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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Could a Florida county directly purchase public-works materials tax-free under its proposed contract procedures?
Yes, if the county actually used the proposed direct-purchase plan. The county had to issue purchase orders, receive direct invoices, pay vendors with public funds, take title and possession on delive…
Was income earned after moving out of Virginia taxable when a former employee performed all subcontractor services for the Virginia company from another state?
No. The husband was taxable as a Virginia resident only through his May 2005 move. After becoming domiciled in State A, he contracted with his former Virginia employer but performed every service in S…
Did daily logs and receipts prove that a wife changed domicile in November 2005 and spent too few days in Virginia to be an actual resident in 2006?
Yes. Virginia accepted that the wife moved to State A in November 2005, took full-time employment, and established a home there. A daily log and receipts supported the reported number of Virginia days…
How did Virginia tax precast wall panels sold without installation versus panels installed by the fabricator?
Uninstalled panels delivered to Virginia were retail sales taxable on selling price, and tax mistakenly paid to another state did not offset Virginia tax. Installed panels were real-property contracts…
Were goods delivered to Virginia customer warehouses exempt because they were later shipped outside Virginia, and would the audit sample be reopened?
The audit sample was reopened because the projected taxable measure might exceed exempt sales originally deducted, subject to further documentation. But goods delivered to customer warehouses in Virgi…
How did Virginia's 2009 Get Square VA tax amnesty waive penalties and half the interest, and who qualified?
These historical guidelines governed the October 7-December 5, 2009 Get Square VA program. For an eligible bill or delinquent return, paying all tax and half the accrued interest waived all penalties …
Are a web service provider's advertising, listing, support-database, and ASP fees subject to New York sales tax?
It varies by service. Banner ads, web listing/catalogue advertising fees for retailers and for residential leasing agents/owners, and separately stated photo setup fees are nontaxable advertising serv…
I'm an inmate at a New York State correctional facility and buy cigarettes and tobacco products from the prison commissary. Are inmate purchases exempt from New York's cigarette and tobacco products excise taxes?
No. Inmates of New York correctional facilities receive no exemption from the Article 20 excise taxes on cigarettes and tobacco products. Cigarettes sold to inmates through the prison commissary must …
Were portions of leased airport property used by an airline excluded from Florida commercial-rent tax?
Conditionally yes. A specific portion was excluded only if the certified airline actually used it, the lessee's rent payment was made on the airline's behalf, and the area was used exclusively for loa…
If an S corporation shareholder can't deduct her full flow-through loss on her federal return because of a basis limitation, does she still have to add back the entire bonus depreciation amount for New York tax purposes?
Yes. New York provides no relief: the shareholder must add back the full $1,200,000 of IRC § 168(k) bonus depreciation passed through from her S corporation under Tax Law § 612(b)(8), regardless of th…
How did Florida tax electronically delivered information services and the terminals used to receive them?
The electronic information services were not subject to sales tax or communications services tax. Free pilot terminals did not create a taxable customer rental, but the provider owed tax when buying t…
Can a cleaning/restoration firm buy dehumidifiers and air movers tax-free for resale when it rents them to clients?
Only if it meets four conditions. The firm cleans fire/smoke/flood-damaged buildings and offers clients optional dehumidifiers and air movers as a separate, value-added rental. Because it doesn't perm…
Can an auto repair shop pass its sales tax on consumable supplies through to the customer in the taxable repair bill?
Yes. An auto body shop properly owes sales/use tax on consumables it buys and uses up in a repair -- things like masking tape, sandpaper, plastic sheeting, and tack cloth -- because it's the user of t…
Are licenses to use customizable prewritten software taxable, and how is the tax sourced when users are in several states?
Yes, the license fees are taxable sales of prewritten software, taxed to the extent the customer's employees access the software in New York. Prewritten software is tangible personal property regardle…
Are buy-out payments a professional sports team pays a nonresident athlete to terminate his employment contract taxable as New York source income?
No. Under 20 NYCRR 132.22(b)(4)(i), termination pay and contract or option-year buy-out payments are specifically excluded from the definition of compensation for services rendered as a member of a pr…
Did a utility management agreement create taxable leases of the utility's premises or equipment?
