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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Were employee fees for mandatory airport ID badges and parking decals subject to Florida sales tax?
Badge fees were not taxable because the badge transfer was incidental to a required condition of airport employment. Parking fees were taxable because employees paid for parking spaces, and a Florida …
Were a building-material seller's delivery and rooftop-loading charges part of the taxable sales price?
Delivery charges were taxable because they were included in the materials' unit price instead of separately stated. Rooftop-loading charges were not taxable because they were separately stated and cus…
May a Texas vehicle rental company accept a photocopy of a motor vehicle rental exemption certificate from a school district?
Yes. A rental company could accept a photocopy when the renter was a qualified exempt entity, such as a school district, and the original certificate had been properly completed and signed by an autho…
How were Florida nonrecurring intangible and documentary stamp taxes calculated on a loan secured by real and personal property?
The closing calculations were correct. Nonrecurring intangible tax applied only to the portion secured by Florida real property and could not use a tax base above that property's fair market value. Do…
Does a steel-and-pipe retailer's new cutting machine qualify for the Kansas integrated plant (production) exemption?
No. The Department advised that a new cutting machine bought by a steel and pipe retailer/wholesaler does not qualify for the integrated plant (integrated production) exemption at K.S.A. 79-3606(kk), …
Could an HPIP credit passed through from an S corporation offset a shareholder's total Kansas income-tax liability, including tax on other income?
Yes. When an S corporation or other flow-through entity qualified for an HPIP credit, the credit passed to its shareholders, partners, or members. A recipient could apply the credit against total Kans…
Could a Louisiana corporation deduct expenses allocated to an IRC § 78 foreign-dividend gross-up that Louisiana excluded from corporation income tax?
No. The gross-up was income for Louisiana purposes but was specifically excluded from tax, so expenses attributed to that untaxed income were disallowed in computing Louisiana taxable income.
When was accrued vacation pay included in surplus and undivided profits rather than treated as a fixed liability for Louisiana franchise tax?
A pooled estimate subject to forfeiture was not a definitely fixed liability and entered surplus and undivided profits. Employee-level accruals guaranteed to be paid in addition to regular pay could b…
How does Kansas sales tax apply to propane sold for residential heating, for commercial use, and to power forklifts?
It depends on the use. Propane sold to heat or light a residence is exempt from Kansas state sales tax but still subject to local sales tax, sourced to the customer's location (K.S.A. 12-191); small 2…
Is Texas motor vehicle sales tax due when vehicle titles transfer between corporations in a statutory merger or consolidation?
No. The Comptroller said vehicle transfers between corporations resulting from a statutory merger or consolidation were not subject to motor vehicle sales tax, including both corporate division and co…
When did a foreign trademark holding company have Louisiana corporation-income-tax nexus from licensing intangible property used in the state?
Nexus existed when the intangible purposefully generated Louisiana income and the company's Louisiana connection was more than de minimis. Public Law 86-272 did not protect licensing or continuing exp…
Were airport passenger-screening services taxable when the Federal Aviation Administration contracted and paid the provider directly?
No. Security services under the Federal Aviation Administration contract were exempt because the United States government paid the provider directly. The same services would be taxable if a private go…
Were custom concrete floating docks fabricated and installed under lump-sum contracts real-property improvements for Florida sales tax?
Yes. The custom floating docks were fixtures and real-property improvements under the proposal reviewed. The contractor could pay tax on materials and fabricated cost rather than collect tax on the fu…
Does being a not-for-profit organization by itself make an organization's purchases exempt from Kansas sales tax?
No. The Department advised that being a not-for-profit organization does not by itself exempt an organization's purchases from Kansas sales tax. Exemptions are narrowly construed, and a group must fit…
Were the notes, mortgages, credit-enhancement agreements, and related documents for higher-education revenue bonds subject to Florida taxes?
No. Statutory exemptions covered the specified trust indentures, loan agreements, letter-of-credit and reimbursement agreements, and related bank and insurer mortgages for the Series 2002A and 2002B b…
If an auto body shop didn't get the required certificates from dealer customers and never charged them tax, does it still owe gross receipts tax — and does its accountant's bad advice at least waive the penalty?
