State Tax Rulings
Free state tax letter rulings and advisory opinions with plain-English summaries, full citations, and the original source on every page.
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Is a digital auction platform a 'marketplace facilitator' that must collect Tennessee sales tax on auctions run by its customers?
No. A company that only provides the auction software and hosting and never collects or transmits payment is not a 'marketplace facilitator' under Tennessee law, so it does not have to collect or remi…
Which med-spa treatments, products, and memberships are subject to Tennessee sales and use tax?
It splits three ways. Prescription drugs for human use are exempt: IV nutrition therapy, injectable neurotoxins (Botox), dermal fillers, the chemical solution in medium-to-deep skin peels, and hyperba…
When a customer makes a large up-front payment to sign a car lease in Colorado, which local sales taxes apply to that payment and how does the dealer report them?
The up-front payment a customer makes when signing a Colorado motor-vehicle lease is sourced the same way as the monthly payments — to the lease's 'primary property location,' not the dealer's locatio…
Is a company that processes card payments for online merchants — and briefly takes 'flash title' to the goods — a retailer that must collect Colorado sales tax?
No. A company whose real role is processing card payments for international e-commerce merchants is not a Colorado retailer, marketplace facilitator, consignee, auctioneer, or seller — even under its …
When a partnership makes a one-off sale of Colorado real estate outside its regular business, do those gross receipts go into the apportionment factor that determines its owner's Colorado-source income?
No. Gross receipts from a partnership's infrequent, out-of-the-ordinary-course sale of Colorado real estate are not 'receipts' under § 39-22-303.6(1)(d), so they're excluded from the apportionment fac…
If a Tennessee lessor delivers leased trucks in Tennessee but they are used only out of state, must it charge Tennessee sales tax on every monthly lease payment?
Mostly no—only the first payment. When a Tennessee lessor delivers leased vehicles in Tennessee but the lessee drives them out and uses them only out of state, Tennessee taxes the first lease payment;…
Can an electing Alaska Native Settlement Trust deduct its beneficiary distributions on its Colorado return, and must it withhold Colorado tax on distributions to nonresident beneficiaries from renting a Colorado building?
No to both. Because the trust elected out of the IRC § 661 distribution deduction federally, it can't claim that deduction on its Colorado return either (Colorado starts from federal taxable income). …
Is a flat subscription fee for a mobile health-tracking app, bundled with a blood-pressure monitor and support, subject to Tennessee sales tax?
Yes — it's taxable. A flat annual subscription to a mobile heart-health program is subject to Tennessee sales tax because, applying the true-object test, what the customer is really buying is remotely…
Can a partner claim Colorado's affordable housing tax credit allocated by a pass-through entity if the partner joins the partnership before the tax return claiming the credit is filed?
Yes. A pass-through entity may allocate the affordable housing credit to its partners, and a partner admitted before the partner's tax return claiming the credit is filed may claim the allocated amoun…
Does a Colorado bakery have to charge state sales tax on packaged baked goods sold individually, in multi-packs, or as catering and bulk orders?
No. Cold, packaged baked goods sold by a bakery with no eating facilities are exempt from Colorado state sales tax as food for home consumption, including multi-packs and catering or bulk orders, as l…
When I buy something at a shopping center that charges a Public Improvement Fee (PIF), is that PIF part of the price that gets sales-taxed?
Yes. A Public Improvement Fee (PIF) — a private fee a developer or landlord adds to purchases at certain shopping centers to fund parking, landscaping, and other on-site improvements — is part of the …
Are the computers, software, and related equipment a Tennessee manufacturer uses to run its production lines exempt from sales tax as industrial machinery?
Mostly yes for the systems that actually run the production lines. For a manufacturer, the computer hardware and software used to monitor and control production — line-optimization (MLO) and quality/s…
Does a prepaid wireless plan with unlimited voice minutes have to collect Colorado's prepaid wireless 911, 988, and TRS/telephone-disability-access charges?
No. Because the units (voice minutes) in an unlimited plan never decline with use in a known amount, the plan isn't 'prepaid wireless telecommunications service' under § 29-11-101(21), C.R.S., so the …
Which quality-assurance testing machines and supplies used by a Tennessee food manufacturer qualify for the industrial machinery exemption?
It depends on when the testing happens. For a manufacturer, equipment and supplies used to test the product during manufacturing are exempt: in-process testing equipment (metal detectors, fat analyzer…
Does an online marketplace facilitator have to remit Colorado's firearms and ammunition excise tax on guns and ammo sold by third-party sellers through its platform?
