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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Does an out-of-state bank create Utah nexus by using independent mortgage brokers and relationship managers to originate Utah home loans, and does that nexus reach its subsidiary and LLC too?
Yes to nexus, and yes it extends further. An out-of-state bank that uses independent relationship managers and mortgage brokers to originate loans secured by Utah real estate has Utah corporate franch…
How did Virginia tax an aviation school's inoperable aircraft and claimed occasional-sale purchases of aircraft paintings?
Inoperable aircraft were removed from retail sales tax and became subject to the 2% aircraft tax when airworthy and licensable. The paintings stayed taxable because the school supplied no documents pr…
Did Virginia retail sales tax apply when an aviation school bought inoperable aircraft for students to restore?
No. Inoperable aircraft were governed by Virginia's aircraft sales and use tax rather than retail sales tax. The ruling applied the 2% aircraft tax when the restored aircraft became airworthy and subj…
Did a Virginia pass-through entity have to withhold for two C-corporation members domiciled outside Virginia?
Yes, if the corporations' commercial domiciles were outside Virginia and the entity allocated them Virginia-source taxable income. The corporations received credit for the withholding and still had to…
Could a New Jersey cigarette importer ship unstamped brands into Virginia as a manufacturer or exclusive distributor?
Not without proof. The company could not be a Virginia exclusive distributor because its principal office was in New Jersey. It had to document, brand by brand, that it met the tobacco-product-manufac…
Could an LLC or S corporation claim Virginia's age deduction, and did a senior living only on Social Security need to file?
No entity could claim the age deduction because it was limited to individuals. A person age 65 or older whose sole income was Social Security could subtract benefits included in federal adjusted gross…
Did keeping a Virginia apartment and driver's license prevent a taxpayer working and living abroad from changing his domicile?
No. The Virginia apartment and renewed driver's license indicated continuing ties, but the taxpayer's permanent residency, foreign home, vehicle, license, employment, and absence from Virginia showed …
Did a nonresident owe Virginia tax on S-corporation investment income when a lower-tier partnership owned undeveloped Virginia land?
No for 2003-2004. The Virginia land created nexus through the pass-through structure, but all income-producing investment activity and costs occurred outside Virginia, so the S corporation had no Virg…
Did P.L. 86-272 protect an animal-medication seller whose Virginia manager administered staff and whose veterinarian trained customers?
No. Sales representatives' solicitation activities were generally protected, but the district manager's administration and the veterinarian's customer training were separate business functions. Togeth…
Did a reverse triangular merger or the buyer's lack of knowledge eliminate the target corporation's earlier withholding-tax liability?
No. The target corporation survived the reverse triangular merger and remained liable for its earlier withholding tax. Pursuing a former officer would not relieve the corporation, and the later owners…
Could a person domiciled in another state exclude military pension income after living in Virginia for more than 183 days?
No. The taxpayer was a Virginia actual resident because he maintained an abode and lived in Virginia for more than 183 days. His military pension was taxable, and the claimed subtraction failed becaus…
Were two receivables subsidiaries taxable in Virginia when their parent serviced and factored accounts through them?
Corporation B was not taxable because it lacked Virginia nexus and positive apportionment factors. Corporation C had nexus through its related parent's Virginia collection work, but whether it had Vir…
Did a federally exempt governmental investment board owe Virginia income tax or pass-through filing through its real-estate LLCs?
No, if each LLC met the requirements in the cited IRS ruling. Its income would be excluded from the exempt board's federal taxable income and therefore from Virginia tax, and the LLCs would not file V…
How should an online social network source advertising revenue when some servers and website-maintenance activity were in Virginia?
The company had to compare the income-producing costs for each advertising fee. Virginia server storage and maintenance counted as Virginia activity, while sales, development, loading, operations, and…
Did a Virginia city's former E-911 tax apply to hundreds of internal phone lines that could not access the local exchange or emergency center?
No. The former E-911 tax applied only to lines accessing the local exchange system and public safety answering point, not private internal communications lines. The city's October 2003-December 2005 a…
When were software service, travel, installation, and modification charges separate from a taxable prewritten-software license?
Independent post-installation work orders for services or travel were removed from the audit, but lump-sum project charges stayed taxable without a valid split between exempt installation or modificat…
Was procurement software custom and electronically delivered when it was licensed for sublicensing to federal customers?
