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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My design firm delivers logos, brochures, and website designs to clients either on disc or electronically — does the delivery method change whether my design charges are subject to New York sales tax?
It depends entirely on delivery method. A design firm's charges are fully taxable when the final design (logos, brochures, website HTML code) is delivered on tangible media like a disc to a client in …
My company licenses customers access to markdown-recommendation software hosted on our own server, with separate charges for implementation, support, and hosting — which of these charges are subject to New York sales tax?
Mostly taxable. Monthly license fees for remotely-accessed, non-downloaded markdown-recommendation software are taxable prewritten computer software because the customer gains the right to use it even…
How did Virginia's new 10% Digital Media Fee apply to separately charged in-room movies, programs, and games beginning July 1, 2009?
The fee was 10% of separately charged in-room movies, audiovisual programming, or games at lodging rented for fewer than 90 continuous days, in addition to then-applicable sales tax. It excluded inter…
Did Florida use tax apply to a foreign-owned, foreign-flagged pleasure yacht operating in Florida under a federal cruising license?
No, while the vessel complied with a valid federal cruising license and remained a noncommercial pleasure yacht. Offering it for sale or charter, or otherwise violating the license, could trigger Flor…
Are late-payment fees charged by South Carolina utilities included in taxable gross proceeds?
Usually yes for taxable cable and telephone service because a default charge was not a finance charge. But late fees on electricity or natural-gas bills were expressly excluded from tax.
Are portable-toilet rental and servicing charges subject to South Carolina sales and use tax?
Yes, but only 30% of the total was taxable under the ruling. The toilet was rented tangible property, servicing fees were part of the rental, and a statute exempted the other 70%.
Did claims of age, inefficiency, technological obsolescence, and low resale proceeds prove that a county overvalued manufacturing machinery?
No. A machinery-and-tools assessment was presumed correct, and the manufacturer supplied no appraisal or other clear evidence that the county's statutory percentage-of-original-cost method produced a …
How could a dealer not franchised for a vehicle line rebut Florida's presumption that its tax-exempt purchase became taxable use?
Resale alone was not enough. The dealer had to show the whole transaction and that it made no use beyond demonstration or display before resale; titling the vehicle did not by itself prevent rebuttal.
Did Florida use tax apply when an out-of-state yacht was used in other U.S. states for more than six months before entering Florida?
No, if it was not bought for Florida use and the owner documented six months of use under another U.S. jurisdiction and payment of any lawfully imposed tax before importation.
New York Advisory Opinion TSB-A-09(7)C/(4)I: May an LLC specially allocate the tangible-property component of the Brownfield Redevelopment Tax Credit in the same proportion as the related depreciation deductions?
Yes, if the depreciation allocation is valid. An LLC taxed as a partnership may specially allocate the tangible-property component of the Brownfield Redevelopment Tax Credit among its members in the s…
Could a licensed Virginia cigarette stamping agent hire another company to physically affix stamps to the agent's own cigarettes?
Yes, under the stated arrangement. The licensed stamping agent would buy Virginia stamps from the Department for its own cigarettes and retain title while the contractor handled and affixed them solel…
Did other-state taxation let a corporation exclude 100% of related-member factoring fees from Virginia's add-back?
No. The exception applied only to the portion of factoring fees corresponding to affiliate income actually apportioned and taxed in other states, not the entire gross amount reported there. Virginia a…
Could a corporation exclude all related-member royalties and factoring fees because affiliates reported them in other states or because the transactions had a valid business purpose?
Not on these facts. The subject-to-tax exception covered only the portion of royalties and factoring fees corresponding to affiliate income actually apportioned and taxed in other states, not 100% of …
How did Virginia source a nonresident consultant's salary and dividends from his Virginia corporation?
Virginia apportioned the consultant's salary using documented days worked in Virginia compared with days worked elsewhere, rather than attributing all salary to Virginia through a corporate equitable …
When the same lender recorded a replacement mortgage to increase a home-equity line, was recordation tax due again on the existing principal?
