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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For an equipment lease, are the purchase option, insurance premiums, documentation fees, late-payment fees, and reimbursed personal property taxes subject to Colorado sales/use tax?
Mixed, and this amended (2013) letter REVERSED the original 2008 conclusion on late fees. Leases of tangible personal property are taxable (and the purchase-option price—fair-market or nominal—is taxa…
Did Illinois include tire disposal fees and statutory tire user fees in a retailer's taxable gross receipts?
The two fees were treated differently. A retailer's tire disposal fee was a cost of doing business and could not be deducted from taxable gross receipts. The statutory tire user fee was specifically e…
Do S corporations with privilege-tax subsidiaries still add back Schedule E losses in Kansas?
Kansas Notice 13-04 explains that Section 3 of 2013 House Substitute for Senate Bill 83 amended the 2012 business-loss addition modification in K.S.A. 79-32,117(b)(xix). That 2012 provision (enacted b…
Did Kansas repeal the 2012 partner and S corporation basis rules?
Kansas Notice 13-02 explains that House Substitute for Senate Bill 83 (2013), Section 19, repealed K.S.A. 79-32,117n, the basis provision enacted by Section 37 of 2012 House Bill 2117. That 2012 provi…
Could a worker claim Virginia's disability-income subtraction while performing competitive paid work?
No. Virginia denied the subtraction for 2008-2010 because the taxpayer regularly performed competitive service-industry work at minimum wage, which constituted substantial gainful activity. The fact t…
Is a single-price, integrated portfolio and risk-management support service for investment managers subject to NY sales tax?
No, the integrated service itself is not taxable. Even though several components viewed alone would be taxable (intrastate telecom, the prewritten-software web interface, and risk-analysis/calculator …
Would Illinois accept an MTC multistate resale certificate that omitted the description of items being purchased?
No, not as submitted. Illinois accepted the MTC Uniform Sales and Use Tax Certificate—Multijurisdictional as a resale certificate only when it contained all information required by 86 Ill. Adm. Code 1…
How can taxpayers check whether an older South Carolina advisory opinion was modified or superseded (per SC IL #13-10)?
Use the citator attached to SC Information Letter #13-10. It helps you determine what effect newer South Carolina advisory opinions have on previously published ones — whether an opinion was modified,…
Does a charity have to charge sales tax on dinner tickets at its annual fundraiser, and how do donations and the $25,000 limit factor in?
A charity's fundraiser sales are exempt as an 'occasional sale' only if it stays under BOTH limits — no more than 12 days of sales in the year AND no more than $25,000 in NET proceeds used for a chari…
Are sutures and IV catheters used in a hospital procedure exempt from Colorado sales tax, and does it matter whether they leave with the patient?
It depends on whether the item leaves with the patient. Colorado exempts nonprescription drugs or materials furnished by a licensed provider as part of professional services to a patient (§ 39-26-717(…
Is a plumber doing sewer inspection, clean-out, and thawing a taxable contractor, does itemizing equipment make it a taxable rental, and when are local taxes due?
Mostly not — but only general guidance was given. (1) A plumber is a 'contractor' (with lump-sum vs. time-and-material tax rules, SR-10) only when incorporating tangible personal property INTO real pr…
If an event company rents equipment from a lessor and hires its own contractors to operate it, can it buy the rental tax-free for resale — or does it owe tax as the user?
It turns on who operates the equipment. A production-event company rents stage/sound/lighting gear from a lessor and either hires its own third-party contractors to run it or lets the client's employe…
Does an out-of-state C corporation that only solicits sales orders for manufacturers — a service — have to file a Colorado corporate income tax return if it has a Colorado employee?
Likely yes, if it has Colorado nexus. An out-of-state C corporation must file a Colorado corporate income tax return if it has substantial nexus — property over $50,000, payroll over $50,000, sales ov…
Are a supplier's implementation, web-hosting, management, and payment-processing fees for on-site vending machines taxable as part of the product sales?
Likely taxable — the Department's general view is that these 'service' fees are inseparable from the taxable product sales and ride into the tax base. A supplier of fasteners and industrial goods put …
In a Colorado drop-shipment, can the seller accept an out-of-state resale or exemption certificate, whose certificate counts, and what form is used?
