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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If I sell memberships letting people drive their own cars on my private road course, are the membership fees and annual dues subject to New York sales tax as club dues or admission charges?
No. Membership license fees and annual dues for a private road-course driving facility are not subject to sales tax, because driving on the course is a participant sporting activity exempt from the am…
How did Florida apply sales and gross receipts taxes to electric-cooperative net billing and customer-generated excess power?
Taxes on commercial utility service were computed on the net amount billed after the generation credit. Residential status remained exempt, behind-the-meter power was untaxed, and excess power deliver…
Could a holding company carry pre-Virginia net operating losses into its new Virginia consolidated group?
Yes. A loss generated before the holding company had Virginia nexus was not barred merely for that reason. The available NOL had to be computed as if the company filed separate federal returns before …
Did owning a Virginia vacation home, registering a car, and obtaining a Virginia driver's license make the taxpayer domiciled in Virginia?
No. The Virginia home and vehicle were used for vacations, and the taxpayer obtained the Virginia license for convenience. More importantly, he kept a permanent home, employment connection, vehicles, …
Could Virginia residents subtract combat pay already excluded federally and claim the full $15,000 extended-duty subtraction?
No. The record did not show any combat pay remaining in federal adjusted gross income, so there was nothing for Virginia's combat-zone subtraction to remove. The husband also received basic military p…
Could a Virginia resident subtract military pay earned in Virginia before a later combat-zone deployment?
No. Pay earned while the service member was stationed in Virginia before deployment was not attributable to combat-zone service. His later combat pay was already excluded from federal adjusted gross i…
Could taxpayers add a 30% Virginia depreciation deduction for property fully expensed under IRC § 179 when no federal bonus depreciation was claimed?
No. The couple fully expensed the 2004 business property under IRC § 179 and claimed no federal bonus depreciation. Virginia's fixed-date conformity rules adjusted federal bonus depreciation; they did…
Did a nonresident owe Virginia tax on income passed through from a Virginia LLC and S corporation?
Yes. The Virginia LLC and S corporation operated in Virginia, and the LLC apportioned all its income to Virginia. Under federal-conformity and pass-through rules, the income kept its Virginia-source c…
Did a countertop fabricator owe use tax on solid-surface materials it installed when customers also charged sales tax?
Yes. Selling and installing kitchen countertops was a real-property construction service, making the fabricator the consumer of all installed materials. It owed sales or use tax on their cost, and the…
Was a nursery's seasonal white poly film exempt agricultural material or taxable greenhouse construction material?
It depended on the use. Disposable film draped seasonally over movable steel supports to protect plants could qualify like exempt shade cloth. Film covering propagation houses with plumbing, electrici…
Were a farm's grinder and excavator exempt when used for storm cleanup, property repairs, ponds, fencing, and soil material?
No. The equipment was used for storm-debris cleanup, ponds, erosion work, fence lines, a stream crossing, and other real-property activities—not agricultural production for market. The planned recycli…
Which South Carolina tax regulations did the General Assembly approve in 2009 (per SC IL #09-11)?
SC Information Letter #09-11 announces that the General Assembly approved three tax regulation proposals on May 13, 2009, effective when published in the State Register on June 26, 2009: Regulation 11…
How many food or food-included events could qualifying nonprofits hold without collecting Virginia sales tax after July 1, 2009?
Qualifying organizations eligible under Va. Code § 58.1-609.11 could make exempt food sales or sell event tickets including food on no more than 23 occasions per year, while meeting the other occasion…
How did Florida tax annual and tournament fees charged by a junior golf tour, host-course charges, and player gifts?
The organizer had to tax annual and tournament fees, pay tax to host courses, and could credit admission tax paid. It also owed tax on trophies, gifts, meals, and equipment bought for players, without…
If I run a web-based platform that homecare agencies and subcontractors log into to schedule care and track visits, is access to my software taxable, and is training or customization also taxed?
Yes. Charges for accessing a web-based homecare scheduling and time-and-attendance platform are taxable as a sale of prewritten software, sourced to the locations of the agencies and subcontractors wh…
New York Advisory Opinion TSB-A-09(9)C/(24)S: Are telecom services a reseller sells to offshore call centers (calls always originating or terminating offshore) subject to New York sales tax or the section 186-e excise tax?