No. A marketplace facilitator that never takes title or possession of the goods is not the 'vendor' for Colorado's 6.5% firearms and ammunition excise tax. The third-party seller is the vendor and rem…
Is the equipment and supplies a Tennessee manufacturer uses to treat its incoming process water and its wastewater exempt from sales tax as pollution control facilities?
It depends on which side of the process the item is on. For a manufacturer, the equipment that treats the wastewater the plant discharges — equalization tanks, pumps, circulators, feed pumps, instrume…
Are factory-built (prefabricated/modular) home modules exempt from Colorado sales tax, and who owes tax — the manufacturer's suppliers, the builder, or the home buyer?
Mostly exempt. A Colorado maker of prefabricated/modular housing modules buys its materials tax-free under a wholesale/manufacturing exemption, and its sales of the finished modules are partially exem…
Which parts of a healthcare practice-management software suite are subject to Tennessee sales tax, and what happens when they are bundled into one price?
It depends on the product. Tennessee taxes remotely accessed software, so the 'Manager' electronic-health-record product is taxable. But 'Billing and Claims' (a billing-and-collection service the vend…
When a construction subcontractor fabricates and installs a staircase into a building, is its labor taxed, or only the materials it buys?
A construction subcontractor who buys materials to fabricate and install a staircase into a building is the consumer of those materials and owes Colorado sales or use tax on the materials it purchases…
If an event organizer charges a cancellation fee for a canceled event that would have included a hotel banquet hall and catered food, is that fee subject to Colorado sales or use tax?
No. A cancellation fee charged when an event — one that would have included a hotel banquet hall and catered food and drink — is canceled is not subject to Colorado state or state-administered local s…
Which freezing-plant machinery, equipment, and supplies qualify for Tennessee's industrial machinery exemption for a frozen-food manufacturer?
Mostly yes. For a frozen-food manufacturer, Tennessee's industrial machinery exemption covers the freezing system (freezers, compressors, evaporators, refrigerant/ammonia, chillers, piping/controls/va…
Does a company that runs electric-vehicle charging stations (and isn't a utility) have to charge Colorado sales tax on the fees customers pay to charge?
Generally no. Fees a non-utility operator charges customers to use electric-vehicle charging stations are not subject to Colorado state sales tax, because EV charging is a discrete, one-time sale rath…
When figuring Colorado's 10% residential energy storage tax credit, does the purchase price include the cost of the on-site generation (like solar panels) paired with the batteries, or only the storage system itself?
Only the storage system itself. Colorado's 10% residential energy storage credit is based on the purchase price of the storage system and its batteries (including batteries paired with on-site generat…
If my customer hires their own shipping company to pick up goods at my Colorado dock and deliver them out of state, is the sale sourced to my location or to the customer's?
The sale is sourced to where the customer actually receives the goods — not the seller's dock. When a buyer hires its own third-party carrier to pick up goods at the seller's Colorado location (an 'Ex…
Does a Tennessee private dining club have to charge sales tax on the membership dues and initiation fees it collects?
Yes. Dues and initiation fees paid to a members-only private dining club are subject to Tennessee sales tax. Because the club offers live entertainment, games, and activities, admission to that entert…
For Tennessee franchise and excise tax, where does a manufacturer source drop-shipment sales — to the third-party merchant it bills, or to the end customer who receives the goods?
To the end user. The Department advised that an out-of-state manufacturer selling through third-party merchants sources its sales to where the end customer is located for Tennessee franchise and excis…
If my utility passes through a municipal franchise fee on my gas or electric bill, is that fee subject to Colorado sales tax?
Yes. A municipal franchise fee — the charge a city imposes on a utility for using its streets and rights-of-way, often passed through to customers — is part of the taxable purchase price of commercial…
When a sign company makes and bolts an illuminated storefront sign to a building, is the sale and installation subject to Tennessee sales tax, or does the sign become real property?
No — the sign does not become real property. The Department ruled that an illuminated channel-letter sign bolted to a storefront remains tangible personal property, so the sign company's charge to mak…
Are the consulting, setup, and website fees a company charges to run an employee-rewards program taxable in Tennessee — and what about the transaction fees, merchandise, and gift cards?
Mostly not. The Department ruled that the consulting, startup, and website-design/configuration fees a company charges to set up and run an employee-recognition rewards program are NOT subject to Tenn…
If a customer won't sign a capital improvement certificate (Form ST-124) and asks to be charged tax, must the contractor collect sales tax on the installation work?