Yes — Colorado accepts out-of-state documentation in drop shipments, with conditions. A wholesaler may accept a buyer's sales tax license issued by another state to document a resale exemption (using …
What historical rules did SC Revenue Ruling 13-2 give for purchases by government employees, diplomats, and nonprofit employees?
Under this superseded ruling, federal purchases were exempt when the federal government was directly billed, used a centrally billed card, or paid by federal check; an employee-billed purchase remaine…
Were a hospital patient-monitoring and communications system's equipment-and-service charges taxable in South Carolina?
Yes. The Department treated the bundled hospital monitoring and communications system as a taxable retail lease of tangible personal property because the equipment was the transaction's true object. T…
Could Virginia collect a corporation's unpaid income tax personally from its president after an asset sale?
Yes. Virginia upheld the converted assessment against the corporation's president because he knew the asset sale would produce a substantial taxable gain, had authority over the transaction, and faile…
Which solar-farm equipment, installation, and warranties are exempt from NY sales tax when the facility generates electricity for sale?
Equipment used directly and predominantly to generate electricity for sale is exempt under Tax Law 1115(a)(12)/1105-B, and the production process ends at the inverter. Exempt: solar panels, racks, com…
New York Advisory Opinion TSB-A-13(6)C: Was an out-of-state remote seller whose employees made limited-purpose trips to New York (inspirational shopping, trade shows, vendor meetings) doing business and subject to Article 9-A franchise tax?
No. On the stated facts, the out-of-state catalog and Internet seller was not doing business in New York, because its employees' limited-purpose trips for 'inspirational shopping,' attending trade sho…
Does a scaffolding company charge sales tax on a lump-sum to install, rent, and dismantle temporary pedestrian walkways used with a capital improvement?
It depends on whether the walkway is a 'temporary facility' at a construction site that is a necessary prerequisite to constructing a capital improvement to real property. If it is, the lump-sum charg…
If someone finances another business's purchases with his credit card, is he a person required to collect NY sales tax on those purchases?
No. A person who merely finances another business's purchases -- by letting it use his credit card, with the business signing a promissory note to repay him with interest -- is acting as a lender, not…
My nonprofit runs a licensed special-education school as one part of a larger chapter that also does other developmental-disability work. Is the whole chapter exempt from MCTMT, or just the school employees?
Only partially exempt -- the exemption applies per-employee, not per-entity. Effective for calendar quarters beginning April 1, 2012, Tax Law § 800(b)(4) exempts "eligible educational institutions" fr…
For New York's '548-day rule,' do the days a taxpayer's minor child spends in New York at a legally separated spouse's home count against the taxpayer, and what about scheduled visitation days?
No - once the taxpayer is legally separated under a written agreement giving the spouse physical custody, the child's ordinary time at the spouse's New York residence does not count toward the 548-day…
Were process-serving and skip-trace charges subject to Florida sales tax when billed to law-firm clients?
Freestanding or separately stated process-serving charges were not taxable. Skip-trace and locate services were taxable investigative services, and failing to separate them from process service made t…
Could a small roadside seller avoid penalty and interest because she did not know her firewood, produce, crafts, and babysitting receipts were taxable?
No. Pauline Gee sold firewood, fruit, vegetables, arts and crafts, and occasional babysitting services in 2008 and 2009. She reported Schedule C income federally but had no CRS number, filed no gross …
Which server-training programs does South Carolina recognize as a mitigating factor for alcohol-licensing penalties (per SC IL #13-7)?
SC Information Letter #13-7 lists the alcohol server/seller training programs the Department recognizes as a mitigating circumstance when it assesses penalties for beer, wine, and distilled-spirits vi…
Did replacing a retiree's pension payments with an annuity make the payments taxable in Illinois?
Possibly. Section 203(a)(2)(F) covered amounts included federally under specified retirement provisions, including Section 403(a) annuities purchased by qualifying employee trusts. The plan's purchase…
What made tuition at an Illinois school eligible for the education expense credit?
The school had to be a public or nonpublic Illinois elementary or secondary school, comply with Title VI of the Civil Rights Act of 1964, and provide attendance sufficient to satisfy Illinois's mandat…
Did an ambiguous letter saying assessments were sent in error and asking for confirmation of zero tax count as a timely protest, and did it prove claimed business losses?
