Question

Egret Corporation generated $600,000 of state taxable income from selling its product in California and Oregon. For the taxable year, the corporation’s activities within the two states were as follows:

	California	Oregon	Total
Sales	$750,000	$250,000	$1,000,000
Property	$300,000	$0	$300,000
Payroll	$400,000	$600,000	$1,000,000

Egret has determined that it has income tax nexus in both California and Oregon. California utilizes a three-factor apportionment formula that equally weights sales, property, and payroll. Oregon uses a three-factor formula with a double-weighted sales factor. The rates of corporate income tax imposed in California and Oregon are 5% and 4%, respectively.

Determine Egret’s state income tax liability in California and in Oregon and enter your answer for each in the text box. Round your answer to the nearest dollar. Show support for your work on your scratch paper in order to receive credit.

Egret's income tax liability in California is  .

Egret's income tax liability in Oregon is  .

Answer 1