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 did RR 06-9 historically tax sales and renewals of warranty, maintenance, and similar service contracts?
For transactions from October 1, 2005 until the rule changed in 2011, retail sales and renewals of contracts covering tangible personal property were generally taxable, whether sold with the property,…
Which communication and online services did South Carolina treat as taxable transmissions under RR 06-8?
RR 06-8 treated charges for access to or use of systems transmitting voice or messages as taxable, including many telephone, programming, fax, voicemail, email, and individual-website or database serv…
Is recording a deed that conveys a South Carolina easement or right of way subject to the deed recording fee?
Yes. Recording a deed that transfers an easement or right of way to another person is subject to South Carolina's deed recording fee unless a statutory exemption applies. The fee is based on the value…
Could the taxpayer claim South Carolina textile-mill revitalization income-tax credits when redevelopment required demolition?
Yes, on the taxpayer's stated facts and if every statutory requirement was met. Demolishing the deteriorated primary building did not prevent the abandoned textile site from qualifying for the income-…
Were movable floating docks tangible personal property, and could a marina buy them exempt as property held exclusively for lease?
The docks were tangible personal property, but their purchase was taxable. They were movable, anchored to removable concrete blocks, and connected by flexible wiring and plumbing. The marina licensed …
How does Kansas sales and use tax apply to an electric-sign fabricator's sales, set-up, construction, and repair charges?
A custom sign maker is treated as a fabricator and retailer. It buys sign materials for resale and collects Kansas sales (or retailers' use) tax on the full price billed for the sign, including delive…
Were early-termination charges on taxable communications-service contracts subject to Florida communications services tax?
Yes. Florida's definition of communications-services sales price expressly included charges for terminating service. The provider's fee—calculated from a fixed amount times the months remaining on the…
Was the taxpayer's early termination fee for a discounted taxable communication service subject to South Carolina sales and use tax?
Yes. The taxpayer's early termination charge was taxable because it was consideration tied to the taxable communication service and formed part of the service's gross proceeds or sales price. The fee …
How did Louisiana treat property and sales connected with a Louisiana foreign trade zone in the corporation income- and franchise-tax ratios?
Income tax treated all corporeal movable property physically in the zone as outside Louisiana; franchise tax did so only for property imported from outside the United States. Sales delivered into the …
How did Virginia's original 2007 communications-tax guidelines replace and administer the prior state and local tax structure?
Beginning January 1, 2007, Virginia replaced several state and local communications levies with a centrally administered 5% communications sales tax, a $0.75 landline E-911 tax, and a cable rights-of-…
We're the Port Authority, redeveloping the World Trade Center site after 9/11. Private lessees will borrow from outside lenders to fund redevelopment costs, and we'll be named mortgagee (alone or with the lenders) on their leasehold financing before assigning our interest to the actual lenders. Is that mortgage -- and its later assignments, splits, and modifications over the years -- exempt from mortgage recording tax?
Exempt for Port Authority-named mortgages; later increases in debt remain taxable. The Port Authority of New York and New Jersey -- created by a 1921 interstate Compact and long recognized as a govern…
Did a reverse-1031 mortgage assumption owe additional documentary stamp or nonrecurring intangible tax after tax was paid at acquisition?
No. Applicable deed, mortgage, note, and intangible taxes had been paid when the accommodator acquired the replacement property. Because the exchange agreement established that the accommodator acted …
Did a recorded collateral assignment of a note and mortgage owe documentary stamp and nonrecurring intangible tax?
Documentary stamp tax was due, but nonrecurring intangible tax was not. A mortgage assignment given as collateral for the new $12 million loan was treated as a new mortgage when recorded. The new note…
Was deed tax due when an estate transferred unencumbered property to an LLC owned equally by the will's seven beneficiaries?
No. The will gave seven children equal shares of the estate, and the personal representative transferred the unencumbered property to an LLC whose only members were those same seven beneficiaries in e…
Were bamboo plants exempt from Florida sales tax when customers intended to grow edible shoots?
Yes, when the buyer intended to use the bamboo to produce food for human consumption and gave the seller a signed exemption statement. The same plants were taxable as ornamental nursery stock when pur…
Was a semi-permanently installed mooring ball a real-property improvement or taxable tangible personal property?
