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 Florida apply the new- and expanding-business machinery exemption to three beverage production lines?
Line 1 was a new business because the new beverage was a distinct economic activity. Lines 2 and 3 could qualify as expansions after separate DR-1214 filings and proof of at least 10% greater output. …
Could a federal consolidated-group member claim its allocated IRC § 199 deduction on a separate Virginia return?
Yes. The expanded affiliated group computed one IRC § 199 deduction and allocated it among members in proportion to qualified production activities income. That member-level share was the same whether…
Could a Virginia resident claim all dependent exemptions and itemized deductions from a joint federal return with a nonresident spouse?
The resident could claim all dependent exemptions because the nonresident spouse did not claim them on the other state return, showing separate accounting and mutual agreement. The resident had not do…
New York Advisory Opinion TSB-A-11(9)C: Can the brownfield redevelopment tax credit be claimed for improvements placed in service before the certificate of completion is issued, if the certificate issues in the same taxable year?
Yes. Under the brownfield redevelopment tax credit (Tax Law section 21), the tangible-property credit can be claimed for improvements placed in service before the certificate of completion is issued, …
Did marketing corn and beans for patrons make a grain elevator a retailer eligible for the replacement-tax investment credit?
The GIL did not decide. Marketing farm products could be a retailing operation, but IDOR needed to know whether the company sold taxable services, sold tangible personal property at retail, and what o…
Are judgment or guarantor payments recovered after a defaulted equipment lease subject to Illinois sales or use tax?
The GIL did not directly decide whether the proposed judgment or guarantor recoveries were taxable. It declined the PLR because regulations addressed the subject and explained that classification cont…
Could tenant or contractor jobs count toward Virginia's historical data-center exemption, and who could claim it?
Yes, if the VEDP memorandum allowed it and the jobs were located at and associated with operating or maintaining the data center. But only the single entity that owned the qualifying center, met the i…
Was airline pilot William Kellerman a Texas resident for 2003-2006, and could New Mexico apply its later 20% penalty cap?
Kellerman remained a New Mexico resident. Although he had a shared Texas condominium, driver's license, voter registration, and vehicle registration, his Albuquerque home, spouse, belongings, day-to-d…
Could an employed taxpayer subtract disability payments from Virginia income because the injury arose during combat-zone training?
No Virginia subtraction was allowed on the returns as filed. The state subtraction required qualifying disability income for a period when the individual was absent from work because of permanent and …
Could a taxpayer overturn a Virginia income-tax assessment with an appeal that identified no error, relevant facts, or supporting authority?
No. A Virginia assessment was presumed correct, and the taxpayer bore the burden of showing error. His letter did not identify an alleged error, give relevant facts, state grounds for relief, cite con…
Could a liquidating C corporation use its Illinois net-loss carryover on a final return during the historical suspension period?
No. The historical Section 207(d) suspension barred a C-corporation net-loss deduction for taxable years ending after December 31, 2010 and before December 31, 2014, with no exception for a final retu…
Were out-of-state domiciliaries who stayed in their Virginia home more than 183 days for medical reasons Virginia residents?
Yes, for the part of each year they lived in Virginia. Their medical reason and lack of intent to restore Virginia domicile did not prevent actual residency after they maintained a Virginia abode and …
What training and testing does Nebraska require to be licensed as an amateur or professional MMA judge or referee?
You must complete a judge or referee training program and pass a written exam, then submit an application for the Commissioner's approval. Nebraska Athletic Commission Ruling 2011-3 explains that to b…
What penalty does the Nebraska State Athletic Commissioner impose on a licensee or applicant who competes in a non-sanctioned fight?
A minimum 45-day ban -- or 60 days plus mandatory blood tests if the fight ended by knockout/TKO/RSC strike. Nebraska Athletic Commission Ruling 2011-2 provides that any licensee or license applicant …
Should a vehicle marketer charge Virginia sales tax on a direct-mail program's list price or the 50% discounted price actually billed?
Tax applied to the discounted price actually charged to the dealerships because the marketer absorbed the 50% discount and received no third-party reimbursement. The marketer could recover tax previou…
Could a senior claim the Illinois property-tax credit in a year when the state paid the bill under the tax-deferral program?
