Nicole’s Salon, a Louisiana corporation, operates beauty salons in Arkansas, Lou

Question

Nicole’s Salon, a Louisiana corporation, operates beauty salons in Arkansas, Louisiana, and Tennessee. These salon’s payroll by state are as follows:

What are the payroll apportionment factors for Arkansas, Louisiana, and Tennessee in each of the following alternative scenarios? (Round your answers to 2 decimal places.)

a. Nicole’s Salon has nexus in Arkansas, Louisiana, and Tennessee.

b. Nicole’s Salon has nexus in Arkansas, Louisiana, and Tennessee, but $52,236 of the Arkansas amount is paid to independent contractors.

Nicole’s Salon State Payroll Arkansas $ 145,782 Louisiana 435,477 Tennessee 845,761 Total $ 1,427,020

Explanation / Answer

a. Nicole’s Salon has nexus in Arkansas, Louisiana, and Tennessee:

b. $52,236 of the Arkansas amount is paid to independent contractors:

Payroll Apportionment Factors Arkansas ($145,782 / $1,427,020 x 100) = 10.22% Louisiana ($435,477 / $1,427,020 x 100) = 30.52% Tennessee ($845,761 / $1,427,020 x 100) = 59.27% Total 100.00%

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