Dott Corporation Generated $300,000 of State Taxable Income from Selling

question 88

Essay

Dott Corporation generated $300,000 of state taxable income from selling its mapping software in States A and B.For the taxable year, the corporation's activities within the two states were as follows.
? $$\begin{array} { l r r r } & \text { State A } & \text { State B } & \text { Total } \\\text { Sales } & \$ 500,000 & \$ 1,500,000 & \$ 2,000,000 \\\text { Property } & 250,000 & - 0 - & 250,000 \\\text { Payroll } & 200,000 & 300,000 & 500,000\end{array}$$ ?
Dott has determined that it is subject to tax in both A and B.Both states utilize a three-factor apportionment formula which equally weights sales, property, and payroll.The rates of corporate income tax imposed in A and B are 7% and 10%, respectively.Determine Dott's state income tax liability.

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Definitions:

Virtual Offices

A business operating model that enables employees to work remotely by using technology, without a fixed physical location for the office.

Mobile Workspaces

Work environments or setups that are not fixed in one location, allowing individuals to work remotely or from various locales.

Flexible Working Hours

An arrangement that allows employees to adjust their working hours and locations in a way that suits their needs.

Autonomy

The degree to which a job provides an employee with the discretion and independence to schedule their work and determine how it is done.