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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If an out-of-state company only licenses patents to an affiliate, and the affiliate's downstream sales eventually reach Tennessee, does the patent licensor owe Tennessee franchise and excise tax?
No — the patent licensor isn't subject to Tennessee franchise and excise tax under these facts. The Department ruled that Company A, which licenses patents to an affiliate (Company B) that arranges ma…
If a chain of disregarded single-member LLCs is ultimately owned by a tax-exempt governmental pension plan, is the bottom-tier LLC subject to Tennessee franchise and excise tax?
It's a not-for-profit, generally exempt — but not completely. The Department ruled that an LLC at the bottom of a chain of single-member LLCs, all disregarded for federal income tax purposes up to a t…
Did a Virginia resident owe state income tax and interest on a sport utility vehicle won in a national contest?
Yes. The sport utility vehicle's fair market value was taxable federal prize income and therefore entered the Virginia resident's federal adjusted gross income, with no identified Virginia subtraction…
Was a reseller of related companies' mobile service a telephone company for Virginia BPOL tax?
No. The reseller lacked an SCC certificate and FCC authorization and did not operate wireless sites, towers, switching equipment, or other mobile-service facilities. Its licensed partners supplied the…
Was a reseller of related companies' mobile service a telephone company for a Virginia city BPOL tax?
No. The reseller lacked an SCC certificate and FCC authorization and did not operate wireless sites, towers, switching equipment, or other mobile-service facilities. Its licensed partners supplied the…
Were a bottle manufacturer's palletizing and wrapping equipment, transferred molds, and rebuilt machinery taxable as Virginia machinery and tools?
The palletizing and wrapping equipment was not taxable machinery and tools because the evidence showed it packaged finished bottles for shipping, not that it directly served manufacturing or product q…
Were a nonresident actor's worldwide movie residuals taxable in Illinois when the movie work was performed entirely in Illinois?
Yes. The residuals were reported on Form W-2, so Illinois treated them as compensation for personal services. Because the acting services that generated the payments were performed entirely in Illinoi…
Could a taxpayer add computational-error refund claims after its original Virginia protective claim had already closed?
No. The taxpayer added the computational-error issue after its original litigation-based protective claim had closed, so Virginia treated the submission as a new claim. The 2004 claim came after the t…
Could a taxpayer add an independent computational-error issue to a still-pending Virginia protective refund claim without amended returns?
Yes. Because the taxpayer added the computational-error issue before the original protective claim was finally resolved, Virginia treated it as timely and decided it on the merits. The April submissio…
Were charges to clean, test, package, and sterilize customer-owned used catheters taxable in Virginia?
No. Hospitals and clinics mailed their used catheters to the out-of-state provider, which cleaned, decontaminated, reconditioned, tested, packaged, labeled, and sterilized them before return. Because …
Does an out-of-state company that occasionally sends tutors to teach a corporate training course in Colorado owe Colorado sales tax or income tax?
Generally no sales tax on the teaching itself, but watch the materials and income tax. Colorado treats education and training as nontaxable services, so charges for instruction aren't subject to sales…
Does Colorado sales or use tax apply when a company leases a passenger car for more than 24 months to someone who lives outside Colorado?
Generally no. If the lessee is a Colorado nonresident when the lease is signed and immediately takes the car to another state to register and use it, the lease is exempt from Colorado sales and use ta…
When a company rents out equipment and also bills customers for reimbursable expenses like lodging, airfare, and car rentals for its on-site staff, are those reimbursed expenses subject to Colorado sales tax?
It depends on separability and the true object — the Department made no determination. When a company both rents taxable equipment (two-way radios) and provides non-taxable services (sending staff to …
Is a prescribed cold-therapy band/cuff that wraps around the body and is connected to a cooling device exempt from Colorado sales tax as durable medical equipment?
Maybe, but the Department wouldn't decide. A prescribed cold-therapy band — wrapped around an injured area and connected to a separate cooling device, used in orthopedic-surgery recovery — could be ex…
Did a closed Virginia plant show that most of its machinery was idle and excluded from 2011 machinery-and-tools tax?
The Department concluded that the affidavit and news reports showed the disputed equipment stopped operating by December 31, 2009, remained idle on January 1, 2011, and did not return to use during 20…
Could Virginia estimate a grocery store's taxable sales from two observation days when six years of returns and records were missing?
