Payroll Factor

Payroll Factor

Payroll Factor means:
a factor in an apportionment formula; a fraction whose numerator is the total amount that an entity paid or accrued for compensation in a particular state during a tax period, and whose denominator is the total amount paid or accrued by the entity everywhere for compensation during this tax period. Most states use a three- factor apportionment formula that weights sales, property, and payroll equally in order to apportion the total federal business income of an out-of-state entity so as to determine the taxes due the individual state. See apportionment.

See Payroll Tax in the U.S. Legal Encyclopedia and Payroll Tax in the World Legal Encyclopedia.


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