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 cut-your-own Christmas tree farm buy weed eaters and similar equipment tax-free when used to make fields accessible to customers?
No. The weed eaters and similar equipment were used to make the Christmas-tree fields accessible for customer visits, not to produce trees for market. Unlike equipment that affected crop growth or pro…
Could retailers defeat reconstructed Virginia sales-tax assessments without adequate records or support for claimed exempt sales?
No. With missing returns and no verifiable records, Virginia could reconstruct sales from the best information available. The retailers supplied no evidence that the method was unreasonable and no sup…
Were delivery charges for mobile-mixed concrete taxable, and what documentation supported exempt government sales?
Yes. Charges connected with concrete mixed at the job site—including short-load and transportation charges—were taxable even when separately stated. Government sales required qualifying direct billing…
Was a Virginia corporate income tax return filed on Monday, October 17 timely when its extended October 15 deadline fell on a Saturday?
Yes. Virginia's weekend rule moved the extended due date from Saturday, October 15 to Monday, October 17, so the return was timely and the late-filing penalty and associated interest were abated. The …
Did an active-duty servicemember become taxable as a Virginia resident merely because military orders transferred him to Virginia?
No. The servicemember documented that he retained his State A domicile and entered Virginia under military orders. Because he did not establish Virginia domicile and his only income was active-duty mi…
Did Louisiana's tax exemption for DROP account benefits continue after the money was transferred into an IRA?
No. Money paid from a qualifying DROP account was exempt from Louisiana income tax under La. R.S. 11:405 because it was a Chapter 1 retirement benefit. After transfer to an IRA, later IRA payments wer…
When a corporate parent eliminates an affiliate through dissolution, merger into the parent, conversion to a single-member LLC, or an F reorganization, does the parent (or its financial institution unitary group) get to use that affiliate's unused Tennessee net operating loss carryforward?
No, generally. A parent corporation cannot use an eliminated affiliate's Tennessee NOL carryforward whether the affiliate dissolved, merged into the parent, converted to a single-member LLC, or underw…
Does an out-of-state printer of clinical research materials have to collect Tennessee use tax on products it warehouses out of state and ships to Tennessee pharmaceutical customers months or years after the sale, and does that extend to shipping and handling charges?
Yes, if the taxpayer has Tennessee nexus: use tax is owed on the initial shipment and on every later shipment to a Tennessee customer, collected when each shipment actually goes to Tennessee (with cre…
How did South Carolina's annual and alternative monthly job tax credits work for small businesses under the 2007 guidance?
A qualifying business with 99 or fewer worldwide employees generally needed a monthly average increase of at least two new full-time South Carolina jobs. It could use an annual credit claimed in years…
The Department already issued an Advisory Opinion on my $1 sale-leaseback-repurchase structure for the Brooklyn Bridge Park redevelopment (TSB-A-06(3)R), which said the eventual assignment of my lease to the condominium's Board of Managers would automatically be taxed like a sponsor-to-cooperative-housing-corporation conveyance. On further review, does that specific conclusion still hold?
This is a MODIFIED Advisory Opinion, correcting one specific conclusion from the Department's original November 30, 2006 ruling (TSB-A-06(3)R) on the same facts -- everything else stays the same. Same…
Did relying on a tax service excuse interest and penalty when a sole proprietor made income-tax estimates but filed no gross-receipts returns?
No. Lee Reeves made quarterly estimated income-tax payments after hiring Jackson Hewitt but filed no CRS returns for 2003 or early 2004. He had filed an earlier gross-receipts return and should have n…
Did an automotive alternator remanufacturer qualify as a manufacturer whose wholesale sales from the place of manufacture were exempt from local BPOL tax?
Yes. Virginia found no basis to reverse its earlier manufacturer classification because alternators were rebuilt at the county facility and the subsidiary was integrated with its manufacturer's busine…
Did a Maryland commission-based sales-service company have Virginia corporate income tax nexus through one Virginia sales representative?
Yes. The Virginia employee regularly solicited sales for third-party clients rather than selling the employer's own tangible goods. Virginia treated that activity as the company's business service, no…
What Virginia returns were required when an out-of-state limited partnership's only Virginia activity was owning leased commercial property?
The partnership had to file a Virginia pass-through information return because its leased Virginia property produced Virginia-source income. That character passed to both owners: the individual genera…
Could Virginia refund an overpayment claimed on a 2002 individual income tax return filed after the three-year refund deadline?
