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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Was additional Florida documentary stamp tax or surtax due when a reverse-1031 accommodator deeded replacement property to the exchanger?
No. The exchange agreement established that the accommodator acquired and held the replacement property as the exchanger's agent and for the exchanger's benefit. Because applicable deed, mortgage, and…
Were equipment leases between sister corporations exempt as intracompany transfers for Virginia sales and use tax?
No. Virginia treated affiliated corporations as separate legal entities, so equipment rentals for consideration between sister companies were taxable leases rather than exempt intracompany transfers. …
What did the Fairfax County Circuit Court order in Intersections Inc.'s tax case against Virginia?
The court set aside as contrary to law the tax assessed on license fees Intersections paid to DMS from April 1999 through December 2001. It ordered Virginia to refund $222,848.74 plus statutory intere…
How does an estate or trust recompute the 2006 federal credit for prior year minimum tax to figure the Nebraska minimum tax credit on Form 1041N?
Revenue Ruling 23-06-2 directs that the federal credit for prior year minimum tax on an estate's or trust's 2006 return (Federal Form 8801) must be recalculated for Nebraska to determine the Nebraska …
How does an estate or trust recompute the 2006 federal alternative minimum tax to figure the Nebraska minimum tax on Form 1041N?
Revenue Ruling 23-06-1 directs that the alternative minimum tax (AMT) figured on an estate's or trust's 2006 U.S. Fiduciary Income Tax Return (Federal Form 1041, Schedule I) must be recalculated for N…
Did a manufacturer's stock sale restart local machinery-and-tools depreciation, and how should an accepted reappraisal affect value?
No. A stock sale changed shareholders but did not transfer the manufacturer's machinery, so the assets kept their original acquisition ages. After the county accepted an outside appraisal, adjusted or…
How do you recompute the 2006 federal credit for prior year minimum tax to figure the Nebraska minimum tax credit on Form 1040N?
Revenue Ruling 22-06-2 directs that the federal credit for prior year minimum tax figured on a taxpayer's 2006 federal return (Federal Form 8801) must be recalculated for Nebraska to determine the Neb…
How do you recompute the 2006 federal alternative minimum tax to figure the Nebraska minimum tax on the Form 1040N?
Revenue Ruling 22-06-1 directs that the alternative minimum tax (AMT) figured on a taxpayer's 2006 federal return (Form 6251, or the AMT worksheet in the Form 1040A instructions) must be recalculated …
What did Virginia's 2007 appraisal guidelines require for Land Preservation Tax Credit donations?
For donations made on or after January 1, 2007, the credit application had to include a qualified appraisal by a Virginia-licensed qualified appraiser and the statutory appraiser affidavit. The guidel…
Could taxpayers use transferred Virginia land-preservation credits from a land donation made in 2000?
No. The transfer statute applied only to qualified donations made in tax years beginning on or after January 1, 2002. Limited 2005 relief for earlier donations also failed because the donors could not…
Can a corporation include the gross proceeds from redeeming short-term investment securities in its Kansas apportionment sales factor?
No -- the assessment was upheld. The Department excluded a corporation's gross investment proceeds (the return of principal from redeeming and rolling over short-term treasury securities) from the den…
Which exemptions apply to South Carolina's local sales and use taxes collected by the Department (per SC IL #07-1)?
SC Information Letter #07-1 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…
Are a shopping mall landlord's unmetered electricity reimbursement, trash-removal, and CAM charges to tenants subject to New York sales tax?
No for all three: a landlord's fixed, unmetered monthly electricity reimbursement is part of the rent (not a taxable utility sale) because it isn't tied to actual usage, and flat trash-removal and CAM…
Do a railroad-debris salvage company's sorting equipment, rock crusher, tie-assembly operation, and highway trucks qualify for New York's production-machinery sales tax exemption?
It depends on the equipment and activity: merely sorting and segregating usable from unusable salvaged railroad ties and scrap steel is NOT exempt production, but assembling new railroad ties for sale…
Are a freelance fashion stylist's services and the clothing/props they provide for photo shoots subject to New York sales tax?
