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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How did Illinois tax prescription eyeglasses and contact lenses transferred by an optometrist?
Prescription eyeglasses and contact lenses were medical appliances eligible for the lower State rate described in the 2010 GIL. An optometrist rendering professional services did not owe Retailers' Oc…
Did Sipapu owe civil penalties when a previously reliable bookkeeper concealed seven missed 2008 gross receipts tax filings and payments?
No. Sipapu had timely filed and paid 86 reporting periods before a trusted bookkeeper concealed seven missed 2008 gross receipts tax filings and payments through false assurances, altered statements, …
Are a firm's three financial-pricing 'advice services' taxable information services or nontaxable consulting in NY?
It depends on the service. Advice Service P -- automated derivative-pricing advice generated by applying the firm's proprietary formulas to its common, internally-built database -- is a taxable inform…
Under Virginia's historical 2011 tobacco-products-tax guidelines, what rates, licensing, filing, invoice, and reporting rules applied?
Under these historical guidelines, Virginia taxed moist snuff at $0.18 per ounce, loose-leaf tobacco at package-based rates from $0.21 to $0.70 for units up to 24 ounces with a formula above that weig…
Did a contractor's vehicle-storage facility create a city definite place of business, and where were its receipts and trucks taxed?
The city storage facility was not a definite place of business because storage, daily employee meetings, assignments, and truck loading did not establish the required regular and continuous business a…
Could an individual Virginia S-corporation shareholder subtract DISC dividends passed through from the S corporation?
No. Virginia's corporate statute allowed a qualifying DISC-dividend subtraction in computing corporate taxable income, but the pass-through rule limited an individual owner to modifications authorized…
Could a Virginia resident filing separately claim dependent exemptions allocated by agreement with a nonresident servicemember spouse?
Yes. Although the couple filed a joint federal return, Virginia law allowed them to allocate federal dependent exemptions between their separate Virginia returns as they mutually agreed. Because they …
Did Virginia allow a 2006 college-savings deduction when checks were mailed in December 2006 but posted to the accounts in January 2007?
Yes. The checks were mailed on December 29, 2006 for unconditional delivery to the institution administering the children's Virginia college savings accounts, although they posted January 3, 2007. The…
Could Virginia refund a federal-refund offset after the taxpayer proved she was not a 2002 Virginia resident but filed after every refund deadline?
No. Virginia accepted that the taxpayer was domiciled elsewhere in 2002 and abated the unpaid balance, but her May 2010 refund request came more than two years after the February 2008 offset payment a…
Was a legally separated husband an actual or domiciliary Virginia resident in 2006 and 2007 despite a Virginia business, license, vehicles, and family home?
No. Evidence rebutted the auditor's credit-card-based day count and showed the husband spent only 68 days in Virginia in 2006 and 72 in 2007, so he was not an actual resident. The full circumstances a…
Did an occupational healthcare provider have to charge Virginia sales tax on its medical services, and how were its supplies treated?
The provider did not have to charge sales tax on the described professional medical services. But as a practitioner and service provider, it was the consumer of tangible personal property used to perf…
Under Virginia's 2010 rules, how were manufactured homes, modular homes, setup materials, installation contracts, and resale certificates taxed?
The historical treatment depended on the home and transaction. Manufactured homes generally entered the motor-vehicle tax system, with qualifying setup components included in that taxable sales price.…
Was injectable tuberculin antigen exempt from Virginia sales and use tax when a licensed medical practice bought it for professional use?
Yes. The Department treated the injectable tuberculin antigen as a prescription drug and Schedule VI controlled substance, distinct from the taxable TB tine testing device addressed in an earlier ruli…
What records did an Illinois retailer need when an authorized person bought property for an exempt organization?
The retailer had to retain the Department letter showing the organization's active Illinois E number and detailed transaction records. A purchaser paying by another method than the organization's chec…
Were separately stated shipping-and-handling charges taxable when party-plan merchandise went to a hostess for customer distribution?
Generally yes. ST 10-0115-GIL says shipping and handling was part of the retailer's taxable cost of doing business when merchandise was sent to a party hostess or distributor who then delivered it to …
Were sales-based 'hostess dollars' excluded from taxable receipts as an unreimbursed discount?