Yes on the tax, no on the penalty — a split result. JM Body Shop deducted receipts from work for auto dealers but never got the required nontaxable transaction certificates in time, so those deduction…
Are dietary supplements such as protein drinks subject to Kansas sales tax?
Yes. The Department advised that Kansas sales and use tax law provides no exemption for dietary supplements such as protein drinks, so the seller must collect and remit Kansas sales/use tax on those s…
Can a nonprofit that promotes a specific county, city, or area get the Texas franchise-tax exemption, and what must it show?
A nonprofit corporation organized solely to promote the public interest of a specific county, city, town, or other area within Texas can qualify for a franchise-tax exemption under Tax Code Sec. 171.0…
If a New Mexico taxpayer misses the 30-day deadline to protest a tax assessment, can the Administrative Hearings Office still review the assessment on the merits?
No. Gilman Construction did not protest a 1998 gross receipts tax assessment within the 30 days that Section 7-1-24 requires. Years later, after a Department collection letter, it wrote in disputing t…
What deed-tax and sales-tax registration results followed a partnership's conversion to an LLC and later transfers to subsidiary LLCs?
A deed recorded solely for the partnership-to-LLC statutory conversion was not subject to documentary stamp tax because title vested by operation of law. Later deeds from the parent LLC to subsidiary …
Was documentary stamp tax due when an individual transferred unencumbered Florida property to a newly formed wholly owned corporation?
No. The individual was the property's sole owner, would be the corporation's sole shareholder, received no consideration for the transfer, and the property had no mortgage. Applying Kuro, the Departme…
If my corporation claimed federal bonus depreciation, does it have to add part of it back on its Nebraska corporate income tax return?
Yes, in part. Under Revenue Ruling 24-02-1, a corporation that claimed federal bonus depreciation under the Job Creation and Worker Assistance Act of 2002 (Internal Revenue Code sections 168(k) or 140…
If a trust or estate claimed federal bonus depreciation, must it add part of it back on its Nebraska fiduciary income tax return?
Yes, in part. Under Revenue Ruling 23-02-1, a fiduciary (estate or trust) that claimed federal bonus depreciation under the Job Creation and Worker Assistance Act of 2002 (Internal Revenue Code sectio…
If I claimed federal bonus depreciation, do I have to add part of it back on my Nebraska individual income tax return?
Yes, in part. Under Revenue Ruling 22-02-1, individuals who claimed federal bonus depreciation under the Job Creation and Worker Assistance Act of 2002 (Internal Revenue Code sections 168(k) or 1400L)…
Is meat bought to be processed and then sold at retail exempt from Kansas sales tax as an ingredient or component part?
Yes. The Department advised that meat purchased to be processed and ultimately sold at retail to consumers is exempt from Kansas sales tax as an ingredient or component part under K.S.A. 79-3606(m). T…
When did communications services sold to resort-condominium owners qualify for Florida's residential household exemption?
Permanent residents and seasonal residents who left their units vacant qualified for the residential household exemption. Units placed in an on-site manager's licensed public-lodging program did not. …
Are garage doors, repair parts, and repair services at a salt-manufacturing plant exempt as integrated production equipment?
No. Garage doors provided access to the manufacturing building but did not receive, move, transform, test, control, package, power, or otherwise perform any function of integrated production equipment…
How did Louisiana tax a dealer's sale of a movable building, and when did a permanently installed structure instead make the seller a contractor?
A temporarily installed movable building was tangible personal property taxed on its full price, including fabrication, overhead, and profit; optional separately stated delivery and installation were …
How does a Nebraska estate or trust figure its 2001 credit for prior year minimum tax?
Recompute the federal credit for Nebraska. Under Revenue Ruling 23-01-2 (a corrected version), Neb. Rev. Stat. §77-2717 requires an estate or trust to recalculate the federal credit for prior year min…
Did a county's airport public-works agreement make the county the tax-exempt purchaser of construction materials?
No. The agreement did not clearly include any of six required protections: county purchase orders with its exemption number, county title and liability at job-site delivery, direct vendor invoices, di…
Does the federal 'bonus depreciation' from the Job Creation and Worker Assistance Act of 2002 apply for the Texas franchise tax?
It depends on which component. For the earned surplus component of the Texas franchise tax, bonus depreciation has no effect: earned surplus is calculated under the Internal Revenue Code of 1986 as in…
Were university revenue bonds issued by a direct-support organization on behalf of a state board exempt from Florida taxes?
