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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How did Illinois answer a 2012 survey about moving services, special-event exemptions, invoice tax display, repossessions, and responsible-person liability?
IDOR gave separate answers. Moving services without transferred property were outside Service Occupation and Use Tax, but packing materials sold to movers or storage companies were taxable retail sale…
Could a Virginia resident avoid a 2007 assessment by refusing to report an IRS audit increase and claiming he had no federally taxable activity?
No. A taxpayer had one year after the final federal change to file an amended Virginia return. Because this taxpayer did not report the IRS increase, Virginia could assess the resulting tax at any tim…
Did a Virginia advertising franchise owe tax on an in-state printer's full charge for printing, inserting, and mailing direct-mail advertisements?
Yes. The franchise provided exempt professional advertising services to its Virginia customers, but as an advertising business it was the taxable user of the printed direct-mail materials. Because its…
Did Virginia finally uphold a 2008 residency assessment when a former service member claimed another domicile but supplied no supporting evidence?
Not finally. The taxpayer had not answered two Department requests or provided objective evidence supporting his claimed out-of-state domicile, so Virginia had no basis to revise the presumptively cor…
Could financial hardship excuse a 2007 Virginia refund return filed more than six months after the three-year deadline?
No. The original 2007 return had to be filed within three years of its due date to claim a refund, making the deadline May 2, 2011 because May 1 fell on a Sunday. The taxpayer filed on November 11, 20…
Are animal shelter adoption fees subject to Kansas sales tax?
Kansas Notice 12-15 (July 19, 2012) revokes Revenue Ruling 19-2012-01, dated June 15, 2012, which had stated that animal adoption fees charged by animal shelters are subject to retailers' sales tax. T…
Could a C corporation use a net-loss carryover against the pre-2011 portion of a straddle year after electing specific accounting?
No. Section 207(d) made the C corporation's Illinois net-loss carryover deduction zero for a taxable year ending after December 31, 2010 and before December 31, 2012. Section 202.5(c)(3) only directed…
Which resale deductions survived when a valve seller held multistate certificates for two buyers, received Intel's NTTC late, and held the wrong certificate for KSL?
The Kinetic Systems and Grainger deductions survived. Albuquerque Valve timely held multijurisdictional certificates, and under Siemens the buyers' New Mexico identification numbers alone did not prov…
Could an Illinois township buy diesel for off-road equipment free of sales tax and Motor Fuel Tax, and what documentation did it need?
The two taxes had different rules. A governmental body's retail purchase was sales-tax exempt only when supported by an active Illinois exemption identification (E) number. Local governments generally…
Did Virginia finally uphold a 2008 residency assessment against a student who lived in two other states but kept a Virginia driver's license?
Not finally. The student said she lived and attended college in two other states and paid tax there, but provided no supporting records despite two information requests. Her Virginia driver's license,…
Did evidence that eliminated a 2008 Virginia residency assessment also prove the taxpayer was not domiciled in Virginia during 2007?
No. Virginia had already abated the 2008 assessment based on additional evidence, but the 2007 record was different: the employer attributed all wages and withholding to Virginia, federal tax document…
Are portable-toilet rentals with waste removal exempt from NY sales tax when the customer is performing a capital improvement?
No. Providing portable toilets together with waste removal is a taxable service of maintaining/servicing real property under Tax Law 1105(c)(5), and the capital-improvement exclusion does not reach it…
Must a Kansas gun dealer collect sales tax on a firearm shipped in from an out-of-state seller and handed to a resident buyer?
No tax on the transfer — but the dealer's own retail sales are still taxable. A Kansas Federal Firearms Licensee (FFL) that simply receives a firearm shipped by an out-of-state seller and transfers it…
Does Tennessee sales tax apply to a single-use vein-ablation catheter and its bundled treatment supply packs sold to treat venous reflux disease (varicose veins)?
Mostly yes, taxable. The Department ruled that the single-use catheter — inserted into a diseased vein to seal it shut with heat, then removed during the same procedure — is subject to Tennessee sales…
Could a corporation use separate accounting because its Illinois office showed a loss while formulary apportionment produced Illinois income?
Not on the submitted showing. Section 304(f) permits separate accounting or another method only when the statutory formula does not fairly represent Illinois activity. A profit-and-loss statement show…
Did purchased homeschool books, maps, DVDs, games, and equipment qualify for Illinois's education expense credit?
