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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Are sales of restaurant equipment to American Legion and VFW posts exempt from Kansas sales tax?
Taxable. A seller must collect Kansas sales tax on restaurant equipment it sells to American Legion and VFW posts. The 1998 exemption only relieved members from tax on their membership dues (K.S.A. 79…
Can a parking company keep only electronic records from its Ticketech ticketing system and stop storing thousands of boxes of paper parking tickets?
Yes, in principle -- New York's electronic recordkeeping regulations apply broadly to any tax record a taxpayer must retain, so a parking operator's Ticketech electronic records can satisfy the Tax La…
Does an out-of-state data backup company owe New York sales or use tax on its subscription service and the connector software it installs on subscribers' computers?
The subscription fee for an off-site data backup and recovery service isn't subject to New York sales tax because it's not an enumerated taxable service (and the data being stored isn't taxable tangib…
Can an asbestos removal contractor get a sales tax refund on the disposable materials and protective equipment it buys, since those items end up contaminated and legally owned by its customer as waste?
Yes -- because federal and state law make the customer the legal owner of contaminated asbestos waste, an asbestos-removal contractor's disposable supplies (suits, gloves, bags, filters, sheeting, etc…
Is an insurance holding company's aircraft-owning affiliate's plane an exempt commercial aircraft when 80% of its use flies employees and guests of its parent insurer for a cost-based fee?
Yes -- because the aircraft-owning subsidiary is a genuinely separate legal entity that retains dominion and control (through an independent management company) and devotes about 80% of the aircraft's…
Are nail clipping, grooming, and medicated baths performed by a veterinarian's staff subject to New York sales tax?
It depends on WHY the service is performed -- nail clipping, grooming, or bathing done as a necessary, medically-related part of treating a diagnosed condition (like an ingrown claw, flea infestation,…
Did a natural-gas pipeline license qualify for Florida's utility right-of-way rent-tax exemption?
Yes, for charges paid on or after January 1, 2006. The pipeline premises, including the temporary work area, were a right-of-way used for utility purposes. Once natural-gas transportation, delivery, t…
Is a not-for-profit political action committee that qualifies under IRC section 527 subject to New York's Article 13 tax on unrelated business income?
No. New York's Article 13 tax on unrelated business taxable income applies only to organizations described in IRC section 511(a)(2) -- those exempt by reason of IRC section 501(a), meaning organizatio…
Are a New York corporation's commission receipts allocated to New York when its sole shareholder-president never works out of its New York office?
No, none of the commission receipts are allocated to New York. A corporation's receipts from compensation for services are allocated to New York if the services are performed there, including by a sal…
Is an out-of-state alarm-monitoring company doing business in New York when it uses third-party contractors to install and service equipment for its New York customers?
Not from the contractors alone. An out-of-state alarm-monitoring company with no New York office, employees, representatives, or inventory is not doing business in New York merely because it hires thi…
Did the county's proposed public-works material purchases qualify as exempt direct purchases?
No. Although the county would pay vendors, hold title, and maintain builder's-risk insurance, the contract did not clearly require the county to issue its purchase orders directly to vendors or requir…
Is a legal videographer's videotape of a deposition taxable in Utah, the same way a court stenographer's written transcript is exempt?
Yes, taxable. Even though Utah's Rules of Civil Procedure now treat video recording of a deposition as an equally valid method to stenographic recording, the Tax Commission held that a videotaped depo…
Was a home-repair worker an exempt employee, and could he exclude customer reimbursements for materials bought with tax and resold at cost?
No. Bruce Kelly was an independent contractor, not a common-law or statutory employee of up to 200 homeowners. He chose customers, supplied tools, selected and bought materials in his own name, worked…
Were distributions to a related property owner taxable after the parties ended their written lease?
Yes, on the submitted documents. The parties said future distributions would reflect business income and profit rather than property expenses, but that description conflicted with their documents and …
Is a trash-disposal company's recycling equipment exempt from Kansas sales and use tax as manufacturing equipment?
No. Even though Missouri exempts this company's recycling equipment as a 'Recovery Facility,' Kansas taxes it. The integrated production (manufacturing) exemption in K.S.A. 79-3606(kk) applies only to…
How did Florida tax lump-sum contracts to furnish and install built-in cabinetry and millwork?
