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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Would using a separate affiliated Virginia distribution center create Virginia income-tax or sales-tax nexus for an internet retailer?
Not by itself, under the stated 2007 facts. Virginia found no corporate-income-tax nexus because the retailer had no Virginia property or payroll and its activities remained within P.L. 86-272. It als…
Was a bail bondsman's deed of trust securing the Commonwealth exempt from Virginia recordation tax?
No exemption applied. The deed of trust secured real estate the bail bondsman already owned; it did not convey the property to Virginia. The conveyance exemption in Va. Code § 58.1-811(A)(3) therefore…
Were software royalties and maintenance fees exempt when the vendor said delivery was electronic but its contracts allowed tangible media?
No. Virginia upheld tax on both the software royalties and maintenance revenue because the agreements allowed or did not rule out tangible delivery. To support electronic-only treatment, the invoice, …
Did a customer's direct pay permit shift tax on a mechanical contractor's materials and operated equipment to the customer?
No. Virginia treated the contractor as the user and consumer of materials used in real-property, painting, sandblasting, and other service work. The customer's direct pay permit did not cover the cont…
Could a mechanical contractor avoid Virginia tax on job materials and operated equipment by relying on its customers' direct pay permits?
No. Virginia treated the contractor as the user and consumer of materials used in real-property, painting, sandblasting, and other service contracts, so it owed sales or use tax on those purchases. It…
Did Virginia approve a manufacturer's refund claim for use tax paid on property allegedly covered by the manufacturing exemption?
Not yet. Virginia found the protective refund claim timely, but the manufacturer still had to prove both that it remitted the use tax and that the property qualified for the manufacturing exemption. T…
Was a custom digital film exempt from Virginia use tax when an amusement facility bought it for an attraction?
Yes. Virginia held that the custom digital film qualified for the audiovisual-work exemption because the amusement facility acquired it for commercial exhibition and incorporated it into an attraction…
Did Virginia use tax apply to tools first received and controlled in Virginia before being sent to out-of-state power plants?
Yes. Virginia treated possession and control of the tools in Virginia as the first taxable use, even though the manufacturer later sent them to power plants in other states. Later out-of-state deliver…
Is installing a hard-wired access control security system a tax-exempt capital improvement, or a taxable sale of tangible personal property?
It depends on the component: the credential readers, alarm sensors, and control panel can qualify as an exempt capital improvement if they're permanently affixed and the owner receives full, unremovab…
Did Virginia's communications-tax internal-use exclusion cover administrative support communications bought by a provider and by a separate affiliate?
Only for the provider itself. Communications services used by a communications provider in its retail stores, engineering offices, switching centers, call centers, and corporate support functions qual…
Could a home-infusion pharmacy buy IV medications and other patient products for resale despite providing nursing support?
Yes. Virginia found that patients sought the IV medications and that the company's nursing and support services were incidental, so patient products could be bought for resale. Prescription IV drugs a…
Were a home-infusion pharmacy's IV medications treated as exempt product sales rather than taxable supplies consumed in a service?
Yes. Virginia found that patients sought the IV medications themselves and that the pharmacy's support services were incidental. The pharmacy could buy medications and related products for resale; pre…
Was a multi-pharmacy home-infusion company's true transaction the sale of exempt IV medication rather than a medical service?
Yes. Virginia found that patients sought IV medications and that the company's nursing, dietician, and support services were incidental. The pharmacies could buy patient products for resale, prescript…
Which pallets, shrink-wrap, and printing plates qualified for Virginia's manufacturing exemption at poultry facilities?
Pallets and shrink-wrap applied at the processing plant as the final production step were exempt. The same items used after off-site storage at separate distribution facilities were not manufacturing-…
Could a new New Mexico resident claim a credit for Pennsylvania tax on gain that he allocated entirely outside New Mexico?
No. Clarence Garrett allocated all gain from his pre-move sale of Pennsylvania real estate outside New Mexico, so New Mexico did not tax that gain and no other-state tax credit was available. Using to…
Did Virginia sales tax apply when a hotel guest redeemed loyalty points for a complimentary room or when the hotel received money from the program fund?
No. A hotel did not collect Virginia sales tax when a guest redeemed loyalty points for a complimentary room, and money redistributed from the segregated program fund was not a separate taxable sale. …
Were diagnostic test kits, calibration and control materials, and qualifying research products exempt from Florida sales tax?