No. A telecom reseller's services sold to offshore call centers are not subject to New York sales tax or the section 186-e excise tax. Because every call either originates or terminates at the offshor…
New York Advisory Opinion TSB-A-09(8)C: How are a website operator's online advertising fees and medical 'risk participation' fees sourced to New York for the Article 9-A business allocation percentage?
By where the audience is and where the service is performed. A website operator's advertising receipts are sourced to New York based on where the audience views/reads the ads (the same audience-based …
How did South Carolina's 2009 guidance source and administer local sales and use taxes and Catawba Tribal tax?
Under this superseded guide, qualifying retailers collected Department-administered local tax for the delivery jurisdiction, while purchasers handled uncollected use tax where property was first used.…
When did paying an individual from nonprofit sales proceeds cause a South Carolina nonprofit to lose its sales-tax exemption?
The exemption was lost for sales tied to percentage-of-proceeds payments to an artist, shop manager, or event promoter. Donated or purchased goods, volunteers, and reasonable fixed wages could qualify…
Are guest units rented by a South Carolina retirement community to residents' family and friends subject to accommodations tax?
Yes. Nightly, weekly, and monthly guest-unit rentals were taxable accommodations unless the same unit was supplied to the same person for at least 90 continuous days or another exemption applied.
What state and local tax legislation did Virginia's Department of Taxation summarize from the 2009 General Assembly session?
This historical Department guide summarizes tax legislation enacted through the General Assembly's February 28, 2009 adjournment. It covers general administration, income and recordation tax, sales an…
Could a corporation retroactively elect alternative Florida apportionment for 2005 after the return deadline?
No. The request was untimely because the taxpayer did not petition by the return's due date, including extensions. The Department therefore denied the request without deciding whether a sales-only met…
Was a federal systems contract a sale of property because ordering used a GSA Schedule, and were software purchases taxable?
The contract was for continuous systems support services, not a property sale. Using a GSA Schedule did not make the agency contract an indefinite-delivery contract or require order-by-order treatment…
Could a corporation exclude all affiliate royalties from Virginia's add-back and subtract dividends allocated to another state?
No. The royalty exception covered only the portion corresponding to affiliate income actually apportioned and taxed in other states, not 100% of gross royalties reported there. The auditor also correc…
Were hotel owners Virginia residents for 2005-2007 when they kept Virginia property but spent fewer than 183 days there?
No. The couple established State A domicile through their full-time hotel business, home, vehicles, and the husband's license and voting registration. Virginia property and the wife's Virginia license…
Did producing hand-painted and digitally printed decorative art and custom frames qualify as manufacturing for local Virginia taxes?
Yes. The hand-painted reproductions, industrial color-print process, and custom frame fabrication transformed paper, paint, ink, chemicals, wood, metal, and glass into substantially different products…
Were contracted college and military food-service programs BPOL retail businesses or professional and specialized occupations?
The contracted meal programs were professional and specialized occupations because the colleges or military were the customers and meals were part of a managed service. Direct sales to individual patr…
Did a resort's owner-read residential submeters preserve Florida's electricity exemption when the utility billed one mixed-use master meter?
No. Because the utility billed one master meter serving residential and commercial uses, the entire purchase was taxable unless the utility itself separately metered and invoiced the exempt use.
Does federal law bar Utah from taxing telecommunications services that a company sells to Internet Service Providers?
Yes, to the extent the telecommunications services are actually used by the Internet Service Provider (ISP) to provide Internet access. Federal law (the Internet Tax Freedom Act as amended by Public L…
How much sales tax could a retailer refund when its return policy refunded only part of the original merchandise price?
Only the same percentage as the price refund. A customer receiving a partial merchandise refund was entitled to a proportionate sales-tax refund, not all tax collected on the original sale.
When did Virginia exempt charges for butchering or processing customer-supplied food from sales tax?
