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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Which out-of-state subsidiaries belonged in a Virginia consolidated return, and could the group use alternative apportionment?
Virginia removed Corporations A and C because the evidence showed no positive Virginia apportionment factor or taxable Virginia activity. Corporation B had a Virginia office, significant property and …
When could church-operated day-care centers qualify for Virginia's charitable nonprofit BPOL exemption?
A church day-care center could qualify if it met the federal § 501(c)(3) standards and furthered the church's exempt purpose, with BPOL still possible on unrelated business income. Church A had strong…
Did two-year convertible notes or the stock received on conversion qualify for Virginia's equity and subordinated-debt investment credit?
No. The notes had to convert or be redeemed within two years, so they could not satisfy the credit's three-year holding requirement for convertible subordinated debt. The common stock received on conv…
Could a Virginia resident remove IRS-reported trucking income by stating that another person owned the business?
No. The taxpayer said her involvement with the other person's trucking business ended in 2001, but she did not prove that the 2003 IRS information or Virginia assessment was wrong. Because Virginia be…
Are Kirschner Wires (K-Wires), temporary bone-fracture implants, exempt from Tennessee sales tax, and did a 2008 law change affect the answer?
Yes, K-Wires sold individually are exempt from Tennessee sales and use tax -- but the LEGAL BASIS for the exemption changed with a January 1, 2008 statutory amendment, and the exemption is now conditi…
Did an exempt organization's direct-purchase agreement qualify its construction materials for Florida's sales-tax exemption?
No. The direct-purchase agreement was not clearly incorporated into the controlling construction contract, did not clearly make the exempt organization the purchase-order issuer, did not require direc…
Could Louisiana taxpayers deduct hurricane recovery benefits and insurance settlement proceeds that were included in federal income?
Qualifying benefits from a statutory hurricane recovery entity were deductible to the extent included in federal income. Insurance settlement proceeds did not qualify and remained in Louisiana income …
Is glass-bottled spring water sold under a physician's prescription exempt from New York sales tax as a drug, medicine, or health-preservation product?
No. New York taxes bottled water regardless of container, and a physician's prescription for chemically sensitive patients doesn't turn spring water into an exempt drug, medicine, or health-preservati…
Are purely financial 'virtual' electricity trades in the NYISO wholesale market subject to New York sales tax on electricity, and does a virtual-only trader have to register as a sales tax vendor?
No. Virtual transactions in NYISO's market are purely financial and never involve actually generating, delivering, or consuming electricity, so they aren't taxable sales of electricity or electric ser…
Are software-as-a-service (SaaS) hosting fees and network-connectivity fees subject to Colorado sales or use tax?
Apparently not. On the limited facts, the Department found that neither a SaaS hosting fee (the right to use hosted software, with no ownership transferred) nor a separately billed network-connectivit…
Does Colorado sales or use tax apply to custom software, standalone services, installation, repairs, freight, and training sold with telecommunications equipment?
Mostly no, with one big 'it depends.' Custom software, standalone services, repair labor, and training are generally not subject to Colorado sales tax. Freight/transportation is generally not taxable …
Are a private golf and country club's dues, initiation fees, and add-on charges (locker, bag storage, tournament, etc.) taxable, even though its members don't run the club or control its activities?
Yes. Requiring every homeowner in the club's surrounding community to join as a condition tied to owning a home is itself a membership restriction, which makes the club a taxable social or athletic cl…
Are a billboard-advertising company's charges to clients, its poster-printing costs, its installer's charges, and its billboard-space fee subject to New York sales tax?
The company's fee to its clients for arranging billboard advertising is exempt as an advertising service, but the company itself owes tax on its own poster-printing purchases and its installer's and b…
Did Virginia properly assess additional tax when taxpayers failed to report final IRS changes to their federal income?
Yes. Virginia law required the taxpayers to report final IRS changes within one year. When they did not file amended Virginia returns or otherwise report the changes, the Department could assess from …
Were amusement tickets bundled with hotel reservations and sod installed by an out-of-state contractor taxable to the Virginia taxpayer?
