Generally, "purchases from other firms" means:
- Inventory acquired during the tax year, including freight, shipping,
delivery, or engineering charges included in the original contract price for
that inventory.
- Assets, including the costs of fabrication and installation, acquired during
the tax year of a type that are, or under the internal revenue code will become,
eligible for depreciation, amortization, or accelerated capital cost recovery
for federal income tax purposes.
- To the extent not included in inventory or depreciable property, materials
and supplies, including repair parts and fuel.
MCL 208.1113(6).
Potential purchases from other firms include depreciable assets acquired by a
mortgage company and the materials and supplies used to maintain or operate
depreciable assets.
Additionally, mortgage companies may exclude from gross receipts proceeds
representing the principal balance of loans transferred or sold in the tax year.
MCL 208.1111(s). To qualify for this exclusion, a mortgage company must be
licensed under the mortgage brokers, lenders, and servicers licensing act, 1987
PA 173, MCL 445.1651 to 445.1684, or the secondary mortgage loan act, 1981 PA
125, MCL 493.51 to 493.81, and [have] greater than 90% of its revenues, in the
ordinary course of business, from the origination, sale, or servicing of
residential mortgage loans.
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