Lexington Corporation conducts business in four states. In state A, its sales factor is 50%, its payroll factor is 14%, and its property factor is 29%. State A uses an equally-weighted three-factor apportionment formula, but plans to change to a formula that double-weight the sales factor. Which is of the following statements is true?
A. Any increase in Lexington's tax liability to state A will be offset by a decline in tax liability to other states.
B. Lexington's tax liability to state A will decrease.
C. Lexington's tax liability to state A will increase.
D. Lexington's tax liability to state A will be unaffected by this change.
Answer: C
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