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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Are lump-sum payments from a nonqualified deferred compensation plan to nonresident former employees taxable by New York, and does the employer have to withhold tax on them?
No. Lump-sum distributions from The Limited's nonqualified deferred compensation plan to nonresident, nondomiciliary former employees are exempt from New York personal income tax under the federal pre…
When an Illinois partnership that does business both in and out of New York sells stock it held in an affiliated company, is a nonresident partner's share of that gain taxable as New York source income?
It's not a flat yes or no. The Department held that because the partnership carried on business both within and without New York, its income (including the stock-sale gain) must be apportioned, but wh…
How does a company source receipts from licensing databases and electronically transmitting circulars, forms, manuals, and reports in the Article 9-A receipts factor?
They are other business receipts sourced to where the customer accesses the data. Receipts from licensing databases and electronically transmitting circulars, forms, manuals, and reports are 'other bu…
What is 'unjust enrichment' in Texas sales tax law, is it illegal for a seller to keep collected tax instead of sending it to the state, and what are the penalties?
Yes, it's illegal, and the penalties can be severe. Under the doctrine of unjust enrichment, a seller may not profit at the expense of the state or its customers by keeping any amount represented to b…
If two commonly-owned S corporations merge into one, does that eliminate the sales tax that used to apply when they sold lumber products to each other, and does merging change the manufacturing exemption on the equipment involved?
Merging eliminates the sales tax on the internal transfers, but does not fix the manufacturing exemption problem. Two commonly-owned S corporations — S1 (which cuts raw lumber into pickets and fence p…
Is cleaning commercial sewer and drain lines taxable, and does it matter whether the cleaning is done on a schedule versus only when the line clogs?
It depends on whether the cleaning is reactive or truly scheduled. Cleaning sewer and drain lines for COMMERCIAL real property is a taxable nonresidential real property repair service UNLESS it's perf…
Does metal detection equipment used for food-safety quality control during spice and seasoning processing qualify for Texas's manufacturing exemption?
Yes. A food processor that blends and packages spices, herbs, and seasonings purchased metal detection equipment to screen out physical contaminants like metal fragments as part of its food-safety pro…
Is a registered nurse's consulting service for attorneys — reviewing medical charts for malpractice cases — subject to Texas sales tax?
It depends on who the nurse's client is. A registered nurse's new consulting business — reviewing medical charts for attorneys in malpractice matters — is taxable ONLY if performed on behalf of an ins…
I moonlight as a contract nurse on a 1099 and claim business expenses — do I owe gross receipts tax on that pay, or is it exempt wages?
Yes, you owe it — the protest was DENIED. Martha Parrell, a registered nurse, worked full-time as an employee of one home-health agency (Olsten) while also doing part-time contract nursing for Educare…
Can I deduct my New Mexico sales for resale using invoices instead of nontaxable transaction certificates?
Mostly no — the protest was GRANTED IN PART and DENIED IN PART. Layton Talbott, who sold artwork and home furnishings mostly at wholesale, stopped reporting his wholesale receipts and did not collect …
Is a university's share of a per-ticket handling/convenience fee, added on top of a city-run ticket agency's own handling fee, taxable as part of the admission charge?
Yes, all of it is taxable. A university that owns an arena and rents it to promoters allows a city-owned ticket agency to add a convenience/handling fee to each ticket to cover ticketing-system and bo…
How does a highway contractor that blasts and crushes rock from a leased quarry compute its taxable cost of rock used in lump-sum construction contracts, versus rock it sells at retail?
This is a detailed auditor's-confirmation letter covering several linked points for a highway contractor that blasts rock from a leased pit, crushes it, and both uses it on lump-sum contracts and sell…
Did exempt shares in one business trust count as exempt assets in another trust's 90% test?
Yes under the 2000 law applied. If the owned money-market fund met the 90% exemption threshold, its shares remained exempt in the investing fund's portfolio. Only assets held at the prescribed year-en…
In a third-party drop-shipment chain, who owes Utah sales tax, how long is a resale certificate good for, and which store-fixture invoice line items (freight, delivery, installation) are taxable?
Neither seller in a drop-shipment chain owes Utah tax if the exempt resale sale is documented with a certificate; a resale certificate stays valid until revoked (renew every ~3 years is recommended); …
Is a refundable, 30-year membership deposit charged by a private golf club subject to Utah sales tax as an admission or user fee?
No, the refundable deposit itself is not a taxable admission or user fee -- but the club's annual dues and per-round guest fees ARE taxable. The Commission held that because the deposit is genuinely r…
Are cell towers, rooftop antenna grids, and equipment buildings real property or taxable personal property once installed, and are the monthly fees a tower company charges wireless carriers for site access subject to Utah sales tax?
