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 selling advertising space on installed displays a taxable service in NY, and are the charges to install, repair, and supply those displays taxable?
The advertising sales are not taxable, but the related installation, repair, and materials charges are. Selling advertising space on digital, backlit, scroll, wrap, and banner displays is not one of t…
Could taxpayers reopen a 2004-2006 residency determination after the 45-day reconsideration deadline or appeal 2007-2009 assessments after 90 days?
No. The July 12, 2010 determination for 2004-2006 could be reconsidered only if a qualifying request arrived within 45 days, but the taxpayers waited until May 13, 2011. Their December 2010 assessment…
Did an out-of-state S-corporation law firm have Virginia-source income when its Virginia office provided only administration and support?
Yes. The Virginia office's property and employee created positive property and payroll factors, so the S corporation had Virginia-source income and had to apportion its total nondividend income. For e…
Was a 2011 refund of previously deducted College Illinois! contributions recaptured at the old contribution-year rate or the 2011 rate?
The 2011 rate applied. Section 203(a)(2)(D-22) required the contribution component of a nonqualified refund that had been deducted in earlier years to be added back in the year of distribution. The co…
Are the fees for a vehicle fleet Maintenance Management Program -- arranging discounts, overseeing repairs, and billing -- subject to NY sales tax?
Generally no. The firm doesn't own or run a repair shop; it negotiates discounts, has its technicians review whether repairs are necessary and fairly priced, acts as liaison with service providers, an…
Could subsidiaries in separate federal consolidated groups file one South Carolina consolidated corporate return?
Yes. Subsidiaries in separate federal consolidated groups could join one South Carolina consolidated return because the same foreign parent ultimately controlled at least 80% of their voting power. Ea…
Could an estate recover a 2005 Virginia overpayment when illness delayed the original return until December 2009?
No. The taxpayer's illness could require a fiduciary or authorized agent to file on her behalf, but Virginia law did not suspend the refund limitation period for mental or physical disability. Because…
May a Georgia flooring manufacturer use the discounted carpet-sample valuation method for laminate or other floor-covering samples?
No. The discounted fair-market-value method in O.C.G.A. § 48-8-39(b) applied only to carpet samples, not laminate flooring or other floor-covering samples. Because the provision was a partial exemptio…
Does a South Carolina coin-operated device license make it legal to operate the machine (per SC IL #12-10)?
No. SC Information Letter #12-10 makes clear that a license issued for a coin-operated machine or device under S.C. Code § 12-21-2720 or § 12-21-2730 does NOT make it legal to operate that machine or …
Did the permanent-affixation test for a construction contractor's tank depend on the property being in an enterprise zone?
No. IDOR said the permanent-affixation analysis it had quoted from ST 08-0003-PLR remained applicable even though the facility was not in an enterprise zone. When a construction contractor permanently…
Were subscriber line charges and primary interexchange carrier charges subject to Illinois Telecommunications Excise Tax?
Yes. Subscriber line charges were included in taxable telecommunications gross charges because they recovered the local exchange company's cost of providing service. Primary interexchange carrier char…
What did the Warren County Circuit Court order in Early A. Caudle's case against the Virginia Department of Taxation?
The court sustained the Department's demurrer because the plaintiff did not object and dismissed the case with prejudice. The short published order does not describe the underlying tax dispute or stat…
Did a professional athlete become domiciled in Virginia during a brief visit before moving to a permanent job abroad?
No. The athlete had abandoned Virginia for State A in 2004 and moved to Country A for a permanent professional-sports job in January 2008. Although he obtained a Virginia driver's license, registered …
Could a developer recover recordation tax on a released portion of a deed-of-trust loan when it filed the refund claim more than three years later?
No. Paying recordation tax when the deed of trust was recorded counted as an assessment, so the taxpayer had three years from that date to file its protective refund claim. The deed was recorded in Ja…
Could taxpayers claim Virginia's disability-income subtraction for police-retirement benefits already excluded from federal adjusted gross income?
No. The District of Columbia police-retirement disability benefits were treated as excluded from federal income and did not enter the taxpayers' federal adjusted gross income. Virginia's subtraction c…
Was Virginia's two-sample sales audit of a metal fabricator flawed, and should customer-paid use tax remove a sale from the sample?
