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 a nonresident of New York deduct contributions made to a spousal IRA when figuring out New York source income?
Yes, but only in part. Because the deduction stems from the husband's compensation and he works in New York, the federal deduction for contributions to the spousal IRA is treated as connected to New Y…
Which of the many ground-services a staffing company provides to airlines at an airport — aircraft cleaning and de-icing, equipment repair, janitorial work, security/baggage-verification, wheelchair/cart transport, skycap and baggage handling, and pass-through port fees — are subject to New York sales tax?
It varies service by service. Ramp service (emptying lavatories, de-icing) and cabin cleaning are exempt when performed on qualifying commercial aircraft under the aircraft exemption, but taxable if p…
Is a private sewer utility's one-time customer connection fee subject to New York sales tax, on top of the tax already owed on its annual sewerage service charge?
Yes. The one-time connection fee is taxable, because it isn't a charge for actual construction/installation work to physically link the customer's pipe to the main line — the customer does that work i…
Can a company that designs, builds, and installs custom 'clean in-process' sanitary piping systems for food, beverage, and pharmaceutical manufacturers buy its machinery, tools, and supplies tax-free under New York's manufacturing exemption?
It depends on how the finished system is installed. If the completed CIP system retains its identity as tangible personal property once installed at the customer's plant (not a capital improvement to …
Could New Mexico keep Ernest Aragon's 2002 income-tax refund as an offset when the Department could not prove that its 1996 assessment for 1995 tax was mailed?
No. A refund may be offset only against a liability for which the taxpayer is actually liable, and an assessment becomes effective when mailed or personally delivered. The Aragons credibly denied rece…
Is a corporation spun off from its parent a newly formed business or a successor for Empire Zone purposes, and must it get its own Article 18-B certification?
It is a newly formed business, not a successor, and needs its own certification. Where a parent (P) spun off MNT in a tax-deferred IRC 368(a)(1)(D) divisive reorganization and 355 distribution, and MN…
Does an out-of-state food distributor lose Public Law 86-272 protection when its delivery drivers pick up damaged goods and collect payments in New York?
Yes. The Pennsylvania food distributor's salespeople solicited orders in New York and it delivered by its own trucks (activities that, by themselves, stay within Public Law 86-272). But its delivery d…
Did Louisiana's state-tax exemption for LASERS retirement benefits extend to distributions from new DROP self-directed sub-accounts managed by a third-party provider?
Yes. The accounts remained within DROP and the LASERS trust, and the provider acted as LASERS's agent under Title 11. Their distributions were benefits paid under Chapter 1 of Title 11 and were exempt…
Were a utility's electricity sales to a city, city agencies, and a jointly owned power plant subject to Florida gross receipts tax?
Yes. Florida treated all three categories as taxable receipts from utility services. The power plant used the purchased electricity for needs such as heating, cooling, and lighting; the electricity wa…
Do I have to file an application to get Employment Expansion and Investment Incentive Act benefits, and what must the application show?
You must apply first. Revenue Ruling 29-03-1 holds that, as amended by Laws 2003, LB 608, an application is required before any benefits may be received under the Employment Expansion and Investment I…
How did Kansas sales tax and transient guest tax apply when an accommodations broker subleased apartments for short or extended stays?
An accommodations broker's room-rental receipts were subject to Kansas sales tax regardless of how long the same guest stayed; Kansas law had no minimum-stay exclusion from sales tax. Transient guest …
Could an LLC buy, resell, and facilitate multiple transfers of Louisiana motion picture investor tax credits, and how could transferees use or lose them?
Yes, subject to the 2003 statutory transfer limits and expiration rules. Transferees could use credits regardless of residence and against qualifying current or prior-year income tax, but not penaltie…
Which Kansas charges for logo design, monogram application, rush delivery, gift boxing, and minimum orders were taxable?
A one-time setup fee was exempt only when it paid for genuine creation or design of a logo or monogram, involved no property transfer beyond conveying the design, and was more than selecting a stock d…
Does Utah's manufacturing sales tax exemption cover equipment used only in the post-assembly 'Test' steps of making semiconductors, and does the electricity powering that equipment qualify for the industrial fuel exemption?
Yes to both, with conditions. All six Test-area steps (burn-in, test floor, excise, marking/scanning, moisture cure, and packaging) happen before the finished semiconductor is complete, so machinery a…
Does a Kansas 501(c)(3) nonprofit automatically qualify for a sales-tax exemption on its purchases?
