How should a corporate taxpayer apply the IPA/COP method to source goodwill from the sale of a business?

Generally, the income-producing activity occurs where the benefit is received by the customer. However, the Department believes the sale of goodwill is unique and must be evaluated on a case-by-case basis. It is anticipated the Department’s draft regulation addressing receipts from intangibles will specifically address this subject.

DISCLAIMER: The Department of Revenue has prepared draft regulations for sourcing receipts of services and intangibles. The initial drafts are currently under internal review and will be made available for public inspection/review/comment as soon as practical. Accordingly, any responses contained herein are based on previously-provided guidance from the Department.