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 should a hotel calculate Virginia's continuous-occupancy exemption when an airline rents a changing number of rooms each day?
The hotel had to apply a rolling daily count rather than start each 90-day measurement period on the first of the month. Each day began a new continuous-occupancy period. Using that approach, the airl…
How did Louisiana tax hydraulic-fracturing labor and sand proppant used in oil and gas wells?
Separately stated well-completion and fracturing labor was not taxable because the well was immovable property. Sand proppant was taxable tangible personal property, and combining the charges made the…
Does the Kansas tire excise tax apply to racing tires sold for off-highway race cars?
Exempt from the tire excise tax. The Department ruled that racing tires sold for cars used exclusively on oval tracks or drag strips — tires marked 'Not Intended for Highway Use' and not street legal …
Were reprocessed medical devices labeled for physician-order and single use exempt from Florida sales tax?
Yes. The products met the exemption because federal law restricted them to sale by or on a physician's order and the FDA-approved label identified them as reprocessed devices for single use. The selle…
Did a prescription polidocanol injection used to treat varicose veins qualify for Illinois's lower drug tax rate?
The GIL did not expressly issue a product-specific conclusion, but its general rule treated prescription drugs and medicines bearing medicinal claims as eligible for the lower State rate described in …
Did a six-month filing extension move the three-year Virginia refund deadline when the taxpayer did not file by the extended due date?
No. Under the rules applicable to the 2004 return, the extension became void when the taxpayer failed to file by November 1, 2005. The three-year refund period therefore ran from the original statutor…
Did spending more than 183 days in another state, claiming its homestead exemption, and registering to vote there end a couple's Virginia domicile?
No. Although the couple spent most of each year in State A, claimed its homestead exemption, registered to vote there, and obtained State A identification cards, they kept Virginia driver's licenses, …
Can a Virginia dealer offset an audit assessment by claiming its customers paid use tax on the same untaxed sales?
Only with verification. The dealer remained liable because it had no exemption certificates or direct-payment permits and did not prove that its customers correctly paid use tax on the same sales. A c…
Is a copper-bearing IUD an exempt drug, or medical equipment, for NY sales tax?
It's medical equipment, not a drug. Tax Law 1115(a)(3) exempts drugs and medicines, and also exempts medical equipment -- but medical equipment is exempt only when bought by patients and is taxable wh…
If an association buys information services it both uses itself and resells to its members, how is NY sales tax applied?
Both ways. The geographic, demographic, and mapping data the association buys are taxable information services under Tax Law 1105(c)(1). The association is the end user as to data it uses in its own b…
Could a New Jersey resident claim an other-jurisdiction credit for New York Metropolitan Commuter Transportation Mobility Tax?
The answer depended on how the MCTMT applied. For self-employed individuals, New Jersey treated it as an income-based tax and allowed the doubly taxed self-employment income in the other-jurisdiction …
Did the federal repeal of paycheck advances under the Earned Income Tax Credit change New Jersey Gross Income Tax reporting?
No. The federal program had allowed eligible workers to receive part of their expected Earned Income Tax Credit in normal paychecks, but ended after 2010. New Jersey law did not provide an advance EIT…
Could a qualified New Jersey Urban Enterprise Zone business buy alarm-monitoring services without Sales Tax?
Yes. A qualified UEZ business could purchase security, burglar, or fire-alarm monitoring without Sales or Use Tax when the service was performed exclusively on the alarm system at its registered UEZ l…
How did New Jersey's UEZ exemption apply during a lease when a zone expired or the lessee lost and later regained qualified-business status?
A qualified UEZ business could provide Form UZ-5 at the start of a lease and receive the exemption while the certificate remained valid. If the zone expired or the business lost eligibility, the lesso…
Could a telecommunications provider use Illinois's manufacturing machinery exemption for equipment used to build its network?
No. ST 10-0105-GIL says Illinois did not allow the manufacturing machinery and equipment exemption for telecommunications equipment, even though another state might. The purchaser therefore had to pay…
How did Illinois tax short-term motorized RV rentals, equipment rentals, and related fees?
