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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
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 sales-only factor in its three-factor apportionment formula. How much of Chipper's taxable income is apportioned to X?
a.$333,333
b.$1,000,000
c.$500,000
d.$0
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