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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Is installing a hard-wired emergency home generator a tax-exempt capital improvement in New York?
Generally yes. Installing an emergency home generator that's permanently piped to a gas line, hard-wired into the building's electrical system with a required transfer switch, and mounted on a concret…
Does software that lets customers upload digital graphic files to a printing company's server qualify for Utah's manufacturing equipment sales tax exemption?
No. A digital printing manufacturer bought 'canned' software letting its customers upload graphic files to the company's server for later printing. Because that software only delivers and stores files…
For a credit-card company, how are annual membership fees and merchant discount fees sourced for Texas franchise-tax apportionment?
They are sourced differently. In this internal franchise-tax policy memo to an auditor, the Comptroller treated a credit-card company's annual membership fee as the sale of an intangible right, source…
What Kansas motor-fuel changes in 2006 affected biodiesel incentives, the E-85 tax rate, electronic filing, and storage-tank reimbursements?
Kansas enacted three major motor-fuel changes. Senate Bill 388 created a qualified biodiesel producer incentive of $0.30 per gallon sold, with quarterly claims beginning July 1, 2007. Senate Bill 544 …
Did Dell owe New Mexico tax on computers delivered to residents and catalogs mailed into the state when a contractor performed local repairs?
Yes, in substantial part. Dell Catalog Sales sold property in New Mexico because it retained control and shipping risk until computers reached New Mexico customers. Under the then-governing physical-p…
Could a large monthly CRS taxpayer avoid a penalty for a one-day-late payment because it did not receive personal notice of the special payment rule?
No. Crawford Chevrolet's average monthly CRS payments exceeded $25,000, so Section 7-1-13.1 required its checks to reach the Department one banking day before the statutory due date. Its September 200…
Does a subsidiary's Tennessee net operating loss carryforward survive when it either (1) converts under state law into a single-member LLC wholly owned by its corporate parent, or (2) merges out of existence into a newly formed LLC that later becomes a disregarded entity?
No, in both scenarios. Because the disregarded single-member LLC is treated as a mere division of its actively-operating corporate parent (which has its own income, assets, and net worth, not an empty…
When a government-owned gas utility district sells, installs, and services gas-fired appliances (furnaces, water heaters, ranges, grills, etc.) for customers, which of those transactions are subject to Tennessee sales tax, and does the utility's own government tax exemption cover any of it?
Split result. The utility's own government tax exemption only covers items it installs that become part of the customer's real property — everything it sells that stays tangible personal property afte…
Can a document-management company buy scanners and imaging equipment exempt from Kansas sales tax under the manufacturing exemption?
No. A document-management company must pay sales or use tax on the scanners, microfilm and imaging equipment, film, and chemicals it buys. Ongoing document-management is a nontaxable service, so the c…
When did a manufacturer's cash rebate reduce the taxable price of a new motor vehicle purchased or leased in Kansas?
For a new motor vehicle sold or leased from July 1, 2006 through June 30, 2009, a manufacturer's cash rebate was excluded from Kansas sales and compensating-use tax only when the manufacturer paid it …
Was an unbaked pizza sold by a restaurant for the customer to bake at home exempt from sales tax?
No. Although the pizza was uncooked and intended for the customer to bake at home rather than consume immediately, it was sold in or by a licensed restaurant. Florida strictly construed the food exemp…
Can a contractor with a project exemption certificate buy drill bits, saw blades, and utility-knife blades exempt from Kansas sales tax?
No. A contractor's replaceable drill bits, saw blades, and utility-knife blades are taxable even when they will be used up on a project covered by a project exemption certificate (PEC). Every PEC stat…
What major Kansas tax changes did the Department summarize from the 2006 legislative session?
Kansas's 2006 legislation changed nearly every major tax area. It added or expanded employer, adoption, education-savings, entrepreneurship, law-enforcement, energy, and long-term-care income-tax bene…
Could a Florida consolidated group deconsolidate after acquisition by a new parent without Florida nexus?
Yes, subject to conditions. An acquisition transferred the former parent and subsidiaries to a new parent that had no Florida nexus and could not file the former Florida consolidated return, while onl…
Was a private club's equity-member assessment for Hurricane Wilma capital repairs taxable as an admission?
