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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Which of a school PTO's carnival charges — game tickets, a cakewalk, a moonwalk — are subject to Kansas sales tax?
The game, cakewalk, and moonwalk charges are taxable; sales of goods are not. The Department ruled that although K.S.A. 79-3606(yy) exempts a parent-teacher organization's sales of tangible personal p…
If a subcontractor's services are resold up a chain and the middleman promised to handle the gross receipts tax but never did, does the subcontractor still owe New Mexico gross receipts tax on what he was paid?
Yes — he still owed the gross receipts tax on his own sale of services, so the protest was denied. Retired engineer Richard Hall performed work for Allied Signal as a subcontractor of Pathfinder, whic…
Can a corporation use push-down accounting to revalue its assets when computing taxable capital for the Texas franchise tax?
No. For the pre-2008 franchise tax, a corporation generally computes surplus, assets, and debts under generally accepted accounting principles (GAAP) (Tax Code Sec. 171.109(b)), but Sec. 171.109(m) an…
Did the interstate-vessel exemption cover fuel, supplies, repairs, and laundry for stevedoring or cargo-handling vessels that never left Louisiana waters?
No for periods beginning November 28, 2001. The vessel's own movement controlled, not the interstate destination of the barges or cargo, so purchases for vessels operating wholly in Louisiana waters w…
Is there a 50% limit on the base amount for the Texas franchise-tax research and development credit, and will penalties be waived where the form did not show it?
Yes - there is a base amount limit of 50% of current qualified research expenses for the franchise-tax research and development credit. A return preparer pointed out that the Texas Schedule F form and…
Is a company's website-hosting, database, and website-design business taxable in Utah when its servers and software sit outside the state?
No sales tax applies to application-hosting and server-storage services when the Company's software and hardware stay outside Utah and customers never download software onto a Utah computer — accessin…
Does an out-of-state mortgage banking LLC create Utah income tax nexus by using a Utah-based loan originator and servicing loans secured by Utah property?
Yes. Using a Utah-based loan originator, servicing loans secured by Utah real property, and using Utah courts to foreclose are all activities "significantly associated" with maintaining a market in Ut…
Which documents in an employer-sponsored employee relocation home sale were subject to Florida documentary stamp tax?
Only the completed deed from the relocating employee to the third-party buyer was taxable. The reviewed relocation-management agreement, employee-to-relocation-company sale contract, power of attorney…
Did a 14.4-mile pipeline connecting two desalination facilities qualify for Florida's industrial machinery and equipment exemption?
Yes. The pipeline did more than transport partly treated water: it mixed required treatment chemicals, and potable water could not be produced without that function. The continuous pipeline was integr…
Under Kansas's original 2001 historic rehabilitation credit, could credits be transferred or specially allocated, and could banks or insurers claim them?
Under the 2001 statute, the Kansas historic rehabilitation credit was not transferable. A partnership, S corporation, LLC, or other flow-through entity allocated the credit to owners according to thei…
Did chemicals used in power-plant air-pollution systems and closed cooling-water systems qualify for Florida's specialty-chemical exemption?
No. Chemicals used in flue-gas desulfurization, nitrogen-oxide removal, and turbine water-injection systems controlled airborne pollutants, not wastewater. Chemicals in closed recirculating cooling sy…
What disclosures and records did a Louisiana dealer need when advertising that it would absorb sales or use tax for a purchaser?
The advertisement had to say the dealer would remit the unpaid tax for the purchaser, and the invoice or other writing had to separately show the tax the dealer accepted. “All taxes included” was insu…
Which of a device seller's charges — installation, training, repairs, warranty, tech support, freight, and others — are subject to Kansas sales tax?
It depends on the charge. The Department ruled that the electronic access control devices themselves — plus installation, repairs, extended warranty, a credit allowance, management charges, artwork se…
Are advertising catalogs given to customers free of charge subject to Kansas sales or use tax, and does Kansas exempt periodicals?
No periodical exemption, and the catalogs are taxable. The Department ruled that Kansas does not exempt periodicals from sales or compensating (use) tax, so a company's industry catalogs — even though…
Which generating-plant, reclaimed-water, wastewater-treatment equipment, and chemicals qualified for Florida sales-tax exemptions?
Qualifying machinery and equipment used in natural-gas electricity and steam generation were exempt, including integrated production and mandated pollution-control systems but not distribution equipme…
When did a Florida timeshare homeowners association filing federal Form 1120-H have to file Florida Form F-1120?
