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 a campground owe tax on park trailers used as cabins, and did it have to tax campground accommodations?
Yes. Virginia classified the wheeled, detachable-hitch park trailers as tangible personal property rather than modular buildings. The campground was the consumer of trailers used to provide accommodat…
Were flat fees paid to a company that managed retirement facilities' dietary departments taxable sales of food?
No. The management company procured, prepared, and served the food while retaining its possession and ownership, so it transferred no tangible personal property to the retirement facilities. Virginia …
Were per-patient fees for operating a healthcare facility's dietary department subject to Virginia sales tax?
No, under the provider's current scenario. It bought raw food, paid tax on the purchases, retained title, prepared and served meals in the customer's facilities, and charged one per-patient daily fee …
Was proprietary software licensed for integration into a customer's product exempt from Illinois sales tax merely because it was not stand-alone and would be sublicensed?
Not automatically. Software that was not custom remained taxable canned software even when it was not stand-alone or was delivered electronically. A license avoided Retailers' Occupation Tax only if i…
Should deed and grantor taxes use the sale consideration when the property's assessed value was higher?
Not automatically. Virginia recordation and grantor taxes use the greater of consideration or the property's actual value. Assessed value has a strong presumption of accuracy, but the circuit-court cl…
Could a city use a vehicle pricing guide to value taxicabs for local business-property tax?
Yes, if the method is uniform within the taxicab class and reasonably estimates fair market value. Virginia found the city's guide-based method facially acceptable and said using a different method fr…
Did a military spouse qualify for Virginia income tax protection when she obtained a Virginia driver's license and established domicile in Virginia?
No. The military-spouse protection required the spouse and service member to share the same out-of-state domicile. Virginia found that the spouse acquired Virginia domicile in 2007 after establishing …
When were a caterer's sales to nonprofits or governments exempt, and which exemption certificates could support the sales?
Virginia treated catered food as a taxable service because food preparation accompanies the sale. Nonprofits generally owed tax unless their statutory exemption expressly covered taxable services, and…
Could an HVAC contractor avoid use tax by saying its vendors included sales tax inside sheet-metal invoice prices?
No. Virginia requires sales tax to be shown separately on the transaction record, and the purchaser remains liable when it cannot establish that sales or use tax was paid. A notarized vendor statement…
Could taxpayers subtract unemployment benefits again when calculating the income limit for Virginia's age deduction?
No. Virginia said the federal unemployment exclusion was already recognized in federal adjusted gross income and required no fixed-date-conformity adjustment. Although Virginia allowed a separate subt…
Could a yarn manufacturer buy nonreturnable strapping exempt when it passed to customers with shipped products?
Yes, under the resale exemption—not the manufacturing packaging exemption. Virginia treated strapping as a taxable transportation device rather than material that places goods into a wrapper or contai…
Could Virginia consider a consumer-use-tax appeal filed one day after the ruling's stated 90-day deadline?
No. Virginia strictly enforced the 90-consecutive-day appeal period and said the faxed appeal arrived one day after the deadline, so it could not consider the merits. The taxpayer had paid the origina…
Was a Virginia nonfiler's assessment unsupported when the Department relied on wage, dividend, and interest data from the IRS?
No. IRS information showed 2008 wage, dividend, and interest income and gave Virginia a factual basis to estimate tax when the taxpayer filed no return or response. The assessment was presumed correct…
Which cleaning, storage, forklift, and furniture items qualified for relief in a food manufacturer's use-tax reconsideration?
Virginia denied relief for floor scrubbers used between production runs and racks storing finished goods because neither was an immediate part of production. Forklift lease charges remained taxable du…
Was a corporate president personally responsible for unpaid business taxes when another manager had the specific filing and payment duty?
Apparently not on the facts presented. Although the president later knew of the liabilities, could prevent future failures, and may have willfully left some known amounts unpaid, the studio manager—no…
Could Virginia decide whether a minimally involved vice president would be personally liable before any business taxes were converted?
Not on the record provided. No business tax had yet been converted to the taxpayer, so the appeal was premature and Virginia treated it as a ruling request. Minimal involvement did not itself prove an…
Were an owner and a retired corporate secretary personally liable for a closed business's unpaid Virginia taxes?