Yes. The store had filed no sales-tax returns for more than six years and could not produce register tapes, journals, ledgers, ST-9 forms, or supported accounting records. Virginia could use the best …
Which county's discretionary sales surtax applied when customers picked up rented scaffolding and used it in another county for multiple billing cycles?
Use the county where the customer received the equipment. The pickup-county rate applied to the first invoice and every later rental billing cycle; moving the scaffolding to another county did not cha…
Were airline tickets bought online subject to Illinois Retailers' Occupation Tax or Use Tax?
No. IDOR said an airline ticket was not tangible personal property, so its sale was not subject to Illinois Retailers' Occupation Tax or Use Tax. The answer did not change based on whether the online …
Would IDOR certify a private vehicle-tax reference book, and what lease-tax corrections did it suggest?
IDOR would not approve the accuracy of a private legal publication and directed the publisher to statutes, rules, and Department publications. To reduce errors, it suggested two corrections: Automobil…
Could taxpayers defeat a Virginia resident assessment by demanding proof after ignoring requests prompted by a federal return using a Virginia address?
No. Virginia lawfully used federal information showing a Virginia address, requested records to determine liability, and assessed from the information available when the taxpayers did not respond. Bec…
Did a notice of intent to protest preserve Virginia's 90-day deadline for a complete sales-tax appeal?
No. A complete appeal stating the grounds and relevant facts was due within 90 days of the June 1, 2012 assessment, by August 30. A notice of intent or incomplete appeal neither satisfied nor extended…
Did repair parts and supplies for a paint manufacturer's integrated tank power-wash system qualify for Virginia's manufacturing exemption?
No. The system cleaned production tanks after a batch ended, generally every one to three days. Although the cleaning protected the color, chemistry, and integrity of later batches, it did not occur d…
Was a federally registered interstate motor carrier exempt from county BPOL tax when its local office also arranged hauling by independent providers?
Yes. The company proved that it was a motor carrier formerly certified by the Interstate Commerce Commission and currently registered with the relevant federal transportation authority. Virginia's BPO…
Could a city impose consumer utility tax on natural gas used by a combined-cycle power plant, and did the gas supplier qualify as a pipeline distribution company?
Yes. The plant used natural gas to run combustion turbines and captured their heat to make steam for another turbine, so the gas was used to furnish heat. The supplier qualified as a pipeline distribu…
How did 2012 House Bill 2117 change the mineral severance tax new-pool exemption for oil and gas?
Revised Kansas Notice 12-02 (November 2012) explains how 2012 House Bill 2117 changed the mineral severance tax (K.S.A. 79-4217). Before July 1, 2012, the first 24 months of production of oil or gas f…
Are inmate purchases from a Georgia prison commissary exempt from sales tax when inmates use money received as gifts?
No. Georgia provided no sales-tax exemption for purchases by incarcerated individuals or for purchases paid with money received as gifts. The commissary operator had to collect tax on taxable retail s…
Are remote-desktop and IT-support web services taxable in Tennessee the same way online meeting and training/webinar platforms are?
It splits along a clean line: services that let someone view/control a SINGLE computer remotely aren't taxable, but services that LINK MULTIPLE PEOPLE in an audio/video session ARE. The Department rul…
When a manufacturer expands a factory, which of the new machinery, structural components, electrical systems, and pollution-control equipment qualify for Tennessee's industrial machinery sales tax exemption -- and which count as part of the building instead?
Mostly exempt, but the BUILDING itself is taxable. The Department ruled that nearly everything a manufacturer bought for a plant expansion — machinery, electrical distribution equipment, transport equ…
What temporary Virginia tax penalty relief did Tax Bulletin 12-7 provide to taxpayers affected by Hurricane Sandy?
Virginia waived specified late-filing and late-payment penalties for affected individuals and businesses that filed returns or made payments between October 29 and November 9, 2012. A taxpayer had to …
Could a Virginia resident claim a credit for Maryland withholding on wages protected by reciprocity, and could Virginia waive the resulting penalty and interest?
The Maryland withholding did not create a Virginia credit because the resident's wages were not subject to Maryland income tax under the reciprocity agreement. Virginia upheld the tax and mandatory in…
Is an edible gummy drinking cup exempt as food, or taxable as candy/confectionery?