The installed built-in cabinetry, countertops, and millwork were real-property improvements. Under the lump-sum furnish-and-install contract, the subcontractor should not charge sales tax to the homeb…
Were Hurricane Katrina purchases made with FEMA or Red Cross assistance exempt from South Carolina sales tax?
Purchases made with the specified FEMA or Red Cross Hurricane Katrina debit cards were exempt as federal-government purchases. Purchases made with aid deposited into a victim's own bank account, paid …
Who had to collect Louisiana advance tax and retail tax when a wholesaler drop-shipped goods directly to a retailer's Louisiana customer?
When both businesses were Louisiana dealers, the wholesaler collected advance tax and the retailer collected final tax. An out-of-state nondealer retailer shifted use-tax payment to the consumer, but …
Was domestic nonemployee compensation exempt under the Section 861 source rules, or beyond New Mexico's authority because the IRS supplied the income data?
No. Donald Barnes's $29,593 of nonemployee compensation and $31 of interest were gross income under Section 61; Sections 861-865 did not exempt a U.S. taxpayer's domestic income. New Mexico had indepe…
Were college-bookstore contracts nontaxable management agreements or taxable property licenses?
They were property licenses, not management agreements. The contractor bore the operating risk and paid the colleges regardless of profitability. Payments for use of space were taxable, while reasonab…
Could Florida CAPCO insurance-premium-tax credits be sold before transfer rules were adopted?
Yes, under the 2005 statute. Until formal transfer rules were adopted, either the buyer or seller had to notify the Department and OTTED within 30 days and provide the original investor, seller, and b…
Did fabricated products sold to a related contractor qualify for Florida's export exemption?
Yes. Although the related LLC was a real-property contractor making retail purchases, the contracts required the Florida seller to deliver the fabricated products outside Florida by common carrier or …
Does the Kansas manufacturing machinery and equipment exemption apply to the equipment in a natural gas producer's gathering systems, booster stations, and compressor stations?
Mostly no. The manufacturing machinery and equipment (integrated plant) exemption in K.S.A. 79-3606(kk) does not reach the equipment in a natural gas producer's gathering systems, booster stations, or…
Could a contractor defeat reconstructed CRS assessments by saying records were lost and the business stopped, despite federal returns and later CRS filings?
No. Richard Sanchez Construction's 1998-2000 tax was based on actual Schedule C receipts exceeding $700,000 per year, which Sanchez admitted were accurate. For 2001 through May 2003, the Department re…
Are charges for criminal background-check services subject to Kansas retailers' sales tax?
No. Kansas taxed sales of tangible personal property and only the services enumerated in its retailers' sales tax act. Criminal background checks were not an enumerated service, so the business's paym…
Could a deed from a reverse-exchange titleholder qualify for Florida's principal-agent exemption?
Yes, if the agreement stated that the exchange accommodation titleholder acted as the taxpayer's agent for state transfer-tax purposes, while not acting as agent for federal income-tax purposes. Witho…
Can a Texas day-care provider claim the franchise-tax child-care credit for the care it provides to the children of its own employees?
Yes. The Comptroller adopted a new policy allowing a child-care provider that is subject to franchise tax to claim the Chapter 171, Subchapter N child-care credit for the care it provides to the child…
What did Nebraska Revenue Ruling 99-05-1 do to the earlier ruling on the definition of a Nebraska Indian reservation?
Revenue Ruling 99-05-1 is a one-line administrative notice that rescinds an earlier ruling: it withdraws Revenue Ruling 99-92-1, 'Definition of Nebraska Indian Reservation.' It was approved by State T…
Were sales of limerock and sand tailings subject to the Miami-Dade Lake Belt mitigation fee?
Yes. The accumulated limerock and sand tailings were products mined from property in the Miami-Dade County Lake Belt Mitigation Area. When the property owner sold them, it had to collect and report th…
Were a restaurant subsidiary's income and profits passed to its property-owning parent taxable rent?
No, on the specific facts. The subsidiary reported no rental expense, the parent was not in the rental business, and distributions reflected income and profit rather than the timing or amount of prope…
Can a Texas manufacturer amend its franchise-tax reports to remove throwback based on the Home Interiors decision, and how will the refund be handled?
