Britta Corporation's entire operations are located in State A. Of Britta's sales, 80% ($800,000) are made in State A and the remaining sales ($200,000) are made in State B, which has not adopted a corporate income tax. If State A has adopted a throwback rule, the numerator of Britta's State A sales factor is:

Question

Quizplus · Accepted Answer

The throwback rule applies to sales that are shipped from the taxpayer's state (State A) to a state that does not impose a tax (State B), treating those sales as if they occurred in the taxpayer's state. Therefore, all of Britta Corporation's sales, including those made in State B, are considered to have occurred in State A for tax purposes, making the numerator of the State A sales factor $1,000,000.

Britta Corporation's Entire Operations Are Located in State A