What is the payroll factor for State A

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Problem - Sante Fe Corporation's sales office and manufacturing plant are located in State A. Sante Fe also maintains a manufacturing plant and sales office in State B. For purposes of apportionment, State A defines payroll as all compensation paid to employees, including contributions to § 401(k) deferred compensation plans. Under the statutes of State B, neither compensation paid to officers nor contributions to § 401(k) plans are included in the payroll factor. Sante Fe incurred the following personnel costs.

 

State A

State B

Total

Wages and salaries for employees other than officers

$60,000

$40,000

$100,000

Salaries for officers

40,000

20,000

60,000

Contributions to § 401(k) plans

20,000

10,000

30,000

Total

$120,000

$70,000

$190,000

Required - What is the payroll factor for: a. State A? b. State B?

Reference no: EM132657603

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