José Corporation realized $900,000 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.
$\begin{array}{lrrr}
& \text { State X } & \text { State Z } & \text { Totals } \
\text { Sales } & \$ 1,500,000 & \$ 1,000,000 & \$ 2,500,000 \
\text { Property } & 500,000 & -0- & 500,000 \
\text { Payroll } & 2,000,000 & -0- & 2,000,000
\end{array}$
Z utilizes a doubleweighted sales factor in its threefactor apportionment formula. How much of José's taxable
Income is apportioned to Z?

Question

José Corporation realized $900,000 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.
$\begin{array}{lrrr} 
& \text { State X } & \text { State Z } & \text { Totals } \
\text { Sales } & \$ 1,500,000 & \$ 1,000,000 & \$ 2,500,000 \
\text { Property } & 500,000 & -0- & 500,000 \
\text { Payroll } & 2,000,000 & -0- & 2,000,000
\end{array}$
Z utilizes a double­weighted sales factor in its three­factor apportionment formula. How much of José's taxable
Income is apportioned to Z?

Quizplus · Accepted Answer

State Z uses a double-weighted sales factor. The apportionment formula is: [(Sales Factor * 2) + Property Factor + Payroll Factor] / 4. For State Z: Sales Factor = $1,000,000 / $2,500,000 = 0.4, Property Factor = 0, Payroll Factor = 0. The apportionment percentage is [(0.4 * 2) + 0 + 0] / 4 = 0.2. Therefore, $900,000 * 0.2 = $180,000 is apportioned to Z.

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