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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Were hourly charges for customer-operated aircraft simulators taxable equipment rent or nontaxable services?
They were taxable rent. The customer supplied its instructors and had possession, direction, and control inside the simulators. The owner provided neither an operator-only service nor flight instructi…
Did Illinois classify a multilevel marketer's soy nuts and granola snack bars for the low or high food tax rate?
No product-specific classification was given. The Department explained that qualifying off-premises food generally received the historical 1% state rate plus local tax, while alcoholic beverages, cand…
Who owed Illinois tax when a granite-countertop business sold countertops over the counter or installed them permanently in real property?
For an over-the-counter countertop sale, the retailer owed Retailers' Occupation Tax and collected the corresponding Use Tax from the customer; a separately contracted installation service was not tax…
Which medicines, prosthetic devices, diabetic supplies, and other medical products did South Carolina treat as sales-tax exempt in 2010?
Exemption depended on the product, purchaser, prescription, and use. Prescription-required medicine sold by prescription to an individual was exempt, while many supplies sold to doctors or hospitals w…
How did South Carolina apply sales tax, admissions tax, alcohol permits, and liquor-by-the-drink tax to nonprofit fundraising events?
Tax treatment depends on what guests are really buying and whether an exemption applies. True donations are not sales or admissions, but meals, entertainment, drinks, and auctioned goods can be taxabl…
Are mandatory housekeeping charges billed to fractional owners during their assigned resort-villa weeks taxable as additional guest charges?
No. During their assigned ownership weeks, the co-owners were not transients paying room rent, so housekeeping was not an additional guest charge. The result changed when the villa was rented to a tra…
Could a partnership subtract wages whose federal deduction was disallowed under IRC Section 280C?
Yes. Section 203(d)(2)(J) allowed a partnership an Illinois subtraction equal to wages or salaries whose federal deduction was disallowed under IRC Section 280C, including the stated Work Opportunity …
Was a deed transferring bare title from one synthetic lessor to a successor subject to Florida documentary stamp tax?
No. Florida treated the synthetic lease and bare title together as a mortgage. The deed transferred only the mortgagee's interest, not an interest in the underlying real property, despite its deed for…
Was a Florida sale of biodiesel to an unlicensed buyer taxable when the buyer immediately exported the fuel?
Yes. Title and possession passed in Florida from a licensed wholesaler to an unlicensed buyer, so the seller had to charge the 2008 rate of 29 cents per gallon. An exporter license could support a ref…
Could a partnership claim extra Illinois depreciation by ignoring federal Section 1031 basis reduction when the relinquished property was outside Illinois?
No. A partnership's Illinois calculation began with federal taxable income, including the federal depreciation deductions based on the Section 1031 replacement property's carryover basis. Illinois all…
Could a corporation skip earlier profitable years and save 2001-2002 Illinois net losses for deductions in 2006 and 2007?
No, unless the corporation had timely elected to relinquish the entire carryback period. Each loss had to be carried to the earliest eligible year and then forward in order. The remaining amount avail…
How can taxpayers find South Carolina advisory opinions by subject (per SC IL #09-25)?
Use the index attached to SC Information Letter #09-25 to find South Carolina advisory opinions. It indexes the advisory opinions issued by the Department from 1987 through December 2009, and it expla…
How can taxpayers check whether an older South Carolina advisory opinion was modified or superseded (per SC IL #09-24)?
Use the citator attached to SC Information Letter #09-24. It helps you determine what effect newer South Carolina advisory opinions have on previously published ones — whether an opinion was modified,…
Is unenhanced diesel motor fuel used to manufacture industrial gases like oxygen and nitrogen exempt from New York's diesel motor fuel, petroleum business, and sales taxes as fuel used to produce tangible personal property for sale?
Yes. Unenhanced diesel motor fuel that a manufacturer uses directly and exclusively, off the highway, to produce industrial gases (such as oxygen and nitrogen) for sale is exempt from the Article 12-A…
Is BP's construction of a wind farm on leased land a capital improvement, and which equipment is exempt?