No. Section 208 allowed the credit only for real property taxes paid by the taxpayer during the taxable year. Under the Senior Citizens Real Estate Tax Deferral Program, the Illinois Department of Rev…
How did Florida treat an aircraft-transportation and repair subsidiary's apportionment, tax-proration election, and aircraft-parts exemptions?
The subsidiary could apportion all income by revenue miles and elect sales-and-use-tax proration. Parts for qualifying heavy aircraft, foreign-registered aircraft leaving the United States, and FAA-ST…
Which purchases by a commercial Kansas wind farm qualify for the integrated-production sales-tax exemption, and which remain taxable?
Some purchases are exempt. Kansas treats a commercial wind farm as a manufacturing facility with an integrated production operation, so turbines, towers, transformers, intra-farm collection wiring, pr…
Could Brewer Oil recover a September 2006 fuel-tax overpayment after filing its refund claim in July 2010?
No. The September 2006 fuel-excise-tax overpayment had to be claimed by December 31, 2009—three years after the end of the calendar year in which payment was originally due. Brewer Oil did not submit …
Could ADC deduct receipts for security and clerical support without a timely NTTC, or defeat the assessment because the Department waited years to request a hearing?
No. ADC did not obtain the required NTTC for its PSST/Comforce receipts within 60 days of the Department's notice, and its Type 6 and Type 7 certificates did not cover security and clerical support be…
Are a commercial landlord's charges to a tenant for 'condenser water' used to cool the tenant's leased space subject to NY sales tax?
No. The condenser water is chilled water the landlord pipes to the tenant's own air-conditioning system to cool the space the tenant leases. Because the water is delivered through pipes, the sale of t…
When a hotel's in-house AV provider contracts directly with guests, is the hotel purchasing those AV services -- and is it liable for the sales tax?
No to purchasing, but yes to liability when the hotel collects the money. Each hotel lets an in-house AV provider rent audiovisual equipment and related services directly to the hotel's guests, who si…
May an Illinois licensed cigarette distributor also sell stamped cigarettes directly to retail customers?
Yes for a distributor within the first statutory definition of 'distributor' that held a license under Section 4 of the Cigarette Tax Act. A retail location could not have unstamped cigarette packages…
What is South Carolina's latest statewide per capita income figure used for tax incentives (per SC IL #11-17)?
$32,460. SC Information Letter #11-17 publishes the updated statewide per capita personal income figure for South Carolina — $32,460 — which the Department uses to test qualification for various South…
Did Virginia exempt an egg processor's tray washer, wastewater wagon, or chicken-house pit fans from sales and use tax?
Only the pit fans were exempt. The plastic tray washer performed general maintenance rather than direct egg processing, and the honey wagon disposed of wastewater after production rather than acting i…
If I'm a Florida domiciliary and I buy a studio apartment in New York City that I'll only use occasionally, will that make me a New York State or City resident who owes New York income tax?
No, not from ownership alone. If Petitioner remains a Florida domiciliary, merely owning a New York City studio apartment does not by itself make him a New York State or City resident. But if the apar…
How does NY sales tax apply to a security company's monitoring services, alarm/CCTV equipment, installation, repairs, and its own purchases?
It depends on the service. Monitoring (and other alarm/protective) services are always taxable as 'protective and detective services' under Tax Law 1105(c)(8). For equipment and its installation: if t…
Is a replacement fee charged when a customer loses a rented book subject to Illinois sales tax under a true lease?
Generally no. When a book rental is a true lease, Illinois imposes no Retailers' Occupation Tax on rental receipts or related lease charges such as late fees or replacement fees. The lessor is treated…
Could a corporation avoid Virginia's related-party factoring-fee addback by asserting a valid securitization business purpose during its audit appeal?
Not through the procedure it used. The corporation had to report the addback, pay the tax, penalty, and interest, and then petition with clear and convincing business-purpose evidence. Because it clai…
Are the FCC-mandated 'shared costs' a number-portability administrator allocates to telephone carriers subject to NY sales tax?
