A corporation, in order to figure out its tax liability to a particular state, would use the apportionment factors required by a particular state$$s tax statute to calculate the corporation$$s percentage of items inside the state. The various factors will result in a percentage of items inside a particular state versus outside a particular state. The corporation would then take its income generated from multiple states and multiply it by the percentage to compute the income taxable to a state. Then, the corporation would apply the respective state$$s tax rates to its income generated from a particular state to compute the corporate tax liability due to that state.

Tasks:

Analyze what apportionment factors are.

Evaluate how apportionment factors would affect your state tax amount owed.

Analyze how the different tax rates for different states would affect the corporation$$s tax liability due.