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 'tomato pie' — a cold, bread-dough-and-tomato baked good sold by the slice at an Italian deli — exempt from New York sales tax as a bakery item?
Yes. Tomato pie — a bread-dough-and-tomato baked good intended to be eaten cold or at room temperature — is exempt from New York sales tax as a baked good sold for human consumption, as long as it's s…
Is an Internet cafe's charge for computer workstation access exempt as Internet access service, even though food and drinks are also available on the premises from a separate vendor?
Yes. Charges for using an Internet cafe's workstations (view-only computers that just browse the web and email, with no ability to edit, save, print, or run other software) are exempt as Internet acce…
Did the requesting organization fall within a group exempt from Kansas retailers' sales and compensating taxes?
No. The Department reviewed the exemptions in K.S.A. 79-3606 and found none that encompassed the requesting organization. Kansas requires an organization claiming exemption to fit the statute's plain …
Does an LLC taxed as a partnership owe New York's annual filing fee for a year in which its only income was bank interest on proceeds from a prior property sale, with no other business activity?
No. Because the LLC's only 2003 income was interest on a bank account, and that money was not employed in any business, trade, profession, or occupation carried on in New York, the LLC had no New York…
Must a tax-exempt school district pay the Article 33 insurance tax that its insurer lists as a separately stated charge in the health insurance premium?
The tax is on the insurer, not the school district. A separately stated "state tax" amount in the health insurance premium reflects the Article 33 section 1502-a franchise tax imposed on the insurance…
Is an out-of-state professional employer organization subject to New York franchise tax because it processes payroll for two New York-resident drivers who work outside New York?
No. An Ohio professional employer organization whose only New York connection is processing payroll (for a fee) for two New York-resident truck drivers who work for an Ohio trucking company and do not…
Did the requesting not-for-profit qualify for exemption from Kansas retailers' sales and compensating taxes?
No. The Department reviewed K.S.A. 79-3606 and found no exemption that encompassed the requesting not-for-profit. Kansas narrowly construes exemptions, so not-for-profit status alone did not qualify. …
Which YMCA purchases and sales qualified for Kansas sales-tax exemption under K.S.A. 79-3606(ii), and which taxable services remained subject to tax?
The YMCA could buy tangible personal property tax-free only for its nonsectarian comprehensive multidisciplinary youth-development programs and activities. It could also buy property for resale withou…
Which private-area-lighting charges were subject to Florida sales tax and gross receipts tax for residential and commercial utility customers?
The bundled monthly private-area-lighting charge was subject to both sales tax and gross receipts tax for commercial and residential customers because it combined rented lighting equipment with electr…
Did taxpayers owe interest on a 1999 New Mexico income-tax underpayment when the Department mailed assessments to an incorrectly entered street address and they learned of the debt almost three years later?
Yes. The Shellenbergers improperly claimed a $6,000 over-65 deduction despite federal adjusted gross income above the eligibility limit, underpaying tax by $381. A Department data-entry error changed …
Does a Texas corporation need advance approval or certification before claiming franchise-tax incentive credits?
No advance approval or certification is required. The Comptroller explained that a corporation does not need prior approval to claim the franchise-tax incentive credits - the three economic developmen…
Are sales to foreign customers who pick up the goods in Texas counted as Texas gross receipts for franchise-tax apportionment?
Yes, they are Texas gross receipts. Where a company's customers from Mexico travel into Texas to pick up (take possession of) the merchandise, the receipts from those sales are delivered to the purcha…
How should a Florida contractor tax a construction contract containing both permanent and removable hurricane shutters?
The result depended on the mixed contract. If the job was predominantly a real-property improvement, the contractor paid tax on all materials and charged no tax to the customer. If it was predominantl…
Was Florida documentary stamp tax due when an individual moved property through revocable trusts into wholly owned LLCs?
It depended on debt. Deeds returning unencumbered property from the individual's revocable trusts to him were not taxable, and his later conveyances of that property to LLCs of which he was the sole m…
Was Florida documentary stamp tax due when spouses transferred a newly purchased residence to their qualified personal residence trusts?
No. Florida found the spouses' transfers of their undivided one-half interests in a newly purchased residence to their respective qualified personal residence trusts exempt from documentary stamp tax.…
Was more than minimum Florida documentary stamp tax due when family members contributed 17 unencumbered parcels to a partnership in unchanged ownership proportions?
