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Which state should boeing choose

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Question - Boeing is considering opening a plant in one of two neighboring states, Oregon or California.

Let's just say, California has a corporate tax rate of 15%. If operated in this state, the plant is expected to generate $1,200,000 pretax profit.

In Oregon state has a corporate tax rate of 5% and operation in Oregon state, the plant is expected to generate $1,085,000 of pretax profit.

Which state should Boeing choose based upon tax considerations only?

Why do you think the plant in the state with a lower tax rate would produce a lower pretax income?

Reference no: EM132686809

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