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 outstanding non-delinquent ad valorem taxes or special-assessment liens remaining on transferred property count as deed consideration?
No. Unlike mortgage debt arising from a contractual obligation, those public-charge liens ran with the property and could not become a personal judgment against the owner. Their present or future valu…
How did Florida sales tax apply to a gaming ship's vessel costs, gaming, food sales, boarding fees, and port berth?
Florida gave mixed answers. The ship, retrofit, equipment, fuel, and other property qualified for the vessel partial exemption; gaming receipts were outside Chapter 212; food and drinks were taxable i…
Are weed-control chemicals used on prairie-grass fields enrolled in wildlife conservation programs exempt Illinois farm chemicals?
The Department did not grant the farmer a specific exemption. It explained that farm chemicals used in production agriculture can be exempt when the resulting crops or animal products are to be sold. …
Could an Illinois construction contractor claim the expanded enterprise-zone exemptions for manufacturing or pollution-control property?
No. Illinois revoked ST 10-0101-GIL and clarified that the expanded enterprise-zone exemptions for property used in manufacturing or assembling and for property used in pollution-control facilities we…
Must a corporation add back Kentucky's Limited Liability Entity Tax when computing Virginia taxable income?
No. Kentucky's Limited Liability Entity Tax was measured by gross receipts or gross profits and excluded most ordinary business expenses, so Virginia did not treat it as a tax based on or measured by …
Could a vendor exempt sales to federal prime contractors without timely certificates, contract statements of work, or reviewable classified records?
Not on assumptions alone. Thirty-one unclassified-contract sales lacked resale certificates and remained taxable unless the vendor used a final 120-day evidence period to prove resale or another exemp…
Which healthcare affiliates had Virginia BPOL filing duties, and where were their service receipts sitused?
Each Virginia affiliate with office space, property, records, phone, mail, and public business presence had a definite place of business and would file if its locality taxed the activity. Affiliates w…
Was a separated spouse liable for a joint Virginia return her spouse electronically filed without her agreement?
No. Virginia did not generally adopt the federal innocent-spouse provision, and spouses who actually file jointly are each liable for the full return. But the evidence showed that this taxpayer never …
Which 2011 tax rate applied to setup components sold with a manufactured home versus sold later?
Setup components attached to or bought at the manufactured home's initial sale, becoming an integral part and included in its sales price, used the then-3% motor-vehicle sales-and-use-tax rate. Compon…
Were machines testing raw pouch film and completed sanitary products exempt production-line quality-control equipment?
Yes. Testing raw film after plant-site storage counted as handling raw material within production, even though the tensile tester stood behind the main machine. Testing bagged sanitary products for me…
Is Nebraska sales and use tax due on digital music, movies, TV shows, e-books, and digital codes delivered electronically?
Yes -- since October 1, 2008, electronically delivered digital audio works (music), digital audio-visual works (movies, TV shows, music videos), digital books, and the digital codes that unlock them a…
Are receipts from a patent draftsman's formal drawings, delivered solely electronically as PDFs, subject to NY sales tax?
No. The draftsman creates formal patent drawings and delivers them solely electronically, as PDF files emailed to patent-attorney customers, with no paper copy. Sales tax applies to sales of tangible …
How did Florida tax supplies consumed in cleaning services versus items separately provided to cleaning customers?
The provider owed tax on cleaning supplies it consumed, but could buy customer resale items with a resale certificate and collect tax when selling them. Because both the cleaning service and resale it…
Were breast implants used for augmentation exempt as prosthetic or durable medical devices?
No, not for the augmentation uses assessed. Virginia had already excluded implants purchased for qualifying reconstructive surgery. The contested implants enlarged underdeveloped breasts, restored vol…
Which mortgage, charitable, mileage, uniform, and professional-dues deductions survived Virginia's documentation review?
Virginia adjusted second-mortgage interest to the documented amount and allowed donated furniture, books, tools, electronics, and other items individually worth $500 or less with proper receipts. It d…
Did two employees living in Virginia create corporate income-tax nexus when they performed all work under an out-of-state contract?
No. The corporation had two Virginia-resident employees and registered for wage withholding, but it had no Virginia property, sales, service contracts, or employee activity. Both employees performed t…
Was AMG National Trust Bank subject to Virginia bank franchise tax rather than corporate income tax?