No, based on the receipts submitted. Purchased books, maps, DVDs, games, and similar items remained the family's property and did not appear substantially consumed during the school year. By contrast,…
What is South Carolina's tax interest rate for the period ending September 30, 2012 (per SC IL #12-8)?
3%. SC Information Letter #12-8 sets South Carolina's interest rate on tax underpayments and overpayments at 3% for the period October 1, 2011 through September 30, 2012. Interest is compounded daily,…
Did Virginia's airline exemption cover cargo trucks, sorting equipment, repair assets, and other property in an integrated air-and-ground delivery network?
Partly. The scheduled cargo airline qualified for the exemption, and Virginia extended it to property directly and principally used in its integrated air-and-ground common-carrier service, including c…
Could a floor-maintenance subcontractor deduct service-for-resale receipts when the buyer delivered the Type 5 NTTC 72 days after the audit deadline?
No. Louis Ortega did not possess the Type 5 NTTC when his 2006 returns were due or within 60 days after the Department's audit notice. Although he persistently asked SMS for the certificate, he receiv…
For New York's '548-day rule,' do the days a Petitioner's minor child spends in New York at a legally separated spouse's home count against Petitioner, and what about days the child is with Petitioner on visitation?
No - if the taxpayer and spouse are legally separated under a written agreement giving the spouse physical custody, the child's days at the separated spouse's New York residence do not count toward th…
Are Orthovisc, Euflexxa, and Hyalgan injections for knee osteoarthritis exempt from NY sales tax?
Yes. Orthovisc, Euflexxa, and Hyalgan are all hyaluronan-based treatments a physician injects into an osteoarthritic knee to supplement the joint's natural fluid, improving the knee's operation and ma…
Are EMS units, orthopedic pillows/cushions, massage devices, mattresses, whirlpool baths, and infrared lamps exempt as medical equipment if sold by prescription?
No. The medical-equipment exemption under Tax Law 1115(a)(3) applies only to equipment that is primarily and customarily used for medical purposes and is not generally useful in the absence of illness…
Are over-the-counter acne products exempt from NY sales tax, and what makes a product an exempt 'acne preparation'?
Yes -- acne preparations that contain a recognized active acne drug are exempt. Tax Law 1115(a)(3) exempts drugs and medicines used to treat illness in humans. An 'acne preparation' qualifies if it co…
Could a Virginia resident claim a state credit for foreign tax withheld from mutual-fund investment income?
No. Virginia's ordinary resident credit applied to qualifying income tax paid to another U.S. state, not to a foreign country. A separate foreign-country credit covered pension or retirement income de…
Could a Virginia resident subtract annuity-surrender gain because he borrowed the money before moving to Virginia and called it a death benefit?
No. Although the taxpayer borrowed from the annuity before moving to Virginia, he did not recognize the cash-surrender value, including the unpaid loan, until he surrendered the contract in 2008 while…
Did a federal refund for qualified airline payments reopen the deadline for a related Illinois refund from a closed year?
Yes, to the extent the Illinois overpayment resulted from the same reduction in federal adjusted gross income. Once the airline employee received the federal refund under the 2012 FAA law, Section 506…
What major Virginia state and local tax legislation did the Department of Taxation identify in its 2012 Legislative Summary?
This historical Department guide summarized state and local tax legislation enacted through the May 14, 2012 reconvened session. Major state changes included mandatory electronic corporate and sales-t…
Can Kansas renters still claim the homestead property tax refund after HB 2117?
Kansas Notice 12-14 explains that 2012 House Bill 2117 repealed the homestead property tax refund for renters. Kansas law provides a partial refund of property taxes paid by low-income homeowners who …
Did Kansas repeal the food sales tax refund, and what was the last year to claim it?
Kansas Notice 12-13 explains that 2012 House Bill 2117, Section 40, repealed the food sales tax refund as of January 1, 2013. The refund had provided a refund of sales tax paid on food by low-income i…
How does HB 2117 keep S corporation bank shareholders from claiming two subtraction modifications for the same income?
Kansas Notice 12-12 explains how 2012 House Bill 2117, Section 12, coordinates two subtraction modifications for shareholders of S corporations that are banks, savings and loans, or federal savings as…
How does HB 2117 exempt certain business income from Kansas tax while adding back related losses and deductions?