Yes, within the ruling's categories. Diagnostic test kits, calibration and control materials, and related chemical compounds used to diagnose human disease were exempt, as were qualifying consumable m…
How did South Carolina tax wireless-system equipment, design, installation, and in-wall cabling under this private letter ruling?
The taxpayer was selling equipment, not primarily improving real property. Antennas, electronics, and related design charges were taxable; reasonable separately stated installation labor was not. Sepa…
Does a commercial landlord have to charge sales tax when it resells submetered electricity to tenants, and are its CAM and trash-removal charges also taxable?
Yes for electricity resold to tenants through submeters (the landlord must register as a vendor and collect tax) and for the related meter-reading fee, but no for CAM charges billed as additional rent…
In a New York combined franchise tax report, does the federal IRC section 382 limitation and the SRLY-overlap rule of Treasury Regulation 1.1502-21(g) apply when computing the net operating loss deduction?
Yes. In a New York combined Article 9-A report, the net operating loss deduction follows the federal rules: the IRC section 382 limitation and the SRLY-overlap provision of Treasury Regulation 1.1502-…
Is a progesterone topical cream marketed as 'not intended to diagnose, treat, cure, or prevent disease' exempt from New York sales tax as a drug or medicine?
No. Because neither the seller nor the manufacturer claims the cream treats, cures, or prevents any illness or disease -- the manufacturer's own website disclaims that use -- it doesn't qualify as an …
Does a subscription investment-analysis publication qualify for New York's tax exemption for periodicals, in both its hardcopy and electronic versions?
The hardcopy version qualifies as an exempt periodical because it's published quarterly, isn't a book, has continuity of subject and format, and is available to any subscriber, but the electronic vers…
What is South Carolina's tax interest rate for the period July 1, 2006 through June 30, 2007 (per SC IL #07-6)?
8%. SC Information Letter #07-6 sets South Carolina's interest rate on tax underpayments and overpayments at 8% for the period July 1, 2006 through June 30, 2007. Interest is compounded daily, except …
What cigarette-stamp compliance and penalty procedures did Virginia announce in Tax Bulletin 07-3?
The superseded bulletin required licensed agents to stamp cigarettes within one business day, described limited unstamped-sale exemptions, and announced graduated penalties and proof procedures for un…
What Virginia tax underpayment and refund interest rates applied during the second quarter of 2007?
Virginia's April 1-June 30, 2007 rates remained 10% for tax underpayments and assessments and 10% for tax overpayments and refunds. The corresponding federal rates were 8%, and Virginia added two perc…
Were healthcare providers' access, implementation, and training charges for a private communications network taxable under this SC PLR?
Yes, on the stated facts. Monthly access and use charges were taxable communication-service charges, and mandatory implementation and training fees were part of taxable gross proceeds. The charges wer…
Did Virginia sales tax apply when a broker arranged private-home rentals for race fans only two weekends per year?
No, under the stated 2007 facts. The broker did not own or operate the homes, and homeowners renting only for two race weekends made occasional sales rather than regularly furnishing transient lodging…
When a Tennessee motor vehicle dealer separately bills a customer the $5.50 statutory fee for a temporary tag, does the dealer owe Tennessee sales tax or business tax on that charge?
No to both. The $5.50 temporary-tag fee, when separately stated on the customer's invoice and passed through dollar-for-dollar to the state, is treated as payment for the intangible right to operate t…
What did South Carolina's 2007 amendment to Regulation 117-300.6 on retail licenses and partnerships do (per SC IL #07-5)?
SC Information Letter #07-5 announces that the General Assembly approved an amendment to SC Regulation 117-300.6, which concerns 'Retail Licenses and Partnerships,' on February 1, 2007, and that the a…
Are a church's sales of below-cost food through a grocery relief program exempt from Kansas sales tax?
Taxable. The Kansas exemption for below-cost food sold by a 501(c)(3) organization, K.S.A. 79-3606(bbb), applies only when the food recipient is required to perform community service in exchange for t…
Were the submitted line-of-credit agreement, attestation, access check, and control agreement subject to Florida documentary stamp tax?
Not as submitted and unrecorded. None of the four documents contained both an unconditional promise to repay a sum certain and the borrower's signature, and none expressly incorporated another reviewe…
Are monthly fees for web-based discount and service membership clubs subject to Utah sales and use tax?
