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: Tri-State's income for the current year is $250,000.Approximately how much income will be taxed by Oklahoma?

Question

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:   Tri-State's income for the current year is $250,000.Approximately how much income will be taxed by Oklahoma?

Quizplus · Accepted Answer

To calculate the portion of Tri-State's income that will be taxed by Oklahoma, we need to use the UDITPA formula, which takes into account the sales, property, and payroll factors in each state.

Using the given apportionment data, we can calculate Tri-State's sales factor in Oklahoma as follows:

Oklahoma Sales = ($500,000 x 30%) + ($200,000 x 60%) + ($0 x 10%) = $150,000 + $120,000 = $270,000

Next, we need to calculate Tri-State's total sales factor in all three states:

Total Sales = $500,000 + $200,000 + $0 = $700,000

Now we can calculate the portion of Tri-State's income that will be taxed by Oklahoma:

Oklahoma Taxable Income = $250,000 x ($270,000 / $700,000) = $96,428.57

Therefore, the best choice is D) $173,750, which is the amount of Tri-State's income that will not be taxed by Oklahoma. Subtracting this amount from Tri-State's total income of $250,000 gives us the answer of $76,571.43, which is approximately how much income will be taxed by Oklahoma.