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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Could a dealer replace Virginia's estimated food-sales assessment with supplier invoices and mixed-beverage reports?
No. Virginia could not verify that the supplier invoices were a complete purchase record, and the alcohol regulator had not audited food sales and found the mixed-beverage reports incomplete. With ina…
Could an interior designer receive separate BPOL classifications for design services and independent furniture retail sales?
Potentially. Furniture sold as part of design work was business-service revenue, while substantial independent furniture sales could qualify for a retail BPOL classification. Because the designer had …
When a customer uses a $40 federal government coupon toward a converter box, is Colorado sales tax computed on the full price or on the reduced price the customer actually pays?
Tax is computed on the full price, not the discounted price. A $40 federal coupon used toward a $49.99 converter box means the customer pays $9.99, but Colorado sales tax still applies to the full $49…
Was a fixed-fee plan for receiving unlimited calls from the Dominican Republic subject to Florida communications services tax?
Yes, for Florida customers. The plan routed calls from the Dominican Republic through the provider's switches to customers in the United States, so it was a communications service. Sales were taxable …
Were a lumber manufacturer's forklifts exempt when more than half of each forklift's use occurred in production activities?
Yes. One forklift was used entirely in exempt production, and the other was used 60% in exempt activities after Virginia counted yard movements of unfinished goods as part of the integrated manufactur…
Is the 2008 federal economic stimulus rebate taxable in South Carolina, and does receiving it require a South Carolina return (per SC IL #08-7)?
Not taxable, and it does not by itself trigger a South Carolina return. SC Information Letter #08-7 explains that the 2008 federal economic stimulus rebate is not subject to South Carolina income tax …
Did a taxpayer establish a new domicile outside Virginia despite retaining a Virginia driver's license during 2004?
Yes. Her full-time out-of-state job, leased apartment and vehicle, minimal time in Virginia, and later replacement of her Virginia driver's license showed that she abandoned Virginia domicile. Virgini…
Was optional travel-protection insurance separately billed by a Virginia vacation-rental manager subject to sales tax?
No. Guests could choose whether to buy the separately stated insurance, the rental manager did not include it in the accommodation charge, and the insurance contract was between the guest and insurer.…
Were free meals for convenience-store employees exempt when the stores also operated fast-food restaurants?
Virginia removed the tax from the 2003-2006 audit because the company reasonably relied on guidance from earlier audits. Going forward, however, all free employee meals were taxable because employees …
Were natural-gas compressor agreements taxable leases, and were compressor transfers in a business reorganization exempt?
The agreement was a taxable equipment lease because furnishing the compressor was its true object; start-up, transport, installation, and maintenance supported that lease. The compressor transfers to …
Do out-of-state for-hire trucking companies that use Nebraska roads owe Nebraska corporate income tax?
Yes -- with a de minimis exception. Revenue Ruling 24-08-1 concludes that trucking companies transporting goods for hire over Nebraska roads are subject to Nebraska corporate income tax because their …
Could Virginia consolidate an intangible holding company with its affiliated group when royalty and loan arrangements improperly reduced Virginia income?
Yes. Virginia found that the intangible holding company had not shown sufficient economic substance and that royalties, loans, uncompensated services, and trademark-value contributions were not handle…
Could a parent and its subsidiaries stop filing consolidated Florida corporate income tax returns when the parent lacked Florida nexus?
Yes. Florida permitted the group to discontinue consolidated corporate income tax filing because the parent had no Florida nexus and was not eligible to file a Florida return. The approval required de…
Could a nonprofit continuing care community exempt purchases for unlicensed independent-living cottages under Virginia's new nonprofit rules?
Yes. After the old licensed-nursing-home exemption expired, the community could exempt tangible personal property used throughout the nonprofit—including food and supplies for unlicensed cottages—if i…
Did clarified facts overturn Virginia's treatment of a male S-corporation shareholder's lump-sum payment after he moved out of state?
No. Virginia corrected factual statements from the earlier determination but found that the clarifications did not change the tax result. The Department concluded that the December lump sum was not su…
Did clarified facts overturn Virginia's treatment of an S-corporation lump-sum payment received after the shareholder moved out of Virginia?
No. Virginia corrected factual statements from the earlier determination but found that the clarifications did not change the tax result. The Department concluded that the December lump sum was not su…
Did a taxpayer abandon Virginia domicile by taking long-term foreign jobs even though his wife, driver's license, vehicle, and voting ties remained in Virginia?