It is taxable. Although NY exempts food and food products, candy and confectionery are not exempt (Tax Law 1115(a)(1)(i)). This edible gummy drinking cup is made of evaporated cane sugar and pectin an…
What NY/NYC parking taxes apply to a co-op's parking charges for members and for resident non-members?
A co-op (homeowner's association) member owes NO state or city parking tax on charges paid to the association or to the operator leasing the association's parking facility -- the homeowner's associati…
How did Illinois treat software, static-control items, and climate equipment used by an electronics manufacturer?
Software used to operate exempt manufacturing machinery was not subject to Retailers' Occupation Tax, but that software did not earn Manufacturer's Purchase Credit. General climate-control equipment q…
Did a distributor create Virginia corporate-income-tax nexus by holding title to inventory at a related Virginia manufacturer's plant for three to seven days?
Yes. Corporation B took title to finished inventory and held it at Corporation A's Virginia plant for three to seven days before common-carrier shipment. Inventory counted in the Virginia property fac…
Was an individual paid to provide foster-care services from a home necessarily engaged in a business subject to county BPOL tax?
The ruling did not decide that the individual was engaged in a taxable business. The facts showed that a tax-exempt foster-care provider paid the individual to perform services at a definite place of …
Was a 2008 amended machinery-and-tools tax return timely when the county learned of the representative's authorization only after the limitation period expired?
Yes. The taxpayer's service contract had been assigned to the representative before the representative filed the amended return on December 29, 2011. The county's later receipt of evidence proving tha…
Did living and working in another state end a taxpayer's Virginia domicile and qualify him for Virginia's credit for tax paid to that state?
No. Although the taxpayer maintained a home and worked in State A, he kept and regularly returned to a Virginia residence, received financial documents there, renewed a Virginia driver's license, and …
How did a consolidated retailer calculate income from a Florida headquarters expansion for the Capital Investment Tax Credit?
Start with the headquarters subsidiary's pro forma income, multiply it by project new-hire payroll divided by total campus payroll, apply the Florida apportionment factor, and then apply the 5.5 perce…
What is South Carolina's latest statewide per capita income figure used for tax incentives (per SC IL #12-16)?
$33,388. SC Information Letter #12-16 publishes the updated statewide per capita personal income figure for South Carolina — $33,388 — which the Department uses to test qualification for various South…
Could a Florida county use its governmental sales-tax exemption to directly purchase courthouse construction materials under an amended public-works contract?
Yes, for purchases over $10,000 made after the TAA under the stated direct-purchase procedures. The county had to order, pay, take title, bear risk of loss, receive invoices, and issue certificates it…
What Virginia tax, filing, apportionment, and withholding duties applied when nonresident owners and their pass-through entities participated in sporting events in Virginia?
The entities had Virginia income-tax nexus because bringing owners, staff, and equipment into Virginia for competitions exceeded protected solicitation under P.L. 86-272. They had to file pass-through…
Did dissolving a corporation and distributing all its assets make its assessed Illinois income-tax debt uncollectible?
No. Dissolution under state law did not make the corporation's previously assessed Illinois income-tax liabilities uncollectible. Section 1405 allowed tax, penalties, and interest to be assessed and c…
Which equipment a produce-packing facility buys -- wash lines, chillers, sanitizers, ice machines, racking, office equipment -- qualifies for Tennessee's qualified-farmer sales tax exemption?
It splits by whether the equipment is part of actually PRODUCING the agricultural product, or just handling it afterward. The Department ruled that a produce packer/grower's Stainless Steel Wash Lines…
Was New Mexico's 2007 gross receipts tax assessment against Computer Square timely, and could the hearing officer remove interest because of an erroneous refund and a nearly five-year protest delay?
Only in part. Computer Square proved that it had originally reported and paid tax for October 2001 through September 2002, so the Department's 2007 assessment of $9,523.80 for those periods came after…
Are welding gases (acetylene, oxygen, argon, CO2) and welding equipment, attachments, and tools exempt from Colorado sales tax when sold to a manufacturer whose welding is part of its manufacturing process?
Mostly taxable, with one exemption. ACETYLENE used in a manufacturing or cutting process is EXEMPT from Colorado state sales tax as an industrial fuel ('gas') because it is an energy source — though s…
Were cable-television converter boxes taxable as city business tangible personal property for 2008 through 2010?