No. ST 10-0114-GIL says credits awarded to a party hostess based on sales generated at the party were included in taxable gross receipts when applied to merchandise. The taxable value equaled the doll…
Did a real-property transfer into a combined business entity qualify for Virginia's merger, parent-subsidiary, or partnership recordation-tax exemptions?
The Department could not approve the claimed exemptions because the entity did not provide enough documents to prove that the transfer met the statutory merger, parent-subsidiary, or partnership condi…
Was a husband working and living overseas a Virginia domiciliary resident in 2006 because his family, home, and driver's license were in Virginia?
No. Although the husband had a Virginia home used by his family and had obtained and renewed a Virginia driver's license, the Department found he had established domicile in the foreign country and ha…
Were subscriptions to an online commercial-information database, upgraded data packages, and web workflow tools taxable in Virginia?
No. The core online database, upgraded electronic data packages, and web-based workflow add-ons were nontaxable service transactions because customers received no tangible personal property or softwar…
Could a federal IT contractor invalidate Virginia's audit sample or claim resale treatment for hardware tied to government contracts?
Not on the record presented. Virginia upheld the audit sample because recurring computer-hardware purchases made the large transaction representative rather than isolated. The taxpayer also had not co…
How did Illinois treat access codes, points cards, stored-value cards, virtual goods, and downloadable video-game software?
The GIL did not conclusively classify every product. A card or coupon redeemable for tangible personal property was an intangible when sold; tax arose when a retailer later transferred the property. E…
Did an unreimbursed program-funding discount reduce Illinois taxable gross receipts on promotional products?
Yes. ST 10-0112-GIL says a discretionary discount funded entirely by the seller reduced taxable gross receipts to the consideration actually received. Full or partial reimbursement from a manufacturer…
Did reselling access to an online employability assessment create Illinois sales or service tax when no property was transferred?
Generally no under the facts stated. ST 10-0111-GIL says a transaction with no transfer of tangible personal property created neither Retailers' Occupation Tax, Use Tax, Service Occupation Tax, nor re…
Were wastewater-treatment chemicals exempt as pollution-control property, and did customer direct-payment permits protect prior sales?
The wastewater chemicals remained taxable because the company had not shown that its wastewater system was certified pollution-control equipment. But direct-payment permits from two customers were val…
What Virginia tax underpayment and overpayment interest rates applied in the first quarter of 2011?
Virginia's state tax underpayment and overpayment rates were both 5% for the first quarter of 2011, two percentage points above the corresponding 3% federal rates. The 5% underpayment rate also applie…
Did donating a car to charity create a deduction or other tax benefit on a New Jersey Gross Income Tax return?
No. Although a qualifying charitable vehicle donation could produce a federal itemized deduction, the New Jersey Gross Income Tax Act had no comparable charitable-contribution deduction. The TAM there…
Was a 42-month equipment 'lease intended as security' a conditional sale, sale-leaseback, or nontaxable financing?
Unresolved. ST 10-0110-GIL found the documents internally unclear: one provision appeared to transfer ownership to the lessor, while another said the arrangement created only a security interest. A gu…
Who owed Illinois Use Tax when custom countertops were sold and installed as part of one construction contract?
The construction contractor that purchased the countertops for permanent incorporation into the home was the end user and owed Use Tax on its cost. Under ST 10-0109-GIL, the customer did not owe Use T…
Could an out-of-state direct seller collect and remit Illinois tax for its independent distributors under one filing arrangement?
Potentially, but only through a Department-approved agency agreement. ST 10-0108-GIL says a manufacturer, importer, or wholesaler could use Form RR-80 to assume registration, return, and Retailers' Oc…
Were seed sales to farmers exempt as sales for resale, and did a seed seller have to register and file Illinois returns?
Seed sold to a farmer for raising crops that would be sold was a nontaxable sale for resale under ST 10-0107-GIL. Seed used to raise grass, crops, or other plants that the purchaser would use rather t…
What is South Carolina's tax interest rate for the period ending March 31, 2011 (per SC IL #10-14)?
3%. SC Information Letter #10-14 sets South Carolina's interest rate on tax underpayments and overpayments at 3% for the period January 1, 2011 through March 31, 2011. Interest is compounded daily, ex…
Could a multistate service partnership avoid Illinois's throwout rule and source exam fees by where the examinations occurred?
