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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Can an insurer exclude bonuses from the Florida insurance premium tax salary-credit calculation based on TAA 04B8-001?
Do not rely on the TAA's original answer. In 2004, the Department said annual management bonuses were not 'salary' for the section 624.509 insurance premium tax credit, even though they appeared in Fl…
Are aircraft repair parts and services exempt from Kansas sales and use tax, and when do aircraft sales stay taxable?
Beginning January 1, 2005, the sale of aircraft repair, modification, and replacement parts, and the services used in the remanufacture, modification, and repair of all aircraft, are exempt from Kansa…
Are sales and repairs of hearing aids exempt from Kansas sales and use tax, and what must the seller be?
Effective January 1, 2005, the sale of hearing aids (as defined by K.S.A. 74-5807(c)), replacement parts, and batteries is exempt from Kansas state and local sales and use tax under 2004 Senate Bill 1…
Which equipment, software, labor, shipping, installation, and training charges formed the Louisiana use-tax cost price of a communications system?
Equipment, canned software, and required design, engineering, safety, management, and tuning labor were taxable. Separately invoiced shipping and installation and optional training were excluded. Prop…
When does a Texas salesperson create franchise-tax nexus for an out-of-state seller, and does Public Law 86-272 protect it?
It depends on what the Texas employee does. If an out-of-state company's only Texas contact is shipping goods from outside Texas to a Texas customer, it is not subject to Texas franchise tax. Once it …
Can a toll galvanizing processor buy forklifts, forklift repairs, and forklift fuel tax-free when the forklifts move customers' steel between storage, the galvanizing plant, and shipping?
It depends on which part of the forklift's job you're looking at. A toll processor (like a galvanizer working on a customer's own steel) still counts as 'producing tangible personal property for sale'…
Does a hunting-preserve lodge owe sales tax on its per-animal charge when a client shoots a game animal, and on its taxidermy or butchering add-ons?
Yes to both. The per-animal fee is a taxable sale of tangible personal property — at the moment the client shoots the animal, it isn't yet an edible food product, so the food exemption doesn't apply, …
When is a seller required to collect New York sales tax on renting or licensing a mailing list to a business or a college?
It depends on what the buyer does with the list and who the buyer is. Renting a mailing list is a taxable sale by default unless the buyer gives the seller a valid exemption document within 90 days. A…
Does a hotel owe New York's hotel occupancy tax on payments its franchisor makes for free rooms given to guests redeeming loyalty-program reward points?
Yes. Even though the guest pays nothing to stay, the hotel is still receiving 'rent' — just from its franchisor instead of the guest — because the franchisor pays the hotel a room-rate-based amount ev…
Could an offshore producer deduct 25 cents per barrel for owned pipelines carrying pipeline-quality oil from central processing points to off-lease terminals?
Yes, for oil moved through the two owned 10-inch transportation lines after gathering and treatment. No deduction applied to gathering lines moving crude from wells to the central points where it beca…
What new Kansas sales tax exemptions took effect on January 1, 2005?
This notice lists Kansas sales/use tax exemptions effective for sales on or after January 1, 2005: purchases and sales by three named IRC 501(c)(3) charities (K.S.A. 79-3606(vv)); aircraft repair part…
Could an independent contractor avoid New Mexico gross receipts tax penalty and interest because her California enrolled agent never told her about the tax and she paid voluntarily after learning of it?
No. Pamela Kelly voluntarily filed and paid four years of gross receipts tax as soon as she learned that her New Mexico independent-contractor receipts were taxable, but interest remained mandatory. H…
Is an out-of-state manufacturer subject to New York franchise tax because a director listed the company's phone number in a New York directory without the company's knowledge?
No. An Ohio manufacturer of currency-changing equipment is not subject to Article 9-A where its only New York link was a telephone listing a director placed (using her own home number) in a New York d…
Did a Florida seller of travel have to register as a sales-tax dealer and collect tax again on lump-sum vacation packages?
No. The travel seller did not have to register as a dealer or collect additional state or local-option tax on a single-price package containing at least two components when every component was purchas…
Does common ownership or using independent-contractor sales reps give a Texas manufacturer nexus elsewhere, or are its shipments thrown back as Texas receipts?
The shipments are thrown back to Texas. Texas is a separate-entity state, so common ownership with a related distributor does not extend that affiliate's nexus to a Texas manufacturer; if the manufact…
Is an out-of-state service company taxed on all services to Texas clients, or only on the services its employees perform in Texas?
