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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Is replacing the vinyl liner of an in-ground swimming pool -- pumping out the water, removing the old liner, repairing the pool walls, and installing a new liner -- a tax-exempt capital improvement, or a taxable repair?
It's a capital improvement, not a taxable repair. Replacing the vinyl liner of an in-ground pool -- along with the related draining, removal, wall repair, and reinstallation work -- substantially prol…
Is a public university's $5 'vehicle registration fee' -- which the university says isn't a parking fee, but which its own rules describe as buying a parking permit -- subject to sales tax as a charge for parking?
Yes. Even though the university calls it a 'vehicle registration fee' rather than a parking fee, its own parking rules repeatedly describe the same $5 payment as buying a 'parking permit' that lets th…
When a company buys a 25% 'interest' in a private jet through a fractional-ownership program -- where a separate management company controls scheduling, pilots, maintenance, and can substitute other aircraft -- is that purchase a taxable acquisition of an aircraft, or a nontaxable transportation service?
It's a nontaxable transportation service, not a taxable purchase of an aircraft. Because the fractional-ownership program's independent Manager -- not the purchasing company -- retains real dominion a…
When disregarded single-member LLCs charge their tenants for utility services, which entity files the Form CT-186-A utility services tax return?
Each LLC files its own return, not the parent. Where domestic single-member LLCs (S1, S2, S3) -- disregarded for federal income tax but each owning an office building and charging tenants for utility …
A contractor performs actual repairs (not maintenance) to nonresidential real property and buys parts/materials at a hardware store to incorporate into the job. Can the contractor use a resale certificate to buy those materials tax-free, and does it matter whether the bill to the customer separates labor from materials?
Yes — because nonresidential real property repair is itself a taxable service, the contractor may give the hardware store a resale certificate and buy the materials tax-free, since the materials will …
Are rented uniforms and 'lab coats' costing less than $50 exempt from Connecticut sales tax, or are they taxable 'protective' clothing?
Exempt. Rented uniforms and 'lab coats' that cost less than $50 each and simply identify employees or protect against soil and stain are exempt articles of clothing under Conn. Gen. Stat. § 12-412(47)…
I inspect homes and buildings, sometimes for insurance purposes and sometimes just because someone is buying or selling the property. Which of these inspections are taxable, and do I need a sales tax permit?
Inspections performed for insurance purposes (evaluating property risk for insurance coverage) are taxable insurance services under Rule 3.355. But an inspection done for the purpose of selling or buy…
How much of a mobile-home park ground lease was subject to Florida sales tax when most pads were long-term dwelling units?
Only the share attributable to office, storage, and other non-dwelling or lessee-exclusive areas was taxable. The park could multiply total base and additional rent by a fraction using those taxable s…
A company plugs holes drilled to record seismic data for an oilfield service company. Is this service taxable, and does it matter whether the bill separates the materials (bentonite) charge from the labor charge?
The hole-plugging service itself is not a listed taxable service, so a lump-sum charge (labor and materials not separately stated) is not subject to Texas sales tax — though the company must pay sales…
Do I need to periodically renew resale and exemption certificates I've collected from customers, and do I need my customers to show me a copy of their Texas sales tax permit?
No to both. There's no requirement to renew resale or exemption certificates once you have them on file, though it's wise to verify the customer's information (address, phone number, etc.) is still cu…
A company answers four separate sales-tax questions: is electricity/gas used to repair aircraft (including in leased-out hangar space) exempt, who collects tax on catered aircraft meals, is electricity for a helicopter-repair shop taxable, and is electricity used to repair equipment held for resale taxable?
Four separate answers in one letter: (1) electricity/gas used for OFF-WING jet turbine engine repair by a licensed, certificated carrier is exempt under Rule 3.297(d)(4) — but a lessor renting out han…
Could a substantially reorganized corporate group discontinue its Florida consolidated filing election?
Yes. Florida found good cause because the group had fundamentally changed its core business and subsidiaries, had independent business reasons, had no deferred items that would benefit from the switch…
Which sports-field maintenance services are taxable in Kansas and which are exempt?
It depends on the service. The Department listed each sports-field service and its status: aerating, edging/trimming, mowing, dethatching, rototilling, and general field clean-up are exempt (untaxed m…
Does use by youth organizations qualify a camp for the K.S.A. 79-3606(ii) exemption, and must the camp charge tax on facility use?
