Net Corporation's Sales Office and Manufacturing Plant Are Located in State

question 68

Multiple Choice

Net Corporation's sales office and manufacturing plant are located in State X. Net also maintains a manufacturing plant and sales office in State W. For purposes of apportionment, X defines payroll as all compensation paid to employees, including contributions to § 401(k) deferred compensation plans. Under the statutes of W, neither compensation paid to officers nor contributions to § 401(k) plans are included in the payroll factor. Net incurred the following personnel costs. $\begin{array}{lrrr}&\text { State } \mathrm{X} & \text { State } \mathrm{W} & \text { Totals }\\\text { Wages and salaryes for employees other } & \$ 500,000 & \$ 300,000 & \$ 800,000 \\\text { hhan officers } \\\text { Salaries for officers } & 300,000 & 150,000 & 450,000 \\\text { Contributions to } \S 401(\mathrm{k}) \text { plans }& 200,000 & 50,000 & 250,000\\ \text { Totals } & \mathbf{\$ 1 , 0 0 0 , 0 0 0} & \mathbf{\$ 5 0 0 , 0 0 0} & \mathbf{\$ 1 , 5 0 0 , 0 0 0} \end{array}$ Net's payroll factor for State W is:

• A)50.00%.
• B)37.50%.
• C)33.33%.
• D)0.00%.

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Definitions:

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