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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Did South Carolina extend tax filing and payment relief to victims of Hurricanes Gustav and Ike (per SC IL #08-20)?
Yes. SC Information Letter #08-20 announces that the South Carolina Department of Revenue will grant the same tax relief the IRS provided to victims of Hurricanes Gustav and Ike. The IRS extended, unt…
Were carrier maintenance fees and separately stated on-site modular-home trim-out labor exempt from Virginia sales tax?
Virginia split the result. Carrier maintenance fees were taxable because they were only indirectly related to delivery. Separately stated factory trim-out labor performed on-site after contractors joi…
Did one officer working from a Virginia home create Virginia-source income for an out-of-state corporation?
Yes. The officer lived and worked from a Virginia residence, performed duties other than sales solicitation, and had Virginia income tax withheld. That single employee created a positive Virginia payr…
What Virginia tax interest rates applied during the fourth quarter of 2008?
For October 1 through December 31, 2008, Virginia's state interest rates were 8% for tax underpayments and assessments and 8% for tax overpayments and refunds, reflecting federal 6% rates plus two per…
My company buys frame relay data service that connects our New York offices to our data center in New Jersey — is that subject to New York sales tax, even though the carrier separately bills for the New York-only segment of the connection?
Not taxable. A financial services company's purchase of frame relay data-transmission service connecting its New York offices to its New Jersey data center is untaxed interstate telecommunication serv…
Was a supermarket refrigeration contractor's lump-sum installation of customer-purchased systems a Florida real property improvement?
Yes. The supermarket bought the refrigeration equipment from manufacturers, while the contractor supplied labor, equipment, refrigerant piping, wiring, reinforcement, and other materials needed to ins…
Did a county's project manual create a qualifying tax-exempt direct-purchase program for construction materials?
Yes. The county's program was limited to goods bought from third-party suppliers, not from the construction contractors. The county issued and signed purchase orders, vendors invoiced it directly, it …
Are the fees a company charges dentists for a turnkey patient-rewards program (including the mailers it sends to patients) subject to Colorado sales or use tax?
The Department gave the framework rather than a firm answer. Colorado taxes tangible personal property and only a limited number of services; when the TRUE OBJECT of a transaction is a service, it isn…
Could a Florida consolidated group stop filing after an unrelated acquisition placed it under a new parent that did not file Florida consolidated returns?
Yes. An unrelated company acquired the taxpayer, merged a subsidiary into it, and became its new parent. The taxpayer's former affiliated group ceased to exist, and the acquired companies joined the b…
When a customer applies a $40 federal NTIA coupon toward a TV converter box, does Colorado sales tax apply to the full price or the reduced price the customer pays?
Tax applies to the full price. Under the federal NTIA program a household gets coupons worth up to $40 each toward a TV converter box, so a $59.99 box costs the customer $19.99—but Colorado sales tax …
I publish school yearbooks under contract with schools, clubs, and activity funds in New York -- who has to collect sales tax on the yearbooks, me or my school customer?
It depends entirely on who Petitioner's actual contract customer is. If the customer is genuinely a public school district itself (invoice names the district, contract signed by someone authorized to …
Did buying a home and opening a business office in another state end the taxpayer's Virginia domicile for 2005 and 2006?
No. Although the taxpayer established significant ties to another state, Virginia found that she did not abandon her Virginia domicile during 2005 or 2006 because she retained a home, driver's license…
Could a Virginia resident subtract pension distributions from another state's retirement system?
No. Virginia taxed the resident's New Hampshire pension because the contributions had not been subject to New Hampshire income tax, so the statutory subtraction did not apply; federal law also barred …
Was the corporation's former president personally liable for its unpaid Virginia withholding tax?
No. Virginia discharged the responsible-officer penalties because the evidence showed that the former president lacked both sufficient knowledge of the withholding failure and authority over the corpo…
Could a permanently disabled taxpayer subtract third-party sick pay reported on Form W-2 from Virginia taxable income?
No. Virginia denied the subtraction because third-party sick pay reported as wages on Form W-2 was classified as temporary sick pay, not qualifying disability income, even though the taxpayer proved a…
Was the taxpayer a Virginia domiciliary resident for the 2005 tax year?
