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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Could a restaurant use Virginia's reduced food rate for hot takeout meals after collecting the full rate from customers?
No. Hot meals and beverages sold for immediate consumption did not qualify as food for home consumption merely because customers took them away or reheated them. The restaurant collected the full 5% t…
Does a Tennessee country club have to charge sales tax on the separate fees it bills members for locker rentals and golf bag storage?
Yes. Both the locker rental fees and the golf bag storage fees a Tennessee country club charges its members are subject to Tennessee sales tax, because the club is a "membership sports and recreation …
Are an online vendor-referral website's charges -- for sales-lead referrals, used-product advertising space, phone-call tracking reports, and hosted vendor websites -- subject to Tennessee sales and use tax?
None of it is taxable. An online business runs a website where customers find vendors and submit purchase requests; it charges vendors for (1) new-product sales-lead referrals, (2) space to advertise …
Did a letter and amended pass-through return satisfy Virginia's duty to report an IRS change to an individual's income?
No. The taxpayer's letter and amended pass-through entity return did not provide enough information to recompute the individual's Virginia tax and did not replace the required amended individual retur…
Did the Servicemembers Civil Relief Act exempt a military spouse who had established her own Virginia domicile?
No. Virginia denied the refund because the spouse's conduct showed that she had abandoned her prior-state domicile and established a separate Virginia domicile. Her Virginia voter registration, Virgin…
What state and local tax legislation did Virginia's Department of Taxation summarize for the 2011 General Assembly session?
This was a broad historical guide, not a taxpayer-specific ruling. It summarized 2011 legislation through the April 6 reconvened session, including electronic filing and delivery rules, fixed-date IRC…
When did Virginia tire installers have to collect the tire recycling fee, and what rate applied after July 1, 2011?
Beginning July 1, 2011, a Virginia tire installer working under an agreement with a tire retailer that had not collected the retail sales and use tax also had to collect and remit the tire recycling f…
For an online database and a long menu of related Internet services accessed remotely over the web, which charges are subject to Tennessee sales and use tax?
Most of it is NOT taxable -- only the items the customer actually receives as tangible personal property are. The company sells an online database (with software tools, reports, and photos) plus a lon…
Could self-employed model Crystal Gonzales recover gross-receipts-tax penalty and interest because H&R Block did not tell her to file?
Only in part. Gonzales' New Mexico modeling income was subject to gross receipts tax, and mandatory interest remained due. Consulting H&R Block only to prepare income-tax returns did not establish rea…
When a direct-selling company runs a party plan with hostess discounts and advisor award certificates, is Tennessee sales tax charged on the full price or only on the discounted price actually paid?
Genuine discounts reduce the taxable amount, but a separate fee paid to unlock a discount you must use right away is itself taxable. For a direct-selling company's party plan: (1) when a Hostess buys …
Did Virginia's railway common-carrier exemption cover locomotive cab heaters and a voice event recorder?
The cab heaters were exempt because they repaired or replaced locomotive components and were indispensable and immediately used in safe transportation. The voice event recorder and its repairs were ta…
What 2011 Virginia exemptions applied to small sales of eggs and farm products at farmers markets and roadside stands?
Effective July 1, 2011, qualifying small producer sales at farmers markets and roadside stands were exempt when annual sales there did not exceed $1,000 and the product and egg-source conditions were …
Did attending college, voting, paying in-state tuition, and interning in another state end a student's Virginia domicile?
No. Virginia found that the student had not clearly abandoned his Virginia domicile. His out-of-state tuition status, voting, internship, and part-year return supported a change, but college housing a…
Could taxpayers offset a 2006 Virginia assessment with a late 2005 refund after the IRS shifted passive losses between years?
Mostly no. Because the taxpayers did not amend their 2005 and 2006 Virginia returns within one year after the final IRS change, Virginia would not offset the 2006 assessment with the otherwise related…
Are the membership dues and related fees (photo-ID activation, guest passes, towel/locker/equipment rentals, facility rentals) charged by a qualifying sports and fitness center exempt from Tennessee sales tax?
Yes. A sports and fitness center that meets the five statutory tests in Tenn. Code Ann. Section 67-6-330(a)(17) has its membership dues -- which would otherwise be taxed as recreation-club/health-spa …
What dealer discount applied to Virginia Tobacco Products Tax returns beginning with the June 2011 return?