No. Where the existing debt had already borne recordation tax and the same lender modified or refinanced it, Va. Code § 58.1-803(D) imposed tax only on the amount above the existing secured debt. Thus…
Could a taxpayer recover a 2001 Virginia overpayment, or use it against a 2003 balance, after filing the return in January 2008?
No. Even with a valid filing extension, the deadline for a 2001 refund claim expired November 1, 2005. The January 2008 return was too late under Va. Code § 58.1-499(D), so Virginia denied both a refu…
Did a four-corporation chain with the stated 80%-plus voting ownership qualify as a BPOL affiliated group, excluding intercompany employee-leasing receipts?
Yes. At least 80% of each subsidiary's voting interests was owned by one or more group members, and the common parent directly held at least 80% of two corporations. With no nonvoting stock, the state…
Were separately stated mileage, zone, road-service, and tire-disposal fees for on-site equipment repairs exempt from Virginia sales tax?
No. Mileage, zone, and road-service charges covered travel before and after the actual on-site repair, so they were not exempt delivery charges or repair labor; they were taxable expenses included in …
Did Kansas enforce sales tax on guided-hunt charges and game-bird sales during the 2008-2010 review period?
Kansas suspended enforcement of sales-tax collection on guided and unguided hunt participation charges and retail game-bird sales from May 7, 2008 through May 6, 2010 while reviewing its interpretatio…
Are a seller's charges for installation, troubleshooting, removal, reinstallation, and trip fees on equipment subject to Colorado sales tax?
It depends on how the labor is sold. Charges for services are generally not subject to Colorado sales tax, but a charge for maintenance or a service warranty made in connection with the sale or lease …
When a bank buys equipment-lease contracts from an affiliate that services them, who registers and files Colorado sales tax — the bank or the servicing affiliate?
The bank that owns the leases must register and file in its own name. A taxpayer can hire an agent to handle invoicing and collections, but the duty to register for a Colorado sales/use tax license, f…
Are PDF documents that customers pay for and download from the internet subject to Colorado sales or use tax?
Yes. Colorado defines taxable tangible personal property as 'corporeal' property, and the Department treats electronic data as corporeal—so the sale of documents (such as PDFs) downloaded from the int…
Does a company that sells and installs a factory-built (modular) home in Colorado owe sales tax, and is any part of the price exempt?
Yes, but only on part of the price. A modular or other factory-built home is taxable tangible personal property, and the seller must collect Colorado sales tax from the buyer—but 48% of the purchase p…
If my business has Colorado nexus but no sales tax to report for a period, do I still have to register and file a Colorado sales tax return?
Yes. Once a retailer is required to hold a Colorado sales tax license, it must file a sales tax return for every reporting period—even one with no tax due—using the Department's free 'zero file' optio…
Are custom single-use surgical instruments a manufacturer sells to hospitals and surgery centers subject to Colorado sales or use tax?
Taxable. Custom, single-use surgical instruments a manufacturer sells to hospitals and surgery centers are subject to Colorado sales/use tax. Colorado's medical exemption covers therapeutic devices an…
Is short-term lodging furnished to an out-of-state church youth group on a ski trip exempt from Colorado sales tax as a sale to a charitable organization?
Taxable. Short-term lodging (under 30 days) furnished to an out-of-state church youth group on a ski trip is subject to Colorado sales tax. Colorado taxes room accommodations rented for fewer than 30 …
When a motor-vehicle lessor sells the leased vehicle to the lessee at the end of the lease, who is responsible for collecting Colorado sales or use tax?
The lessor collects the tax. When a motor-vehicle lessor sells the leased vehicle to the lessee at the end of the lease (here, at fair market value), that's a taxable sale and the Company, as seller, …
How did Kansas sales tax apply when the State paid part or all of an eligible household's appliance purchase through the Kansas Appliance Replacement Program?
The portion paid directly by the State of Kansas was exempt, while the portion paid by the income-eligible household was taxable. The retailer's invoice and related records had to identify both Kansas…
Are soap, stain remover, and disinfectant used to launder towels for cleaning dairy cows before milking exempt as consumed in production?
