Question

Popavich Company has the following average property values: State A = $300,000; State B = $200,000; State C = $600,000. State B has the throwback rule and State C is a non-taxing state. Calculate the property factor for State B:

a. 0.6667
b. 0.3333
c. 1.0
d. 0.0

Answer 1

To calculate the property factor for State B, divide the average property value in State B by the average property value in a non-taxing state. In this case, the property factor for State B is 0.3333.

Step-by-step explanation:

To calculate the property factor for State B, we need to compare the average property value in State B to the average property values in other states. In this case, the average property value in State B is $200,000. The formula to calculate the property factor is:

Property Factor = Average Property Value in State B / Average Property Value in Non-taxing State

Since State C is a non-taxing state and has an average property value of $600,000, the property factor for State B is:

Property Factor = $200,000 / $600,000 = 0.3333