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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Did an out-of-state company owe Illinois tax on receipts from renting chassis through an Illinois container terminal?
It depended on the agreement. For a true lease—generally one with no buyout or only a fair-market-value option—Illinois imposed no tax on rental receipts and the lessee owed no tax; the lessor was the…
Was an installed landfill truck scale a resale, or was the seller a consuming contractor liable for tax on its costs?
The scale was a real-property installation, not an exempt resale. The resale certificate arrived three years after the transaction, described a waste-service customer rather than a scale dealer, and c…
Was a Virginia sales-tax appeal timely when the taxpayer faxed it two days after the 90-day deadline?
No. The February 1, 2012 assessment required a complete appeal by May 1. For a fax filing, the appeal had to be dated and received by the 90th calendar day. The taxpayer transmitted and Virginia recei…
Could mobile pollution-control equipment qualify for Virginia's sales-tax exemption without being permanently attached, and who had to certify it?
Mobile tangible property could qualify even when used at multiple sites and not permanently attached. But the exemption did not apply until DEQ or the authorized pollution-control board certified that…
What documentation allowed a medical-device seller to treat prosthetic-device sales to Virginia hospitals and physicians as exempt?
For profit hospitals and physicians, the device had to be bought for a specifically identified patient, and the seller needed a signed purchaser statement tying the qualifying device to that patient's…
Are charges for renting inflatable amusement devices and equipment -- with the company's safety staff on site -- subject to NY sales tax?
Yes. Providing inflatable devices (bungee runs, slides, obstacle courses, etc.) and other amusement equipment (jousting, boxing, sumo gear, Segways) for parties is a taxable lease of tangible personal…
How did South Carolina apply sales tax, admissions tax, and alcohol licensing to nonprofit fundraising events?
Tax treatment depended on what attendees paid for and whether the nonprofit qualified for a statutory exemption. A true charitable donation could be nontaxable even with an incidental meal, while a me…
Was one bundled charge for hosted medical-practice software and claims-billing services taxable in South Carolina?
No. The entire nonitemized monthly charge for hosted practice software plus medical billing and claims services was nontaxable data processing because the billing service manipulated the medical pract…
Could a Virginia-resident spouse claim a proportional share of joint federal itemized deductions when the other spouse lived in another state?
Yes. When a Virginia resident and nonresident spouse filed separate state returns but a joint federal return, separately traceable deductions belonged to the appropriate spouse. Joint deductions that …
What did the 2012 Kansas Legislature change for motor fuel taxes and fuel-related funds?
Kansas Notice 12-01 (June 11, 2012) summarizes three 2012 motor fuel bills. Senate Bill 294 (effective June 7, 2012) set quarterly $50,000 deposits into the Kansas Qualified Biodiesel Fuel Producer in…
Was Club 33's tax protest untimely when it was mailed 91 days after the notices' printed assessment date but the Department could not prove when or where it mailed them?
No. The 90-day protest period ran from the Department's mailing of the assessments, not merely the printed assessment date. The Department produced no mailing log, postmarked envelope, witness testimo…
Could a taxpayer shift a 2007 Virginia assessment to the preparer who completed the return, and could later deduction records still reduce it?
The assessment could not be transferred to the preparer. Virginia's self-assessment system made the taxpayer responsible for return accuracy, with any claim against a negligent preparer pursued separa…
Which dealers owed Virginia's historical June 2012 accelerated sales-tax payment, how was it calculated, and when could hardship relief apply?
For June 2012, a dealer or direct-payment permit holder with at least $26 million in taxable sales and purchases during the prior July-June fiscal year had to prepay 90% of its June 2011 sales-and-use…
Did a corporation need Virginia permission to switch from a consolidated return after all affiliates became disregarded single-member LLCs?
No permission was needed because separate filing was mandatory. After the four corporate affiliates became wholly owned single-member LLCs treated as disregarded entities and transferred their operati…
Could a long-term truck lessor buy later repair parts for resale, and was federal tire excise tax included in Virginia consumer use tax?
No resale exemption applied. The lessor installed parts during one-year truck leases but showed no Virginia motor-vehicle or retail tax charged on lease receipts or the repairs, and the parts were not…
How should a Virginia locality calculate the BPOL out-of-state gross-receipts deduction when receipts are sitused by payroll apportionment?