No. After weighing all the evidence, Virginia found that the taxpayer had abandoned Virginia domicile and established domicile in another state before 2005, so the 2005 individual income-tax assessmen…
Must a corporation add back the Texas Business Margin Tax when computing Virginia taxable income?
No. Virginia ruled that the Texas Business Margin Tax was not based on, measured by, or computed with reference to net income, so it was not required to be added back under Va. Code § 58.1-402 B 4.
Did P.L. 86-272 protect a remote seller whose carriers performed setup and whose related Virginia stores accepted returns?
Not necessarily. Virginia found that related-store return services exceeded P.L. 86-272 protection and that carrier setup or inspection could also exceed it, but the Department lacked enough facts to …
How did Virginia tax broadcast servers, software, support, maintenance, installation, and delivery sold by an out-of-state provider?
Virginia exempted the portion of servers used directly to broadcast signals but taxed their editing and storage use. Tangible or installed conversion software was taxable; separately sold electronic d…
I sell customized emergency-preparedness plans, training videos, brochures, and live drills to schools and businesses -- which parts of my invoice owe New York sales tax?
It depends on what's billed separately. New York taxes AK Productions' physical products -- training videos on tape or disc, brochures, evacuation maps, floor plan diagrams, and emergency signage -- a…
Did a dissolving partnership owe documentary stamp tax when it distributed unencumbered Florida properties to its partners in their ownership proportions?
No. The partnership's two townhouses had no mortgages or other encumbrances, and the dissolution agreement distributed them to the partners in proportion to their partnership interests. Florida conclu…
Are retail sales of game birds subject to Nebraska sales tax?
No -- as of October 1, 2008. Revenue Ruling 01-08-4 explains that LB 916 amended Neb. Rev. Stat. § 77-2704.46 so that retail sales of game birds subject to permit and regulation by the Nebraska Game a…
Did Kansas treat the revised Texas franchise or margins tax as an income tax for addback and credit-for-taxes-paid purposes?
Yes. The Department concluded that the revised Texas franchise tax was based on income and therefore was in the nature of an income tax. It was an addback modification for Kansas corporate income-tax …
Will D.C.'s Office of Tax and Revenue accept a protective refund claim when the amount depends on a future event?
Yes. OTR will accept a timely protective claim that identifies the tax years and contingency and is clear enough to alert OTR to the claim's essential nature, even if it states no dollar amount or imm…
How long does a D.C. taxpayer have to file a refund claim for an overpayment?
A D.C. refund claim must be filed within the later of three years from the return's due date or three years from the date the tax was paid. A valid filing extension can therefore make the return due d…
Did F.O.B.-shipping-point terms and buyer-paid freight prevent Florida's export exemption when goods left by common carrier?
No. F.O.B.-shipping-point terms and the buyer's payment of freight did not defeat the export exemption. Supplies for out-of-state use were exempt when the buyer directed the Florida seller to deliver …
What is South Carolina's tax interest rate for the period October 1, 2008 through December 31, 2008 (per SC IL #08-18)?
6%. SC Information Letter #08-18 sets South Carolina's interest rate on tax underpayments and overpayments at 6% for the period October 1, 2008 through December 31, 2008. Interest is compounded daily,…
What were the significant South Carolina tax law changes enacted in the 2008 legislative session (per SC IL #08-17)?
SC Information Letter #08-17 is the Department's summary of the significant tax and regulatory law changes enacted in South Carolina's 2008 legislative session, organized into four parts: (1) income t…
Did Virginia tax Internet access or telecommunications purchased by Internet service providers after the 2007 federal amendments?
Virginia said its retail sales tax did not apply to telecommunications services and its communications sales tax excluded Internet access and telecommunications used by an Internet access provider to …
How did an annual lump-sum premium affect Virginia's long-term-care insurance credit and deduction for 2006 and 2007?
The full annual premium paid in November 2006 covered the first 12 months, so the ruling applied the entire eligible payment to the 15% credit in 2006 rather than prorating two months. The 2007 annual…
Which purchases by a federal IT contractor were taxable in Virginia's audit, and which qualified for service, government, export, maintenance, or research exemptions?