The company is subject to Texas franchise tax, but only the services performed in Texas are Texas receipts. Providing any service in Texas - regardless of whether the people performing it reside in Te…
Could a Florida consolidated group switch to separate returns after bankruptcy, reorganization, acquisitions, divestitures, and major market changes?
Yes, subject to four conditions. Florida found good cause because bankruptcy forced an extensive reorganization, acquisitions, discontinued business lines, divestitures, and a changed revenue mix that…
What percentage of a hotel's county-airport ground rent was taxable when guest dwelling areas and commercial or inaccessible areas shared the leased property?
Florida determined that 21% of the hotel's ground-lease rent was taxable. The taxable numerator included ground-level commercial and business areas, the full restaurant and lounge, and 32,503 square f…
How must a consolidated Florida corporation calculate income and the credit generated by a certified Capital Investment Tax Credit project?
The corporation had to attach a project-specific pro forma calculation to its consolidated F-1120. The schedule had to separately show every project revenue, direct and indirect expense, and book-to-t…
Was a separately stated furniture delivery charge taxable when customers could avoid it by picking up their purchases?
No. The furniture retailer separately stated the delivery charge, and the customer could avoid it entirely by picking up the furniture at a store or distribution facility. Those two facts satisfied Ru…
Was an optional home-electronics delivery-and-setup fee taxable when delivery, hookup, testing, and demonstration shared one price?
Yes. The retailer charged one optional lump-sum fee covering delivery and possible hookup, testing, and demonstration. Setup was taxable installation even when optional, and delivery could be excluded…
When did South Carolina collect casual excise tax or use tax on historical vehicle, boat, motor, airplane, and trailer transfers?
Casual excise tax generally applied at titling after a non-retailer sale of a vehicle, motorcycle, boat, motor, or airplane; use tax generally applied to out-of-state retailer purchases for South Caro…
Which electricity meters at a Florida RV park qualified for the residential household sales-tax exemption?
Meters 1 and 6 through 18 qualified for the residential electricity exemption because they served RV sites, cabins, or common areas restricted to tenants and guests. Meters 2 through 5 were fully taxa…
Could a Florida school board buy roofing materials tax-exempt under direct-purchase procedures while a construction manager performed the project?
Yes. The school board could buy project materials tax-exempt if it issued purchase orders with its exemption number, provided the certificate, received vendor invoices, paid vendors directly, took tit…
Could a construction business avoid New Mexico gross receipts tax penalty and interest because the Department waited until 2002 to assess unfiled and underreported 1996-1997 periods and payment would cause hardship?
No. Magdalena Construction failed to file gross receipts tax returns for 19 of 24 months and underreported its liability by more than 25%. Those facts triggered the seven-year no-return and six-year s…
Did the requesting nonprofit organization's community work exempt its taxable retail sales from Kansas sales tax?
No. The Department acknowledged that the organization performed substantial community services with the funds it raised, but Kansas provided only specific exemptions and none extended to this organiza…
Were qualifying drugs bought by veterinarians for inventory or professional use, and drugs dispensed on veterinary prescriptions, exempt from Kansas state and local sales tax?
Yes, if the products were drugs as defined by K.S.A. 65-1626. K.S.A. 79-3606(q) exempted qualifying drugs sold to a licensed healing-arts practitioner, including a veterinarian, for inventory or use i…
Could a taxpayer contest a 1999 New Mexico income-tax residency assessment through mailed statements and documents after moving to New York and not appearing at the scheduled hearing?
No. Nicholas Drobot received the hearing date he had requested within the offered range, then moved to New York and did not appear. His mailed residency statements were unsworn and not subject to cros…
Could a Kansas caterer buy disposable place settings or rent tables, chairs, glassware, and equipment tax-free, and what customer charges were taxable?
The caterer could buy disposable tableware, glasses, napkins, plates, cups, and similar items tax-free when ownership passed to the customer as part of the catered meal. It could not claim exemption f…
Which truck movements counted as interstate commerce for Louisiana's 80% heavy-truck sales-tax exemption?
Continuous shipments to, from, or through Louisiana counted even during necessary intermodal delays. Interstate movement ended when goods came to rest as inventory; trips wholly inside Louisiana did n…
How could a Kansas public water supply system elect to pay the Clean Drinking Water Fee and become exempt from sales tax on its purchases?