No on both audited items. The amusement-ticket and hotel prices were set independently, so the tickets were not an integral lodging charge even though sold in one package; Virginia recommended separat…
Could a Virginia resident avoid filing by claiming the Department unlawfully received insufficient IRS income information?
No. The Tax Commissioner-signed IRS exchange agreement satisfied the federal written-request requirement, and IRS data showing federal adjusted gross income supplied a factual basis for the assessment…
Did a telecommunications reseller with no Virginia presence owe Virginia income, retail sales, or communications tax on calls routed through a supplier?
No corporate-income or retail-sales-tax nexus arose because the reseller had no Virginia property, payroll, sales, physical presence, customers, or dealer activity. The supplier-to-reseller communicat…
How does a New York S corporation figure out how much of a nonresident shareholder's income counts as New York source income?
The source of a New York S corporation's income, gain, loss, and deduction items is determined at the corporate level, using the same business allocation percentage and investment allocation percentag…
Must an employer collect sales tax on meals it sells to employees in a company cafeteria that is not open to the public?
Not required to collect from employees. Because the company cafeteria is not open to the public, the employer may elect to pay Kansas sales tax on its own food purchases rather than collect sales tax …
When did Virginia's 2008 guidelines classify machinery and tools as idle and exempt from local machinery-and-tools tax?
Machinery and tools were classified as exempt intangible property when they had been continuously unused for at least one year before tax day, were unused on tax day, and had no reasonable prospect of…
How can taxpayers find South Carolina advisory opinions by subject (per SC IL #07-23)?
Use the index attached to SC Information Letter #07-23 to find South Carolina advisory opinions. It indexes the advisory opinions issued by the Department from 1987 to December 31, 2007, and it explai…
How can taxpayers check whether an older South Carolina advisory opinion was modified or superseded (per SC IL #07-22)?
Use the citator attached to SC Information Letter #07-22. It helps you determine what effect newer South Carolina advisory opinions have on previously published ones — whether an opinion was modified,…
Was a vehicle transfer from a single-member LLC to its owner taxable when the owner registered the vehicle in Florida?
Yes. Although the LLC was disregarded for federal income-tax filing, Florida treated it as a separate legal entity for non-income-tax purposes. Transferring the LLC-owned vehicle to the sole member fo…
Could a Canadian buyer receive Florida's export exemption after taking possession of a vehicle at the dealership and driving it to Canada?
No. Taking possession at the Florida dealership broke the continuous export process, and personally driving the vehicle to Canada did not restore the exemption. The buyer's export intent and later arr…
Did all related-party royalties escape Virginia's add-back merely because affiliates reported the gross royalties in other states?
No. The exception covered only the portion of royalty payments corresponding to the affiliate income actually apportioned and subjected to net-income or capital tax in another state. Reporting the gro…
Was a former officer personally liable for a corporation's January-June 2005 delinquent Virginia withholding taxes?
No. The former officer documented that the president, not he, controlled payment of corporate taxes, and the first-quarter payroll did not list him as an officer or employee. Because the evidence show…
Did a nonresident owe Virginia tax on dividends and bond interest reported to a Virginia mailing address?
No. The taxpayer lived in another state, and her stock dividends and bond interest were not from intangibles used in a Virginia business. Her rental property was outside Virginia, and Social Security …
Was a nonresident decedent's LLC membership taxable by Virginia merely because the LLC owned Virginia real estate?
No. Virginia law treated the decedent's LLC membership as personal, intangible property located in her state of residence. The estate owned the LLC interest, not the Virginia real estate held by the L…
Were per-foot patent and trademark royalties taxable when tied to a contractor's purchases and use of gutter coil?
Yes. The distributor agreement tied the licenses, required material purchases, royalty discount, and weekly royalty invoices directly to the coil and accessories used or sold. The royalty was an incre…
Should a locksmith separately charge Florida sales tax for replacing and rekeying permanently installed door locks?
No separate sales-tax line should have been charged to the customer. Florida classified the replacement, rekeying, and installation described in the invoice as a time-and-materials real-property contr…
Was a chemical absorbed into manufactured concrete roof tiles subject to Florida sales and use tax?
No. Engineering materials showed that more than 99% of the E-44 chemical was absorbed into the concrete roof tiles. Florida treated the incorporated chemical as an ingredient or component of tangible …
What Virginia tax underpayment and refund interest rates applied during the first quarter of 2008?