Virginia granted some audit adjustments for government-system property, professional services, documented out-of-state delivery, qualifying R&D, and certain maintenance contracts, but upheld other ite…
Were unrelated financing loans taxable when an office-equipment lessor documented them in the same master agreement as taxable leases?
No. The separately negotiated financing was a loan unrelated to the equipment lease, so its proceeds were not taxable lease gross proceeds even though both transactions appeared in the same master agr…
Did owning a Virginia home through a qualified personal residence trust and holding Virginia licenses make a long-term foreign couple Virginia domiciliaries?
No. A Virginia QPRT residence and Virginia driver's licenses indicated possible Virginia domicile, but the couple's continuous foreign residence, voting, permanent-residency status, home, and license …
Did missionaries living and working abroad owe Virginia nonresident tax because Virginia churches issued their Forms 1099-MISC?
No. The married taxpayers lived and performed their missionary work outside Virginia, so payments reported by Virginia church organizations were not Virginia-source income. They were not required to f…
Did an irrevocable trust have to file a Virginia fiduciary return when its parties, administration, governing law, and property were outside Virginia?
No. Based on the stated facts, the trust was not a Virginia resident trust and had no Virginia property or Virginia-source income. It therefore was not required to file a Virginia fiduciary income-tax…
Could each corporation in a Virginia consolidated group claim up to $100,000 of Land Preservation Tax Credits against the group's joint liability?
Yes. Each corporation in the consolidated group was a separate taxpayer for the $100,000 annual Land Preservation Tax Credit limit, and each member's credits could offset the group's joint liability r…
Could a seller accept nonprofit or school exemption certificates for bulk prepared food delivered without serving staff to schools and day-care providers?
Yes, when the school or day-care customer qualified for an exemption and gave a valid certificate. Virginia treated the bulk food as tangible personal property because the seller delivered it without …
Who owed Virginia tax on modular homes and related materials bought by a dealer that installed modular buildings as a contractor?
The contractor did. Virginia treated it as the consumer of modular buildings and installation materials, so it had to ensure the proper sales tax was paid or remit use tax itself. The ruling applied t…
Did construction materials stored temporarily in Virginia qualify for exemption when shipped to embassy projects in countries imposing VAT?
Potentially yes. A country imposing VAT rather than retail sales tax satisfied the ruling's sales-tax-free requirement, but the contractor still had to prove that the Virginia-stored materials were in…
Which equipment used by a Virginia cabinet manufacturer qualified for the industrial manufacturing or pollution-control exemptions?
Only the knife grinder qualified on the facts presented. Virginia upheld tax on shipping lifts, administrative bar-code scanners, post-production label printers, and a sawdust diverter that lacked the…
Did Virginia's government exemption remove use tax from materials a contractor installed in government real-property projects?
No. A real-property contractor was the taxable consumer of structural materials used in government projects. It also could not claim a dealer's bad-debt credit, while limited audit items remained open…
Did a timely notice of intent preserve a Virginia sales-tax appeal when the taxpayer did not submit the grounds for relief within 90 days?
No. A notice saying the taxpayer disagreed and was gathering data was not a complete administrative appeal. Because the taxpayer did not fully state its grounds within 90 days of assessment, the right…
I sell access to software that produces scannable and nonscannable tax and business forms -- is that a taxable sale of software, and is the computer hardware I use to build it exempt?
Yes, it's a taxable sale of software. STF Services Corp.'s SuperForm products (installed from a CD or downloaded from the Internet) let customers fill in and file scannable/nonscannable federal, state…
Does Utah sales tax apply to the full purchase price of a prepaid telephone calling card sold in Utah, even if the card only allows interstate calls?
Yes. Utah taxes the full purchase price of a prepaid telephone calling card under Utah Code Ann. § 59-12-103(1)(m), regardless of whether its minutes are interstate-only, intrastate-only, or a mix — t…
Could financial hardship allow a Virginia income-tax refund when the original returns were filed after the three-year refund deadline?
No. Although tax had been overwithheld, Virginia could not issue refunds for 2000-2003 because the original returns were filed after the three-year limitation period. Financial hardship did not change…
Which Energy Star and WaterSense products qualified for Virginia's historical 2008 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 October 2008 hol…
Could an oil-well customer rely on a 1970 Kansas bulletin to stop paying sales tax on well-site inspection and labor services?
