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 year-round employees supporting a customer at its county facility create a BPOL definite place of business?
Likely yes. The provider owned no local property and had no phone, advertising, mail, or administration at the client site, but its employees performed around-the-clock services there 365 days a year.…
Could Mark and Debra Stanger avoid New Mexico penalty after an IRS audit disallowed pension-plan deductions that an earlier IRS letter and their accountant had supported?
Yes as to penalty, but not interest. Mark and Debra Stanger reasonably relied on their accountant and an IRS determination letter when claiming defined-benefit-plan contribution deductions. After the …
Is a subscription to an educational website with videos, study guides, practice questions, and no software download taxable in Illinois?
The GIL did not expressly classify the educational subscription. It stated that electronically transferred or downloaded information and data were not tangible personal property, while canned software…
Can a nonprofit single-member LLC use its educational nonprofit parent's Illinois E number without applying separately?
Generally no. An organization's purchases were taxable unless that organization had an active Illinois E number, even when it was related to an organization holding one. The discretionary statute allo…
Are engineering and design charges for custom bridges taxable in Illinois, and what if engineering is sold without tangible property?
It depends on the bridge transaction. If the bridge was a retail sale, separately stated engineering and design were costs of doing business included in taxable gross receipts. If the bridge met all s…
Can a trailer used only to transport and store combine headers qualify for Illinois's farm-machinery and equipment exemption?
Yes, they may qualify. Illinois said combine-header transport trailers were not general transportation vehicles when used solely to carry headers for installation on a combine or store them when remov…
Can a Kansas county appraiser raise my property value using aerial or street-view images instead of actually coming out to look at it?
Only with the Director's advance approval, and never entirely. Kansas law requires every parcel to be "actually viewed and inspected" once every six years, and this directive holds that digital imagin…
Did homeowners qualify for Virginia's same-lender refinance tax rule when the broker had sold the original mortgage to its parent bank?
No. The reduced recordation-tax rule applied only when the refinancing lender was the lender then holding the existing deed-of-trust debt. Although both loans went through the same broker, the broker …
Did a Virginia-domiciled travel nurse owe Virginia tax on wages earned in other states?
Yes. She admitted that she had not changed her Virginia residency, so Virginia taxed her as a resident on federal adjusted gross income even though she lived and worked elsewhere. She qualified for Vi…
Could Thomas Nagle claim estimated 2006 wage-withholding credits without W-2s, and could New Mexico apply the later 20% penalty cap?
Partly. Thomas Nagle credibly proved $39.25 of withholding for his final 2006 pay period because his December 15 pay statement and equal-pay testimony established a regular pattern. He could not prove…
What corrections did Illinois suggest for a private publication about moving property into Illinois and taxing rented vehicles?
Illinois did not approve or endorse the private publication. It suggested limited corrections: the moving-to-Illinois exemption language should refer to individuals because businesses were not exempt,…
Did a military spouse qualify for a Virginia withholding refund when she and the service member did not share the same domicile?
No. The spouse appeared to retain domicile in State A, but the service member had never been physically present there and therefore could not acquire State A domicile despite vehicle registration, vot…
How did Florida source a cable programmer's distributor subscription revenue and national advertising revenue for the corporate sales factor?
Both were sourced under the income-producing-activity rule to the taxpayer's customer location. Subscription revenue was Florida sales when the distributor was located in Florida; advertising revenue …
How did Illinois tax retail and private-party vehicle transfers, military purchases, trade-ins, and motor-vehicle leases in 2011?
This 2011 GIL was a broad survey, not a ruling on one transaction. It said retail sales of the listed vehicles were subject to Retailers' Occupation and Use Tax, while private-party transfers could tr…
Are aircraft repair and maintenance services or the parts transferred with them exempt from Illinois tax?
Unresolved for the requester. Illinois could not determine the treatment because the letter did not identify the exact service or maintenance work or the aircraft parts involved. A service with no tra…
If a Tennessee LLC taxed as a partnership makes a federal IRC Section 754 election, do the resulting basis step-ups under Sections 743(b) and 734(b) also affect the LLC's Tennessee excise tax net earnings?