No. The software targeted a broader federal-procurement market and was intended for sublicensing, so it was not designed only for one customer. With no proof of electronic delivery, Virginia treated i…
Did an ISP's servers, software, and distribution equipment qualify for Virginia's Internet-service-provider exemption?
Yes. Subscriber-created news, reviews, articles, and blogs counted as proprietary content, so the bundled email, content, and Internet service qualified. Access-service equipment was exempt; administr…
Did a contract reference to website URLs prove that prewritten software was delivered electronically and exempt from Virginia tax?
No. The URL clause showed that modules would be integrated into a website, but it did not prove the software itself was downloaded. Without stronger delivery records, Virginia upheld the tax on the so…
Did vendor mistakes relieve a Virginia purchaser from use tax on repair parts and goods delivered from out of state?
No. The purchaser was ultimately responsible for Virginia tax when sellers failed to collect it. Repair parts were retail sales, and unidentified or other-state charges on goods delivered in Virginia …
Did a hotel's management arrangement, long-term guests, or Chapter 11 filing invalidate its Virginia sales-tax assessment and officer conversion?
No. The hotel lacked records proving another company operated it or that guests stayed at least 90 continuous days. Its unpaid returns and the partner's knowledge and authority also supported converti…
Were combined shipping-and-handling charges and claimed resale leases exempt in a Virginia audit of an imaging-equipment dealer?
No, not on the records presented. Combined shipping and handling was taxable because transportation was not separately stated, and a resale certificate alone did not prove the fixed-asset leases were …
Cadman Towers, a Mitchell-Lama not-for-profit housing cooperative with 421 apartments and 16,000 shares, plans to voluntarily dissolve and reconstitute as a new for-profit BCL corporation (Cadman Towers Owners) with 101,038 shares, letting shareholders finally sell at market value instead of at restricted Mitchell-Lama prices. Each old share converts to a different number of new shares (to satisfy an IRS 'reasonable relationship' test), and old apartment leases become proprietary leases tied to the new shares. Does this conversion trigger New York's Real Estate Transfer Tax, both on the building itself and on the new shares issued to shareholders?
Yes, RETT applies at two separate points, with a partial credit to reduce the overlap. Cadman Towers, Inc., a 421-unit, 16,000-share not-for-profit residential cooperative organized under the Private …
Were laser access, computer training, and patient-billing charges taxable for two Virginia vision businesses?
The laser agreement was a taxable equipment rental because the physician controlled and operated the laser. Required computer training was part of the taxable equipment sale, while customized patient-…
I manufacture and permanently install baggage-handling systems at airport terminals leased by airlines from government-owned airports -- do I owe New York sales or use tax on the materials, labor, and installation charges?
Usually exempt as a capital improvement, but only with the right paperwork. G&T Conveyor's permanently bolted, custom-built baggage-handling systems installed in airport terminals qualify as capital i…
Could a Florida consolidated group use an alternative apportionment method because different state filing methods taxed more than 100% of federal income?
No. Showing that the affiliated companies' combined state tax bases exceeded 100% of consolidated federal income did not prove that Florida's elected consolidated formula was grossly distortive. The m…
Could an acquired Florida consolidated group discontinue its old consolidated-return election after its membership and parent changed?
Yes, subject to stated conditions. The acquisition, sale of several subsidiaries, elimination of the prior group configuration, and inclusion of the remaining companies in the purchaser's new federal …
Would Louisiana respect a multistate professional partnership's agreement that sourced income into state buckets and first allocated each bucket to equity partners working in that state?
Yes. The agreement was respected because its principal purpose was geographic attribution of income, not tax avoidance. Nonresident partners reported their Louisiana-source shares under the agreement,…
Can a business exclude, from its taxable receipt, credits it gets for trading in old computer hardware and for unused prepaid maintenance services when it buys new hardware from the same vendor?
Only the hardware trade-in qualifies. Because the seller resold (rented back) the old hardware to the buyer for an extra fee before taking final possession, the trade-in credit for that hardware is ex…
How is Texas motor vehicle sales tax calculated when a mechanic or storage facility takes or auctions a vehicle under a possessory lien?
Forgiving the unpaid mechanic or storage debt in exchange for the vehicle was taxable consideration. If the lienholder took title, tax generally used the noticed charges; a separate auction buyer paid…
Does a newly formed C corporation that bought New York manufacturing assets qualify as a 'new business' under section 210.12(j), making its investment tax credit refundable?
