Is the occasional sale of assets by a taxpayer a “sale” for apportionment purposes?
No, so long as the assets sold are neither stock in trade nor inventory and are not held by the taxpayer for sale to customers in the ordinary course of the taxpayer’s business. This determination is made on a facts and circumstances basis. For example, the occasional and isolated sale of a desk by a law firm is not a “sale” under MCL 208.1115; the desk does not constitute stock in trade or inventory to the law firm and is not held by the taxpayer primarily for sale to customers in the ordinary course of the law firm’s business. In contrast, if the law firm operates a program under which office furniture is routinely and systematically sold at auction, then such sales would be “sales” under MCL 208.1115. If a transaction is not a “sale” under MCL 208.1115, it will be excluded from both the numerator and denominator of the sales factor. “Sales” under MCL 208.1115 may still be included in the business income and modified gross receipts tax bases.
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