No, with a carve-out. Monthly membership fees for seven web-based discount and benefit clubs (offering things like third-party discounts, warranty protection, credit monitoring, and travel protections…
When a short-term rental broker's business office is in a different jurisdiction than the homes it rents out, which jurisdiction gets the local option sales tax -- the office's location or the property's location?
The property's location, not the business office's location. When a broker rents out short-term (under 30 days) homes, condos, and cabins located in multiple jurisdictions from a single business offic…
Did Kansas's farm-machinery sales-tax exemption cover ATVs or work-site utility vehicles, and how were interstate sales treated?
ATVs did not qualify for Kansas's farm machinery and equipment exemption, including their parts and repair labor. A defined work-site utility vehicle with a bed or cargo box could qualify — along with…
Can a 48-foot flatbed trailer with Texas token-trailer registration qualify for the interstate motor vehicle tax exemption?
Potentially yes. A token-registered flatbed trailer could qualify if used exclusively with a truck or tractor operating under IRP apportioned registration in interstate service. The claimant had to pr…
Does a bank subsidiary's one-time election to be taxed under Article 9-A instead of Article 32 carry over after it converts from one state's corporation into a Delaware corporation?
No. The bank's one-time section 1452(d) election to be taxed under Article 9-A instead of Article 32 does not carry over to the converted Delaware corporation. Because the conversion creates a new Del…
How did Virginia's move to December 31, 2006 federal conformity affect 2006 income-tax returns?
Virginia conformed to federal tax law as of December 31, 2006 for tax years beginning in 2006, except it still disallowed specified bonus depreciation and five-year carrybacks of 2001 or 2002 net oper…
Which exemptions apply to South Carolina's local sales and use taxes collected by the Department (per SC IL #07-4)?
SC Information Letter #07-4 provides the Department's reference chart showing which exemptions apply to each type of local sales and use tax the Department collects on behalf of counties, school distr…
Does breeding horses for resale qualify for Kansas agricultural sales-tax exemptions, and must the breeder collect tax on horse sales?
Yes, generally. Breeding horses for resale qualifies as agricultural for Kansas sales-tax purposes, so the breeder's purchases of breeding stock and the feed and supplements for that breeding stock ar…
Is a monthly application-service-provider (ASP/SaaS) hosting fee, and its bundled add-on services like database setup, installation, bank reconciliation, and training, subject to Tennessee sales tax — and does the taxpayer owe use tax on the software licenses and hosting services it buys to run the ASP business?
The monthly ASP fee and related standalone services (database setup, bank reconciliation, training) are not subject to Tennessee sales tax as long as they're billed separately, but on-site installatio…
For a vacation/overnight rental property manager, which of its various charges — cleaning fees, forfeited deposits, reservation fees, pet deposits, resold show tickets, pass-through firewood charges, bundled wedding packages, and trip insurance — are subject to Tennessee sales tax?
Most are taxable: forfeited deposits, reservation fees, non-refundable pet deposits, resold show tickets, and pass-through item charges (like firewood) are all subject to sales tax, as is any bundled …
Did a county's contract procedures make construction-material purchases exempt as direct government purchases?
No. Direct payment to suppliers was the only required factor the contract clearly satisfied. It did not establish county-issued purchase orders with the exemption number, direct vendor invoices to the…
Could one related rental company subtract property taxes it reimbursed to the vehicle-owning affiliate from South Carolina rental surcharges?
Yes, on the stated facts. The rental company could reimburse its vehicle-owning affiliate for a documented share of South Carolina property tax and subtract that amount from surcharge remittances. Acr…
Are ride tickets for portable funhouse amusements at a county fair subject to New York's admission-charge sales tax?
No. Ticket sales for portable funhouse amusements at a county fair are not subject to the sales tax on admission charges, because a funhouse is an amusement ride or device rather than a 'place of amus…
Are materials a developer buys to rehabilitate New York City Housing Authority buildings exempt from sales tax if the Authority takes immediate ownership under a long-term lease?
Yes. Materials purchased by a developer, its contractors, or subcontractors that become an integral component part of buildings owned by the New York City Housing Authority (a tax-exempt governmental …
Does a construction-debris recycler's rock-crushing machine qualify for New York's production-machinery sales tax exemption?