The association filed Florida Form F-1120 for the first year it legally elected and filed federal Form 1120-H. It did not need subsequent Florida returns while it continued lawful annual 1120-H filing…
Were charges for fumigating cargo containers and their contents subject to Florida's tax on nonresidential pest-control services?
No. Florida's taxable nonresidential pest-control category covered services to nonresidential buildings and expressly excluded services provided to tangible personal property. Cargo containers and the…
Are engineering, design, fabrication, and installation of control panels for a manufacturer's machinery exempt from Kansas sales tax?
Yes, when two conditions are met. The Department ruled that a company's engineering, design, fabrication, and installation of control panels for machinery and equipment — together with the related equ…
Can a hands-off company president escape personal liability for withholding tax the company deducted but never paid over, by claiming he did not know and had reasonable cause?
No — the president was personally liable, and the reasonable-cause exception did not save him, so the protest was granted only on the estimate for three years and otherwise denied. Hal Dean was the ma…
Is a corporate officer who controls wage payments personally liable for withholding tax the company deducted but never remitted, and does the seven-year audit period reach him individually?
Yes on both — the officer was personally liable and the seven-year period reached him — but the Department's estimate for three years was cut to the actual amounts in the records, so the protest was g…
Could a corporate group stop filing Florida consolidated returns after 15 years of reorganization, divestitures, acquisitions, and changed business lines?
Yes, subject to four conditions. The group had fundamentally changed its business and apportionment profile, had independent business reasons, expected separate filing to produce the same or more Flor…
When is software, a content database, or hosting taxable under Utah sales tax — and does it matter whether the customer downloads it or just accesses it online?
Canned (prewritten) software and content databases are taxable whenever the customer takes possession of them — by disk, electronic download, or delivery to a server the customer controls — regardless…
Which natural-gas generating-plant equipment and reclaimed-water or wastewater-treatment purchases qualified for Florida sales-tax exemptions?
Machinery and equipment consistent with the integrated-plant authorities qualified when used in natural-gas electricity and steam production, not distribution, and properly documented. Reclaimed-water…
Must New Mexico settle a state income tax bill on the same ability-to-pay terms the taxpayer got from the IRS, and does an attorney's advice not to file excuse the late-filing penalty?
No on both points, so the protest was denied. Howard Bancroft, on his attorney's advice during divorce litigation, did not file 1992–1994 New Mexico income tax returns; after the IRS resolved his fili…
How did Texas tax rentals of manufactured homes, trash trailers, and trailer-mounted septic systems used at oilfield sites?
The answer depended on the equipment. Manufactured-home rentals fell under hotel occupancy tax; trash-trailer charges were part of a taxable waste-disposal service, with vehicle tax due when buying th…
An oilfield-services rental company rents out three different things -- mobile homes, trash trailers used to collect and remove jobsite garbage, and septic systems mounted on trailers. What tax (if any) applies to each, and who's on the hook if the customer doesn't pay it?
Three different taxes for three different rentals. (1) Renting a manufactured (mobile) home is subject to STATE HOTEL OCCUPANCY TAX (6%, Chapter 156), not sales tax -- rentals under 30 consecutive day…
Which sterilization, lighting, HVAC, and air-cleaning equipment qualified for Kansas's integrated production exemption?
Equipment sterilizing bottles or containers for the finished product qualified as exempt packaging equipment, and its operating electricity was exempt. General plant lighting, heating, cooling, ventil…
If a carpet installer holds the wrong type of nontaxable transaction certificate and can't get the right one within the Department's 60-day deadline, can he still deduct his resale receipts — and do 'double taxation' or 'another installer got the deduction' arguments help?
No — the deduction was lost and the protest was DENIED. Southwest Flooring Installations sold carpet-installation services to carpet retailers, which resold those services to their customers and charg…
Are multi-level marketing commissions taxable New Mexico gross receipts when they are measured by the phone charges of out-of-state customers but earned for sales services performed in New Mexico?
His commissions were taxable New Mexico gross receipts to the extent his sales and recruiting services were performed in-state, so the protest was denied. Wayne Gaede earned multi-level marketing comm…
Are a utility's connection, reconnection, damage-claim, name-change, and similar service charges taxable as part of the sales price of electricity or gas, and when did utilities have to start collecting tax on them?