No. The 2002 return was due May 1, 2003, so the refund claim had to reach the Department by May 1, 2006. Because the couple filed in June 2006, Va. Code § 58.1-499 D barred the refund, and the Tax Com…
How did Virginia calculate a resident couple's credit when some other-state tax was paid through a partnership's unified nonresident returns?
Virginia recognized the wife's share of tax paid through the partnership's unified returns, but each state's credit had to be calculated separately and was limited to the lesser of tax paid or Virgini…
How did Virginia sales and use tax apply to modular duplexes and site-work materials installed for a U.S. Navy construction project?
The contractor's proposed calculation was rejected. Assuming the duplexes qualified as modular buildings, the 60% taxable base applied only to the factory-built units, with the installer treated as th…
Did a commercial printer owe Virginia litter tax when it printed envelopes, stationery, brochures, letterhead, and business cards but not newspapers or magazines?
No. Merely printing images on paper did not make the company a manufacturer or seller of covered paper products, and it did not print newspapers or magazines. Virginia ended its litter-tax filing obli…
Was a permanently implanted birth-control device exempt from Virginia sales and use tax as durable medical equipment?
No. The device failed two mandatory durable-medical-equipment criteria: it could not withstand repeated use and was not appropriate for home use because a trained medical practitioner had to implant i…
Did business growth during part of an audit period require Virginia to adjust a sales and use tax sample's extrapolation or error factor?
No. The sample covered months before and after the company's growth, and its error factor was applied across an audit period that likewise included lower- and higher-revenue months. Growth alone did n…
Were feed, supplies, and resale horses exempt when a Virginia horse breeder also used the horses for paid riding lessons, training, or shows?
Not for the paid lessons and other business uses. Feed, hay, and supplies were exempt only for horses used exclusively in qualifying breeding or raised exclusively for market, and using resale horses …
Did an acquired group's Florida consolidated-return election continue after the group ceased to exist for federal tax purposes?
No. When the acquired affiliated group ceased to exist for federal consolidated-return purposes and its members joined the buyer's group, its Florida consolidated election ended too. The buyer's exist…
Could a later federal contract amendment toll New Mexico's refund deadline when it retroactively changed where research hardware was first used?
No. When the gross receipts tax was paid, the Air Force contract called for the research testbed's first use in New Mexico, so the payments followed the law then in effect. A 2003 amendment changing f…
Could a business obtain separate retail and wholesale BPOL treatment without records reconciling its claimed wholesale receipts to tax returns?
Not on the evidence submitted. The county could not reconcile the claimed wholesale activity to the business's federal and local returns, and the taxpayer supplied no contrary proof on appeal. The ret…
Could a Maryland commuter recover Virginia tax withheld in error for 1997 through 2000 when the refund claims were not filed until April 2006?
No. Maryland reciprocity meant the commuter's wages were not subject to Virginia withholding, but he had not given his employer the required exemption certificate. More importantly, his April 2006 ref…
Could Virginia residents claim the credit for taxes paid to another state for Canadian federal income tax on wages?
No. Virginia's credit applied to qualifying income tax paid to another U.S. state, not to Canada or a Canadian province. The U.S.-Canada treaty provision cited governed specified federal taxes and did…
Did Virginia use tax apply to lease payments after equipment moved from California when California tax had been correctly paid upfront on the full lease value?
No. The lessee had correctly paid California sales tax on the full value of the five-year lease when the lease began. After the equipment moved to Virginia, that payment qualified for Virginia's other…
Did an out-of-state publisher create Virginia sales-tax nexus by retaining title to books stored and sold through an independent Virginia distributor?
No under the specific 2007 facts. Although the publisher retained title to books in the distributor's Virginia warehouse and qualified as a dealer, the distributor sold in its own name and was not sub…
Did a notice of intent preserve a Virginia tax appeal when the complete administrative appeal was not filed within 90 days of assessment?
No. The assessment was dated December 22, 2006, making March 22, 2007 the deadline. A March 21 notice stating that a complete appeal would follow did not satisfy or extend the 90-day period, so the ap…
Were leases and other transactions between separately incorporated affiliates exempt as intracompany transfers for Virginia sales tax?
No. Virginia records showed that the taxpayer and its affiliates were separate legal entities, not departments of one company. Transactions for consideration between them—including rentals of tangible…
How did South Carolina update its April 17, 2007 filing relief to cover the storm, Virginia Tech, and Intuit e-filing problems (per SC IL #07-10)?