No. Only minimum documentary stamp tax applied after a parent first gifted undivided interests in 17 unencumbered Florida parcels to two children and all three then contributed their interests to a fa…
Was a natural-gas compression contract a taxable equipment rental, and how were separate delivery, installation, monitoring, and service charges treated?
The compressor charge was a taxable rental because the customer detained the autonomous unit at its chosen location and benefited from its use. Separately stated delivery and installation were not tax…
When is Kansas sales tax not due on a sale to a nonresident who takes delivery in Kansas?
Under K.S.A. 79-3606(k), Kansas retailers' sales tax is not due when a bona fide resident of another state buys and takes delivery in Kansas of a motor vehicle, semitrailer, pole trailer, or aircraft …
Did a 12,000-copy monthly Florida shoppers publication qualify for the exemption for free advertising publications?
Yes. Florida found the monthly publication exempt because it was regularly published, more than 90% of its 12,000 copies were distributed free or mailed free to potential advertisers, and its submitte…
Did a monthly Florida shoppers publication qualify for the sales-tax exemption for free advertising publications?
Yes. Florida found the monthly publication exempt because it was regularly published, distributed free through mail, home delivery, rack machines, newsstands, or similar methods, and primarily adverti…
Should a Kansas municipality collect state or local sales tax on water utilities purchased directly by a public university for university-owned dormitories and scholarship halls?
No. When the public university directly purchased water utilities for dormitories and residential scholarship halls that it owned, K.S.A. 79-3606(c) exempted the purchase from both state and local sal…
Could a Florida city buy construction materials for a public library tax-exempt under its proposed direct-purchase procedures?
Yes, once the agreement and purchasing procedures were fully executed. The city could buy library construction materials tax-exempt if it issued purchase orders with its exemption number, was invoiced…
Can a Florida public-works contractor separate manufacturing from installation so a government can buy materials tax-exempt?
Yes, under the proposed structure. A contractor could place manufacturing in a separate related company, and a government could buy materials directly from that manufacturer or an unrelated supplier t…
Are profits distributed by a single-member LLC occupant to its parent property owner taxable as rent for Florida sales tax purposes?
No, under the stated conditions. A single-member LLC's distributions to its parent property owner were not taxable rent when their timing and amount did not match the property's expense obligations an…
Must a Texas PLLC taxed as a partnership pay franchise tax, and are guaranteed payments deductible in computing earned surplus?
Yes, the PLLC owes Texas franchise tax, and guaranteed payments can be deductible with limits. A professional LLC is subject to franchise tax under Tax Code Sec. 171.001(a)(2) based on its legal forma…
Was a 2003 claim for refund on an amended 1999 New York personal income tax return, filed after the original return itself was filed late, timely under the Tax Law's statute of limitations?
Yes. Because the petitioner's original 1999 New York return was filed (and the tax paid) on August 21, 2001, Tax Law § 687(a) gave him three years from that filing date - until August 21, 2004 - to fi…
Which of a video/audio advertising production company's many line-item charges (scriptwriting, shooting, editing, studio rental, tangible media) are taxable to its clients, and which of its own production purchases qualify for exemption?
It depends on delivery format and purchase category. Selling a finished commercial on tape, CD, or other physical media is a fully taxable sale of tangible personal property — and every itemized produ…
Were mandatory HOA dues paid by resident owners for association-owned recreational common areas subject to Florida admissions tax?
No. The resident owners' annual dues were mandatory as a condition of owning property in the community, membership could be transferred only with the home, and the association-owned recreational facil…
Was a related-party deed, leaseback, and mortgage a taxable commercial lease or a financing arrangement, and what Florida transaction taxes applied?
It was a financing arrangement, not a taxable commercial lease. The deed, lease, mortgage, and related agreements together secured a refinancing loan, so no sales tax was due on rent under section 212…
Could a Florida affiliated group revoke its consolidated-return election after major business expansion and industry regulatory changes?
Yes, with conditions. Florida allowed the group to discontinue consolidated corporate income tax returns because its substantial growth, new business lines, changed business focus, and industry regula…
Which dental products qualified for Louisiana's exemption for orthotic, prosthetic, restorative, and patient-used dental devices?
