Luttrix Inc. does business in Nebraska (6% tax rate) and Colorado (3% tax rate). All other factors being equal, Luttrix will reduce state taxes if it constructs a new manufacturing plant in Colorado. Assume apportionment formula modeled after the Uniform Division of Income for Tax Purposes Act (UDITPA).

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Since Colorado has a lower tax rate than Nebraska, constructing a new manufacturing plant in Colorado would reduce Luttrix Inc.'s state taxes. Additionally, the apportionment formula modeled after UDITPA would allocate the percentage of income earned in each state, resulting in a lower tax liability for Luttrix in Colorado.