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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Does federal law (the FAAAA) preempt NY sales tax on interstate movers' storage-in-transit lasting more than 30 days?
No. New York taxes the service of storing property (Tax Law 1105(c)(4)), and the Department's long-standing policy is that an interstate mover's 'storage-in-transit' is taxable for the whole period if…
When can a Virginia seller treat human allograft and porcine xenograft soft-tissue products as sales-tax exempt?
The human allograft could be sold exempt as a Schedule VI controlled substance to qualifying licensed practitioners and medical facilities, with physician or DEA documentation. The porcine xenograft c…
Did a marina's purchase of electricity qualify for Florida's residential-utility exemption when its boat slips were not separately metered?
No. The same metered electricity served boat slips used for residential and nonresidential purposes, so the entire purchase was mixed-use and failed the residential-utility exemption.
Are a Virginia tire shop's separately stated off-site road-service charges exempt repair labor when the service call results in a tire sale?
No. When an off-site call resulted in a tire sale, Virginia treated the technician's travel-based road-service charge as part of the taxable sales price, even though it was hourly and separately state…
Was a 10% shareholder who served as secretary and treasurer personally liable for the corporation's unpaid Virginia withholding tax?
No. Virginia found that the minority shareholder was not a responsible corporate officer for the unpaid withholding tax because the evidence did not show he had a duty to file or pay it, authority to …
Could a New Jersey dealership buy oil-change parts for resale when lifetime oil changes were included with a vehicle sale or lease?
Yes, when the invoice, sales contract, or other document given at the vehicle sale stated that the purchase or lease price included the oil changes. Property incorporated into the vehicle or transferr…
How did Illinois treat downloaded media, downloaded canned software, and local sales-tax sourcing for online sales to Chicago customers?
Electronically downloaded music or video was not tangible personal property and was outside Illinois Retailers' Occupation and Use Tax, while canned software remained taxable even when downloaded unle…
Did an Illinois university withhold Illinois tax from employees based permanently outside the state who sometimes returned to Illinois?
Generally not under the Illinois-compensation rule. In all eight scenarios, the employee's permanent out-of-state job location was the base of operations, so the wages were not compensation paid in Il…
Would a county health department owe Illinois sales tax when reselling toothbrushes to low-income dental patients at its cost?
Likely no. ST 11-0033-GIL says Illinois governmental bodies generally incur Retailers' Occupation Tax when selling tangible personal property to the public outside the performance of a governmental fu…
Which dealers had to make Virginia's June 2011 accelerated sales-tax payment, how was it calculated, and what deadlines and waivers applied?
For June 2011, dealers and direct-payment permit holders with at least $5.4 million of taxable sales or purchases in the prior July-to-June fiscal year generally had to prepay 90% of their June 2010 s…
Could a satellite installer buy equipment for resale tax-free when it installed the equipment before transferring it to the programming provider?
No. The installer owned the equipment when purchased and made an intervening taxable use by installing it before transfer, so it owed sales or use tax on that purchase. Its later transfer to the progr…
What documentation did a Virginia IT seller need to remove claimed government, electronic-software, and installation-service sales from an audit?
The seller needed contemporaneous records proving each exemption. Virginia upheld every challenged exception because the documents did not show a direct federal sale or resale, did not reliably certif…
Does a Virginia steel contractor consume materials it fabricates and delivers under one construction contract when other contractors install them?
No. A contractor is the taxable user or consumer only of property it installs or otherwise uses in performing its real-property work. Separately priced bollards, anchor bolts, lintels, plates, and sim…
Was VSL#3 medical food exempt from Virginia sales and use tax as a prescription drug, nonprescription medicine, or reduced-rate food?
No. Virginia found that VSL#3 was food rather than a medicine or drug, its labeling did not claim to diagnose, cure, treat, or prevent disease, and the submitted facts did not show it qualified as foo…
Did an Illinois contest winner owe Use Tax on noncash prizes such as outdoor furniture and lighting?
No. ST 11-0032-GIL says the donor or contest sponsor that buys tangible personal property to give it away makes the taxable use and incurs Illinois Use Tax on its purchase price. The contest winner in…
Must Kansas farmers and ranchers collect sales tax when they sell whole livestock directly to consumers for personal slaughter or processing?