An item qualified either as a listed orthotic, prosthetic, prosthesis, or restorative material used or prescribed by a dentist, or as a one-patient dental device directly used or administered for trea…
Will the 1934 Rockefeller family trusts become subject to New York State or New York City income tax if their corporate trustee is replaced with a Delaware trust company and the two New York-domiciled members of the trusts' controlling Committee are replaced by people not domiciled in New York?
Not automatically. The trusts are New York resident trusts because the grantor was domiciled here when they became irrevocable, but Tax Law § 605(b)(3)(D) exempts a resident trust from tax if all trus…
Are an HR-outsourcing company's fees for administering health/welfare benefits, retirement plans, COBRA/flex spending, and pre-employment background checks subject to New York sales tax?
Mostly no, with one exception. Start-up and ongoing charges for Health and Welfare Administration, Retirement Services Administration, and COBRA/Flex Spending Account Administration are nontaxable — t…
How did Kansas tax uniform and linen rentals, restroom-supply services, laundry inputs, delivery charges, and equipment purchases?
Uniform, garment, mat, mop, towel, cabinet, and dispenser rentals were taxable on the full charge, including delivery; retail merchandise sales were also taxable. Rental inventory, component parts, th…
When were Kansas's new numbered Tax-Exempt Entity Exemption Certificates issued, and when must retailers require them?
This notice announced that the new numbered Tax-Exempt Entity Exemption Certificates (form series PR-78) had been issued -- more than 8,500 Kansas exempt entities received them since November 1, 2004.…
Was computer equipment leased to the federal government under a lease-to-own financing plan subject to South Carolina property tax?
No. Because the lease-to-own arrangement was treated as a sale and the federal government as the income-tax owner, South Carolina treated the equipment as federal property immune from ad valorem prope…
Must a Texas franchise taxpayer file the long form to preserve a business loss carryforward, and how does the carryforward work?
No long form is required. The Comptroller explained that a corporation does not have to file the franchise-tax long form to preserve or add to a business loss carryforward, though it should keep a wor…
Were an electric utility's monthly charges for utility-owned special facilities subject to Florida sales tax and gross receipts tax?
Yes. Florida treated the monthly facilities charge as part of the charge for providing electric energy because the utility owned, installed, operated, maintained, and replaced the equipment. Gross rec…
Which communications and online services did South Carolina treat as taxable under RR 04-15?
The ruling taxed charges to access or use many voice, message, programming, email, website, and database systems, while excluding specified data processing, cooperative databases, and statutory servic…
If nonresident individuals, estates, and trusts are partners in an upper-tier partnership that invests in a lower-tier fund trading securities solely for its own account, is that trading income treated as New York source income - even if the upper-tier partnership also invests in another lower-tier entity that does business in New York?
No, as to the trading fund. Under Tax Law § 631(d) and the tiered-partnership regulation, 20 NYCRR 137.6, income a lower-tier Master Fund earns from trading stocks and securities solely for its own ac…
Why did Kansas start assigning Tax-Exempt Identification Numbers and numbered certificates to exempt entities, effective January 1, 2005?
Under Sections 16 and 21 of 2004 House Bill 2375, effective January 1, 2005, entities exempt under K.S.A. 79-3606 must provide a Tax-Exempt Identification Number issued by the Department, on a special…
Were microwave equipment and single-use catheters used in prescribed prostate treatment exempt Kansas prosthetic devices?
The catheters were exempt, but the microwave equipment was not. The prescribed treatment inserted a single-use catheter through the urethra and applied microwave energy through it to shrink diseased p…
Which tax periods did Louisiana's 2001 expansion of the unfiled-return prescription rule reach?
The amendments applied to taxes due in 1998 and later, including still-open pre-2001 periods, but not taxes due in or before 1997 that had already prescribed. The Department treated the change as proc…
Can a New York insurance company carry back its 2002 New York net operating loss to 1997 under Article 33 when it could not carry back the federal loss to that year?
No. For Article 33, an insurer's New York NOL deduction must arise from the same source year as its federal NOL deduction. The company could not carry its 2002 federal NOL back to 1997 because its 199…
When two commonly owned manufacturers share one unmetered facility and one pays 'rent' to the other for a share of the electric bill, is that charge a taxable utility resale, and does the manufacturing exemption still apply?
