Answer:
a. The overall state income tax for the unitary group is $60,474
b. The aggregate state income tax for the entities if they were non-unitary is $110,000
c. The aggregate state income tax for the entities if they were non-unitary-overall state income tax for the unitary group is $49,253
Explanation:
a. In order to calculate the overall state income tax for the unitary group we would have to make the following calculation:
overall state income tax for the unitary group=state A income tax+ state B income tax
state A income tax=state taxable income*tax rate
state taxable income=$600,000*30.7%
state taxable income=$184,200
tax rate=8%
Therefore, state A income tax=$184,200*8%
state A income tax=$14,736
state B income tax=state taxable income*tax rate
state taxable income=$600,000*69.3%
state taxable income=$415,800
tax rate=11%
Therefore, state B income tax=$415,800*11%
state A income tax=$45,738
Therefore, overall state income tax for the unitary group=$14,736+$45,738
overall state income tax for the unitary group=$60,474
The overall state income tax for the unitary group is $60,474
b. In order to calculate the aggregate state income tax for the entities if they were non-unitary we would have to make the following calculation:
aggregate state income tax for the entities if they were non-unitary=aggregate state income tax state A+aggregate state income tax state B
aggregate state income tax state A=0
aggregate state income tax state B=$1,000,000*11%
aggregate state income tax state B=$110,000
Therefore, aggregate state income tax for the entities if they were non-unitary=0+$110,000
aggregate state income tax for the entities if they were non-unitary=$110,000
The aggregate state income tax for the entities if they were non-unitary is $110,000
c. The aggregate state income tax for the entities if they were non-unitary-overall state income tax for the unitary group=$110,000-$60,474
The aggregate state income tax for the entities if they were non-unitary-overall state income tax for the unitary group=$49,253
