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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Which servers, power, cooling, monitoring, software, security, and building items qualified under Virginia's 2010 data-center sales-tax exemption?
Most listed operational equipment qualified if used in a data center meeting the investment, job, wage, and memorandum requirements. Virginia treated computing, network, power, cooling, control, rack,…
When is South Carolina's 2010 sales tax holiday and what is exempt (per SC IL #10-6)?
August 6-8, 2010. SC Information Letter #10-6 sets South Carolina's 2010 sales tax holiday for the weekend beginning Friday, August 6, 2010 at 12:01 a.m. and ending Sunday, August 8, 2010 at midnight.…
Was Illinois withholding for a nonresident who worked 80% in Illinois automatically limited to 80% of wages?
No. IDOR said the 80% Illinois and 20% other-state example could not be resolved by a simple percentage. If the out-of-state work was incidental to Illinois service, all compensation was paid in Illin…
New York Advisory Opinion TSB-A-10(8)C: Does a foreign equipment seller owe Article 9-A tax, and if installation/training push it past PL 86-272, is it taxed only on those receipts?
It depends, and there is no partial exemption. A foreign corporation that only solicits orders for testing equipment (approved and shipped from outside New York) is protected by Public Law 86-272 and …
Did a county's requisition procedure exempt direct purchases of a sludge dewatering system and metal building for a public-works project?
Yes, if the county followed the form: it issued the vendor order, received the invoice, paid from public funds, took title at jobsite delivery, and assumed liability and risk of loss.
Did a U.S. citizen living abroad become a Virginia domiciliary by using his parents' address and holding a Virginia license, voter registration, property interest, and vehicle?
No. Virginia found that the taxpayer remained domiciled abroad in 2005. He had lived there for decades, maintained a permanent home and license there, worked there full time, and visited Virginia for …
Could an out-of-state contractor create Illinois income-tax nexus by hiring Illinois subcontractors for repair services?
IDOR did not decide nexus because the issue was fact-specific. It explained that a taxpayer generally had Illinois nexus when its agents were physically present in the state providing services on its …
Are motor-vehicle repair parts and labor exempt from Kansas sales tax when the damage was caused by a storm, flood, earthquake, terrorism, accident, or vandalism?
No exemption applies. Kansas sales tax covers motor-vehicle repair, servicing, replacement-part installation, and painting regardless of how the vehicle was damaged. The disaster-related exceptions in…
New York Advisory Opinion TSB-A-10(7)C: Must a New York not-for-profit corporation that has no IRS 501 determination still file and pay Article 9-A franchise tax?
Not necessarily. A New York not-for-profit corporation with no stock or shares, operated on a nonprofit basis with no earnings inuring to members, can qualify for the Article 9-A franchise-tax exempti…
Does a Connecticut photo booth business owe sales tax on the charge for a booth and attendant at a wedding or event?
Yes. A single, non-separately-stated charge for a photo booth and its attendant at an event is a taxable rental of tangible personal property under Conn. Gen. Stat. § 12-407(a)(2)(J). Because the even…
Which braces, orthotics, TENS units, electrode pads, and orthopedic pillows sold by a Kansas chiropractor were sales-tax exempt?
Prescribed prosthetic devices were exempt, including carpal-tunnel braces and splints, molded foot orthotics, cervical collars, lumbosacral support belts, and TENS units worn on the body. Orthopedic c…
Could taxpayers obtain a Virginia refund more than one year after an IRS closing agreement by relying on later notices or equitable recoupment?
No. The taxpayers filed their amended Virginia returns more than one year after the IRS closing agreement became final. A later notice confirming the same changes and later interest notices did not cr…
Could a registered consumer-use-tax taxpayer overturn an estimated assessment after filing no returns, producing no records, and submitting an incomplete appeal?
No. Virginia upheld the estimate because the taxpayer filed no use-tax returns and produced no business records despite repeated audit requests. Its protest also failed to become a complete appeal wit…
Could spouses have different Virginia domicile results for the same year after moving together to another state?
Yes. Virginia found that neither spouse was an actual resident because their records supported fewer than 183 Virginia days. The wife had changed her domicile by switching her license and voter regist…
Did a taxpayer establish domicile outside Virginia even though his wife, home, vehicle, doctor, and more of his days remained tied to Virginia?
