Hendricks Corporation sells widgets in two states. State A levies a 9% effective tax rate, and State B levies a 3% rate. A and B have adopted sales-factor-only apportionment formulas. To reduce overall multistate income tax liabilities, Hendricks should:
A. Move its home office from B to A.
B. Remove all stored inventory from A.
C. Establish a personal training center in A.
D. Convert to employee status the independent contractors that it uses to sell widgets in A.
Answer: B
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