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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When a company gives a 'free' satellite-TV receiver as an inducement to subscribe to non-taxable TV service, who owes tax on the equipment — and can the company collect it from the customer?
The company owes use tax. When a provider gives a 'free' or credited satellite receiver as an inducement to sign up for non-taxable TV service, it's using its own inventory for marketing — so it owes …
Was a supermarket's separately contracted installation of owner-purchased refrigeration equipment a taxable service or a real property improvement?
It was a real property improvement contract. Roof-mounted compressors and condensers plus tubing, pipes, valves, insulation, drains, controls, and related items were bolted, welded, embedded, or other…
When is a rental vehicle considered destroyed so a self-insured Texas rental company is relieved from minimum tax liability?
A rental vehicle qualified as destroyed when its title was surrendered for a salvage or nonrepairable title under Transportation Code § 501.091 and the vehicle was removed from normal operation. That …
Which items qualified for South Carolina's 2008 Second Amendment sales-tax holiday, and what later happened to the law?
Qualifying handguns, rifles, and shotguns sold during the two-day 2008 holiday were exempt, including associated delivery and engraving charges. Separately sold ammunition, parts, attachments, supplie…
Is USDA-required protective apparel (and processing machinery) taxable for a meat-cutting business, or exempt as integrated-production safety equipment?
Taxable. A meat cutting and butchering business is treated as a retailer, not an integrated production (manufacturing) operation, so it does not qualify for the integrated-production exception for saf…
Can a service provider buy tangible personal property tax-free for resale when the property is only an incidental part of the service it provides?
No. Revenue Ruling 01-08-6 concludes that when a seller is principally engaged in providing services, any tangible personal property used incidentally in performing the service is not resold in the no…
Are sales of saddles, bridles, and other horse equipment subject to Kansas sales tax?
It depends on the use. Saddles, bridles, and other horse equipment are exempt from Kansas sales tax when sold for use in the production and care of cattle as part of an agricultural operation — but th…
Is a tour fee subject to Kansas sales tax when the tour is advertised primarily as sightseeing or entertainment?
Yes. When a ride or tour is advertised or otherwise presented primarily as sightseeing or entertainment, K.A.R. 92-19-22a(a)(6) treats the charge as a recreational or entertainment activity rather tha…
How could a Louisiana motion-picture infrastructure company earn, hold, allocate, transfer, and apply the former 40% infrastructure credit?
A certified project with more than $300,000 of base investment earned a 40% credit. The company could hold unused credit, allocate it disproportionately through noncorporate entities, admit later memb…
When is Florida documentary stamp tax due in a reverse section 1031 exchange using an exchange accommodation titleholder?
Tax was due when the exchange accommodation titleholder transferred the relinquished property interest to the ultimate buyer, not when the exchanger first parked that interest with the titleholder. Th…
Which machines used to develop and mass-produce genetically enhanced tree seedlings qualified for South Carolina exemptions under this PLR?
The operation was farming, not processing. Machines used to mass-produce seedlings qualified as farm machinery, and machines used directly and primarily to develop new or improved seedlings qualified …
Are sales of depositions, bills of exceptions, and transcripts prepared and sold by a court reporter subject to Nebraska sales tax?
No -- beginning October 1, 2008, they are exempt. Under Neb. Rev. Stat. § 77-2704.58 (added by Laws 2008, LB 916 § 22), Revenue Ruling 01-08-5 concludes that sales and use tax is not imposed on the gr…
Do nonresident directors of a nonresident corporation owe Colorado income tax on their director pay because they held one board meeting in Colorado?
Yes, on a day-apportioned share. Nonresident directors who attend a board meeting in Colorado are carrying on their occupation in Colorado, so that income is Colorado-source. The Colorado portion is t…
How did Louisiana's original 2008 Revenue Ruling 08-011 explain who could claim, allocate, sell, and calculate state New Markets Tax Credits?
This superseded 2008 ruling tied Louisiana eligibility to the federal credit, let holders claim and sell available credits, respected LLC allocations, and supplied historical calculation rules for dif…
When could an IRC § 501(c) organization sell food or event tickets that included food without collecting Virginia sales tax under the 2008 policy?
Effective October 1, 2008, an IRC § 501(c) organization could sell food or tickets including food without collecting Virginia sales tax if it was not otherwise required to register as a dealer, paid t…
Could a long-standing Florida consolidated corporate group stop filing consolidated returns after major business and organizational changes?
Yes. Florida found good cause in the group's substantial changes since its original election: repeated acquisitions and mergers, new lines of business, major growth in sales, assets, income, employees…
Which internet-exchange services were subject to Florida sales and use tax: peering, cross-connect, managed router, colocation, equipment, or maintenance?