Taxable, with transition relief. Charges for services like connection/reconnection, damage claims, and name changes are taxable as part of the sales price of electricity or gas when the customer's und…
For a $1.3 billion JFK Airport terminal rebuild, is an airline's purchase of construction materials, furniture, computers, and equipment exempt from sales tax through the Port Authority/City of New York's exempt status or through an Industrial Development Agency agency arrangement?
Yes, through two separate paths. Construction materials that become part of the new terminal are exempt because title to each improvement passes immediately to the City of New York (an exempt governme…
Are medical-record copying, storage, digital database, and file-management services subject to Kansas sales tax?
No, the services are not taxable. The Department ruled that no imposition exists in Kansas law to tax a company's medical-record copying, monthly storage, virtual (digital) file-room database, or file…
Is a nonprofit senior center exempt from Kansas sales tax?
No. The Department ruled that this nonprofit organization is not exempt from Kansas sales tax. Although 1998 Senate Bill 493 added sales-tax exemptions for several deserving organizations — including …
Do construction materials bought with a political subdivision's bond proceeds stay exempt from Kansas sales tax if a private company buys the industrial revenue bonds?
Yes, they remain exempt. This ruling confirms an earlier Department ruling (issued August 30, 2001) that construction materials for the project are exempt from Kansas sales tax because they will be pu…
Must a newspaper collect Kansas sales tax on subscriptions, and does it still owe use tax on the free copies it gives away?
Yes, Kansas newspaper subscriptions are taxable. The Department ruled that a publisher must collect Kansas sales tax on subscriptions delivered by mail to a Kansas address (the specific rate is redact…
Which medical supplies and equipment — including rentals and delivery fees — are exempt from Kansas sales tax?
It depends on the item, a prescription, and the buyer. Under K.S.A. 79-3606(r), prescribed prosthetic and orthopedic appliances are exempt — from the items listed, only wheelchairs, shower/commode cha…
Can a company buy ATVs and watercraft tax-free if it modifies them and resells them?
Yes, the purchases are exempt. The Department agreed that a company buying all-terrain vehicles and watercraft to modify and then resell — to a dealer or an end user — may acquire them without paying …
Are hand tools sold to a Kansas manufacturer exempt from sales tax if the manufacturer uses them in production?
Exempt when the manufacturer's use test is met. The Department explained that Kansas law changed after the seller's 1999 inquiry: under the current integrated production exemption, K.S.A. 79-3606(kk),…
Can someone avoid New Mexico income tax by reporting zero income on tens of thousands of dollars of wages and arguing he isn't a 'taxpayer,' that Federal Reserve Notes can't be taxed, or that a self-styled 'private judgment' cancels the tax?
No — every argument failed and the protest was DENIED. Patrick Youngman reported zero income on his 1999 New Mexico return despite $60,502.47 in wages shown on his withholding statements, and the Depa…
A company's licensed insurance adjuster works full-time at an insurance company's office, under that company's total supervision, on an open-ended assignment -- is billing for that adjuster still taxable after the 2001 law change?
Still taxable. Even though the licensed insurance adjuster works at the insurance company's own office under its total day-to-day supervision, with the insurance company furnishing all supplies and ha…
What Utah sales taxes apply to a company handling Olympic athlete food services, its food sales to the Olympic Organizing Committee, and the restaurant equipment used and later transferred as compensation?
Multiple issues, multiple answers. Sales tax rates vary by Olympic venue location and combine up to three components (a base sales/use rate, a 1% tourism-restaurant tax, and, in resort areas, a 1% res…
If New Mexico wrongly told a business it owed gross receipts tax and it overpaid for years, can it get all of that money back — or does the three-year refund deadline bar the older years even though the state admits no tax was due?
The older years were barred, so the protest was DENIED. Raven Wolf Communications, a consulting astrologer serving only out-of-state clients by phone, was wrongly told by a Department counter employee…
Is a company that supplies licensed insurance adjusters to insurance companies after a catastrophe providing exempt temporary help, or a taxable insurance service?
Taxable. A company that supplies its own licensed insurance adjusters to insurance companies on a temporary basis after catastrophes is performing a taxable insurance damage-appraisal/claims-adjustmen…
If a customer redirects a software delivery into Texas for installation, is Texas sales tax due even though the customer's employees only ever use the software remotely from outside Texas?
Yes, tax is due. Where software (treated as tangible personal property) is physically delivered and installed controls Texas sales/use tax -- not where the customer's employees are physically located …
On a taxable installation contract, what is included in the Kansas sales-tax base — and can a contractor deduct overhead and profit?