Yes. Without a timely, properly completed Form ST-124, the contractor must collect and remit sales tax on both the installed property and the installation charges. Because the contractor already paid …
Are a concrete-pumping company's charges to contractors subject to New York sales tax when its own crew operates the pump trucks?
Not when the job is a capital improvement. Because the company keeps dominion and control of the trucks and supplies the operators, it is providing a service, not renting equipment. Pumping concrete t…
Does an out-of-state seller whose products are sold and shipped through an online marketplace (and stored at a New York fulfillment center) have to register for and collect New York sales tax?
Generally no. The seller is a 'marketplace seller.' When the marketplace provider collects and remits New York sales tax on the sales it facilitates, and publicly commits to do so, the seller need not…
After a corporate 'F reorganization,' can the new successor company use the predecessor's Tennessee net operating losses and tax credits against its future franchise and excise tax?
Yes. The Department ruled that after an IRC § 368(a)(1)(F) 'F reorganization' — a mere change in a corporation's identity or form — the newly formed successor company may carry over and use the predec…
When a bank's subsidiary sells assets and is then moved from a first-tier to a second-tier position, are its sale transactions still included in the bank group's combined Tennessee franchise and excise return?
Yes — for the sales made while it was still in the group. The Department ruled that a bank-owned subsidiary's sale of two investments must be included in the bank group's combined Tennessee franchise …
Is the equipment a contractor rents for asbestos abatement and demolition exempt from sales tax when the job is a capital improvement to a New York State-owned building?
No. Equipment a contractor rents to perform asbestos abatement and demolition is a taxable purchase, even when the job is a capital improvement to a State-owned building. The equipment never becomes a…
Does the owner of a single-family vacation rental have to charge New York sales tax on the rent when he provides no housekeeping or linen service during the stay?
No. New York taxes occupancy only in a 'hotel,' and a building is a hotel only if it provides housekeeping, linen, or other customary hotel services. Because this owner offered none of those during a …
Are the weekly per-employee fees a company charges to train, supervise, and run payroll for a hotel's own housekeeping staff subject to New York sales tax?
No. Because the hotel's own employees perform the cleaning and the company only supervises them and handles payroll as the hotel's agent, the company is not performing a taxable cleaning or maintenanc…
Does New York sales tax apply to the 'buyer's premium' (the commission an auction house charges the winning bidder) on top of the hammer price?
Yes. New York treats the buyer's premium as part of the sales price of the auctioned property, so the whole charge, hammer price plus commission, is a taxable receipt. A vendor cannot deduct its own s…
Can a manufacturer sell uninstalled building panels (materials) tax-free if the customer hands over a Form ST-124 Certificate of Capital Improvement?
No. A sale of uninstalled panels is a taxable retail sale of tangible personal property under Tax Law § 1105(a), and a Form ST-124 (Certificate of Capital Improvement) cannot be used to buy building m…
Are the fees from a web-based job search and posting platform taxable as software, information services, or are they exempt advertising?
Not taxable. The platform is free to the customers who embed it (no consideration = no taxable sale of software), and the pay-per-click and job-posting fees the operator earns are charges for an adver…
Does an out-of-state online retailer become a New York sales-tax vendor just by storing inventory at, and buying fulfillment services from, an unaffiliated fulfillment company in New York?
No. If the retailer isn't otherwise a vendor, buying fulfillment services from an unaffiliated provider and storing inventory at that provider's New York warehouses does NOT make it a vendor required …
For an event planner, which purchases can be bought tax-free for resale, when does providing food make the whole event a taxable catering charge, and what happens if it arranges catering as the customer's agent?
It depends on food and agency. At no-food events, the planner can buy/rent TPP and taxable services for resale (with Form ST-120) when separately stated and proportionate, and collect tax on the resal…
Are hosted, web-accessed investment, trade, and compliance management platforms taxable as prewritten software, or nontaxable information services?
Taxable. The firm's three hosted investment-management products are taxable prewritten software: clients pay annual fees for the right to use, control, and direct software platforms for risk analysis,…
For a multi-level-marketing company, is a distributor's annual 'active status' renewal fee taxable, and what about fees for a mobile app sold alone or bundled with a dashboard and website?
The $25 annual renewal fee for 'active' distributor status is NOT taxable — it buys the right to keep distributing products and earn a discount, not taxable property or services. But the mobile app fe…
Are fees for outdoor adult and children's health and nature classes held in New York City public parks subject to sales tax?
