Section 15.19.302. Special rule.

	(a)  Where substantial amounts of gross receipts arise from an incidental or occasional sale of a fixed asset used in the regular course of the taxpayer's trade or business, those gross receipts must be excluded from the sales factor. For example, gross receipts from the sale of a factory or plant will be excluded.  
	(b)  Insubstantial amounts of gross receipts arising from incidental or occasional transactions or activities may be excluded from the sales factor unless that exclusion would materially affect the amount of income apportioned to this state. For example, the taxpayer ordinarily may include or exclude from the sales factor gross receipts from such transactions as the sale of office furniture, business automobiles, etc.  
	(c)  Where the income-producing activity in respect to business income from intangible personal property can be readily identified, that income is included in the denominator of the sales factor and, if the income-producing activity occurs in this state, in the numerator of the sales factor as well. For example, usually the income-producing activity can be readily identified in respect to interest income received on deferred payments on sales of tangible property (15 AAC 19.251(a)(1)) and income from the sale, licensing or other use of intangible personal property (15 AAC 19.301(b)(4)).  
	(d)  Where business income from intangible property cannot readily be attributed to any particular income-producing activity of the taxpayer, that income cannot be assigned to the numerator of the sales factor for any state and must be excluded from the denominator of the sales factor. For example, where business income in the form of dividends received on stock, royalties received on patents or copyrights, or interest received on bonds, debentures or government securities results from the mere holding of the intangible personal property by the taxpayer, those dividends and that interest must be excluded from the denominator of the sales factor.  

Authorities

43.05.080;43.19.010

Notes

Reference

15 AAC 19.131
15 AAC 19.1320
15 AAC 19.1330
15 AAC 19.251
15 AAC 19.261
15 AAC 20.610
15 AAC 21.550

Authority

AS 43.05.080 AS 43.19.010 ________________________

History

Eff. 5/24/78, Register 66