Question

Macbeth Corporation conducts business in States X ,Y and Z. Macbeth’s $1,000,000 of federal taxable income consists of $800,000 apportionable income and $ 200,000 allocable income generated from transactions conducted in State Y. Macbeth’s sales, property, and payroll are evenly divided among the three states. States X and Y employ a three-equal factors appointment formula. State Z also has a three-equal factors appointment but double weighs the sales factor. How much of Macbeth’s income is taxable in: State X State Y State Z

Answer 1

Solution:
Computation of taxable income in State X State Y and State Z
Particular	State X	State Y	State Z	Total
Apportinment of apportionable income $800,000
Weights:
Sales	1	1	2	4
Property	1	1	1	3
Payroll	1	1	1	3
Total	3	3	4	10
Apportionment in these ratio	$ 240,000	$ 240,000	$ 320,000	$    800,000
Allocable income $ 200,000 to State Y		$200,000		$200,000
Total income taxable State Wise	$ 240,000	$440,000	$ 320,000	$ 1,000,000