Your client Crimson Corp. (CC) is being audited by the Department of Revenue for the State of New York for the calendar year 2010. CC had been audited by the Internal Revenue Service (IRS) for 2010 and agreed with CC's tax position that the sale of the corporation's stock as described later, was primarily treated as the sale of goodwill. The issue in question is limited to a single question. CC is a Massachusetts (MA) corporation and has made an S election several years ago. The owner of the S corporation shares is a MA resident. It has been in business since 1998. It had operated exclusively in MA from 1998 until 2004 when it began to do business in New York. It has had minimal contacts in NY, hiring a few employees in NY but the majority of the business has been solicited through its MA based sales force. In 2010, approximately 45% of its operating income was apportioned to NY with the remainder allocated to MA. In 2010, the company was sold to NPD, a publicly traded company for $100 million. The proceeds from the sale of the company were allocated entirely to MA. Its normal operating profit was allocated as previously described. NYS is now asserting that 45% of the profit from the sale of the stock must be allocated to NY. How would you respond, on behalf of your client? Are there any arguments that you could make to rebut the NY's assertions?