It depends on which kind of Section 754 basis adjustment is involved. An IRC Section 743(b) adjustment (triggered when a member's interest is SOLD) only steps up the PURCHASING MEMBER's own personal/i…
When are medical-supply payments involving Medicare, Medicaid, or Illinois HFS exempt from Illinois sales tax?
A payment was exempt only when Medicare, Medicaid, or the Illinois Department of Healthcare and Family Services paid the provider directly and the government exemption was properly documented with an …
What Virginia tax interest rates applied during the fourth quarter of 2011?
Virginia's fourth-quarter 2011 rates were 5% for tax underpayments and 5% for overpayments, reflecting 3% corresponding federal rates plus two percentage points. For estimated-tax additions, June 30 y…
Could Sunrooms Plus exclude claimed loans, reimbursements, and returned checks from a bank-deposit gross-receipts audit without supporting records?
Mostly no. The Department could use bank deposits to estimate Sunrooms Plus's unreported gross receipts because the company did not timely provide complete records. The hearing officer excluded $1,493…
Did South Carolina extend tax relief to victims of Hurricane Irene (per SC IL #11-15)?
Yes. Following the IRS, the South Carolina Department of Revenue extended the same tax relief to victims of Hurricane Irene, postponing certain filing and payment deadlines to October 31, 2011 — inclu…
When a corporate group emerges from Chapter 11 bankruptcy with discharged debt, does Tennessee follow the federal rules that exclude cancellation-of-debt income but also shrink the group's net operating losses, basis, and loss carryforwards after an ownership change?
Tennessee's excise tax excludes discharge-of-indebtedness income from net earnings the same way federal law does (Tenn. Code Ann. § 67-4-2006(b)(1) doesn't require adding it back), but Tennessee does …
Is an LLC that's wholly owned by an individual's IRA (through a custodian) exempt from Tennessee franchise and excise tax as a family-owned entity, if its only income is residential rent?
Yes, conditionally. An LLC wholly owned (through a custodial IRA) by one individual qualifies as a "family-owned noncorporate entity" exempt from Tennessee franchise and excise tax under Tenn. Code An…
When were Florida towing, vehicle-storage, and related administrative charges taxable?
Separately stated towing was not taxable, but a bundled taxable-and-nontaxable charge was fully taxable. Storage was exempt only for a documented lawful impoundment; ambiguous records required tax. Ad…
May an Illinois licensed cigarette distributor sell cigarettes and other tobacco products directly to retail customers?
Yes for a cigarette distributor within the first statutory definition of 'distributor' that held a Section 4 license. A retail-sales location could not hold unstamped cigarette packages, and the distr…
What Virginia filing and payment relief applied to Hurricane Irene victims with September 15, 2011 deadlines?
Virginia gave qualifying individuals and businesses seven extra days, through September 22, 2011, for income- and withholding-tax returns and payments otherwise due September 15. Relief applied when n…
Can a Tennessee series LLC with dozens of individual series file one combined franchise and excise tax return, or does every series have to file its own separate return?
No, a single combined return isn't allowed. Each individual series of the series LLC -- potentially up to thirty of them -- must file its OWN separate Tennessee franchise and excise tax return, and so…
Did Healthsouth preserve its 2006 gross-receipts-tax refund by filing the original claim on time and later refiling after Department inaction?
No. Healthsouth timely filed its original refund claim on October 8, 2009, but the Department did not act within 120 days and Healthsouth did not protest or sue by May 6, 2010—the 210-day deadline. It…
Were monthly payments under a long-term lease-purchase agreement taxable as rent when the agreement required transfer of the deed?
No. The agreement was substantively an installment sale and mortgage, not a lease: payments amortized principal and interest, the seller had no reversion, the buyer could pay off the balance, bore pro…
Could a Florida consolidated group retroactively escape its election by asserting years later that the former parent lacked nexus when the election was made?
No. The group had repeatedly filed and benefited from consolidated returns, supplied no clear evidence disproving original nexus, and provided none of the information required for good-cause deconsoli…
Did an out-of-state recognition-products seller create Florida corporate income tax nexus when its in-state activity was limited to soliciting orders?
No, for years fully covered by Public Law 86-272. Florida representatives only solicited orders for tangible goods; approval, fulfillment, inventory, and shipment occurred outside Florida, with delive…
What documentary stamp tax applied when an individual transferred unencumbered foreclosure property to an LLC indirectly owned through the individual's revocable trust?
