Origami does business in states X and Y. State X uses an equally-weighted three-factor apportionment formula and has a 4 percent state tax rate. State Y uses an apportionment formula that double-weights the sales factor and has a 6 percent tax rate. Origami's taxable income, before apportionment, is $3 million. Its sales, payroll, and property information are as follows.
$\begin{array}{lrrr}
&X&Y&\text { Total }\
\text { Gross receipts/sales } & \$ 575,000 & \$ 100,000 & \$ 675,000 \
\text { Payroll } & 140,000 & 60,000 & 200,000 \
\text { Property } & 600,000 & 150,000 & 750,000
\end{array}$ Calculate Origami's apportionment factors, income apportioned to each state, and state tax liability.State Y is considering changing its apportionment formula to a single sales factor. Given its current level of activity, would such a change increase or decrease Origami's state income tax burden? Provide calculations to support your conclusion.

Question

Origami does business in states X and Y. State X uses an equally-weighted three-factor apportionment formula and has a 4 percent state tax rate. State Y uses an apportionment formula that double-weights the sales factor and has a 6 percent tax rate. Origami's taxable income, before apportionment, is $3 million. Its sales, payroll, and property information are as follows.
 $\begin{array}{lrrr}
&X&Y&\text { Total }\
\text { Gross receipts/sales } & \$ 575,000 & \$ 100,000 & \$ 675,000 \
\text { Payroll } & 140,000 & 60,000 & 200,000 \
\text { Property } & 600,000 & 150,000 & 750,000
\end{array}$ Calculate Origami's apportionment factors, income apportioned to each state, and state tax liability.State Y is considering changing its apportionment formula to a single sales factor. Given its current level of activity, would such a change increase or decrease Origami's state income tax burden? Provide calculations to support your conclusion.

Quizplus · Accepted Answer

The Answer of Origami does business in states X and Y. State X uses an equally-weighted three-factor apportionment formula and has a 4 percent state tax rate. State Y uses an apportionment formula that double-weights the sales factor and has a 6 percent tax rate. Origami's taxable income, before apportionment, is $3 million. Its sales, payroll, and property information are as follows.
 $\begin{array}{lrrr}
&X&Y&\text { Total }\
\text { Gross receipts/sales } & \$ 575,000 & \$ 100,000 & \$ 675,000 \
\text { Payroll } & 140,000 & 60,000 & 200,000 \
\text { Property } & 600,000 & 150,000 & 750,000
\end{array}$ Calculate Origami's apportionment factors, income apportioned to each state, and state tax liability.State Y is considering changing its apportionment formula to a single sales factor. Given its current level of activity, would such a change increase or decrease Origami's state income tax burden? Provide calculations to support your conclusion.

Origami Does Business in States X and Y Calculate Origami's Apportionment Factors, Income Apportioned to Each State, and Uses