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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How can taxpayers check whether an older South Carolina advisory opinion was modified or superseded (per SC IL #07-19)?
Use the citator attached to SC Information Letter #07-19. It helps you determine what effect newer South Carolina advisory opinions have on previously published ones — whether an opinion was modified,…
Does a private petrochemical refinery owe Texas motor vehicle tax on a fire truck, command van, and breathing-air truck?
Yes. A private refinery's fire truck, command van, and breathing-air truck were taxable motor vehicles because the purchaser was not a public agency or independent volunteer fire department, the two e…
If a sightseeing cruise ticket bundles in a meal that can't be purchased separately, can the operator allocate the price between an exempt cruise portion and a taxable meal portion?
No. Because the meal isn't merely incidental to the cruise, the entire combined charge for a cruise-with-meal package is taxable as a restaurant sale, and splitting the price between cruise and meal d…
A 62-year-old homeowner took out a federally-insured HUD reverse mortgage (HECM), but years earlier had deeded the property to family members under 60 while keeping a life estate for herself. Because title is held by people who don't meet the state's own age-60 reverse-mortgage rules, does the mortgage still qualify for New York's reverse mortgage exemption from recording tax?
Exempt. A 62-year-old borrower obtained a Home Equity Conversion Mortgage (HECM) reverse mortgage -- a federally insured HUD program under 12 U.S.C. section 1715z-20 -- secured by her single-family Ne…
Can a financial data provider buy servers and routers tax-exempt as 'purchases for resale' when it separately charges customers an additional fee to use that equipment alongside its data-feed service?
Yes. Because the equipment is optional, not required to access the underlying data service, and separately and reasonably billed, providing it for an extra fee is a genuine equipment rental to the cus…
Were two classified federal IT contracts treated as service contracts or sales of tangible property for Virginia use tax?
They were sales of tangible personal property. The government's acquisition and control of computer systems and hardware was the true object, so resale items were removed from the audit. Other purchas…
Did two trusts remain Virginia resident trusts after moving administration and assets away when one Virginia resident remained on each trustee committee?
No, for Trusts B and C. A Virginia resident's membership on each multi-trustee committee did not make the trust resident when no trustee could act alone and the committee operated and was controlled o…
Did common-carrier delivery into Virginia and a shared independent delivery witness create corporate income tax nexus for an out-of-state petrochemical trader?
No. On the accepted facts, the trader had no Virginia property, payroll, or solicitation. Common-carrier delivery and a delivery witness acting independently for both buyer and seller did not create t…
Could a city apply its grandfathered three-percent telephone BPOL rate to a cellular PCS provider that did not offer landline local-exchange service?
No. The PCS provider was a telephone company, but the city's grandfathered three-percent rate applied only to the local-exchange landline service covered by its 1972 ordinance. The city could apply th…
Was a cabinet fabricator a real-property contractor when customers separately hired and paid an independent installer?
No. Because the fabricator neither installed the cabinets nor had a contractual duty to install them, it sold tangible personal property at retail and owed tax on the full sales price. Virginia allowe…
Could a retired physician claim Virginia's Neighborhood Assistance credit for donated clinic services when the clinic lacked DSS approval for 2005?
No. The physician's donated services appeared substantively eligible, but the clinic or county was not approved by DSS to allocate credits for 2005. Virginia denied that portion, then ordered a separa…
Were corn, wheat, barley, and rye exempt from Virginia sales tax when individuals bought the grain to burn as home-heating fuel?
No. Virginia's domestic-fuel exemption specifically covered artificial or propane gas, firewood, coal, and home heating oil. Grain did not qualify merely because customers burned it for home heat. A s…
Did internally manufactured wireless demonstration equipment remain exempt resale inventory after it was capitalized and never sold?
No. The taxpayer withdrew the units from resale inventory, used them in labs, trade shows, and customer demonstrations, amortized them, and recorded them as fixed assets. That was a taxable use, and t…
Could Virginia consider a retailer's exemption certificates when its administrative appeal was filed after the 90-day deadline?
No. The retailer filed its appeal after the 90-day statutory deadline, so the Tax Commissioner could not consider whether the customer exemption certificates supported the sales. The assessments were …
Under Virginia's 2007 policy, did a Virginia Internet and phone seller tax third-party gift orders by the buyer's transaction or only by the recipient's destination?
