A not-for-profit nursing home has total expenses of $20 million. Sales tax in the state is 7%. Expenses are broken down into salareies ($12 million), supplies ($6million), and pharmacy ($2 million). The benefti recieved by the nurisng home formt he sales tax exemption assuiming that pharmacy items are exempt form state sales tax is?

a. $1.4 million

B. $1.26 million

C. 420,000

D. 480,000