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 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		$	1,790	$	535	$	635	$	925
Business income		$	43,700	$	38,250	$	15,200	$	10,900
Sales:	State X	$	98,200	$	14,400	$	10,600	$	15,200
	State Y			$	54,250	$	9,100
	State Z			$	22,900	$	25,750	$	13,300
	State A	$	25,300
	State B	$	18,900					$	19,600
Property:	State X	$	60,250	$	27,300			$	16,400
	State Y			$	82,000
	State Z					$	49,750	$	29,500
	State A	$	67,750
Payroll:	State X	$	10,800	$	19,900
	State Y			$	57,750
	State Z					$	4,250	$	11,900
	State A							$	19,000

Compute the following for State X assuming a tax rate of 15 percent. (Use an equally weighted three-factor apportionment. Do not round intermediate calculations. Round apportionment factors to 4 decimal places. Round other answers to the nearest whole dollar amount. Leave no answer blank. Enter zero if applicable.)

b. Calculate the business income apportioned to State X.

C. Calculate the taxable income for State X for each company.

	State taxable income reported: State X Sharon Carol Josey Janice

	State X Business Income

Answer 1

Computation of State X tax liability, Business Income and taxable income
Josey has no nexus in State X as it has no property or payroll in State X
		Sharon Inc.	Carol Corp	Josey Corp	Janice Corp
Sales	X	$98,200	$14,400	$10,600	$15,200
	Total	$142,400	$91,550	$45,450	$48,100
Property	X	$60,250	$27,300	0	$16,400
	Total	$128,000	$109,300	$49,750	$45,900
Payroll	X	$10,800	$19,900	0	$0
	Total	$10,800	$77,650	$4,250	$30,900
Sales		0.69	0.16		0.32
Property		0.47	0.25		0.36
Payroll		1	0.26		0
		2.16	0.66		0.67
Approtionment Factor		0.7201	0.2211		0.2244
Income		$43,700	$38,250		$10,900
Apportioned Income		$31,469	$8,458		$2,446	$42,372
Allocated Income		$1,790
State Taxable Income		$33,259	$8,458		$2,446
Total Taxable Income						$44,162
Tax rate						15%
State Tax Liability						$6,624
Business Income apportioned to State X is $42,372