The county's excess-only method was wrong. When payroll apportionment assigns receipts to the Virginia definite place of business, the taxpayer first identifies Virginia employees' interstate particip…
How should a city calculate the BPOL out-of-state gross-receipts deduction when receipts are sitused by payroll apportionment?
The city's excess-only method was wrong. When payroll apportionment assigns receipts to the Virginia definite place of business, the taxpayer first identifies Virginia employees' interstate participat…
Is a call-tracking service — toll-free numbers that route and record sales calls so a retailer can measure its advertising and capture customer data — taxable in Tennessee as a telecommunications service?
No. The Department ruled that 'Call Tracking Services' are NOT subject to Tennessee sales and use tax. The provider sells retailers a package built around custom toll-free 'vanity' numbers (supplied t…
Could a wholesaler buy heat-treated export pallets for resale when it used them once to deliver federal commissary supplies to the port?
Yes. The wholesaler separately itemized the pallets, bought them only to fill export orders, applied customer-required heat treatment, and transferred title when the federal agency accepted the loaded…
Did new evidence about an out-of-state home and Virginia mailing arrangements prove that a taxpayer abandoned Virginia domicile for 2007?
No. On reconsideration, Virginia again found that the taxpayer had not abandoned her Virginia domicile. She kept and renewed a Virginia driver's license, registered vehicles in Virginia, was construct…
What Virginia tax interest rates applied during the third quarter of 2012?
Virginia's third-quarter 2012 rates were 5% for tax underpayments and 5% for tax overpayments. The reduced rate for qualifying assessments under administrative appeal was 0% after the statutory nine-m…
When must a Louisiana veterinarian pay or collect sales tax on drugs, devices, and pet merchandise?
Veterinary professional services were not taxable. The veterinarian generally paid tax as the consumer of administered drugs and devices, but collected sales tax on items transferred to animal owners.
How did Louisiana tax first-time coating, wrapping, or galvanizing compared with redoing the same treatment?
First-time coating, wrapping, or galvanizing was taxable fabrication. Recoating, rewrapping, or regalvanizing was a taxable repair, including materials and labor, subject to stated exemptions.
Could an Illinois resident subtract Italian social-security benefits and an Italian employer pension from Illinois income?
No. The private Italian employer pension did not fall within the federal retirement provisions listed in Section 203(a)(2)(F), and the separate Social Security subtraction in Section 203(a)(2)(L) cove…
Did a timely extension payment preserve a 2006 Virginia refund when the taxpayer did not prove the return was filed within the extension period?
No. Paying with an extension was only one condition; the taxpayer also had to file the return by the extended November 1, 2007 deadline. Virginia had no record or objective proof of the claimed Octobe…
Was a fee to attend a private social event subject to Illinois sales tax when the fee included restaurant or catered food and drinks?
Admission by itself was an intangible and was not subject to Illinois sales tax, but a ticket or event charge that entitled the attendee to food or drink was taxable. When members bought food or drink…
How did Florida source an education provider's online-course tuition receipts for the corporate income tax sales factor?
The tuition receipts were sales included in the apportionment factor and were sourced where students accessed the online courses. Because students generally accessed from home, Florida-resident studen…
Could a substantially larger and more diversified corporate group revoke its Florida consolidated-return election because its business circumstances had changed?
Yes, subject to conditions. The group's domestic-to-multinational growth and operational changes established good cause, but deconsolidation had a specified effective date, deferred or unrecognized in…
Is bulk water pumped into a vessel's built-in potable or ballast tanks taxable in Louisiana?
No, under the ruling's facts. Bulk water pumped into built-in vessel tanks was exempt whether used by the crew, as ballast, or transferred for drilling operations.
Did Illinois's prepaid wireless 9-1-1 surcharge apply to every prepaid calling card reported for sales tax, including an international access-code card?
The two charges used different definitions. A prepaid calling arrangement was tangible personal property subject to Retailers' Occupation Tax, but the 2012 prepaid wireless 9-1-1 surcharge applied onl…
Could taxpayers subtract both a taxable annuity death benefit and a distribution from an inherited IRA on their 2008 Virginia return?