Yes. Long-term or indefinite foreign employment, established homes abroad, foreign licenses, a vehicle, and a citizenship application showed abandonment of Virginia domicile beginning in 2002. The exp…
Which packaging, engineering, vendor-support, and refurbishment costs of a food manufacturer were subject to Virginia local machinery-and-tools tax?
Virginia treated cartoning equipment, engineering-related assets, and most vendor installation support as taxable machinery and tools used in manufacturing. Case-packing equipment used only to prepare…
Could a multistate salon operator remove disputed purchases and a 20% amnesty penalty from a Virginia sales-and-use-tax audit?
Only with supporting records, and the amnesty penalty remained valid. Virginia allowed 60 days to produce invoices, contracts, delivery evidence, allocation records, and proof of electronic software d…
Which cardiology and radiology products qualified for Virginia's medical-equipment sales-tax exemptions?
Virginia exempted the listed catheters and specifically related supplies, plus compression stockings that met all four durable-medical-equipment criteria. Two syringes were exempt only when dispensed …
How can taxpayers find South Carolina advisory opinions by subject (per SC IL #08-6)?
Use the index attached to SC Information Letter #08-6 to find South Carolina advisory opinions. It indexes the advisory opinions issued by the Department from 1987 to March 31, 2008, and it explains t…
How can taxpayers check whether an older South Carolina advisory opinion was modified or superseded (per SC IL #08-5)?
Use the citator attached to SC Information Letter #08-5. It helps you determine what effect newer South Carolina advisory opinions have on previously published ones — whether an opinion was modified, …
Did a federal television-converter-box coupon reduce the South Carolina sales or use tax base under the 2008 ruling?
No. The retailer had to include both the customer's payment and the federal reimbursement in gross proceeds or sales price. The coupon did not make the transaction an exempt sale to the federal govern…
Could a multistate company use one cost-of-performance method to source its service and software receipts for Florida's corporate income tax sales factor?
No. Florida required the company to source each separate income-producing activity under the rule that specifically governed it. Florida operations and services performed in Florida entered the numera…
Were an automobile lender's separate approval, check, agreement, disclosure, instruction, and thank-you documents subject to Florida documentary stamp tax?
No, for the documents reviewed. No single document—and no expressly incorporated group—contained all three required elements: an unconditional promise to pay, a sum certain, and the borrower's signatu…
Which purchases and sellers qualified for Louisiana's 2008 hurricane-preparedness sales tax holiday under Revenue Ruling 08-006?
The first $1,500 of each listed hurricane-preparedness item qualified for exemption from Louisiana's 4% state sales tax during the May 24-25, 2008 holiday, but the holiday did not exempt political-sub…
What had Northern Virginia repair providers and customers do after the regional motor-vehicle repair tax was invalidated in 2008?
Providers had to stop collecting the repair tax as of February 29, 2008, remit all amounts collected through February and any mistakenly collected in March, and file the February return by May 6, 2008…
Does New York sales tax apply to an expert-network company's subscription charges for one-on-one phone consultations with industry experts, custom written research reports, and invitation-only seminars?
No, as long as the oral consultations and written reports are based on each consultant's own personal knowledge and experience rather than a shared database or recycled prior reports -- these are nont…
Does Tennessee sales and use tax apply to a carrier's DSL Internet-access sales to end users, its Layer 2 data-link sales to non-ISP customers with their own point of presence, and the telecommunications services it buys to build its own DSL network?
Mixed. DSL Internet access sold directly to end users is exempt under the federal Internet Tax Freedom Act; Layer 2 data-link transmission service sold to a non-Internet-service-provider that owns its…
Were bags, pallets, and containers used by a Virginia export-packaging service exempt under the foreign-commerce exemption?
No. The foreign-commerce exemption applied to qualifying sales of tangible personal property, but the taxpayer provided packaging services rather than selling the bags, pallets, and container material…
Did a timely notice of intent preserve a Virginia corporate-income-tax appeal when the complete appeal arrived after 90 days?
No. The taxpayer filed a notice of intent before the January 14, 2008 deadline, but that notice did not fully state the grounds needed for an informed determination. The complete appeal arrived Februa…
Will a nonresident property owner become a New York domiciliary for personal income tax purposes just by registering to vote in a New York town?