Only the minimum deed tax applied if no consideration was given and the taxpayer retained the same proportional beneficial ownership through the trust and LLC. The LLC became a conduit entity, so a tr…
How do Illinois Service Occupation Tax rules apply to custom-printed loyalty cards stored in Illinois and later drop-shipped nationwide?
Unresolved for the exact loyalty-card transaction. Illinois did not directly answer whether tax attached when ownership changed in Illinois, whether later drop-ship and freight fees were taxable, whet…
Does a Missouri business owe Kansas sales tax on training videos bought from a Kansas producer?
It depends on delivery. A training video delivered to a Kansas facility, or picked up in Kansas by the buyer or its agent, is subject to Kansas sales tax. Kansas tax does not apply when the Kansas sel…
Could a pass-through recipient preserve transferred conservation credits based on an easement appraisal Virginia found overstated?
No. Virginia rejected the landowner's unsupported approximately $31 million easement valuation and adopted an independent $3.9 million sales-comparison value. That reduced the total credit from about …
Did Virginia accept a conservation-easement appraisal valuing the donated interest at about $31 million?
No. The owner's discounted-cash-flow appraisal used unsupported lot assumptions and implied nearly eightfold land appreciation in about 2½ years. Virginia adopted an independent sales-comparison appra…
May an Illinois retailer exclude separately billed air freight paid to acquire goods for sale from taxable gross receipts?
No. A seller's incoming freight or transportation cost for acquiring property for sale was a cost of doing business included in taxable gross receipts. The seller could not deduct it merely because th…
Could Mary Satterla's estate recover New Mexico estate tax after abandoning a timely protective claim and filing a new claim after limitations expired?
No. The estate timely filed a $394,406 protective refund claim on June 1, 2004, but the Department did not act within 120 days and the estate did not protest or sue by December 28, 2004, the 210-day d…
Could taxpayers move a 2008 Virginia NOL deduction to 2007 because an other-state tax credit prevented a cash refund for 2006?
No. Virginia required the 2008 loss to follow the ordinary two-year federal carryback sequence after disallowing the special five-year carryback. The deduction fully reduced the taxpayers' 2006 FAGI a…
What is South Carolina's tax interest rate for the period ending December 31, 2011 (per SC IL #11-14)?
3%. SC Information Letter #11-14 sets South Carolina's interest rate on tax underpayments and overpayments at 3% for the period October 1, 2011 through December 31, 2011 — down from 4% in the prior qu…
Is a maintenance agreement covering hardware, technical support, warranty repairs, and canned-software updates taxable in Illinois?
Unresolved for the requester's embedded-software and hardware agreement because Illinois declined to issue the requested PLR and did not apply the rules to a final result. Generally, maintenance inclu…
Which building systems and production items for a meat-processing facility qualified for Illinois manufacturing relief under the 2011 rules?
Illinois did not approve every facility component requested. The manufacturing-machinery exemption applied to machinery and equipment used primarily—more than 50%—in manufacturing or assembling proper…
How did Illinois distinguish taxable canned software from custom software, qualifying licenses, and related support or training services?
Illinois gave general rules rather than a separate conclusion for every service described. Canned software was taxable tangible personal property regardless of electronic delivery. Custom software pre…
Did an out-of-state medical-device seller with an Illinois sales employee have Illinois sales-tax nexus or need to keep filing returns?
Unresolved. Illinois declined to determine the seller's nexus or remove it from filing because nexus facts were best gathered by an auditor. Under the historical 2011 framework, an agent or representa…
Was Illinois income tax properly withheld from inmate payroll, and did the inmate have to prepare Form W-2?
It depended on federal law. Illinois withholding was required only for Illinois compensation that was subject to federal income-tax withholding; federal FICA treatment alone was not enough. The GIL di…
When a NY vendor ships taxable goods by common carrier, is sales tax based on the rate where the vendor is located or where the buyer takes delivery?
The rate is the combined state and local rate in effect where the buyer takes delivery. New York sales tax is a 'destination tax': under Tax Law 1213 the vendor collects the city, county, and school-d…
Are soaps, acids, sanitizers, teat dips, and similar chemicals used by Illinois dairy farmers exempt farm chemicals?