The sampling method was valid. Virginia used separate three-month samples before and after a substantial increase in retail sales, and the fabricator offered no evidence disproving the sampled transac…
Could a unitary group separately account for two business lines because the statutory sales factor produced much more Illinois income?
Not on the evidence submitted. A different or lower Illinois result from separate accounting did not establish that the statutory sales factor was grossly distorted. The group omitted details about in…
Could a purchaser relieve a Florida printer from collecting tax on advertising mailers sent both inside and outside Florida, and credit earlier tax payments on its return?
A proper certificate could relieve the printer when more than an unsubstantial part of the order was mailed outside Florida, but the purchaser then owed tax directly on Florida-mailed materials. Prior…
Are interior lights and exhaust fans (and the electricity they use) at a manufacturing plant exempt under Kansas's integrated-production exemption?
Taxable. The Department ruled that a manufacturer's purchase and installation of metal-halide interior lights and air-exhaust fans for its Kansas plant and warehouse — and the electricity those lights…
Could a contractor treat separately priced water lilies and installation as a retail sale plus installation for public works or exempt-organization jobs?
Only a non-public-works contract itemizing every incorporated material could potentially qualify. The sample failed if pots, soil, fertilizer, or other materials were omitted; public-works contracts c…
How much of a multistate employee's wages should an employer report as Illinois wages on Form W-2?
Report the amount treated as compensation paid in Illinois under Section 304(a)(2)(B), not an amount determined by whether another state also taxes or withholds from the wages. The GIL could not decid…
Could in-home child-care providers keep their claimed business deductions when their records commingled business and personal expenses?
No. Virginia conforms to the federal starting point but may adjust federal adjusted gross income when reported deductions are inconsistent with federal law. The providers supplied invoices, bank state…
Could a development holding company combine its LLCs in one Virginia use-tax audit, and were sign posts and a carpet runner taxable?
The LLCs had to be treated as separate legal entities. Virginia returned the audit so each LLC could be registered and, if warranted, separately audited and assessed within the limitations period. The…
Did IDOR decide whether gelatin embolization pledgets qualified for Illinois's reduced medical-appliance tax rate?
No product-specific determination appears in the published response. IDOR said the reduced rate applied to an item intended by its manufacturer to directly substitute for a malfunctioning body part. A…
Were stage-equipment rentals exempt because a naval air station or nonprofit event organizer paid for them, and was the purchase sample invalid?
No. The company was the taxable user and consumer of stage equipment used to provide entertainment and production services. It did not prove a government purchase made through official purchase orders…
Could a tire seller avoid Virginia sales-tax audit items with late exemption certificates, claimed delivery labor, or tax collected after the sampled sales?
Mostly no. The seller was liable for tax when it failed to collect Virginia tax or hold valid exemption certificates. Incomplete certificates, an undocumented handling charge, and an unsupported claim…
Under Virginia's 2012 motion-picture credit guidelines, which productions and expenses qualified, how large were the credits, and how were they claimed?
Under these 2012 guidelines, an approved production spending at least $250,000 in Virginia could receive a refundable base credit of 15% of qualifying expenses, plus a 5% distressed-area bonus and sep…
Is the service of installing and dismantling scaffolding, safety netting, hoisting equipment, and temporary pedestrian walkways subject to NY sales tax?
It depends on whether the item is a 'temporary facility' and whether the underlying job is a capital improvement. Installing scaffolding, safety netting, hoisting equipment, and temporary pedestrian w…
Were separately billed vending-program implementation, hosting, management, and processing fees part of an Illinois retailer's taxable gross receipts?
Yes, based on the information provided. IDOR said the implementation, web-hosting, management, and payment-processing fees appeared to cover the retailer's costs of selling products through customer-s…
Did a restaurant owe use tax on contracted floor repairs and on a second purchase supported only by unclear, unreconciled invoices?
The floor-repair charge was not taxable to the restaurant. The contractor installed cement board, sealant, tile base, and grout as a real-property repair and was the taxable user of those materials, s…
Do reusable, part-specific protective containers that move components from storage to a factory's assembly line qualify for Tennessee's industrial machinery sales tax exemption?