A fashion stylist's coordinating and styling services aren't taxable, but clothing, accessories, and props that are actually transferred (sold) to the client are taxable tangible personal property, an…
Is a graphic design studio's charge for a client's final logo or branding design subject to New York sales tax when it's delivered electronically versus on a disk?
Design charges are not taxable when the final design (logo, branding, artwork) is delivered to the client purely electronically, since that's a sale of intangible property, but the same design deliver…
If a New York State employee directly transfers funds from a New York State-sponsored IRC 403(b) plan to a different 403(b) plan, are the retirement benefits later received from that second plan still exempt from New York personal income tax?
Yes, if New York State actually contributed to the original 403(b) plan - the direct plan-to-plan transfer is not a taxable distribution, so the transferred funds and their earnings keep their exempt …
Is a non-U.S. fund whose only activity is buying and holding life-settlement policies - some originally owned by New York residents - subject to New York's insurance tax or general business franchise tax?
No. A non-U.S. fund whose sole activity is buying and holding traded life-insurance (life-settlement) policies is not 'doing an insurance business,' so it is not an insurance corporation under Article…
What did Virginia's 2006 reciprocal income-tax agreement with Maryland cover and exclude?
Virginia residents working in Maryland were exempt from Maryland tax on compensation, and Maryland residents working in Virginia received the matching Virginia exemption. The agreement treated a perso…
What Kansas E-85 tax rate applied beginning January 1, 2007, and how did Form MF-35 change for nonhighway-use refunds?
Kansas reduced the motor-vehicle fuel tax on E-85 to $0.17 per gallon effective January 1, 2007 under Senate Bill 544. The Department revised Form MF-35, Claim for Refund of Motor-Vehicle/Special Fuel…
Were single-use postoperative pain pumps purchased by a physician or clinic exempt from Florida sales tax?
Yes, when the licensed physician dispensed the single-use prescription-labeled pump to the patient, who wore it home and discarded it after use. A reusable pump remained taxable to the healthcare prov…
What timing, rematching, and valuation rules apply when a Texas rental company uses retired vehicles for fair market value deductions?
The retired vehicle had to leave service before the replacement purchase and no more than 18 months earlier. The company could rematch eligible deductions with records, but had to keep the same book v…
Were reservation, condominium-application, and optional golf-transfer fees taxable as transient-accommodation rent?
No, as transient-accommodation rental charges on the stated facts. The reservation and condominium fees paid for application processing and were never credited against rent. The golf transfer fee was …
Under RR 06-12, which pass-through income qualified for South Carolina's reduced active-business income-tax rate?
Eligible individuals, estates, and trusts could elect the phased reduced rate for South Carolina active trade or business income from a sole proprietorship, partnership, S corporation, or qualifying L…
What Virginia tax underpayment and refund interest rates applied during the first quarter of 2007?
Virginia's January 1-March 31, 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 p…
Are reinvested mutual-fund dividends and capital-gain distributions taxable when the investor later sells the fund shares at a loss?
Yes. Manuel Vigil had to report the dividend and capital-gain distributions shown on his 2002 Form 1099 even though he directed Charles Schwab to reinvest them and later sold his mutual-fund shares at…
Was documentary stamp tax based only on the mortgage when encumbered property moved to an LLC owned by the transferor's trust?
Yes. The transfer produced no change in beneficial ownership because the LLC's sole member was the transferor's revocable trust and the transferor was its sole lifetime beneficiary. The property's fai…
Can a parent company file one combined sales and use tax return covering both itself and its wholly-owned single-member LLC leasing subsidiary, instead of the subsidiary registering and filing separately?
Yes. Because Subsidiary is a disregarded single-member LLC, the Department will treat it as a division of Parent for sales and use tax purposes -- Parent may register and pay tax owed by Subsidiary on…
Is a sale of protective safety leggings to a meat-packing company exempt under Kansas's integrated plant (manufacturing) exemption?
Yes. The sale of safety leggings to a meat-packing company is exempt under the integrated machinery and equipment (integrated plant) exemption, K.S.A. 79-3606(kk). Although K.S.A. 79-3606(kk)(5)(J) ta…
Can a central-station alarm company buy the burglar and fire alarm equipment it installs at customer sites exempt from sales tax as a purchase for resale?