Yes. Virginia found that the taxpayer became domiciled in the other state in 2005 after his parents died and he returned there. He bought another home, maintained and renewed that state's license, vot…
Under Virginia's historical 2010 motor-vehicle-fuel sales-tax guidelines, who collected the tax, what entered the tax base, and what filing and record rules applied?
These historical guidelines required distributors to collect a 2.1% tax on fuel sold to retail dealers for retail sale in the covered transportation districts. Beginning July 1, 2010, transportation a…
Which charges by an application service provider or SaaS provider were subject to Kansas sales tax?
Hosted application-service-provider charges were not subject to Kansas sales tax, including recurring monthly fees and separately stated setup, support, training, data-migration, and forms-programming…
How did Kansas apply the July 1, 2010 state sales-tax increase from 5.3% to 6.3% to transactions crossing the effective date?
Kansas raised its state sales and use tax rate from 5.3% to 6.3% on July 1, 2010 without changing what was taxable. The notice applies the new rate mainly by delivery, first use, return of serviced pr…
Could a trust succeed to an Illinois net loss incurred by a terminated estate under the federal Section 642(h) carryover rule?
No. Although IRC Section 642(h) allowed specified federal carryovers from a terminated estate or trust to beneficiaries, the Illinois Income Tax Act had no parallel provision transferring an estate's …
Are membership dues charged by a business-development networking organization taxable as social or athletic club dues?
No. New York taxes dues paid to a social or athletic club (Tax Law 1105(f)(2)), but this organization is not one. While it qualifies as a 'club or organization' under the regulations, it is not a soci…
Could a dealership and leasing-management group discontinue Florida consolidated filing after major organizational and strategic changes?
Yes, effective for tax years beginning on or after January 1, 2008, subject to no omitted intercompany or deferred items, no reconsolidation before the 2013 year, and full reporting of specified defer…
How did Florida tax beverage carbon dioxide, tank rentals, and related delivery, fuel, hazardous-material, inspection, and property-tax charges?
CO2 incorporated into fountain drinks was exempt for resale. A separate tank rental and its related fees were taxable; a lump-sum CO2-and-tank charge was exempt with a resale certificate. Optional sep…
Were electronically downloaded medical-practice software licenses and their support agreements subject to Florida sales tax?
No. The taxpayer delivered all software, upgrades, forms, and training materials electronically and sold no hardware or other tangible property. Both the license and maintenance agreement were nontaxa…
What Kansas tax changes did the Department highlight in its 2010 motor-fuel legislative update?
Kansas Notice 10-04 highlights four 2010 bills: a $10 fee for installment plans longer than 90 days and mandatory e-filing for sales, use, and withholding returns; biodiesel and retail-dealer incentiv…
Was the royalty income a retired professor received from his patented glaucoma treatment, after he became a nonresident of New York, taxable as New York source income?
No. Because the royalties arose from a voluntary patent assignment rather than his university employment, and the patent was not employed in a business, trade, profession, or occupation carried on in …
Could a mechanical contractor remove Virginia audit items using permits, late or undated exemption certificates, and cost estimates?
No. Virginia kept every contested item in the audit. Purchase orders and federal permits were not the state certification required for pollution-control equipment; a late, undated manufacturing certif…
Which floors, HVAC, electrical, hydraulic, pneumatic, ventilation, gas, paint-booth, freezer, and inspection items qualified for Virginia's manufacturing exemption?
The result was item-specific. Virginia exempted direct production systems such as hydraulics, qualifying chillers, production pneumatic lines, milling-room downdraft ventilation, production natural ga…
Could a video post-production company remove bundled application software from computer value and reclassify specialized equipment for local property tax?
Not on the evidence provided. Virginia agreed that qualifying application software can be treated as intangible property even when bundled with hardware and not separately billed, but the company had …
Did an equipment rental company qualify as a short-term rental business when less than 80% of annual rental receipts came from periods of 92 days or less?
No. For 2007 and 2008, the company failed the statutory test because less than 80% of its annual gross rental receipts came from transactions lasting 92 consecutive days or less, including extensions …
Was a separately invoiced reimbursement for a janitorial contractor's employee medical insurance taxable with the contractor's nonresidential cleaning service?