Only the annuity death benefit qualified. It was a federally taxable lump-sum payment to the beneficiary under an annuity contract, satisfying Virginia's subtraction. The inherited IRA distribution wa…
Which clinical-trial patient-recruitment services -- ads, call centers, tracking, site kits, translation -- are subject to NY sales tax?
Most are not taxable, but the printed materials are. Producing TV/radio ads and websites, running e-mail and direct-mail advertising campaigns, operating screening call centers, and ad-response tracki…
What are South Carolina's latest per capita income figures used to qualify for tax incentives (per SC IL #12-6)?
SC Information Letter #12-6 publishes the state and county per capita personal income figures the Department uses to test qualification for various South Carolina income, sales and use, and property t…
Did selling an interest in a disregarded LLC trigger recapture when the LLC became a partnership but kept using the enterprise-zone property?
Yes. Before the sale, the disregarded LLC and its owner were one Illinois taxpayer. Selling 88% caused the LLC to become a new partnership, and Rev. Rul. 99-5 treated the owner as contributing the qua…
Could an insurer treat gain from selling premium renewal rights as nonbusiness income or exclude it from the premium-factor apportionment formula?
The gain was business income because the renewal rights served an operational function in the insurer's business. It therefore entered the insurer's statutory premium-based apportionment formula. IDOR…
Could an Illinois S corporation subtract the federal payroll-expense disallowance tied to the FICA tip credit?
No. Claiming the federal Section 45B FICA tip credit reduced the S corporation's federal payroll-tax deduction. Illinois allowed subtractions only for the federal disallowances specifically listed in …
Are movies a theater receives from studios taxable in NY when delivered by satellite versus on a hard drive?
It depends on the delivery medium. Movies a theater receives by satellite transmission or otherwise delivered electronically are not subject to sales tax -- they're treated as sales of intangible prop…
Did Virginia sales tax apply to an association's fee for reserving a pavilion or lodge when no property or other services came with it?
No. The property owners association charged members and leaseholders in good standing to reserve a beach pavilion or lodge for meetings, parties, and community events. Because the reservation applicat…
Which marketing-firm audit items did Virginia remove, and could creative pass-through costs or appeal interest also be abated?
Virginia granted only documented adjustments. It removed specified items mailed or shipped to the Washington, D.C. customer and reduced the contested sales measure by the documented 35% non-Virginia m…
Were a telephone company's fixed-price equipment transactions exempt repairs, and did its spreadsheet prove credits for Internet-service equipment?
Not with the evidence presented. The supplier invoices looked like fixed-price product transfers, and the contract permitted advanced replacements and other exchanges, so the company did not prove tha…
Did a telephone company prove that supplier charges were exempt repairs or that taxed equipment qualified for Virginia's Internet-service exemption?
Not with the submitted records. The invoices charged for products and the contract allowed advanced or replacement equipment, so the company did not prove that each charge covered only a separately st…
What happened when a taxpayer did not report an IRS income adjustment but later said she was only a part-year Virginia resident?
Virginia was authorized to assess the IRS adjustment because the taxpayer did not file the required amended Virginia return. But her original return had treated her as a full-year resident, while she …
Could a country club exclude member payments collected for pro shops, golf associations, and an employee fund from BPOL gross receipts as pass-through money?
Not on the evidence provided. Although the club kept separate accounts for payments collected for pro shops, golf associations, and an employee appreciation fund, it did not substantiate the required …
Could beneficiaries subtract federally taxable annuity death-benefit payments from Virginia income when the benefits were not paid in a lump sum?
No. Virginia required an annuity death-benefit payment to come from an annuity contract, be awarded to the beneficiary in a lump sum, and be federally taxable. The wife's survivor annuity payments fai…
Did an out-of-state employer owe Virginia withholding for employees working in Virginia when it lacked detailed payroll records?
Yes. A nonresident employer can owe Virginia withholding when employees earn wages from services performed in Virginia. Because the corporation kept no detailed employee records, Virginia reasonably e…
Could a flooring seller keep tax collected on lump-sum invoices by later treating labor as separate, and could Virginia estimate sales when invoices were missing?