No. The 1970 bulletin interpreted a law later held unconstitutional and replaced by the legislature, so K.A.R. 92-19-58 made the old guidance invalid. Current Revenue Ruling 19-2002-2 governed instead…
I run a portable-toilet rental and servicing business — do I owe sales tax on the toilets and supplies I buy to run it, or on the insurance I charge customers for the toilets?
Split result. A portable-toilet servicing company owes New York sales and use tax on its purchases of the toilets themselves (and the parts/paint used to build and maintain them), because providing to…
In Colorado, are dietary supplements, TENS units, and 'pads' subject to sales tax, or do they qualify as exempt food or exempt therapeutic devices?
Supplements are generally taxable—dietary supplements like vitamins and minerals are tangible personal property and don't qualify as exempt food (Regulation (39)-26-102.4.5(b)(8)/(9)) or, generally, a…
In Colorado, are restocking fees, passed-through vendor travel/expense charges, on-site training, and equipment rentals subject to sales or use tax?
Four answers. (1) Restocking fees: if a retailer charges one, it gets NO sales-tax refund on the return, because §39-26-102(5) allows the credit only when the FULL purchase price is refunded—a partial…
I electronically process physicians' medical insurance claims and arrange printing and mailing of patient invoices for a fee -- is that a taxable New York information service?
Not taxable. New York held that a health-IT vendor's charges to physicians for electronically submitting patient billing data to insurance companies to file claims, facilitating insurer payments, and …
I pay an annual individual affiliate fee to the Transportation Research Board for library access, meeting discounts, and publications -- does New York charge sales tax on that fee?
Not taxable. Annual individual affiliate fees paid to the Transportation Research Board -- a research-focused nonprofit, not a social or athletic club -- are not subject to New York sales tax, because…
My company waterproofs leaking basement wall cracks by injecting a clay-based sealant through drilled holes and covering the crack with a vinyl moisture barrier panel -- is that an exempt capital improvement or a taxable repair to real property under New York sales tax?
Taxable repair, not a capital improvement. A basement waterproofing contractor's method of injecting a clay-based sealant through drilled wall holes and covering the crack with a vinyl moisture barrie…
Could a retailer combine enterprise-zone locations on one county sales-tax return to use a jobs credit across the locations?
Yes, if every location included under the county control number collectively met the enterprise-zone credit requirements. The retailer had to combine all of its places of business in that county, and …
Are optional, separately stated clothing alterations (hemming, shortening, taking in) ordered at the time you buy the garment subject to Colorado sales tax?
No. Optional, separately stated alteration services—shortening, hemming, taking in—that a customer orders from the retailer at the time of buying the clothing are NOT subject to Colorado sales or use …
Was Louisiana sales and use tax limited to the $360 discounted price of wireless internet equipment that cost the provider $600?
No. The ruling treated the mandatory service contract as partly recovering the equipment discount, so sales and use tax applied to the full $600: $360 at sale and $240 as provider use tax.
Would Florida follow a corporation's federal treatment of shareholder advances as compensation, and did the ruling decide tax on its use of the shareholder's vehicle?
Florida would follow the corporation's federal treatment of net personal-expense and travel advances to its owner as compensation unless a contrary federal determination or an audit-supported exceptio…
Could a Florida city buy materials tax-exempt under its proposed direct-purchase procedure for a real-property construction project?
Yes. The reviewed procedure made the city the direct purchaser: it issued purchase orders with its exemption certificate, received vendor invoices, paid vendors directly, took title upon job-site deli…
I'm an out-of-state jewelry retailer that sells through satellite and cable TV home-shopping arrangements to New York viewers -- do those broadcast and airtime-purchase relationships give me nexus, requiring me to register and collect New York sales tax?
No nexus from the TV distribution deals alone, but the Department stopped short of a final answer. Gems TV USA Limited, a Delaware corporation with no New York locations, employees, warehouse, or plac…
What sales and use tax exemptions were available to qualifying motion picture companies under South Carolina's 2008 guidance?
A certified production expecting at least $250,000 of South Carolina spending within 12 months could exempt qualifying in-state production expenditures from state and Department-administered local sal…
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