Motorized RV rentals of one year or less fell under the Automobile Renting Occupation and Use Tax described in ST 10-0104-GIL, while a minimum term over 365 days was outside that Act. Other equipment …
Did Illinois decide whether a New York provider's web-based software and training were taxable or created Illinois collection duties?
Unresolved for the described web-based provider. The Department declined to determine nexus and said ASP, hosting, and web-software guidance belonged in rulemaking. Under the 2010 rules it described, …
My business partner and I run a traveling antiques business with no office, storing merchandise at our home in the MCTD and selling at shows across the country. Do we owe MCTMT, and does it cover our out-of-state show income too?
Yes, but only on the portion of earnings allocated to the MCTD. A partnership's individual partners are subject to MCTMT as self-employed individuals if their net earnings from self-employment allocat…
If a personal income tax refund from a net operating loss carryback isn't paid within 45 days of the claim, does interest run from the loss year return's original April 15 due date or from the later, extended filing date?
It runs from April 15. Under Tax Law § 688(d), once a carryback refund isn't paid within 45 days of the claim, interest accrues from the due date of the loss year return determined without regard to e…
How could an Illinois restaurant document tax-free purchases of products it planned to resell?
A restaurant buying products that it would resell should document the exemption by giving its supplier a certificate of resale. The 2010 GIL directed the owners to 86 Ill. Adm. Code 130.1405 and enclo…
Must a Virginia auctioneer collect sales tax on storage-unit lien auctions, and did later Live Chat advice cancel the audit liability?
Yes. An auctioneer generally must collect Virginia sales tax on taxable property sold at storage-unit lien auctions; those sales were not exempt occasional sales. Alleged oral advice was undocumented,…
Could a construction contractor claim an Illinois enterprise-zone exemption for tools, safety items, rentals, temporary facilities, and other project purchases?
Not categorically. Each enterprise-zone exemption covered different property and required its own certification and use tests. Building materials generally had to be physically incorporated into enter…
How did Illinois treat retail and private vehicle transfers, military purchases, trade-ins, and long-term motor-vehicle leases?
Under the 2010 rules surveyed, retail sales of automobiles, trucks, motor homes, mobile homes, trailers, boats, motorcycles, and off-road vehicles were taxable. Private transfers could face separate v…
What proof did Illinois require for a sale-for-resale exemption, and could a seller recover tax remitted before receiving that proof?
A seller could document resale with a proper certificate containing the parties, items, signature, date, and an active registration or resale number. Missing documentation created a rebuttable presump…
What firearms and transaction charges were exempt during South Carolina's one-time Second Amendment sales tax holiday in November 2010?
Only qualifying handguns, rifles, and shotguns were exempt during November 26-27, 2010. Associated delivery or engraving could be exempt, but ammunition and separately sold parts, accessories, and sup…
Were consumable items bought by a residential-service provider exempt merely because Medicaid recipients used them?
No blanket exemption applied merely because Medicaid recipients consumed the items. Direct Medicare or Medicaid payments could be exempt as governmental purchases when supported by an active E-number,…
Did Illinois tax dark chocolate at the lower food rate because of claimed health benefits?
No. Illinois's 2010 candy rule did not distinguish dark chocolate from other candy because of claimed health benefits. Candy—sweetener combined with chocolate, fruit, nuts, or flavorings in bars, drop…
Is customer-owned excess renewable electricity taxable when it is banked under a net-metering plan and later offsets the customer's utility usage?
No. When the customer retained ownership of excess renewable electricity and banked it with the utility, later use of that electricity was not a utility sale or customer consideration, so its value wa…
Was a privately held REIT a Virginia captive REIT when no partner owned more than 50% and the general partner lacked majority voting or value control?
No. Although the REIT was not publicly traded and received more than 25% of its income from real-property rents, no single partner owned more than 50% of the fund, and the general partner's decision-m…
Could a construction subcontractor use separate accounting because its only Illinois contract produced a loss?
No. The petition was not filed 120 days before the extended due date, and the company had used separate accounting on its original return instead of filing and paying under the statutory method. IDOR …
Could spouses filing a joint Illinois return claim the property-tax credit for two separately owned principal residences?