Virginia required the seller to keep collecting Virginia tax under its constructive-possession policy unless it had approval to collect the recipient state's tax or a statutory use exception applied. …
When would a carrier's very light jets qualify for Florida's aircraft lease, repair, and maintenance tax exemptions?
The jets became qualified aircraft once the Part 135 carrier leased and operated at least 25 eligible very light jets in Florida. Lease payments due from acquisition of the 25th jet, plus qualifying r…
Could a federal employee use a centrally billed government credit card instead of an exemption certificate for a Louisiana tax-exempt purchase?
Yes. A card billed and paid directly by the United States showed that the federal government was the purchaser, so the merchant could accept it instead of a sales-tax exemption certificate. A card bil…
Which charges were taxable when a provider furnished temporary construction barricades, lights, and fencing?
The temporary equipment was tangible personal property furnished under a taxable lease. Rental charges and maintenance such as bulb replacement were taxable even if separately stated. Separately state…
When were charges for paper or electronic copies of medical records subject to Louisiana sales tax?
A licensed medical provider's own copies to a patient or authorized requester were excluded professional work product and not taxed. An outside vendor's flat-fee copying for the provider was a taxable…
Could a Virginia resident claim credit for California tax paid through a partnership's unified nonresident return when California gave no credit there?
Yes. Although California generally offered a reciprocal credit, it did not allow that credit on the partnership's unified nonresident return. The taxpayer documented his share of California income and…
After Home Interiors & Gifts v. Strayhorn, when are a corporation's sales thrown back to Texas for the earned-surplus franchise tax?
Texas changed its throwback rule. This internal audit memo tells auditors that, after the Texas Supreme Court decision in Home Interiors & Gifts, Inc. v. Strayhorn, sales protected by Public Law 86-27…
What is South Carolina's latest statewide per capita income figure used for tax incentives (per SC IL #07-18)?
$29,688. SC Information Letter #07-18 publishes the updated statewide per capita personal income figure for South Carolina — $29,688 — which the Department uses to test qualification for various South…
Could a new Virginia corporate group choose either predecessor group's filing method after a near-equal merger of previously unrelated affiliated groups?
Yes. Pending regulations, a new group could choose the acquirer's or target's prior Virginia filing method when neither group had a substantial prior interest in the other and the target represented m…
Did all royalties paid to a parent escape Virginia's add-back merely because the parent reported the royalty income on returns in two other states?
No. Reporting gross royalty income on another state's return did not prove that all of it was taxed there. The exception matched only the parent's apportioned shares taxed in those states—2.453% total…
Is a Senate-confirmed presidential appointee exempt from D.C. income tax when the President can remove the officer only for cause?
No. An officer removable only for cause does not serve at the President's pleasure, so the presidential-appointee residency exception does not apply. On the ruling's facts, living in D.C. for at least…
Could a semiconductor manufacturer sell equipment tax-free to unrelated lessors for immediate exempt leaseback using resale certificates?
Yes, conditionally. Each lessor could give the manufacturer Form ST-10 for the resale purchase, even though the later leaseback was exempt rather than taxable. The manufacturer could give each lessor …
How did South Carolina's 2007 physical-presence-era ruling analyze activities that could create sales and use tax nexus?
The ruling evaluated each listed South Carolina contact separately under assumed retail sales and no other in-state activity. It warned that fact changes or multiple contacts could create nexus even w…
Which products qualified under Virginia's 2007 Energy Star Sales Tax Holiday, and can these guidelines be used for current sales?
Historically, eight listed Energy Star product types costing $2,500 or less qualified when bought for noncommercial personal use during the four-day October holiday. The source states that the recurri…
What did Virginia's original pass-through entity withholding guidelines require for nonresident owners, and are those rules still current?
Historically, covered pass-through entities paid five percent of nonresident owners' Virginia-source income, subject to exemptions and alternatives such as a unified return. These guidelines are super…
What Virginia tax underpayment and refund interest rates applied during the fourth quarter of 2007?
Virginia's October 1-December 31, 2007 rates were 10% for tax underpayments and assessments and 10% for tax overpayments and refunds. Federal rates remained 8%, and Virginia added two percentage point…
Are street sweepers built on standard cab chassis subject to Texas motor vehicle sales tax despite special title or registration treatment?
