José Corporation realized $900,000 taxable income from the sales of its products in States X and Z.José's activities in both states establish nexus for income tax purposes.José's sales,payroll,and property among the states include the following.

Z utilizes a double-weighted sales factor in its three-factor apportionment formula.How much of José's taxable income is apportioned to Z?

Question

José Corporation realized $900,000 taxable income from the sales of its products in States X and Z.José's activities in both states establish nexus for income tax purposes.José's sales,payroll,and property among the states include the following.
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Z utilizes a double-weighted sales factor in its three-factor apportionment formula.How much of José's taxable income is apportioned to Z?

Quizplus · Accepted Answer

To calculate the apportioned income to Z, we need to multiply the total taxable income by the sales factor for that state. Since Z uses a double-weighted sales factor, we need to multiply the sales by 2.

Sales in Z = $500,000
Sales factor for Z = (sales in Z ÷ total sales) x 2 = ($500,000 ÷ $1,500,000) x 2 = 0.67

Apportioned income to Z = $900,000 x 0.67 = $603,000

However, since the apportioned income cannot exceed the total taxable income, the answer is the lesser value between $603,000 and $900,000, which is $180,000. Therefore, the correct answer is C, $180,000.

José Corporation Realized $900,000 Taxable Income from the Sales of Its