Tri-State's, Inc. operates in Arkansas, Oklahoma, and Kansas. Assume that each state has adopted the UDITPA formula. During the corporation's tax year ended December 31, the apportionment data indicated: $\begin{array}{lrrrrr}&\text { Arkansas }&\text { Okahoma }&\text { Kansas }&\text { total }\
\text { Gross receipts/sales }&\$ 175,000 & \$ 225,000 & \$ 100,000 & \$ 500,000 \
\text { Payroll }&20,000 & 140,000 & 20,000 & 180,000 \
\text { Property }&50,000 & 600,000 & 50,000 & 700,000
\end{array}$ Tri-State's income for the current year is $250,000. Approximately how much income will be taxed by Oklahoma?

Question

Quizplus · Accepted Answer

The UDITPA formula uses an equally weighted three-factor formula: sales, payroll, and property. For Oklahoma: Sales factor = 225,000/500,000 = 0.45, Payroll factor = 140,000/180,000 = 0.7778, Property factor = 600,000/700,000 = 0.8571. Average these factors: (0.45 + 0.7778 + 0.8571)/3 = 0.69497. Multiply by total income: 0.69497 * 250,000 = $173,742.50, approximately $173,750.

Tri-State's, Inc Tri-State's Income for the Current Year Is $250,000