Question
Sharon Inc. is headquartered in State X and owns 100 percent of Carol, Josey, and Janice Corps, which form a single unitary group. Assume sales
Sharon Inc. is headquartered in State X and owns 100 percent of Carol, Josey, and Janice Corps, which form a single unitary group. Assume sales operations are within the solicitation bounds of Public Law 86-272. Each of the corporations has operations in the following states: |
Domicile State | Sharon Inc. State X (throwback) | Carol Corp State Y (throwback) | Josey Corp State Z (nonthrowback) | Janice Corp State Z (nonthrowback) | ||||
Dividend income | $ | 1,030 | $ | 560 | $ | 420 | $ | 400 |
Business income | $ | 40,000 | $ | 45,250 | $ | 16,400 | $ | 16,200 |
Sales: State X | $ | 83,200 | $ | 19,500 | $ | 11,900 | $ | 12,200 |
State Y | $ | 50,750 | $ | 9,350 | ||||
State Z | $ | 30,000 | $ | 39,000 | $ | 11,900 | ||
State A | $ | 34,000 | ||||||
State B | $ | 15,500 | $ | 11,500 | ||||
Property: State X | $ | 70,500 | $ | 27,400 | $ | 10,200 | ||
State Y | $ | 102,250 | ||||||
State Z | $ | 42,000 | $ | 30,500 | ||||
State A | $ | 69,500 | ||||||
Payroll: State X | $ | 17,600 | $ | 14,500 | ||||
State Y | $ | 63,250 | ||||||
State Z | $ | 5,100 | $ | 13,400 | ||||
State A | $ | 16,000 |
Compute the following for State X assuming a tax rate of 15 percent.(Be sure to use an equally weighted three-factor apportionment formula. Round your apportionment factors to 4 decimal places. Also round your apportioned business income and tax liability to the nearest dollar amount.) |
a. | Calculate the State X apportionment factor for Sharon Inc., Carol Corp., Josey Corp., and Janice Corp. |
b. | Calculate the business income apportioned to State X. |
c. | Calculate the taxable income for State X for each company. |
d. | Determine the tax liability for State X for the entire group. |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-text-image.webp)
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Step: 3
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started