The camp does not qualify for the exemption and must charge tax on its facility fees to non-exempt users. The Department ruled that although many organizations using Camp ABC are nonprofit sponsors of…
How does Kansas sales tax apply to the equipment, installation, and monitoring sold by a security alarm business?
It depends on how the contract is written. Kansas taxes only the services listed in K.S.A. 79-3603, and security monitoring is not one of them, so the monitoring service itself is not taxable. As a ge…
A university owns and operates a parking garage used mostly by its own students, faculty, and staff, with about 10% of the use going to the general public. Are the parking charges to the university's own students, faculty, and staff subject to Texas sales tax?
No — parking permits sold to the university's own faculty, staff, and students are exempt from Texas sales tax. But the university must collect sales tax on parking charges to other tenants of the bui…
Are an internet risk-management education platform, and separate market-risk and credit-risk analysis/forecasting services sold to financial professionals, subject to New York sales tax?
No, on all three services. Interactive online educational courses in risk management aren't taxable because educational services (interactive or not) aren't among New York's enumerated taxable service…
If out-of-state companies hire New York-based, homebased independent contractors to take inbound customer calls and orders by phone, does that alone make the out-of-state companies responsible for collecting New York sales tax on their New York sales?
No, not by itself. Having New York-based, homebased independent contractors take inbound telephone orders and provide customer service on behalf of an out-of-state company is a 'fulfillment service' u…
Did a post-January 1 distribution of intangible assets to a Florida charitable trust retroactively create Florida intangible tax?
No. A later distribution to the Florida trust did not retroactively tax the assets for the period they were held by another owner, although Florida made no finding about that owner's domicile. The tru…
Were specified infusion, stimulation, implantable-lead, and heart-lung bypass products exempt from Florida sales tax?
They were not exempt as prosthetic or orthopedic appliances. But their sale to a patient was exempt when a licensed practitioner prescribed them and they were incorporated into that patient. The suppl…
A corporation that already holds a Texas sales tax permit forms a single-member LLC (a disregarded entity for federal and Texas income tax purposes) with activity in Texas. Can the LLC report its sales tax activity on the parent corporation's own sales tax permit, or does the LLC need its own separate permit?
The single-member LLC needs its own separate Texas sales and use tax permit — it cannot report its taxable activity on its member's (parent corporation's) sales tax return. Even though the LLC is disr…
A proofreader worked for a court-reporting company that billed her work into its own charges. Does she owe New Mexico gross receipts tax, or can a resale certificate save her?
She owes the tax — the protest was denied. An independent proofreader corrected transcripts for a court-reporting firm, which folded her cost into its own client charges. Her receipts are taxable gros…
Were license fees paid by food and drink concessionaires at a permanent festival park exempt from Florida sales tax?
Yes. Florida treated the year-round festival park as a recreational facility, so licenses allowing food and drink concessionaires to operate within it were exempt. The exemption covered only concessio…
A retailer's computerized point-of-sale system calculates a sales tax amount that differs from what's actually collected from customers. Can the Comptroller approve reporting sales tax based on the actual amount collected instead of the statutory calculation?
No — the Comptroller cannot approve a reporting method that departs from Tex. Tax Code § 151.053(a). Tax must be computed on the TOTAL sale of taxable items (not on each individual item), with fractio…
Are admission tickets to view movies in a theater that's listed in the National Register of Historic Places subject to Texas sales tax?
No. Admission tickets to a movie theater are ordinarily taxable amusement services under Tex. Tax Code §§ 151.0028 and 151.0101(a)(1), but § 151.3101(2)(B) specifically exempts admission tickets to vi…
For pre-2008 Texas franchise tax, could an LLC exclude contributed property with a $1,000 tax basis and $600,000 agreed value from taxable capital?
No. A corporation contributed property with a $1,000 tax basis and $600,000 fair market value to an LLC taxed federally as a partnership. The Comptroller said the LLC's pre-2008 taxable capital includ…
Is a not-for-profit independent system operator that controls the bulk electric grid and runs spot markets -- but does not own the grid or buy or sell electricity -- subject to section 186, section 186-a, or the Article 9-A franchise tax?