No. The agreement was a nontaxable management contract: the utility kept the business revenues and risk of loss and paid the manager for services. The manager paid nothing for the required premises or…
New York Advisory Opinion TSB-A-09(16)C: Are two-way paging services subject to the Public Safety Communications Surcharge under Tax Law section 186-f?
No. A two-way paging service that runs over the provider's own mobile radio network, is not interconnected with the public switched telephone network, and gives users no real-time access to 911 or eme…
Should a furniture store with separately billed design work and significant custom framing be classified only as a BPOL retailer?
Not necessarily. Furniture and furnishing sales were retail, and free design plus third-party labor tied to those sales were ancillary. Separately billed design services under 1% of receipts were unli…
Are golf, tennis, and similar tournament entry fees subject to South Carolina admissions tax?
The participation fee itself was not taxed, but the portion representing normal use of the course, court, range, or other amusement facility was subject to admissions tax unless exempt.
What Virginia tax interest rates applied during the fourth quarter of 2009?
Virginia's fourth-quarter 2009 rates were 6% for tax underpayments and assessments and 6% for tax overpayments and refunds. The corresponding federal rates for underpayments and noncorporate overpayme…
Can a Louisiana restaurant buy cooking oil, shortening, or butter tax-free with a resale certificate?
Sometimes. Oil or butter bought as an ingredient or frying medium qualified for resale treatment, but oil or butter bought merely to coat pans was taxable restaurant-use property.
Were threshold ramps and removable van ramps sold to physically disabled customers exempt from Kansas sales tax with a prescription?
No. The Department said a threshold ramp did not qualify because installation made it a fixture to real property, while a van ramp that was not permanently attached to the vehicle was also taxable. An…
Was a nonprofit economic development corporation exempt from sales tax when it bought state-funded equipment and leased it to an exempt for-profit user for $1 a year?
No. The private nonprofit EDC was a taxable person, not a government instrumentality, and its $1-per-year lease was not arm's-length. The seller's equipment sale to the EDC was taxable.
When a customer returns a vehicle under a satisfaction guarantee, what refund is required before Texas motor vehicle sales tax can be refunded?
The buyer had to return the vehicle and receive a full refund of total consideration, including dealer-installed accessories, before motor vehicle sales tax could be refunded. Nonrefundable statutory …
Was Louisiana sales or use tax due on single-use camera capsules sold to health care providers for diagnosing patients?
No. The ruling treated the prescribed, single-patient diagnostic capsules as exempt medical devices, and also as part of an exempt professional service when sold to qualifying outpatient facilities.
If a retired New York public school teacher rolls over her IRC §403(b) tax-deferred annuity into an IRA, are the later IRA distributions subject to New York State personal income tax?
The portion of each IRA distribution that represents a return of the rollover contribution from the school-district-funded 403(b) plan is exempt from New York tax under Tax Law § 612(c)(3)(i), because…
Which Energy Star and WaterSense products qualified for Virginia's historical October sales tax holiday, and what transaction rules applied?
These expired guidelines exempted specified Energy Star appliances and WaterSense-labeled products costing $2,500 or less when bought for noncommercial home or personal use during the four-day October…
How does Kansas sales tax apply to sales of propane, and which uses are exempt?
The retail sale of propane in Kansas is generally subject to Kansas Retailers' Sales Tax, but several uses are exempt. Propane sold to a residence for heating or lighting is exempt from the STATE tax …
What is South Carolina's income tax credit for solar energy and small hydropower systems (per SC IL #09-16)?
South Carolina allows an income tax credit equal to 25% of the cost of a solar energy system or a small hydropower system that a taxpayer purchases and installs in or on a South Carolina facility the …
Which technology-development purchases were exempt when a nonprofit tested products but vendors performed the actual software development?
Virginia denied the broad R&D exemption because the nonprofit managed and tested projects while vendors performed actual development, third parties also tested products, and some testing served invest…
Was a federal research-support contract principally a sale of specialty hardware rather than taxable services?
Yes. The contract centered on designing, fabricating, installing, repairing, and maintaining research hardware that transferred to federal control; the contractor's operating role was secondary. Prope…
Was a wastewater heat-recovery system that preheated water for an industrial laundry exempt as direct industrial processing equipment?