Yes. The Department ruled that a manufacturer's reusable, part-specific protective containers — used to move components from a parts-storage area to the production and assembly line, then returned to …
Does Tennessee's sales tax exemption for energy fuels used directly in manufacturing apply to natural gas burned in a factory's ovens — and does it matter whether each oven is separately metered?
Yes, but only for the metered ovens. The Department ruled that natural gas a food manufacturer burns in its direct-fired processing ovens qualifies for Tennessee's FULL energy-fuel exemption (Tenn. Co…
Are fees a company charges to manage clients' cooperative advertising funds — tracking balances, processing reimbursement claims, and reporting — subject to Tennessee sales tax?
No. The Department ruled that fees for managing a client's cooperative advertising fund — maintaining the Co-op database and balances, fielding customer calls about fund usage and claims, processing a…
Could a taxpayer use overpayments from 2004-2006 returns filed in December 2010 to offset 2007 tax and avoid Virginia penalty and interest?
No. The three-year refund deadlines for 2004, 2005, and 2006 expired before the taxpayer filed all six returns on December 5, 2010, so those old overpayments could not be refunded or used as requested…
Did a restaurant microbrewery's 67% on-site beer sales conclusively defeat Virginia's industrial manufacturing exemption for its brewery equipment?
Not conclusively. The auditor reasonably treated 67% on-site beer sales as evidence that brewing was incidental to the restaurant, but sales volume was not the only permitted measure of the business's…
Could Virginia residents subtract a 2008 gain from foreign real property because the foreign country taxed it and federal law allowed a foreign tax credit?
No. Virginia began with the couple's federal adjusted gross income, which included the gain, and the General Assembly had repealed the state's foreign-source-income subtraction for taxable years begin…
Could an Illinois resident claim the other-state tax credit for Kentucky county income tax withheld from wages?
Yes. The Illinois-Kentucky reciprocity agreement barred Kentucky state income tax on an Illinois resident's wages but did not cover county or city income taxes. The Kentucky county withholding therefo…
Could church staff or members use the church's Illinois E number for meals or supplies they bought personally and were later reimbursed for?
No. An Illinois E number exempted qualifying purchases made by the church in furtherance of its organizational purposes, not purchases by individual staff or members. Staff and member restaurant meals…
Which Illinois taxes and 9-1-1 surcharge applied when a wireless retailer accepted payments for prepaid or subscription plans?
A true prepaid calling arrangement—service bought in advance and exhausted in known units or dollars—was tangible personal property subject to Retailers' Occupation Tax. A payment credited to an exist…
Was a specialty vehicle exempt from Virginia retail sales tax when a broker-arranged carrier picked it up in Virginia and delivered it out of state?
Yes. The ordinary Virginia motor-vehicle retail-tax exemption did not apply because the vehicle was not titled in Virginia and Virginia motor-vehicle sales tax was not paid. But the manufacturer docum…
When could a charity provide a T-shirt with a donation without owing Illinois Retailers' Occupation Tax?
A charity's E number generally exempted its qualifying purchases, not its own retail sales. Its sales remained taxable unless a limited exception applied. T-shirts could qualify as exempt noncompetiti…
Were vehicle telematics plans limited to communication with a call center subject to Illinois Telecommunications Excise Tax?
No. Vehicle telematics that allowed voice and data communication only between the vehicle and a call center, without public-switched-network calling, were information services and not subject to Telec…
What annual caps and proration factors applied to Virginia's Qualified Equity and Subordinated Debt Investments Tax Credit for 2011-2013?
For taxable year 2011, the cap was reduced from the $5 million statutory amount to $3 million. Because taxpayers requested $8.09 million, Virginia prorated commercialization-investment credits to 52.6…
Could a Virginia resident defeat a 2005 nonfiler assessment by arguing that IRS data sharing was illegal and that his income was not federal adjusted gross income?
No. Virginia law required a resident with taxable income to file, and federal law authorized the Department to receive IRS return information under its written coordination agreement. The taxpayer did…
Could a retired service member claim Virginia's military-spouse income-tax protection without sharing the active-duty spouse's out-of-state domicile?
No. The Servicemembers Civil Relief Act protection required the spouse claiming exemption and the active-duty service member to share the same domicile. The claimant showed intent to adopt another sta…
What Illinois wages belonged in Box 16 when an Illinois resident worked in another nonreciprocal state?
