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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Are sales of e-books delivered electronically over the Internet subject to NY sales and use tax?
No. The company sells electronic books through an online bookstore, delivered over the Internet and stored on the customer's own device. E-books aren't tangible personal property -- they have no physi…
Are entry fees for a nationally sanctioned youth baseball tournament subject to Kansas sales tax?
Exempt. Kansas taxes fees charged for participation in sports and recreational activities under K.S.A. 79-3603(m), but that statute specifically carves out entry fees and charges for participation in …
Did ceasing operations create an exception allowing a C corporation to use a net-loss carryover during Illinois's historical suspension?
No. Historical Section 207(d) barred a C-corporation carryover deduction for taxable years ending after December 31, 2010 and before December 31, 2014. The statute contained no exception for a final t…
How can taxpayers check whether an older South Carolina advisory opinion was modified or superseded (per SC IL #11-12)?
Use the citator attached to SC Information Letter #11-12. It helps you determine what effect newer South Carolina advisory opinions have on previously published ones — whether an opinion was modified,…
Did a donee include the donor's holding period when calculating Illinois's subtraction for pre-August 1969 appreciation?
Yes, provided federal law included the donor's holding period in the donee's holding period. Illinois Section 203(f) used a holding-period fraction when the property's August 1, 1969 value was not rea…
Were payments to Economics of Dignity for managing an art-gallery LLC capital distributions rather than taxable consulting receipts?
No. Economics of Dignity managed World Wide Art Sellers' gallery and received payments reported on Forms 1099 as nonemployee compensation for consulting. Suspending an operating-agreement provision fo…
How does South Carolina's electric power tax apply when a manufacturer sells all self-generated power to Santee Cooper and separately buys its plant power from a cooperative?
The manufacturer's sale of biomass-generated power to Santee Cooper is exempt. The cooperative's separate sale of power back to the manufacturer is taxable, although the industrial-customer excess-sal…
Was an interstate trust bank exempt from Virginia corporate income tax when it was subject to the bank franchise tax but had no approved apportionment method?
Yes. The Norfolk Circuit Court held that AMG was a bank subject to Virginia's bank franchise tax and therefore exempt from corporate income tax, even if its bank-franchise-tax liability was currently …
Could a contractor buy school construction materials tax-free using the locality's exemption form and purchase-order instructions?
No. The contractor permanently installed materials into school real property and was their taxable user, not a reseller. It supplied no proof that the school system officially appointed it as purchasi…
Were separately stated labor charges for installing movable home-theatre systems subject to Virginia sales tax?
No. The home-theatre systems were taxable sales of tangible personal property, but the disputed invoice lines represented installation of that equipment. Virginia's regulation exempted separately stat…
Could invoice lines labeled shipping and handling be exempt if they actually represented only common-carrier delivery?
Potentially, but documentation was required. A lump-sum charge combining exempt transportation-out and taxable handling was generally fully taxable, while vendor or carrier records could segregate or …
Are an auctioneer's mandatory buyer administrative fees included in taxable Illinois gross receipts, and who owes the tax?
Yes when the underlying auction sale was taxable. A mandatory buyer administrative fee was part of the total selling price and could not be deducted as a service or business cost. If the auctioneer ac…
When is South Carolina's 2011 sales tax holiday and what is exempt (per SC IL #11-11)?
August 5-7, 2011. SC Information Letter #11-11 sets South Carolina's 2011 sales tax holiday for the weekend beginning Friday, August 5, 2011 at 12:01 a.m. and ending Sunday, August 7, 2011 at midnight…
Could an advertising company remove separately stated services, invalidate the audit sample, or limit review to three years after not filing returns?
No. The audited invoices did not prove exempt advertising for specific media campaigns; several sample invoices were not in the exceptions, and the disputed ones involved taxable tangible property or …
Could Virginia Taxation hear a business's direct BPOL and BTPP appeal when no complete final local appeal covered the disputed years?
Not yet. The business's 2011 correspondence did not identify specific BTPP years and amounts and no final county determination existed, while the 2010 BPOL protest remained locally pending and the cou…
Did an out-of-state employer owe Virginia withholding for employees working in Virginia, and could a self-created document pay the assessment?