Taxable tangible personal property. The mooring ball was described as semi-permanent and was not connected to or a continuation of dry land, so it did not qualify as a permanently attached real-proper…
Could Kansas distributors and retailers recover the tax difference on E-85 inventory held when the rate fell on January 1, 2007?
Yes. When Kansas reduced the E-85 motor-fuel tax from $0.24 to $0.17 per gallon on January 1, 2007, it allowed a $0.07-per-gallon credit or refund for E-85 inventory on hand that day on which the $0.2…
Could an independent medical provider recover gross receipts tax because the clinic also billed patients and paid tax, but gave her no NTTC?
No. Carole Ann Kirby was independently engaged in business when she provided medical services to a clinic for a commission, so her receipts were taxable even though the clinic separately billed patien…
Did a federal support contractor owe Virginia use tax on property delivered directly to an Army warehouse?
Yes. The task order's true object was engineering, technical, and analytical support, so the contractor was the taxable consumer of property furnished with those services. Direct delivery to an Army w…
Could a late-filed 2000 Virginia overpayment be credited against an outstanding 1999 income-tax assessment?
No. The taxpayer filed the original 2000 return after the three-year refund period expired, so Virginia could not refund or credit that overpayment against 1999. The 2001 overpayment was timely and wa…
Could a Virginia medical practice buy IUDs and pessaries in bulk without sales or use tax?
No. Virginia treated IUDs and pessaries as medical devices rather than medicines or drugs. The practice bought them in bulk, held them in stock, and did not show that they were purchased by or on beha…
Could an industrial-gas seller accept a resale certificate obtained during audit for bulk oxygen sold to a home-healthcare facility?
No. The resale certificate was obtained only after audit began, so it lacked ordinary good-faith protection and required strict validation. Virginia treated the home-healthcare facility as a service p…
Was a water-deionization company's BPOL business wholesale sales, contracting, or a business service?
Virginia classified the deionization operation as a business service. Customers bought the water-purification process, not merely chemicals, tanks, or parts. Chemical sales, tank rentals, maintenance,…
Did a couple abandon Virginia domicile by living and working abroad under a series of employment contracts?
No. Virginia found the couple had established domicile in Virginia and failed to prove abandonment while abroad. They kept a Virginia home, driver's licenses, vehicle registrations, adult children at …
Could an acquired Florida consolidated group stop consolidated filing after joining an unrelated buyer's affiliated group?
Yes, conditionally. An unrelated company acquired the parent, the original affiliated group ceased to exist, and the acquired companies joined the buyer's group, which did not file Florida consolidate…
Were eight attraction photography agreements taxable real-property licenses or nontaxable management arrangements?
Six of the eight agreements were taxable licenses to use real property. One theater-event concession qualified for the percentage-of-sales exception, and one agreement was a true nontaxable management…
Did government exemptions protect cable and installation materials a contractor permanently installed in public buildings?
No. Virginia treated the contractor as the taxable consumer of cable, conduit, raceways, boxes, supports, and related materials installed as permanent parts of school and federal buildings. The resale…
Was a subsidiary's capital gain from selling stock included in the Virginia numerator of its 1999 sales factor?
Yes. Virginia found that the subsidiary's income-producing activity for the stock-sale gain occurred in Virginia: its day-to-day and affiliate-management work was performed at its Virginia office, all…
Could a nonprofit church treat sales at its annual three-week fundraiser as exempt occasional sales?
No. Virginia ruled that three weeks of selling pumpkins, baked goods, and handicrafts was extensive enough in number, scope, and character to constitute a retail activity. The church had to remain reg…
Did Virginia finally uphold fraud, amnesty, and older-period assessments based on an automotive-parts retailer's underreported sales?
Not finally. The audit record showed sales reported at 50% of actual sales, which supported fraud penalties and a six-year review, but the taxpayer submitted different receipt figures on appeal. Virgi…
Could a company remove an infrequent maintenance-agreement sale from an audit sample and waive compliance and amnesty penalties?
No. Virginia found that maintenance agreements were part of the company's normal business even if infrequent, so the sampled sale remained in the projection. A customer-tax credit prevented double tax…
Were a paper mill's cleaning chemical, jam-clearing winch, and valve-work invoice exempt as direct manufacturing purchases?