Not automatically. Voter registration is only a secondary factor in a domicile analysis, considered only if the primary factors - business involvement, time spent at the residence, personal effects ke…
Do jobs created for an Empire Zone location but temporarily worked at a non-Empire-Zone facility qualify for the Empire Zone wage tax credit, and for how many years?
Only inside the zone. Jobs at the Empire Zone building qualify for the wage tax credit; the same jobs temporarily worked at a non-zone facility do not qualify until the employees move into the zone, a…
Are the coin-operated fees a laundromat charges customers to wash their own dogs in a self-service dog-wash machine subject to New York sales tax?
Yes. Because New York's sales tax regulations classify animals as tangible personal property, washing a dog in a coin-operated machine is a taxable service of maintaining tangible personal property, s…
Are bottled coffee drinks like Starbucks Frappuccino and chocolate drinks like Yoo-Hoo exempt from New York sales tax as food and beverages, or taxable as soft drinks?
Bottled Starbucks Frappuccino coffee drink is exempt from sales tax because it's essentially flavored cold coffee, but Yoo-Hoo chocolate drink is taxable because it's treated as a noncarbonated, flavo…
Is replacing a corroded metal chimney chase cover with a new stainless steel one a taxable repair, or does it qualify as an exempt capital improvement to real property?
It's a taxable repair or maintenance service, not an exempt capital improvement, because replacing a worn-out chase cover simply restores the chimney chase to good condition rather than adding new val…
Is a daily investment-analysis newsletter about corporate bonds, delivered by email, fax, or hard copy on a subscription basis, exempt from sales tax as a periodical?
Yes. The daily fixed-income-market newsletter qualifies as an exempt periodical because it's published regularly with varied bylined articles and is available to the public by subscription, and its el…
Did a city's proposed direct-purchase procedure exempt materials for an advanced wastewater-improvement project from Florida sales tax?
No. The documents addressed city purchase orders, direct payment, title, and insurance but did not require vendors to invoice the city directly. The agreement was also unexecuted, and any conclusion w…
How does Kansas sales tax apply to a farm special-events business — barn rental, tables and chairs, catering, and horse-drawn carriage rides?
It depends on the charge. Renting the barn (a meeting/reception space) is not taxable, and tables and chairs bundled into that rental at no separate charge are not taxed either — the operator pays tax…
Are frozen, pre-made dinners sold by a dietician from a retail freezer case -- with no seating or on-site heating -- subject to New York sales tax?
No. Because the frozen dinners are sold cold, pre-made rather than made-to-order, with no seating or on-site heating facilities -- the same way frozen dinners are commonly sold in ordinary food stores…
Did a federally funded $40 converter-box coupon reduce the amount subject to Kansas sales tax when the government reimbursed the retailer?
No. The federal $40 coupon did not reduce the taxable selling price because the retailer was reimbursed by the National Telecommunications and Information Administration. Kansas sales tax applied to b…
Were separately stated assembly and portion-splitting fees taxable when a meal-assembly business sold raw food kits for customers to cook later?
No. The ready-to-cook kits contained raw grocery ingredients, were taken home for later cooking or freezing, and were not meals sold for immediate consumption. Because the kits were exempt food, separ…
Did the Hampton Roads repair and motor-vehicle fuel taxes scheduled for May 1, 2008 ever take effect?
No. After the Supreme Court of Virginia held the House Bill 3202 regional-tax provisions unconstitutional, the Hampton Roads repair and motor-vehicle fuel taxes scheduled for May 1, 2008 did not take …
When a software vendor separately invoices each of three $25,000 software packages plus a maintenance agreement covering all three, does Tennessee's $1,600 single-article cap apply once per package or once to the whole sale, and does the maintenance agreement get the same cap?
Because each $25,000 software package is separately itemized on the invoice, the $1,600 local-option cap and the $1,600-$3,200 state single article tax apply separately to EACH package (not once to th…
Is an automated, interactive after-hours telephone answering service that routes calls, takes messages, and pages physicians a taxable telecommunications or ancillary service in Tennessee?
No. Even though the answering system transmits voice and data over telephone lines, the true object of the service is answering and routing calls (not transmitting communications), so it doesn't quali…
Is a bundled weight-loss program that includes an on-site fitness center, personal training, meal-plan coaching, and a motivational newsletter subject to Tennessee sales tax as health club dues?
