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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Are leases of dark (unlit) fiber-optic cable, and charges for 'lit' fiber, subject to Colorado sales or use tax?
It depends on the fiber. Leasing dark (unlit) fiber-optic cable is a taxable lease of tangible personal property if the cable keeps its identity as property and can be removed without significant dama…
Is crime-scene / biohazard property remediation (chemical wipe-downs, flooring removal, odor thermo-fogging) a taxable sale of property or a nontaxable service in Colorado?
It's a nontaxable service. Under Colorado's 'true object' test, crime-scene and biohazard remediation (chemical wipe-downs, removing flooring, thermo-fogging out odors) is primarily a service, not a s…
Are energy drinks like Red Bull, and enhanced or carbonated waters, exempt 'food' or taxable in Colorado?
Energy drinks are taxable. Colorado exempts only 'food for domestic home consumption,' which it defines by what's eligible under the federal food-stamp (SNAP) and WIC programs. The USDA has determined…
When a leased vehicle is first leased and taxed in another state and then moved to Colorado, does Colorado give the lessee a credit for the tax paid to that other state?
Yes — but only if the other state's tax legally fell on the lessee. When a vehicle is first leased and taxed in another state, then moved to Colorado, the lessee owes Colorado use tax at registration …
What is South Carolina's tax interest rate for the period January 1, 2008 through March 31, 2008 (per SC IL #07-21)?
7%. SC Information Letter #07-21 sets South Carolina's interest rate on tax underpayments and overpayments at 7% for the period January 1, 2008 through March 31, 2008. Interest is compounded daily, ex…
If a compression-services company restructures into separate lease and service entities, are the compressor leases and the compression services taxable in Utah, and is transferring the compressor fleet into the new entities a taxable sale?
Compression services taxed as a lease. The Commission ruled that the "compression services" the taxpayer's restructured entities provide to third-party customers are, in substance, a taxable lease or …
Could a Virginia land-preservation tax credit be transferred before the Department issued it, contingent on later approval?
No. Under the 2006 statutory changes analyzed in the ruling, the donor did not possess a land-preservation credit until the Department issued it. A transfer could occur only after issuance, and the tr…
Could a revocable trust claim Virginia's Riparian Forest Buffer Protection for Waterways Credit under the law analyzed in P.D. 07-200?
No. Under the Virginia statutes analyzed in 2007, a trust was not an eligible corporation, individual, partnership, or S corporation and therefore could not claim the Riparian Forest Buffer Protection…
Did a merchant mariner who separated from his spouse and established ties to a U.S. territory remain a Virginia domiciliary resident?
No. Considering all the circumstances, Virginia found that the merchant mariner abandoned his Virginia domicile and established a domicile outside Virginia. His assessments for 2003 and 2004 were abat…
Could a Virginia nonprofit high-school orchestra buy and resell kitchen products tax-free for a school fundraiser?
Yes. Because the nonprofit school orchestra had obtained a Virginia sales-and-use-tax exemption certificate, it could buy and resell the company's products without paying or collecting tax, provided t…
Could a Virginia corporate group allocate passive partnership investment income and exclude construction-service sales from Virginia's sales-factor numerator?
Yes, in part. Virginia allowed the non-Virginia group members to allocate the partnership's passive interest and capital-gain income to their commercial domicile, while the Virginia-domiciled member's…
Did the Richmond Circuit Court uphold Virginia sales-tax successor liability against GFT, Inc. in P.D. 07-210?
Yes. The Richmond Circuit Court found GFT, Inc. was the successor to Tavern at Great Falls, LLC under Va. Code § 58.1-629, held that the Department's assessment procedures were not arbitrary and capri…
Did a petroleum marketer have a definite place of business, and therefore BPOL liability, at a third party's city terminal?
No. Virginia found that the petroleum marketer neither leased terminal facilities nor maintained a definite place of business in the city. Its throughput agreement bought temporary commingled storage …
Could a corporation retroactively use a 2002 overpayment credited to 2003 estimated tax to avoid interest on a later 2002 deficiency?
No. Once the corporation directed its 2002 overpayment to 2003 estimated tax, it became a 2003 payment and could not retroactively satisfy a later 2002 deficiency. Interest ran until a 2003 return ove…
Was an out-of-state domiciliary an actual Virginia resident when she owned a Virginia home but spent fewer than 184 days in the state?
