A California Franchise Tax Board (FTB) Chief Counsel Ruling concluded that a taxpayer’s sales of assets pursuant to a plan of reorganization under Chapter 11 of the U.S. Bankruptcy Code were not “occasional sales” within the meaning of 18 Cal. Code Regs. § 25137(c)(1)(A)2. Instead, the sales of assets were deemed to be part of the taxpayer’s normal course of business and occurred frequently. As a result, the taxpayer’s gross receipts from the asset sales were includable in its sales factor for apportionment purposes. Under 18 Cal. Code Regs. § 25137(c)(1)(A), receipts are excluded from the sales factor when a substantial amount of gross receipts arise from an occasional sale of assets used in that taxpayer’s trade or business. A sale is an “occasional sale” if the transaction is outside of a taxpayer’s normal course of business and occurs infrequently. The taxpayer at issue filed for Chapter 11 bankruptcy, which lead to a number of creditors cashing out to investors for amounts less than face value of the debt. In order to monetize their investments, and as part of the taxpayer’s plan of reorganization, the new owners directed the taxpayer’s management to sell the taxpayer’s assets, resulting in a series of asset sales over a two-year period. The FTB concluded that “[t]o accomplish the goal of the Plan of Reorganization, negotiation and implementation of asset sale transactions became part of [the] Taxpayer’s normal course of business.” Consequently, the asset sales were found not to be “occasional sales.” California FTB Chief Counsel Ruling No. 2014-2 (June 3, 2014).