No, not on the petition submitted. The partnership treated states without partnership filing requirements as states where it was not taxable, but Section 303(f)(2) also treated it as taxable wherever …
Must a printer charge Colorado sales tax to print a bi-weekly newspaper that the owner distributes free to the public?
Yes. A bi-weekly newspaper does not qualify as a tax-exempt 'legal publication' under § 24-70-102 (that exemption is keyed to publishing frequency, such as daily), so it is taxable tangible personal p…
How did Florida tax a vehicle protection plan and a dealer's discretionary electronic tag-and-title processing fee?
The protection plan was taxed separately as a service warranty, not as part of the vehicle price. The dealer's optional $68 electronic filing charge was taxable as part of the vehicle sales price beca…
Could parents claim the Illinois education expense credit for dependent children who had no Social Security numbers because of a religious exemption?
Yes. After reviewing the federal return and the statement concerning the approved IRS Form 4029 religious exemption, IDOR corrected the Illinois return to allow a $313 education expense credit and sai…
Did the Capeharts owe a 20% negligence penalty and interest after failing to report gross receipts tax on $56,938 of 2006 consulting fees?
Only partly. The Capeharts negligently failed to report gross receipts tax on $56,938 of 2006 consulting fees, and statutory interest remained due despite their prompt payment after notice. But their …
Are monthly dues paid to a nonprofit homeowners association subject to Kansas sales tax?
Property owners' dues are exempt; associate members' dues are taxable. Monthly dues and assessments paid by Foundation Members (the property owners) to a nonprofit homeowners association — here, one w…
Did a 50% dealer-funded discount reduce the taxable price, and were electronically delivered sales leads taxable in Florida?
Only the net price after the contemporaneous 50% dealer discount was taxable. Sales leads delivered solely by email or direct software integration were nontaxable because they transferred neither tang…
Did an amended S-corporation return and explanatory note adequately report an IRS increase to a shareholder's federal adjusted gross income?
No. The taxpayer amended the S-corporation return but did not file an amended individual return or clearly explain how the IRS adjustment changed his federal adjusted gross income. The Department foun…
What annual compliance procedures must a Nebraska county, city, or village follow to run a keno lottery?
A sponsor must complete a defined set of annual keno compliance procedures drawn from the Nebraska County and City Lottery Act and its regulations. Revenue Ruling 35-10-3 lists them: an unannounced ob…
Is Utah Private Letter Ruling PLR 08-002 still valid?
No. The Utah State Tax Commission rescinded PLR 08-002 effective December 1, 2010. The substance of the original ruling is no longer published, and the ruling cannot be relied on by anyone going forwa…
Did Florida's tax exemption for project-bond documents continue after the bonds were redeemed and the borrower's mortgage obligations were modified?
No. The exemption protected related instruments only while the bonds were outstanding. After redemption, modified mortgage and lien documents securing reimbursement- and swap-agreement obligations inc…
When a manufacturer contributes its Georgia plant to a newly formed partnership in a Section 721 transaction, does the new entity qualify as an 'existing manufacturing facility' for Georgia's investment tax credit?
Yes. The Department ruled the new partnership qualifies as an 'existing manufacturing facility' under O.C.G.A. § 48-7-40.2. Although a sale, merger, or acquisition does not by itself create new eligib…
Is e-discovery access taxable when the customer logs in and uses the vendor's software to review and organize data?
Partly. When the customer uses the vendor's proprietary online tool to classify, organize, batch, and index its uploaded data -- the Data Capturer, Data Reviewer, and Data Manager access levels -- the…
I'm buying ~66 gas stations, then immediately conveying about 60 of those properties to a financing company and leasing them back on a 15-year triple-net lease with options to eventually buy some properties back at fair market value or a premium over the financing company's cost. Which of these steps -- my initial purchase, my sale to the financing company, and the leaseback itself -- are subject to New York's Real Estate Transfer Tax, and do any exemptions (like the 'mere change of form' or 'securing a debt' exemptions) apply?