Virginia reinstated the 2% dealer discount for accounting for and remitting the Tobacco Products Tax, beginning with the June 2011 monthly Form TT-8 return due July 20, 2011. The bulletin updated the …
When did Virginia treat a tax return or payment sent by commercial delivery service as timely filed?
Effective July 1, 2011, Virginia treated state and local tax returns and payments sent by a recognized commercial delivery service like U.S. mail when they were in a sealed envelope or container beari…
Could a city split a multioffice service business's BPOL receipts 50/50 with a county when the taxpayer's records did not verify situs?
Not on the record presented. Virginia remanded the case because neither the business nor the city conclusively established where the service receipts belonged, the corporate income-tax sales factor wa…
What Virginia tax interest rates applied during the third quarter of 2011?
Virginia's third-quarter 2011 rates were 6% for tax underpayments and 6% for overpayments, reflecting corresponding 4% federal rates plus two percentage points. Taxpayers with a June 30, 2011 year-end…
What sales tax law changes did the 2011 Kansas Legislature make to refund deadlines and game bird sales?
Kansas Notice 11-01 summarizes two 2011 sales tax changes. First, Section 6 of 2011 Senate Bill 10 amended K.S.A. 79-3609(b) so that, for any sales tax refund claim filed after July 1, 2011, the claim…
Is a prescribed, at-home ophthalmic monitoring device — and the monitoring, data-processing, and call-center services that go with it — subject to Colorado sales tax?
No on both. A prescribed ophthalmic device a patient uses at home to monitor for eye disease appears to qualify as exempt durable medical equipment (it withstands repeated use, serves a medical purpos…
When a company expands its Tennessee headquarters with more than $10 million invested and 100+ new high-wage headquarters jobs, can it claim the enhanced $5,000-per-job tax credit, what jobs count, and how much of its franchise and excise tax can it wipe out?
Yes -- a headquarters expansion that invests more than $10 million and creates at least 100 qualified jobs that are 'headquarters staff employees' paying at least 150% of Tennessee's average occupatio…
When a company expands and remodels its existing Tennessee headquarters, what counts toward the minimum investment threshold for the sales/use tax credit, when does the investment period start and end, and do aesthetic-only renovations like paint and carpet qualify?
A 7-part ruling clarifying the mechanics of Tennessee's qualified headquarters facility sales/use tax credit (Tenn. Code Ann. Section 67-6-224) as applied to an existing-headquarters expansion and rem…
Is the sale of customized shop drawings used by contractors to fabricate items taxable in Tennessee, and does it matter whether they're delivered as a printed booklet versus purely electronically?
It depends entirely on the delivery medium. The Department ruled that the Taxpayer's customized shop drawings are subject to Tennessee sales and use tax when transferred to the customer in a TANGIBLE …
Could a taxpayer deduct mortgage interest when the deed, mortgage records, and Form 1098 did not clearly distinguish him from his identically named father?
Not on the evidence submitted. Because the taxpayer and his father had the same name, the deed and payment records did not establish which man owned the home or owed the mortgages, while Form 1098 use…
Could Behr Trucking deduct 2006 construction-hauling receipts without obtaining the buyer's NTTC within the 60-day deadline?
No. Whether Behr's construction hauling could otherwise qualify for a deduction was immaterial because it did not obtain the required NTTC within 60 days of the Department's notice. The buyer's closur…
Could Virginia residents claim the out-of-state tax credit for D.C. unincorporated business franchise tax paid by a single-member consulting LLC?
No. Virginia reaffirmed its longstanding position that the District of Columbia unincorporated business franchise tax did not qualify for the Va. Code § 58.1-332 credit. The Tax Commissioner declined …
Could a vertically integrated manufacturer obtain a Virginia BPOL exemption and a prorated refund after transferring its local operations?
Potentially, but more proof was required. Virginia held that the appeal was timely and that a vertically integrated business can qualify as one manufacturing business when its manufacturing is substan…
Did a military spouse preserve her out-of-state domicile and qualify for a refund of 2009 Virginia wage withholding?