No, it's not a capital improvement. Because BP installs the equipment on leased land under a lease that keeps title with BP, lets BP move/replace/refurbish it, and requires BP to remove everything (in…
Did documentary stamp tax apply when an individual transferred stock in corporations that had acquired Florida real property before July 1, 2009?
No. The entity-interest provision applied only when the legal entity acquired its Florida real property after July 1, 2009. These corporations acquired their properties in 2000 and 2002.
Is an injectable dermal filler used to smooth smile lines exempt from Colorado sales and use tax?
Yes—but on a narrow ground. In this amended letter (which reversed the Department's original 2008 conclusion that the product was taxable), the Department held the injectable dermal filler is EXEMPT b…
Did Virginia's occasional-sale exemption cover business assets bought during a bankrupt seller's five-month liquidation and reorganization?
Yes. The bankrupt seller sold business divisions to five entities over five months under an orderly liquidation and reorganization plan. Even though some branded consulting operations continued outsid…
Does Texas accelerate seller-finance motor vehicle tax when notes move from one related finance company to a second qualifying RFC?
No. On the stated facts, transferring notes from the dealer's first registered related finance company to a second qualifying RFC did not accelerate the remaining motor vehicle tax. The dealer continu…
New York Advisory Opinion TSB-A-09(17)C/(60)S: Are IBM's value-added network (VAN) and application services taxable telecommunications, how are receipts apportioned to New York, and do they qualify as exempt Internet access?
They are taxable telecommunications. IBM's value-added network (VAN), EDI, and email services are telephony/telegraphy subject to sales tax and telecommunications subject to the section 186-e excise t…
Were bulk sales of the Mirena intrauterine contraceptive to licensed physicians, hospitals, and clinics exempt from Virginia sales tax?
Yes. Virginia treated Mirena, an intrauterine device that releases levonorgestrel, as a Schedule VI controlled drug. The wholesaler could sell it tax-free to licensed physicians, optometrists, nurse p…
Did a late, facially invalid resale certificate exempt a medical-equipment maintenance agreement billed through a third-party vendor?
No. The seller obtained the certificate after the audit began, so it faced greater scrutiny and had to prove the specific transaction qualified. The form improperly listed both the third-party vendor …
Was a Virginia sales-tax appeal timely when it was dated September 1 after an August 31 deadline?
No. The assessment was issued June 2, 2009, making August 31 the deadline for applying to the Tax Commissioner. The taxpayer's correspondence was dated September 1 and received September 2. Virginia h…
Was a hand-delivered Virginia sales-tax appeal timely when the Department received it on the 91st day after assessment?
No. Assessments issued June 26, 2009 required a complete appeal by Thursday, September 24. The taxpayer delivered a notice of intent in August but hand-delivered the actual appeal on September 25, the…
Does the $10 Texas vehicle gift tax apply when the sole owner of a used-car dealership transfers a dealership vehicle to a brother?
It depends on the business form. A sole proprietor and the dealership were legally the same, so a vehicle given to the owner's brother qualified for $10 gift tax. A corporation or LLC was separate, so…
What are 'telephone communication services' subject to Nebraska sales tax, and which telecom charges are taxable or exempt?
Sales tax applies to 'telephone communication services,' which Revenue Ruling 01-09-3 defines as using a network capable of voice communications to furnish communication services to subscribers by ele…
Which wind-farm components and construction services qualify for New York's exemption for electricity-generation machinery?
A commercial wind farm generating electricity for sale is an eligible production activity, so the wind turbines -- rotor blades, hub, nacelle, and tower as a unitary machine -- plus integrally connect…
Is a tenant's rent that includes utilities supplied by the landlord subject to sales tax as a utility sale?
No. The tenant's payments are a component of rent for real property, so they are not subject to sales or use tax. A landlord's base rent isn't taxable even when the landlord provides utilities as part…
What Virginia tax assessment and refund interest rates applied during the first quarter of 2010?
Virginia tax assessments and refunds both carried a 6% annual interest rate from January 1 through March 31, 2010. The federal underpayment and noncorporate overpayment rates remained 4%, and Virginia…
Are receipts from renting photo studio space subject to New York sales tax?
No -- renting photo studio space is the rental of real property, which is not subject to New York sales or use tax, as long as the charge is solely for the space. But if the studio rental is combined …
Are a photo-shoot company's sales and the props, equipment, and services it buys subject to sales tax?