No. Virginia treated the biocide as taxable maintenance because it cleaned the formers, and the separate winch as taxable because it only intermittently cleared jams rather than operating directly in …
Could a group stop filing Florida consolidated returns after exiting most former business lines and reshaping its operations?
Yes, conditionally. Florida found the group's extensive divestitures, exits from major lines, acquisitions, international expansion, and concentration in its remaining core business were changes in ci…
Under Florida's 2006 physical-presence analysis, did hiring Florida printers for drop shipments create sales-tax nexus?
No, under the ruling's 2006 facts and legal framework. The out-of-state seller had no Florida office, staff, representatives, or other property beyond goods being printed, and Florida law said a print…
Did an out-of-state hotel-reservation intermediary have to collect Virginia sales tax on its retained guest-service fee?
No, on the stated 2006 facts. The property owner provided the room and collected tax on the rental amount, while the out-of-state company only arranged reservations and payments. Because the company h…
Can a charitable nonprofit that provides paramedic services (but doesn't transport patients) get New York's motor fuel, petroleum business, and sales taxes refunded on the fuel for its response vehicles?
Only partly — it can recover the sales tax but not the motor fuel or petroleum business tax. Greene County Emergency Medical Services is a 501(c)(3) charity exempt under Tax Law § 1116(a)(4), but it i…
Is New York sales or use tax due on an art collector's overseas-delivered artwork, its bequest to his children, transferred company shares, or a nonresident's artwork brought into New York upon relocating?
No New York sales or use tax is due in any of these situations: artwork delivered and titled outside New York escapes sales tax under the destination rule, an estate's no-consideration bequest of artw…
Is cable sold to a wind farm developer exempt from New York sales tax as production machinery, or taxable as a contractor purchase?
Taxable. Because production of electricity ends at the generator, cable that carries the electricity from wind turbines to a substation is used in distribution rather than production, so it doesn't qu…
In a long-term car lease where the dealer sells and assigns the lease to a leasing company, who is responsible for collecting New York sales tax -- the dealer or the leasing company?
The motor vehicle dealer is the original lessor and is responsible for collecting and remitting the full upfront sales tax on a long-term vehicle lease at the time of the first lease payment, even tho…
Did retirees remain New Jersey domiciliaries after selling their home, buying their only residence in New Mexico, and planning to return years later?
No. Edward and Rebecca McNair abandoned their New Jersey domicile and established New Mexico domicile when they sold their New Jersey home, bought their only residence in New Mexico, and moved there i…
Did a couple abandon Virginia domicile before realizing a 2002 gain even though they kept Virginia businesses and later returned?
Yes. Virginia found that the couple changed domicile to State A by August 15, 2002. They bought and renovated a home there, moved in, obtained State A driver's licenses, registered to vote, and listed…
Could a bingo-supply seller use exemption certificates obtained during or after audit to remove untaxed nonprofit sales?
Only in part. Virginia removed sales to five organizations after validating the additional documentation. It kept three other customer groups taxable because their late Form ST-13 certificates did not…
Could a seller remove untaxed sales from its audit sample because the customer later paid use tax in its own audit?
No. The customer's later use-tax payment did not cure the seller's failure to collect sales tax or justify removing the sales from the seller's compliance sample. The auditor credited the customer's p…
Was the full capitalized cost of a contractor-refurbished production machine subject to Virginia use tax?
No. Virginia abated the assessment in full because the outside contractor performed the refurbishment and most capitalized costs were exempt replacement parts and associated labor, freight, separately…
How does Louisiana's Motion Picture Investor Tax Credit work — who can earn it, can it be transferred and sold, and how is it applied to a tax bill?
It answers common questions about the film Investor Tax Credit under La. R.S. 47:6007: any investor that is not itself a production company (even a tax-exempt one) can earn it, the credit is freely tr…
Do computer hardware, software, and telecommunications systems installed during a corporate headquarters relocation/expansion count toward Tennessee's $50 million qualified headquarters facility sales and use tax credit?