The landlord company's charges to its tenant company for a square-footage-based estimate of electricity usage are NOT a taxable utility resale — since there's no separate meter measuring the tenant's …
Was an optional, separately listed furniture delivery-and-setup fee subject to Florida sales tax when delivery and installation were bundled together?
Yes. The retailer combined delivery and taxable furniture installation in one optional lump-sum fee. A delivery charge can be excluded when the customer can avoid it and it is separately stated, but i…
Could a buyer of an exempt South Carolina facility continue the seller's property-tax exemption or receive a new five-year exemption?
Yes, if the county approved, the buyer was unrelated, the sale was arm's length, and the buyer preserved the facility and jobs. A new five-year exemption also required the buyer to satisfy the facilit…
When did a Kansas school district have to collect sales tax on cafeteria meals, seminar lunches, and meals sold to a civic group?
The district had to collect tax on every cafeteria meal sold to outsiders such as parents, even if outsider sales were 10% or less. At an off-campus seminar, a direct meal purchase by an exempt school…
Did a physician's corporation owe Florida rent tax for using a building owned by the physician and spouse through a related LLC without paying rent?
No, under the stated conditions. The professional corporation paid no rent or property expenses, while the husband-and-wife LLC held title and paid the mortgage, tax, and insurance. But the answer dep…
Were medical-practice distributions followed by owner contributions to a related property LLC taxable as rent for the practice's free occupancy?
No, if the distributions and contributions were genuine owner-level profit and capital transactions rather than indirect payment of property expenses. The practice could occupy the related LLC's build…
Can a Texas enterprise project outside a strategic investment area claim both the jobs creation and investment credits, and abate more than 50% of its franchise tax?
Yes to both, within limits. An enterprise project designated on or after September 1, 2001 that creates qualifying jobs or makes a qualified capital investment within an enterprise zone may claim both…
Are a securities self-regulatory organization's mandatory bond-transaction reporting fees and its market-data subscription fees both taxable in New York, or just one of them?
Only the market-data fees are taxable. A securities self-regulatory organization's basic fees for members to satisfy their federally mandated corporate-bond transaction reporting (System Fees, Transac…
Are wages paid to an injured firefighter who was reassigned to desk duty (rather than retired) subject to New York State personal income tax and withholding?
Yes. Because the firefighter was reassigned to desk duty rather than retired on disability, and was not permanently and totally disabled, his wages don't qualify for the Tax Law § 612(c)(3-b)(i) disab…
How much of Charles Becknell's gross receipts tax assessment was abated when his tax return mixed his own consulting receipts with income and subcontractor payments of his nonprofit organization?
The decision removed tax, penalty, and interest attributable to $10,010 that Becknell proved his nonprofit had paid three outside subcontractors. The Department had already removed $4,000 for services…
Were electronic financial data, analytics, news, and third-party exchange feeds subject to Florida communications tax, and were optional computers taxable?
The financial data service and separately invoiced third-party exchange feeds were not subject to communications services tax because they were excluded information services delivered over communicati…
Was a lessee's lump-sum reimbursement of the lessor's property tax on leased equipment subject to Louisiana sales tax?
Yes. Because the lease required the reimbursement, it was part of the gross proceeds and total price agreed to be paid for the equipment rental, just like periodic rent.
Were towing-service charges subject to Kansas retailers' sales tax, and did the towing company owe tax on its equipment and taxable inputs?
The towing charges were not subject to Kansas retailers' sales tax because Kansas taxed only specifically enumerated services and towing was not then listed. The towing company was the consumer of wha…
Was an oil and gas corporation commercially domiciled outside Louisiana even though it maintained a Louisiana administrative and operations office?
Yes. Looking at actual commercial practices as a whole, the corporation was directed and managed from its out-of-state headquarters, where strategic deals, executive approvals, governance, finance, ba…
Was an adult professional-sports fantasy camp exempt as a vacation package when the operator rented the facilities and arranged former-player services itself?
No exemption applied. The fantasy-camp fee was a taxable admission because the operator itself rented the sports facilities and arranged the former professional players' services. A qualifying vacatio…
Does a Texas business in a federal empowerment zone qualify for strategic investment area franchise-tax credits?
Yes. The Comptroller confirmed that a business located in a federally designated empowerment zone is eligible for strategic investment area (SIA) franchise-tax credits. The definition of an SIA in Tax…
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