Suppose that in addition to $17.85 million of taxable income, Texas Taco, Incorporated, received $1,105,000 of interest on state-issued bonds and $760,000 of dividends on common stock it owns in Arizona Taco, Incorporated. (Use corporate tax rate of 21 percent for your calculations.) Calculate Texas Tacos income tax liability.

Note: Enter your answer in dollars not in millions. What are Texas Tacos average and marginal tax rates on taxable income?

A. Income tax liability: __________

B. Average tax rate: ____________

Marginal tax rate: ____________