Yes. The reimbursement reduced the contractor's cost of providing taxable cleaning services and became part of the customer's total sales or cost price. Separately invoicing it did not make it an exem…
A prior owner financed a building through an Islamic-finance (Ijara/lease-to-own) structure, deeding the property to a lender's special-purpose entity as security instead of using a conventional mortgage, and paying Mortgage Recording Tax (not RETT) on that deed. I'm now buying the building and financing part of the price by having that lender's entity assign the security deed to my new bank, then consolidating it with an additional mortgage into one new mortgage. Do I owe extra Real Estate Transfer Tax or Mortgage Recording Tax on the deed assignment and consolidation, beyond what's already been paid?
The assignment itself is free of additional RETT and MRT; consolidating it with new financing is taxed only on the NEW money. In 2006, a prior owner (YR) conveyed title to a special-purpose entity (DB…
Are charges for towing and transporting motor vehicles subject to NY sales tax?
It depends on what's being moved and why. Towing a disabled or inoperative vehicle so it can be repaired or maintained is TAXABLE as a constituent part of repair/maintenance under Tax Law 1105(c)(3) -…
Could Steve Ortiz use Type 6 NTTCs obtained after the 60-day audit deadline to deduct 2006 construction and resale-service receipts?
No. Ortiz did not have the required Type 6 NTTCs when the 2006 returns were due or within 60 days after the Department's audit notice. Section 7-9-43 made disallowance mandatory, and NTTCs obtained ab…
Did an out-of-state contractor have to register a Kansas contract and post a tax bond under K.S.A. 79-1009 if it was authorized to do business in Kansas?
No, if the contractor was a foreign corporation authorized to do business in Kansas. The 2010 version of K.S.A. 79-1009 required a nonresident contractor to register each contract over $10,000 and oth…
How were retailers supposed to report July 2010 sales that mixed Kansas's old 5.3% and new 6.3% state tax rates?
Retailers reported all gross sales on the July 2010 return, including sales correctly invoiced at both the old 5.3% and new 6.3% state rates, then claimed an additional deduction for the old-rate sale…
Did human- and animal-tissue implants qualify for Illinois's reduced medical-appliance tax rate when used in reconstructive or cosmetic surgery?
The tax rate depended on use. Tissue implants used to substitute for malfunctioning body tissue—such as reconstruction after a mastectomy—generally qualified for the reduced medical-appliance rate. Th…
What state and local tax legislation did Virginia's Department of Taxation summarize for the 2010 General Assembly session?
This was a broad historical guide, not a taxpayer-specific ruling. It summarized 2010 legislation enacted through the April 21 reconvened session, including a shorter state collection period, expanded…
Were the separate documents for six bank loan and credit products subject to Florida documentary stamp tax when no document or expressly incorporated set contained every required element?
No, while unrecorded. None contained or expressly incorporated all three required elements: an unconditional promise, a sum certain, and the borrower's signature. A document establishing a lien would …
How did Virginia's move to January 22, 2010 federal conformity affect the domestic production deduction and earned-income credit for tax year 2010?
For tax year 2010, Virginia advanced its Internal Revenue Code conformity date to January 22, 2010 but kept two specific differences. Virginia allowed only two-thirds of the federal IRC § 199 domestic…
What Virginia tax interest rates applied during the third quarter of 2010?
Virginia's third-quarter 2010 rates were 6% for tax underpayments and 6% for tax overpayments. The corresponding federal underpayment and noncorporate overpayment rates were 4%. For taxpayers with yea…
Is a trust exempt from New York income tax if its sole trustee lives outside New York and the trust owns no New York property?
Yes. Under Tax Law § 605(b)(3)(D)(i), a resident trust owes no New York income tax if all trustees are domiciled outside New York, its entire corpus (including real and tangible property) is located o…
Once the only New York-domiciled trustee of a resident trust dies and the surviving trustee is a nonresident, does the trust stop owing New York income tax on its income?
Yes, but only prospectively. Once all trustees are non-New York domiciliaries, the trust's corpus (including real and tangible property) is entirely outside New York, and its income is otherwise non-N…
Did a related company's mortgage payments and recorded depreciation create taxable rent when it occupied an LLC's Florida property without a written lease?
Yes. Florida treated the related entities as separate persons and their arrangement as an implied rental. Mortgage payments plus depreciation recorded as rental expense and income were taxable conside…
How did Illinois treat wireless Internet access bundled with voice, data, messaging, information, and consultation services for telecommunications tax?
Illinois gave no plan-by-plan determination. It explained that qualifying Internet access was covered by the then-effective federal tax moratorium, while voice or other telecommunications outside that…
Did selling gift codes or cards through Illinois retailers create nexus, and when was Illinois sales tax due on the gift-code transaction?
