Sante Fe Corporation’s sales office and manufacturing plant are located in State A. Sante Fe also maintains a manufacturing plant and sales office in State B. For purposes of apportionment, State A defines payroll as all compensation paid to employees, including contributions to § 401(k) deferred compensation plans. Under the statutes of State B, neither compensation paid to officers nor contributions to § 401(k) plans are included in the payroll factor. Sante Fe incurred the following personnel costs. 
What is the payroll factor for: a. State A? b. State B?
State A State B Total Wages and salaries for employees other than officers Salaries for officers $ 60,000 40,000 $40,000 $100,000 20,000 60,000 Contributions to 5 401(k) plans 20,000 10,000 $70,000 30,000 Total $120,000 $190,000