It can file, but the refund will be denied and held pending the Home Interiors appeal. A Texas heavy-equipment-trailer manufacturer had apportioned 100% of its gross receipts to Texas under the earned…
If a nonresident owns a seat (membership) on a New York stock or commodity exchange and leases it out for income after moving out of state, is that rental income - and any later gain on selling the seat - taxable as New York source income?
Yes. Because an exchange seat has its business situs in New York, leasing it out with regularity and permanency is carrying on a business in New York under Tax Law § 631(b)(1), so the rental income is…
Are a medical-equipment company's rentals of prescription therapeutic hospital beds and wound-care (V.A.C.) devices subject to New York sales tax?
The beds and devices themselves qualify as exempt medical equipment, so a sale or rental directly to a patient or an exempt organization isn't taxable -- but because this company actually rents them t…
Does a contractor installing underground high-voltage electric cable and related equipment for a utility owe New York sales tax on the materials it buys for the job?
Mostly yes -- because installing the cable, conduit, and related utility equipment is a capital improvement to real property (so the contractor's charge to the utility isn't taxable if it gets a Certi…
Is a stock-photo business's sale of its own photographs subject to New York sales tax, and does it matter whether the images are delivered on paper/disk or purely electronically?
It depends on the format and the rights sold -- selling a photo on paper, disk, or other tangible medium is a taxable sale of tangible personal property, but delivering the same image purely electroni…
Is the per-event fee a singles-events organizer charges attendees a taxable admission charge under New York sales tax law?
No -- because the primary purpose of the events is to facilitate dating (a social-networking service), not to provide entertainment or amusement, the organizer's per-event fees aren't taxable admissio…
Is a Florida corporation that owns entities holding New York lottery annuity rights doing business in New York, and can it claim a credit for income tax withheld on those payments?
No, it is not doing business in New York and owes no Article 9-A tax. A corporate partner is subject to Article 9-A only if a partnership it owns is doing business in New York; here the entities merel…
As a national retail chain leasing store space, I'm structuring various long-term lease deals with landlords -- some in existing or planned shopping centers, some with due-diligence contingency periods before I'm bound, some involving lease extensions or a right of first refusal instead of a purchase option. Which of these eight common leasing scenarios trigger New York's Real Estate Transfer Tax, and when exactly does the tax clock start running in each?
This landmark 8-scenario ruling establishes the framework later RETT lease opinions rely on. A long-term lease (49+ years including renewals, with substantial capital improvements) is only taxable if …
Does a seller have to charge sales tax on playground equipment sold to a city, county, or school district if the seller also assembles and installs it?
No additional tax is triggered. Playground equipment sold to a political subdivision (city, county, school, etc.) stays exempt under Utah's political-subdivision sales tax exemption even when the sell…
Could interest be limited to one year because the Department found an income-tax mismatch near the end of its three-year assessment period?
No. Daniel C de Baca underpaid $294 of 2001 New Mexico income tax and retained the money from April 2002 until April 2005. Section 7-1-67 required interest for that entire period at the then-statutory…
How did South Carolina tax a lump-sum county contract for communications towers, concrete shelters, and radio equipment?
For this taxpayer's contract, the tower and concrete-shelter construction portion was not taxed to the county, but the contractor owed tax on the building materials it consumed. Antennas, cables, ampl…
Were distributions from two property-occupying LLCs to their owner taxable rental consideration?
Florida did not approve the arrangement as nontaxable on the submitted record. Distributions would be taxable if paid for use and occupancy or if they tracked property expenses. The owner had to provi…
Are massage therapy services subject to Kansas sales tax?
No. Kansas sales tax is not imposed on charges for massage therapy services. Kansas taxes sales of tangible personal property and only the specific services listed in K.S.A. 79-3603, and massage thera…
Could a large taxpayer avoid penalty and interest when its CPA used the wrong ACH account number and a Department employee briefly reported no liability?
No. United Drilling's CPA firm entered the wrong account number for a $59,447.87 ACH payment, then saw for two months that the debit had not cleared. A Department employee briefly said the system show…
Which entertainment and recreation charges did South Carolina treat as taxable admissions under Revenue Ruling 05-14?