The towers, grids, and equipment buildings are real property once installed (whether on land the company owns or leases), so the monthly fees a tower company charges wireless carriers for the right to…
Is unearned income a tribal member living on the reservation receives from the tribe exempt from Kansas income tax, or does the exemption only cover earned income?
Yes, it is exempt. The Department ruled that unearned income received from a tribal council or tribe by a Native American Indian who resides on his or her own reservation is exempt from Kansas income …
How does a new swimming pool construction business handle Texas sales tax on installing new pools versus repairing existing ones, at residential versus commercial properties?
Installing a new in-ground swimming pool where none previously existed is new construction, whether the property is residential or nonresidential. For RESIDENTIAL property (repair, remodeling, or new …
When a grocery store accepts a manufacturer's coupon or its own store coupon, is Texas sales tax charged on the full price or the discounted price?
Sales tax is due only on the DISCOUNTED price, not the full price, for both types of coupons. A shopper asked the Comptroller to confirm that Rule 3.301(e) (Promotional Plans, Coupons, Retailer Reimbu…
How is 'surplus' defined for the taxable-capital component of the Texas franchise tax?
Surplus is a corporation's net assets minus its stated capital. For the taxable-capital component of the franchise tax, Tax Code Sec. 171.109(a)(1) defines surplus as the net assets of a corporation m…
When was shop cutting of glass taxable fabrication for a Florida real-property contractor?
Shop cutting to the sizes or shapes required for a particular job was taxable fabrication for the contractor's own use. A preliminary shop cut made solely for safer handling and transport was not taxa…
Will Texas accept the Uniform Sales & Use Tax Certificate - Multijurisdiction as a valid resale certificate, and what does a Texas seller need to accept a resale certificate from an out-of-state retailer?
Yes, conditionally. A resale certificate must be substantially in the form of a Texas Sales and Use Tax Resale Certificate or a Border States Uniform Sale for Resale Certificate under Rule 3.285(h) — …
As of 2000, would the Texas Comptroller accept a web-based resale certificate signed with an electronic signature or a digital signature?
As of this 2000 letter, a printable electronic-signature resale/exemption certificate was accepted, but a digitally signed one was not. A business setting up a website to sell to wholesalers and indiv…
Could a partnership electing corporate status be the parent of a Florida consolidated group?
Yes. Florida followed the partnership's federal election to be treated as an association taxable as a corporation. It could be the common parent and file a Florida consolidated return while it remaine…
Are a personal trainer's one-on-one training session fees subject to Texas sales tax as an amusement service?
Not taxable, if the training meets a specific two-part test. A registered accountant asked on behalf of a personal-training client, after noticing that two employers billed personal training services …
For an entertainer expanding into catering, room rental, and party equipment rental for company parties, which charges are subject to Utah sales tax and which are exempt services?
It depends heavily on how you bill and structure each service. Entertainment charged alone is a nontaxable service, but it must be SEPARATELY STATED from any taxable charge (like catering) on the same…
Does Utah's transient room tax apply to the rental fees a 'condo hotel' charges unit owners for nights beyond their free annual usage allotment?
Yes, if the stay is under 30 consecutive days. A resort planned to sell equity ownership in condo-hotel units that lets each owner use their unit free for 28 days a year, then charges a rental fee for…
My employer put me on a 1099 and I filed a Schedule C by mistake — do I still owe New Mexico gross receipts tax if I was really an employee?
No — the protest was GRANTED (taxpayer win). Michael Flure, in his early twenties, worked full-time for Four Star Builders, which set his hours, paid him $7/hour, directed his work, and supplied the w…
Is a charge for security services provided by an off-duty peace officer subject to Texas sales tax?
No. A charge by an off-duty peace officer for providing security services is not subject to Texas sales tax. Rule 3.333, 'Security Services,' contains a specific carve-out in section (i)(3) that exemp…
For a manufacturer: are safety apparel, hand tools, and dies/molds used to make products exempt from Texas sales tax, and how does a written agreement affect whether a die charge to a customer is a taxable sale?
Four separate manufacturing-exemption points, confirmed together. (1) Safety apparel and work clothing used during actual manufacturing/processing of goods for ultimate sale is exempt under Tax Code §…
Can a Texas Direct Payment permit holder issue a direct pay exemption certificate to a contractor building a pipeline under a lump-sum contract?