No. The New York Independent System Operator -- a not-for-profit that has operational control of the bulk electric transmission grid, administers spot markets, and maintains reliability, but does not …
A photographer's work was resold to realtors by a magazine. Does she owe New Mexico gross receipts tax, and does bad advice from a Department auditor get her off the hook?
She owes the tax — the protest was denied except for penalty. An independent contractor photographed houses for an advertising magazine that resold the photos to realtors. Her receipts qualified in su…
A university holds various events — rock concerts, a student-organization movie showing, and a monster truck rally — sometimes alone, sometimes with a performer's agent, sometimes with a promoter under a profit/loss-sharing contract. In which of these five scenarios are the admission tickets taxable amusement services?
It depends on whether the university is "held out as the provider" of the event and whether it's genuinely sharing both profit AND loss with a for-profit co-provider. Tickets are NOT taxable when the …
A commercial bank asked the Comptroller to run through the sales-tax treatment of a whole list of products and services it purchases: training seminars, delivery charges, armored car/courier services, UCC lien searches, printing, appraisals, pest control, books/subscriptions, audit/loan-review/401(k) administration, software maintenance, and repossession services. Which of these are taxable?
A mixed bag, item by item: training seminars are NOT taxable. Delivery charges billed by the seller of a taxable item ARE taxable. Armored car/courier services requiring a Board of Private Investigato…
A construction company acts as authorized purchasing agent and general contractor for the Federal Home Loan Bank on a construction job, billing equipment rentals to the Bank (paid by Bank check) as a federal exemption claim. Are those equipment rentals exempt from Texas sales tax?
Yes. The equipment rentals are exempt because they are made to the Federal Home Loan Bank, which Tex. Tax Code § 151.309(1)-(3) treats as an exempt purchaser — the statute exempts sales, rentals, and …
Is a Muzak-style 'Marketing on Hold' service — messages and music played to callers while they wait to be connected — a taxable service in Texas?
The Muzak 'Marketing on Hold' service itself is not a taxable service. But if the same seller also provides 'on hold' tapes containing marketing messages to be played to waiting callers, charges for t…
A manufacturer uses a dedicated holding table to hold molded components in place while glue and carpet pieces are affixed and set, then removed for packaging. The table is used for no other manufacturing process. Does it qualify for the manufacturing equipment exemption?
No. Work tables or holding stations used in a manufacturing process do not qualify for the manufacturing exemption unless they directly cause a chemical or physical change in the product (or its compo…
Did a utility-owned LLC include transition charges and interest earned while temporarily investing those receipts in taxable capital or taxable earned surplus?
No. TXU Electric's proposed wholly owned LLC would issue bonds secured by transition property, receive transition charges, and temporarily invest those receipts. Section 39.311 excluded the described …
A homeowners' association contracted for three subdivision entrance signs; the contractor's proposals and invoices bundled labor and materials into one lump-sum price and charged sales tax on top. Are the sign sale/installation charges lump-sum contracts, and is sales tax properly due on the invoices as billed?
The sale and installation of the sign posts qualify as improvements to realty, and the contractor's proposals/invoices here were lump-sum (one combined price for labor and materials). Under a lump-sum…
Was an off-balance-sheet headquarters lease a taxable real-property lease or a mortgage financing arrangement?
Florida treated it as mortgage financing, not a taxable lease. All six agreements showed that the trustee held title as security, rent equaled financing costs rather than market rent, the lessee bore …
When a contractor buys materials tax-free in New Mexico and uses them to build tax-exempt housing on an Indian reservation, does it owe New Mexico compensating (use) tax on the materials?
Yes for the materials — but the bill was cut dramatically. A construction company built Indian housing on the Navajo Reservation as a subcontractor, buying materials off-reservation in New Mexico with…
Can a Texas lessor buy a vehicle exempt from motor vehicle sales tax when it will be modified and leased for an orthopedically handicapped driver or passenger?
Yes. The vehicle did not have to be sold directly to the orthopedically handicapped driver or passenger. A lessor's purchase could qualify if the required modification was performed and the vehicle's …
A retailer's employee embezzled company funds, including sales tax collected from customers. Can the retailer get a refund or waiver of the sales tax that was stolen, since the retailer never actually got to keep that money?