Yes. IDOR recognized that married couples could have two principal residences during a tax year and said they could claim the tax paid on both when computing the residential property-tax credit. They …
Can Nebraska certify multiple independent laboratories to test bingo and keno equipment, and what must a lab do to be certified?
Yes -- the Department may certify independent testing laboratories (rather than contract with a single lab) to test and examine bingo and keno equipment, and may require manufacturers to use a certifi…
Were purging compounds used to clean plastic injection lines between production runs exempt from Virginia use tax as manufacturing supplies?
No. The compounds cleaned injection lines only after production stopped and before the next run, generally every one to four days. Virginia treated that activity as general maintenance rather than an …
Were injectable dermal fillers used for HIV-treatment-related facial lipoatrophy exempt from Virginia sales and use tax as prosthetic devices?
No. Virginia found that the temporary dermal filler restored facial volume and improved appearance but did not replace a missing body part or bodily function. It therefore remained a cosmetic treatmen…
New York Advisory Opinion TSB-A-10(12)C: Are a parent's disregarded subsidiaries treated as one taxpayer for the QEZE real property tax credit, and does the group pass the employment test as a new business?
Treated as one taxpayer. A petitioner and its disregarded subsidiary and NewCo are a single Article 9-A taxpayer for the QEZE real property tax credit, with the certification imputed to the group; the…
Did member, employee-member, training, maintenance, refueling, relocation, and demonstration use preserve a boat club's exclusive-rental treatment?
Yes. Member use occurred under bareboat rental agreements, and the stated staff uses were reasonably designed to further the rental business. Any unrelated owner use or removal from rental inventory c…
Did the physician in Louisiana PLR 10-023 qualify for the small town doctor income tax credit?
Yes. The physician had the required Louisiana license, qualifying office and hospital locations, relocation history, three-year practice commitment, and acceptance of Medicaid and Medicare.
Did Rose Ann Mathews owe gross receipts tax, penalty, and interest on counseling services performed in Valencia County in 2005 and 2006?
Partly. Mathews owed gross receipts tax, negligence penalty, and interest because counseling services performed in New Mexico were taxable and lack of knowledge did not excuse two years of nonfiling. …
If I file a joint New York State income tax return with my spouse, will my separate assets become subject to the liens from tax warrants that were filed and docketed against my spouse before we married?
No. Filing a joint New York income tax return does not subject a spouse's separate assets to liens from warrants docketed against the other spouse before the marriage, and does not make that spouse li…
How does a customer's trade-in reduce the NY sales tax on a long-term motor vehicle lease?
The trade-in credit must be applied against the capitalized cost (the lease's 'sale price'), which lowers the monthly payments and therefore the taxable amount -- it can't be taken a second time off t…
Which of a railroad IT provider's hosted products are taxable, and how are they sourced for NY sales tax?
They split three ways. Products where the customer uses the provider's hosted software to manipulate its own data are sales of prewritten software (taxable, Tax Law 1101(b)(6)) -- Transportation Manag…
Are charges to rent reusable shipping pallets, plus related fees, subject to NY sales tax?
Yes, the pallet rentals are taxable and so are most of the add-on fees. A lease of tangible personal property is a taxable sale (Tax Law 1101(b)(5)), and renting reusable pallets to manufacturers does…
Does Louisiana treat liquefied natural gas the same as natural gas for the state sales and use tax exemption?
Yes, on the ruling's facts. LNG created only to improve storage and transport, with regasification required before use, received the same Louisiana state sales and use tax treatment as natural gas.
What restrictions applied when a licensed charitable-games supplier used, labeled, listed, or explained gaming equipment?
A licensed supplier could not distribute charitable-games equipment for a fun-only event unless the recipient held a charitable-games license. Equipment had to display the supplier's true corporate or…
Did Illinois tax a 401(k) withdrawal included in an individual's federal adjusted gross income?
No. Illinois began with federal adjusted gross income but Section 203(a)(2)(F) allowed an individual to subtract amounts included under IRC Section 402(a). Because a 401(k) withdrawal was included in …
Could a taxpayer receive Illinois withholding credit from a Form W-2 issued under a different name or Social Security number?