No. The soap, stain remover, and disinfectant were taxable because they were used to launder towels before the actual milk-production process, not in the actual process itself. Even though the supplie…
Is equipment purchased or leased by a farmer or rancher to remove phosphorus from feedlot manure, urine, and runoff exempt from Kansas sales tax?
Yes. The Department concluded that the described equipment, called 'Phred,' qualified as exempt farm and ranch equipment under K.S.A. 79-3606(t) when purchased or leased by a farmer or rancher for exc…
Could a corporate group abandon Florida's consolidated apportionment result in favor of separate accounting because the outcomes differed substantially?
No. The group had elected consolidated filing and did not prove the standard formula was arbitrary, grossly distorted, or taxed extraterritorial values. A less favorable result than separate accountin…
What Florida severance-tax rate applied to oil produced through the taxpayer's certified tertiary-recovery project?
Five percent of gross value at the point of production. The Department treated the certified project output as tertiary oil rather than other oil taxed at the higher rate stated in the 2009 ruling.
Were dust-and-debris cleaning services performed during building construction subject to Florida sales tax?
No. Installing and later removing temporary plastic sheeting, disposing of trapped debris, and cleaning the surrounding construction area were classified as construction work rather than taxable nonre…
What were Virginia's Land Preservation Income Tax Credit cap and taxpayer claim limits for 2009?
The inflation-adjusted statewide issuance cap was $106,647,000 for calendar year 2009. Separate 2009 legislation reduced the amount claimable on returns for taxable years 2009 and 2010 to $50,000 per …
Was a cabinet seller-installer a retailer when it took orders at a business location and appeared to keep bulk cabinet materials?
Yes, based on the available evidence. A showroom was unnecessary because the business took and accepted orders at its Virginia location. The auditor reasonably found inventory where materials appeared…
Which federal modular-building transactions were exempt leases of tangible property rather than taxable real-property construction?
Virginia removed line items where contracts showed temporary or relocatable buildings leased directly to the federal government and intended for removal, making them exempt tangible-personal-property …
How should a multinational service firm apply BPOL payroll apportionment and the deduction for business conducted outside Virginia?
Virginia upheld the county's use of total worldwide receipts multiplied by county payroll over total payroll because the firm had definite places of business inside and outside Virginia. The firm coul…
Must a Virginia pass-through entity withhold for a nonresident owner whose other-state tax credit eliminates the Virginia liability?
No withholding was required for a nonresident owner whose allowable credit for taxes paid to the owner's state of residence was sufficient to offset all Virginia income tax attributable to the pass-th…
Could a company claim Virginia's coal incentive credit when it bought and consumed Virginia coal but did not own the electric generator?
No. Va. Code § 58.1-433.1 required the electricity generator to purchase and consume Virginia-mined coal and actually produce electricity. Virginia interpreted that to require ownership of the electri…
Is a separately stated market-development fee taxable when a vendor passes it through with a sale of materials?
Yes. Virginia treated the market-development fee as part of the taxable sales price because the vendor passed its representative's service cost through in connection with the material sale. Separately…
Which separately stated charges on a Virginia party-tent rental invoice were taxable?
Virginia taxed the tent rental and late fees. Separately stated installation and delivery charges were exempt. A separately stated fuel surcharge was exempt only when directly calculated and attributa…
Did a federal research-and-development subcontractor qualify for Virginia's reduced BPOL rate for principal or prime contractors?
No. Virginia upheld business-service classification at the ordinary rate because the contract designated the taxpayer as a subcontractor, not a principal or prime contractor, and Corporation A rather …
When could a Virginia federal contractor treat purchases as exempt resale property instead of taxable contract-use property?
Virginia applied the true-object test at the TDL, task-order, delivery-order, or work-order level where the contracts did not identify the later mix of goods and services. It removed documented proper…
Was a sign fabricator a retailer or real property contractor during 2003-2004, and was its full audit timely?
For this 2003-2004 audit, Virginia treated attached signs as real property and the fabricator-installer as the consuming contractor, so resale and manufacturing exemptions did not apply. The September…
Can a Texas county issue vehicle title without collecting tax again when a closed dealer took the buyer's tax but failed to remit it?