Yes. The Norfolk Circuit Court held that AMG was a bank under the Virginia Bank Franchise Tax Act, subject to bank franchise tax and exempt from corporate income tax. It ordered refunds of all corpora…
How did installment payments from a July 2010 business sale split across Illinois's 2011 rate change, and could the corporation use its 2010 loss?
Under a specific-accounting election, installment gain belonged to the pre-2011 portion only to the extent federal accounting recognized gain from payments received before January 1, 2011. Gain tied t…
Did Paragon's earlier gross-receipts-tax refund prevent the Department from assessing its later zero-liability returns?
No. Paragon provided taxable services in New Mexico but reported zero gross receipts tax from January 2004 through October 2009, understating liability by more than 25%. The resulting $158,298.78 tax …
Is electronic access to Illinois county title records, delivered entirely online to an out-of-state customer, subject to Illinois sales tax?
The GIL did not issue a definitive transaction ruling, but said electronically transferred or downloaded information and data were not tangible personal property. Based on the limited facts, if the co…
Are room charges at privatized DoD temporary military housing subject to the Kansas Transient Guest Tax or Retailers' Sales Tax?
Neither tax applies. The Department ruled that room charges at privatized U.S. Department of Defense temporary housing — open only to military 'official travelers' on temporary duty, a change of stati…
If a company sells compressed air (not the compressor itself) to a manufacturer under a long-term service contract, does the sale qualify for Tennessee's industrial machinery sales tax exemption?
No. Selling compressed air under a "compressed air as a service" contract does NOT qualify for Tennessee's industrial machinery exemption, for two independent reasons: (1) the customer never buys, lea…
Is a document-management/e-discovery service -- collecting, processing, hosting, and storing client data, plus consulting and file delivery -- taxable in Tennessee, and does it matter whether the finished files are delivered electronically or on a hard drive?
Mostly not taxable, with one key exception. The provider's data collection ("Data Service"), hosting, storage, and hourly project-management consulting are all NOT subject to Tennessee sales and use t…
When are storage-in-transit charges for interstate household-goods moves exempt from New Jersey Sales and Use Tax?
Interstate storage-in-transit charges were exempt while the storage stayed within the period stated in the carrier's tariff or customer contract. If storage exceeded that period, the full storage char…
Could a multistate partnership use separate accounting for Virginia real-estate investments instead of the statutory apportionment formula?
No. A different result under separate accounting did not prove that Virginia's statutory formula was unconstitutional or inequitable. The partnership supplied no clear and cogent evidence of gross dis…
Which graphic-printing audit items did Virginia remove after reviewing late certificates, invoices, shipment records, and customer facts?
Virginia removed line items 2, 5, and 6 because records showed out-of-state shipments or an art charge tied to those shipments, and removed items 35 and 43 because customer information supported resal…
Could active-duty service members claim the Illinois property-tax credit when their Illinois home was the principal residence but legal domicile changed later?
Yes. Although the couple did not change legal residence to Illinois until retiring from active duty in 2010, they had owned and physically used the Illinois home as their principal residence since 200…
Are irrevocable trusts created by New York grantors exempt from filing New York State income tax returns once all their trustees live outside New York?
The Trusts stopped owing New York income tax on their New York-resident portions once the New York co-trustee resigned, leaving a Connecticut resident as sole trustee, satisfying all three conditions …
Could a taxpayer overturn years of Virginia assessments by claiming he had no federal adjusted gross income under his reading of federal law?
No. Appeals for 1995, 1996, 1998-2001, and 2005 were filed after Virginia's 90-day deadline and were barred. The 2007 appeal was timely, but the taxpayer admitted receiving income and supplied no obje…
Could Jesus Hernandez avoid gross-receipts-tax penalties because his accountant told him that income-tax filings covered all his tax obligations?
Yes, as to penalty only. Hernandez owed $2,795.14 of gross receipts tax on 2005-2006 Schedule C service income, and $1,071.33 of mandatory interest remained due. But he had fully informed a licensed a…
Did an entire spray-paint booth qualify as exempt manufacturing equipment because it controlled finishing conditions?