Yes. Although the spouse moved to Virginia and began working before her marriage, Virginia found that the full facts showed she maintained State A domicile, shared that domicile with her service-membe…
Could a Virginia taxpayer reverse an audit assessment for itemized deductions without providing the requested supporting records?
No, not without substantiation. Virginia upheld the 2007 and 2008 assessments because the taxpayer did not provide records supporting the itemized deductions and an assessment is presumed correct unti…
Could a nursing assistant keep unreimbursed vehicle-expense deductions without records substantiating the business use?
No. Virginia upheld the 2007 and 2008 assessments because the taxpayer did not provide the requested records substantiating business use of her personal vehicle. The assessment was presumed correct, a…
Did prior return processing or use of Virginia-approved tax software prevent a later assessment for an overstated out-of-state tax credit?
No. Virginia upheld the additional tax and interest because earlier processing did not establish that the return was correct, and software approval tested conformity with processing requirements rathe…
Did Virginia use tax remain due on Tennessee equipment rentals when Tennessee properly taxed the continuous rental first?
No tax remained due on the contested rentals. Virginia concluded Tennessee had the first right to tax the continuous rental agreements and allowed a Va. Code § 58.1-611 credit for Tennessee sales tax.…
Could a Virginia resident defeat a 2007 nonfiler assessment by showing only that she filed a federal return?
No. Virginia did not dispute that the taxpayer filed federally, but a resident required to file a federal return generally also had to file a Virginia return. Because she did not provide the requested…
Could manufacturing lines qualify as idle machinery without advance written notice to the county?
Possibly under the separate one-year test, even though the manufacturer failed the advance-notice test. Virginia remanded because neither side had established whether there was a reasonable prospect t…
Could an interior-design company receive separate BPOL classifications for design services and its substantial furniture sales?
Potentially. Virginia found the city could classify the company as a business service based on how it held itself out, but its furniture sales appeared substantial enough to be a separate retail busin…
Is a hosted email-marketing service performed through the provider's software taxable, and are its training and consulting charges taxable?
The hosted service is taxable as prewritten software, but the optional training and consulting charges are not. Clients log into the provider's 'Hosted Offering' to build, target, and send email/messa…
Is liquor-filled candy exempt from Colorado sales tax as food, or is it taxable?
It's taxable. Liquor-filled candy does not qualify as 'food' under the federal SNAP and WIC definitions that Colorado uses for its food exemption, so it's subject to Colorado state sales and use tax (…
How did Illinois tax a vehicle lessor leasing vehicles to the U.S. government, and what exempt-entity rule could apply?
For a true lease, the lessor generally was the end user and owed Illinois Use Tax on its cost price; Illinois imposed no sales tax on the rental receipts, so the lessee incurred no sales-tax liability…
Can a Virginia taxpayer avoid assessments for incorrect itemized deductions by blaming the return preparer?
No. Virginia upheld the 2007 and 2008 assessments because taxpayers remain responsible for the accuracy of their returns, and this taxpayer knew or should have known she had not incurred the expenses …
Would an Illinois school district owe sales tax if it supplied diesel fuel to a private pupil-transportation contractor and recovered the cost?
Potentially. ST 11-0043-GIL says governmental bodies generally incur Retailers' Occupation Tax when they sell tangible personal property to the public for use or consumption, with an exception for an …
How did Illinois tax canned software, custom software, exempt software licenses, and maintenance agreements under ST 11-0042-GIL?
Canned software was taxable regardless of delivery method, while custom software prepared to special order might not be taxable. A canned-software license avoided Retailers' Occupation Tax only if it …
Were separately sold support, maintenance, and update agreements taxable when the underlying software license met Illinois's five-part license exemption?
No, under the stated assumption. ST 11-0041-GIL says that when a software license met all five criteria in 86 Ill. Adm. Code 130.1935(a)(1), charges for support, maintenance, or updates of that licens…
What documentation supported an Illinois resale exemption for in-state, out-of-state, and auction buyers under ST 11-0040-GIL?
A properly completed Certificate of Resale, signed by the purchaser and containing the seller and buyer details, item description, signature date, and the required registration, resale, or out-of-stat…
Could an Illinois pharmacy fill prescriptions tax-free when a tax-exempt health center paid for uninsured patients?