Effective July 1, 2009, fabrication of customer-supplied meat, grain, vegetables, or other food was exempt when consumed by the purchaser or family, purchased by a qualifying § 501(c)(3) or (c)(4) org…
What interest rates did Virginia apply to state tax assessments and refunds in the third quarter of 2009?
Virginia's third-quarter 2009 rate was 6% for state tax underpayments and 6% for overpayments. The bulletin also applied the 6% rate through October 15, 2009 for certain estimated-tax additions of tax…
If customers buy fractional ownership interests in an aircraft I manage, but I retain control over scheduling, pilots, and maintenance, are their payments taxed as a rental of the aircraft or as an untaxed transportation service — and is my own purchase of the aircraft taxable?
Neither is taxed as a sale of the aircraft. Because the fractional-share operator retained full dominion and control (scheduling, pilots, maintenance, and the right to substitute aircraft), customer p…
Is South Carolina's Energy Star sales tax holiday still in effect (per SC IL #09-10)?
The Energy Star sales tax holiday has been eliminated and will not take place. SC Information Letter #09-10 explains that the 2008 General Assembly created a month-long Energy Star Sales Tax Holiday —…
If an employer's electronic system produces a Form W-4 that satisfies the federal electronic-signature requirements, does the New York equivalent, Form IT-2104, automatically satisfy New York's own signature requirements?
No. Meeting the federal electronic-signature requirements for Form W-4 does not automatically satisfy New York's signature requirements for Form IT-2104. The electronic system must separately comply w…
When is South Carolina's 2009 sales tax holiday and what is exempt (per SC IL #09-9)?
August 7-9, 2009. SC Information Letter #09-9 sets South Carolina's 2009 sales tax holiday for the weekend beginning Friday, August 7, 2009 at 12:01 a.m. and ending Sunday, August 9, 2009 at midnight.…
What is South Carolina's tax interest rate for the period ending September 30, 2009 (per SC IL #09-7)?
4%. SC Information Letter #09-7 sets South Carolina's interest rate on tax underpayments and overpayments at 4% for the period April 1, 2009 through September 30, 2009. Interest is compounded daily, e…
Could a taxpayer defeat a Virginia assessment by arguing that only federal-connected work and money are taxable?
No. Virginia starts with federal adjusted gross income and taxes resident income unless a specific Virginia modification applies; taxability is not limited to federal-connected employment or money. Th…
Did repeal of Florida's credit-union intangible-tax rule eliminate the underlying tax immunity for federal and state credit unions?
No. Federal credit unions retained federal immunity, and Florida-chartered credit unions retained matching immunity under state law. The rule was repealed as obsolete after Florida ended its annual in…
Could a late 2003 Virginia overpayment claim offset a 2004 assessment after an IRS correction moved retirement income between years?
No. The federal correction became final on October 20, 2006, and Virginia said the amended 2003 return had to be filed by October 22, 2007. The couple waited until April 2008. Even though the same ret…
Could a 2003 overpayment reported on an August 2007 original return be credited against a 2004 Virginia assessment?
No. The three-year period for the 2003 overpayment expired May 1, 2007, and the taxpayer filed the original return on August 29, 2007. Calling the request a credit or carryforward rather than a refund…
Could a taxpayer challenge old Virginia assessments in 2008 when the latest assessment had been issued in May 2001?
No. For these pre-August 15, 2003 assessments, Virginia's then-existing policy accepted an administrative appeal within the three-year period for a judicial remedy. The latest assessment was dated May…
Did a couple abandon Virginia domicile after moving, buying a home, and operating a business in another state while retaining Virginia ties?
Yes. The couple established a permanent home and demanding business in another state and proved an intent to remain there indefinitely. Keeping an unsold Virginia house, an old Virginia registration, …
Could Virginia refund a 2003 overpayment when the original return was filed in April 2008 after the refund deadline?
No. Virginia's refund statute required the return or written claim within three years of the timely filing deadline. The April 2008 original return came after the applicable period, even considering t…
How did Virginia tax purchases under federal ID/IQ task orders and an IT integration subcontract, and did computer assembly qualify as manufacturing?