Peering, cross-connect, and managed-router services were not subject to Chapter 212 sales and use tax because they transmitted data without selling or renting tangible property or real estate. Colocat…
How did Virginia treat gain and net operating losses after a corporate group made an IRC § 338(h)(10) election for a subsidiary sale?
Virginia followed the federal IRC § 338(h)(10) election and treated the subsidiary as selling its assets, so the gain belonged in the subsidiary's separately computed Virginia income and was apportion…
Must a lessor charge Virginia sales tax on a separately stated reimbursement of local personal property tax collected from a lessee?
No. Virginia's sales-price definition excluded separately stated local property taxes collected by a lessor. When the lessor separately billed the lessee for the allocated personal property tax in add…
Were fluorescent-lamp recycling kits taxable retail products when their price included the container, prepaid shipping, and recycling?
No, the customer-facing charge was exempt. Virginia found that buyers wanted compliant shipping and recycling of mercury-containing lamps, while the box or bucket was only the means of providing that …
How could a corporate group aggregate jobs, document partial-year hires, and amend returns for Virginia's MBFJTC?
Virginia allowed aggregation across the taxpayer's own facilities when operations were related or hires occurred in the same continuous 12-month period, and allowed qualifying affiliates to aggregate …
Did warranty work performed in Virginia by unrelated distributors, retailers, and contractors exceed an out-of-state seller's P.L. 86-272 protection?
No, on the stated facts. Virginia treated the unrelated distributors, retailers, and contractors as independent vendors from whom the taxpayer purchased repair services and effectively resold them to …
Could trust beneficiaries reduce Virginia inheritance tax on a 2007 remainder by the actuarial value of life interests taxed after the decedent's 1962 death?
No. Virginia treated the old inheritance tax as a tax on each beneficiary's succession to an interest, not as a tax on the trust property itself. Earlier tax on the wife and daughter's temporary incom…
Could Virginia taxpayers claim 2004 depreciation on a business automobile after electing federal IRC § 179 expensing for the vehicle in 2003?
No. Virginia conformity included IRC § 179, so the taxpayers' 2003 federal election to expense the business automobile also controlled their Virginia income-tax calculation. The vehicle's cost belonge…
Were structural steel and an HVAC system exempt when a Virginia church bought them but hired a contractor to install them in a worship facility?
No. Virginia's church exemption covered building materials only when the church purchased and installed them without contracting for installation. Because the church supplied the structural steel and …
How did Virginia's post-July 1, 2006 government-contractor true-object rule apply to a liquid-nitrogen plant contract, subcontractors, refunds, and modifications?
Virginia applied the true-object test to each order executed on or after July 1, 2006. The supplied statement of work primarily required delivery of a liquid-nitrogen production plant, so the contract…
Did Virginia's temporary multifuel-stove exemption cover outdoor residential furnaces, their operating parts, and refunds of tax already collected?
Only qualifying furnaces were exempt. Virginia's July 1, 2007-July 1, 2012 exemption covered residential heating furnaces capable of burning alternative fuels, but not furnaces limited to wood or foss…
Is an out-of-state corporation taxable in New York as a general partner of a partnership that leases New York space, and is its gain from selling an FCC broadcast license a business receipt in the allocation factor?
Yes to nexus, no to the receipts factor. As general partner of a partnership that leased space in the Empire State Building, the corporation is subject to Article 9-A tax. The gain on selling its FCC …
I run pay-per-minute Internet cafe workstations and offer an optional 'premium' upgrade that lets customers edit documents in real desktop software instead of just viewing them -- is the basic Internet time exempt, and is the premium software upgrade taxable?
Split result. A pay-per-minute Internet cafe's basic Internet access charge is exempt from New York sales tax under the state's Internet access exemption, but its optional 'premium service' upgrade --…
Is a dietary supplement subject to Kansas sales tax, or is it exempt?
It depends on how it is sold. A dietary supplement is exempt from Kansas sales tax only if it both meets the statutory definition of a "dietary supplement" and is dispensed pursuant to a prescription …
How does Colorado tax commercial signs and the related charges—installation, removal, crating, freight, city permits, electrical hookup, and subcontracted repairs—on a customer's invoice?
Signs are generally taxable tangible personal property—most commercial signage does NOT lose its identity to become an integral, inseparable part of realty just by being bolted down (Reg (39)26-102.15…
My company runs a warehouse that repackages inventory before shipping it to my own retail stores — are the boxes, tape, and wrap I buy for that internal shipping exempt from sales tax as packaging materials?
