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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If a Connecticut domiciliary who spends over 183 days working in New York donates the use of his East Hampton house to a charity for three months, does he still maintain a permanent place of abode in New York for statutory residency purposes?
No. Because the individual executes a written lease giving the charity sole and exclusive use of the house for a continuous three-month period and has no access to it during that time, the East Hampto…
Were cleaning services for timeshare units, residential common areas, and outdoor resort areas taxable, and how could managers recover tax paid by mistake?
No. Cleaning residential timeshare units and their residential common areas was nontaxable even when units were rented transiently; cleaning parking lots, outdoor walkways, and outdoor recreation area…
Was an off-balance-sheet synthetic lease taxed as a lease over the payment stream or as financing with sales tax due upfront?
It was treated as financing, not an operating lease. The customer took federal tax depreciation, ownership risks, maintenance duties, and other burdens, while the finance company held only a security …
Did a Christian Women's Fellowship have to collect Kansas sales tax on donations it received?
No. Kansas sales tax applied to sales of tangible personal property and specifically enumerated services. The amounts received by the Christian Women's Fellowship were donations, not sales. Because th…
Were snow and ice removal charges subject to Kansas sales tax, and was tax due on salt, sand, and other inputs?
The snow and ice removal service itself was not subject to Kansas retailers' sales tax. The provider still had to pay sales tax on the tangible personal property and taxable services used to perform t…
Is a company's fee for a phone-in employee time-and-attendance monitoring service subject to New York sales tax, and does the company owe tax on the telephone service it buys to run it?
No on the service fee — a phone-in employee time-and-attendance tracking service isn't sales-taxable because it isn't a taxable telephone answering service (taking messages is only incidental to it) a…
Which restaurant supplies were taxable, exempt ingredient or component parts, or resale items under Kansas PLR P-2004-037?
Items transferred to diners with taxable food—such as carryout containers, cups, lids, napkins, disposable silverware, straws, wetnaps, sandwich foil, and kids' meal toys—qualified as exempt ingredien…
Was diesel fuel used after rock crushing to move aggregate to a stockpile and load customer trucks exempt as consumed in production?
No. Kansas exempted property consumed in the actual production or mining process, but the Board of Tax Appeals had held that moving already crushed, finished rock to a stockpile and later loading it o…
Were stents sold to physicians, hospitals, and other medical facilities exempt from Kansas retailers' sales tax?
Yes. The Kansas Department of Revenue ruled that the described stents sold to physicians, hospitals, and other medical facilities were exempt from Kansas retailers' sales tax under K.S.A. 79-3606(r), …
Were charges for renting space on a communications tower taxable as a rental of tangible personal property in Kansas?
No. The tower owner rented space to users operating paging systems or two-way radios. Users sometimes installed their own equipment, while in other cases the tower owner installed equipment that serve…
Was a certified Louisiana health maintenance organization exempt from corporation income and franchise taxes because it paid the annual HMO license tax instead?
Yes. The organization met the HMO definition, held the Insurance Commissioner's certificate, earned most revenue from member health services, and paid the annual premiums tax. The annual license tax a…
Could a first-year New Mexico resident stop interest after seven months because the IRS and Department took years to match his federal income with a state return that omitted out-of-state income?
No. Mark Welsh failed to follow the first-year-resident instructions requiring all federal adjusted gross income on PIT-1 and allocation through PIT-B. The Department's delayed IRS information match d…
Were document-shredding services and the machinery used to provide them subject to Kansas sales tax?
The shredding service was not taxable, but the machinery and equipment were. Kansas treated on-site and off-site document destruction as similar to nontaxable trash hauling. The integrated-production …
How did Florida tax the computers, clinic setup package, software licenses, and patient fees used in a computerized vision-therapy program?
The provider owed tax on computers and therapy devices it retained and redeployed because it did not sell or lease them to prescribed patients. Clinic setup packages, included onsite training, and ann…
Could proceeds from selling old equipment through a Section 1031 exchange intermediary reduce Kansas sales tax on replacement equipment as a trade-in allowance?
No. The seller/customer transferred old equipment to a third-party buyer through an exchange intermediary and later used the proceeds toward replacement equipment. Kansas treated that as two separate …
Were games played exclusively on wireless phones taxable Kansas computer software, and how could the retailer source the sale?