No. The petitioner runs the regional databases that let phone customers keep their number when they switch carriers, and federal rules make the carriers share the cost of that system. Although it conv…
How can taxpayers check whether an older South Carolina advisory opinion was modified or superseded (per SC IL #11-16)?
Use the citator attached to SC Information Letter #11-16. It helps you determine what effect newer South Carolina advisory opinions have on previously published ones — whether an opinion was modified,…
Could Jeannie Myers recover a $12.28 estimated-tax penalty when temporary Census wages pushed her 2010 tax above the $500 exception?
No. Myers owed $742 of 2010 personal income tax and had only $21 withheld, leaving a $721 difference—more than the $500 penalty exception. Her 2009 liability was $493, she had paid it in one lump sum …
Do Metro-North Commuter Railroad maintenance-of-equipment workers who sometimes work in both New York and Connecticut owe income tax only to their home state, or to every state where they perform services?
They must pay income tax to every state where they perform services, plus their resident state. The federal railroad tax exemption in 49 U.S.C. § 11502(a) (added by the Amtrak Reauthorization and Impr…
Did consumer home shows qualify as industry trade shows so that exhibitor booth subleases were exempt from Florida real-property rental tax?
Yes. The shows focused on the home-and-garden industry, displayed relevant products and services, and were marketed through trade channels. The organizer owed tax on its prime convention-center lease,…
Must Virginia deed-recordation tax use the property's assessed value when it exceeds the stated consideration?
Not automatically. Recordation tax used the greater of consideration or actual property value, and assessed value carried a strong presumption of accuracy. But the circuit-court clerk could consider c…
Could Virginia Taxation exempt or refund tax on pollution-control equipment before a statutory certifying authority approved it?
No. The Department of Taxation administered the exemption only after a statutory certifying authority approved the equipment; it had no power to make that technical certification itself or override DE…
Does an Illinois public school district owe Retailers' Occupation Tax when it sells books and supplies to students?
Yes. Illinois said a school district incurred Retailers' Occupation Tax when selling books and supplies to students because those sales competed with private retailers and were not direct performance …
When a vehicle lease has an end-of-lease 'true-up' payment between the leasing company and the customer, how is Colorado state and local sales/use tax adjusted, refunded, or collected?
Treat the true-up as an adjustment to the earlier lease payments. Because the lease agreement says the payments are only estimates to be finalized when the vehicle is sold at lease-end, the true-up re…
How did Illinois analyze sales tax, service tax, nexus, and voluntary disclosure for an out-of-state repair dispatcher using Illinois contractors?
Illinois did not expressly decide the repair dispatcher's nexus or final tax liability. It explained that construction contractors were end users owing Use Tax on materials permanently incorporated in…
Are niche walls, wall fittings, and paneling installed during a retail store's initial build-out taxable fixtures or nontaxable capital improvements?
They're capital improvements, so they aren't taxable as tangible personal property. The floor-to-ceiling display niche walls, wall fittings, and paneling were installed during the store's initial buil…
Is an unavoidable percentage fee added to a taxable Illinois retail transaction itself included in taxable gross receipts?
Generally yes. Illinois Retailers' Occupation Tax applied to all consideration received for a retail sale, and the seller could not deduct materials, labor, freight, overhead, processing, or other bus…
Did an out-of-state return and voter registration overcome evidence from a Virginia driver's license and vehicle registrations?
No. The out-of-state resident return and voter card supported domicile elsewhere, but the taxpayer obtained a Virginia driver's license in March 2007, renewed it in 2010, and kept two vehicles and a t…
Were out-of-state insurance companies exempt from Illinois corporate income and replacement tax?
No. Illinois corporate income and personal property replacement taxes applied to insurance companies whether domiciled in Illinois or another state. Business income was apportioned using Illinois dire…
Could a C corporation use an Illinois net-loss carryover on its final return during the historical 2011–2014 suspension?
No. Historical Section 207(d) prohibited a C-corporation carryover deduction for any taxable year ending after December 31, 2010 and before December 31, 2014. The statute did not provide an exception …
When spouses file separate Virginia returns and one is a nonresident, what income measure allocates shared deductions and exemptions?