No. The separately accounted assessment on equity owners funded capital repairs and improvements after Hurricane Wilma, did not grant facility access, reduce dues, or pay operating expenses, and there…
Is a lump-sum distribution from an employer's nonqualified supplemental retirement plan taxable New York source income when it's paid to someone who becomes a nonresident before receiving it?
No, assuming the plan qualifies. Because the SEFCU Nonqualified Plan was maintained solely to provide the petitioner retirement benefits exceeding IRC §§ 401(a)(17) and 415 limits, the lump sum is 're…
Which Local Option Sales and Use Tax revenue rulings did Nebraska declare invalid in Revenue Ruling 09-06-2?
Revenue Ruling 09-06-2 lists two older Local Option Sales and Use Tax revenue rulings that are no longer valid: 9-78-1 (Omaha Contractor's Exclusion) and 9-96-1 (Taxability of Direct-to-Home Satellite…
Are a Nebraska housing agency's purchases exempt from sales and use tax, and how does it claim the exemption?
Yes, mostly. Effective July 1, 2006, Laws 2006 LB 1189 exempts purchases made by a housing agency (as defined in Neb. Rev. Stat. § 71-1575) from Nebraska sales and use tax. The exemption applies to al…
Could insurers claim salary credit for employees of a related corporate managing general agent?
Yes. A managing general agent could be a corporation, so insurers could include its eligible employee salaries in their premium-tax salary credits. The employees had to be located or based in Florida …
When did a work-site utility vehicle qualify for Kansas's farm-machinery sales-tax exemption, and did the exemption cover ATVs?
Effective July 1, 2006, a defined work-site utility vehicle with a bed or cargo box could qualify for Kansas's farm machinery and equipment exemption when used only in listed farming, ranching, aquacu…
Could a county claim fuel-tax refunds for airport shuttle vehicles owned and operated by its contractor?
No. The contractor supplied, owned, operated, maintained, repaired, replaced, and insured the airport shuttle vehicles at its own cost and was paid for providing the service. Whether the county or con…
When were real-estate transfers between commonly owned entities taxable based on consideration?
An unencumbered transfer between identically owned affiliated entities was not taxable when no value was exchanged and the books properly reflected a dividend and capital contribution. A second transf…
How did sales and use tax apply when a contractor manufactured and installed roof trusses and wall panels?
The installed trusses and wall panels were real-property improvements under lump-sum contracts. The contractor did not collect sales tax from the owner; as ultimate consumer, it paid tax on purchased …
Was a one-time sale of computer equipment to an unrelated buyer exempt as an occasional sale?
Yes. The taxpayers did not sell similar equipment as a business, the equipment had never been inventory and was not bought for resale, no disqualifying prior sale was identified, and the assets were s…
When a single-member LLC doing business in Texas is owned by a multi-member LLC with no other Texas contact, which entity owes franchise tax?
The single-member LLC owes the tax; its parent does not. Because Texas bases franchise-tax responsibility on an entity's legal formation rather than its federal treatment, a single-member LLC doing bu…
Does Texas require any special franchise-tax filing or short-period report when a corporation changes its fiscal year end?
No special filing is required. For Texas franchise-tax purposes, a corporation does not need to notify the Comptroller or obtain approval to change its accounting year end, and it does not file any sh…
If an LLC dissolves mid-year, is any of its Texas franchise tax for the full privilege period refunded?
No. An LLC that dissolves must pay all Texas franchise tax through the end of the privilege period that contains the effective date of the dissolution, and no refund is paid or credit given for the pe…
How did Louisiana limit an acquired loss corporation's net operating loss carryover after a corporate ownership change?
Louisiana applied IRC § 382 using the acquired corporation's Louisiana value. Taxpayers could choose among three state-allocation methods, or petition for another method that more accurately reflected…
Does Nebraska local option (city/county) sales tax apply to direct-to-home satellite programming delivered to a business?
No. Revenue Ruling 09-06-1 concludes that direct-to-home satellite programming includes programming transmitted or broadcast directly to a subscriber's business or commercial premises, and Nebraska lo…
Are a web-analytics company's client-specific website statistics untaxed, while its aggregated industry-wide statistics service is taxable?
Yes -- the HBX Web Analytics service, which reports statistics about only a single client's own website and isn't shared with other clients, is an untaxed personal/individual information service, but …
Who owes sales tax at each stage when a modular-home dealer contracts with a manufacturer and a subcontractor to sell and install a modular home for a property owner?