Yes. Kansas defined computer software as coded instructions that cause a computer or automatic data-processing equipment to perform a task. The Department treated games played exclusively on wireless …
Which dog-breeding purchases were exempt from Kansas sales tax for breeding stock, puppies held for sale, and offspring kept for breeding?
The purchase of dogs used as breeding stock was exempt. Food for puppies held for sale, breeding stock, and offspring retained for breeding was exempt, as were consumed production inputs such as presc…
What did Kansas require of internet, telephone, and mail-order cigarette sellers under 2004 House Bill 2682?
Under 2004 House Bill 2682, every cigarette retailer selling to Kansas residents -- in-state or out-of-state, including internet, telephone, and mail-order sellers -- must register with the Department…
When did Kansas raise the minimum tax that requires individuals to pay estimated income tax?
Effective July 1, 2004 (for tax year 2004), 2004 Senate Bill 147, Section 5 raised the minimum tax that triggers individual estimated income tax from $200 to $500 under K.S.A. 79-32,101. An individual…
When was an online retailer's separately stated gift-wrapping charge subject to Kansas sales tax under destination-based sourcing?
Gift wrapping was a taxable Kansas service under K.S.A. 79-3603(p), but destination controlled. If the gift-wrapped item was delivered to Kansas, the separately stated wrapping charge was taxable even…
Could a mechanical contractor rent fabrication equipment tax-free because it would be used to build machinery that qualified for Kansas's integrated-production exemption?
No. A mechanical contractor could claim exemption for materials it fabricated into qualifying integrated-production machinery, but not for tools or equipment used to perform that fabrication. The rent…
Was dyed diesel used by a contract earth mover to remove soil and shale overburden and expose quarry rock exempt as consumed in mining?
Yes. The contractor used scrapers, bulldozers, and front-end loaders to remove soil and shale overburden and expose the rock ledge in quarries. The Department treated the dyed diesel consumed by that …
When must a Nebraska contractor remit sales tax on construction labor -- when the customer is billed or when payment is received?
It depends on the contractor's accounting method. Under Revenue Ruling 01-04-1, and pursuant to Laws 2004, LB 1017, beginning July 1, 2004 contractors must collect and remit sales tax on their gross r…
Did replacing an entire packaging line qualify for Florida's industrial-machinery repair exemption when it was part of one integrated production process?
Yes, on the described facts. The packaging line was one component of a physically connected, continuous production system, and losing that component idled the rest of the process. Replacing it therefo…
How is Kansas sales tax computed on the isolated or occasional sale of a used motor vehicle or trailer under Senate Bill 147?
On the higher of the stated selling price or the property tax value. This 2004 Division of Vehicles memo explains Senate Bill 147: the base for computing sales tax on a motor vehicle or trailer is the…
Does generating electricity count as 'processing' under Connecticut's Manufacturing Recovery Act, so that machinery and equipment used to generate electricity qualify for the partial sales and use tax exemption?
No. Generating electricity is not 'processing' under Connecticut's Manufacturing Recovery Act (MRA), so purchases of machinery and equipment used primarily to generate electricity do NOT qualify for t…
Which Kansas oil-pipeline meter services, fabricated provers, detector switches, spheres, replacement parts, and specialty tools were taxable?
Kansas meter calibration, meter repair, and water-draw testing were taxable servicing of pipeline property when performed in Kansas and not taxable when performed outside Kansas. Repair parts were tax…
Did a Texas call center with no Kansas property, employees, inventory, or fixed assets have to collect Kansas tax when arranging Kansas electrical subcontractors?
No under the 2004 facts and physical-presence analysis. The Texas call center had no Kansas location, employees, inventory, or fixed assets and only arranged for nearby electrical subcontractors to pe…
When were a Kansas excavator's digging, boring, installation, and repair charges taxable, and how did separate billing affect the result?
Digging, drilling, and boring in soil or rock were nontaxable excavation services. Installation of electrical lines or other property was generally taxable unless connected with original construction …
Are a physician support company's per-message voice-mail lab-results service and its after-hours nurse triage-call service subject to New York sales tax?
Split result. The lab-results voice-messaging service — where a physician calls in and records a message a patient later retrieves by PIN — is a taxable telephone/voice-mail service, because every par…
When a home builder sends buyers to a related materials supplier for paid upgrades, who does the supplier have to charge sales tax to — the builder or the home buyer — and can it accept a Certificate of Capital Improvement?