Virginia's January 1-March 31, 2008 rate was 9% for tax underpayments and 9% for overpayments. The federal rates were 7%, and Virginia added two percentage points. For calendar-year 2007 estimated-tax…
Were photo-lab prints produced and shipped for professional photographers' online customers wholesale sales under this SC PLR?
Yes, when the photographer resold the prints and the lab documented wholesale status or obtained a valid resale certificate. Shipping, handling, and credit-card processing charged with the wholesale p…
After Nebraska repealed the tax on contractor labor in 2007, is work on telephone and cable lines still taxable?
Yes. Revenue Ruling 01-07-2 concludes that charges to install, construct, repair, replace, upgrade, or remove telephone, telegraph, mobile telecommunications, or community antenna (cable) television p…
Were long-term lease obligations tied to industrial revenue bonds borrowed capital subject to Louisiana corporation franchise tax?
No. Long-term lease obligations associated with industrial revenue bonds were not borrowed capital and were not included in the Louisiana franchise-tax base. The corresponding future lease right also …
How did Virginia coordinate its long-term care insurance credit and deduction with the federal medical-expense deduction under 2006 law?
Virginia allowed taxpayers to allocate premium dollars among the federal deduction, Virginia credit, and Virginia deduction, but not to use the same dollars twice. Only premiums actually absorbed by t…
Could a city require a second BPOL license when a growing service business moved employees to a second city location?
Yes. The second office conducted regular, continuous, nonancillary service activity for more than 30 days, making it a separate definite place of business. The city could require a second license and …
Was electronic catalog data conversion manufacturing for BPOL tax, and could a county default to payroll to situs receipts?
Virginia classified the county operation as a business service, not manufacturing, because it reformatted and indexed data without substantially changing its character and did not sell goods at wholes…
Could a Virginia partner claim resident credits for Arizona and California tax paid through unified nonresident partnership returns?
Yes. Arizona and California generally offered reciprocal individual credits, but their unified nonresident returns did not give the partnership or partners a credit for tax paid elsewhere. The Virgini…
Could a partnership compute a Virginia combined nonresident return separately for each partner instead of on aggregated income?
No. Filing a combined nonresident return was an elective administrative privilege subject to the Tax Commissioner's terms. Those terms required applying Virginia's graduated individual rates to the pa…
Did checks paid to another state's revenue department prove that a taxpayer was not a Virginia resident?
No. Checks sent to another state's revenue department could reflect nonresident tax and did not establish domicile. Virginia asked for evidence bearing on residence, employment, spouse, property, vehi…
Did merchant-seaman protections exempt a nonresident NOAA survey technician from Virginia tax on ship-related work?
No. Virginia found that a scientific survey technician on an oceanographic research vessel was not a seaman covered by 46 U.S.C. § 11108. Because she planned surveys, maintained and calibrated equipme…
Did lumber-mill catwalks, supports, measuring computers, cleanup equipment, ATVs, and tractors qualify for Virginia production exemptions?
No. Virginia held that catwalk material and structural supports were facilitative rather than direct production items; the field computer and log rulers served payment, inventory, and recordkeeping; t…
Which software sales qualified as custom programs or direct manufacturing equipment in Virginia?
Virginia removed Customer One's programs because extensive customer-specific programming made them custom software despite initial hopes for broader sales. Customer Two's software remained taxable bec…
Were sales of two model homes isolated or occasional transactions exempt from New Mexico gross receipts tax?
Only the first sale. The first model was built under an owner-builder permit as an office and sales display, used for more than a year, and sold only after a visitor asked to buy it. That sale was iso…
Did a bona fide replacement vehicle supplied under Louisiana's lemon law or a manufacturer's warranty trigger sales tax?
Not when the substitute was a bona fide equal-value replacement under the warranty or lemon law; the Department treated it as part of the original sale, not a return and new sale. Any customer payment…
If a multi-level marketing company sells through independent distributors in Colorado, is sales tax figured on the suggested retail price or on what the customer actually paid, and who is liable if a distributor fails to collect it?