No. Kansas does not have a broad sales-tax exemption for 501(c)(3) organizations, so being a federally tax-exempt nonprofit is not enough. The Department checked whether the crisis-pregnancy and adopt…
Did an out-of-state-chartered bank paying Louisiana bank shares tax qualify for the same corporation income- and franchise-tax exemptions as Louisiana banks?
Yes. The Department interpreted the exemptions to cover every bank paying the bank shares tax, avoiding unconstitutional discrimination after interstate branch banking became legal. The bank could cla…
For Texas franchise tax, are receipts from goods shipped from Texas to the U.S. government thrown back to Texas, and does it matter that the buyer is the federal government?
The throwback rule looks at the state the goods are delivered to, and it does not matter that the purchaser is the U.S. government. Sales of tangible personal property shipped from Texas to a buyer in…
Which respiratory-care products were exempt or taxable when sold to patients or purchased by healthcare practitioners?
Treatment depended on the product and purchaser. Ventilator systems, nebulizers, thermometers, test kits, and portable resuscitators were specifically exempt, along with necessary parts. Prescribed pr…
Were rental charges at a structured transitional-housing and treatment facility exempt from Florida sales tax?
Yes. Florida found that residents recovering from addiction or other illnesses were dependent on special care and attention and that the facility was designed and operated primarily for their care. Re…
Does a church-affiliated health-care foundation qualify for the Kansas religious-organization sales-tax exemption?
No. A church-affiliated health-care fund does not qualify for the Kansas religious-organization sales-tax exemption in K.S.A. 79-3606(aaa). That exemption requires both a 'religious organization' (a w…
Which state, local, and foreign tax deductions had to be added back when computing South Carolina taxable income under RR 03-6?
South Carolina denied deductions for state and local income taxes, franchise taxes measured by net income, and other taxes measured by or with respect to net income. The ruling classified selected tax…
How did South Carolina classify tangible and electronic software, ASP access, and software maintenance under RR 03-5?
Software delivered by tangible media was taxable, while a completely electronic remote transfer was generally nontaxable if no tangible copy or update was provided. Hosted ASP access was taxable commu…
Which activities did RR 03-4 analyze as creating South Carolina income tax nexus for an out-of-state corporation?
The ruling gave fact-specific yes, no, or qualified answers for more than 100 activities involving property, sales, employees, contractors, delivery, finance, and printing. Each answer assumed that ac…
Could Academy Leasing recover $10,112 of gross receipts tax overpayments when the Department repeatedly failed to act on amended returns but the company did not timely protest the inaction?
No. Academy Leasing timely filed amended returns claiming $10,112 of overpaid gross receipts tax, but the Department did nothing within its statutory action period. Section 7-1-26 then required the co…
Under Florida's former commercial-rent tax, how were a mixed-use hotel lease, third-party subleases, and a no-charge drainage easement treated?
For the 2003 ruling period, rent attributable to hotel areas not used exclusively as guest dwelling units was taxable, while guest rooms and guest common areas provided without an added fee were exclu…
What historical time-and-payment test did superseded Revenue Ruling 03-007 use for long-term hotel occupancy?
The withdrawn ruling treated monthly-paying guests remaining at least two consecutive months as permanent and generally excluded charges beginning in month three, with a contract exception for the fir…
How did Louisiana treat a corporate owner's single-member LLC that had not elected federal corporate tax status?
Louisiana followed federal treatment: the LLC was a disregarded division of its corporate owner, and its assets, liabilities, income, deductions, and credits belonged on the owner's return. Nexus of e…
Under Florida's former commercial-rent tax, was a tenant's payment to remove a percentage-rent clause taxable as rent?
No. The tenant paid the landlord to eliminate a percentage-rent clause so the lease could be assigned, not to obtain or continue occupancy. Florida extended the cited lease-cancellation rule to cancel…
What did Texas's December 2003 revision to Form 14-202 cover for motor vehicle tax and surcharge refund claims?
The 2003 revision made Form 14-202 cover refunds of motor vehicle sales tax, diesel motor vehicle surcharge, and commercial vehicle registration surcharge paid in error, including the then-new diesel …
Did New Mexico violate the Foreign Commerce Clause by taxing Xerox's dividends and Subpart F income from unitary foreign subsidiaries while excluding income from nonunitary domestic subsidiaries?
