Question
Oldham Incorporated 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 Incorporated 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 Required: 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. Do not round any intermediate values. Enter your answers in dollars and not in millions or thousands of dollars.)
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