The letter counted as a timely protest, but the taxpayer still lost on the merits. Collin Sanchez wrote within 30 days that the assessments were sent in error and asked the Department to confirm that …
Is a lump-sum settlement of SERP and deferred compensation plan benefits that a nonresident received after his former employer's bankruptcy exempt from New York income tax?
Yes. Federal law bars states from taxing a nonresident's retirement income, and a settlement payment takes on the same tax character as the payments it replaces, so the Department ruled that JPMorgan …
Could the post-merger Virginia group switch from combined to consolidated corporate returns?
No. Virginia held that the merger-of-equals election policy did not apply because one side had only a single Virginia-taxable subsidiary, not an affiliated Virginia group. That subsidiary joined the e…
Were removable data-center equipment and claimed application switches exempt from local BTPP tax?
No. Virginia upheld local BTPP tax on backup generators, modular data-center equipment, transformers, and switchgear because the lease treated them as removable property owned by the operator. The ope…
Were medical gases and argon used in cryosurgery exempt from Virginia sales tax?
Qualifying prescription medical gases could be sold exempt to specified licensed practitioners and medical facilities with supporting documentation. Argon used in cryosurgery was taxable because the F…
Was Illinois's January 2013 moist-snuff tax 30 cents per ounce even though 15% of the cigarette-package tax equaled 29.7 cents?
Yes. IDOR read 35 ILCS 143/10-10 as expressly setting the January 1, 2013 moist-snuff tax at $0.30 per ounce. It treated the separate 15%-of-cigarette-tax language as a cap on future moist-snuff rate …
Were prepaid wireless electronic PINs taxed as telephone service or as tangible personal property, and did the 9-1-1 surcharge also apply?
A qualifying prepaid telephone calling arrangement was treated as tangible personal property subject to Illinois Retailers' Occupation and Use Taxes plus applicable local occupation taxes. A prepaid s…
Did IDOR decide whether the software license attached to ST 13-0015-GIL qualified for Illinois's canned-software exemption?
No. IDOR declined to issue a PLR or decide whether the attached agreement met the exemption, saying 86 Ill. Adm. Code 130.1935 was clear enough for licensors and licensees to apply. It stated generall…
How did Illinois classify food, medicines, grooming products, diabetes supplies, propane exchanges, and coupon books for sales tax?
IDOR did not classify every listed product. It explained that qualifying food, drugs, medicines, and medical appliances received the lower 2013 state rate, while grooming and hygiene products used the…
Could an Illinois-based IFTA carrier destroy original fuel receipts after creating electronic images for tax records?
Yes, generally. Electronic imaging of original IFTA and motor-fuel records was acceptable if the records were complete, supported the quarterly return, and remained accessible. During an audit, the ca…
Could a contractor remove untaxed purchases and penalties from its Virginia use-tax audit?
Not on the records submitted. Virginia found that the contractor's proof did not reconcile to four audited purchases, but allowed 45 days for corrected documentation. It upheld the compliance penalty …
Did the taxpayer prove that she had abandoned Virginia domicile during 2008?
Yes. Virginia abated the 2008 assessment because the taxpayer's employment, resident income-tax filing, voter registration, and other evidence showed that she established domicile in another state and…
New York Advisory Opinion TSB-A-13(5)C / (4)I: How is a 'qualifying census tract' for the historic rehabilitation credit determined when the 2010 census lacks median-family-income data?
A qualifying census tract for the historic rehabilitation credit is determined using a combination of the 2000 federal census and the most recent American Community Survey, because the 2010 census lac…
Was an exempt organization's Illinois E-number letter enough for its contractor to buy floor-covering materials tax-free?
No. A contractor incorporating materials into real estate owned by an exempt organization or government entity could buy them tax-free, but it had to give the supplier both the owner's active E-number…
Could an Illinois resident subtract pension income paid by a foreign employer's retirement plan?
No, based on the facts presented. Illinois begins with federal adjusted gross income and permits only expressly authorized modifications. The foreign employer's plan did not appear to fall within the …
Was a pension earned from a private foreign employer excludable from Illinois income?