No. Virginia's 1984 statutory amendment removed tuners and converters from the cable-property list subject to local taxation, and contemporaneous Department guidance classified them as intangible pers…
Were cable-television converter boxes taxable as local business tangible personal property for 2008 through 2010?
No. Virginia's 1984 statutory amendment removed tuners and converters from the cable-property list subject to local taxation, and contemporaneous Department guidance classified them as intangible pers…
Do tuition payments for a dependent enrolled in a six-year pre-pharmacy/Doctor of Pharmacy program count as 'qualified college tuition expenses' under Tax Law § 606(t)(2)(C)?
No, not entirely. The Department held that the four-year Doctor of Pharmacy portion of the program is analogous to a post-baccalaureate or graduate degree program and its tuition is excluded from 'qua…
New York Advisory Opinion TSB-A-12(6)C: Does converting a certified corporation into a disregarded single-member LLC keep its Empire Zone certification, and do its EZ ITC and EIC carryover credits flow up to the parent without a carryforward limit?
Yes. Converting a certified corporation into a single-member LLC treated as a disregarded entity (via IRC sections 332, 334(b)(1), 337 and 381) does not end Empire Zone eligibility, and the EZ investm…
Are formal patent drawings taxable when delivered to attorney clients only in electronic form?
No. Sales tax applies to tangible personal property, which includes artistic items like sketches and drawings when delivered in a tangible (paper) form. But when the drawings are delivered solely elec…
Are downloadable craft patterns and project collections (eProjects) subject to NY sales tax?
No. Downloadable craft patterns (step-by-step instructions to make something) and eProjects (collections of multiple electronic patterns) are non-tangible digital files. They are not tangible personal…
Is a hotel buying (and reselling) AV services from its in-house AV provider, and is it liable for the AV sales tax it collects via master billing?
No, the hotel is not purchasing the AV services. Where the AV provider signs a separate contract directly with the hotel's guest for AV equipment and services -- the provider owns the equipment, only …
Is a computer software maintenance contract sold to a Tennessee customer taxable, and does it matter where the vendor and customer are located or where repairs are performed?
Yes, sourced by computer location, not contract-signing location. The Department ruled that whether a computer software maintenance contract is subject to Tennessee sales tax depends entirely on WHERE…
Were tire-disposal fees taxable, was the audit sample valid, and did Virginia correct overstated discount and unreported-sales adjustments?
Tire-disposal fees were part of the taxable sales price, and the three-month sample was properly extrapolated. But the audit overstated later unreported sales by adding back discount deductions in mon…
Do FDA-licensed blood-testing reagents used by hospitals qualify for Tennessee's prescription drug sales tax exemption when ordered by a physician?
No, they're taxable. The Department ruled that FDA-licensed in-vitro diagnostic reagents — used to test blood compatibility before transfusions — do NOT qualify for Tennessee's prescription drug exemp…
Are IT staffing/contract-employee services subject to Tennessee sales tax — including software development, help desk support, repairs, and reimbursed travel expenses?
It depends on the task. The Department ruled that when an IT staffing company's contract employees work on-site for a client, creating or programming COMPUTER SOFTWARE on the client's premises is a ta…
Did revised depreciation schedules prove that a retailer's replaced, obsolete, or allegedly disposed assets should be removed from city BTPP assessments?
Not yet. The retailer did not prove that the city's 2007-2009 fixed-asset assessments were wrong: some items remained on site or in use, disposal records were missing, and federal returns had not been…
Were a bowling alley's monthly payments to an affiliate taxable equipment lease payments or nontaxable loan reimbursements?
They were taxable lease payments. The affiliate owned the bowling equipment, retained title, and allowed the bowling alley to use it for monthly consideration equal to the affiliate's loan payment. Co…
How can taxpayers check whether an older South Carolina advisory opinion was modified or superseded (per SC IL #12-14)?
Use the citator attached to SC Information Letter #12-14. It helps you determine what effect newer South Carolina advisory opinions have on previously published ones — whether an opinion was modified,…
If a company generates a Tennessee job tax credit through a disregarded single-member LLC and then sells that LLC, can the parent company still use the leftover credit carryforward on its own future tax returns?
Yes. The Department ruled that a corporation may continue using a Tennessee job tax credit carryforward on its own franchise and excise tax returns even after selling the single-member LLC whose busin…
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