Origami Does Business in States X and Y

question 74

Essay

Origami does business in states X and Y. State X uses an equally-weighted three-factor apportionment formula and has a 4 percent state tax rate. State Y uses an apportionment formula that double-weights the sales factor and has a 6 percent tax rate. Cromwell's taxable income, before apportionment, is $3 million. Its sales, payroll, and property information are as follows.
a. Calculate Origami's apportionment factors, income apportioned to each state, and state tax liability.
b. State Y is considering changing its apportionment formula to a single sales factor. Given its current level of activity, would such a change increase or decrease Origami's state income tax burden? Provide calculations to support your conclusion

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Definitions:

Role Ambiguities

Uncertainties faced by employees regarding their job roles, expectations, and responsibilities within an organization.

Substantive Conflict

A disagreement over goals, resources, rewards, policies, or procedures that has a significant impact on the tasks or outcomes.

Emotional Conflict

A situation where a person experiences mixed feelings or emotions about a decision, situation, or person, leading to internal turmoil or struggle.

Proxemics

The study of human use of space and the effects that population density has on behavior, communication, and social interaction.