Lydell Corporation currently operates in two states, P and Q. State P has a 5 percent tax rate and uses an equally weighted three-factor apportionment formula. State Q has a 9 percent tax rate and uses an apportionment formula that double-weights the sales factor. For the current year, Lydells state taxable income before apportionment was $1,500,000. Below is information regarding Lydells current activity within each state.

	State P		State Q		Total
Sales	$	3,000,000	$	2,000,000	$	5,000,000
Payroll		1,000,000		500,000		1,500,000
Average property		1,200,000		800,000		2,000,000

Lydell is considering expanding its operations by constructing a new production facility. The facility would increase Lydells total property and payroll by $1 million and $400,000, respectively. The company projects that, as a result of the new facility, total sales would increase by $800,000, of which half of these new sales would be to customers in State P and half would be to customers in State Q. Total net income would increase by $300,000.

Required:

1. Using the above information, calculate total state income tax if the new facility is located in State P, then calculate total state income tax if the new facility is located in State Q.
2. In which state would you recommend Lydell locate the new facility?