Yes. A new C corporation that bought New York manufacturing assets is a 'new business' eligible to refund its investment tax credit, because it is not over-50% owned by an Article 9-A/32/33 taxpayer (…
Is installing point-of-sale cash register systems, related hardware, and power/cabling equipment in retail stores subject to New York sales tax, and does testing the pre-loaded software count too?
Mostly yes. Installing point-of-sale cash registers and computer hardware peripherals is a taxable installation service, and the hardware itself is taxable when sold. Installing UPS power-supply equip…
Is a construction company's use of a leased crane and operator a taxable equipment rental or a nontaxable purchase of a construction service?
It's a service, not a taxable rental — as long as the crane provider keeps dominion and control. Because the crane provider's own employees set up, operate, and tear down the crane, and the provider (…
Is a general contractor's purchase of construction debris removal and dumpster services on a capital-improvement project subject to New York sales tax?
It depends on the service. Construction debris and cleanup removal purchased by a contractor in conjunction with a capital-improvement project is exempt from sales tax (with the right paperwork), but …
Are charges for millwork shop drawing services for custom woodwork on a construction project subject to New York sales tax?
Yes. Millwork shop drawings and the on-site project manager's coordination work are taxable 'interior decorating and design services' under Tax Law § 1105(c)(7), since the company preparing them isn't…
Does a company that bolts advertising display/directory units to mall floors owe sales tax on installing them, on selling the advertising space on them, or does it even need to register as a New York sales tax vendor?
The floor-bolted display units are taxable installations of tangible personal property (not exempt capital improvements) since they can be unbolted without material damage, but the company's separate …
What does South Carolina Regulation 117-337 do for the unprepared-food sales tax exemption (per SC IL #08-16)?
SC Information Letter #08-16 announces that on June 20, 2008 the General Assembly approved SC Regulation 117-337 (the Food Tax Regulation), which became official upon publication in the State Register…
How were horse trailers, stock trailers, and trailers with camper packages taxed under South Carolina's 2008 guidance?
Horse trailers received the historical 5% rate capped at $300, while stock trailers generally paid 6% plus applicable local tax. A horse or stock trailer primarily designed as temporary living quarter…
When did withdrawing wholesale inventory for business use, employee use, samples, or giveaways trigger South Carolina sales or use tax?
A South Carolina withdrawal, use, or consumption of wholesale inventory was itself a taxable retail sale measured by fair market value. A withdrawal outside the state followed by South Carolina use tr…
When did firefighting equipment share a fire truck's historical South Carolina $300 maximum tax under the 2008 ruling?
Equipment such as ladders, hoses, extinguishers, oxygen tanks, and axes shared the fire truck's historical 5%-or-$300 treatment when supplied with the vehicle and included in its purchase price. Prote…
Was an optional vehicle service contract included in automobile lease payments exempt from South Carolina sales and use tax under this PLR?
Yes, on the stated facts. The optional motor vehicle service contract was exempt whether its price was separately stated in the lease or allocated at a reasonable retail fair market value. The lease i…
How did Florida calculate sales tax for off-street parking meters that accepted nickel time units and allowed multiple coin insertions?
For the meters described, Florida treated 50% of gross coin receipts as taxable and applied the taxpayer's combined state and county rate to that amount. The meters sold five minutes for a nickel, ten…
A new commercial hunting lodge will charge guests for overnight rooms, meals, guided hunts, and gear rental/sales. Which parts are hotel occupancy tax, which are sales tax, and which aren't taxed at all?
A four-way split depending on what's charged and how it's billed. LODGING is subject to state HOTEL OCCUPANCY TAX (6%) under Tax Code Sec. 156.001's 'hotel' definition. If lodging, meals, and hunts/gu…
How can taxpayers find South Carolina advisory opinions by subject (per SC IL #08-15)?
Use the index attached to SC Information Letter #08-15 to find South Carolina advisory opinions. It indexes the advisory opinions issued by the Department from 1987 to June 30, 2008, and it explains t…
How can taxpayers check whether an older South Carolina advisory opinion was modified or superseded (per SC IL #08-14)?