No. Outdoor health and nature classes taught in public parks are not subject to New York State sales tax (teaching such classes is not an enumerated taxable service), and they are not subject to New Y…
Is a service that disassembles, removes, and disposes of a company's used office furniture during a move or remodel subject to New York sales tax?
Yes. Disassembling, removing, and disposing of used office furniture from a New York building is taxable as maintaining/servicing real property under Tax Law § 1105(c)(5). Trash and garbage removal is…
If a Colorado manufacturer sells goods to the U.S. Government for delivery out of state but stores them in Colorado until the government is ready, are those sales sourced to Colorado for income tax apportionment?
No. The receipts are not Colorado receipts. Goods sold to the U.S. Government are sourced to where they're delivered or shipped to the purchaser — outside Colorado — regardless of f.o.b. point or othe…
Can a contractor expanding a municipal water-treatment plant buy the treatment piping exempt from Tennessee sales and use tax as industrial machinery?
Yes — the process piping is exempt. A municipal water utility that draws river water and treats it into drinking water sold to customers is a 'manufacturer' for Tennessee tax purposes (water is tangib…
Is installing a permanent gutter protection (gutter guard) system onto a house's existing gutters a tax-exempt capital improvement?
Yes. Installing a permanent gutter protection system onto existing gutters is a capital improvement and not subject to sales tax. It meets all three prongs of Tax Law § 1101(b)(9)(i): it prolongs the …
Are paid 'discount memberships' that let customers buy at a discount subject to New York sales tax, and what happens when an exempt organization buys one?
A paid membership that entitles the holder to buy goods or services at a discount is generally taxable, because it's treated as a prepayment for discounted property or services. But when the buyer is …
Is replacing a hot water hydronic coil and altering the ductwork in a heating system a tax-exempt capital improvement, or a taxable real-property repair?
Capital improvement — not taxable to the customer. Although replacing a heating-system coil is normally a taxable repair of real property, here the coil replacement required fabricating new ductwork a…
Are admission fees to an escape room or 'mystery room' interactive game subject to New York sales tax?
Yes. Charges to enter and use an escape room or mystery room to play an interactive game are taxable admissions to a place of amusement under Tax Law § 1105(f)(1). An employee playing a part in charac…
Does a pharmacy charge New York sales tax on human prescription drugs (like allergy medicine) that are dispensed for use on an animal?
It depends on the buyer and the animal. Human-use prescription medication dispensed for an animal is EXEMPT only when sold to a licensed veterinarian, or a farm-production-eligible person, for use on …
Does a 35-foot motor coach qualify for New York's sales-tax omnibus exemption if the operator holds a certificate of authority?
No. New York's omnibus exemption (Tax Law § 1115(a)(32)) requires the bus to weigh at least 26,000 pounds AND measure at least 40 feet long, and be used to transport persons for hire under a DOT/feder…
For a service delivered to a New York customer but invoiced to an out-of-state address, does New York sales tax follow the delivery location or the billing address?
The delivery location. New York sales tax is a destination tax: if a seller has nexus and delivers a taxable service in New York, it must collect tax at the combined State and local rate where deliver…
Does a New York jeweler have to charge sales tax on repairing, cleaning, resizing, or engraving customers' own jewelry and watches?
Yes. Receipts from repairing, cleaning, polishing, resizing, gemstone setting, battery and crystal replacement, and similar work on a customer's own jewelry or watch are taxable as servicing/repairing…
Are fees a website charges professionals to be listed in its online directory taxable as an information service, or are they exempt advertising?
Not taxable. Fees charged to representatives for listing their profile and contact information in an online directory are excluded from New York sales tax as advertising services, not a taxable inform…
Is propane delivered to a New York homeowner's tanks — for a detached garage, the house, and a back-up generator — exempt from sales tax if no business is run on the property?
Partly. Propane used for residential purposes — heating the home, heating a detached garage with no business activity, and running a back-up generator for the home — qualifies for New York's zero perc…
Is a powdered coffee-based beverage mix, sold unheated in grocery stores and online to be mixed with water at home, subject to New York sales tax?
Generally no. A coffee-based beverage mix sold unheated for off-premises consumption — in grocery stores or online — is exempt food and beverage under Tax Law § 1115(a)(1); it is not a soda, fountain …
If a New York marina buys floating cement docks and installs them with its own employees, is the purchase a tax-exempt capital improvement or taxable tangible personal property?
Taxable. Because the marina bought the floating cement docks uninstalled and installed them using its own employees, it purchased only tangible personal property — not a capital-improvement installati…
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