Yes. The system recovered heat from hot laundry wastewater to preheat fresh water before a boiler raised it to the temperature needed by processing equipment. Virginia treated that preheating as a sub…
Did a husband change Virginia domicile when his employer transferred him out of state but his wife and children temporarily remained in their Virginia home?
Yes. The husband transferred to State A, rented and then bought a home, obtained its driver's license, registered a vehicle, and registered to vote. His wife and children temporarily remained in Virgi…
Did a retired business owner change domicile outside Virginia despite keeping a Virginia home, business interests, cars, and a later Virginia license renewal?
Yes. The taxpayer retired, moved to State A, obtained its license, registered to vote and register a car there, and developed community ties. He retained a Virginia home, minority business interests, …
Did buying a Virginia townhouse and obtaining a Virginia driver's license establish domicile when the taxpayer kept his spouse, home, vote, car, and license in another state?
No. The taxpayer worked in Virginia, bought a townhouse, and obtained a Virginia license, but kept his primary home and spouse in State A, returned there when possible, and maintained its license, veh…
Did shared credit-card activity prove that an out-of-state domiciliary spent more than 183 days in Virginia?
No. The auditor used credit-card activity to estimate Virginia days, but the taxpayer showed that employees of his Virginia business and a family member also used the account. That evidence refuted th…
Could one spouse be a Virginia actual resident while the other remained a nonresident when they shared a credit-card account?
Yes. The couple conceded that the wife was a Virginia actual resident, but the husband's calendar and other documentation showed fewer than 183 Virginia days. The auditor had attributed the wife's sha…
Did obtaining a Virginia driver's license and using a relative's Virginia mailing address establish domicile for a person living and working abroad?
No. The taxpayer had established Country A domicile for employment in 2000 and took no steps to abandon it in 2004. He used his sister's Virginia address because overseas mail was poor, visited the Un…
Which aircraft-related parts and equipment sold by an aviation business are exempt under Kansas's aircraft-parts exemption, and which are taxable?
It depends on whether the item becomes a permanent part of the aircraft. Under K.S.A. 79-3606(g), sales of aircraft repair, modification, and replacement parts — and the services to install them — are…
Was a customized website software license subject to Florida sales tax?
No. Each website was customized to the customer's specifications, making the transaction an exempt custom-software service, and delivery was generally electronic. Even a compiled copy supplied after h…
Did proposed public-works material-purchase procedures qualify for Florida's governmental direct-purchase exemption?
No. Although the owner would issue purchase orders, pay vendors, take title, and insure the materials, the contracts routed original vendor invoices through the subcontractor and construction manager.…
Can a retail gas-station operator claim the prepaid sales-tax credit for motor fuel lost to shrinkage and evaporation?
No. The up-to-2% credit for gallons lost to shrinkage, evaporation, and handling (Tax Law 1132(h)(1)(ii)) is available to a distributor holding fuel in bulk storage -- not to fuel held for sale at ret…
New York Advisory Opinion TSB-A-09(15)C: What documentation supports the telecommunications-excise-tax exemption for telecom sold to an ISP to provide Internet access?
There is no special form. To support the telecommunications-excise-tax exemption for telecom services sold to an ISP to provide Internet access, the provider should keep records for three years showin…
Do Iowa and its political subdivisions still get a Nebraska sales tax exemption on industrial machinery and equipment they buy in Nebraska?
No -- as of September 1, 2009, those purchases are taxable. Nebraska's reciprocal exemption in Neb. Rev. Stat. § 77-2704.43 exempts a purchase of industrial machinery and equipment (including repair p…
Are Fruit Snacks, Fruit Gushers, and Craisins taxable candy or exempt food in New York?
They're exempt food, not taxable candy. Food and food products are exempt under Tax Law 1115(a)(1) except candy and confectionery. Fruit Snacks and Fruit Gushers are substantially similar in ingredien…
New York Advisory Opinion TSB-A-09(37)S: Is a monthly license fee for the right to use a payroll processing provider's software, and are related payroll processing charges, subject to New York sales tax?