Kansas Notice 12-11 explains that 2012 House Bill 2117, Section 12, added five new addition modifications in K.S.A. 79-32,117(b)(xix) through (xxiii) and one new subtraction modification in (c)(xx), e…
Did 2012 House Bill 2117 change the Kansas corporate income tax rates or C-corporation modifications?
Kansas Notice 12-09 explains that despite the many changes in 2012 House Bill 2117 -- most effective beginning tax year 2013 -- the Bill did not change the corporate income tax rates or the credits av…
After HB 2117, can Kansas individuals still deduct or carry net operating losses starting in 2013?
Kansas Notice 12-08 explains that under 2012 House Bill 2117, beginning in tax year 2013 the net operating loss deduction is eliminated for individuals. Section 17 amends K.S.A. 79-32,143 to add new s…
Which Kansas income tax credits became C-corporation-only in 2013, and can individuals still carry forward old unused credits?
Kansas Notice 12-05 explains that under 2012 House Bill 2117, beginning in tax year 2013 a long list of income tax credits is available only to corporations subject to the Kansas corporate income tax …
Which Kansas income tax credits and which subtraction modification did HB 2117 repeal starting in 2013?
Kansas Notice 12-04 explains that 2012 House Bill 2117 repealed certain income tax credits beginning in tax year 2013, so after tax year 2012 they are no longer available. Section 40 of the Bill repea…
Which Kansas income tax deductions did HB 2117 limit to C corporations starting in tax year 2013?
Kansas Notice 12-03 explains that, under 2012 House Bill 2117, beginning in tax year 2013 certain deductions are available only to corporations subject to the Kansas corporate income tax (C corporatio…
Could an electroplater buy packaging materials for resale when the materials stayed with customer-owned metal returned after processing?
It depended on the electroplater's serviceman method. If it used one of the first three Service Occupation Tax methods and unequivocally transferred all ownership rights in the packaging to the custom…
Was a printing company's leased electrostatic duplicator exempt when it produced fewer than 4,000 impressions per hour?
No. Virginia's printing exemption applied only to electrostatic or other duplicators capable of at least 4,000 impressions per hour and used by a business primarily printing or photocopying products f…
Could a corporation recover the denied portion of a 2005 tax refund by filing another amended return after it missed the 90-day protest period based on Department advice?
No. St. Mary timely claimed a $39,307 corporate income tax refund, but the Department paid only $28,811 and partially denied $10,496. Instead of protesting that denial within 90 days, the company foll…
Is a kegel pelvic-floor exercise device exempt from NY sales tax as medical equipment?
No. The medical-equipment exemption under Tax Law 1115(a)(3) applies only to equipment that is primarily and customarily used for medical purposes and is not generally useful in the absence of illness…
Was Florida documentary stamp tax due when unencumbered real estate moved between sister subsidiaries through a new conduit entity and out-of-state statutory merger?
No, under the five no-consideration steps presented. The capital contributions and stock transfers were untaxed, and the merger vested the property by operation of substantially similar state law. The…
Were monthly medical-alarm monitoring fees taxable in New Mexico when the customers and company-owned alarm equipment were in New Mexico but the call center was in California?
Yes. American Medical Alarms sold New Mexico customers one integrated monitoring and emergency-response service for $24.95 per month. The company owned and maintained alarm consoles and transmitters i…
Is the fee a Tennessee car dealer charges to ship a vehicle between its own stores — so a customer can see and test-drive it before buying — subject to sales tax?
No. The Department ruled that a fee a Tennessee car dealer charges to ship a vehicle from one of its business locations to another — so that a prospective customer can see and test-drive it before dec…
Under Virginia's superseded 2012 motor-vehicle rental guidelines, which short-term rentals were taxed, what entered gross proceeds, and where was tax sourced?
Under these superseded guidelines, most passenger-vehicle rentals under 12 months bore a combined 10% charge: a 4% tax, a 4% additional tax, and a 2% fee. Vehicle type and weight could produce differe…
Were lease amounts recovered through a breach-of-contract judgment or guarantor payment subject to South Carolina sales tax?
Yes. Compensatory damages collected from a defaulting lessee and payments collected from a third-party guarantor were taxable gross proceeds because both arose from the lease agreement. The same resul…
When is South Carolina's 2012 sales tax holiday and what items are exempt (per SC IL #12-7)?