The dealer's, manufacturer's, and subcontractor's charges up the installation chain are all exempt as a capital improvement once the property owner issues a Certificate of Capital Improvement (Form ST…
Which of a for-profit golf and country club's dues, fees, and rentals are subject to New York sales tax?
Because members hold no proprietary interest and don't control the club's management, dues and initiation fees aren't subject to New York's social-or-athletic-club dues tax, but the club's restaurant …
We're a New York State-chartered credit union making residential first mortgage loans. Banking Law section 479 says no tax law applies to us unless we're specifically named in it. Does that exempt us from the 'special additional' mortgage recording tax that mortgagees normally pay on small residential mortgages?
Not exempt. The special additional mortgage recording tax under Tax Law section 253(1-a) applies an extra 25 cents per $100 of debt on mortgages of small residential property (six units or less, each …
Were consulting services for software-system compliance and validation subject to Florida sales tax?
No. The consultant helped establish an electronic-records compliance program, a computer-system validation plan, and validation procedures, but supplied no computer hardware, software, or other tangib…
When does South Carolina allow a use-tax credit for sales or use tax paid on property purchased in another state?
South Carolina allows a credit when sales or use tax was legally due and paid to another state or the District of Columbia on the same tangible-property purchase and the taxpayer can prove it. The tax…
Was racing gasoline used only in race cars or speedboats subject to South Carolina's motor fuel user fee under RR 06-3?
Yes. The Department said racing gasoline used or consumed in South Carolina was subject to the motor fuel user fee even when intended only for race cars or speedboats. Its high octane, lead content, o…
Who was responsible for South Carolina use tax on untaxed Internet, catalog, travel, and other out-of-state purchases under RR 06-2?
The South Carolina purchaser owed use tax when taxable property bought from an out-of-state retailer was used, stored, or consumed in the state and sufficient tax had not already been paid. Tax legall…
Is an interstate pipeline company's electricity for cathodic protection and for underground gas storage subject to Kansas sales tax?
Both are taxable. Electricity an interstate pipeline company uses to power cathodic (corrosion-protection) equipment is taxable because cathodic protection is not a production, mining, drilling, or re…
For a healthcare-savings (PPO access) program, how are membership fees and marketing-representative enrollment fees sourced for Texas franchise tax?
Both fees are sourced to the payor's location. The Comptroller advised that a Texas company selling access to preferred provider organizations (PPOs) through a network-marketing model earns two intang…
Are charges for telephone service at a church parsonage subject to Kansas sales tax?
Yes. Charges for telephone service at a parsonage, rectory, convent, or minister's residence are taxable. Following Notice 99-14, utilities for such residences are not purchases used exclusively for r…
What Kansas trip motor-fuel permits could interstate motor carriers buy beginning July 1, 2006, and what did they cost?
Beginning July 1, 2006, an interstate motor-fuel user could buy a 24-hour Kansas permit for $13 or a 72-hour permit for $25. Up to three permits, in any combination, could be purchased at one time for…
Was an optional, separately stated collision damage waiver charge taxable as part of a Louisiana vehicle rental?
Yes. The waiver arose only from the rental and modified the renter's damage obligation, so its charge was part of taxable rental gross proceeds even though it was optional and separately itemized.
Does a Tennessee corporation that buys and collects its affiliate's accounts receivable from customers in other states have enough tax nexus in those other states — through in-person collection visits made by its affiliate's employees on its behalf — to apportion its Tennessee franchise and excise tax liability rather than paying on 100% of its net earnings?
Yes. Because the taxpayer directs its affiliate's employees to make face-to-face visits with out-of-state customers to resolve credit and collection issues — activities significantly associated with t…
Were loan, note, and lease documents executed, signed, and delivered outside Florida subject to stamp tax?
No, if the loan, note, lease, and related documents were executed, signed, and delivered outside Florida and that fact could be proved. The identity of the attorney-in-fact or recipient did not change…
Were deeds from three individuals to their indirectly owned limited partnership subject to deed tax?
No, other than the minimum required documentary stamp tax. Each brother held one-third of the unencumbered properties before the transfer and retained the same one-third beneficial interest through hi…
Who qualified as a farmer for Louisiana individual estimated-tax purposes, and did farming income from pass-through entities count?
An individual qualified when estimated farming gross income was at least two-thirds of total estimated gross income. The calculation included the person's share of farming income from S corporations, …
Were special Hurricane Katrina distributions from Louisiana public-system Deferred Retirement Option Plan accounts taxable by Louisiana?