Yes. The direct-support association acted as agent for the state university board, and Chapter 243 separately exempted the bond issuance. The Series 2001 bonds were exempt from documentary stamp tax, …
Could a parent company stop Florida consolidated filing after organizational changes left only the parent with Florida nexus?
Yes, subject to four conditions. The affiliated group had changed substantially after Florida-operating subsidiaries were sold or dissolved and only the parent retained Florida nexus. Permission depen…
Could a banking group stop filing Florida consolidated corporate income-tax returns after major legal and business changes?
Yes. The Department found the group met the rule's good-cause standard based on changes in law and fundamental changes in business activities, including ownership, scale, customer base, and services. …
If I ship merchandise directly to a Utah customer on behalf of a foreign reseller I sold it to, do I have to collect Utah sales or use tax?
No. When an out-of-state vendor sells merchandise to a foreign reseller with no Utah nexus and ships it directly to the reseller's Utah customer, the sale to the reseller is a sale for resale — the ve…
Under Utah's HB 1006, is interest earned by a mutual fund holding out-of-state municipal bonds taxable, and does it matter when the mutual fund itself (versus the underlying bonds) was purchased?
It depends on the purchase date and whether reciprocity applies — and the Commission later flagged this exact ruling for reconsideration. Under the ruling's original interpretation, HB 1006 taxes inte…
Are a nonprofit ice arena's skating sessions, lessons, hockey leagues, and concession sales exempt from Utah sales tax as a charitable organization?
Mostly yes, with one carve-out. Public skating, lessons, hockey and figure/speed skating fees, event admission, skate sharpening, related equipment sales, advertising, and donations are exempt because…
How is a general partner in an independent power producer taxed, and are PSC-mandated contract termination payments taxable utility income?
An IPP general partner is taxed under Article 9-A for years beginning on or after January 1, 2000 (after section 186 was repealed); for earlier years it fell under section 186 only if it was actively,…
Does a nonprofit association of teaching physicians qualify for Kansas's educational-institution sales-tax exemption?
No. The Department advised that a newly formed nonprofit 'institute' — an association of teaching physicians organized as a 501(c)(3) school — does not qualify for the Kansas educational-institution s…
How are receipts from internet sales of gift certificates and gift checks sourced for the New York receipts factor?
They are intangible other business receipts sourced to where the customer accesses the website. Selling merchant certificates, gift certificates, and gift checks over the internet is not a sale of tan…
Are purchases Utah state agencies and local governments make with the State Purchasing Card exempt from sales and use tax?
Yes. Purchases made with the State Purchasing Card are exempt from Utah sales and use tax because the card is paid for directly by the State of Utah — the issuing bank bills the state, which pays it d…
Can a New Mexico company get back the interest and penalty on a late gross receipts tax (CRS) payment because a temporary employee later mailed the payment check to the wrong state agency, or because the company has a long, clean filing record?
No. Commodore Advanced Sciences paid $105,404.76 of September 2000 CRS (gross receipts) taxes one month and three days late, triggering two months of interest and penalty totaling $6,851.31 under Sect…
Is a person who delivers mail for the U.S. Postal Service under a highway contract route an employee exempt from New Mexico gross receipts tax, or a taxable independent contractor?
She is a taxable independent contractor, so her mail-route payments are subject to gross receipts tax. Cynthia King delivered mail under a U.S. Postal Service highway contract route (HCR) and claimed …
Was licensed practice-management software exempt as customized software because it took more than a year to implement and integrate?
No. A lengthy implementation and integration into the customer's proprietary platform did not establish customized software. The contract described sale or licensing of the vendor's proprietary produc…
Were a tenant's monthly repayments of a landlord-funded improvement allowance taxable as part of commercial rent?
Yes. The lease treated the reimbursements as additional rent, required payment to retain occupancy, priced the base rent with the improvements in mind, and gave the improvements to the lessor at lease…
How do Connecticut's sales, use, admissions, and motor vehicle fuels taxes apply to a federally recognized Indian tribe's purchases and sales, both inside and outside its Indian country?