No. The taxpayer's daily log, receipts, and other evidence sufficiently showed she spent fewer than 184 days in Virginia in both 2004 and 2005. She was not an actual resident, so Virginia abated the p…
Is separately stated labor for crimping custom hydraulic hoses, air-conditioning hoses, and battery cables taxable fabrication in Virginia?
Yes. Crimping components into new custom hoses and battery cables changed tangible property into replacement products and was fabrication, not repair. Virginia therefore taxed the total fabrication ch…
Could the Tax Commissioner reduce estimated city BPOL and meals-tax assessments for a caterer with incomplete records?
Only the BPOL issue could be considered administratively. The Tax Commissioner lacked authority over the city's meals-and-beverage tax. For BPOL, the caterer had not disproved the estimated receipts, …
Was a holding company's office property exempt from county BTPP tax because its separate subsidiaries conducted manufacturing?
No. The holding company was a separate legal and taxable entity from its manufacturing subsidiaries and performed no manufacturing itself, so its office property could not be classified as exempt inta…
Was a 2003 Virginia nonfiler's statement that he moved abroad enough to overturn the residency assessment?
No. The taxpayer said he changed domicile to another country in September 2003, but he did not answer repeated requests for supporting information. Because he failed to prove both abandonment of Virgi…
How did Virginia revise a corporation's 1998 property factor when the audit included construction in progress and unreconciled Virginia property?
Virginia kept federal tax basis as the starting point, revised the numerator using the taxpayer's reconciled Virginia property records, and removed construction in progress from both the numerator and…
Did a nonresident owe Virginia tax because his employer was in Virginia when he performed all work in another state?
No. Wages from the Virginia employer were not Virginia-source income because the nonresident performed every workday in another state. His other S corporation also lacked Virginia nexus and Virginia-s…
Could a Virginia resident overturn a 1998 assessment by claiming the Department illegally obtained erroneous IRS information?
No. Virginia was authorized to receive IRS information, and the taxpayer did not dispute receiving the additional income or show that the tax computation was wrong. The challenged data fields did not …
Could Virginia residents defeat an assessment based on IRS adjustments by arguing the federal assessment was not lawful?
No. Virginia lawfully used IRS information to adjust the residents' federal adjusted gross income starting point, and the taxpayers did not prove that the federal information or Virginia assessment wa…
Did a Virginia advertising agency owe tax on photo-production labor and brochures printed for a client campaign?
Yes. Photo-retouching and computer labor were taxable because the transaction's true object was the finished image or print. The agency also owed tax on client brochures because Virginia treated adver…
Did a contractor owe Virginia use tax when vendors omitted tax from fabrication labor and equipment-rental damage-waiver fees?
Yes. Fabrication labor and equipment-rental damage-waiver fees were taxable, and the purchaser remained liable even though the vendors failed to collect tax. The loader assessment could be removed onl…
Did a Virginia dental practice owe use tax on the full invoice price of teeth-whitening kits and supplies?
Yes. Dentists are consumers of property used in their practices, and the invoices listed teeth-whitening kits, toothpaste, and other tangible items. Virginia taxed the full sales price and rejected th…
Could a Virginia country club buy printing for its bimonthly newsletter without sales or use tax?
Yes. The bimonthly newsletter qualified as an exempt publication because it was issued at intervals under three months and was available to the general public at facilities open to nonmembers. Virgini…
Did one Virginia employee selling an out-of-state energy company's services create Virginia sales-tax or corporate-income-tax duties?
No collection or corporate-income-tax duty arose on the stated facts. The company sold services rather than tangible property, so it was not a sales-tax dealer, and one employee merely soliciting thos…
Could a Virginia dealer remove audited sales by producing customer exemption certificates?
Only in part. Virginia removed sales covered by a complete exemption certificate accepted in good faith and ordered a refund with interest. It rejected a second customer's incomplete, post-audit resal…
Was a service that converted, edited, proved, and electronically filed customers' SEC documents taxable as communications under this SC PLR?
No, on the stated facts. The true object was the provider's personal service of converting, editing, proving, and making the customer's documents SEC-compliant; electronic EDGAR filing was incidental.…
Does a New York LLC that is taxed as a partnership and formed only to trade securities for its own account have to pay the annual LLC filing fee under Tax Law § 658(c)(3)?