Sales tax is figured on the money actually received in cash and credits, not the suggested retail price. Colorado lets the company treat its independent distributors as its agents, so the company is t…
Will Colorado accept an electronically captured exemption/resale certificate with an electronic signature as adequate audit documentation, and what due diligence must the cashier still do?
Yes, with safeguards. Colorado will accept an electronically captured exemption or resale certificate with an electronic signature as adequate audit documentation, but the cashier must still: view the…
Is market/consumer research delivered on paper or CD a taxable product or a nontaxable service in Colorado?
It depends on custom vs. repetitive. Under the 'true object' test, market or consumer research created for a single specific client is a nontaxable service, with the paper or CD treated as incidental …
Are external fixators and single-use surgical wire exempt from Colorado tax as therapeutic devices?
External fixators are exempt; the surgical wire is taxable. Colorado exempts therapeutic devices, equipment, and accessories that correct or treat a human physical disability. An adjustable external f…
Is gas, electricity, and water used in manufacturing exempt in Colorado — and how do R&D, packaging, residential use, nursing homes, and restaurants fit?
Electricity and gas (and steam, coal, fuel oil, coke, nuclear fuel, wood) used in manufacturing and industrial processes are exempt from state, special-district, and state-administered local sales/use…
Is carbon dioxide sold to a retailer to carbonate fountain drinks taxable, and is the rental of the tank system that ships and stores it taxable?
The carbon dioxide is exempt — it becomes an ingredient of the soft drink, so the supplier's sale to a retailer is an exempt sale for resale. The shipping tank is also exempt as the container for an e…
After a sale is completed, can the retailer and buyer rescind it, claim a sales-tax refund, and resell the property to a leasing company that then leases it back to the buyer?
Only if there's a genuine full refund. Sales tax is a tax on a completed transaction, and later recasting the deal — rescinding it and reselling to a leasing company that leases the property back — do…
For a commercial furniture dealer, which charges — delivery, installation, reconfiguration, repair, storage, freight-in, design — are subject to Colorado sales tax?
Services a furniture dealer provides are taxable when they're inseparable from the sale of the goods, and nontaxable when they're optional and separately stated. Resales to end users are taxable (resa…
Is a service contract bought together with rented office equipment taxable in Colorado?
It depends on whether it's a separate contract. If the equipment rental and the service contract are one bundled deal, the entire consideration is taxable unless the retailer gets Department permissio…
Are outsourced call-center / contact-center services subject to Colorado sales tax?
No. Outsourced call-center / contact-center services aren't subject to Colorado sales tax. Colorado generally doesn't tax services, and although it does tax telephone service, the call-center company …
Are CCTV consulting and project-management fees taxable in Colorado, and can a company credit sales tax it paid another state on equipment it bought to resell to its client?
Consulting and project-management fees for a video-surveillance system are not taxable if they're genuinely separable from the equipment sale and separately stated on the invoice (the Department won't…
When a night club collects all the money for a meal-and-show package sold with a separate restaurant, who reports and remits the sales tax?
It depends on the structure. If the night club is acting only as the restaurant's collecting agent, each business can report and remit sales tax on just its own portion of the package, even though the…
For short-term rentals of oilfield living quarters, water/sewer systems, generators, transportation, cleaning, and consumables, who owes Colorado tax and on what?
For rentals of three years or less, the lessor is treated as the end user: it owes sales or use tax on what it paid for the equipment (with credit for tax paid another state), rather than charging tax…
Can a retailer buy bulk gift-card stock tax-free as a sale for resale, and is a transaction-tracking service bundled with the cards taxable?
No resale exemption. A gift card is functionally a credit voucher, not something the retailer actually sells to the customer (there's no separate charge for the card itself), so a retailer's bulk purc…
How these rulings are useful
- See how the rule applies: A letter ruling shows how a state revenue department actually applied the tax law to a specific business and set of facts.
- Plan with confidence: Find a ruling with facts close to yours before you charge, remit, or claim an exemption.
- Binding only on the requester: A ruling is binding on the department only for the taxpayer who asked. It is persuasive, not a substitute for your own ruling or professional advice.
- Research across states: Compare how different states treat the same issue, from SaaS and food exemptions to nexus and contractor purchases.