Yes, withholding was required because employees performed services for wages in Virginia, regardless of the employer's out-of-state location. After the proprietor filed no returns and refused record a…
Is the rental of a swab tank used at a well subject to Kansas sales tax?
Taxable. Renting a swab tank — a portable holding tank used at wells — is subject to Kansas sales tax. Rentals of tangible personal property are taxable because a rental transfers property to someone …
How does the Kansas Rural Opportunity Zone income tax credit work for people who move to a designated county?
Kansas Notice 11-03 explains the Rural Opportunity Zone (ROZ) program created by 2011 Senate Bill 198, which designates 50 Kansas counties as ROZ and effectively provides an income tax exemption to ce…
Was cloud-streamed dental patient-education video subject to Illinois sales and use tax when customers received no property or software?
Generally no, if the customer only received online access and no software or other tangible personal property. ST 11-0052-GIL says a company providing access to a database of information without trans…
What is South Carolina's tax interest rate for the period ending September 30, 2011 (per SC IL #11-10)?
4%. SC Information Letter #11-10 sets South Carolina's interest rate on tax underpayments and overpayments at 4% for the period April 1, 2011 through September 30, 2011. Interest is compounded daily, …
Could a full-year Virginia resident and part-year-resident spouse claim a credit for tax paid on wages earned in another state?
Yes. The couple supplied the other-state return, and wages or business income taxed by both states could qualify. The credit was limited to the lesser of the other-state tax actually paid or Virginia …
Did attending college, working part time, and filing a resident return in another state end a student's Virginia domicile?
No. The student attended college, worked part time, received statements, and filed a resident return in the other state, but excluded investment income from that return in a way that raised doubt abou…
Did employment and utility bills in another state prove domicile there while the taxpayer kept Virginia licenses, vehicles, and a home under construction?
No. Employment and utility bills supported presence in the other state, but the address had been reported as rental property, no 2007 federal return established a permanent abode there, and the Virgin…
As an out-of-state lessor of equipment used in Colorado, do I collect from lessees both the sales tax I paid when I bought the property and use tax on their lease payments?
No — you choose one method, not both. For a true lease of 36 months or less, the default is the lessor pays sales/use tax up front when it buys the property and does NOT collect tax from lessees (it c…
What must an out-of-state or online seller do to ship cigarettes or smokeless tobacco to South Carolina consumers under the PACT Act (per SC IL #11-9)?
A remote or online seller that ships cigarettes or smokeless tobacco to South Carolina consumers (a 'delivery seller') must pay the South Carolina and any local excise tax IN ADVANCE of shipping, and …
Could an Illinois taxpayer claim a claim-of-right subtraction when repaying Social Security benefits that had already been subtracted when received?
No. Illinois had already allowed the federally taxable Social Security benefits to be subtracted in the years received under Section 203(a)(2)(L). Although the 2010 repayment supported a federal Secti…
Are a retailer's sales of municipally-mandated garbage bags and town-endorsed leaf bags subject to NY sales tax?
It depends on the bag. The town-mandated household garbage bags are exempt; the optional leaf bags are taxable. The mandated bags are embossed with the town's name and logo, must be bought and used to…
Could a military spouse claim the 2009 Virginia exemption when both spouses had established Virginia domicile before moving back to another state?
No. Both spouses had established Virginia domicile through their condominium, licenses, voter registrations, and vehicle ties, and no evidence showed another domicile before December 2009. The refund …
What did the 2011 Kansas Legislature change for biodiesel and ethanol fuel producer incentives?
Kansas Notice 11-02 (June 24, 2011) summarizes two 2011 motor fuel bills. House Bill 2014 (effective June 9, 2011) directed a transfer of $124,265 from the Kansas qualified biodiesel fuel producer inc…
Is Texas motor vehicle sales tax due when someone barters parts for a street-legal motorcycle, and can the parts count as a trade-in?
Yes. Exchanging parts for a street-legal motorcycle was a taxable sale even though no cash changed hands. The parts were consideration, not a motor vehicle trade-in, so tax was based on their value or…
Were separately charged pumping services taxable when supplied with rented portable toilets, and did the taxpayer prove its claimed rental exemptions?