No on the facts presented. The 50% owner was not an officer or employee with a specific corporate duty, and the ruling understood that person's converted assessments had already been canceled. The ret…
Were pallets used to ship imported finished rugs exempt as manufacturing or packaging materials?
No. Adding a hanger or label to an imported finished rug did not create a new product, so that work and the related pallets belonged to taxable distribution rather than manufacturing. Pallets were tra…
How should a Virginia contractor assign out-of-state construction receipts and job-site wages in its apportionment factors?
Virginia sent the assessment back for more work. The contractor had not documented all direct and headquarters costs by contract well enough to prove where the greater cost of performance occurred for…
For BPOL tax, could a gas producer remove value added after gas entered transit at the county wellhead?
Yes. Because the gas was placed in transit at the county wellhead for sale elsewhere, BPOL gross receipts had to reflect fair market value at that point, not later value added before sale. Sale procee…
What did Virginia's original Barge and Rail Usage Tax Credit guidelines require before they were superseded?
Under these superseded guidelines, a qualifying international trade facility could claim $25 for each full TEU moved by barge or rail above its prior-year volume instead of by highway. The claimant ha…
What did Virginia's original 2012 International Trade Facility Tax Credit guidelines require before they were superseded?
Under these superseded guidelines, a company with at least a 10% increase in qualifying Virginia port cargo could elect either $3,000 per qualified full-time employee or 2% of qualifying capital inves…
How far back could a Virginia town recover communications and E-911 taxes billed despite its government exemption?
The town was never subject to Virginia communications sales tax or E-911 tax as a political subdivision, but the billing-error remedy limited this claim to the two years before its September 7, 2011 r…
Would Illinois tax a future Florida resident's gain from selling stock in an Illinois corporation?
Generally not if the gain was nonbusiness income from intangible stock. But IDOR lacked enough facts to decide whether this owner's future sale gain would instead be business income. If it was busines…
Must a New York gun dealer (FFL) collect sales tax when transferring a firearm the buyer purchased from an out-of-state seller, and is its transfer fee taxable?
No on both. When a New York buyer purchases a gun directly from an out-of-state seller (FFL) and pays that seller, federal law requires the gun to ship to a New York FFL who runs the background check …
New York Advisory Opinion TSB-A-12(4)C / 12(7)S: Does a not-for-profit electricity Independent System Operator become subject to corporate franchise tax or lose its sales-tax exempt status by adopting a central counterparty structure under FERC orders?
No. A not-for-profit Independent System Operator that adopts a central counterparty structure -- becoming a party to all transactions in the electricity markets it administers under FERC orders -- doe…
Could taxpayers deduct motor-home loan interest even without Form 1098 or real-estate tax on the vehicle?
Yes. A lender did not have to issue Form 1098 because a motor home generally is not real property, and paying real-estate tax was not the test. The motor home contained sleeping space, a kitchen, and …
Could Virginia estimate a floor-covering dealer's sales tax from a prior audit when current records were inadequate?
Yes. The dealer supplied unsigned federal returns and monthly income statements but did not reconcile them to reported taxable sales or provide other valid data. Virginia therefore allowed the auditor…
Should guaranteed payments to a New Mexico LLC member for serving as CEO be allocated entirely to New Mexico or apportioned among the states where the LLC operated?
They were allocated entirely to New Mexico. Stuart Schoenmann was an LLC member but continued performing the same CEO services for which he previously received a salary. The decision treated him as an…
Did pre- and post-judgment interest awarded with specific performance enter the documentary-stamp-tax consideration for a Florida deed?
No. The deed was taxed on the agreed contract sales price. The court-awarded interest compensated the seller for the unavailability of the sales funds and was not consideration paid for the real-prope…
Could Virginia keep an itemized-deduction adjustment after the IRS withdrew it and the ordinary assessment period expired?
No. Virginia could assess the unreported income change at any time because the taxpayer failed to report the final federal change, and the taxpayer accepted that part. But once the IRS withdrew its it…
Did federal qualified-funeral-trust treatment require Virginia to tax the trust at its lowest fiduciary rate?
