Question
Oldham Inc. conducts business in State M and State N, which both use the UDITPA three-factor formula to apportion income. State Ms corporate tax rate
Oldham Inc. conducts business in State M and State N, which both use the UDITPA three-factor formula to apportion income. State Ms corporate tax rate is 4.5 percent, and State Ns corporate tax rate is 7 percent. This year, Oldham had the following sales, payroll, and property (in thousands of dollars) in each state:
State M State N Total Gross receipts from sales $ 3,000 $ 7,500 $ 10,500 Payroll expense 800 1,200 2,000 Property costs 900 1,000 1,900
Oldhams before-tax income was $3 million. Compute Oldhams State M and State N tax if State N uses an apportionment formula in which the sales factor is double-weighted. (Round all apportionment factors to 4 decimal places, e.g., 47.15% would be 0.4715. Enter "Apportionment percentage" and "Tax rate" in decimals and not in percentage. Enter your answers in dollars and not in millions or thousands of dollars.)
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