Only if the alarm equipment remains fully functional on its own (usable as a stand-alone local alarm or with another provider's monitoring) and Petitioner genuinely rents it to the customer at a reaso…
Could a corporate group stop filing Florida consolidated returns after substantial growth, acquisition, and business-model changes?
Yes, conditionally. Florida found the group's substantial growth, acquisition, expanded lines of business, and changed business model were changes in circumstances sufficient to permit separate return…
Was the electricity portion of shopping-center CAM charges exempt when a year-end reconciliation identified the tenant's share?
Yes, for the electricity portion passed through without markup. The lessor paid sales tax to the utility, the year-end reconciliation listed shopping-center electricity and the tenant's pro-rata share…
Were a landlord's bundled after-hours HVAC charges taxable as commercial rent when the utility portion was not separately stated?
Yes. The charges were required additional rent and bundled electricity with other after-hours costs. Although the landlord had paid tax to the utility, its tenant invoices did not separately state the…
What Kansas oil and gas conservation-fee rates took effect December 22, 2006, and how were December reports split?
Effective December 22, 2006, Kansas increased the oil conservation assessment to 91.00 mills per barrel and the gas assessment to 12.90 mills per 1,000 cubic feet (one mcf). December 2006 production t…
Did Florida treat installed Murphy beds as real-property improvements or sales of tangible personal property?
Real-property improvements. The bed mechanism was anchored to the foundation or floor beams and the cabinet was bolted to wall studs for indefinite placement. Under a lump-sum contract, the contractor…
Did legally reprocessing and reselling single-patient Rx devices remain exempt when customers could receive equivalent devices?
Yes. Legally reprocessed devices remained exempt when they were qualifying single-patient prescription products bearing the required federal restriction. The result covered both returning the customer…
Did legally reprocessing and reselling single-patient Rx medical devices eliminate their Florida sales-tax exemption?
No. One-time-use medical devices that were legally reprocessed, remained single-patient prescription devices, and carried the required federal Rx restriction did not lose their exemption when resold. …
Are a document-processing company's charges for scanning surveys and extracting raw data into computer files subject to New York sales tax?
No, as long as the extracted data is delivered electronically -- converting scanned paper surveys into raw electronic data files is a nontaxable format-conversion service, not a taxable information se…
How did Virginia apply sales and use tax to a steel fabricator whose main business was real-property contracting?
Virginia treated the company primarily as a real-property contractor fabricating for its own use, so the manufacturing exemption did not apply and it owed tax on raw materials and taxable third-party …
How did Virginia tax dietary supplements, mixed product packages, shipping-and-handling charges, and distributor renewal fees?
Dietary supplements, vitamins, toothpaste, cream, and the mixed package were taxable at the full then-current rate unless qualifying items were sold by prescription. A combined shipping-and-handling c…
Did Virginia retail sales tax apply when an unrelated travel company sold expiring unused time-share weeks to the public?
No. The travel company did not own or operate resorts, act as their agent, or furnish lodging. Its buyers acquired interests permitting the use of real estate and therefore were not statutory transien…
How should a petroleum marketer's fuel receipts be classified and sitused for Virginia local BPOL tax?
The marketer was a retailer at each station because it owned the fuel until sale to the end user, set prices, and sold through commission merchants. Each station was a definite place of business, and …
Were a leased restaurant's stainless-steel tables, panels, guards, and door window real-property fixtures or taxable business property?
Virginia upheld the county's classification and denied the refund. The restaurant did not plainly show that the disputed stainless-steel items were intended as permanent fixtures. Under the lease, lan…
Could a yacht enter Florida without use tax solely to be offered for sale by a registered Florida broker?
Yes, under strict conditions. The yacht had to be listed with a registered Florida broker, remain under the broker's care, custody, and control, and be used in Florida solely for retail-sale activitie…
When does a deed conveying South Carolina mineral rights trigger the deed recording fee?
A deed conveying mineral rights is subject to the recording fee when the buyer will sever the oil, gas, sand, or other minerals, because the transaction transfers realty. If the seller will sever the …
Could a cabinet manufacturer prorate Florida's boiler-fuel exemption when one gas meter served production and building heat?