No. On a lump-sum contract, the contractor is treated as the consumer of all materials it incorporates into the customer's property — the contractor pays sales/use tax directly to its suppliers on tho…
Are the electricity, gas, and fuel purchases a residential condominium association or trailer park makes to heat and light shared areas -- hallways, parking lots, pools, community buildings, water/sewage pumps -- exempt from New York sales tax as residential energy use?
Yes, generally exempt. Energy sources and services (fuel oil, gas, electricity, steam, propane, etc.) purchased by a residential condominium association or trailer park to heat, light, or operate comm…
Were college food, vending, and amusement concession agreements taxable real-property licenses?
Yes. Both concessionaires independently operated their own businesses, controlled assigned college premises, supplied equipment and employees, and paid fixed or percentage-based amounts for that acces…
Does the manufacturing exemption cover an excavator with grapples used to gather raw material before an organic mulch manufacturing process begins, versus the wood grinder that actually processes it?
It depends on which stage of the operation the equipment is used in. A manufacturer may exempt equipment directly used in the actual manufacturing, processing, or fabrication of goods for ultimate sal…
Could an acquired Florida consolidated group revoke its election and begin filing separate returns?
Yes. Acquisition by a new parent without Florida nexus was a qualifying change in circumstances, so the Department allowed separate returns beginning with the year ended December 31, 1999. Permission …
Are the gross proceeds a company receives when debt securities held as inventory are called or mature counted as gross receipts for Texas franchise-tax apportionment?
Yes. The Comptroller decided that the gross proceeds received from the calls and maturities of debt securities held as inventory are gross receipts for franchise-tax apportionment purposes. The letter…
Does a business that only distributes flyers (without printing or selling them) need a Texas sales tax permit, and what changes if it starts printing and selling flyers too?
Flyer distribution alone is not a taxable service in Texas, so a business that only distributes flyers it neither prints nor sells does not need a sales tax permit for that activity. Every seller of t…
Is a wastewater treatment facility's flat monthly sewer-connection charge to customers taxable, and does a nonprofit water supply corporation owe tax on the chemicals and equipment it buys to run the facility?
The customer-facing charge is not taxable, but the facility's own purchases usually are. There is no sales tax due on flat rate monthly charges billed to customers who connect their sewer lines to a w…
Were payments and documents in a Chapter 331 synthetic-lease financing subject to Florida taxes?
No tax was due on the described transaction. The synthetic lease was financing rather than a taxable real-property lease, and Chapter 331 exempted the authority-financed documents and transactions fro…
Is a non-profit association automatically exempt from Kansas sales tax on its own purchases of goods and taxable services?
Not on this record. The Department ruled that nothing in the association's documentation established that the non-profit is exempt from Kansas sales tax on its purchases of goods and taxable services.…
Can a Nebraska nonprofit sell 'bingo bonus' pickle cards whose winners are decided by a bingo-ball draw, and what rules apply?
Yes, if the organization holds both licenses. Under LB 658, effective July 13, 2000, a Nebraska organization holding a Class I or Class II bingo license that also holds a Class I or Class II lottery-b…
When were single-patient prescription medical devices exempt from Florida sales tax?
A medical device qualified when it was intended for one-time use on one patient and federal law required it to bear an “Rx only” or practitioner-order warning. The exemption covered items such as proc…
Are purchases by persons who claim membership in a tribe that is not federally recognized exempt from Utah sales tax the way purchases by members of a federally recognized, contracting tribe are?
No. A tribe that is not federally recognized has no state-negotiated sales tax exemption, so persons claiming membership in it are treated as ordinary Utah citizens subject to sales tax like anyone el…
Does Utah sales tax apply to inmate meals when a private company runs a correctional facility, subcontracts the food service, and bills the State?
No sales tax is due at either level, but not for the reason the taxpayer first proposed. Correctional services aren't a taxable service at all. Meals ARE normally a taxable sale under Utah law, but ar…
If an outside food service company (not the nursing home itself) contracts to provide meals to nursing home residents, are those meals exempt from Texas sales tax the same way meals from the nursing home's own kitchen would be?
Yes — meals to residents stay exempt even when a third-party contractor, not the nursing home itself, provides them. Rule 3.293(c)(2)(E) and (F) exempts food ready for immediate consumption served to …
What Texas resale certificates and tax permits did a wholesale auto dealer need for vehicles and repair parts?
A wholesale dealer selling only to other dealers had no retail motor vehicle tax collection duty. It could use and collect the vehicle resale certificate for dealer sales, document out-of-state dealer…
Are carbon tanks and chlorine test packets used with a hemodialysis machine exempt from Texas sales tax?
