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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Were Illinois public school districts exempt from state Telecommunications Excise Tax because they were local-government entities?
No. The Telecommunications Excise Tax Act's exemptions were limited to the State and federal governments, state universities created by statute, and specified wholly owned corporate-subsidiary purchas…
Did prototype production make the taxpayer a manufacturer exempt from local BPOL tax?
Not on the record presented. Production for end use can be manufacturing, but prototypes made to advance research and development are business services. After inspecting facilities, contracts, and inv…
Were welding fabrication and repair-part charges taxable even when the welder paid suppliers tax?
Yes. Welding that changed property into a different form was taxable fabrication, and separately stated repair parts were taxable retail sales; lump-sum repair charges including parts were fully taxab…
Who bore the tax when a purchased Virginia land-preservation credit was later reduced?
The credit purchasers remained liable to Virginia after the donor and Department agreed to a lower conservation-easement value. Their good-faith purchase and private indemnification agreement did not …
Was a former wife personally liable for gross receipts tax assessed against her ex-husband's D & M Recovery sole proprietorship when she never worked in or controlled it?
No. D & M Recovery was Dennis Fluitt's automobile-repossession sole proprietorship. Mariah Affentranger never worked for it, managed it, reviewed its finances or tax filings, or caused it to conduct b…
Could a solid-waste consultant deduct management and operating services resold by a governmental authority as taxable garbage-collection services even though the services were not identical?
Yes. Southern Oasis effectively operated the North Central Solid Waste Authority: it managed employees, budgets, billing, collections, equipment, environmental compliance, and daily garbage operations…
How are South Carolina counties ranked for the job tax credit for 2013, and which counties qualify for the fee-in-lieu and tax moratorium (per SC IL #13-6)?
SC Information Letter #13-6 publishes South Carolina's county rankings for the job tax credit for 2013, together with the counties that qualify for a reduced minimum investment under the fee in lieu o…
Could a part-year Virginia couple claim credit for tax on wages excluded from Virginia income?
No. The wife earned and was taxed on the wages while she was a resident of the other state, so Virginia's part-year rule barred the credit for that period. The couple also excluded those wages from Vi…
What Virginia tax interest rates applied during the second quarter of 2013?
Virginia's second-quarter 2013 rates remained 5% for tax underpayments and 5% for overpayments. The reduced rate for a qualifying assessment under administrative appeal was 0% after nine months until …
When could two bone-repair medical devices be sold exempt from Virginia sales tax?
Device B could be sold exempt when purchased specifically for an identified patient's use, but bulk purchases were taxable. Device A required FDA Class III approval before receiving the same treatment…
Did a 2012 retailer classification automatically entitle an equipment broker to earlier BPOL refunds?
No automatic refund followed. Claims before 2009 were time-barred. For 2009-2011, Virginia remanded because both sides relied mainly on the taxpayer's self-descriptions rather than evidence of its act…
New York Advisory Opinion TSB-A-13(4)C: Is an out-of-state company whose New York independent contractors hold consigned inventory and make sales and deliveries subject to franchise tax, or is it protected by the fulfillment-services exclusion or Public Law 86-272?
Yes. The out-of-state company is subject to franchise tax, because consigned inventory it still owns in New York gives it nexus, and neither the fulfillment-services exclusion nor Public Law 86-272 pr…
What is South Carolina's tax interest rate for the period ending June 30, 2013 (per SC IL #13-5)?
3%. SC Information Letter #13-5 sets South Carolina's interest rate on tax underpayments and overpayments at 3% for the period October 1, 2011 through June 30, 2013. Interest is compounded daily, exce…
Could spouses claim $100,000 of land-preservation credit when only the husband donated the easement?
No. Only the husband appeared on the easement deed and credit application, so only he earned the land-preservation credit. Marital funds did not make the wife a donor, and no credit had been transferr…
Could New Mexico estimate a smoke-shop owner's Tobacco Products Tax from a comparable retailer when he failed to provide adequate purchase records?
Yes. Hamza Benderra admitted that he sold pipe tobacco and was its first purchaser but had not paid Tobacco Products Tax. Because he repeatedly failed to provide adequate records, the Department reaso…
Are membership dues for a business-networking / referral association subject to NY sales tax as social or athletic club dues?