The rock crusher can qualify for the production-machinery exemption, but only if the recycler can show that more than 50% of its use processes construction debris into materials that are actually sold…
Are a party-entertainment company's charges for entertainers, equipment rentals, novelty items, and food packages subject to New York sales tax?
It depends on the offering: charges for entertainers alone (clowns, DJs, magicians) aren't taxable, but renting equipment the client operates without staff control is a taxable rental, novelty items a…
Is installing a wood, pellet, or gas burning stove, a zero-clearance fireplace, or manufactured stone veneer a tax-exempt capital improvement in New York?
Generally yes. Installing gas, wood, or pellet burning stoves that require cutting holes, installing chimney flues or liners, or reinforcing floors and walls, along with installing zero-clearance fire…
Is the gain from selling a passive interest in a lower-tier partnership that owns New York real estate treated as New York source income for a nonresident partner?
No. Because Petitioner never used its interest in the lower-tier partnership (589 Associates, LP) in a New York trade or business - it was purely a passive investment, not pledged as collateral or oth…
Could an independent contractor avoid gross receipts tax penalty and interest because she did not know her services to a nonprofit were taxable?
No. Aida Luz Gonzales's lack of knowledge did not excuse gross receipts tax on her independent-contractor services to the Boys and Girls Club. A Type 9 nontaxable transaction certificate covered quali…
How are South Carolina counties ranked for the job tax credit for 2007, and which counties qualify for the fee-in-lieu and tax moratorium (per SC IL #07-3)?
SC Information Letter #07-3 publishes South Carolina's 2007 county rankings for the job tax credit, plus the counties that qualify for a reduced fee-in-lieu investment threshold and for the tax morato…
How did Louisiana's former film investor credit treat demand-note investments, the 25% base credit, 10% resident-payroll bonus, later allocations, transfers, and carryforward?
A qualifying demand note counted at original principal if fully and promptly drawable; otherwise it counted at fair value. Certified investment earned a 25% credit plus 10% for qualifying Louisiana-re…
Which South Carolina county classifications governed 2006 job credits, tax moratoriums, and reduced fee-in-lieu investment under RR 07-1?
The ruling published two historical 2006 job-credit ranking lists based on when a credit was first earned, designated Allendale, Marion, McCormick, and Williamsburg as moratorium counties, and identif…
Does Utah's throwback rule pull a Utah-based credit card issuer's out-of-state customer receipts back into Utah's tax numerator if a sister company has nexus in those states?
No throwback needed, based on the facts represented. A Utah-commercially-domiciled credit card issuer generally sources its credit card interest/fees, interchange fees, and loan interest to each cardh…
How is South Carolina treating Economic Impact Zone credit carryforwards and effective dates after the SCANA litigation (per SC IL #07-2)?
SC Information Letter #07-2 explains the Department's position after a November 14, 2006 Circuit Court order in SCANA Corporation and Subsidiaries v. South Carolina Department of Revenue (Case No. 200…
Was documentary stamp tax due when an individual transferred unencumbered property to an LLC owned by the individual's revocable trust?
No. The property was unencumbered, the LLC's sole member was the individual's revocable trust, and the individual was the trust's sole settlor and lifetime beneficiary. Florida found no change in bene…
For a company that runs on-site photocopy and fax centers under a management-fee contract, which equipment and supplies qualify for the industrial machinery sales tax exemption, and must sales tax be charged on the full contract price?
Partly exempt. Pre-press, press, binding, and stapling machinery used in the copying process can qualify for the industrial machinery exemption (with Commissioner approval), and paper and copier compo…
Could Virginia refund 2000 and 2001 tax paid in error after the statutory refund deadline expired?
No. Even though the Maryland resident's wages were described as exempt from Virginia tax and her preparer had filed incorrectly, the 2000 and 2001 refund claims were outside Va. Code § 58.1-1823. The …
Could a poolside cabana include Virginia sales tax in posted item prices instead of adding it separately?
Yes, by specific permission. Virginia allowed the cabana to include retail sales tax in posted prices beginning May 1, 2007 because ordinary point-of-sale collection was impractical. Signs had to say …
Could a poolside cabana include Virginia sales tax in posted item prices instead of adding it separately?
Yes, by specific permission. Virginia allowed the cabana to include retail sales tax in posted prices beginning May 1, 2007 because ordinary point-of-sale collection was impractical. Signs had to say …
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