No. The wife's pension from a private employer in another country was included in federal income, and the plan did not appear to fit any federal retirement provision listed in Section 203(a)(2)(F). Be…
Could a highway contractor buy taxable cleaning and security services tax-free for resale to its state customer?
Only after fixing the documentation. Future purchases could qualify for resale if contracts named the single state customer, both invoice levels separately stated the services, and resale records comp…
Did equipment used after treated water entered storage qualify for Virginia's processing exemption?
No. Virginia held that water became a finished product when it left processing and entered the storage tank. Equipment and testing used during later transmission to customers were taxable distribution…
Did tax paid by a REIT lessor when buying hotel property eliminate tax on leases to hotel operators?
No. Virginia held that leases of the hotel furniture, fixtures, and equipment were taxable and that the tax was the lessees' legal debt, even though the lessor claimed it paid tax when buying the prop…
Did a tiered partnership need alternative-apportionment permission to use the Illinois amounts reported on its partnership schedules?
Not if the LLC only meant to apply Section 305 to the Illinois amounts reported by its lower-tier partnerships on Schedules K-1-P; no Section 304(f) petition was needed for that statutory method. If i…
Did a tiered limited partnership need alternative-apportionment permission to use the Illinois amounts on its partnership schedules?
Not if the partnership only meant to apply Section 305 to the Illinois amounts reported by its lower-tier partnerships on Schedules K-1-P; that statutory method did not require a Section 304(f) petiti…
Could a Virginia retailer remove audited assets when Virginia or another state's tax was already paid?
Yes. Virginia reviewed the retailer's invoices and removed ten amounts from the Asset Exceptions list because Virginia use tax or another state's similar sales tax had already been paid. The audit wou…
Was the entire portable-toilet rental and servicing charge taxable in Virginia?
Yes. Virginia treated the portable toilet as the true object and waste-removal service as incidental, making the entire charge taxable. The administrative appeal was also filed two days after the 90-d…
Could two one-time lead-lined drywall purchases be projected across the full audit period?
No for this audit period. Virginia found that the two untaxed lead-lined drywall purchases were isolated specialty purchases outside the contractor's normal business. The contractor accepted and paid …
Could an online seller exclude charges labeled shipping and handling from Virginia sales tax?
Only with adequate proof that the charges were separately stated transportation-out and contained no handling. The seller's spreadsheet labeled them shipping and handling, and its sample invoice fell …
Could an online seller exclude charges labeled shipping and handling from Virginia sales tax?
Only with adequate proof that the charges were separately stated transportation-out and contained no handling. The seller's spreadsheet labeled them shipping and handling, and its sample invoice fell …
Did overseas foreign-service assignments prove that a couple had ended Virginia domicile?
Not on the facts presented. Virginia said the couple likely became Virginia domiciliaries during 2004-2007. Although they took substantial steps to abandon Virginia when moving overseas, they showed n…
Could an auto-parts seller keep submitting exemption certificates after a four-year audit review?
No. Virginia upheld the remaining assessment after the seller received at least six information requests over four years. Certificates were missing, incomplete, dated after the sales, or did not cover…
Did Virginia's temporary-storage exemption cover materials fabricated here for an out-of-state government project?
No. The subcontractor was the taxable user and consumer of materials it fabricated in Virginia into property installed in an out-of-state building. The materials were not merely stored in Virginia pen…
Could a hotel replace Virginia's sample assessment with a detailed audit of one customer's sales?
No. Virginia upheld the sample because the customer's recurring lodging purchases were taxable and formed a consistent part of the hotel's normal business, not isolated transactions. The customer was …
Which nonprescription drugs and proprietary medicines qualified for Virginia's sales-tax exemption?
A product qualified when it was a nonprescription drug or proprietary medicine, was sold for internal or topical use, and was intended to cure, mitigate, treat, or prevent human disease. Cosmetics, gr…
How these rulings are useful
- See how the rule applies: A letter ruling shows how a state revenue department actually applied the tax law to a specific business and set of facts.
- Plan with confidence: Find a ruling with facts close to yours before you charge, remit, or claim an exemption.
- Binding only on the requester: A ruling is binding on the department only for the taxpayer who asked. It is persuasive, not a substitute for your own ruling or professional advice.
- Research across states: Compare how different states treat the same issue, from SaaS and food exemptions to nexus and contractor purchases.