Pumping the taxpayer's rented portable toilets was taxable because it was inextricably tied to the lease, even when separately stated. Pumping campers or customer-owned toilets was not taxable. Virgin…
A Tennessee manufacturer buys design software with a bundled maintenance plan, plus a long list of welding gases, gear, and shop supplies -- which of these qualify for the sales tax industrial machinery or industrial materials exemptions?
It's a mixed bag by item. The design software (and its bundled maintenance contract) is FULLY TAXABLE -- because it's used before raw materials reach the manufacturing process, it doesn't count as "ne…
Are software 'configuration' consulting services -- setting toggles and building tables within already-installed software, without writing new code -- taxable in Tennessee, and can a vendor bill them tax-free separately from software development work?
No, software configuration services are NOT subject to Tennessee sales and use tax, as long as the consultants only set predefined toggles/switches and build tables within existing software -- without…
Could a hotel use a private attestation form and an organization's Illinois E number to exempt employee purchases and room rentals?
No blanket approval. ST 11-0051-GIL declined to approve a private attestation form. For sales and use tax, federal section 501(c)(3) status alone was not enough: an organization needed an Illinois E n…
Were replacement filters used in a heatset printing press exempt under Illinois's graphic-arts machinery exemption?
Unresolved. ST 11-0050-GIL explains that qualifying graphic-arts machinery, equipment, and repair or replacement parts could be exempt, while materials used or consumed in the process were not. But th…
Could press-packing paper qualify for Illinois's graphic-arts machinery and equipment exemption?
Potentially. ST 11-0049-GIL says the described press-packing material appeared to qualify for the graphic-arts machinery and equipment exemption, but a one-time expendable supply would not qualify und…
Did Illinois's graphic-arts machinery exemption cover donor sheets, receptors, and specially coated proofing paper?
Generally no. ST 11-0048-GIL says materials used or consumed in the graphic-arts process are outside the machinery-and-equipment exemption. Although qualifying machinery used in prepress work could be…
Did Illinois confirm a print broker's de minimis serviceman status, 50%-of-bill method, and interstate-commerce exemption for direct mail?
No. ST 11-0047-GIL declined to issue a Private Letter Ruling and did not confirm the print broker's de minimis-serviceman classification, use of 50% of the service bill as the tax base, or interstate-…
Did an unlimited monthly cellular subscription fee fall under Illinois sales tax or telecommunications excise tax?
Unresolved on the limited facts. ST 11-0046-GIL says a statutory prepaid telephone calling arrangement was tangible personal property subject to Retailers' Occupation Tax rather than Telecommunication…
Were specialized HVAC equipment and a backup generator fixtures taxed as real estate, or tangible personal property subject to local BTPP tax?
The generator and transfer switch were taxable BTPP because their stated need and primary use for the taxpayer's technical operations showed an intent to treat them as personal property. The HVAC evid…
Did buying a home and spending most of the year abroad establish a new domicile when the taxpayers kept extensive Virginia business and personal ties?
No. Although the taxpayers bought a foreign home and spent most of 2007 and 2008 there, they returned for long periods to run Virginia businesses, renewed Virginia licenses, kept registered vehicles, …
How did Florida allocate sales tax among a student-housing land lease, a separate parking lease, operating costs, and student rents?
Florida accepted 15.82% as the taxable share of the mixed-use land lease, taxed the separate parking-lot lease in full, and exempted the stated long-term full-time-student rents. Direct utilities and …
Was a prepaid phone card subject to Virginia's prepaid wireless E-911 fee when one price covered both landline and wireless calls?
Yes. The cards supplied prepaid wireless service subject to the fee and landline service not subject to it for one nonitemized charge. Under Virginia's 2010 guidelines, that combined purchase was subj…
Could a military spouse claim Virginia's 2009 exemption after obtaining Virginia licenses, vehicle registration, and voter registration?
No. Virginia found that by 2008 she had abandoned relevant connections with the service member's home state and established Virginia domicile through her license, vehicle, voter registration, residenc…
How did Illinois treat downloaded ringtones, media, music, videos, and software for sales tax and telecommunications excise tax?
For sales tax, electronically downloaded information or data was not tangible personal property, but canned software remained taxable even when transmitted electronically; custom software might not be…
Did a taxpayer establish domicile abroad with her transferred spouse when she kept a Virginia home and commuted to an adjacent-state employer?