It depends on the chemical's use. Raising dairy cows to produce milk for sale as food qualified as production agriculture. A chemical product used in that production or in the care of animals whose pr…
What were the significant South Carolina tax-law changes from the 2011 legislative session, as summarized by the Department (per SC IL #11-13)?
SC Information Letter #11-13 is the Department's brief summary of the significant tax and regulatory law changes enacted in South Carolina's 2011 legislative session, organized into five categories: (…
How is Nebraska's 5% gross receipts tax on MMA, boxing, and wrestling events calculated, including on sponsorship and complimentary tickets?
The 5% tax applies to the total face value of tickets collected at an event (minus state and federal taxes) plus, in most cases, the full amount paid for any sponsorship/advertising package that inclu…
We're building a new electric transmission line partly financed and secured by mortgages to the New York Power Authority (NYPA), a state agency. Is recording those mortgages subject to New York mortgage recording tax?
No MRT is due. A private developer built a 660-megawatt electric transmission system running from New Jersey into New York City, financed partly through the New York Power Authority (NYPA) under a 20-…
Is renting out a banquet/meeting room (not a hotel room) for weddings, business meetings, or temporary merchandise sales subject to Tennessee sales tax?
It depends entirely on WHY the room is rented, not who rents it. Renting the meeting/banquet room for a meeting, seminar, wedding reception, or similar event is NOT subject to Tennessee sales tax, reg…
How did Virginia treat a multistate maintenance contract, late exemption certificates, professional services, and post-amnesty penalties?
Virginia removed the support-contract portion covering equipment permanently outside the state but taxed the Virginia equipment portion. It rejected a late ISP certificate without proof of the full st…
Was Aurelia Shorty's 2005 Navajo Nation teaching income exempt when she worked on tribal land but lived in a Gallup apartment?
No. Shorty was an enrolled Navajo Nation member and all her 2005 teaching income came from work at a Navajo Nation school, but she did not live within the Nation's boundaries. She worked year-round, p…
Does a summer home in a cooperative community that restricts occupancy to a 5-month season and has no working heating system count as a 'permanent place of abode' for New York statutory residency purposes?
No. Because the cooperative's rules limited use of the home to summer occupancy (May 1 through September 30) and Petitioner had the heating system permanently removed around October 5, 2010, the home …
Does Illinois provide a sales-tax exemption for disabled veterans or for purchases by a county veterans association?
Illinois did not have a sales-tax exemption for disabled veterans. The Department could not decide whether the county veterans association qualified because the request did not explain its creation, o…
Which heart-assist devices, accessories, parts, and maintenance agreements qualified for Illinois's reduced medical-appliance rate?
Unresolved for the nine product and service categories because Illinois said it lacked necessary item-specific information and declined the PLR. A medical appliance had to be intended by its manufactu…
Were sales of two single-use human allergy skin-testing devices subject to Florida sales tax without individual prescriptions?
No. Based on their described diagnostic use, the devices were treated as exempt allergy test kits that use human blood to test for common allergens, an item included on Florida's nontaxable medical-it…
What resale-certificate documentation must an Illinois-registered seller keep for a drop shipment to an Illinois customer?
The Illinois-registered drop-ship seller had to charge tax or document the exemption for its Illinois delivery. To establish that its sale was for resale, it had to obtain and keep a valid Certificate…
Must an Illinois business making only wholesale sales register and file sales-tax returns, and how can it document purchases for resale?
A person making exclusively wholesale sales was not required to register, file Retailers' Occupation Tax returns, or remit that tax. The business could nevertheless obtain an Illinois resale number so…
How did Virginia tax an internet cafe's phone-access cards, complimentary food, estimated assets, and equipment or software fees?
Virginia taxed access cards advertised for both telephone and Internet use because telephone calling cards were tangible personal property and the cafe did not prove Internet-only sales. Complimentary…
When did a Florida UCC-1 filing, security agreement, or variable trade-credit invoice trigger documentary stamp tax?
A UCC-1 alone was not taxable if the security agreement was not filed. The agreement itself lacked a sum certain, but filing or recording its security interest made it taxable on the secured balance. …
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