Korn, Co Was Incorporated in Delaware

question 103

Multiple Choice

Korn, Co. was incorporated in Delaware. It has production, distribution, and sales facilities in Kansas and Nebraska. All of Korn's customers reside in Kansas or Nebraska. Assume that both states use the UDITPA formula for apportionment of income. The corporation is investing in new equipment that cost $900,000. The equipment could be used in either the Kansas or Nebraska production facilities. Assume that Kansas' corporate income tax rate is 7% and Nebraska's is 8.5%. Should the equipment be placed in Kansas or Nebraska to minimize Korn's state income tax?

• A) Kansas.
• B) Nebraska.
• C) Either state, because state income tax will be unaffected by this choice.
• D) Korn should place the equipment in a third state in which it does not have nexus.

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Definitions:

Customer Experience

The overall perception and satisfaction a customer has with a company's products or services, based on their interactions with the brand.

Sales Staff

Individuals employed by a company to execute the selling of products or services to customers, often requiring expertise in product knowledge and customer service.

Online Channel

A digital pathway through which goods or services are marketed, sold, and distributed to consumers via the internet.

Supply Chain Networks

Complex systems of organizations, people, activities, information, and resources involved in moving a product or service from supplier to customer.