Chipper Corporation realized $1,000,000 taxable income from the sales of its products in States X and Z. Chipper's activities establish nexus for income tax purposes only in Z, the state of its incorporation. Chipper's sales, payroll, and property among the states include the following. X utilizes a salesonly factor in its threefactor apportionment formula. How much of Chipper's taxable income is apportioned to X?

Question

Chipper Corporation realized $1,000,000 taxable income from the sales of its products in States X and Z. Chipper's activities establish nexus for income tax purposes only in Z, the state of its incorporation. Chipper's sales, payroll, and property among the states include the following.  X utilizes a sales­only factor in its three­factor apportionment formula. How much of Chipper's taxable income is apportioned to X?

Quizplus · Accepted Answer

Since X utilizes a sales-only factor in its three-factor apportionment formula, only Chipper's sales in X will be considered for apportionment. Since Chipper does not have nexus in X, none of its sales will be apportioned to X. Therefore, the correct answer is A) $0.

Chipper Corporation Realized $1,000,000 Taxable Income from the Sales of Its