South Carolina's 2012 sales tax holiday runs from 12:01 a.m. Friday, August 3, 2012 through midnight Sunday, August 5, 2012. During that three-day weekend, the 6% state sales and use tax and any appli…
When a customer buys several vehicles from a Tennessee car dealer and trades in several others in one transaction, is the sales tax figured on the total purchase price minus the total value of all the trade-ins?
Yes. The Department ruled that when a customer buys more than one vehicle from a Tennessee car dealer in a single transaction, the taxable sales price is figured by ADDING UP the price of all the vehi…
Which of two individuals was personally liable for a corporation's unpaid consumer-use-tax assessment during its shutdown?
The acting president was liable; the minority shareholder was not. The president remained a director and company president through the shutdown, knew of the audit liability, controlled requests for av…
Could a Virginia resident claim a Virginia credit for West Virginia and Maryland tax withheld from wages covered by reciprocity?
No. Virginia's reciprocal agreements with West Virginia and Maryland exempted this Virginia resident's wages from those states' income taxes. Because he was not legally subject to their tax, he could …
Could Maryland residents recover Virginia tax withheld from Virginia wages when amended returns followed a later Maryland audit?
Yes. Under Virginia's reciprocal agreement with Maryland, the Maryland-resident spouses were not subject to Virginia income tax on their Virginia wages. Although the ordinary refund period had passed,…
Could a person who moved out of Virginia avoid adjustments to the standard deduction and personal exemption on a 2010 part-year return?
No. A part-year resident was taxable for the portion of the year spent as a Virginia resident. The standard deduction was prorated by the share of federal adjusted gross income attributable to Virgini…
Could doughnut shops keep the difference after mistakenly collecting 5% sales tax from customers but remitting only the 2.5% reduced food rate?
No. Eligible food could have been taxed at 2.5%, but the shops actually charged customers 5%. Virginia required dealers to remit every dollar collected, including erroneous or illegal overcollections,…
Could one licensed Illinois cigarette distributor buy or receive stamped cigarettes from another licensed Illinois distributor?
Yes. Informational Bulletin FY 2012-09 said stamped or unstamped cigarette packages could be sold or transferred between licensed cigarette distributors. Both the sale or transfer had to be accounted …
Were separately listed average shipping charges excluded from Illinois sales tax when the amount sometimes exceeded actual delivery cost?
Not merely because shipping appeared on a separate invoice line. The buyer and seller had to agree to delivery separately from the property price, shown best by a separate contract or by a genuine pic…
Could a retailer satisfy Illinois's unconditional-repayment requirement for an erroneous-sales-tax credit claim with a credit memorandum instead of first paying cash?
Yes, if the instrument was unconditional. A retailer seeking credit for tax it collected and remitted in error had to show that it had unconditionally repaid the purchaser so the retailer would not be…
Did a 250,000-gallon fire-protection tank bolted to a concrete foundation remain personal property, or was the subcontractor a construction contractor owing Use Tax on materials?
IDOR did not decide whether this tank was permanently incorporated into real estate. It said the classification was highly fact-intensive and directed the subcontractor to prior letters, including a P…
Was a village-owned Illinois hotel and convention facility exempt from Telecommunications Excise Tax and entitled to recover tax it had paid?
No. The Telecommunications Excise Tax Act did not exempt Illinois local governments. Its purchaser exemptions were limited to the State and federal governments, state universities created by statute, …
Did living abroad, holding a foreign license, and paying foreign tax prove that a taxpayer abandoned Virginia domicile for 2008?
No. The taxpayer showed a residence, driver's license, vehicle, and tax return in another country, but did not provide requested voting records or a usable federal transcript. She also maintained a pe…
Was a tire-shop foreman personally liable for corporate taxes merely because he held the title of president and could sign checks?
No. The taxpayer's president title was nominal; he continued working as shop foreman while another officer exclusively handled accounting, returns, bills, and taxes. He used check authority only rarel…
Could an insurer replace Florida's direct-premiums apportionment factor for income from an IRC section 338(h)(10) deemed asset sale?
No. A different percentage and a large one-time gain did not establish gross or constitutional distortion. The insurer failed to show by clear and cogent evidence that the standard premium factor taxe…
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