No. Federal QFT status required a Virginia fiduciary return, but Virginia conformity did not import a federal lowest-rate treatment that conflicted with state law. Virginia taxed the trust's total Vir…
Did assigning, amending, and restating a Florida mortgage loan at a reduced principal balance trigger additional documentary stamp or nonrecurring intangible tax?
No, if each renewal stayed at or below the original unpaid balance, kept the same obligor, and attached the original tax-paid note. The matching mortgage was exempt, and assignment to a new lender did…
Did an out-of-state lessor selling an off-lease vehicle located in Illinois use seller Form ST-556 or have the buyer file Form RUT-25?
The lessor had to file Form ST-556, not rely on the purchaser's Form RUT-25. Illinois treated a lessor selling an off-lease passenger car as a retailer, and a vehicle located in Illinois when sold gen…
Did federal qualified-funeral-trust treatment require Virginia to tax the trust at its lowest fiduciary rate?
No. Federal QFT status required a Virginia fiduciary return, but Virginia conformity did not import a federal lowest-rate treatment that conflicted with state law. Virginia taxed the trust's total Vir…
Are separately stated transportation/delivery charges subject to Colorado sales tax, including in a drop-shipment where goods ship directly from the manufacturer to the customer?
It depends on separability. Transportation of goods between a retailer and a buyer is presumptively a NON-TAXABLE service, but a delivery charge is excluded from sales tax only if it is BOTH (1) separ…
Is the product delivered by an Application Service Provider (ASP) — such as an electronic sales-tax-rate lookup accessed over the internet — subject to Colorado sales and use tax?
Generally not taxable software, but the Department didn't decide this specific product. Colorado taxes tangible personal property, and effective July 1, 2012, computer software is taxable only if it i…
When a steel fabricator does internal fabrication work, or buys fabrication services from a third party, are those labor costs subject to Colorado sales and use tax?
It depends on who fabricates, who supplies the materials, and what happens to the goods. Colorado taxes the FULL purchase price of articles made to order, INCLUDING the fabrication labor, even if labo…
New York Advisory Opinion TSB-A-12(3)C: Will the Department respect an Empire Zone certificate transferred to a corporation after a stock purchase and name change, and when does its sales-tax benefit period end?
Yes. The Department will respect an Empire Zone certificate of eligibility that the Department of Economic Development transfers to the surviving corporation after a stock purchase and name change (th…
Did a hotel-room membership reseller owe Illinois Hotel Operators' Occupation Tax on its full member charge or only the hotel's discounted room price?
IDOR did not answer whether the membership club owed tax on its $40 markup or whether the taxable amount was $100 or the hotel's $60 receipt. It explained that Hotel Operators' Occupation Tax is impos…
Did independent sales managers, local installers, and direct shipments from Illinois require a Missouri LED-sign seller to collect Illinois tax?
IDOR declined to decide the seller's nexus, saying those facts were better developed in an audit. Under the historical framework it described, physical presence included an agent or representative and…
How can taxpayers check whether an older South Carolina advisory opinion was modified or superseded (per SC IL #12-4)?
Use the citator attached to SC Information Letter #12-4. It helps you determine what effect newer South Carolina advisory opinions have on previously published ones — whether an opinion was modified, …
Did one Virginia home-based salesperson create corporate-income and employee-withholding obligations for an out-of-state seller?
Corporate-income tax depended on the salesperson's actual duties. If all Virginia activity stayed within solicitation, ancillary activity, or de minimis conduct protected by P.L. 86-272, the seller wo…
Could incarceration excuse personal-income-tax refund claims filed after New Mexico's three-year statutory deadline?
No. Mark Serros filed 2004, 2005, and 2006 personal income tax returns claiming refunds in September 2011, after the respective refund deadlines at the ends of 2008, 2009, and 2010. Although he had be…
Was scheduling and playout software sold to radio, television, and cable broadcasters exempt from South Carolina sales tax?
Yes. When sold to a radio station, television station, or cable television system, the scheduling and playout software was exempt even on tangible media because it was a part of the dedicated server u…
Did Wendy's qualify for Virginia's related-member royalty add-back exception when its affiliate received unrelated royalties indirectly?