Yes. A farmer's or rancher's sale of a whole hog, cow, or other livestock to an individual for personal slaughter or delivery to a meat locker is a taxable retail sale to a final consumer, so a seller…
For the 548-day rule that lets a New York domiciliary working abroad avoid New York resident status, do partial days spent in a foreign country count toward the 450-day requirement, or only full days?
Both full and part days spent in a foreign country count toward the 450-day threshold under the 548-day rule of Tax Law § 605(b)(1)(A)(ii). The Department applies the same counting method used for New…
Are personalized postage stamps and a separate 'stitch file' charge for embroidery subject to NY sales tax?
Personalized stamps bought for mailing aren't taxable; the stitch-file charge depends on how it's billed. Postage stamps are treated as tangible personal property only when bought for a purpose other …
Did a nonprofit sale lose its Virginia exemption because the certificate used the customer's legal name while the invoice used its trade name?
No. Virginia confirmed through its registration system that the invoice name was the nonprofit customer's trade name, while the complete certificate used its legal name. Because the goods were shipped…
Were forfeited deposits under season-ticket and club-seat agreements subject to Florida sales tax?
No, when the deposits were merely retained after default and were not applied to admissions, license fees, or use of real property. Any portion applied to a ticket price or club-seat license fee was t…
How does a Kansas contractor-retailer handle tax on resale inventory, construction projects, taxable labor, and work for exempt entities?
A contractor-retailer may operate as both a retailer and contractor. It may buy resale inventory tax-free and collect tax on over-the-counter sales, but must accrue tax on the cost of untaxed material…
What are South Carolina's latest state and county per capita income figures used for tax incentives (per SC IL #11-8)?
$32,505 statewide. SC Information Letter #11-8 publishes the most recently available per capita personal income figures for South Carolina — $32,505 for the state, plus a figure for every county — whi…
Did South Carolina extend tax relief to victims of the spring 2011 storms across the Southeast (per SC IL #11-7)?
Yes. Following the IRS, the South Carolina Department of Revenue extended the same tax relief to victims of the spring 2011 severe storms, tornadoes, and flooding in the federally declared disaster ar…
Is a subscription for digital-certificate authentication and resolution services (secure-website certificates) subject to NY sales tax?
No. The company verifies a website operator's identity and issues a 'digital certificate' (an SSL-type certificate) so visitors' browsers can confirm the site is genuine and open an encrypted connecti…
Does a Qualified Empire Zone Enterprise's aircraft qualify for the QEZE sales-tax exemption when it's used to fly to business locations outside the zone?
No. During 2008, Tax Law 1115(z) exempted property bought by a Qualified Empire Zone Enterprise (QEZE) only if it was used 'directly and predominantly' in the Empire Zone where the enterprise is certi…
Were New Jersey State employee Sick Leave Injury payments excluded like workers' compensation, or taxable as wages?
They were taxable wages. The Division distinguished Sick Leave Injury benefits, which continued a State employee's full salary for up to 12 months, from workers' compensation wage replacement calculat…
Are charges for wireless (3G) broadband internet access subject to Kansas sales tax, including when bundled with taxable services?
Not taxable. Charges for wireless (3G) broadband internet access are not subject to Kansas sales tax, because the federal Internet Tax Freedom Act bars Kansas from taxing internet access charges. Ther…
How did Florida tax fabricated stairs sold as goods, exported out of state, or installed as real-property improvements?
Uninstalled Florida sales were taxable unless continuously committed to export. Installed stairs were real-property improvements, so the fabricator owed tax on its fabricated cost rather than charging…
Are purchases of software licenses and support services taxable in Kansas when no prewritten software is received?
Not taxable. The Department ruled that purchases of software licenses and support services are not subject to Kansas Retailers' Sales Tax or Consumers' Compensating Use Tax where, as the taxpayer repr…
Was separately metered natural gas used to wash, sanitize, and dry rented hospital linens exempt as boiler fuel in Florida?
Yes. The separately metered gas qualified because it was used exclusively in an industrial process that changed rented linens from soiled to sanitary condition, and a rental counted as a sale. The tax…
Did a military spouse qualify for a 2009 Virginia withholding refund when she and the service member had different domiciles before Virginia?