No exemption. A pet-supply retail chain must pay New York sales or use tax on the boxes, tape, wrap, and other packaging materials it buys and uses to ship inventory from its own warehouse to its own …
Are submittal drawings — engineering/CAD drawings similar to blueprints — subject to Kansas sales tax?
Not taxable. Submittal drawings — engineering or CAD drawings that map out a building control system, described as similar to a blueprint — are not subject to Kansas sales tax. The Department does not…
Are orthopedic implants (screws and plates made in standard sizes, not fitted to one person) exempt from Colorado sales tax, even if they don't meet the 'prosthetic device' definition?
They may well be exempt, but through a different door than the company assumed. Rather than fighting over whether standard-size screws and plates are 'prosthetic devices' (which FYI Sales 68 defines a…
A hotel and its on-site restaurant are commonly owned but separately incorporated. Guests can pay one bundled price for room-plus-meal (with the hotel doing an internal 'book transfer' payment to the restaurant), or a lower room-only price. Is hotel tax or sales tax due, is the internal book transfer itself taxable, and can the hotel give the restaurant a resale certificate for it?
Three related answers for this commonly-owned hotel-and-restaurant American Plan setup: (1) if the guest's invoice does NOT separately state the meal charge, hotel occupancy tax is due on the ENTIRE b…
I rent fully furnished condominium apartments in a New York City tower complex on month-to-year-or-longer leases, with the same daily housekeeping and amenities offered equally to all residents -- do I owe New York's hotel occupancy tax on the rent?
Not taxable as hotel occupancy. A landlord renting fully furnished New York City condominium-tower apartments on month-to-year-or-longer leases, under a genuine landlord-tenant relationship with no ho…
I rent fully furnished condominium apartments in New York City on month-to-month-or-longer leases with a real landlord-tenant relationship, not hotel stays -- do I owe New York's hotel occupancy tax on the rent?
Not hotel tax, but some add-ons are taxed. A landlord renting fully furnished New York City condominium apartments on month-to-year-or-longer leases, under a genuine landlord-tenant relationship with …
How can taxpayers find South Carolina advisory opinions by subject (per SC IL #08-24)?
Use the index attached to SC Information Letter #08-24 to find South Carolina advisory opinions. It indexes the advisory opinions issued by the Department from 1987 through September 2008, and it expl…
How can taxpayers check whether an older South Carolina advisory opinion was modified or superseded (per SC IL #08-23)?
Use the citator attached to SC Information Letter #08-23. It helps you determine what effect newer South Carolina advisory opinions have on previously published ones — whether an opinion was modified,…
My company subsidizes an outside contractor that runs our employee dining facility, covering whatever costs exceed daily meal sales -- is that subsidy taxable, and can our QEZE (Empire Zone) certification exempt it?
Taxable, no QEZE relief. An employer's payments that subsidize a food-service contractor's operation of the employer's in-house employee dining facility -- covering the gap between meal revenue and th…
What is South Carolina's latest statewide per capita income figure used for tax incentives (per SC IL #08-22)?
$31,048. SC Information Letter #08-22 publishes the updated statewide per capita personal income figure for South Carolina — $31,048 — which the Department uses to test qualification for various South…
May a parent deduct a transfer to a 529 plan on a joint Kansas return when the money belongs to a minor child and the parent acts only as custodian?
No. The roughly $6,000 in the custodial savings account belonged to the minor child, not the parent. Moving those funds into a 529 plan for which the parent also served as custodian meant the child wa…
I pay an annual fee to a country club just to hold a certificate that lets me apply for membership someday, even though I'm not a member and have no membership privileges — is that fee taxable as club dues?
Taxable, but as an initiation fee, not dues. Annual payments a homeowner makes to a country club solely to maintain a "Membership Eligibility Certificate" -- a prerequisite for someday joining the clu…
Was retirement income taxable on a New Mexico return when the pension payor withheld no state tax and the taxpayer believed tax was withheld elsewhere?
Yes. Sarah Hunter's New Mexico return had to begin with the federal adjusted gross income that included her pension income. The payor was required to withhold New Mexico tax only if she requested it i…
Were printing costs and incorporated paper and ink exempt for a free, advertising-heavy magazine mailed regularly to Florida high schools?
Yes, for copies actually distributed free. The high-school sports magazine was a circulated publication, followed a regular release schedule, contained primarily paid advertising, and was mailed throu…
Were certified Louisiana historic rehabilitation credits subject to statutory recapture, and how did the former two-sale limit count an intermediary transfer?