It depends on how the photo is delivered. Photographs delivered on tangible media (disc, print, flash drive) in New York are taxable; photographs delivered electronically are not taxable. Because all …
Are web-based retail site-selection reports taxable, and how is the tax sourced to local jurisdictions?
Yes, they're taxable. The reports draw on a common database of demographic and competitive market data that the provider offers to any customer, so they are taxable information services under Tax Law …
Are a drop-off child-care center's receipts subject to sales tax as admission to a place of amusement?
No. The center's receipts aren't subject to sales tax. It takes custody of and responsibility for the children it cares for -- with sign-in/sign-out contact info, authorized-pickup ID and code words, …
When a landlord reimburses a commercial tenant for the cost of building out the leased space, does the landlord owe sales or use tax on that reimbursement?
No. A landlord's disbursements from a 'Tenant Fund' to reimburse a commercial tenant for the cost of Initial Alterations (build-out) to the leased premises are not receipts from a sale of tangible per…
Would a yacht be subject to Florida use tax after at least six months of documented use in another state?
No, if the owner proved actual use for six months or longer under conditions creating the other state's taxing jurisdiction and documented payment of any lawfully imposed tax before Florida entry.
What is South Carolina's tax interest rate for the period ending March 31, 2010 (per SC IL #09-22)?
4%. SC Information Letter #09-22 sets South Carolina's interest rate on tax underpayments and overpayments at 4% for the period April 1, 2009 through March 31, 2010 — extending the same 4% rate the De…
How does the federal Military Spouses Residency Relief Act affect South Carolina income, withholding, and personal property tax for a servicemember's spouse (per SC IL #09-21)?
SC Information Letter #09-21 explains how the federal Military Spouses Residency Relief Act (Pub. L. 111-97, signed November 11, 2009) applies in South Carolina. The Act lets a servicemember's spouse …
What tax changes did South Carolina's 2009 subsequent legislation (Act 124 / House Bill 3130) make for large manufacturing projects (per SC IL #09-20)?
SC Information Letter #09-20 summarizes tax legislation the General Assembly passed after its main 2009 session — House Bill 3130 (Act No. 124), signed October 30, 2009 — supplementing the Department'…
Were entry fees for educational exhibits at a Florida university-owned museum taxable admissions?
Yes. The general governmental-exhibit exemption had expired July 1, 2009, and the exhibits did not use only faculty and student talent, so museum patrons' entry payments were taxable.
Were a youth-services nonprofit's thrift-store sales of donated clothing, household goods, appliances, and vehicles exempt from Florida sales tax?
Yes. The Chapter 617 nonprofit primarily provided character, educational, cultural, recreational, and social benefits to minors and directly sold qualifying donated property while holding a valid exem…
When could property temporarily kept in South Carolina avoid use tax because it was intended for out-of-state use?
The exclusion applied only to a use-tax purchase made for known out-of-state use, with first substantial use outside South Carolina or qualifying in-state processing followed by exclusive out-of-state…
How did Virginia's original 2010 Motor Vehicle Fuel Sales Tax guidelines shift collection from retailers to distributors?
These superseded guidelines moved collection on January 1, 2010 from retail dealers charging customers 2% to distributors charging retail dealers 2.1% on fuel for sale in Northern Virginia and Potomac…
How did Virginia respond when U.S. diplomatic sales-tax exemption cards moved the exemption details from the front to the reverse?
Virginia agreed to update its regulation and dealer guidance. The U.S. Department of State had redesigned diplomatic tax-exemption cards so the extent of a mission's or individual's exemption appeared…
Did a city's communications-tax exemption apply back to January 1, 2007 when its provider had one valid certificate but taxed other city accounts?
Yes. The city was a political subdivision and had never been subject to the communications tax after it began January 1, 2007. Providers still needed a properly executed exemption certificate, but one…
Could a flooring contractor offset use tax with sales tax it had wrongly billed to customers on real-property jobs?
Not directly. As a real-property contractor, the business owed use tax on untaxed flooring materials and could not satisfy that liability with sales tax wrongly billed to customers. Erroneously collec…
What National Guard and Reserve pay could be subtracted from South Carolina taxable income under the 2009 guidance?
