How much of marquardt taxable income

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Reference no: EM132190387

Question - Marquardt Corporation realized $900,000 in taxable income from the sales of its products in States X and Z. Marquardt's activities establish nexus for income tax purposes in both states. Marquardt's sales, payroll, and property among the states include the following.

 

State X

State Z

Totals

Sales

$1,000,000

$3,000,000

$4,000,000

Property

2,000,000

-0-

2,000,000

Payroll

1,000,000

-0-

1,000,000

Marquardt is incorporated in State X. State Z utilizes the three-factor (sales, property and payroll) formula, with the sales factor double-weighted, in its apportionment formula, while State X uses an equal-weighted average of the sales, property and payroll factors. Otherwise, the tax laws of the two states are identical. How much of Marquardt's taxable income is apportioned to State Z?

a. $0

b. $225,000

c. $675,000

d. $337,500

e. $900,000

Reference no: EM132190387

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