PRINCIPLES OF TAXATION F/BUS...(LL)
23rd Edition
ISBN: 9781260433197
Author: Jones
Publisher: MCG
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Chapter 13, Problem 4AP
To determine
Calculate Incorporation O’s State M and State N tax.
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Oldham Incorporated conducts business in State M and State N, which both use the UDITPA three-factor formula to apportion income. State M's corporate tax rate is 4.5 percent, and State N's corporate tax rate is 7 percent. This year, Oldham had the following sales, payroll, and property (in thousands of dollars) in each state:
Gross receipts from sales
Payroll expense
Property costs
State M
$ 3,000
800
900
State N
$ 7,500
1,200
1,000
Total
$ 10,500
2,000
1,900
Required:
If Oldham's before-tax income was $3 million, compute its State M and State N tax. (Round all apportionment factors to 4 decimal
places, e.g., 47.15% would be 0.4715. Enter "Apportionment percentage" and "Tax rate" in decimals and not in percentage. Do not round any intermediate values. Enter your answers in dollars and not in millions or thousands of dollars.)
Oldham Incorporated conducts business in State M and State N, which both use the UDITPA three-factor formula to apportion income
State M's corporate tax rate is 4.5 percent, and State N's corporate tax rate is 7 percent. This year, Oldham had the following sales, payroll, and property (in thousands of dollars) in each state:
Gross receipts from sales
Payroll expense
Property costs
State M
3,000
800
900
State N
$ 7,500
1,200
1,000
Total
$ 10,500
2,000
1,900
Required:
Oldham's before-tax income was $3 million. Compute Oldham's State M and State N tax if State N uses an apportionment formula in which the sales factor is double-weighted.
(Round all apportionment factors to 4 decimal places, e.g., 47.15% would be 0.4715. Enter
"Apportionment percentage" and "Tax rate" in decimals and not in percentage. Do not round any intermediate values. Enter your
answers in dollars and not in millions or thousands of dollars.)
Cromwell Corporation does business in two states, A and B. State A uses an equal-weighted, three-factor apportionment formula and
has a 5 percent state tax rate. State B uses an apportionment formula that double-weights the sales factor and has a 6 percent state
tax rate. Cromwell's state-level taxable income, before apportionment, is $3.5 million. It has identified the following components of its
sales, payroll, and property factors:
Sales
Payroll
Average property
Required A Required B
State A
$ 7,500,000
3,500,000
2,500,000
Required:
a. Calculate Cromwell's apportionment factors, income apportioned to each state, and state tax liability.
b. State B is considering changing its apportionment formula to place 100 percent of the weight on the sales factor, ignoring payroll
and property for apportionment purposes. Given its current levels of activity, what would Cromwell's state tax liability be for each
state?
Complete this question by entering your answers in the tabs below.…
Chapter 13 Solutions
PRINCIPLES OF TAXATION F/BUS...(LL)
Ch. 13 - Why does a corporations state income tax cost...Ch. 13 - Prob. 2QPDCh. 13 - Prob. 3QPDCh. 13 - Prob. 4QPDCh. 13 - Borden Inc. conducts a business that spans four...Ch. 13 - Prob. 6QPDCh. 13 - Prob. 7QPDCh. 13 - Prob. 8QPDCh. 13 - Prob. 9QPDCh. 13 - Prob. 10QPD
Ch. 13 - Prob. 11QPDCh. 13 - Prob. 12QPDCh. 13 - Prob. 13QPDCh. 13 - Prob. 14QPDCh. 13 - Prob. 15QPDCh. 13 - Prob. 16QPDCh. 13 - This year, Mesa Inc.s before-tax income was...Ch. 13 - Prob. 2APCh. 13 - Prob. 3APCh. 13 - Prob. 4APCh. 13 - Prob. 5APCh. 13 - Prob. 6APCh. 13 - Prob. 7APCh. 13 - Prob. 8APCh. 13 - Prob. 9APCh. 13 - Prob. 10APCh. 13 - Prob. 11APCh. 13 - Prob. 12APCh. 13 - Prob. 13APCh. 13 - Prob. 14APCh. 13 - Prob. 15APCh. 13 - Prob. 16APCh. 13 - Prob. 17APCh. 13 - Prob. 18APCh. 13 - Prob. 19APCh. 13 - Prob. 20APCh. 13 - Prob. 21APCh. 13 - Prob. 22APCh. 13 - Prob. 23APCh. 13 - Prob. 24APCh. 13 - Prob. 25APCh. 13 - Prob. 26APCh. 13 - Prob. 27APCh. 13 - Prob. 28APCh. 13 - Prob. 29APCh. 13 - Prob. 30APCh. 13 - Prob. 31APCh. 13 - Prob. 32APCh. 13 - Prob. 33APCh. 13 - Prob. 34APCh. 13 - Prob. 35APCh. 13 - Prob. 36APCh. 13 - Prob. 37APCh. 13 - State E wants to encourage the development of a...Ch. 13 - Prob. 2IRPCh. 13 - Prob. 3IRPCh. 13 - Prob. 4IRPCh. 13 - Prob. 5IRPCh. 13 - Prob. 6IRPCh. 13 - Prob. 7IRPCh. 13 - Prob. 8IRPCh. 13 - Prob. 9IRPCh. 13 - Prob. 10IRPCh. 13 - Prob. 11IRPCh. 13 - Prob. 2RPCh. 13 - Prob. 3RPCh. 13 - Prob. 1TPCCh. 13 - Prob. 2TPCCh. 13 - Prob. 3TPCCh. 13 - Prob. 1CPCh. 13 - Prob. 2CP
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