No, not as a complete unit. The booths created controlled temperature, humidity, drying, dust, and contaminant conditions, but ordinary walls, floors, and ceilings did not play an immediate production…
Was inbound freight from furniture manufacturers exempt when separately passed through to customers, and was a mail-based sample audit valid?
The inbound freight was taxable. Virginia's separately stated transportation exemption covered delivery from the seller to the final purchaser, not shipping from a manufacturer to the dealer or its wa…
Is firewood sold over the counter at a retail store exempt from Tennessee sales tax as residential heating fuel?
No. Even though Tennessee exempts "gas, electricity, fuel oil, coal and other energy fuels sold directly to the consumer for residential use" under Tenn. Code Ann. § 67-6-334(a), that exemption specif…
Could a Virginia National Guard captain claim combat, extended-active-duty, and Guard-pay subtractions without deducting the same income twice?
Yes, multiple military subtractions could apply, but the same income could not be subtracted twice and only compensation included in FAGI was eligible. Virginia kept the basic-pay calculations, allowe…
Was electronically downloaded software taxable in Florida, and did the seller's Florida personnel raise nexus concerns?
The download was not taxable because it contained no tangible medium or accompanying tangible property. The Department did not make a final nexus holding, but warned that Florida corporate officers an…
Were exhibitor licenses for retail concessionaires selling goods at an event on airport premises exempt from Florida real-property rental tax?
Yes. The agreement was a license rather than a lease, the exhibitors sold food, drink, or tangible goods as retail concessionaires, and the event property was within airport premises. Licenses to non-…
When is South Carolina sales tax due on layaway and partial-payment sales, and is a layaway fee taxable?
Tax is due when title or possession of the merchandise transfers, not when advance payments are received. A layaway fee becomes taxable as part of the sale if the transfer occurs, but is not taxable i…
When an event-staging company both rents out its own tables/chairs AND handles a customer's own equipment for a one-day event, which of those charges owe Tennessee sales tax?
It depends on WHOSE property is involved. When the company rents its OWN tables, chairs, or other equipment to a customer, ALL of the associated transportation and handling charges are taxable as part…
Is an SEC EDGAR filing service -- converting company financials into SEC format and transmitting them electronically -- a taxable telecommunications service in Tennessee, and does it matter that the provider's servers are out of state?
The EDGAR filing service IS a taxable "telecommunications service" under Tennessee law (Tenn. Code Ann. § 67-6-205(c)(3)), because converting customer files into SEC-compliant format and electronicall…
My temporary-staffing employees work back-to-back assignments in different states -- some inside New York's Metropolitan Commuter Transportation District, some outside. How do I figure out which of their wages count toward my MCTMT payroll expense?
Each distinct, consecutive assignment is tested separately using the four-part "covered employee" allocation test, applied in strict order: localization (are the services performed entirely, or almost…
Could a tire dealer avoid tax on disposal fees because Department staff later gave incorrect verbal and online guidance?
No. Virginia's published 1994 bulletin required sales tax on tire-disposal fees connected with tire sales, even when separately stated. The dealer had no written proof of the alleged verbal advice dur…
Were a water utility's treatment purchases exempt because they processed water or because Virginia Health required them?
Direct-use treatment items could be exempt, but a government mandate alone was not enough. After repeal of the broad public-service-corporation exemption, chemicals, machinery, tools, equipment, and s…
Were a water utility's treatment purchases exempt because they processed water or because Virginia Health required them?
Direct-use treatment items could be exempt, but a government mandate alone was not enough. After repeal of the broad public-service-corporation exemption, chemicals, machinery, tools, equipment, and s…
When a software company licenses core products, optional add-ons, and maintenance together for one lump-sum, non-itemized price, does Tennessee's $1,600 'single article' local-tax cap limit the tax on that sale?
No. Because the software company bundles its core products, optional components, and maintenance together and charges one non-itemized lump-sum price, none of it qualifies for Tennessee's local-option…
If a Tennessee equipment-rental company charges for cartage, assembly, and disassembly along with the lease, are those service charges taxed along with the equipment rental, even if billed separately?
Yes to both. The equipment lease itself is subject to Tennessee sales and use tax under Tenn. Code Ann. § 67-6-204 because it's a rental of tangible personal property that's part of the company's regu…
Did a husband become domiciled in Virginia because he spent substantial time there caring for his ill wife?
