# State Income Tax Apportionment Calculator: Single Sales Factor vs Three Factor > Source: https://netray.co/tools/us-state-apportionment-single-sales-factor-tax-calculator > Publisher: Netray (netray.co), AI and integration engineering for ERP and manufacturing systems. > Section: Free Tools ## Short answer See how much state income tax a manufacturer owes under single sales factor or an equally weighted three-factor formula. ## Category cost-finance ## Region United States ## Audience - Controller - Tax manager - CFO ## Tool **Kind:** calculator **Currency:** $ **Inputs:** #### Apportionable business income **Key:** income **Type:** number **Default:** 5000000 **Min:** 0 **Step:** 50000 **Unit:** $ #### Total sales everywhere **Key:** total_sales **Type:** number **Default:** 40000000 **Min:** 1 **Step:** 100000 **Unit:** $ #### Sales sourced to this state **Key:** state_sales **Type:** number **Default:** 6000000 **Min:** 0 **Step:** 100000 **Unit:** $ **Help:** Use the state's sourcing rules, which differ for goods and services. #### Share of payroll in this state **Key:** payroll_share **Type:** slider **Default:** 55 **Min:** 0 **Max:** 100 **Step:** 1 **Unit:** % #### Share of property in this state **Key:** property_share **Type:** slider **Default:** 50 **Min:** 0 **Max:** 100 **Step:** 1 **Unit:** % #### State corporate income tax rate **Key:** rate **Type:** number **Default:** 6 **Min:** 0 **Max:** 15 **Step:** 0.1 **Unit:** % **Outputs:** #### Sales factor **Key:** sales_factor **Expr:** state_sales / total_sales * 100 **Format:** percent #### Equally weighted three-factor percentage **Key:** three_factor **Expr:** (sales_factor + payroll_share + property_share) / 3 **Format:** percent #### State tax, single sales factor **Key:** tax_ssf **Expr:** income * sales_factor / 100 * rate / 100 **Format:** currency **Primary:** true #### State tax, three-factor **Key:** tax_3f **Expr:** income * three_factor / 100 * rate / 100 **Format:** currency **Primary:** true #### Difference (three-factor minus single sales) **Key:** diff **Expr:** tax_3f - tax_ssf **Format:** currency **Description:** Positive means a single sales factor state costs less for a plant-heavy exporter. #### Effective state rate on total income, single sales factor **Key:** eff **Expr:** tax_ssf / income * 100 **Format:** percent **Chart:** #### State tax vs sales sourced to the state **Type:** line **X:** state_sales **From:** 0 **To:** 40000000 **Steps:** 21 **Series:** - tax_ssf - tax_3f **Disclaimer:** States differ on weighting, throwback, market-based sourcing and combined reporting. This is a simplified two-formula comparison for planning, not a return computation. ## Content **Intro:** Where a manufacturer makes goods and where it sells them can be very different states. Apportionment decides how much of your income each state may tax. This tool compares the two most common formulas. **Sections:** #### How to use it **Body:** Enter apportionable income, total sales and the sales sourced to the state under that state's rules. Add the state's share of your payroll and property to see the three-factor result. The calculator shows the sales factor, the three-factor percentage and the tax each would produce. Use the sweep to see how state tax moves as sales sourced there grow, which helps when you open a new distribution channel or move a plant. #### The method **Body:** Single sales factor apportionment assigns income to a state in proportion to its share of sales. The three-factor formula averages the sales, payroll and property factors, each weighted equally in this model. Many states have moved toward single sales factor, and some double-weight sales instead. A manufacturer with large plants in a state but most customers elsewhere pays more under three-factor and less under single sales. **Bullets:** - Sales factor = state sales / total sales - Three-factor = average of sales, payroll and property factors - State tax = income x apportionment x rate - Check your state for weighting, throwback and sourcing rules #### Worked example and common mistakes **Body:** With 5,000,000 of income, 6,000,000 of 40,000,000 sales in the state (15 percent), 55 percent payroll and 50 percent property, three-factor is 40 percent. At a 6 percent rate, single sales tax is 45,000 and three-factor is 120,000, a 75,000 difference. Mistakes include using billing rather than shipping destination, ignoring throwback rules, forgetting that some states tax gross receipts or margin rather than income, and treating Texas franchise tax as income tax. #### Sales sourcing data in the ERP **Body:** Apportionment needs sales by ship-to state, payroll by work location and property by site. ERP sales order ship-to addresses, HR location codes and fixed asset locations are the typical sources. Reconcile them to the trial balance before year end to avoid late scrambles. **Cta:** We can help build a read-only report that totals sales by ship-to state and payroll by site from your ERP and HR system. **Faq:** #### Which states use single sales factor? **Answer:** A large and growing group of states do, but the list changes, and some apply it only to manufacturers or to certain industries. Check the current statute or your adviser rather than relying on a fixed list. #### What is throwback? **Answer:** A throwback rule assigns sales of goods shipped from a state to customers in a state where you are not taxable back to the origin state. It can raise the origin state's sales factor and tax. #### Do I need nexus to use this? **Answer:** Apportionment only matters in states where you have nexus. Economic nexus thresholds for income tax and public law restrictions on solicitation of orders differ from sales tax thresholds, so assess each tax type separately. #### Does this cover Texas franchise tax? **Answer:** No. Texas franchise tax is a margin tax with its own apportionment on gross receipts and different base calculations. Use this tool for income-based states and a Texas-specific tool for franchise tax. ## Search terms single sales factor apportionment calculator, state apportionment formula, three factor apportionment, multistate manufacturer state tax, state corporate income tax calculator, sales factor tax planning, nexus state tax apportionment, apportioned income calculation --- Talk to an engineer: https://netray.co/contact?intent=erp_ai | Machine catalog: https://netray.co/agent/catalog.json