SC Information Letter #07-10 updates the Department's relief for returns originally due April 17, 2007, expanding on SC Information Letter #07-9. It reflects that the IRS extended the April 16, 2007 N…
Did South Carolina extend the April 17, 2007 tax deadline for people affected by the April 16 Northeast storm or the Virginia Tech shooting (per SC IL #07-9)?
Yes. SC Information Letter #07-9 announces that the South Carolina Department of Revenue will provide the same filing and payment relief the IRS granted for returns originally due April 17, 2007, to t…
What Virginia income tax filing and payment relief was available to people affected by the April 2007 Virginia Tech tragedy?
Affected victims, families, emergency responders, Virginia Tech students, and employees received until November 1, 2007 to file and pay 2006 Virginia individual income tax otherwise due May 1, includi…
Can Tennessee limited partnerships that received federal low-income housing credits in 1987-1989, before an extended low-income housing commitment was federally required, still claim Tennessee's affordable-housing franchise and excise tax exemption without one?
No. Tennessee's affordable-housing franchise and excise tax exemption requires an extended low-income housing commitment under IRC § 42(h)(6)(B) to be in effect, and lacking one — even because it wasn…
Are enrollment fees for a private airport 'Registered Traveler' expedited-security program subject to New York sales tax?
No. Enrollment fees for a TSA-authorized Registered Traveler expedited security-screening program are not a taxable sale of tangible personal property or any enumerated taxable service, though the com…
Does Nebraska sales tax apply to the deductible a vehicle owner pays under a maintenance agreement or extended warranty?
No. Revenue Ruling 01-07-1 concludes that a deductible amount a motor vehicle owner is required to pay under a vehicle maintenance agreement or extended warranty contract is not subject to Nebraska sa…
Can the individual members of a religious or apostolic organization exempt under IRC section 501(d) claim a pass-through share of the organization's New York investment tax credits and other tax incentives?
No. Even though a section 501(d) organization files a federal partnership return (Form 1065) to report its common-treasury income, it remains a corporation, not a partnership, and Tax Law section 607(…
When a deceased parent's IRA is split equally between two beneficiaries, does each beneficiary get the full $20,000 pension and annuity income exclusion, or must they share a single $20,000 amount?
They must share it. Under 20 NYCRR 112.3(c)(2)(iv), the decedent's $20,000 annual pension and annuity exclusion is allocated among multiple IRA beneficiaries in the same ratio as the distribution is s…
Will adding another party - Queens West Development Corporation (QWDC) - to a brownfield cleanup agreement and Certificate of Completion jeopardize the brownfield tax credits otherwise allowable to the original petitioners under Tax Law sections 21, 22, and 23?
No. The Department ruled that adding QWDC to the brownfield cleanup agreements and Certificates of Completion for the sites does not jeopardize the Petitioners' own brownfield redevelopment, real prop…
Is the sale of a video delivered electronically over the Internet subject to New York sales or use tax?
No. Videos delivered electronically for download, like electronically delivered music and photographs, are treated as intangible property and are not subject to New York sales or compensating use tax,…
To obtain property tax and other benefits under New York's Cultural Resources Act, I plan to convey one condominium unit of my building (currently leased to a public TV station) to the Trust for Cultural Resources of the City of New York for just $10, subject to my existing mortgages -- then immediately lease it back from the Trust for $10/year for up to 4 years, after which title automatically reverts to me. I'll stay liable for all the mortgage debt and expenses, and remain the beneficial owner for tax purposes the whole time. Do these title conveyance, leaseback, and reversion steps trigger New York's Real Estate Transfer Tax?
All three steps -- the Title Conveyance, the Leaseback, and the Reversion -- are exempt from RETT. The owner of a Manhattan office building planned to create a condominium with two units: one covering…
Did the Department's failure to answer Margaret Palumbo's letter stop penalty and interest on her unpaid 2002 personal income tax?
No. The negligence penalty had already reached its statutory 10% maximum in September 2003, two years before Margaret Palumbo wrote the Department, so no penalty accrued after her letter. Interest rem…
Were shareholder distributions taxable rent when a related business occupied real property without a written lease?
Yes, on these facts. A landlord-tenant relationship existed because one entity occupied property owned by another, even without a written lease. Distributions routed through the owners were rental con…
Did the daily-commuter exception eliminate Virginia filing when a worker moved into Virginia and established an abode during the same year?
No. The taxpayer qualified as an out-of-state commuter only before she established a Virginia abode. Her November 1 move and continued residence showed Virginia domicile for the rest of 2003, so she c…
Who owed Virginia communications sales tax on satellite TV and pay-per-view services supplied to hotels and their guests?
