In: Accounting
Delicious Dave’s Maple Syrup, a Vermont corporation, has property in the following states: Property State Beginning Ending Maine $ 979,746 $ 1,052,867 Massachusetts $ 143,813 $ 259,053 New Hampshire $ 426,867 $ 326,967 Vermont $ 930,532 $ 964,776 Total $ 2,480,958 $ 2,603,663 What are the property apportionment factors for Maine, Massachusetts, New Hampshire, and Vermont in each of the following alternative scenarios? (Round intermediate calculations and final answers to 2 decimal places.) a. Delicious Dave’s has income tax nexus in each of the states.b. Delicious Dave’s has income tax nexus in each of the states, but the Maine total includes $470,000 of investment property that Delicious rents out (unrelated to its business). c. Delicious Dave’s has income tax nexus in each of the states, but it also pays $57,000 to rent property in Massachusetts.
a. | Delicious has the following property factors | ||||
Beginning | Ending | Average | Factor | ||
Maine | 9,79,746 | 10,52,867 | 15,06,180 | 39.82% | |
Massachusetts | 1,43,813 | 2,59,053 | 2,73,340 | 7.23% | |
New Hampshire | 4,26,867 | 3,26,967 | 5,90,351 | 15.61% | |
Vermont | 9,30,532 | 9,64,776 | 14,12,920 | 37.35% | |
24,80,958 | 26,03,663 | 37,82,790 | 100.00% | ||
b. | Delicious must remove the non-business property from property factors | ||||
Beginning | Ending | Average | Factor | ||
Maine | 5,09,746 | 5,82,867 | 8,01,180 | 26.03% | |
Massachusetts | 1,43,813 | 2,59,053 | 2,73,340 | 8.88% | |
New Hampshire | 4,26,867 | 3,26,967 | 5,90,351 | 19.18% | |
Vermont | 9,30,532 | 9,64,776 | 14,12,920 | 45.91% | |
20,10,958 | 21,33,663 | 30,77,790 | 100.00% | ||
c. | Delicious has the following property factors. The annual rent ($57,000) is multiplied by 8 and thus $456,000 is added. | ||||
Beginning | Ending | Average | Factor | ||
Maine | 9,79,746 | 10,52,867 | 15,06,180 | 33.72% | |
Massachusetts | 5,99,813 | 7,15,053 | 9,57,340 | 21.43% | |
New Hampshire | 4,26,867 | 3,26,967 | 5,90,351 | 13.22% | |
Vermont | 9,30,532 | 9,64,776 | 14,12,920 | 31.63% | |
29,36,958 | 30,59,663 | 44,66,790 | 100.00% |