Net Corporation's sales office and manufacturing plant are located in State X. Net also maintains a manufacturing plant and sales office in State W. For purposes of apportionment, X defines payroll as all compensation paid to employees, including contributions to § 401(k) deferred compensation plans. Under the statutes of W, neither compensation paid to officers nor contributions to § 401(k) plans are included in the payroll factor. Net incurred the following personnel costs. $\begin{array}{lrrr}
&\text { State } \mathrm{X} & \text { State } \mathrm{W} & \text { Totals }\
\text { Wages and salaryes for employees other } & \$ 500,000 & \$ 300,000 & \$ 800,000 \
\text { hhan officers } \
\text { Salaries for officers } & 300,000 & 150,000 & 450,000 \
\text { Contributions to } \S 401(\mathrm{k}) \text { plans }& 200,000 & 50,000 & 250,000\
\text { Totals } & \mathbf{\$ 1 , 0 0 0 , 0 0 0} & \mathbf{\$ 5 0 0 , 0 0 0} & \mathbf{\$ 1 , 5 0 0 , 0 0 0}
\end{array}$ Net's payroll factor for State W is:

Question

Net Corporation's sales office and manufacturing plant are located in State X. Net also maintains a manufacturing plant and sales office in State W. For purposes of apportionment, X defines payroll as all compensation paid to employees, including contributions to § 401(k) deferred compensation plans. Under the statutes of W, neither compensation paid to officers nor contributions to § 401(k) plans are included in the payroll factor. Net incurred the following personnel costs. $\begin{array}{lrrr}
&\text { State } \mathrm{X} & \text { State } \mathrm{W} & \text { Totals }\
\text { Wages and salaryes for employees other } & \$ 500,000 & \$ 300,000 & \$ 800,000 \
\text { hhan officers }  \
\text { Salaries for officers } & 300,000 & 150,000 & 450,000 \
\text { Contributions to } \S 401(\mathrm{k}) \text { plans }& 200,000 & 50,000 & 250,000\
 \text { Totals }  & \mathbf{\$ 1 , 0 0 0 , 0 0 0} & \mathbf{\$ 5 0 0 , 0 0 0} & \mathbf{\$ 1 , 5 0 0 , 0 0 0} 
\end{array}$ Net's payroll factor for State W is:

Quizplus · Accepted Answer

The payroll factor for State W is calculated as follows:Payroll factor = (Payroll in State W / Total payroll) * 100%Payroll in State W = $300,000 (wages and salaries for employees other than officers) + $150,000 (salaries for officers) = $450,000Total payroll = $800,000 (wages and salaries for employees other than officers in State X) + $450,000 (payroll in State W) = $1,250,000Payroll factor = ($450,000 / $1,250,000) * 100% = 36%

Net Corporation's Sales Office and Manufacturing Plant Are Located in State