The supplier must charge sales tax to the builder, not the home buyer, even when the home buyer pays part of the upgrade cost directly to the supplier. A materials supplier's sale of building material…
Can a Kansas motor vehicle dealer lose its license for failing to file sales or withholding tax returns?
Yes. Effective July 1, 2004, House Bill 2375 amended K.S.A. 8-2411(b) of the Dealer Licensing and Manufacturer's Act to make suspension or revocation of a motor vehicle dealer's license mandatory — th…
Can a broker-dealer claim the investment tax credit on a building it owns when part of it is used by affiliated banks that are regulated securities dealers?
Yes, if the combined qualifying use exceeds 50%. For the section 210.12 investment tax credit, property is eligible if it is principally used in qualifying broker-dealer activities under section 210.1…
Could Kansas contractors get an exemption or refund of local use tax on out-of-state materials for public works contracts signed before July 1, 2003?
Since July 1, 2003, out-of-state materials incorporated into non-exempt Kansas projects have owed both state compensating use tax and applicable local use tax. Section 4 of 2004 HB 2375 exempted the L…
What did the 2004 Kansas motor-fuel legislation (HB 2375r) change about fuel-tax exemptions and refund invoices?
Effective July 1, 2004, 2004 House Bill 2375r made two motor-fuel changes. It added a fuel-tax exemption under K.S.A. 79-3408g(d)(7) for kerosene used only to power antique steam motor vehicles first …
Did replacement pulp-making equipment qualify for Florida's pollution-control exemption when it also performed an integral production function?
Yes. Although brownstock washing and oxygen delignification were integral to pulp production, Florida found their primary replacement and installation purpose was compliance with a DEP-implemented law…
Was natural gas used to keep customers' sulfur molten at a Florida terminal exempt as boiler fuel when the terminal also removed explosive hydrogen sulfide?
Yes. The terminal did not need to own the sulfur, but it did need to process tangible personal property for sale at its Florida location. Florida found that air sparging—which removed dissolved hydrog…
Was separately metered natural gas used exclusively to heat condominium-association pools and spas exempt from Florida sales tax?
Yes. Natural gas delivered through nine separate meters and used exclusively to heat pools and spas in condominium common areas was exempt from Florida sales tax and discretionary surtax. The pools we…
Is a Kansas community action agency exempt from sales tax on all of its purchases as an entity or political subdivision?
No. Kansas did not exempt community action agencies as a class, and the agency described did not qualify as a political subdivision merely because it was created under federal law or funded with gover…
Were mortgage, property-tax, and improvement payments taxable rent when a shareholder held title but his S corporation occupied the property?
Yes, until title transferred to the corporation. The shareholder and S corporation were separate legal persons: he owned the commercial property, while the corporation occupied it and paid the mortgag…
Could a two-newspaper publisher exclude independent-carrier delivery charges when subscribers could choose pickup or mail instead?
Yes. The publisher could exclude independent-carrier delivery charges if, at the initial subscription or renewal, it disclosed both carrier and mail delivery charges, told subscribers they could avoid…
Can an LLC's members still claim New York's empire zone wage tax credit for 2003 and 2004 if the credit's five-year window already began back in 1998?
No. Under Tax Law § 606(k), the empire zone wage tax credit is allowed for only five consecutive taxable years, beginning with the first year a taxpayer's wages qualified. Because Petitioner's members…
Does a record label owe sales tax on hairstylist and makeup artist services it hires for CD, video, and DVD cover-art photo shoots?
Not state tax — hairstylist and makeup artist services aren't among the services New York State taxes under section 1105(c), so no state or MCTD sales tax applies, even though the label is using them …
Must a gas vendor include in its section 186-a gross receipts the money it receives from selling natural gas to an independent power producer that burns the gas to generate electricity?
Yes. The vendor is a utility under section 186-a, and its receipts from selling natural gas to an independent power producer that uses the gas to generate electricity in New York are taxable gross rec…
Are membership dues paid to a traditional fox-hunting and trap-shooting club subject to New York's club dues sales tax?