Illinois made no nexus determination for the gift-code issuer or affiliated online retailers. It did decide the transaction sequence generally: selling a card or code that only gave the buyer a right …
Could Illinois grant a one-day sales-tax return extension on request, and what items qualified for the reduced medical-appliance rate?
No. Illinois said retailers had to meet the statutory return deadlines and the Department lacked authority to grant the requested one-day extension. It also explained that a medical appliance received…
Was payroll apportionment automatically required to split a cable provider's BPOL gross receipts between two local offices?
No. Virginia treated payroll apportionment as a last-resort method used only when it is impractical or impossible to attribute service receipts under the general definite-place-of-business rules. The …
Did a military spouse abandon Virginia domicile by following her active-duty husband to another state for two years?
No. Virginia found that the spouse had established Virginia domicile in 2000 and did not abandon it during the two-year duty assignment. She kept the Virginia home where her children lived, retained a…
Did a federal employee change domicile when his paid education program moved him from Virginia to college and work assignments in two other states?
Yes. Virginia found that the employee changed domicile to the college state in August 2004. Employer records showed he lived and worked in the two other states, spent little time in Virginia, and file…
How did Virginia resolve a couple's domicile, college-savings, pension, age-deduction, and appeal-interest claims for 2006 and 2007?
Virginia reached a mixed result. The couple were Virginia domiciliaries, their pension subtraction lacked federal-return and other-state tax proof, and the wife's age deductions were unavailable under…
Did foreign and out-of-state work assignments end a taxpayer's Virginia domicile when his family, home, licenses, and registrations stayed in Virginia?
No. Employment and housing abroad and in another state did not prove abandonment of Virginia domicile. The taxpayer's spouse and children stayed in the Virginia home; he retained Virginia vehicles, a …
Did a taxpayer's statement that he lived and worked outside Virginia in 2003 justify removing the state's income-tax assessment?
Not yet. The taxpayer said he lived and worked outside Virginia in 2003, but he retained a Virginia driver's license, voter registration, vehicle registration, and a Virginia address receiving federal…
Did Virginia property, vehicles, a license, and voter registration make a taxpayer living and working abroad a Virginia domiciliary in 2006?
No. The taxpayer took several steps associated with Virginia domicile, including property ownership, registered vehicles, a driver's license, and voter registration. But he remained employed full time…
Could Virginia convert a bankrupt corporation's unpaid use and withholding taxes to its president and majority shareholder?
No, on these facts. Although the taxpayer's titles and ownership gave him authority, Virginia found that he was not under the relevant duty to pay the taxes, lacked actual knowledge before other debts…
Could a phone-system installer credit sales tax wrongly collected from customers against use tax owed on cable installed in walls?
No. Cable permanently installed in walls made the business a consuming contractor liable for tax on the cable's cost. Sales tax wrongly collected from customers could not offset that use-tax liability…
Was a cabinet fabricator a retailer when its office showed unsaleable sample cabinets and it bought primary materials for accepted jobs rather than general inventory?
No, for the installed cabinets on these facts. Unsaleable sample cabinets on office walls did not create a showroom, and materials purchased for accepted jobs did not satisfy the general inventory req…
Was a medical practice's one-time sale of imaging-center fixed assets taxable when the practice made no regular retail sales and was not required to register?
No. Virginia treated the fixed-asset transfer as an exempt occasional sale. The radiology practice did not regularly sell tangible personal property, was not required to register for retail sales tax,…
Did Virginia waive the penalty on 31 unstamped cigarette packs bought from a licensed stamping agent?
Yes. An inspection found 31 unstamped packs, but the retailer produced purchase receipts and a signed affidavit from the licensed Virginia stamping agent that sold them. Virginia accepted that evidenc…
Did a lumber manufacturer's strapping machine and reusable strapping qualify as exempt packaging materials?
No. Virginia treated the strapping as a transportation device used to bundle, restrain, and secure lumber for shipment, not material that placed the product into a protective wrapper or container. The…
Did Virginia remove use tax assessed on a manufacturer's software, checks, forklift, maintenance supplies, and other purchases?
No. The manufacturer did not document that disputed software, laser checks, repair items, rentals, petroleum products, or supplies were returned or used exemptly. Its forklift was used more than 80% o…
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