No. NY taxes dues only for a social or athletic club (Tax Law 1105(f)(2)). This association is a 'club' (its members control admission and activities), but it is not an athletic club (it has no sports…
New York Advisory Opinion TSB-A-13(3)C: Does a U.S. bank holding company stay taxed under Article 9-A (rather than Article 32) after a reorganization and the sale of its banking subsidiary, under the Gramm-Leach-Bliley transition rules?
Yes. Holdco continues to be taxed under Article 9-A. A bank holding company that first registered and elected financial-holding-company status after January 1, 2000 cannot be forced into Article 32 co…
How could a Virginia manufacturer average full-time employees for the single-sales-factor election?
A manufacturer could use a mean, median, or mode based on employee counts that represent the entire taxable year, and it could change methods from year to year. It could not use only the last day's he…
Did Louisiana Revenue Ruling 13-003 exclude repair parts for leased or rented equipment from sales tax?
No. The ruling said repair parts and maintenance materials did not qualify, whether installed by the lessor or a repair shop. The Department suspended its implementation effective July 18, 2013.
How is the federal credit for prior year minimum tax recomputed to determine the Nebraska minimum tax credit on a 2012 fiduciary (estate or trust) return?
Recompute the federal prior-year minimum tax credit for the estate or trust using Nebraska's adjustments, then apply a 29.6% factor. Revenue Ruling 23-12-2 tells fiduciaries filing a 2012 Nebraska Fid…
How is the federal alternative minimum tax recomputed to determine the Nebraska minimum tax on a 2012 fiduciary (estate or trust) income tax return?
Recompute the federal fiduciary AMT using Nebraska's adjustments. Revenue Ruling 23-12-1 tells estates and trusts filing a 2012 Nebraska Fiduciary Income Tax Return (Form 1041N) to recalculate the alt…
When does a professional trapeze artist have to collect NY sales tax -- on performance fees, instruction, or admissions?
Only when she performs directly for the public and charges an admission. Being hired for a fee -- to instruct aerial skills, to perform at events booked by event planners or private hosts, or as a sub…
Will selling a minority (up to 49%) ownership stake in a Qualified Empire Zone Enterprise LLC to an outside investor cause it to lose its QEZE tax credits?
No. New York concluded that transferring no more than a 49% ownership interest in Petitioner to an unrelated third party will not cause a loss of Qualified Empire Zone Enterprise (QEZE) tax benefits, …
When a contractor builds and runs a city-owned landfill in Tennessee, can it claim the sales-tax pollution-control credit, and which of its purchases qualify for the industrial-machinery exemption?
It splits. The landfill operator gets NO pollution-control credit, but SOME of its purchases qualify for the industrial-machinery exemption. (1) The pollution-control credit (Tenn. Code Ann. § 67-6-34…
Does Georgia use tax apply when a pharmaceutical company stores prescription-drug samples in Georgia and gives them to medical providers?
No, for samples that were lawfully dispensable only by prescription for treating natural persons. The exemption covered use as well as sale, so Georgia storage and distribution of qualifying samples w…
Does leased quality-control equipment qualify for Georgia's manufacturing exemption when it is also used for research and development?
Yes. The quality-control equipment tested incoming industrial materials, work in process, or finished goods and was necessary and integral to manufacturing. Because the company represented that manufa…
When can a Louisiana nonprofit make tax-free sales at a fundraising event?
A qualifying nonprofit event could be exempt with Department approval when proceeds furthered the nonprofit purpose and no promoter profited from the event. Vendor-led or profit-sharing events remaine…
How much 2007 New Mexico income tax did Steve and Sheila Lambert owe after omitting a South Dakota retirement distribution and interest income, and did their misunderstanding remove the penalty?
The omitted income was taxable, but the assessment overstated principal by $120. As full-year New Mexico residents, the Lamberts had to report $35,975.78 withdrawn from the South Dakota retirement sys…
Were a data center's cross-connect, peering, and managed-router services subject to Florida communications services tax?
Cross-connect and peering charges were not subject to CST because the operator supplied unlit infrastructure and monitoring, not transmission. Managed routing was exempt only when bought to provide In…
Was a customized marketing package taxable because it included surveys, campaigns, website work, DVDs, CDs, booklets, and a DVD player?