Yes. The standard cab chassis was a motor vehicle and the added sweeper was an accessory, so the completed street-sweeping unit was subject to Texas motor vehicle sales tax despite special registratio…
How did Virginia require nonresident owners to correct pass-through entity returns and report Virginia-source income for 2003-2005?
The entities had to correct their Virginia apportionment and issue amended K-1s, while the spouses had to file nonresident—not part-year—returns reporting their shares of Virginia-source income. ASC h…
Could Virginia reduce telecommunications minimum tax after an audit when the company missed the 18-month deadline to correct SCC-certified gross receipts?
No. The Tax Department had to use gross receipts certified by the State Corporation Commission, and the company did not seek SCC review within 18 months. The deadline applied even though the tax probl…
Did the BPOL exemption for a title insurance agent cover separate real estate settlement-service receipts unrelated to insurance premiums?
No. The exemption protected title-insurance agency activity tied to the insurance company's direct gross premium income, not the agent's separate settlement and other noninsurance services. Virginia u…
Did a taxpayer abandon Virginia domicile during 2002 by leasing a home from his daughter in another state after his Virginia employer entered bankruptcy?
No. His temporary return to another state did not show abandonment of Virginia domicile, especially because he kept Virginia ties, sought Virginia work, used a Virginia address for unemployment, and r…
Which separately stated airline catering and aircraft services were taxable when the provider worked with airline-owned food, equipment, and supplies?
Separately stated services performed independently on airline-owned property—including much cleaning, loading, kit assembly, security checks, and paperwork—were not taxable. Services connected to the …
When did long-term hotel or motel occupancy qualify as a permanent residence excluded from Louisiana sales tax rather than taxable transient lodging?
Only a natural person's use of hotel accommodations as a genuine permanent home qualified. Time and payment method were evidence, not controlling; the unit needed home facilities, and physical presenc…
As a follow-up to an earlier ruling on my Cultural Resources Trust condominium conversion (Title Conveyance, Leaseback, Reversion), I now need to split my existing $365 million Wachovia mortgage across two new condominium units and spread part of it to cover the leaseback and a future 'springing' affiliate lease -- with no new borrowing, just restructuring the existing debt. Do these mortgage split, modification, and spreading steps trigger New York's Mortgage Recording Tax, and does my earlier RETT exemption still hold with this added mortgage detail?
Both confirmed exempt. This is a follow-up petition to the same taxpayer's earlier ruling (TSB-A-07(1)R) on converting a Manhattan office building into a two-unit condominium (a 'Channel 13 Unit' leas…
What is South Carolina's tax interest rate for the period July 1, 2006 through December 31, 2007 (per SC IL #07-17)?
8%. SC Information Letter #07-17 sets South Carolina's interest rate on tax underpayments and overpayments at 8% for the period July 1, 2006 through December 31, 2007. Interest is compounded daily, ex…
How should a disregarded LLC calculate Virginia BPOL receipts when its corporate owner reports the LLC's out-of-state business on income tax returns?
The LLC could deduct its own receipts from business in jurisdictions where its corporate owner filed an income or income-like tax return reporting those receipts. It had to start with worldwide receip…
Did occasional short-term rental of an owner's second home owe BPOL tax, and did the Virginia Tax Commissioner decide the transient occupancy tax?
The private-home rental was exempt from BPOL tax. The Tax Commissioner did not decide whether transient occupancy tax was due because that tax fell outside the Commissioner's advisory jurisdiction; th…
Could a media-buying business exclude client money paid to media vendors from BPOL gross receipts as pass-through agency funds?
No. The business did not prove contracts linking clients and vendors, did not document a separate or fiduciary accounting system, and reported the client payments as federal gross income with vendor c…
When could a federal contractor buy property tax-free as the government's designated purchasing agent, and did contract pricing method matter?
The exemption applied only when the government officially designated the contractor as purchasing agent and the government's credit was directly bound. The result did not depend on whether the contrac…
Did a Virginia home-based employee soliciting orders create sales tax nexus while the out-of-state manufacturer remained protected from income tax?
Yes for sales tax, but not corporate income tax on the stated facts. Employee solicitation created sales tax nexus and required registration and collection on Virginia sales. Because the employee's wo…
Did Virginia's reduced food tax rate apply to packaged bulk groceries sold to nursing homes, correctional facilities, hotels, and other businesses?
Yes, under the 2007 rules. Packaged staple foods and cold prepared foods in closed containers, not sold hot or for immediate consumption, qualified as food for home consumption regardless of whether t…
Who had to use Kansas's new Form K-4 for state income-tax withholding after January 1, 2008?