Virginia applied the true-object test at the task-order level where the ID/IQ agreements did not reveal what would be purchased. Several documented government orders were exempt property sales, subjec…
Did contract and FTP records prove that prewritten software was electronically delivered and exempt from Virginia sales tax?
Yes. The statement of work expressly required electronic delivery, and an email showed the software files were uploaded to an FTP server for customer download. That met Virginia's minimum proof that n…
Could a hotel lower the use-tax value of used furniture acquired with the property below the cost basis used on its books and tax returns?
Not on the existing record. The hotel had assigned $2,062,500 to the used furniture, fixtures, and equipment on its depreciation schedule and federal partnership return, so Virginia treated that amoun…
If my store charges customers a separate fee for a personal shopper to pick their groceries, and a separate fee for home delivery, are either of those service charges subject to sales tax?
It depends which service. A grocery store's separate personal shopping fee is not taxable, but its home delivery fee is taxable in full whenever the delivered order includes any taxable item or servic…
Did periodic Virginia logistics work subject an out-of-state support company to Virginia income tax or inclusion in a combined return?
No, on the stated facts. Employee logistics work in Virginia appeared to exceed protected solicitation, and the record was insufficient to decide whether the contacts were de minimis. But the company …
Did a taxpayer change Virginia domicile in June 2005 after moving to State A for a non-temporary job while retaining a Virginia driver's license?
Yes. The taxpayer stopped renting in Virginia, established a State A home, registered his car there, and accepted employment that was not shown to be temporary. Although retaining a recently renewed V…
Could Virginia residents subtract a New York state pension when their employee contributions had not been taxed by New York?
No. Virginia's subtraction applied only to the extent retirement contributions had been subject to another state's income tax after being deductible federally. The couple's prior New York returns show…
Did part-year Virginia residents have to prorate S-corporation capital gain that documentation showed arose after they moved away?
No. Virginia generally treated property or business income as earned evenly through the year unless the taxpayer documented a specific timing. On reconsideration, the couple supplied records clearly s…
How did Virginia tax S-corporation income after a couple moved away, merged the Virginia company, and performed no later Virginia work?
The original Virginia S corporation had nexus for all of 2004 because it operated in Virginia before the move and remained in existence until a September merger. Its income had to be divided between t…
Was a brick maker's separately stated minimum-load charge an exempt delivery charge or a taxable service?
It was exempt. A third-party carrier charged for a full truckload even when the shipment used less capacity, and the brick maker used the minimum-load line to recover the difference between actual fre…
Were a contractor's water-treatment materials, Maryland-taxed purchases, administrative supplies, and equipment charges exempt from Virginia use tax?
No. The contractor provided no required pollution-control certification, and municipal water-treatment authorities did not qualify for the claimed industrial manufacturing exemption. Maryland tax paid…
Was a medical-equipment service contract exempt when a resale certificate was obtained after audit and the contract named a third-party vendor as purchaser?
No. A certificate obtained after audit was subject to heightened scrutiny and did not by itself prove that the third party validly bought the contract for resale. The agreement between that vendor and…
Were a permanent structure housing a production crane and magnesium-chloride dust-control equipment exempt manufacturing property?
No. Steel, panels, fasteners, paint, tools, and rentals used to build a crane-housing structure were plant construction permanently affixed to realty, not component parts of exempt machinery. Magnesiu…
Could an unregistered interior designer avoid estimated tax and penalties after collecting sales tax, keeping it, filing no returns, and preserving no records?
No. The dealer collected sales tax but never registered, filed returns, remitted the trust funds, or preserved records. Virginia properly estimated sales from bank deposits because the dealer offered …
Which utilities used in a nursing home or assisted-living facility qualify for the residential sales-tax exemption, and which are taxable?
Only utilities used in a resident's own room or apartment (and its private bath) count as exempt "residential" use. Electricity, gas, and water consumed in a nursing home's or assisted-living facility…
If my engineering firm designs products for clients and delivers drawings, prototypes, and CAD data, which parts of my charges and which of my own material purchases are subject to New York sales tax?
Mostly untaxed. An engineering firm's product-development service charges (including transferring CAD data electronically) aren't subject to sales tax unless the firm separately sells taxable prototyp…
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