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9 November, 13:29

Della Corporation is headquartered in Carlisle, Pennsylvania. Della has a Pennsylvania state income tax base of $433,500. Of this amount, $76,700 was nonbusiness income. Della's Pennsylvania apportionment factor is 28.52 percent. The non-business income allocated to Pennsylvania was $61,850. Assuming a Pennsylvania corporate tax rate of 7.75 percent, what is Della's Pennsylvania state tax liability?

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  1. 9 November, 13:51
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    Della's Pennsylvania state tax liability is $12,679.73

    Explanation:

    Tax Liability

    = [{ (Income Tax Base - Non Business Income) x Apportionment Factor} + Allocated Non - business Income] x tc

    = [{ ($433,500 - $76,700) x 0.2852} + $61,850] x 0.0775

    = [$101,759.36 + $61,850] x 0.0775

    = $163,609.36 x 0.0775

    = $12,679.73

    Therefore, Della's Pennsylvania state tax liability is $12,679.73
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