No. Xerox's unitary foreign subsidiaries and its nonunitary domestic subsidiaries were not similarly situated. New Mexico could include dividends and Subpart F income from the foreign members of Xerox…
Did Florida's residential communications-services exemption apply when elder-care and housing facilities bought telephone service for residents?
Yes. Communications services used exclusively by residents qualified for the residential-household exemption whether the resident or facility bought them. Facility business and administrative use rema…
Does an out-of-state insurance and bonding company have Texas franchise tax nexus if its representatives periodically enter Texas to inspect job sites?
Yes. An out-of-state corporation that provides insurance and bonds for Missouri and Kansas contractors doing work in Texas has Texas franchise tax nexus because its representatives periodically enter …
Does a Delaware holding company that only owns a Texas bank's stock and collects dividends have Texas franchise tax nexus, and are those dividends counted in the Texas parent's Texas receipts?
No on both. A newly formed Delaware holding company whose only activity is owning a Texas bank's stock and receiving dividends - with no Texas employees, assets, services, or meetings - is not doing b…
Does an insurance-industry auditing company owe New York sales tax on its charges to insurance carriers for premium audits, underwriting surveys, and government-mandated site inspections?
No, not generally. Premium audits (which are like payroll/bookkeeping review) and most underwriting and government-compliance property surveys are not taxable, because the reports either aren't the en…
When a trust beneficiary uses a power of appointment to create a new appointive trust, whose domicile decides whether that new trust is a New York resident trust?
It depends on whether the power is general or special. If the donee holds a general power of appointment (exercisable in favor of the donee, the donee's estate, or creditors), the donee is treated as …
Does an out-of-state corporation create Texas franchise tax nexus merely by hiring legal counsel to defend itself in Texas litigation?
No. It is the Comptroller's policy that a corporation hiring legal counsel to defend itself in litigation in Texas does not create nexus for Texas franchise tax purposes. Here, an out-of-state corpora…
Was a purported sale-leaseback of office furniture a taxable operating lease or a financing arrangement?
It was a financing arrangement, not an operating lease of tangible personal property. The taxpayer retained substantially all ownership risks and benefits, including warranties, insurance duties, and …
Is all IRC Section 1245 property first placed in service in a strategic investment area a 'qualified capital investment' for the Texas franchise tax capital investment credit?
Not automatically. A qualified capital investment (QCI) is tangible personal property first placed in service in a 'strategic investment area' (SIA) - or first placed in service in a Texas county with…
If an out-of-state company has employees based in Texas but performs all its services outside Texas, is it subject to the Texas franchise tax and does it owe any tax?
It is subject to the franchise tax but may owe nothing. A Florida company performing services for the U.S. Army whose employees are based at a Texas military base is subject to the Texas franchise tax…
If a retired NYC teacher rolls 403(b) tax-deferred annuity funds into a private IRA, are later distributions from that IRA exempt from New York personal income tax?
Only partly. The portion of each IRA distribution that represents a return of the 403(b) contributions originally rolled over is a nontaxable return of principal, exempt under NYC Administrative Code …
Does an out-of-state bathrobe and towel manufacturer have to register as a New York sales tax vendor and collect tax on all its New York sales — including Internet sales — just because one independent commission-only salesman shows its children's clothing line to a few New York retail stores?
Yes. Having even a single independent salesman solicit business in New York on the manufacturer's behalf — even one who's paid only a modest commission and performs no other functions — is enough cont…
Can a rock-salt spreading company get a refund of the sales tax it paid when it bought the rock salt, on the theory that the salt is resold to (or becomes part of) its customers' driveways and walkways, when the company sells salt-spreading as a standalone service separate from snow plowing?
No refund. Even though the company sells salt-spreading separately from snow plowing, and applies the salt mainly to increase traction rather than to melt existing ice, the rock salt is still a supply…
If I roll over my SUNY pension into an IRA, what portion of my later IRA distributions is exempt from New York income tax?
Only the portion of each IRA distribution that represents a return of the pension contributions actually rolled over from a New York public pension (here, SUNY's Optional Retirement Plan accounts) is …
When did a retailer with South Carolina nexus collect tax on a gift shipped between South Carolina and another state?
Delivery generally controlled. A retailer with South Carolina nexus collected tax when the gift was delivered to the buyer or recipient in South Carolina. Seller-required shipment to a recipient outsi…
How should a recreation business spanning two Kansas counties allocate local sales tax on retail sales and golf green fees?