No. Virginia found the athletic facility's true object was a customized strategy to attract and retain members, not the DVDs, CDs, booklets, DVD player, or other property included in the package. The …
Was an automotive company's purchase of substantially all assets from three related store operators exempt as an occasional sale?
Yes. The asset purchase agreement transferred all or substantially all assets of the sellers' automotive-store businesses, including equipment, inventory, records, customer lists, intangible rights, a…
Who owed Virginia local machinery-and-tools tax when idle recycling equipment was sold and returned to use midyear?
The buyer owed machinery-and-tools tax for the year because it owned the previously idle equipment and returned it to service in July; the equipment was taxable as though in use on tax day. The county…
Could a contractor use an exempt end user's E-number alone to buy construction materials tax-free in Illinois?
No. A contractor incorporating materials into real estate owned by an exempt organization or government entity could make a tax-free purchase only by giving the supplier the owner's active E-number an…
For Virginia machinery-and-tools tax, whose cost is the 'original total capitalized cost' after used equipment is purchased?
The original total capitalized cost is the amount capitalized by the owner that first bought the machinery new, not a later purchaser's lower acquisition cost. A locality must consider a bona fide ind…
How did Virginia's move to January 2, 2013 federal conformity affect 2012 Virginia income tax returns?
Virginia generally conformed 2012 returns to federal law through January 2, 2013, including the American Taxpayer Relief Act and enhanced federal earned-income-tax-credit rules. Taxpayers still had to…
Could an education consultant deduct services sold for resale to a Colorado contractor without an NTTC, and could penalty be removed when a Department employee had said the certificate was unnecessary?
The tax deduction was denied, but the penalty was abated. William Wanker's consulting services for Celero could potentially have qualified as services sold for resale, but Section 7-9-48 required Cele…
Could a New Mexico construction contractor defeat gross receipts tax assessments based on Schedule C mismatches by presenting purchase receipts, offering no explanation for the federal-state differences, and producing no NTTCs?
No. Donald Coleman reported $4,781 more receipts federally than to New Mexico for 2005 and $4,421 more for 2006. He presented no evidence showing whether those customer receipts were for goods or serv…
We're a free association library, a 501(c)(3) nonprofit chartered by the state, exempt from real property tax and sales tax, and primarily funded by our school district's tax levy. We took out a construction loan to renovate our historic building. Does our public-service mission and public funding make our mortgage exempt from mortgage recording tax too?
No, mortgage recording tax IS due. The petitioner is a free association library chartered and registered by the state Education Department since 1957, founded by a 1912 deed of trust, serving all resi…
How is the federal credit for prior year minimum tax recomputed to determine the Nebraska minimum tax credit on a 2012 individual income tax return?
Recompute the federal prior-year minimum tax credit with Nebraska's adjustments, then apply a 29.6% factor. Revenue Ruling 22-12-2 tells 2012 individual filers to recalculate the federal credit for pr…
How is the federal alternative minimum tax recomputed to determine the Nebraska minimum tax on a 2012 individual income tax return?
Recompute the federal AMT using Nebraska's adjustments. Revenue Ruling 22-12-1 tells 2012 individual filers to recalculate the alternative minimum tax (AMT) from their federal return (Form 6251, or th…
Is an employee wellness program -- web portal, health education, biometric assessments, and advice -- subject to NY sales tax?
No. A company that sells employers a wellness program for their employees -- combining an online portal with health/nutrition/exercise education and tracking, annual biometric health assessments, and …
Was the purchase of all interests in a real-estate LLC subject to documentary stamp tax under Florida's conduit-entity rules?
No. The older properties were acquired before the conduit-entity law, and the later property's deed paid documentary stamp tax on full consideration. The LLC therefore was not a conduit entity when it…
Does an out-of-state gift-code issuer (or its affiliated online retailers) have to register to collect Utah sales tax just because unrelated third-party retail stores in Utah sell its gift codes to consumers?
No. The Utah State Tax Commission reaffirmed (updating its own 2010 PLR 09-024 after a 2012 change to the affiliate-nexus statute) that selling gift codes isn't a taxable sale at all — a gift code is …
Does annual attendance at a Utah film festival or trade show, without sales activity, create Utah sales tax or corporate income tax nexus for an out-of-state company or its affiliated retailers?