No. Since October 1, 1996, dues and initiation fees paid to a genuine rod or gun club — including a hunting club like this one, which maintains a trap range and fox-hound/beagle kennels for hunting ra…
Does a fabless semiconductor company's production-testing of chips made by contract foundries count as manufacturing for the New York investment tax credit?
Yes. A fabless semiconductor company's Manufacturing Production Test Process -- testing the packaged devices that contract foundries and assemblers produced to its specifications -- is part of produci…
When did RR 04-12 treat rentals of a small vacation home, second home, or owner-occupied bed-and-breakfast as taxable accommodations?
Short rentals were taxable when the property was not the owner's place of abode. A rental to the same person for at least 90 continuous days was not transient lodging, and rooms in an owner-occupied h…
What design, sale, approval, and recordkeeping standards did South Carolina set for electronic bingo tickets?
Electronic bingo used a Department-approved, perforated two-part ticket sold at face value through licensed manufacturers and distributors. Each ticket needed prescribed identifiers, matching player a…
Is an independent contractor's service of turning a record company's flat promotional poster into a 3-D in-store display taxable in New York?
Yes, if the finished 3-D poster is delivered to and used at a store in New York. Converting a customer-furnished flat poster into a three-dimensional version is a taxable fabricating service, and beca…
Is a gain recognized under IRC Section 336 on a liquidating distribution included in Texas taxable earned surplus, and how is it apportioned?
Yes, and it is apportioned as a sale of the distributed assets. IRC Section 336 requires a liquidating corporation to recognize gain or loss on a distribution of property in complete liquidation as if…
Were a single-member LLC subsidiary's net-profit and cash-flow distributions to its property-owning LLC parent taxable as rent?
No, if the distributions genuinely reflected business income or profit rather than disguised property payments. They could not coincide with the timing or amount of mortgage, tax, insurance, or other …
Did South Carolina treat a jet ski as a boat eligible for the maximum sales and use tax under RR 04-10?
Yes. The ruling classified a jet ski or other qualifying personal watercraft as a boat and applied the then-current $300 maximum tax. RR 18-4 expressly superseded it and updated the maximum to 5% capp…
Were aircraft sold and delivered in Wichita exempt when nonresident LLC buyers immediately liquidated, distributed the aircraft to a nonresident parent, and removed them within ten days?
Yes, but only if the stated conditions occurred. Two nonresident single-member LLCs would accept and pay for aircraft in Wichita, then liquidate and distribute the aircraft without consideration to th…
Can an equipment lessor rely on TAA 04B4-006's express-incorporation analysis to avoid documentary stamp tax?
Do not rely on this TAA's original answer. In 2004, Florida said the lease documents were not taxable because the payment promise depended on delivery and acceptance, but the delivery certificate was …
Were materials bought by contractors and subcontractors for a federal construction project exempt from South Carolina sales tax?
A prime contractor's qualifying purchases were exempt when its written federal contract required the property to pass to the government. Subcontractor purchases were taxable unless a documented agency…
How did South Carolina tax nonprofit fundraising dinners, entertainment, alcohol, and auctions under RR 04-8?
Tax depended on what attendees were really paying for and whether a specific exemption applied. True donations could be nontaxable, while meals, admissions, drinks, and auction sales could be taxable.…
Was XYZ's tear-duct implant sold to an ophthalmologist exempt as a prosthetic device in SC PLR 04-5?
No exemption applied. The tear-duct implant was taxable because it prevented drainage and restored a function but did not replace a missing part of the body, as South Carolina's prosthetic-device defi…
Was ABC Gas Company's recurring charge for a company-owned LP gas storage tank subject to South Carolina sales tax?
Yes. When ABC owned the LP gas tank, the recurring maintenance and upkeep fee was effectively rent for the customer's possession and use of tangible personal property, so it was subject to sales tax.
Are lease payments for satellite transponders included in the New York property factor, and how are they valued?
Only the tangible portion is included. A satellite transponder lease covers both tangible property (the transponder, which is tangible personal property under section 208.11) and intangible property (…
Can a sole LLC member rely on TAA 04B4-005's minimum-tax treatment for moving unencumbered property through himself to his revocable trust?
Do not rely on this TAA's original answer. In 2004, Florida said only minimum documentary stamp tax applied when a sole-member LLC conveyed an unencumbered condominium to its owner and he then conveye…
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