Retail and recreational activity occurring wholly in one county was allocated entirely to that county; tangible-property sales generally followed the cash-register location. For golf courses crossing …
Is the fee a garnet-mine tour operator charges for scheduled tours and lectures on local mining history, gemology, and geology subject to New York sales tax as an admission charge?
Yes. Even though the tour and lecture are educational and historical in content, the mine site qualifies as a taxable 'place of amusement,' and the fee to attend is an admission charge subject to sale…
Can a diesel-engine manufacturer get back the New York petroleum business tax it paid on kerosene and No. 2 fuel oil used to run and test the engines it makes, when none of the fuel is used on the highways?
Yes, potentially — if the engine testing is part of the production line and the fuel is unenhanced diesel used entirely in production, the fuel is 'manufacturing gallonage' eligible for reimbursement …
Did a corporate partner include its share of a Florida commercial-rental partnership's property-sale proceeds in its sales factor?
Yes. The corporate partner had to include its partnership share of the Florida business-property sale in both the Florida sales-factor numerator and everywhere denominator. The sale substantially chan…
Did a corporate partner include its shares of partnership sales of Florida rental property and out-of-state land in its sales factor?
Yes. The taxpayer's shares of both partnership business-property sales entered its sales-factor computation. The Florida sale entered the Florida numerator and everywhere denominator; the out-of-state…
Were a corporate partner's shares of Florida and out-of-state partnership real-estate sales included in its apportionment factor?
Yes. Partnership sales flowed through to the corporate partner according to its interests. The Florida business-property proceeds entered the Florida numerator and everywhere denominator; the out-of-s…
Did a corporate partner include its share of a Florida rental partnership's real-property sale proceeds in its sales factor?
Yes. The partnership's sales flowed through to the corporate partner, and receipts from selling the Florida business property entered both the Florida sales-factor numerator and the everywhere denomin…
Did a corporate partner include its shares of partnership sales of Florida and out-of-state business real estate in its sales factor?
Yes. Both partnership property sales entered the taxpayer's sales-factor computation to the extent of its partnership interests. The Florida sale was sourced to the Florida numerator as well as the ev…
How did a corporate partner include proceeds from partnership sales of Florida and out-of-state business real estate in its sales factor?
The taxpayer had to include its direct and indirect partnership shares of both business-property sales in the sales-factor computation. The Florida property's proceeds entered the Florida numerator an…
Did a corporate partner have to include its share of a Florida rental partnership's real-estate sale proceeds in its sales factor?
Yes. The partnership's payroll, property, and sales flowed through to its corporate partner, and gross receipts from selling a business asset belonged in the sales factor. Although inclusion substanti…
Did a free monthly publication mailed to recipients and consisting primarily of advertising qualify for Florida's shopper-periodical exemption?
Yes. After reviewing three sample issues, Florida found that the publication met the exemption because it was published regularly, mailed to recipients free of charge, and consisted primarily of adver…
Are nafion membranes used in an integrated chemical-production process exempt from Kansas sales tax?
Exempt. Nafion membranes that serve as dividers in the electrolytic cells producing caustic soda and chlorine are repair or replacement parts within the taxpayer's integrated production operation and …
Which listed medical products were exempt when sold to Florida hospitals: prescription-labeled single-use devices, thermometers, catheters, or other supplies?
Florida exempted the listed devices and kits that both carried the federal prescription legend and were intended for one-time use. Thermometers for human use and catheters were specifically exempt reg…
Are sales of drugs to licensed practitioners (dentists, optometrists, veterinarians) exempt from Kansas sales tax?
Exempt. Under K.S.A. 79-3606(q), sales of drugs (as defined in K.S.A. 65-1626) to a person licensed to practice the healing arts — including dentistry, optometry, and veterinary medicine — for that pe…
Could a utility stop taxing commercially coded electricity accounts after receiving a residential-use certificate, and could an earlier period be refunded?
Yes, prospectively. A utility that accepted a qualifying residential-use representation in good faith could stop collecting sales tax after receiving it even if the account remained commercially coded…
Did the redacted equipment planned for a Florida enterprise-zone facility qualify for the business-property sales-tax refund under the 2003 statute?
Yes. Florida found that all listed equipment met the property-eligibility test, subject to every other statutory requirement. Under the 2003 provision, eligible units generally had to be qualifying fi…
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