What determines Reiki Inc.'s apportionment factor for a state?

The apportionment factor for a corporation, such as Reiki Inc., is determined by a formula that typically includes a ratio of payroll, property, and sales. This approach is used to allocate a corporation's income among the states in which it operates, ensuring that each state receives a fair share of income based on the economic activities conducted within its borders.

The rationale behind using payroll, property, and sales is that these three components are considered significant indicators of where a corporation is generating its business activity. Sales capture the revenue generated in each state, payroll reflects the employment and economic contribution to each state's economy, and property indicates the investment in the state's resources. Each state's proportion of these factors contributes to determining the overall apportionment rate, which then affects the amount of income that is subject to state corporate income tax.

In contrast, the other options do not effectively capture how income is apportioned according to state-specific activities. Average sales across all states don't provide the granular view needed for apportionment. The amount of taxes paid in each state can vary widely and does not correlate with the business activities that generate income. Finally, the number of employees in each state alone does not comprehensively reflect the overall economic footprint of a corporation since it doesn't account for sales