Yes. The county could accept the title application without collecting tax again if the buyer documented payment to a licensed Texas dealer and the county notified the Comptroller in writing by the 31s…
My company sells subscription reports built from a shared database of evaluator input about my customers — are those subscription fees a taxable information service in New York?
Taxable. A web-based subscription service's fees for evaluation reports on investment broker dealers are a taxable information service under Tax Law §1105(c)(1), because the reports are built from a c…
Could Virginia residents subtract foreign-source income from their 2007 Virginia taxable income?
No. Virginia began with the residents' federal adjusted gross income, which included the foreign income, and no Virginia modification authorized a subtraction in 2007. The General Assembly had repeale…
Did Virginia's other-state-tax exception remove 100% of related-member royalties from the corporate add-back?
No. Virginia limited the exception to the portion of each affiliate's royalty income apportioned to and taxed by another jurisdiction; merely reporting the gross royalties on another state's return di…
Could a securities broker exclude commissions passed to independent representatives from BPOL gross receipts?
Generally no. The real-estate-broker exclusion did not extend to a securities broker merely because its business model was similar. The full fee, including the representative's commission, was gross r…
Could a multistate real-estate partnership replace Virginia's statutory apportionment formula with separate accounting for each property?
No. A different result under property-by-property separate accounting did not prove that Virginia's statutory formula was unconstitutional or inequitable. The partnership supplied no clear and cogent …
How did missing invoices and records affect a Virginia bank's consumer-use-tax audit appeal?
Virginia largely upheld the estimated assessment because the bank lacked invoices and transaction-level proof for real-property work, vendor tax, software delivery, accounting entries, services, and i…
Could a Virginia bank use sample invoices instead of transaction records to overturn a consumer-use-tax audit?
No. Sample invoices showing a vendor's usual practice did not prove the tax treatment of each audited purchase. Virginia removed many lines supported by matching invoices, tax payments, services, real…
Did unrelated Virginia installers create sales-tax or corporate-income-tax nexus for an out-of-state seller?
No, on the stated facts. The seller had no Virginia property, employees, sales representatives, contractor ownership, or installation supervision. Unrelated businesses installed the systems under qual…
Was a beauty retailer's paid discount membership taxable when members also received a birthday gift?
Yes. The membership was not merely a coupon program because members were entitled to tangible personal property, including a birthday-month gift valued at $10 or less. The website showed that benefit …
Did post-audit resale certificates prove that an Internet retailer's Virginia sales were exempt?
Only one reviewed transaction was removed. Virginia rejected a Puerto Rico resale certificate that became valid after the sale and a New Jersey certificate that did not match the Virginia purchaser, l…
Was a Virginia use-tax appeal timely when the assessment was dated July 8, 2008 and the appeal was mailed in February 2009?
No. Under the 90-day deadline cited in the ruling, the July 8, 2008 assessment had to be appealed by October 6, 2008. The Department's records showed no appeal correspondence until a February 2009 let…
Were aesthetic injectable implants used to treat facial wrinkles exempt from Virginia sales and use tax?
No exemption applied. Virginia treated the wrinkle-treatment injectables as medical devices rather than drugs, so the prescription-drug exemption did not apply. Because they were used for cosmetic pur…
How did Virginia aircraft tax apply to a replacement aircraft held through an LLC in a reverse exchange?
The LLC purchasing and licensing the replacement aircraft owed Virginia's 2% aircraft sales and use tax on the purchase price before licensing. Its lease to the taxpayer for no more than 180 days was …
Who owed Virginia aircraft sales and use tax when an out-of-state owner leased an aircraft that its lessee would sublease for Virginia use?
The primary lease was not taxable because the aircraft was not used or required to be licensed in Virginia under that lease. Virginia use under the sublease triggered the tax. If the owner obtained th…
Are pet microchips, scanners, and ID tags taxable, and how are bundled pet-recovery services and 'free' chips treated under Colorado sales tax?
Goods taxable, services not. Pet microchips, scanners, and ID collar tags are tangible personal property, so their sale is subject to Colorado sales/use tax; no exemption applies (the livestock-drug e…
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