Federal adjusted gross income was the example Virginia used for proportional allocation. Each spouse first had to account separately for income, deductions, and exemptions. Only items that could not b…
Could a taxpayer relitigate business deductions in Virginia after the IRS made a final 2005 itemized-deduction adjustment?
No. Virginia generally follows federal figures and does not look behind the IRS's final determination after a federal examination. The taxpayer had one year to report the federal change on an amended …
Was a machine dispensing exempt gloves, ear plugs, and safety glasses itself exempt manufacturing equipment?
No. The machine controlled and dispensed safety supplies but was neither indispensable to nor an immediate part of production. Exempt safety apparel did not make the storage-and-dispensing machine exe…
Why did Illinois sales tax appear on mail-order prescription drugs, and how did a pharmacist calculate and collect that tax?
Qualifying drugs, medicines, and medical appliances were taxed at a reduced 1% Illinois state rate plus applicable local taxes; items not qualifying for the reduced rate used the 6.25% general-merchan…
Could a county impose BPOL tax on a foreign parent because its wholly owned service subsidiary operated in the county?
No. The subsidiary was a separate legal business operating at the county location, while the foreign parent had no facility, employees, property, or business activity there. Virginia ordered the count…
Did a public school division's annual or every-other-year surplus auction qualify as an occasional sale?
Only if all of the school division's sales stayed within the occasional-sale limit. Government surplus sales were generally taxable. A seller making three or fewer separate sales occasions in a calend…
Was a worker living in Virginia over 183 days a resident, and could she deduct Virginia housing as temporary-job lodging?
Virginia treated her as an actual resident because she maintained a Virginia abode for more than 183 days, even if her domicile remained elsewhere. Housing was not deductible as temporary-job lodging …
Was an individual personally liable for a dissolved company's tax merely because her Social Security number appeared on company returns?
No. The available evidence showed that her Social Security number had been used erroneously on company returns and that she had never been a shareholder, officer, director, or employee. She therefore …
Who owes Illinois tax on building and remodeling materials that a construction contractor permanently incorporates into real property?
The construction contractor owed Use Tax on the cost of materials permanently affixed to or incorporated into Illinois real property. If the supplier did not collect the tax, the contractor had to sel…
How do loyalty points and paperless autopay discounts affect South Carolina sales tax on wireless service, phones, and accessories?
Loyalty points do not change the taxable monthly wireless fee when issued, and redeemed discounts generally reduce the taxable price. But phones transferred for one cent or far below cost may be taxab…
Was a former president personally liable for company use tax when tax and finance duties belonged to the CFO?
No. His responsibilities were limited to operations and sales, while the CFO handled tax filings, financial reporting, and bank accounts. The president left active involvement before the company recei…
Could an out-of-state receivables affiliate join a Virginia combined return or avoid factoring addbacks through a business-purpose claim made on appeal?
No. The receivables affiliate operated entirely outside Virginia, lacked Virginia nexus, and would not have been subject to Virginia income tax on a separate return, so it could not join the combined …
May an Illinois manufacturer buy pallets, containers, wrapping, and packing materials tax-free for resale when ownership passes to customers with the shipped product?
Yes for pallets and qualifying containers, wrapping, and packing materials when ownership transferred to the customer together with the shipped product. Illinois treated the container seller's transac…
Can a nonresident partner claim an additional passive activity loss to offset New York's required bonus-depreciation add-back, even though the partnership had a larger overall economic loss?
No. The Tax Law contains no provision letting a nonresident partner claim an extra passive activity loss equal to the New York adjustments. Because the required bonus-depreciation add-back under Tax L…
Are a layaway service fee and a layaway cancellation fee subject to Kansas sales tax?
Not taxable. A non-refundable layaway service fee and a layaway cancellation fee are not subject to Kansas sales tax, because no retail sale has been made. On a layaway, sales tax is due only when the…
Could New Mexico keep two later tax liens on Samuel Ponce's property when both duplicated one 1997 assessment and extended beyond its ten-year collection period?
No. New Mexico issued one 1997 personal-income-tax assessment, then recorded overlapping liens in 1998, 2003, and 2006. Filing a lien counted as a collection action, and the Department admitted later …
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