No. Because the LLC's only activity is buying and selling securities for its own account - not holding property for sale to customers - Tax Law § 631(d) means it is not carrying on a business in New Y…
Is a New York resident's distribution from an out-of-state 529 college savings plan subject to New York State personal income tax if it's used for qualified tuition expenses?
No. Because the distribution qualifies as a federal tax-free withdrawal under IRC § 529(c) and no Tax Law § 612 modification requires adding it back, the entire distribution - including earnings - pas…
Can a property owner get a New York sales tax refund on building materials used to rehabilitate a building that's part qualifying commercial space and part nonqualifying residential space in an Empire Zone?
Yes, but only for the commercial portion. The sales tax refund on building materials should be allocated between the qualifying commercial space and the nonqualifying residential space by any reasonab…
When a computer consulting firm sells hardware, prewritten software, installation, and consulting together in one deal, which pieces are taxable and which are exempt?
Hardware and prewritten software sales, and hardware installation/repair, are taxable; computer consulting and software-only services (troubleshooting, reconfiguring, custom coding) are exempt only if…
Were maritime-crane modification, repair, and transport activities contracting or a business service for Virginia BPOL tax?
They were business services. The cranes were machines and tangible personal property rather than real-property structures, so modifying and repairing them was not contracting for BPOL purposes. Transp…
Did fuel stored and lifted at a third-party city terminal create BPOL liability and a late penalty for a petroleum wholesaler?
No. The petroleum business's throughput agreement provided temporary commingled storage and distribution services, not leased premises. With no office, staff, records, continuous presence, or advertis…
Did shared individual ownership and a management agreement make medical-service companies one affiliated group for the BPOL receipts exemption?
No. The companies lacked the required direct stock-ownership relationship with the medical group. An individual's ownership and a management agreement did not create statutory affiliation, so receipts…
Could legally separated spouses file a joint Virginia nonresident return when the husband lived elsewhere but the wife remained a Virginia resident?
No. The husband proved he was domiciled outside Virginia in 2004, but the wife remained a Virginia resident. A resident and nonresident spouse could not file a joint nonresident return; the husband's …
Did new financial records overturn Virginia's assessment involving a taxpayer-controlled finance subsidiary and intercompany loans?
No. The additional records did not show that the finance subsidiary conducted an independent business or that its intercompany loans matched unrelated-party terms. Virginia denied reconsideration and …
Was software used to plan production, and a thermal oxidizer awaiting pollution-control certification, exempt from Virginia sales and use tax?
No. The production-planning software was an administrative tool used indirectly, not software that immediately directed or controlled production. The thermal oxidizer also remained taxable because it …
Could a landowner entitled to a Virginia Land Preservation Tax Credit of $1 million or more request less than $1 million and avoid DCR review?
Yes. A landowner did not have to request the full allowable credit. By entering an amount below $1 million on Form LPC-1, the taxpayer could apply only to the Tax Department without DCR verification, …
When an out-of-state company uses an unrelated fulfillment provider that leases a warehouse from the company's affiliate, is that warehouse the provider's 'premises' so the fulfillment-services exemption protects the company?
Yes for the user, no for the owner. A warehouse an affiliate leases to an unrelated third-party fulfillment provider is treated as the provider's 'premises,' so the out-of-state company using those fu…
Did New Mexico penalty and interest on tax caused by an IRS adjustment begin only when the Department later notified the taxpayers?
No. After the IRS disallowed federal itemized deductions, the Cordovas owed $709 of additional 1999 New Mexico income tax and did not amend their state return. Interest ran from the original April 200…
Who handled Florida tax when an out-of-state dealer sold through an unregistered out-of-state buyer and goods were drop-shipped to Florida?
It depended on where the goods were located when purchased. For goods shipped from a Florida facility, the registered dealer had to collect tax from the Florida customer because the unregistered buyer…
How did the former downtown historic rehabilitation credit's $5 million taxpayer cap, affiliate test, pass-through allocations, and two-sale rule apply to a syndicated project?