No. He kept an out-of-state driver's license, vehicles, voting, residence, and federal-return address, while his extended Virginia stays were tied to his wife's medical treatment. Although he maintain…
Is a hotel's mandatory service charge on a banquet or meal included in taxable Illinois gross receipts?
Usually yes, unless the separately stated mandatory charge was actually turned over as tips or a substitute for tips to employees who directly prepared, served, hosted, or cleaned up that food or beve…
What are Kansas's Streamlined Sales Tax rules for how and when sales and use tax returns and payments are made?
To comply with the Streamlined Sales and Use Tax Agreement, Kansas announced that sales and compensating (use) tax remittances (K.S.A. 79-3601 et seq.) may be paid by ACH Credit or Debit; that a retur…
Must a Kansas event-production company charge sales tax when it furnishes audio, video, lighting, and other equipment with technicians who operate it?
Generally no. Equipment furnished with an operator is treated as a service rather than a rental, and the event-production services described were not among the taxable services in K.S.A. 79-3603. The …
Are a security firm's guard services, provided to a contractor working on a NYC government construction project, subject to NY sales tax?
Yes. Guard, patrol, and watchman services are taxable 'protective and detective services' under Tax Law 1105(c)(8). The security firm provides guard services as a subcontractor to a construction compa…
What deed tax applied when unencumbered property moved from a partnership through its wholly owned LLC partner to an individual and then a revocable trust?
Only minimum tax applied to the partnership and LLC deeds because proportional beneficial ownership did not change and no consideration existed. The trust deed also received minimum tax only if the re…
What did Illinois report in its 2011 multistate survey about transfer tax, discounts, gratuities, R&D, maintenance, and remote sellers?
This was a historical 2011 survey, not approval of the private publication. Illinois said real-estate transfer tax used net consideration after allowed deductions; unreimbursed discounts reduced taxab…
Could a manufacturer exempt packaging, compressor parts, gloves, oils, and pollution-control equipment under Illinois's 2011 rules?
Packaging could be purchased for resale when transferred to customers with the products and documented by a Certificate of Resale; retained, reused, or discarded containers did not qualify. Machinery …
Were a revolving-credit application, line-of-credit agreement, and bank approval letter subject to Florida documentary stamp or nonrecurring intangible tax?
No. No document contained all required elements of an unconditional promise to pay a sum certain signed by the borrower, and none expressly incorporated the others. Nonrecurring intangible tax did not…
Are motorcycle rentals covered by Illinois's Automobile Renting Tax, and is a lease to another short-term rental dealer exempt?
Motorcycles and motor-driven cycles were treated as automobiles under the Act, so a person renting them in Illinois for one year or less was subject to the Automobile Renting Occupation and Use Tax. T…
Can a foreign visitor obtain an Illinois sales-tax refund for merchandise bought and received in Illinois before taking it abroad?
No. Foreign or domestic traveler status did not exempt merchandise delivered and used in Illinois, and mere possession in Illinois counted as use. A sale remained taxable when the buyer received the p…
New York Advisory Opinion TSB-A-11(8)C: How does an internet-based futures and OTC exchange operator source its access, trade-execution, and market-data fees for the Article 9-A receipts factor?
Source them to the customer. The fees an internet-based futures and OTC market operator earns for exchange access, trade execution, and market data are other business receipts, sourced to the location…
Is calibrating a fuel meter a taxable repair service in Tennessee, and does it matter whether the meter is permanently attached to real property?
It depends on whether the fuel meter is affixed to real property. Calibrating a fuel meter is a taxable REPAIR SERVICE under Tenn. Code Ann. § 67-6-205(c)(4) when the meter is NOT affixed to realty, b…
Is a home-use physical therapy machine exempt from Tennessee sales tax when a doctor prescribes it, and does it matter whether insurance, Medicaid, or the government pays for it?
Yes, the machine is exempt from Tennessee sales and use tax as durable medical equipment when it is sold for HOME USE pursuant to a physician's prescription -- and that exemption does NOT depend on wh…
Why did historical Illinois Schedule CR put the full federal alimony deduction in the non-Illinois column when limiting the other-state tax credit?
Because Illinois had to apply the same alimony-deduction allocation principle to nonresidents and to the hypothetical other-state income used in the resident credit limit. Under Lunding, Illinois allo…
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