RR 05-14 treated a paid right to enter or use a location that entertains, relaxes, distracts, or gives pleasure as a taxable admission unless a statutory exemption applied. Its broad examples included…
Did Kansas cities and counties impose local sales tax on piped water sold for residential noncommercial or agricultural use after January 1, 2006?
No. Effective January 1, 2006, public water suppliers stopped collecting Kansas city and county retailers' sales tax on water delivered through mains, lines, or pipes for residential noncommercial or …
Is a vehicle rental to a Texas state employee on official business exempt when made under a state master contract?
Yes. A state employee's official-business rental was exempt when made under a state master contract and supported by a Motor Vehicle Rental Exemption Certificate. The rule applied to IBA, CLIBA, and C…
When did Louisiana treat reciprocal transfers of raw materials or products as exchanges excluded from the corporation income- and franchise-tax revenue ratios?
A routine mutual agreement exchanging interchangeable property to reduce costs qualified when quantity and value balanced. The exchange was excluded from both revenue ratios; cash used only to settle …
Which charges for video and audio production were subject to Florida sales tax?
Charges essential to producing a tangible master, including production, post-production, venue acquisition, transferred artwork, and copies, were taxable unless the statutory master-tape exemption app…
Could a tenant use a related entity's exemption certificate, and were lease-settlement proceeds taxable?
No related-entity certificate substitution was allowed: the lease had to be directly with the certificate holder. Settlement amounts for CAM charges owed while the tenant occupied the property were ta…
Can a lessee use a currently leased vehicle as a trade-in toward another leased vehicle for Texas motor vehicle tax purposes?
No. Returning the old leased vehicle to its lessor, or having the new-vehicle dealer buy it separately, did not make it a trade-in. The lessee had to first purchase the old vehicle and pay sales tax, …
Were a wage-tax assessment and lien invalid because the IRS report was exchanged under a standing agreement, unsigned, and issued by allegedly unbonded employees?
Mostly no. New Mexico's standing agreement with the IRS satisfied Section 6103(d), and Section 6065 did not require an IRS-issued Revenue Agent Report to be signed under penalty of perjury. Jo Ann Sto…
Through what report years could an enterprise project claim the Texas franchise-tax jobs creation credit and capital investment credit?
The credits had firm cutoff dates. The Comptroller explained that the franchise-tax jobs creation credit (Tax Code Sections 171.751-171.761) and capital investment credit (Sections 171.801-171.811) we…
Must a nonprofit shelter collect Kansas sales tax on its annual fundraiser's admissions, food, and auction sales?
Yes. Most Kansas nonprofits, including this community shelter, are not exempt from the sales tax act, so the shelter must pay tax on its purchases and collect tax on its taxable sales. Because it hold…
Which Kansas state and local sales-tax rate should an online retailer collect when goods are shipped to a Kansas customer?
Kansas used destination-based sourcing. A Kansas retailer shipping goods to a Kansas buyer collected the combined state and local rate at the ship-to address; if the buyer took possession at the retai…
Does the Kansas motor-vehicle and trailer exception for an entity's transfer of all assets apply when only its Kansas assets are transferred?
No. The exception in K.S.A. 79-3603(o)(2) applied only when one corporation or LLC transferred all of its assets to another corporation or LLC. Transferring every asset located in Kansas was not enoug…
Did expiration of the 10-year period for the Department to sue on old assessments automatically release a tax lien filed later?
No. Section 7-1-19 barred the Department from starting a collection or foreclosure action more than 10 years after Sterling Kennedy's 1992-1993 assessments, but it did not extinguish the unpaid taxes …
Could a Florida county buy construction materials for a public-works project tax-free under its proposed direct-purchase procedures?
Yes. The county's procedures supported exempt direct purchases because the county would issue purchase orders, receive vendor invoices, pay vendors, take title, and bear the risk of loss. The result d…
Did separately priced vacation-package add-ons make the underlying package taxable?
No, if the add-ons were genuinely separate. The qualifying lump-sum package remained exempt when taxable add-ons were separately priced and their price and availability did not depend on buying the pa…
How did Louisiana's historical food-for-home-consumption relief distinguish qualifying groceries from taxable prepared food, restaurant sales, and institutional purchases?
Qualifying nonprepared food sold for home consumption received the historical reduced rate or exemption. Seller-heated or seller-combined food, food sold with utensils, restaurant sales, and known non…
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