Yes. Computer hardware, software, and telecommunications systems installed at a qualifying headquarters facility during the investment period count as "qualified tangible personal property" (equipment…
Did a multi-program design college qualify as an entity primarily teaching qualified motion-picture production services?
No. The school met the fixed-Florida-location, Chapter 1005 license, and 500-student requirements, but its broad programs in graphics, marketing, fashion, interiors, multimedia, and game design were n…
How did Florida's $5,000 surtax limitation apply to bulk building-product orders shipped on one or several invoices?
A complete bulk order shipped and billed on one invoice received one $5,000 surtax limitation for the invoice. A purchase order filled through partial shipments failed the single-sale test when it lac…
What transactions were covered by South Carolina's one-time Thanksgiving sales-tax holiday on November 24–25, 2006?
For 48 hours on November 24–25, 2006, South Carolina suspended state sales, use, and casual excise taxes on otherwise taxable events, except accommodations and additional guest charges. The holiday al…
Did Louisiana grant military and support personnel the same individual income-tax deadline relief that the IRS granted for combat-zone service?
Yes. For tax years beginning on or after January 1, 2001, qualifying federal combat-zone relief also extended Louisiana filing, payment, collection, and assessment deadlines.
Which foods qualified for South Carolina's reduced 3% state sales-tax rate beginning October 1, 2006?
Unprepared food that could lawfully be purchased with USDA food benefits qualified for the historical 3% state rate, whether or not benefits were actually used and whether or not the retailer accepted…
Can a restaurant company deduct, for Tennessee franchise and excise tax purposes, the royalty payments it makes to its own wholly-owned trademark-holding subsidiary?
Yes, the Taxpayer may deduct the royalty payments it makes to its affiliated trademark-holding subsidiary as ordinary business expenses, provided that all outstanding loans from the subsidiary to the …
Does a family-owned Tennessee LLC that licenses intellectual property, but also provides active services to its licensees, qualify for the franchise and excise tax exemption for family-owned entities earning passive investment income?
Not automatically. The Taxpayer is family-owned and can be a qualifying non-corporate entity, but it is exempt from Tennessee franchise and excise tax only if it demonstrates that at least 66.67% of i…
Could varied HVAC parts on one invoice be aggregated for Florida's $5,000 discretionary sales surtax limitation?
Not merely because the invoice exceeded $5,000. Assorted parts were not multiple quantities of one item and were not shown to form one complete or integrated system, so they failed the bulk/working-un…
Does a utility-scale Kansas wind farm qualify for the manufacturing machinery and equipment sales-tax exemption?
Yes, for the generating equipment. A utility-scale turbine wind farm qualifies as a manufacturing plant or facility under K.S.A. 79-3606(kk), so the generators, blades, support towers, the power lines…
Did Louisiana's maritime sales-tax exemption cover fuel, supplies, repairs, and services for drilling ships or barges working in Louisiana waters?
No. Although the statute was expanded to include barges and drilling ships, purchases for mineral exploration, drilling, or production in Louisiana waters did not qualify because the vessels were not …
Were per-procedure patent and technology license fees required to operate an eye-surgery machine subject to Louisiana sales tax?
Yes. The patented technology was inseparable from the surgical machine's intended use, so separately charged license fees were taxable as part of the amount paid for the equipment rights.
How did Louisiana tax temporary portable-toilet rentals, cleaning and sanitation, and separately stated delivery and pickup charges?
The portable-toilet transaction was a taxable rental. Cleaning and sanitation were included in the taxable base even when separately stated, while separately stated delivery and pickup charges were ex…
Which industrial and medical gases sold by a specialty gas distributor — oxygen, acetylene, nitrogen, argon, propane, and mixtures used in welding — are exempt from Tennessee's local sales and use tax as "natural or artificial gas"?
It depends on whether the gas is used as combustible energy fuel: oxygen, acetylene, nitrogen (when used as fuel), and propane used to power equipment are exempt from local sales and use tax, but iner…
Is access to an online business-data platform — where customers build contact lists, send communications, review keyword impressions, and generate reports — subject to Tennessee sales and use tax?
No. Access to the database, including compiling contact lists, sending communications, reviewing keyword-impression data, and generating printed or electronic reports, is a non-taxable information ser…
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