Yes. Oldemark owned Wendy's marks and received a 3% royalty through Wendy's, while Wendy's sublicensed the marks to related and unrelated restaurants at 4%. Because at least one-third of Oldemark's gr…
Did Virginia servers and a salesperson create income-tax nexus for an out-of-state online marketing company?
Apparently yes. Even if the salesperson stayed within protected solicitation, the company's Virginia-owned servers delivered online profiles and marketing services rather than merely supporting sales …
Could a grocery store overturn estimated tax and penalties after collecting sales tax but failing to file and remit it?
Not on the existing record. The store lacked sales and accounting records, so Virginia accepted an observation-based estimate and the taxpayer did not prove it unreasonable. The 50% fraud penalty rema…
Was a proposed sale of installed distributed-antenna-system equipment a taxable retail sale, a resale transaction, or a construction contract?
IDOR did not classify the proposed DAS transaction. If equipment was bought with the intent to resell it, the first purchase could be for resale and the later sale would be a taxable retail sale, supp…
Were management fees between an S corporation and tiered family partnerships exempt BPOL affiliated-group receipts?
No for fees involving the first- and second-tier partnerships. The commonly owned S corporations met the brother-sister affiliated-group test, but the S corporation and first-tier partnerships failed …
Did additional construction-business records reduce a couple's 2004 and 2005 Virginia income assessments?
Yes, in part. The appeal records still did not support the amounts originally reported, but they showed that the audit had allowed no construction-business expenses and justified revisions. Virginia a…
Did a prescription for asthma or chemical-sensitivity relief make an air purifier or filter eligible for Illinois's reduced medical-appliance tax rate?
Not automatically. A medical appliance had to be intended by its manufacturer to directly substitute for a malfunctioning part of the body. A physician's or other licensed professional's prescription …
Could a Virginia day care center remove use tax from fixed-asset purchases by stating that sales tax had already been paid?
No. The day care center said sales tax had been paid on several fixed-asset purchases but provided no supporting documents. Because Virginia imposes use tax on tangible personal property used in the s…
When did a charitable remainder unitrust have to file an Illinois fiduciary income-tax return?
A charitable remainder unitrust followed the same Illinois income-reporting and payment rules as another trust. It filed Form IL-1041 when it had Illinois net income subject to tax. A resident trust a…
Did an out-of-state part-year return change Virginia's finding that a taxpayer became domiciled in Virginia in May 2007?
No. The other state's part-year return confirmed that the taxpayer left that state in April 2007 but did not show where she established domicile afterward. Virginia retained its finding that she becam…
Could a fabricator rely on an ST-587 manufacturing exemption certificate issued by its customer's customer, or did its direct customer need to certify each purchase?
The fabricator needed exemption documentation from its direct purchaser for each transaction. The purchaser could provide Form ST-587 or another certificate containing the required information. A cert…
Are cable TV charges like basic cable, pay-per-view, converter box rentals, and installation or repair labor taxed under Utah's Multi-Channel Video/Audio Service Tax, the sales tax, both, or neither?
It depends on which of three buckets the charge falls into. Programming content (basic/expanded/premium cable, video-on-demand, pay-per-view, DVR service, and connect/disconnect fees) is subject ONLY …
Could a Virginia resident employed by NATO exclude qualifying foreign earnings from 2010 Virginia taxable income?
Yes. The taxpayer documented that NATO—not a United States agency—employed her under a three-year contract as a NATO International Staff member throughout 2010. Virginia therefore allowed the IRC § 91…
Was a farm-harvesting contractor entitled to attorney fees after the Department granted his gross-receipts-tax refund only after he protested?
Yes. Abelardo Ortiz substantially prevailed when the Department granted his $31,264.88 gross receipts tax refund before the hearing. The Department had repeatedly requested invoices but never told him…
Is a natural-gas utility's fixed monthly customer charge taxable when the customer uses no gas that month?
Yes. A natural-gas utility's fixed monthly charge was part of the taxable gross proceeds from selling gas even when the customer used no gas during that billing period. If the customer's underlying na…
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