Effective January 1, 2005, a public water supply system that had previously opted out of the Clean Drinking Water Fee could make an irrevocable election to begin paying it, under 2004 Senate Bill 147,…
What penalty and interest relief applied when a first-year New Mexico resident's preparer miscalculated Form PIT-B and a Department examiner gave the preparer conflicting advice?
The $16.90 negligence penalty was abated because Maggie Martinez reasonably relied on her longtime preparer. But interest on the $169 underpayment remained due. The preparer failed to follow the first…
Was a private operator's lease of an entire city-owned golf course exempt from Florida rent tax because it sold food and drinks in the clubhouse?
No. A city-owned golf course was a publicly owned recreational facility, but the food-and-drink concessionaire exception did not exempt a lease of the entire course. The exception covered a portion of…
Could a boat owner buy a vessel tax-free for a bareboat-charter program while using it personally without paying a charter fee?
Only if the owner registered as a dealer and used the boat exclusively for taxable bareboat rentals. Rental receipts would be taxable. The proposed agreement let the owner use the vessel without payin…
Was a free booklet mailed to local consumers exempt from Florida use tax as a publication whose content was primarily advertising?
No. Although the booklet was published regularly, mailed free to consumers, and carried local-merchant advertising, Florida found it was not primarily advertising because its address-book and gift-cer…
The Army is leasing land at Fort Hamilton Military Base to our LLC for 50 years (no rent) so we can demolish and rebuild deteriorated military family housing, with the Army and a private developer (GMH) as our only two members. The Army will hold no less than 90% of the beneficial interest in the underlying property, with GMH acquiring no more than 10% as its share for managing and eventually capital-contributing to the project. Because this is federal military property and the Army pays no consideration for our lease, is any part of this conveyance subject to New York's Real Estate Transfer Tax?
Partially taxable -- RETT applies, but only to the extent of the private co-member's minority beneficial interest, not the whole property. Under the federal Military Housing Privatization Initiative, …
Does a 501(c)(3) charity have to collect Utah sales tax when it sells consigned artwork at a fundraiser and keeps a percentage of the proceeds?
Yes, sales tax is due on the entire sale price. A 501(c)(3) charity that sells artists' consigned artwork at a fundraiser -- keeping a percentage (here, 35%) and passing the rest to the artists -- doe…
Were a warehouse operator's bundled receiving, storage, order-fulfillment, packing, and shipping charges to a cruise line taxable as rent for storage space?
No. The agreement created a bailment and warehouse-service relationship, not a taxable lease or license of storage space. The operator received and verified the cruise line's goods, controlled and sto…
Could taxpayers defeat a timely New Mexico income-tax assessment because the PIT instructions said to keep records for at least three years and they destroyed their 1999 files before the Department's federal income match?
No. The Dotsons destroyed their 1999 records after reading an instruction to retain returns for at least three years, but the statute gave the Department until December 31, 2003 to assess tax due in 2…
Was ripening concentrate used in ethylene generators at produce warehouses exempt from Florida sales and use tax?
Yes, if the taxpayer's ripening product was registered by the Florida Department of Agriculture and Consumer Services as a plant regulator. Florida's pesticide definition included plant regulators, an…
Was ethylene gas used to accelerate fruit ripening exempt from Florida sales and use tax as a pesticide or packaging material?
Yes, if the ethylene product was registered by the Florida Department of Agriculture and Consumer Services as a plant regulator. Florida law included plant regulators within “pesticide,” and pesticide…
Could taxpayers limit New Mexico interest after the IRS increased their capital gain when they waited for the Department to contact them instead of filing an amended state return within 90 days?
No. After the IRS notified the Chacons in July 2002 that they had underreported 2000 capital gain income, New Mexico law required an amended state return within 90 days. They instead waited for the De…
Were a Kansas painting contractor's labor charges for decorative painting, faux finishes, and murals on residential interiors subject to sales tax?
No. Although K.S.A. 79-3603(p) generally taxed services that apply or install tangible personal property, labor for original construction was exempt. The contractor performed only interior residential…
Were partial vehicle transfers by two companies to their joint-venture LLC exempt isolated or occasional sales?
Possibly under one exception, but not the other. Kansas taxed isolated or occasional motor-vehicle sales. A transfer to a corporation or LLC was exempt if made solely for stock, securities, or members…
When a Texas broker-dealer books all the revenue but affiliates perform much of the work, how are its service receipts sourced for franchise tax?