Exempt only for the in-treatment portion of their use. A hemodialysis services company asked whether sales tax was correctly being charged on carbon tanks connected to its dialysis machines (exchanged…
Were county impact-fee agreements taxable mortgages for Florida documentary stamp tax?
No. Although an impact-fee agreement created a lien on each lot when sold, it did not resemble a mortgage securing borrowed money evidenced by a promissory note. The Department treated it like other s…
A distributor complained that Metabolife was still charging sales tax on now-exempt vitamins/supplements, and that the company required a minimum sales volume before letting distributors buy tax-free. Is that correct?
No, on both counts. Metabolife is not required to collect sales tax on any vitamins, minerals, and nutritional supplements for humans sold in Texas on or after April 1, 2000 (the effective date of Sen…
If a contractor doing repair or remodeling work on commercial property fails to charge or remit sales tax, can the Comptroller come after the customer (property owner) for the unpaid tax instead of or in addition to the contractor?
Yes. Sales and use tax is ultimately the purchaser's liability, so if a contractor fails to collect and remit tax on a nonresidential repair or remodeling job, the Comptroller can pursue the property …
Is collagen that a dermatologist purchases and injects into a patient's body during an office procedure subject to Texas sales tax?
No. Collagen purchased for the purpose of implanting into the human body qualifies as an exempt prosthetic device under Texas Tax Code § 151.313(a)(4) and Rule 3.284(a)(10)(C), so the dermatologist ow…
Are toothbrushes, floss, and toothpaste that a dentist buys for practice use or to give away to patients subject to Texas sales tax?
Mostly yes. Toothbrushes, floss, and non-fluoride toothpaste are taxable when sold to a dentist for practice use or to give away to patients. Fluoride toothpaste, however, may be sold to dentists tax-…
Did a free biweekly real-estate advertising publication qualify for Florida's shopper exemption?
Yes. The publication was distributed free through newsstands every two weeks and consisted primarily of advertising from real-estate and related businesses. It qualified as an exempt shopper while eac…
Is an Eagle Sand Classifier — a machine that washes and sizes sand — exempt manufacturing/processing equipment under Texas sales tax law?
No. Simply sizing, screening, sorting, washing, or drying sand does not count as "processing" under Rule 3.300, because it doesn't modify or change the characteristics of the sand. So a sand classifie…
Are an excavator's sales of sand, gravel, and rock — and the hauling charges to deliver them to a job site — subject to Kansas sales tax?
Yes to both. The Department ruled that sand, gravel, and rock severed from real property are tangible personal property, so their sale is taxable — and when the seller delivers the materials, the haul…
Which year's labor statistics set the required employment, investment, and wage levels for Rural Economic Opportunity Act incentive applications filed in 2000?
Applications filed in calendar year 2000 use calendar-year 1997 labor statistics -- the most recent year for which all required, non-preliminary figures had been reported as of July 1, 1999 (some 1998…
Does a bank's dedicated aviation subsidiary -- a genuinely separate corporation that owns and flies its own planes for related companies' employees and customers, charged at cost -- qualify for the commercial aircraft sales tax exemption on new aircraft purchases and on the fees it charges affiliates?
Yes. A dedicated aviation subsidiary that is a genuinely separate, independently operating legal entity -- with its own assets, employees, bank accounts, and business relationships, not just a shell -…
Who owed Florida tax when an out-of-state drop shipper delivered goods to a Florida buyer?
For common-carrier delivery from outside Florida, the drop shipper's sale to the unregistered out-of-state customer was not a Florida sale, so the shipper did not collect tax; the Florida buyer genera…
Could a governmental unit buy wastewater-project materials tax-free through direct purchases?
Yes, if the governmental unit was the purchaser in substance and form. It had to issue purchase orders with its exemption number, receive direct invoices, pay vendors directly, take title and liabilit…
Is a nonprofit community concert association exempt from Kansas sales tax on its purchases?
No — it must keep paying sales tax on its purchases. The Department reviewed the association's by-laws and found no basis for an exemption, explaining that 'there is no broad-based sales tax exemption…
How these rulings are useful
- See how the rule applies: A letter ruling shows how a state revenue department actually applied the tax law to a specific business and set of facts.
- Plan with confidence: Find a ruling with facts close to yours before you charge, remit, or claim an exemption.
- Binding only on the requester: A ruling is binding on the department only for the taxpayer who asked. It is persuasive, not a substitute for your own ruling or professional advice.
- Research across states: Compare how different states treat the same issue, from SaaS and food exemptions to nexus and contractor purchases.