No. Virginia found that the spouse maintained State A domicile, but the service member had not abandoned State B domicile before the move to Virginia. Because the 2009 military-spouse protection requi…
When a customer uses a coupon, does Colorado sales tax apply to the price before or after the coupon — and does it matter whether it's a manufacturer's or a store coupon?
It depends on who funds the coupon. A manufacturer's coupon doesn't reduce the Colorado sales tax base — because the manufacturer reimburses the retailer for that part of the price, tax is calculated …
Did South Carolina extend tax relief to victims of the April 2011 North Carolina storms (per SC IL #11-6)?
Yes. Following the IRS (Information Release 2011-20), the South Carolina Department of Revenue extended the same tax relief to victims of the severe storms, tornadoes, and flooding that began April 16…
Could a Virginia restaurant obtain review of an underreported-sales assessment by supplying deposit and loan records with its appeal?
Yes, the Department sent the audit back for review of the new documents, but it did not cancel the assessment immediately. Because bank deposits exceeded reported sales and adequate explanations were …
Could Virginia residents reopen the 2004 refund period after another state assessed tax on the same rental income in 2009?
No. The March 2009 amended Virginia return came after the general May 2, 2008 deadline, and none of the exceptions reopened 2004. The other state's assessment was not a Virginia assessment, a 2009 fed…
Is artwork held by a Virginia gallery on consignment inventory subject to the gallery's local merchants' capital tax, and how is purchased art valued?
No. Artwork held by a gallery on consignment remained owned by the artist and was not the gallery's inventory for merchants' capital tax. Artwork the gallery actually purchased for resale would be inv…
How did New Jersey tax employer health coverage, cafeteria-plan amounts, and medical expenses for an employee's adult child under the Affordable Care Act?
Qualifying employer-provided health coverage or employer reimbursements excluded from federal income were also excluded from New Jersey Gross Income, regardless of the child's age. New Jersey did not …
Which parts of South Carolina's waterworks corporate license fee applied to a utility operating entirely in a federal enclave?
The privately owned utility owed the gross-receipts portion of South Carolina's waterworks corporate license fee because the Buck Act allowed a state tax measured by gross receipts inside a federal en…
Did a beverage manufacturer's new in-house container lines qualify for Florida's expanding-business machinery exemption?
Yes, at each facility when it produced its first new container. The listed equipment and installation labor qualified after a separate temporary exemption-permit application was filed for each facilit…
What Virginia filing and payment relief applied to taxpayers affected by the April 8 and April 16, 2011 severe storms?
Virginia generally moved qualifying state return and payment deadlines falling from April 16 through May 2, 2011 to June 1, 2011 for storm-affected taxpayers whose needed records were in designated di…
How did Kansas treat restocking charges on returned vehicles and bad-debt deductions when a dealer assigned receivables to a commonly owned finance company?
For a fully rescinded vehicle sale, the dealer refunds the full price and tax; a separate fee covering the cost of returning unused goods to inventory is a nontaxable restocking fee. If use, mileage, …
How is the 2010 federal alternative minimum tax recomputed to determine the Nebraska minimum tax on a 2010 individual income tax return?
Recompute the federal AMT using Nebraska's adjustments. Revenue Ruling 22-10-4 -- a re-issued ruling that supersedes 22-10-2 -- tells 2010 individual filers to recalculate the alternative minimum tax …
Were diagnostic kits, controls, calibrators, and cell-stabilization products sold to Florida clinical laboratories exempt from sales tax?
Yes, when used by clinical laboratories to diagnose or treat human disease, illness, or injury. Required controls and calibrators qualified as diagnostic chemical compounds, and qualifying blood-colle…
Was a single-patient bone-marrow needle labeled for use only by or on a physician's order exempt from Florida sales tax?
Yes. The needle was a one-time-use medical product bearing the federally required prescription legend and was therefore exempt both before and after July 12, 2010.
Could permanently installed vehicle-wash components qualify for Illinois's enterprise-zone building-materials sales-tax exemption?
Potentially, component by component. ST 11-0031-GIL says the enterprise-zone exemption covered qualified sales of building materials physically incorporated into real estate through a covered project.…
Could a Virginia seller reduce an audit assessment by supplying valid resale certificates after the audit?
