & \text { State Z } & \text { Totals } \
\text { Sales } & \$ 1,000,000 & \$ 3,000,000 & \$ 4,000,000 \
\text { Property } & 2,000,000 & -0- & 2,000,000 \
\text { Payroll } & 1,000,000 & -0- & 1,000,000
\end{array}$
Z utilizes an equally weighted three-factor apportionment formula. Marquardt is incorporated in X. How much of
Marquardt's taxable income is apportioned to Z?

Quizplus · Accepted Answer

Marquardt's taxable income apportioned to Z is $225,000, calculated as follows:Sales factor: $3,000,000 / $4,000,000 = 0.75Property factor: $0 / $2,000,000 = 0Payroll factor: $0 / $1,000,000 = 0Apportionment percentage: (0.75 + 0 + 0) / 3 = 0.25Apportioned taxable income: $900,000 x 0.25 = $225,000

Marquardt Corporation Realized $900,000 Taxable Income from the Sales of Its