Pass-through entities could allocate credits disproportionately, and each ultimate taxpayer could receive up to $5 million if not affiliated under the 50% common-ownership and attribution test. An int…
After Virginia's 2007 policy change, did contractors installing sod, plants, or silt fence collect sales tax from customers or pay tax on their materials?
Qualifying real-property and landscape contractors became users and consumers: they paid sales or use tax on installed sod, plants, silt fence, and similar materials instead of collecting retail tax f…
Did Virginia waive a supermarket's penalty after inspectors found 117 unstamped cigarette packs and the store claimed their stamps had faded?
No. Inspectors found no physical stamp evidence on 117 packs, and possession above 30 packs triggered a statutory presumption of tax evasion. Virginia had already reduced the initial assessment under …
Were dental implants exempt when a dental practice could not document on invoices that each implant was purchased for a specific patient?
No. The practice could not prove that the audited implants were purchased for specific patients because the invoices lacked patient identification and its internal order forms had been discarded. Virg…
Was a chemical used to clean paper-mill calendar rollers between production runs exempt as a manufacturing supply?
No. Immunol cleaned calendar-stack rollers before or after paper production, not during the production process. Virginia treated that use as taxable general maintenance even though clean rollers prote…
Did a contract chip-mill operator owe Virginia forest products tax when customers owned the logs and chips and claimed to pay the tax themselves?
Yes. Operating a chip mill made the taxpayer the statutory manufacturer liable for forest products tax, even though customers retained title to the logs and chips. Any tax customers paid was erroneous…
Did Virginia's 2007 five-percent Motor Vehicle Repair Labor and Services Tax remain valid in Northern Virginia and Hampton Roads?
No. The guidelines described a five-percent regional tax on motor-vehicle repair labor and services, but the Virginia Supreme Court ruled the authorizing provisions unconstitutional on February 29, 20…
Who owed South Carolina use tax on untaxed Internet, catalog, travel, and other out-of-state purchases under RR 07-5?
The South Carolina purchaser owed use tax when taxable property bought from an out-of-state retailer was used, stored, or consumed in the state and enough tax had not already been paid. Tax legally pa…
Which foods became exempt from South Carolina's state sales and use tax on November 1, 2007 under RR 07-4?
Unprepared food that could lawfully be bought with USDA food benefits became exempt from state sales and use tax, even when purchased with cash or from a retailer that did not accept benefits. Prepare…
Did 25% of a taxpayer's $1,900 of unreimbursed medical expenses create a refundable New Mexico income tax credit?
No. Joan Oller could deduct 25% of her $1,900 of unreimbursed medical expenses, and that $475 deduction helped reduce taxable income to zero. It was not a refundable credit. The senior medical credit …
How did Texas treat seller-financed vehicle accounts transferred to related finance companies before and after the 2007 law change?
Partially superseded. The 2007 law let qualifying registered related finance companies receive transfers without immediate tax acceleration, while the dealer remained responsible for tax collection an…
Could a hardware retailer rely on Type 6 and Type 9 NTTCs for tools and construction materials that the certificates did not cover?
No. Type 9 NTTCs did not cover construction materials bought by governments or nonprofits, and Type 6 NTTCs covered only items incorporated into a construction project—not drill bits, rollers, tools, …
Does Utah sales or use tax apply to printed customer statements a Utah printer produces and mails to both Utah and out-of-state policyholders, depending on who supplies the paper and where the printer ships the materials?
It depends entirely on where the printed materials are shipped. When a Utah printer produces and mails customer statements, Utah sales tax applies to everything shipped to Utah policyholders (whether …
Was providing a crane with the owner's operator a taxable equipment rental or a nontaxable lifting service?
It was a nontaxable lifting service under the revised advisement. The owner's employee retained physical control and responsibility for crane operation and safety, while the customer could only specif…
Who owed Louisiana sales tax when a dealer immobilized a manufactured home on dealer-owned land and then sold both as real property?
The dealer owed tax on its purchase of the new manufactured home. By removing the home from resale inventory and immobilizing it on dealer-owned land, the dealer became the contractor and ultimate con…
How can taxpayers find South Carolina advisory opinions by subject (per SC IL #07-20)?
Use the index attached to SC Information Letter #07-20 to find South Carolina advisory opinions. It indexes the advisory opinions issued by the Department from 1987 to October 24, 2007, and it explain…
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