Yes, in this appeal. The seller submitted two exemption certificates after the audit, the auditor reviewed them, and Virginia revised the assessment accordingly. But certificates must be complete and …
Was a Virginia software-support agreement taxable when it mainly provided remote labor but allowed the vendor to supply loaner equipment?
Yes. Virginia treated the agreement as a parts-and-labor maintenance contract because it expressly allowed the vendor to provide loaner equipment in some circumstances. Even though loaners could requi…
Did a contractor have to charge Florida sales tax for cleaning and repairing permanently installed concrete fountain pools?
No. The fountain pools were real property, and their cleaning was outside the specifically taxed janitorial-services category. The contractor was the ultimate consumer and owed tax on materials and su…
Were spouses full-year Virginia residents for 2006 even though one did not obtain Virginia employment until October?
Yes. Virginia found that the couple's licenses, Virginia apartments, vehicle registration, and earlier part-year filing showed Virginia domicile throughout 2006. A later Virginia job start and one par…
When must a Colorado auctioneer collect sales tax on items it sells (including motor vehicles), and when is the owner responsible instead?
The auctioneer usually must collect. A Colorado auctioneer selling goods on an owner's behalf is treated as the retailer and must collect and remit sales tax — unless one of two exceptions applies: (1…
Did Virginia properly add back interest paid to an affiliate and reorder a corporation's net-operating-loss deductions?
Virginia reversed the interest addback because the lending affiliate held no intangible property, so the cited related-party addback did not apply. But the corporation had not filed the required state…
When a custom millwork company sells and installs cabinetry and similar products, is the sale and installation taxable -- and does it matter whether the finished product stays movable personal property or becomes permanently attached to the building?
It depends entirely on whether the finished product stays personal property or becomes part of the building -- with a separate rule for lump-sum jobs mixing both. The Department ruled: (1) when the Ta…
Could a federal IT contractor buy build-out furniture for resale tax-free and exclude that order from Virginia's projected audit sample?
No. The order's true object was a federal facility reconstruction and build-out, so the contractor consumed the furniture in a real-property contract even though the government reimbursed it or took t…
Did Barnesandnoble.com have substantial New Mexico nexus through affiliated Barnes & Noble bookstores during the 1998-2005 audit period?
No. Under the Commerce Clause nexus test applied to the 1998-2005 audit period, Barnesandnoble.com had no New Mexico property, employees, facilities, or direct in-state operations, and its products ar…
Are a golf club's member dues, its mandatory 'subvention' fee, and its non-member playing fees subject to NY sales tax?
Member dues and the subvention fee are taxable; non-member playing fees aren't. The club's members must each buy a $1,000 'subvention certificate' that gives them a proportional share of the club's as…
Are a company's customized background and investigative reports taxable as detective services or as information services in NY?
They're taxable -- the only question is under which provision. If preparing a report requires a private-investigator license under General Business Law Article 7, the report is a taxable detective ser…
Does a sculpture bought at a NYC auction qualify for the resale exclusion when the buyer loans it to a museum before reselling it?
No -- the purchase is subject to New York sales tax. First, it's a New York sale: the sculpture was shipped to Florida by a private carrier the museum (acting as the buyer's designee) hired, and New Y…
My organization administers a union health and welfare benefit plan. A prior advisory opinion said the benefits we pay out are wages subject to MCTMT but that we don't have to pay the tax on them -- has that changed?
This MODIFIED opinion replaces TSB-A-10(1)MCTMT (issued July 20, 2010) on the identical petition. It reaffirms that union health and welfare benefits funded through employer contributions negotiated i…
Could a token-pusher machine awarding toys, food, and gift cards qualify as an Illinois redemption machine or coin-operated amusement device?
Not on the limited description. ST 11-0030-GIL says a redemption machine had to involve the specified physical-object game and satisfy all five statutory conditions, including awarding only merchandis…
When did Illinois sales tax apply to layaway and partial payments, and was a nonrefundable layaway fee taxable?
When the buyer had made a binding commitment, the property was identified, and a payment was made, that payment entered the seller's taxable gross receipts when received. A nonrefundable layaway fee w…
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