Nexus & Apportionment 1. 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 206.609(4)(a); 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 206.609(4)(a).

If a transaction is not a "sale" under MCL 206.609(4), it will be excluded from both the numerator and denominator of the sales factor, although the proceeds of the sale may still be included in the corporate income tax base.