|
|  |
 Printer Friendly
 Text Version  Email Page
| M51. Are vehicles taken as trade-ins and later sold by an auto dealer considered "purchases from other firms" under the MBT, and thus deductible from gross receipts in determining the modified gross receipts tax base? |
|
Yes. Vehicles an auto dealer acquires as trade-ins and which are later resold by the auto dealer are considered "purchases from other firms", and deductible for gross receipts to arrive at modified gross receipts. MCL 208.1113(6). "Purchases from other firms" includes inventory which is defined as "[t]he stock of goods held for resale in the regular course of trade of a retail ... business." MCL 208.1111(4). An auto-dealer that accepts a trade-in as part of the purchase price of a replacement vehicle and holds the trade-in for resale in the regular course of its retail business is holding the trade-in as inventory. The auto dealer's gross receipts is reduced by the amount that the auto dealer credited against the purchase price of the replacement vehicle it sold when acquiring the trade-in.
|
|