Yes, mostly taxable. The weight-loss program is taxed as recreation club dues/fees because it bundles fitness-center access with coaching and services all delivered on-site, but the first $150 per mem…
Did bankruptcy-remote securitization subsidiaries owe Louisiana corporation income or franchise tax when they held loan pools that might include Louisiana-originated loans?
No on the stated facts. They had no Louisiana property, employees, activities, registration, or Louisiana-source taxable income, and merely bought and sold loan paper. The Secretary retained authority…
What Virginia tax underpayment and refund interest rates applied during the second quarter of 2008?
Virginia's April 1-June 30, 2008 rate was 8% for tax underpayments and 8% for overpayments. The federal rates were 6%, and Va. Code § 58.1-15 added two percentage points. The 8% underpayment rate also…
What is South Carolina's tax interest rate for the period April 1, 2008 through June 30, 2008 (per SC IL #08-4)?
6%. SC Information Letter #08-4 sets South Carolina's interest rate on tax underpayments and overpayments at 6% for the period April 1, 2008 through June 30, 2008. Interest is compounded daily, except…
Can an LLC that absorbs a corporation in a tax-free A reorganization, and elects to be taxed as a corporation federally, still qualify for Tennessee's obligated-member-entity exemption from franchise and excise tax — and does that exemption shield a later asset sale's gain from Tennessee excise tax?
Yes to the exemption question — merging a corporation into a member-managed LLC via a tax-free A reorganization, and the LLC's federal corporate tax election, don't disqualify it from Tennessee's obli…
Were charges to retrofit store lighting taxable to the customer, and who owed tax on the installed materials?
The retrofit charges were not subject to sales tax because replacing fixtures and wiring was a real-property improvement. The contractor was the consumer and had to pay tax on fabrication and material…
Was electricity used to process tomatoes at a packing house exempt when the building was separated from the farm's crops by a rail line?
Yes. The packing house stood on land assessed for agricultural use and was treated as contiguous to the farm even though a rail line separated it from the crops. Electricity used there to process toma…
Is the sale and installation of an above-ground swimming pool subject to Tennessee sales and use tax, or does it count as a non-taxable improvement to real property?
Yes, taxable. Because the above-ground pool is designed to be removable without serious damage to the property and keeps its character as personal property after removal, it's treated as tangible pers…
How much qualifying research-and-development use did a machine need for South Carolina's sales-tax exemption under the 2008 ruling?
More than 50% of the machine's total use had to be direct qualifying research and development. Teaching, administration, indirect support, and work outside experimental or laboratory development count…
Was a manufacturer's annual charge for cylinders holding exempt welding gas also exempt under this South Carolina PLR?
Yes, on the stated facts. The welding gas qualified for the manufacturing exemption, and the filled cylinders were incidental containers used to deliver that gas, so the annual cylinder charge shared …
Are open-topped, returnable plastic crates that food producers rent to ship packaged food products to distributors and stores exempt from Tennessee sales and use tax as packaging materials?
No, taxable. Because the lidless, open-topped crates don't fully enclose the food products (that's done by an inner plastic bag) and delivery of the food isn't impracticable without the specific crate…
Was a Virginia sales-tax appeal timely when the letter was dated on the deadline but the fax arrived one week later?
No. Holiday rules moved the deadline to January 2, 2008, but a faxed appeal had to be received by that date. The Department received it January 9, so the appeal was barred. Virginia did not reach the …
How did Virginia classify a wireless LLC for BPOL tax when an FCC-licensed affiliate supplied the licenses needed to operate?
Virginia treated the wireless LLC as a telephone company because its management agreement with an FCC-licensed sister affiliate effectively supplied the licenses needed to operate. Retail-store receip…
What did Northern Virginia repair providers have to do immediately after the regional repair tax was invalidated?
They had to stop collecting the Northern Virginia motor-vehicle repair labor and services tax immediately on February 29, 2008. The ruling did not affect the separate motor-vehicle fuel sales tax in t…
Did filing Virginia's Administrative Appeal Form preserve an appeal when the taxpayer never supplied complete grounds and authority?
No. The filed form did not fully identify the alleged errors, relevant facts, remedy, and legal authority required for a complete administrative appeal. Virginia contacted the representative and allow…
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