No. The seller collected sales tax on the full lump-sum customer charges, then revised the invoices internally to separate labor and remitted less tax without refunding customers. Virginia required it…
Which natural-gas well items qualified for Virginia's pollution-control or direct-use exemptions in this superseded ruling?
Historically, Virginia removed DMME-certified pit liners, fluid-collection tanks, and silt fence purchased before the pollution-control exemption expired on July 1, 2006. It kept tracer wire and stone…
Did replacement baking pans and labor to re-glaze or straighten them qualify for Florida's industrial-machinery repair exemption?
Yes. Pans with a depreciable life of at least three years were industrial machinery and functionally integrated with the ovens because the baking process could not operate without them. Replacement pa…
Could taxpayers contest unpaid tax from their 2005 return by saying an IRS dispute was pending without filing a complete Virginia appeal?
No. The taxpayers' letter did not identify an assessment error, relevant facts, grounds, or controlling legal authority, despite repeated requests for information. Virginia denied the incomplete appea…
Could a graphic printer overturn tax using incomplete or post-audit exemption certificates and unsupported resale or manufacturing claims?
No. Virginia held that incomplete, invalid, facially inconsistent, or inapplicable certificates did not protect the printer, especially when obtained after the audit rather than relied on at the time …
Is a sweetened chocolate product taxable candy in NY, and does selling through in-state independent reps require registering as a vendor?
The chocolate is taxable, and the reps may trigger registration. A sweetened chocolate product sold in wrapped pieces is candy or confectionery, which is excluded from the food exemption and taxable -…
We're a public benefit corporation created by state law to build office facilities for the UN. Our enabling statute says our 'income and operations' are tax-exempt. If we record a mortgage to finance a new construction project, is that mortgage subject to mortgage recording tax?
Exempt. The petitioner is a public benefit corporation created by a 1968 state statute (later amended in 2011) to coordinate development of office and other facilities near UN Headquarters in New York…
Were separately stated, optional sign-permit and site-survey charges excluded from Virginia sales price as services, pass-through fees, or installation?
No. Manufactured signs were taxable tangible personal property, and the permit and site-survey charges completed or supported those sales. Virginia found no statute excluding the charges merely becaus…
Was an electrical contractor's purchase of a generator from its owner an exempt occasional sale, and could audit interest be waived?
Virginia removed the generator from the audit because the facts supported the occasional-sale exemption for its transfer from the contractor's owner. Virginia did not reduce interest: interest was man…
Which printer sales were supported by exemption certificates, and was separately stated postage taxable?
Virginia decided each exemption certificate by whether a reasonable dealer could conclude that the particular goods were covered. It removed direct-mail statements, flash drives and lanyards, and pens…
Is GPS-based precision-farming tower equipment exempt from Kansas sales tax as farm equipment?
Exempt. The GPS receivers, radios, antennas, cables, electrical boxes, and stand that make up a Real Time Kinematic (RTK) tower — used exclusively to send and receive signals for precision-farming gui…
Were golf green fees inside a single-price accommodation package taxable, and were the audit penalties waived?
The green-fee portion was taxable because a single-price accommodation package is taxed in full. For this audit, however, Virginia abated the green-fee tax and interest because the taxpayer's detailed…
Which items and services bought to expand a Tennessee manufacturing plant qualify for the industrial-machinery sales-and-use-tax exemption — and can the manufacturer's contractors buy them tax-free?
Most of it is exempt, but not all. The Department (in an advisory revenue ruling) applied Tennessee's INDUSTRIAL MACHINERY exemption (Tenn. Code Ann. § 67-6-206(a)) to a long list of items a manufactu…
Was a multistate commercial printer a manufacturer for Virginia local BPOL and business-property taxes?
Yes. Virginia considered the printer's facilities as one business rather than isolating the county's direct-mail location. Its printing transformed raw materials and its manufacturing operations were …
Were amusement-equipment rentals exempt services when a trained operator stayed with the equipment?
No. Virginia found that the customers' true object was renting the amusement equipment. Although trained operators remained on site, their work mainly ensured proper setup, tethering, and participant …
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.
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