Question

<pclass=”msobodytext” style=”box-sizing: border-box; margin: 3.2pt 9.5pt 0.0001pt 31.25pt; text-indent: -16.5pt; line-height: 16.96px;”>1. 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.

	State X	State Z	Totals
Sales	$1,500,000	$1,000,000	$2,500,000
Property	500,000	–0–	500,000
Payroll	2,000,000	–0–	2,000,000

X utilizes an equally weighted three­factor apportionment formula. How much of José’s taxable income is

apportioned to X?

1. $120,000.
2. $450,000.
3. $780,000.
4. $900,000.
5. 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.

	State X	State Z	Totals
Sales	$1,000,000	$2,000,000	$3,000,000
Property	200,000	2,300,000	2,500,000
Payroll	100,000	1,900,000	2,000,000

X utilizes a sales­only factor in its three­factor apportionment formula. How much of Chipper’s taxable income is

apportioned to X?

1. $0.
2. $333,333.
3. $500,000.
4. $1,000,000.
5. Helene Corporation owns manufacturing facilities in States A, B, and C. A uses a three-factor apportionment formula under which the sales, property and payroll factors are equally weighted. B uses a three-factor apportionment formula under which sales are double-weighted. C employs a single-factor apportionment factor, based solely on sales.

Helene’s operations generated $1,000,000 of apportionable income, and its sales and payroll activity and average

property owned in each of the three states is as follows.

	State A	State B	State C	Totals
Sales	$400,000	$800,000	$300,000	$1,500,000
Payroll	100,000	150,000	50,000	300,000
Property	200,000	200,000	200,000	600,000

Helene’s apportionable income assigned to A is:

1. $0.
2. $266,667.
3. $311,100.
4. $1,000,000.
5. Simpkin Corporation owns manufacturing facilities in States A, B, and C. A uses a three-factor apportionment formula under which the sales, property and payroll factors are equally weighted. B uses a three-factor apportionment formula under which sales are double-weighted. C employs a single-factor apportionment factor, based solely on sales.

Simpkin’s operations generated $1,000,000 of apportionable income, and its sales and payroll activity and average

property owned in each of the three states is as follows.

	State A	State B	State C	Totals
Sales	$400,000	$800,000	$300,000	$1,500,000
Payroll	100,000	150,000	50,000	300,000
Property	200,000	200,000	200,000	600,000

Simpkin’sapportionableincomeassignedtoB is:

a.$1,000,000.

b.$533,333.

c.$475,000.

d.$0.

5. Cruz Corporation owns manufacturing facilities in States A, B, and C. A uses a three-factor apportionment formula under which the sales, property and payroll factors are equally weighted. B uses a three-factor apportionment formula under which sales are double-weighted. C employs a single-factor apportionment factor, based solely on sales.

Cruz’s operations generated $1,000,000 of apportionable income, and its sales and payroll activity and average

property owned in each of the three states is as follows.

	State A	State B	State C	Totals
Sales	$400,000	$800,000	$300,000	$1,500,000
Payroll	100,000	150,000	50,000	300,000
Property	200,000	200,000	200,000	600,000

Cruz’s apportionable income assigned to C is:

1. $1,000,000.
2. $273,333.
3. $200,000.
4. $0.

6. Boot Corporation is subject to income tax in States A and B. Boot’s operations generated $200,000 of apportionable

income, and its sales and payroll activity and average property owned in each of the states is as follows.

	State A	State B	Totals
Sales	$200,000	$600,000	$800,000
Payroll	100,000	50,000	150,000
Property	200,000	50,000	250,000

How much more (less) of Boot’s income is subject to A income tax if, instead of using an equally weighted three­

factor apportionment formula, A uses a formula with a double-weighted sales factor?

1. ($50,000).
2. $50,000.
3. $16,100.
4. ($16,100).
5. General Corporation is taxable in a number of states. This year, General made a $100,000 sale from its A headquarters to an agency of the U.S. government. State A applies a throwback rule. In which state(s) will the sale be included in the sales factor numerator?
6. $0 in A.
7. $50,000 in A, with the balance exempted from other states’ sales factors under theColgatedoctrine.
8. $100,000 in A.
9. In all of the states, according to the apportionment formulas of each, as the U.S. government is present in all states.
10. General Corporation is taxable in a number of states. This year, General made a $100,000 sale from its A headquarters to a State B office of an agency of the U.S. government. General has not established nexus with B. State A does not apply a throwback rule. In which state(s) will the sale be included in the sales factor numerator?
11. In all of the states, according to the apportionment formulas of each, as the U.S. government is present in all states.
12. b. $100,000 in A.
13. c. $100,000 in B.
14. $0 in both A and B.

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