Every step is a taxable conveyance, and no exemption applies -- including, notably, the lease itself. The petitioner planned to buy ~66 gas stations (fee and leasehold interests, plus equipment/invent…
Are electronic-discovery litigation support services -- where the vendor processes a client's own documents -- subject to NY sales tax?
No. The vendor collects, processes, searches, and organizes a client's own electronic documents for litigation -- categorizing, de-duplicating, threading emails, and making them searchable -- which ad…
Was the HCG product described in the ruling exempt from Florida sales tax without a prescription?
Yes. Florida treated the product as an exempt common household remedy used for diet control, and the ruling stated that it was exempt with or without a prescription.
Are charcoal briquettes sold for outdoor home cooking exempt from Virginia sales tax as fuel used for domestic consumption?
No. Virginia's domestic-consumption exemption specifically covered artificial or propane gas, firewood, coal, and home heating oil. Although the regulation said domestic use could include cooking, it …
Did a no-consideration deed between identically owned entities trigger value-based documentary stamp tax on unencumbered Florida property?
No. With identical proportional direct or indirect ownership, no encumbrance, and no other consideration, only minimum documentary stamp tax applied. A compensated ownership-interest transfer within t…
Could an electric utility assign its refund rights to a customer instead of directly refunding allegedly overpaid Florida sales tax?
Yes. The Department could not force the utility to refund the customer directly. The utility could issue a cash refund or credit, or assign its refund right so the customer could file directly with th…
Are antibacterial hand gels, soaps, and sanitizers exempt from NY sales tax as drugs, or taxable as cosmetics/toiletries?
They're taxable. Tax Law 1115(a)(3) exempts drugs and medicines, but it expressly excludes cosmetics and toilet articles 'notwithstanding the presence of medicinal ingredients.' These antibacterial ha…
Are an IT firm's support-service charges taxable when one fee covers both software work and hardware/equipment servicing?
It depends on how the bill is written. Services performed on computer software (maintaining, monitoring, debugging, adjusting settings) are exempt under Tax Law 1115(o), but services to hardware and e…
Which of a business's various revenue streams — journal sales, software, licensing, staffing, and document services — are subject to Kansas sales tax?
It varies by revenue stream. Taxable: sales of journal/medical articles and any related transaction, copyright, or customization fees; reprint sales; and prewritten 'document transmission' software (w…
What annual cap applied to Virginia Land Preservation Income Tax Credits issued during calendar year 2011?
Virginia set the calendar-year 2011 Land Preservation Income Tax Credit cap at $108,424,000. Under the statutory CPI-U formula, the Department calculated that the relevant 12-month average had risen a…
Did a one-year job, rented housing, and bar admission in another state establish that an individual had abandoned his Virginia domicile for 2006?
No. The taxpayer's one-year employment, temporary living arrangements, retained Virginia driver's license and vehicle registration, use of a Virginia address on tax returns, and return to Virginia sho…
Was an individual still domiciled in Virginia for 2007 when he had moved to another state and only a Virginia address on federal information statements linked him to Virginia?
No. The taxpayer had moved back to State A before 2007, established a permanent home and driver's license there, kept his business interests there, and spent most of the year there. Because the only 2…
Are custom-fitted sports mouth guards exempt from Virginia sales tax as dental services, durable medical equipment, or prosthetic devices?
No. The sports mouth guards were taxable tangible personal property, not exempt durable medical equipment or prosthetic devices. The dental-supply retailer could sell them to dentists tax-free for res…
Are an FBO's charges for aircraft community-hangar space and tie-downs subject to NY sales tax as a storage service?
No. Tax Law 1105(c)(4) taxes the service of storing tangible personal property, but the Department treats hangaring and tie-downs of aircraft as nontaxable when the owner or lessee has regular or imme…
Could a Virginia town obtain a Communications Sales and Use Tax Trust Fund share for qualifying 2006 revenue that it had not timely reported?
Yes. The town proved through an independent CPA's verification and town-treasurer records that it had collected qualifying telecommunications or cable revenue in fiscal year 2006. Under the adjustment…
Did Virginia repair and maintenance work performed by third-party providers create corporate income-tax nexus for an out-of-state coordinator?
It depended on each provider's relationship with the taxpayer. Purchasing Virginia services from an unrelated independent contractor and reselling them would not itself create nexus for a corporation …
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