Question
Sharon Inc. is headquartered in State X and owns 100 percent of Carol Corp., Josey Corp., and Janice Corp., which form a single unitary group.
Sharon Inc. is headquartered in State X and owns 100 percent of Carol Corp., Josey Corp., and Janice Corp., 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 | $ | 1,700 | $ | 475 | $ | 385 | $ | 660 | |
Business income | 58,200 | 34,250 | 17,800 | 17,300 | |||||
Sales: | State X | 76,000 | 19,000 | 17,900 | 15,400 | ||||
State Y | 48,250 | 8,000 | |||||||
State Z | 26,800 | 35,750 | 10,100 | ||||||
State A | 19,500 | ||||||||
State B | 16,800 | 19,500 | |||||||
Property: | State X | 74,250 | 22,400 | 18,200 | |||||
State Y | 87,750 | ||||||||
State Z | 42,750 | 38,250 | |||||||
State A | 52,250 | ||||||||
Payroll: | State X | 16,600 | 12,600 | ||||||
State Y | 41,000 | ||||||||
State Z | 6,000 | 10,700 | |||||||
State A | 18,500 | ||||||||
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Compute the following for State X assuming a tax rate of 15 percent. (Use an equally weighted three-factor apportionment. Round all apportionment factors to 4 decimal places. Round other answers to the nearest whole dollar amount. Leave no answer blank. Enter zero if applicable.)
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.
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