Employees hired after January 1, 2008 had to use Kansas Form K-4 instead of relying on the federal W-4 for state withholding. Employees hired before that date did not need a K-4 unless they chose to a…
Did additional information overturn Virginia assessments when the taxpayer spent over 200 days in Virginia and still lacked support for claimed losses?
No. Virginia found the taxpayer was an actual resident in 2000-2001 based on more than 200 days of presence and upheld 2002-2003 assessments because he did not provide partnership returns or other req…
Could a using and consuming contractor offset its own use tax with sales tax it wrongly collected from customers and remitted to Virginia?
No. A using and consuming contractor could not use sales tax improperly charged to customers to satisfy its own tax on materials. Refund or credit required proof that the contractor bore the tax or re…
What were the significant South Carolina tax law changes enacted in the 2007 legislative session (per SC IL #07-16)?
SC Information Letter #07-16 is the Department's summary of the significant tax and regulatory changes enacted in South Carolina's 2007 legislative session, organized into four parts: (1) income taxes…
After a corporate reorganization splits a natural-gas compression business into equipment-owning partnerships and customer-facing service entities, is the customer's charge a taxable equipment rental or an exempt service, and are the internal compressor transfers taxable sales?
The customer-facing compression charge is an exempt service, not a taxable equipment rental, because the operating company keeps dominion and control of the compressors; the equipment transfers into t…
Does installing a gas stove that requires building a new chimney and adding new gas and electric lines qualify as an exempt capital improvement rather than a taxable installation service?
Yes. Because the installation required a new chimney (cutting a hole in the roof) plus new gas and electric lines rather than simply plugging in an appliance, the whole project is a capital improvemen…
Did an individual owe Florida documentary stamp tax for deeding unencumbered real property to an LLC the individual wholly owned?
Only the 70-cent minimum tax was due. The same individual owned all of the unencumbered property and all of the LLC, and no mortgage or other consideration accompanied the deed, so Florida found no tr…
Did an individual owe Florida documentary stamp tax for deeding unencumbered real property to an LLC the individual wholly owned?
Only the 70-cent minimum tax was due. The same individual owned all of the unencumbered property and all of the LLC, and no mortgage or other consideration accompanied the deed, so Florida found no tr…
Can a New York taxpayer subtract military active-duty pay and a related state-employer supplement from federal adjusted gross income under Tax Law section 612(c)(8-b)?
No. Section 612(c)(8-b) only lets members of the New York State organized militia (Army/Air National Guard, inactive National Guard, Naval Militia, and the New York Guard) subtract active-duty pay. Be…
Is a construction subcontractor on a project for a foreign government's UN mission exempt from New York's tax on independently procured insurance from an unauthorized insurer?
Not exempt - usually. A subcontractor that buys insurance from an unauthorized insurer for a foreign-mission construction project owes New York's Article 33-A tax on independently procured insurance, …
Are a nursing home's purchases of disposable adult diapers exempt from New York sales tax?
Not as medical supplies -- a for-profit nursing home is providing medical services for compensation, which disqualifies the medical-supplies exemption. But adult diapers still qualify for New York's c…
Is the fee to use a high-wire, zip-line tree-top adventure course taxable as an amusement admission, or exempt as a charge for a participant sporting facility?
Exempt. Because customers are active participants physically navigating zip lines, rope bridges, and obstacles themselves (not spectators), the charge is for use of a participant sporting facility, th…
Are prepaid cards sold at retail that let a customer download ringtones, wallpaper, and games to a cellphone taxed at the time the card is sold?
No, not at the time of sale. Like a gift certificate, the card's purchase isn't itself a taxable transaction -- tax is only due (if at all) when the customer redeems a credit for a taxable product, an…
Was an administrative appeal timely when its letter was dated before the 90-day deadline but the delivery service received it afterward?
No. The delivery service's receipt date controlled the filing date. Although the appeal letter was dated January 10, 2007, the carrier date was February 7, after the January 16 deadline. Virginia ther…
Could the donated portion of a bargain sale to the National Park Service qualify for Virginia's land credit without a perpetual deed restriction?
Yes, conditionally. The National Park Service qualified as a conservation donee, and federal park statutes sufficiently assured perpetual preservation even without a deed restriction. Only the bargain…
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