Qualifying pay for limited annual training, all actual weekend drills, and other actual inactive-duty training could be subtracted. Activated members could instead qualify for 15 days of active-duty p…
How did South Carolina phase in single-sales-factor apportionment for tangible-property businesses from 2007 through 2010?
The taxpayer compared the old three-factor and new sales-factor methods and received only 20%, 40%, 60%, or 80% of a beneficial reduction in 2007–2010. The phase-in also affected license fees.
Are an online auction site's seller listing fees and buyer registration fees subject to sales tax?
No. Sellers' registration and per-item listing fees are charges for advertising their goods on the website -- nontaxable advertising services. Buyers' registration fees aren't taxable either: unlike a…
Are a waste-management consultant's fees and pass-through hauling charges subject to sales tax?
No. The consultant advises clients on managing waste but performs no removal itself, and it buys hauling as its clients' disclosed agent -- written agency agreements, contracts with haulers signed as …
What initial Virginia tax relief did Tax Bulletin 09-10 announce for qualifying military spouses in 2009?
The initial bulletin said a spouse accompanying a service member under military orders could avoid gaining or losing domicile when both shared the same domicile and the spouse was present solely to ac…
May an accrual-basis Kansas dealership recover sales tax it remitted but never collected when it repossesses a vehicle from a defaulting buyer?
Yes, when the accrual-basis dealer financed the sale itself under a nonassignable agreement and remitted tax it never collected from the defaulting buyer. It may seek a refund of that uncollected tax,…
Can a horse or livestock trailer with built-in human living quarters qualify for Texas's farm-trailer motor vehicle tax exemption?
Only with strict proof. A livestock trailer with human living quarters was presumed taxable and had to be used at least 80% for qualifying transport by an agricultural producer. Trips to races, rodeos…
Did transferring unencumbered fee-simple property from tenants in common to their wholly owned LLC trigger value-based documentary stamp tax?
No. Only minimum tax applied if each owner's percentage in the LLC exactly matched the owner's prior property share. A tenant's mortgage on leasehold improvements did not encumber the fee title.
How could a certified Florida project calculate its taxable income for the Capital Investment Tax Credit when its operations supported the broader enterprise?
Florida approved a two-step method: apply the project's share of company expenses to total revenue, subtract project expenses, and allocate book-to-tax adjustments using the same percentage.
Did a terminated Florida facility lease or a Florida-based internal process consultant require a mail-order retailer to collect Florida sales tax?
No. The retailer had vacated and removed its property, ending facility nexus. The consultant served headquarters, had no customer or vendor contact, and did not solicit or maintain the Florida market.
Could an expanding manufacturer satisfy Florida's 10% output-increase test without producing during every month of the two 12-month measurement periods?
Yes. The statute measured output over two continuous 12-month windows but did not require continuous production. Actual post-installation output was 1,180% above pre-installation output.
Are city-imposed ticket surcharges and separately stated order or reprint fees part of a taxable Florida admission price?
No. The city's capital-improvement and operations surcharges were excluded from the admission price. Separately stated mail-order, phone-order, and ticket-reprint fees added to an established ticket p…
Are temporary dewatering equipment rentals and the related installation and removal services taxable in Florida?
Yes. Florida treated the temporary pipes, pumps, and related equipment as rented tangible personal property, not real-property improvements. The installation and removal services were also taxable bec…
Are in-vehicle telematics service plans subject to sales tax, including the extra 5% tax on aural information services?
They're taxable, but mostly not at the extra 5% rate. The bundled safety plans (crash response, emergency, stolen-vehicle, roadside, diagnostics, door unlock, etc.) are taxable as protective/detective…
When an S corporation's shareholders are bought out and the farmers' school property taxes are paid only after the buyout by the new owners, is the resulting tax credit allocated based on who owned shares when the taxes were actually paid, or split among all shareholders on a per-share-per-day basis?
Absent an IRC §1377(a)(2) election to close the S corporation's books at the date of a shareholder's termination, the farmers' school tax credit must be allocated among all shareholders - both before …
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