It depends on who legally bears the tax and where value is generated. Under U.S. Supreme Court doctrine, if a tax's legal incidence falls on the Tribe for a sale made inside Indian country, Connecticu…
When a contractor installs kitchen appliances for hotels, institutions, and tax-exempt organizations, which appliances are taxable free-standing property and which are tax-exempt capital improvements — and does it matter when title to the appliances transfers or whether the customer is tax-exempt?
Free-standing appliances like dishwashers, refrigerators, ovens, and stoves remain taxable tangible personal property even when installed as part of a larger project, but built-in appliances (cabinets…
If a New Mexico Department employee reviews your income tax return and tells you it looks correct, can the state still charge you penalty and interest when the return turns out to be wrong?
The penalty is abated, but the interest stands. Joseph Apodaca wrongly claimed a $16,000 over-65 deduction his income was too high to allow, then took the return to a Department office where a front-d…
Does a New Mexico business owe interest on unpaid gross receipts tax when it mistakenly deducted its receipts from a government day-care program, even though the underpayment was innocent and the state took years to audit?
Yes. Kid’s Kountry, a day care, wrongly deducted all of its payments from a state program (CYF). While sales of food to the government are exempt, sales of services to the government are taxable — so …
When a corporation gets a franchise-tax extension but doesn't file by November 15, does the statute of limitations run from May 15 or November 15?
It depends on how the extension was obtained. If the corporation got its extension by paying 100% of the tax reported in the prior period, Texas Tax Code Sec. 171.202(c)(2)(B) makes the extension mand…
Are labor services performed on a fraternity house at a state university exempt from Kansas sales tax as work on a residence?
Yes — the labor is exempt. The Department advised that a fraternity (or sorority) house is a residence — an enclosure constructed for human habitation — so labor services to repair it qualify for Kans…
Is a religious organization's direct purchase of hotel accommodations exempt from Kansas sales tax with a proper exemption certificate?
Yes. The Department advised that a direct purchase of hotel accommodations by a Kansas or out-of-state religious organization is exempt from Kansas sales tax when supported by a properly completed exe…
Is the rental of construction equipment to a contractor installing manufacturing machinery exempt from Kansas sales or use tax?
No. The Department advised that Kansas law does not exempt the purchase or rental of construction equipment by a contractor for the purpose of installing manufacturing machinery, so the rental of that…
Are royalties from licensing patents and other intellectual property to manufacturers sourced to New York based on where the licensee manufactures?
Yes. Royalties from licensing product and process patents are allocated to New York under section 210.3(a)(2)(C) when the licensee uses the patents in New York, and royalties from licensing trade secr…
What are the carryback and carryforward rules for a corporate franchise-tax 'business loss,' and is it the same as a federal NOL?
A Texas franchise-tax 'business loss' is defined by Texas Tax Code Sec. 171.110(e) and Franchise Tax Rule 3.555(b)(1), which allow it to be carried forward to the five successive years following the l…
Is a web-hosting company's purchase of internet 'bandwidth' from telecommunications carriers exempt from New York sales tax as interstate or international telephone service?
No, it's taxable. Even though most of the web site's visitor traffic comes from outside New York, the bandwidth purchase itself is treated as intrastate telephone service delivered to and consumed by …
Are refundable 'land fund' security deposits that a country club requires as a condition of membership subject to New York's social/athletic club dues tax?
Yes. A 'land fund' deposit that a country club requires new members to pay as a condition of joining is an 'initiation fee' subject to sales tax, regardless of the fact that it's kept in a segregated …
Can a bus company get a New York sales tax refund on the portion of its diesel fuel purchase price that corresponds to federal excise tax the IRS later refunds to it?
No. Because the sales tax is computed on the full price the vendor actually received at the time of the sale -- which properly includes the federal excise tax embedded in that price -- a later refund …
Is an elk farmer's purchase of a hydraulic elk squeeze and handling system exempt from New York sales and use tax as farming production equipment?
Yes, as long as it's used more than half the time for that purpose. Because the elk squeeze and its handling pens are used to immobilize elk for artificial insemination, semen collection, antler velve…
Does selling candy and snacks from open, unlocked vending trays for 75 cents or less qualify for New York's coin-operated vending machine sales tax exemption?
No. An open vending tray where customers simply take candy or snacks and drop payment in a nearby coin box is not a 'vending machine' under New York's sales tax law, so sales through it don't qualify …
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