Overhead and profit are part of the taxable base. Addressing contracts to install or apply tangible personal property — which the ruling cites K.S.A. 79-3606(p) as taxing — the Department explained th…
If a retailer switches to having a third-party fulfillment house pay customer rebates (funded by manufacturer reimbursements) instead of paying them itself, does the retailer get to reduce its taxable sales price and claim a sales tax refund?
No sales tax adjustment. Rebates that a third-party fulfillment house pays to a retailer's customers -- funded by the retailer billing the manufacturers, not by the retailer's own funds -- are not con…
For an advertising agency's retainer fees, ad campaigns, ad revisions, and sales materials, what parts of the bill are taxable, and what records does the agency need to keep to prove it?
It depends on the line item. A pure monthly retainer fee is a nontaxable service. Charges for employee-fabricated property (finished art, photographs, etc.) are taxable. Preliminary art (concepts, lay…
Was a seller's certificate in a revolving master trust holding trade receivables exempt from Florida intangible tax?
Yes, if the master trust was registered under the Investment Company Act of 1940. The Department treated the common-law trust as a business trust and the seller's certificate as an undivided interest …
Did a corporation owe Florida annual intangible tax on contingent residual interests retained in two automobile-receivable trusts?
The corporation owned taxable residual interests in both trusts, but its current intangible-tax liability was zero because distributions depended on excess spread-account balances after superior claim…
Was hay-grade baling twine exempt from Florida sales tax when a farmer used it for another agricultural purpose, such as staking tomatoes?
Yes. Twine of the same type or caliber appropriate for baling hay remained exempt when a farmer used it to contain, produce, or process an agricultural commodity. The Department expressly included a t…
Must a nonprofit historical society collect Kansas sales tax when it sells books?
Yes. The Department ruled that a historical society must collect the appropriate Kansas sales tax on its sales of books whenever the purchaser cannot provide a properly completed exemption certificate…
Did Texas's tax-law definition of "person" change when the tax statutes were recodified in 1981?
No substantive change. Before the 1981 recodification, former Tex. Tax.-Gen. Ann. art. 20.01(A) broadly defined "person" to include individuals, firms, partnerships, corporations, trusts, and governme…
Was leasing all or part of parcels assessed as agricultural property subject to Florida sales tax on real-property rentals?
No. Because the county property appraiser had assessed the parcels as agricultural property under section 193.461, leasing the parcels or portions of them was not subject to Florida sales tax under se…
Are disposable medical electrodes exempt from Kansas sales tax as prosthetic or orthopedic appliances?
No. The Department ruled that disposable electrodes do not qualify for the prosthetic and orthopedic appliance exemption in K.S.A. 79-3606(r), and so are subject to Kansas sales tax. That exemption co…
Who owed state tax on newspaper advertising inserts while Louisiana's newspaper exemption was suspended through June 30, 2002?
An advertiser buying printed flyers for free delivery to a newspaper owed tax on the full flyer and printing cost at the stated 4% rate. A commercial publisher selling the newspaper could continue buy…
When were roustabout or work-as-directed company charges taxable repairs, fabrication, or property sales rather than nontaxable supervised personnel services?
Independent responsibility for a specific repair, fabrication, or delivered product made the full charge taxable regardless of invoice format. Charges might be nontaxable when personnel functioned as …
When were freight or delivery charges excluded from the taxable price of tangible personal property, and when were they taxable seller overhead?
Optional, avoidable, separately stated delivery from the completed place of sale to the buyer's destination was excluded. Mandatory or bundled delivery was taxable, and freight incurred to bring goods…
When must a Louisiana diving service company collect sales tax on underwater repair work?
Repairs performed in Louisiana on movable property—including ships, barges, boats, and vessels—were taxable unless an exemption applied. Repairs to immovable property were not taxable services, though…
When a racetrack sells corporate sponsors hospitality-tent passes with closed-circuit race viewing, catered food, and rented tents/furniture, which charges are taxable, and can the racetrack buy the tent equipment tax-free for resale?
All three charges are taxable, and no resale certificate applies to the tent equipment. Admission to a racetrack's hospitality tents (with closed-circuit race viewing) is a taxable amusement service, …
In which income-tax and franchise-tax periods did a taxpayer claim Louisiana's inventory tax credit?
For income tax, the credit belonged to the period when the inventory tax was paid, not the assessment year. For franchise tax, the payment entered the immediately following franchise-tax period becaus…
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