No. The manufacturing boiler-fuel exemption required the purchased fuel to be used exclusively in the qualifying production process. Because the same metered natural gas also heated the facility for e…
Was a substantiated Virginia corporate claim-of-right credit treated as a timely payment for penalty and interest?
Yes. After the corporation documented its IRC § 1341 claim-of-right repayment, Virginia treated the claimed amount as a timely payment. The tax assessment had already been abated when the credit was a…
Could interest on tax from a joint return be waived because the couple divorced, the Department gave incorrect refund information, and payment caused hardship?
No. Penny Mitchell and her former husband remained jointly and severally liable for interest on $672 of underreported 2001 New Mexico income tax until final payment. Their divorce did not change liabi…
Is the sale of a house that the buyer plans to relocate subject to Kansas sales tax?
No. Even though the buyer intends to move the house to another location, the Kansas Department of Revenue treats the building as real property at the time of the sale. Because a sale of real property …
Who had to file and pay Kansas estate tax under the stand-alone law for deaths in 2007 through 2009?
For decedents dying in 2007, 2008, or 2009, Kansas's stand-alone estate-tax law required a return only when the gross estate exceeded $1 million; an estate at or below that threshold was not subject t…
How is New York source income determined for guaranteed payments a nonresident law firm partner receives, when he personally works only from an out-of-state office and serves mostly out-of-state clients?
Guaranteed payments to a nonresident partner are treated as a distributive share of partnership income, not personal compensation, so New York sourcing follows the partnership's own books and records …
When a partner's interest in a partnership is reduced after brownfield property is placed in service but within the same partnership tax year, which ownership percentage governs the partner's share of the brownfield redevelopment tax credit?
The partner's ownership percentage on the date the qualified tangible property is placed in service controls, even if that percentage is later reduced within the same partnership taxable year. Under I…
Can a corporation elect to treat its Eurodollar deposits, other time deposits, and Yankee certificates of deposit as investment capital, apportioned by its investment allocation percentage?
Yes. Eurodollar deposits, other time deposits, and Yankee CDs maturing within six months and one day are debt instruments treated as cash on hand or on deposit. Because the corporation also holds long…
As part of the Brooklyn Bridge Park redevelopment, I own land I'll sell to the park's development subsidiary for $1.00, then lease back for up to 99 years to build a mixed-use condo project, with an option to buy the fee back for $1.00 when the lease ends. I've agreed to pay any transfer taxes that ARE due. Is this $1-sale/leaseback/$1-repurchase structure a taxable RETT conveyance, or does it qualify as debt-security financing?
Exempt as a whole -- but ONLY conditionally, and several add-on transactions ARE independently taxable. A Brooklyn landowner planned to sell its property to the Brooklyn Bridge Park Development Corpor…
Does an out-of-state company selling product service contracts through in-state retailers, web referrals, or direct mail have enough nexus with New York to have to collect sales tax?
Yes, in all three sales scenarios described -- because New York retailers act as Company's designated repair centers performing warranty repairs on its behalf, that in-state activity by a representati…
Can a trash-hauling company buy its trash containers tax-exempt as purchases for resale when it separately bills customers for container rental and trash removal?
Only if the container rental is a genuinely separate transaction from the trash removal service -- meaning customers can rent a container without buying removal service and vice versa, the price is re…
What did Virginia's 2006 guidelines require for a timely and complete administrative appeal of a Department tax assessment?
A taxpayer had to file a complete appeal within 90 calendar days after the assessment date; a notice of intent, phone call, meeting, or bare conference request did not preserve or extend the deadline.…
Was piano tuning a taxable repair service under Louisiana sales and use tax law?
Yes. Tuning restored the piano to proper pitch, temperament, and intended sound, so it was a taxable repair rather than a mere enhancement. No part had to be replaced. The tuner collected tax on the f…
Did a city's direct-purchase procedures make construction materials exempt for a public-works project?
Yes, once the agreement and incorporated procedures were fully executed. The city issued purchase orders with its exemption information, received direct invoices, paid vendors, retained title, and car…
Could a caregiver deduct receipts for services resold by an agency without obtaining the required nontaxable transaction certificate within 60 days?
No. Karen Houser's caregiving services were subject to gross receipts tax even though Angels of Assistance resold the services and paid tax on its own receipts. The agency and Houser were separate tax…
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