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 apportioned income for each state, we use the UDITPA formula which takes into consideration the property, payroll, and sales factors.

For Oklahoma, the calculation would be: 
($250,000 x 60% x 15%)
= $22,500

Therefore, approximately $173,750 of Tri-State's income will be taxed by Oklahoma.