Question

Hogarth, an accrual-based business, has nexus with States D, E and F. It does NOT have nexus with States G and H. State E does not have an income tax. To which states will Hogarth apportion its business income?

a. D, E and F
b. D, E, F, G and H
c. D and F
d. D, F, G and H

Answer 1

Hogarth, an accrual-based business, will apportion its business income to the states with which it has nexus. Hogarth will apportion its business income to States D and F, as it has nexus with those states. Therefore, the correct option is C.

Step-by-step explanation:

Hogarth, an accrual-based business, will apportion its business income to the states with which it has nexus. In this case, Hogarth has nexus with States D, E, and F. Nexus refers to a significant presence or connection with a state that requires a business to follow that state's tax laws, including apportioning income.

Since State E does not have an income tax, Hogarth will not apportion its business income to State E. Therefore, Hogarth will apportion its business income to States D and F. It will not apportion its income to States G and H, as it does not have nexus with those states.