Use the citator attached to SC Information Letter #08-14. It helps you determine what effect newer South Carolina advisory opinions have on previously published ones — whether an opinion was modified,…
How did Virginia's 2008 clothing and school-supply sales tax holiday apply price limits and transaction rules?
These historical guidelines exempted each listed school-supply item priced at $20 or less and each qualifying clothing or footwear article priced at $100 or less during the August 1-3, 2008 holiday. T…
Did a security agreement and related advance documents owe Florida documentary stamp or nonrecurring intangible tax?
Not as unrecorded written obligations on the documents reviewed. Neither the individual documents nor the expressly incorporated agreement package contained both a borrower-signed unconditional promis…
Which Texas tax applies to a park-model trailer: motor vehicle tax, manufactured-housing tax, or ordinary sales and use tax?
STAR says the rule changed on November 14, 2013: park models became subject to Chapter 152 motor vehicle tax and left Chapter 151 sales tax. Historically, the 2008 letter treated qualifying industrial…
Did a nonprofit's direct-purchase agreement allow it to buy construction materials tax-exempt for its new facility?
Yes. The contract amendment made the exempt organization the direct purchaser: it issued purchase orders, received vendor invoices, paid suppliers directly, accepted title at the job site, and bore ri…
What does Louisiana Revenue Ruling 08-010 conclude about the sales tax treatment of electronic bingo dabber devices?
The electronic dabbers were tangible personal property. The distributor's per-device charge to the charity was lease consideration, and the charity's provision of each device to a player was a taxable…
What does Louisiana Revenue Ruling 08-009 conclude about licensing fees for software used in electronic video bingo devices?
Both license layers were taxable leases. The manufacturer's prewritten video-bingo software was canned tangible personal property, title stayed with the manufacturer, and continued use depended on dai…
Were Washburn University retirement-plan benefits exempt from Kansas income tax, and what happened after a rollover to another retirement account?
Direct Washburn University retirement-plan benefits received on or after January 1, 2008 qualified for a subtraction from federal adjusted gross income and were not subject to Kansas income tax, wheth…
Under the historical 2008 guidance, when did South Carolina collect casual excise tax or use tax on vehicles, boats, motors, airplanes, and trailers?
Casual excise tax generally applied when South Carolina issued title or ownership proof after a non-retailer sale of a vehicle, motorcycle, boat, motor, or airplane. Use tax generally applied to prope…
How were boats, boat motors, and boat trailers taxed when sold separately or together under South Carolina's 2008 ruling?
A boat, including a qualifying permanently attached motor, received the historical 5% rate capped at $300. A motor or ordinary boat trailer sold separately was taxed at 6%, and a trailer bundled with …
Is South Carolina's sales tax rebate for alternative fuel vehicles and conversion equipment still available (per SC IL #08-13)?
No — it was eliminated. SC Information Letter #08-13 announces that the sales tax rebate for purchasers and lessees of certain alternative fuel and fuel-efficient vehicles, and for purchasers of certa…
What did the Chesterfield County Circuit Court decide in Ross L. McDonald's case against the Virginia Department of Taxation?
The court entered judgment for the Virginia Department of Taxation on every allegation. It granted a motion to strike part of Ross McDonald's complaint after his proof and then found, after all eviden…
When is South Carolina's 2008 sales tax holiday and what is exempt (per SC IL #08-11)?
August 1-3, 2008. SC Information Letter #08-11 sets South Carolina's 2008 sales tax holiday for the weekend beginning Friday, August 1, 2008 at 12:01 a.m. and ending Sunday, August 3, 2008 at midnight…
Did a letter saying Virginia's nonfiler assessment was overstated constitute a complete administrative appeal without the promised return and proof?
No. A bare assertion that the assessment was overstated, without the promised return, detailed errors, facts, authority, or supporting records, was not a complete appeal. Virginia allowed 30 more days…
Did owning a Virginia house for his parents and obtaining a Virginia license make a long-term overseas worker a Virginia resident?
No. The house, tax mail, and driver's license indicated Virginia ties, but the taxpayer spent little time there, lived abroad with his wife and children, worked outside Virginia, and did not use the h…
Could a travel agency limit county BPOL gross receipts to commissions when its financial records also showed grossed-up travel sales?
Potentially, but the agency had not proved the correct amount. Funds handled solely as an agent can be excluded from BPOL gross receipts, while resold travel packages may be included. Detailed transac…
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