Potentially. ST 11-0039-GIL says drugs sold to an organization holding an Illinois exemption identification number could be sold free of tax; without an E number, the sale could not be tax-free. The p…
Did knives, gloves, aprons, hairnets, and similar meat-processing items qualify for Illinois's manufacturing exemption or Manufacturer's Purchase Credit?
They did not qualify for the manufacturing machinery and equipment exemption when they were hand tools, supplies, or personal apparel; the regulation specifically excluded categories including gloves,…
Must a Virginia restaurant copy diplomats' exemption cards, and which contested meals, purchases, penalties, and interest remained taxable?
No card copy was required: recording each diplomat's exemption number was enough, and validated diplomat meals were removed. Church meals and unsupported restaurant purchases and assets remained in th…
Will Virginia cancel a resident income-tax assessment when the taxpayer does not provide the requested domicile evidence?
Not without evidence. Because the taxpayer did not provide the domicile information requested during the audit or appeal, Virginia found no basis to adjust the 2007 assessment. The Commissioner allowe…
Did temporary job transfers outside Virginia establish that a taxpayer abandoned his Virginia domicile for 2007?
No. Virginia held that temporary job assignments outside the state, even for years, did not prove the taxpayer intended to establish a permanent home elsewhere. His Virginia driver's license, Virginia…
Can a Virginia taxpayer avoid assessments for incorrect itemized deductions by blaming the return preparer?
No. Virginia upheld the 2007 and 2008 assessments because taxpayers remain responsible for the accuracy of their returns, and this taxpayer knew or should have known he had not incurred the expenses u…
Is labor to cut customer-furnished bricks into shapes for masonry arches taxable fabrication in Virginia?
Yes. Virginia treated cutting contractor-furnished bricks to specified shapes as taxable fabrication because it changed the bricks' form. Real-property contractors are the users and consumers of the m…
Could a university allocate its mandatory student transportation fee between taxable parking access and nontaxable uses?
Yes. The fee was taxable to the extent it paid for the privilege of parking on university property, and the university could use the ratio of available spaces to students paying the fee as a reasonabl…
Was a separately stated newspaper-delivery charge subject to Florida sales tax when subscribers could avoid it by choosing pickup or mail delivery?
No. The carrier-delivery charge was not taxable when subscribers were told at the initial subscription or renewal that they could avoid it through pickup or mail delivery and the charge was separately…
Did Illinois treat a two-ounce 5-Hour Energy dietary supplement as reduced-rate food or a full-rate soft drink?
As a soft drink under the 2011 rule. ST 11-0037-GIL points out that the product contained sucralose, which Regulation 130.310 listed as a sweetener, and that the regulation specifically listed sport o…
Did reliance on an out-of-state CPA, clerical errors, and inadequate tax software excuse a hardware store's New Mexico CRS penalties and interest?
No. Alamo True Value did not dispute the tax errors, which included unsupported gross-receipts deductions, home sales reported to the wrong county, untaxed out-of-state purchases, and inventory withdr…
Does a story-driven live show qualify as a 'live dramatic or musical arts performance' under Tax Law 1115(x), making production-property purchases potentially exempt?
The show qualifies as that kind of performance, but the Department did not decide whether the specific property purchases are exempt. Tax Law 1115(x) can exempt tangible personal property used directl…
Could a distributor allocate a mandatory delivery fuel surcharge between taxable and exempt products on the same Florida invoice?
No. On an invoice containing any taxable products, the entire mandatory fuel surcharge was taxable even though separately stated; Florida did not allow allocation between taxable and exempt items. The…
Did an Illinois sales-tax exemption number exempt a government instrumentality from hotel room tax or the hotel's reimbursement charge?
No. ST 11-0036-GIL says Illinois Hotel Operators' Occupation Tax was imposed on the hotel operator, not on the room occupant. Because the occupant had no hotel-tax liability to which its exempt status…
Is a country club's mandatory monthly service charge subject to South Carolina sales tax or admissions tax?
It is not subject to sales tax when it is charged independently of food purchases, but it is generally subject to admissions tax as part of the price for using the country club. A qualifying nonprofit…
Could a Virginia watercraft business defeat retail and watercraft tax assessments by asserting that it made no sales during the audit period?
No. Virginia upheld the assessments because sales and rental agreements, registration records, and commingled transactions showed that the business made taxable sales and rentals during the audit peri…
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