Milt Corporation owns and operates two facilities that manufacture paper products. One of the facilities is located in State D, and the other is located in State E. Milt generated $1,200,000 of taxable income, comprised of $1,000,000 of income from its manufacturing facilities and a $200,000 gain from the sale of non-business property located in E. E does not distinguish between business and non-business property. D apportions business income. Milt's activities within the two states are outlined below.
|
|
State D
|
State E
|
Total
|
|
Sales of paper products
|
$4,500,000
|
$1,500,000
|
$6,000,000
|
|
Property
|
3,500,000
|
2,500,000
|
6,000,000
|
|
Payroll
|
1,500,000
|
1,000,000
|
2,500,000
|
Both D and E utilize a three-factor apportionment formula, under which sales, property, and payroll are equally weighted. Determine the amount of Milt's income that is subject to income tax by each state. Make sure to calculate the full taxable income and show all calculations.