(1) Section 15-31-302, MCA, defines "business income" as income arising from transactions and activity in the regular course of the taxpayer's trade or business and includes income from tangible and intangible property if the acquisition, management, and disposition of the property constitute integral parts of the taxpayer's regular trade or business operations. In essence, all income which arises from the conduct of trade or business operations of a taxpayer is business income.   For purposes of administration, the income of the taxpayer is business income unless clearly classifiable as non-business income.

(2) Non-business income means all income other than business income.

(3) The classification of income by the labels occasionally used, such as manufacturing income, compensation for services, sales income, interest, dividends, rents, gains, operating income, non-operating income, etc., is of no aid in determining whether income is business or non-business income. Income of any type or class and from any source is business income if it arises from transactions and activity occurring in the regular course of a trade or business.   Accordingly, the critical element in determining whether income is "business income" or "non-business income" is the identification of the transactions and activities which are the elements of a particular trade or business.   In general, all transactions and activities of the taxpayer which are dependent upon or contribute to the operations of the taxpayer's economic enterprise as a whole constitute the taxpayer's trade or business and will be transactions and activities arising in the regular course of and will constitute integral parts of a trade or business. (See ARM 42.26.207 for more specific examples of the classification of income as business or non-business income; see ARM 42.26.202 and 42.26.205 for further explanation of what constitutes a trade or business.)