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Michigan Business Tax
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Ap5. Under MCL 208.1115, "sales" means "[f]or taxpayers not engaged in any other business activities, sales include interest, dividends, and other income from investment assets and activities and from trading assets and activities." Does this definition include the investment income of individuals?
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Answer:
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Yes, for those taxpayers who are not engaged in any other business activity other than investing and trading, the definition of "sales" would include investment income of individuals in the apportionment factor. However as a practical matter, while investment income may constitute "sales" for apportionment purposes, an individual not engaged in a trade or business may have no tax base to apportion. This is so because personal investment and trading income of an individual does not constitute business income or gross receipts so long as the income or gross receipts is not derived in the regular course of the individual's trade or business.
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