No. Although she sold the prior home and traveled abroad with her spouse, she owned and used a Virginia home, registered a vehicle, renewed her Virginia license, and spent more days in Virginia than a…
Did the taxpayer prove that three software purchases were electronically delivered without any taxable tangible medium?
Only in part. Two Vendor 1 items remained taxable because the records did not prove electronic delivery was the sole method: one transaction referenced a CD and ground shipment, and the other lacked a…
If a Tennessee municipality hires a construction management firm on an AIA B801 agency-CM contract, does that contract cause the municipality's own construction purchases to become taxable, or do they stay exempt as government purchases?
No. A Tennessee municipality's construction-related purchases stay exempt from sales and use tax under Tenn. Code Ann. § 67-6-329(a)(4) even when the municipality hires a construction management firm …
Is a prescription dermal filler injected by a doctor to treat facial wrinkles exempt from Tennessee sales and use tax, and does the seller need exemption certificates from the buying physicians?
Yes. The dermal filler is exempt from Tennessee sales and use tax as a prescription drug for human use under Tenn. Code Ann. § 67-6-320(a), because it meets the statutory definition of a 'drug' (it's …
Could an investment fund apportion gain from selling master limited partnership interests using the underlying partnerships' Illinois factors?
No, not on the evidence submitted. The fund asked to apportion gain from selling master limited partnership interests, including IRC Section 751 ordinary-income recapture, with the underlying partners…
Did a school board's direct-purchase procedures exempt construction materials for a public-works roofing project from Florida sales tax?
No, not as submitted. The procedures omitted the required Certificate of Entitlement. The school board could correct the program prospectively, but an amendment could not exempt purchases made before …
Were member donations for refreshments served by a Florida tax-exempt organization taxable sales?
Only if payment was required. A genuinely voluntary donation was not taxable when members could take refreshments without paying; a required 'donation' was the taxable sales price of the food or bever…
Could a corporation carry 2004-05 net operating losses forward without attaching Virginia elections, or offset later assessments after refund deadlines expired?
No. Virginia required a statement with each original loss-year return to elect out of the carryback period; later conduct did not substitute for that election. Because no statements were attached, the…
Were a manufacturer's pollution-control and recycling equipment and capitalized replacement costs properly included in local machinery-and-tools tax?
The fines bin was machinery and tools because it collected waste wood used to power and heat the plant. The pollution-control equipment could also qualify if its waste supplied plant power, but the re…
Is aviation fuel bought for aircraft used in an airline's interstate passenger or freight operations exempt from Kansas sales tax?
Yes. Aviation fuel used in aircraft that carry passengers or freight in an airline's actual interstate common-carrier operations is exempt from Kansas retailers' sales tax under K.S.A. 79-3606(f) and …
If a Tennessee limited partnership keeps doing business after the fixed termination date in its partnership certificate, does it become subject to franchise and excise tax as a general partnership, or does it stay exempt?
Once a Tennessee limited partnership formed before 1988 (still governed by the old Uniform Limited Partnership Act) passes the fixed termination date stated in its certificate, it automatically dissol…
Does Colorado sales or use tax apply to an advertising agency's separately stated charges for direct-mail materials and mailing fulfillment when the materials are printed in Colorado but mailed to recipients outside the state?
No. An advertising agency's separately stated charge for direct-mail advertising materials — printed in Colorado but mailed to the client's potential customers located outside Colorado — is not subjec…
Was a person domiciled in another state still a Virginia resident after living and working in Virginia for 190 days?
Yes. Although the taxpayer remained domiciled in another state, he lived and worked in Virginia for 190 days in 2007. Because he maintained a Virginia abode for more than 183 days, he was an actual Vi…
Did foreclosure-related loss of records excuse taxpayers from substantiating itemized and vehicle-expense deductions?
No. Virginia upheld the 2007 and 2008 assessments because the taxpayers did not provide enough support for their itemized, employee-vehicle, and business-truck deductions. Losing records during a late…
Could Virginia disregard a final IRS income adjustment because the taxpayer said the return preparer made the underlying error?
No. Once the IRS adjustment became final, Virginia used the resulting federal figures and would not revisit the taxpayer's claim that a preparer mishandled an education-expense deduction. Because the …
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