Dollin Inc. is incorporated under Virginia law and has its corporate headquarters in Richmond. Dollin is a distributor; it purchases tangible goods from manufacturers and sells the goods to retailers. It has a branch office through which it sells goods in the United Kingdom and owns 100 percent of a French corporation (French Dollin) through which it sells goods in France. Dollin€™s financial records provide the following information for the year.

Before-tax net income from sales:
Domestic sales ........................................................ $ 967,900
UK sales (foreign source income) .........................    415,000
                                                                                    $1,382,900
Dividend income:
Brio Inc.  ..................................................................     $ 8,400
French Dollin (foreign source income) ...............      33,800

• Dollin pays state income tax in Virginia, North Carolina, and South Carolina. All three states tax their apportioned share of Dollin€™s net income from worldwide sales. Because Virginia is Dollin€™s commercial domicile, it also taxes Dollin€™s U.S. source (but not foreign source) dividend income net of any federal dividends received deduction. The states have the following apportionment factors and tax rates.

• Dollin paid $149,200 income tax to the United Kingdom.
• Dollin elects to claim the foreign tax credit rather than to deduct foreign income taxes.

Brio Inc. is a taxable U.S. corporation. Dollin owns 2.8 percent of Brio€™s stock.

• Dollin has owned 100 percent of the stock of French Dollin for 10 years. None of French Dollin€™s earnings are considered GILTI or sub part F income.
• Earnings of the UK branch are not considered FDII.

Solely on the basis of these facts, compute the following:
a. Dollin€™s state income tax for Virginia, North Carolina, and South Carolina.

b. Dollin€™s federal income tax. Assume that Dollin paid the state taxes during the year, and no state income tax is allocable to foreign source income.

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Apportionment Factor Tax Rate Virginia 43.19% 6.00% North Carolina 11.02% 7.75% South Carolina 39.52% 5.00%