The service company had to register, charge communications sales tax to the hotel, and calculate tax on what the hotel remitted after its commission. Satellite TV and pay-per-view movies, music, and g…
Under Virginia's 2007 guidance, could a retailer advertise that it would pay, absorb, or discount an amount tied to the customer's sales tax?
Generally no. Virginia treated both direct promises to pay the customer's sales tax and discounts advertised as equal to the tax as prohibited absorption advertising, potentially a Class 2 misdemeanor…
Could Virginia reconstruct a government contractor's sales and use tax from a prior audit when the contractor lacked records for the current period?
Yes. With inadequate current records, Virginia could use the prior audit as the best available information. Unsupported claims about underground-phone-line contracts did not justify revision, but mixe…
Was a corporate general manager personally liable for unpaid Virginia withholding tax when he knew of the failure and could sign company checks?
Yes. Evidence showed that the general manager ran day-to-day operations, signed payroll and Virginia withholding checks, knew the returns and tax were unpaid, and had authority over bank disbursements…
How can taxpayers find South Carolina advisory opinions by subject (per SC IL #07-8)?
Use the index attached to SC Information Letter #07-8 to find South Carolina advisory opinions. It indexes the advisory opinions issued by the Department from 1987 to March 31, 2007, and it explains t…
How can taxpayers check whether an older South Carolina advisory opinion was modified or superseded (per SC IL #07-7)?
Use the citator attached to SC Information Letter #07-7. It helps you determine what effect newer South Carolina advisory opinions have on previously published ones — whether an opinion was modified, …
Does a company that retrieves and delivers a patient's confidential medical records to insurers, attorneys, or the patient have to charge New York sales tax on its fee?
No. Retrieving and delivering an identified patient's own confidential medical records is not a taxable sale of tangible personal property or a taxable information service, but a separately stated cha…
How did Virginia's 2007 guidance allocate its earned income tax credit when spouses filed separate Virginia returns?
Each spouse could claim only a proportional share of the Virginia EITC, based on that spouse's share of the earned income used to qualify for the federal credit. The combined Virginia credit was 20% o…
Does converting interior warehouse space with new walls, flooring, and a ceiling qualify as exempt 'original construction' labor in Kansas?
Taxable. Finishing a 50,000-square-foot interior warehouse space with new walls, flooring, and a ceiling to convert it to a different use does not qualify as the 'original construction' of a building,…
Can an employer claim Georgia's child care tax credits for 2006 when its child care facility was fully built in 2006 but not licensed and operating until January 2007?
No. Georgia's employer child care tax credits under O.C.G.A. § 48-7-40.6 -- both the cost-of-operation credit and the qualified-child-care-property credit -- require the facility to be licensed and op…
Were a county's charges to private users and vendors for firing-range space subject to Florida sales tax?
Yes. The county's agreement granted private users a license to occupy and use the firing-range property, and vendor-space charges were also licenses to use real property. The governmental-purchase exe…
Did a Virginia country club have to charge sales tax on dyed diesel sold to members for pleasure boats?
Yes. The club could buy the fuel exempt for resale, but it had to collect and remit 5% retail sales tax when selling dyed diesel to members for pleasure watercraft. Because that use was exempt from Vi…
Were restaurant rent payments at a municipally owned beach exempt as a food concession at a public recreational facility?
Yes. Florida treated the municipal beach as a publicly owned recreational facility and the restaurant lessee as a food-and-drink concessionaire, so base and percentage rent were not taxable. The opera…
Did a registered out-of-state drop shipper have to collect Florida tax from an out-of-state dealer when goods went by common carrier to Florida?
No, under the stated three-party facts. Both the vendor and purchasing dealer were outside Florida, the goods were outside Florida when sold, and a common carrier delivered them to the dealer's Florid…
Does a corporate group that owns home-care-organization subsidiaries and is affiliated with one hospital qualify as a Tennessee 'hospital company' entitled to combined-return franchise and excise tax credits?
No. A corporate group whose subsidiaries are licensed only as home care organizations, and which is affiliated with just one hospital, does not qualify as a Tennessee 'hospital company' for franchise …
Was an auto dealer's combined environmental-disposal and shop-supply charge taxable when it actually represented only shop supplies?
No, on the verified facts. Virginia abated the assessment because the combined invoice label actually represented only nontaxable shop-supply charges, not an environmental disposal fee. Dealers must p…
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