The statutes contained no recapture provision after Part 3 approval, though Revenue could disallow credits never earned or claimed in excess. A sale to an intermediary was the first transfer and its r…
When will the Nebraska Tax Commissioner abate interest charged on delinquent taxes?
Only in very limited circumstances -- generally when the interest resulted from an error by the Department of Revenue or in cases of extreme hardship. Revenue Ruling 99-08-3 explains that before 2008 …
Does Nebraska require taxpayers to add back the bonus depreciation or enhanced Section 179 expense they claimed under the federal Economic Stimulus Act of 2008?
No. Revenue Ruling 99-08-2 concludes that a taxpayer who claimed bonus depreciation or the enhanced Section 179 expense deduction under the federal Economic Stimulus Act of 2008 is NOT required to add…
If a corporation modified an asset's Nebraska basis because of a bonus depreciation or enhanced Section 179 addback, can it also take the 20%-per-year recovery deduction?
No -- doing both would double-count the deduction. Revenue Ruling 24-08-2 (which supersedes Revenue Ruling 24-06-1) addresses corporations that added back bonus depreciation (85%, tax years 2000-2005,…
As a tenant leasing space in a government-owned airport terminal, do I owe sales tax on a contractor's bill for repairs and maintenance, including the materials the contractor uses -- and does it matter if I buy the materials myself instead?
Fully taxable when the contractor bills for the whole job, but there's a workaround. When JetBlue Airways hires a contractor to repair or maintain its leased terminal space at JFK Airport, the contrac…
Is compensation a U.S. citizen who lives in Canada earns working in New York for the Consulate General of Canada considered New York source income for personal income tax purposes?
Yes, but only to the extent the compensation is included in the individual's federal adjusted gross income. Because the petitioner performs his services solely in New York, that pay is New York source…
My holding company leases a corporate jet to me, and I use it mostly to fly a paying affiliate's people and cargo -- is the lease exempt from New York sales tax as a 'commercial aircraft,' and will a later merger of my holding company into me trigger sales tax on the plane?
Yes, exempt as a commercial aircraft, and the merger transfer isn't taxed either -- but only if the for-hire use holds up. Where an aviation-holding LLC leases a jet to its corporate parent, and the p…
My company bought a corporate jet out of state and dry-leased it to an affiliate that operates it entirely outside New York — do we owe New York sales or use tax now, and would it change if we later brought the plane to New York and used it to provide 'for hire' air transportation to that same affiliate?
No tax now, exemption available later. A company's purchase and dry-lease of a corporate aircraft to an affiliate is not subject to New York sales or use tax where the aircraft is delivered and used e…
Did a foreign corporate parent have Florida nexus allowing a 2007 consolidated-return election when an assistant secretary worked from Florida?
Yes. The parent corporation's assistant secretary permanently resided and worked in Florida and made management decisions there, including acquisition-related litigation updates, debt-covenant certifi…
Were personal-training dues taxable fitness-club admissions when members could use the facility only during supervised lessons, and how could prior tax be refunded?
The fees were not taxable admissions because members received only scheduled, trainer-directed one-hour sessions and had no independent access to the studio or equipment. For tax previously collected,…
Which alcohol-server training programs does South Carolina recognize as a mitigating circumstance for ABL penalties (per SC IL #08-21)?
SC Information Letter #08-21 lists the alcohol-server training programs the Department recognizes for purposes of mitigating penalties under the alcoholic beverage licensing (ABL) laws. Under the pena…
When a printer in one Colorado city prints marketing material and either ships it to a direct-mail company or mails it to recipients, whose local sales tax applies?
It depends on where the printed material is delivered, and many of the relevant taxes are home-rule taxes the Department doesn't administer. For the state-administered county taxes, a retailer that de…
In Colorado, are food supplements (vitamins, minerals), therapeutic medicines, and toiletries like soap and deodorant exempt from sales tax as 'food'?
Most of them are taxable. Colorado exempts 'food' (tied to the federal food stamp definition, 7 U.S.C. §2012(g)), but food supplements and deficiency correctors—vitamins, minerals, cod liver oil, and …
How did Virginia tax Internet-only e-learning, later CD delivery, analysis services, and mixed invoices?
Internet-only courses, mentoring, reference libraries, and downloads were not taxable when no tangible media was provided. If a course was later delivered on CD-ROM, the entire fee became taxable. Ana…
Did two proposed land-trust restructurings create a taxable note-and-mortgage renewal by changing the obligor?
The two alternatives produced opposite results. A trustee's deed to the beneficiary followed by the beneficiary signing the modification changed the obligor and created a taxable renewal on the entire…
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