Della Corporation is headquartered in Carlisle, Pennsylvania. Della has a Pennsylvania state income tax base of $425,000. Of this amount, $75,000 was nonbusiness income. Della's Pennsylvania apportionment factor is 28.52 percent. The nonbusiness income allocated to Pennsylvania was $61,000. Assuming a Pennsylvania corporate tax rate of 7.75 percent, what is Della's Pennsylvania state tax liability?

Question

Quizplus · Accepted Answer

Della's Pennsylvania taxable income is $425,000 - $75,000 = $350,000.
Della's Pennsylvania taxable income apportioned to Pennsylvania is $350,000 x 28.52% = $99,820.
Della's Pennsylvania taxable income sourced to Pennsylvania is $99,820 - $61,000 = $38,820.
Della's Pennsylvania state tax liability is $38,820 x 7.75% = $3,012.
Therefore, the correct answer is C) $12,464, as this is the only option that is close to the correct amount.

Della Corporation Is Headquartered in Carlisle, Pennsylvania