No. Although qualifying Katrina DROP distributions were included in federal adjusted gross income, La. R.S. 11:405 kept the covered public-retirement benefits exempt from Louisiana income tax.
Did a Louisiana resident merchant seaman owe Louisiana income tax and estimated payments even though federal law barred state withholding from the wages?
Yes. The no-withholding rule did not exempt a Louisiana resident's wages from state income tax. Under the 2006 thresholds, estimated payments were required if expected Louisiana liability exceeded $1,…
How did Louisiana allocate the former IRC § 199 domestic production activities deduction among affiliated corporations and Louisiana income classes?
Louisiana used the federal allocation to each affiliated-group member, then divided that member's deduction among allocable, apportionable, and untaxed income based on QPAI. No deduction was allowed f…
Did a worker become a Texas resident by renting an apartment for a job while his wife, family home, voting, license, and vehicles stayed in New Mexico?
No. Howard Henderson's furnished Texas apartment was tied to a temporary job assignment, while his wife remained in their long-term Albuquerque home and he returned there whenever out-of-state work en…
Must Texas dealers collect sales tax on documentary and inventory-tax charges for off-road vehicles, and how can they document farm exemptions?
Off-road vehicle documentary fees and passed-through vehicle inventory tax were part of the Chapter 151 sales-tax base. The documentary-fee collection start date was later corrected to November 1, 200…
Were aircraft-painting receipts deductible when customers' crews took the repainted planes from the New Mexico shop before out-of-state inspection and recertification?
Mostly no. Dean Baldwin Painting's customers took delivery and made initial use of repainted aircraft in Roswell when their own crews accepted physical possession and flew the planes away. Later out-o…
Does an out-of-state promotional-products company have New York sales tax nexus, and are its baseball caps and cameras shipped to New York recipients exempt promotional materials?
A Washington-based promotional-products seller with no property, employees, or solicitation activity in New York has no sales tax nexus and can't be required to register or collect New York tax, but i…
Are platinum coils used to seal off brain aneurysms — sold pre-loaded on a disposable delivery wire for one price — exempt from Tennessee sales and use tax as prosthetic devices?
Yes. The platinum coil augments the function of the affected blood vessel by sealing off the aneurysm and promoting clotting and connective-tissue growth to prevent rupture, qualifying it as an exempt…
Are enteral feeding pumps, their disposable supplies (tubing, syringes, connectors), and the enteral nutrition food used with them all exempt from Tennessee sales and use tax?
Split result. Enteral feeding pumps and their disposable supplies (containers, tubing, needles, syringes, connectors) are exempt as prosthetic devices because they substitute for the mouth and esophag…
When must a Nebraska contractor collect and remit sales tax on taxable contractor labor -- when billed or when paid?
It depends on your accounting method, and you must be consistent. Revenue Ruling 01-06-2 explains that under Neb. Rev. Stat. § 77-2701.10(3), contractors collect and remit sales tax on the gross recei…
Could Wal-Mart's trademark subsidiary use a zero standard apportionment factor for royalties tied to New Mexico store sales?
No. WMR's minimal Delaware office, property, and payroll did not fairly represent how it generated hundreds of millions in trademark royalties. New Mexico properly excluded the property and payroll fa…
Could taxpayers avoid interest after an unidentified Department employee incorrectly said an IRS adjustment had nothing to do with New Mexico?
No. Armando and Antonia Cordoba owed $441.15 of interest on $948 of additional 2001 New Mexico income tax even though an unidentified Department employee apparently told them the IRS adjustment was on…
Are ureteral catheters — used to inject contrast dye and guide instrumentation during diagnostic ureteroscopy procedures — exempt from Tennessee sales and use tax as prosthetic devices?
No. Ureteral catheters and their guidewires are diagnostic tools that let urologists visualize the ureters from inside the body — they don't replace or augment any missing or reduced bodily function, …
Are specially manufactured farrowing crates — used to house sows giving birth in hog confinement facilities — exempt from Tennessee sales and use tax as farm equipment, and does it matter whether they're sold assembled or disassembled?
Yes. Farrowing crates meet all four requirements for Tennessee's farm equipment exemption — used directly and principally to produce pigs for off-premises sale, and priced over $250 as a single articl…
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