Wages for an Illinois resident working 100% in Minnesota were not Illinois wages in Box 16 because no services occurred in Illinois. The same applied if the employee worked 100% in Tennessee or anothe…
Did a packaging wholesaler's machine qualify for Virginia's manufacturing exemption because it folded corrugated cardboard into self-locking boxes?
No. Virginia accepted that erecting self-locking boxes could be processing, but the exemption required industrial processing as the business's primary activity. The company was classified as a packagi…
Did transferring a vehicle title between an individual and that individual's trust trigger Illinois Vehicle Use Tax?
Yes. A vehicle-title transfer from a trust to an individual, or from an individual to a trust, was subject to Illinois Vehicle Use Tax. The preferential $15 family-transfer rate did not apply because …
Were sales tax and a prepaid wireless 9-1-1 surcharge automatically improper on a monthly phone recharge?
Not automatically. A true prepaid calling arrangement was tangible personal property subject to Retailers' Occupation Tax, and prepaid wireless retail transactions also faced the 9-1-1 surcharge rules…
Was a rental company's one-off sale of a used man lift from rental inventory subject to Illinois sales or use tax?
No, under the stated non-motor-vehicle facts. A business that was strictly a lessor and sold only items no longer needed in its rental inventory made a nontaxable isolated or occasional sale. The less…
Did a small auto repair shop's de minimis serviceman status eliminate Form ST-1 filing for its retail tire sales?
No. Selling tires was a retail sale subject to Retailers' Occupation Tax, separate from repair services taxed under Service Occupation Tax when property was transferred. A retailer generally had to fi…
Is a flat subscription fee for online access to reference materials, library databases, and simulation programs subject to Tennessee sales tax — and did the answer change when Tennessee started taxing 'specified digital products' in 2009?
It depends on the period. The Department ruled that a flat subscription fee giving customers online access to reference databases, dictionaries/encyclopedias, library content, and computer simulation …
Is the labor to construct a new underground electrical 'duct bank' exempt from Kansas sales tax as original construction?
Taxable. The labor to construct a new underground electrical distribution 'duct bank' — a conduit and manhole system that protects and routes electrical wiring — is not exempt as 'original constructio…
When did Kansas's environmental assurance fee on petroleum products resume in 2012?
This Kansas Department of Revenue notice (approval date July 24, 2012) advises all Kansas Environmental Assurance Fee filers that, effective September 1, 2012, the environmental assurance fee of $.01 …
Are charges from a third-party contractor for fabricating, installing, reworking, or repairing parts and inventory during a Tennessee manufacturer's production process subject to sales and use tax?
Mostly exempt, with one exception. The Department ruled that a manufacturer's third-party contractor charges for (1) fabricating parts of the product, (2) installing parts on the product, and (3) rewo…
Could a taxpayer who moved out of Illinois claim the property-tax credit for the months the Illinois home was the principal residence?
Yes, proportionately. The taxpayer used the Illinois house as his principal residence from January 1 through October 1, 2009, continued to own it, and paid the 2009 property tax in 2010. Residence in …
Could an Illinois tobacco retailer receive more time after July 31, 2012, to sell its existing inventory of unstamped little cigars?
No. IDOR said it could not delay enforcement beyond July 31, 2012. Under the 2012 law, qualifying little cigars purchased on or after July 1 had to bear cigarette tax stamps, and unstamped inventory r…
Did manufacturing-execution software, wireless inventory scanners, and their maintenance contract qualify for Virginia's direct-use manufacturing exemption?
No. The MES software collected and processed production data for inventory control but did not operate equipment or control product quality, making it a taxable administrative tool. The wireless gun s…
Who owed Illinois tax on equipment provided under a lease with a $1 purchase option when the out-of-state lessor lacked Illinois nexus?
The $1 purchase option generally made the arrangement a conditional sale rather than a true lease. In the situation described, if the out-of-state lessor lacked Illinois nexus and was not registered, …
Were custom-printed magnetic hotel, casino, loyalty, and gift cards a taxable sale of property or a sale of service in Illinois?
IDOR described manufacturing and selling custom-printed magnetic cards as a sale of service, but the card and its custom printing were tangible personal property transferred with that service and were…
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