The broker-dealer includes all the revenue it books and sources service receipts to where the services are actually performed - including work done by affiliates. Company A, a Texas registered broker-…
Did related entities owe Florida commercial-rent sales tax when the occupant paid no cash rent directly to the property owner?
Yes. The owner and occupant were separate related entities in a landlord-tenant relationship even though the occupancy agreement said no rent was payable directly. Amounts both entities identified as …
Was an arena's annual club-seat license fee taxable even though the customer still had to buy a separate ticket for each event?
Yes. The multi-year agreement granted a limited license to use specific club seats and exclusive arena amenities, including a lounge, VIP entrance, private restrooms, and preferred parking rights. Req…
Could a newspaper publisher exclude an independent-carrier delivery charge from sales tax when subscribers could choose pickup or mail instead?
Yes. The publisher did not have to collect sales tax on independent-carrier delivery if, at the start or renewal of the subscription, it disclosed the carrier and mail delivery charges, told subscribe…
Are a contractor's charges for mold-mitigation work on homes damaged by fire subject to New York sales tax?
Usually yes — removing damp, musty walls, ceilings, and flooring and drying out a fire-damaged home is a taxable real-property repair service, so the contractor must collect sales tax on its charges (…
Does a tax-exempt social club owe New York's Article 13 minimum tax on unrelated business income when its federal unrelated business taxable income is zero?
Yes. A section 501(c)(7) social club that carries on an unrelated trade or business in New York is subject to the Article 13 tax under section 290(a), which imposes a minimum tax of $250. That minimum…
Is a new subsidiary a "new business" eligible for the refundable Empire Zone wage credit and QEZE benefits when it is wholly owned by an existing New York taxpayer but does different work?
Yes. A new subsidiary (Newco) that will perform healthcare-claims processing -- work unrelated to its parent's New York sales activity -- is a new business under section 210.12(j)/210.19(e) (so the EZ…
Does an out-of-state jewelry maker lose Public Law 86-272 protection by making retail sales and collecting sales tax at New York trade shows?
Yes, it loses protection and is taxable. An out-of-state jewelry manufacturer that attends New York wholesale trade shows to take orders (approved out of state) would stay within Public Law 86-272 sol…
Did Florida documentary stamp tax apply to an equipment master lease, supplement, or acceptance certificate executed in Florida?
No, for the documents reviewed. None of the master lease, equipment supplement, or acceptance certificate alone contained an unconditional promise to pay a sum certain. The documents also did not expr…
Could a grantor living trust merge into a Florida limited partnership so its real estate transferred without documentary stamp tax?
No. Florida treated the grantor living trust as an inter vivos estate-planning trust, not a common-law or business trust eligible to register under Chapter 609 or merge with a limited partnership. Rec…
Can a husband and wife rely on TAA 04B4-007 to avoid documentary stamp tax when transferring unencumbered property to their corporation?
Do not rely on this TAA's original answer. In 2004, Florida said a debt-free apartment building transferred by husband and wife to their corporation was exempt only if no stock was issued; stock issue…
Emma Fonti, over 60, deeded her home to her two adult children (both under 60) while keeping a life estate, and now wants a reverse mortgage with her children as co-mortgagors. Does that reverse mortgage qualify for New York's mortgage recording tax exemption, given that some titleholders are under 60 and there's no living trust involved?
Exemption NOT established on these facts. Emma Fonti, over 60, wanted a reverse mortgage on her New York residence, but had earlier deeded the property to her two children (both under 60), retaining a…
Were prescription-labeled surgical devices and tools exempt from Florida sales tax when sold for use by physicians and surgeons?
Only the one-time-use products qualified under the ruling. A medical device or tool intended for one use was exempt when federal law required it to bear “RX only” or the stated physician-order restric…
How were delivery and installation charges taxed under an appliance contract covering both built-in fixtures and freestanding appliances?
Tax followed each separately priced item. Because the contract reasonably allocated appliance, delivery, and installation prices, Florida did not apply one predominant-purpose result to the whole cont…
Should a contractor refund sales tax charged on labor and materials used to build a concrete foundation at an electric substation?
No. The Department said labor and materials used to build an electric-substation foundation were taxable and the contractor should neither issue the requested $2,111.90 refund nor exempt similar futur…
Does Texas motor vehicle sales tax apply when a borrower buys a replacement vehicle but keeps the old loan through a substitution of collateral?
Yes. Buying the replacement vehicle was a separate taxable retail sale. Keeping the old loan and merely substituting the new vehicle as collateral did not change the purchase's taxability, even if the…
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