No, on all counts. Annual attendance at a single Utah trade show or film festival for less than two weeks, limited to networking and relationship-building with no sales negotiated or contracts execute…
Was an interactive telephone disease-management program taxable as communications or exempt as data processing in South Carolina?
No. On the stated facts, charges to healthcare providers for the interactive telephone disease-management program were nontaxable data processing, not taxable communications. Patients supplied respons…
Are tear/serum osmolarity testing modules exempt from Colorado sales tax as 'blood and urine testing kits and materials'?
No — they're taxable. Colorado exempts the sale of 'blood and urine' testing kits and materials (§ 39-26-717(d)), but the Department concluded that tear/serum osmolarity testing modules (such as TearL…
Can a Colorado special district levy its sales tax on natural gas and electricity that a business buys for industrial/manufacturing use?
No. Natural gas and electricity bought for manufacturing and other industrial processes are exempt from Colorado state sales and use tax (§ 39-26-102(21)), and the Department's special districts follo…
Are charges for renting equipment, for the on-site labor of an operator who runs it, and for chemicals used with it subject to Colorado sales or use tax?
It depends on how the deal is structured — and the Department could only give general guidance, not a determination. Colorado taxes the rental of tangible personal property (like motors and tooling), …
If a Colorado customer pays sales tax and later provides an exemption certificate, how and when can the seller refund the tax — and can the customer force the seller to do it?
Yes, with limits. A seller that collected Colorado sales tax because the buyer didn't show an exemption certificate at the time of sale may later refund the tax once the buyer provides a valid certifi…
Did IDOR classify a carrier's prepaid home-phone plans as taxable prepaid calling arrangements instead of telecommunications services?
IDOR did not decide whether the carrier's plans met the definition. It explained that qualifying prepaid telephone calling arrangements were treated as tangible personal property subject to Retailers'…
How did Illinois tax computer servers leased for 24 months with a $1 purchase option and then rented to another customer?
The upstream 24-month contract's $1 purchase option generally made it a conditional sale. The lessor-retailer owed Retailers' Occupation Tax as installment payments were received, and a buyer purchasi…
What records did an Illinois retailer need to support the enterprise-zone building-materials exemption?
The retailer needed two records: a Certificate of Eligibility for Sales Tax Exemption from the enterprise-zone administrator and a purchaser certification identifying the project, zone, materials, pur…
Did a Florida trust become a Virginia resident trust because one of two co-trustees lived in Virginia?
No. The trust was created and governed in Florida, owned no Virginia property, and was administered by two co-trustees acting by majority. Although one co-trustee and beneficiary lived in Virginia, th…
Were Internet-delivered television and movie subscriptions subject to Virginia communications tax?
No. Virginia treated the online television and movie content as electronically delivered digital products rather than communications services. It refunded the tax, penalty, and interest the provider h…
Did Virginia communications tax apply to subscription-priced mobile apps, and were penalties waived for separate billing errors?
The mobile applications were exempt electronically delivered digital products and could also qualify as information services; monthly subscription pricing did not make them taxable. But Virginia uphel…
Did Virginia communications tax apply to subscription-priced mobile apps, and were penalties waived for separate billing errors?
The mobile applications were exempt electronically delivered digital products and could also qualify as information services; monthly subscription pricing did not make them taxable. But Virginia uphel…
Did Virginia communications tax apply to subscription-priced mobile apps, and were penalties waived for separate billing errors?
The mobile applications were exempt electronically delivered digital products and could also qualify as information services; monthly subscription pricing did not make them taxable. But Virginia uphel…
Did Virginia communications tax apply to subscription-priced mobile apps, and were penalties waived for separate billing errors?
The mobile applications were exempt electronically delivered digital products and could also qualify as information services; monthly subscription pricing did not make them taxable. But Virginia uphel…
What filing deadlines and payment lookback limits govern South Carolina tax refund claims under Revenue Ruling 13-1?
A South Carolina refund claim generally must be filed by the later of three years after the original return was filed or two years after the tax was paid; if no return was filed, the general deadline …
When could a Virginia seller accept an exempt organization's certificate in good faith, and whose funds had to pay?
A seller could make a tax-free sale after examining and accepting a properly completed exemption certificate with reasonable care, if the purchased property matched the certificate and the exempt orga…
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