The monthly license fee for the right to use the provider's prewritten payroll software is subject to New York State and local sales tax, because a license to use prewritten computer software is a tax…
Did a federal Cash for Clunkers voucher reduce the South Carolina sales-tax base for a new vehicle?
No. The dealer's federal voucher payment and the buyer's payment both entered taxable proceeds. The separate salvage value allowed for the trade-in was excluded.
What is South Carolina's tax interest rate for the period ending December 31, 2009 (per SC IL #09-15)?
4%. SC Information Letter #09-15 sets South Carolina's interest rate on tax underpayments and overpayments at 4% for the period April 1, 2009 through December 31, 2009. Interest is compounded daily, e…
Were bulk purchases of Mirena and Implanon exempt controlled drugs when used by a medical practice?
Yes. Unlike a non-drug IUD addressed in an earlier ruling, Mirena and Implanon release medication. The FDA classified them as prescription drugs, and the Virginia Board of Pharmacy treated them as Sch…
Does equipment used in a flywheel energy-storage facility that helps stabilize the electrical grid's frequency qualify for New York's sales tax exemption for machinery used to produce electricity for sale?
No. Equipment in a flywheel-based frequency-regulation facility does not qualify for New York's production exemption because it stores and returns electricity generated by others rather than generatin…
Was a propane pool heater used on a tropical fish farm exempt from Florida sales tax?
Yes. The heater qualified as power farm equipment because it depended on propane and electricity to operate and was purchased for use on the tropical fish farm. The purchaser had to provide the requir…
Is repair and maintenance work on a telecom company's permanently wired backup generators subject to Utah sales tax?
Labor is exempt, parts depend on useful life. A telecommunications carrier's backup generators — permanently wired into each site's electrical circuitry but primarily serving its telecom equipment rat…
If my cleaning company buys garbage bags and trash liners to remove trash from a customer's building, do I owe sales tax on those bags, even if I bill the customer separately for them?
Yes, for bags the cleaning company uses itself. Garbage bags and liners a cleaning company consumes while removing trash from a customer's building are taxable purchases for the cleaning company, even…
If I rent reusable shipping containers to farmers who return them after use, do I have to charge sales tax on the rental, the delivery charges, and the deposit?
Yes. Because the farmers were required to return the containers instead of keeping them, the rental didn't qualify for New York's packaging-materials exemption, so the rental fee, pallet and delivery …
Could a vehicle trade-in allowance reduce the taxable sales price under a one-pay motor-vehicle lease?
Yes. The verified $30,000 trade-in allowance was deducted from the leased vehicle's sales price before sales tax. The lessees owned the traded vehicle; otherwise the owner would have needed to be pres…
We're building a new power plant and selling all its output to the New York Power Authority (NYPA) under a 20-year Tolling Agreement. NYPA will be a co-mortgagee alongside our private lenders on the plant's mortgage, with the right to foreclose if we default. Is that mortgage exempt from recording tax?
Exempt, if specific conditions are met. The petitioner planned to build and operate a new power plant converting NYPA-owned natural gas into electricity, selling 100% of the output to the New York Pow…
If my company lets customers access software over the Internet from my own servers (a SaaS model), rather than installing it on their computers, do I still have to charge New York sales tax on it?
Yes. New York taxes a customer's Internet-based access to software hosted on the vendor's own servers the same as a sale of prewritten software, because the customer gains the right to use and control…
Are a publisher's payments to freelance editors who compile e-newsletter content subject to sales tax?
Yes. The independent-contractor editors compile and aggregate content from multiple trade publications and write headlines and summaries -- that's a taxable information service under Tax Law 1105(c)(1…
Did SRLY rules limit post-acquisition losses of a Virginia affiliate or parent losses incurred before the group had Virginia nexus?
No. Company X's post-acquisition short-year loss was not a SRLY loss because it already met the ownership requirements for group membership, even though no other group member then had Virginia nexus. …
Did disability income paid by the Virginia Retirement System qualify for Virginia's disability-income subtraction?
Yes. Virginia allowed up to the statutory $20,000 subtraction because the VRS income statement treated the payments as disability income under IRC § 72 and the supporting documents showed qualificatio…
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