Yes, after adequate proof. IDOR said it would allow Illinois withholding reported on a Form W-2 whose name or taxpayer identification number did not match the return if the taxpayer proved that the IR…
Is a merchant return-authorization (fraud-scoring) service taxable in NY, and what about a linked discount-coupon service?
The return-authorization service is taxable; the discount-coupon service isn't. The authorization service compiles shoppers' return history and runs it through proprietary risk models to recommend whe…
Was a company's rotating block of hotel rooms exempt from Illinois hotel tax when reserved for at least 30 consecutive days?
Yes only for a specific number of rooms the company was unconditionally required to pay for throughout at least 30 consecutive days. Different employees could occupy those rooms during the period. If …
How did the rules for temporary beer and wine permits at South Carolina special events change effective January 1, 2011 (per SC IL #10-13)?
Effective January 1, 2011, temporary beer and wine permits for fairs and special functions are restricted to nonprofit organizations — individuals and businesses can no longer obtain them for function…
Was a Medicare Part D insurer that paid no Louisiana premiums tax exempt from corporation franchise tax?
No. The exemption covered insurance corporations paying Louisiana premiums tax. Because federal law prevented premiums tax on the insurer's Medicare Part D receipts, it paid none and remained subject …
Could a home health agency partnership subtract income from patient services as personal service income?
Yes, for compensation from the described patient services. Illinois used the former federal definition of personal service income, which included wages, salaries, professional fees, and other compensa…
Could a taxpayer exclude future installment payments from 2009 estimated tax after electing to recognize the entire sale gain in 2009?
No. By electing out of the installment method, the taxpayer recognized the entire gain in the 2009 sale year, including the fair market value of the buyer's installment obligation. Illinois estimated …
Did Shane and Kim McGrew prove that they mailed their 2001 New Mexico income tax return, making the Department's 2008 assessment too late?
Yes. The McGrews credibly testified that they followed the 2001 filing instructions, properly addressed the return, and mailed it on October 15, 2002 under a federal extension. A properly mailed lette…
Does an in-service hardship distribution from the Federal Employees' Thrift Savings Plan qualify for New York's income subtraction for federal pensions?
Yes. Tax Law § 612(c)(3)(ii) lets federal employees subtract their pension income from New York adjusted gross income, and because New York exempts in-service distributions paid to its own state emplo…
Were diapers, briefs, and protective underwear sold as incontinence products subject to Florida sales tax?
Yes. Florida classified them as taxable personal hygiene products unless they were dispensed under an individual prescription written by a qualified medical practitioner.
Did Illinois treat prescribed insulin pumps, cartridges, and infusion sets as medical appliances eligible for the reduced sales-tax rate?
Unresolved. The Department did not classify the insulin pump, disposable cartridges, or infusion sets. It explained that a medical appliance had to be intended by its manufacturer to directly substitu…
Could medical equipment qualify for Illinois's exempt-hospital lease exemption when a financing bank owned and leased it to a company that subleased it to the hospital?
Potentially. The rule did not bar a lessor from leasing qualifying equipment to an intermediary that subleased it to an exempt hospital. But every relevant lease had to be executed or in effect when t…
When a restaurant gave customers complimentary meals and drinks, was Illinois Use Tax based on menu price or the restaurant's cost?
The restaurant owed Use Tax on its cost price, not the normal menu price. Taking food or drinks from inventory and giving them to a customer made the restaurant the end user. It could satisfy the tax …
Could an out-of-state vendor exclude an estimated freight charge from Illinois tax when the invoice listed freight separately but the vendor never reconciled it to actual shipping cost?
Not automatically. A separate freight line on an invoice did not prove a separate delivery agreement. Under the 2010 rule described, nontaxable delivery required a separate agreement from the property…
Would the Illinois Department of Revenue verify the tax, fee, and vehicle-procedure information in a private legal textbook?
No. The Department would not approve the accuracy of a private legal publication. It advised the publisher to consult Illinois statutes, administrative rules, and Department publications. It said the …
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