No refund is available. Sales tax is paid by the purchaser and collected by the retailer, who holds it IN TRUST for the state and remains personally liable for remitting it to the Comptroller — even i…
A full-service interactive media company builds websites, domain names, and e-commerce solutions for clients. Which pieces of this work — web page creation, HTML/scanning, graphics/logos, hosting, database access, domain registration, search-engine submission, and software sold online — are taxable data processing, advertising, or other services in Texas?
Web page creation and maintenance is generally a taxable data processing service. Scanning data and creating HTML documents are taxable data processing; creating graphics or logos for a client's page …
How did the former Texas franchise tax treat an electric utility LLC's transition-property transactions and interest received by its bondholders?
The LLC excluded the transfer and ownership of transition property and receipt of transition charges from taxable capital and taxable earned surplus under Section 39.311. A bondholder subject to Texas…
A repair business fixes copiers for customers located outside Texas. Is the repair service taxable, and does it matter whether the customer picks up the repaired copier in Texas or has it shipped back out of state?
The repair service is exempt from Texas sales tax if the repairman travels to another state to perform the repair, OR if the repair is performed in Texas but the repaired copier is shipped or delivere…
Could a homebuilding group stop filing Florida consolidated corporate income-tax returns after major multistate growth?
Yes, with Department permission and four conditions. The group had grown from Florida-only operations into multiple markets, increased employment more than fivefold and revenue nearly sixfold, and sub…
Is restaurant-style food-preparation equipment purchased when constructing a new nursing home facility exempt from Texas sales and use tax as manufacturing equipment, since it turns raw food into consumable food for residents?
No. The manufacturing exemption applies to equipment used to process tangible personal property that is HELD FOR SALE. A nursing home is in the business of providing nursing care, not in the business …
How did Florida tax a production company's master advertising videos and the additional copies sold to customers?
Use of a retained master video was taxable only on its tangible elements, not the production's artistic and copyrightable value. But the full customer charge for each additional copy—including handlin…
Did Florida severance tax apply to processed clay sold for further processing and later sales under Chapter 212?
No, on the stated facts. Florida found the corporation's clay products exempt from solid-mineral severance tax because they were sold for further processing under Chapter 212. The products were used f…
A debt collection company collects on behalf of a client operating both inside and outside Texas, and has been charging Texas sales tax on ALL debtors regardless of where the debtor is actually located. Is that correct, or should Texas tax only apply to debtors located in Texas?
Texas sales tax should only apply to debt collection charges for debtors located in Texas — no Texas sales tax is due on the charge to collect a debt if the debtor was not located in Texas at the time…
Did Florida's post-June 1996 repeal of the solvent-mixture category exempt imported automotive chemical blends from pollutants tax?
Only partly. Florida found the specified smog-emission reducer and carburetor/fuel-injector cleaner nontaxable beginning July 1, 1996, but could not decide two other products without their safety data…
Did selling substantially all assets of a corporate division qualify as a nontaxable isolated sale in Florida?
Yes, subject to limits. The division sale qualified when the seller withdrew from that business and had paid applicable tax on noninventory assets. Inventory required a timely resale certificate or ta…
How did Florida tax portable storage-unit rentals, warehouse storage charges, and county surtax after a unit moved?
Both the portable-unit rent and the added warehouse-storage charge were taxable. The company could avoid pyramiding tax on re-rented warehouse space through a pro-rata credit or, when all but incident…
Were pathology-laboratory proficiency-testing subscriptions and the included test kits subject to Florida tax?
The subscription charge was not subject to sales tax because the true object was a proficiency-testing service and the disposable kits were incidental. The company was the kits' consumer and owed Flor…
Which machinery and materials for a natural-gas electricity and steam plant qualified for Florida's production exemption?
The facility and most integrated generation equipment qualified because natural gas was nonresidual fuel and the electricity and steam were produced for sale. Production systems generally qualified, w…
A CPA firm signed a large outsourced-services contract to perform finance, accounting, and information technology functions for a client's upstream/chemical and downstream business units. Should the whole contract be treated as one nontaxable bundle of 'professional' accounting services (since the computer work is just how the firm delivers its professional advice), or does it need to be broken into individually taxable and nontaxable pieces?
The contract must be broken into pieces — it can't all be treated as one nontaxable professional-services bundle just because a CPA firm is providing it. Rule 3.330 defines data processing broadly (da…
Was Florida documentary stamp tax due when one Delaware limited partnership merged into another and Florida property vested by law?
No, on the stated facts. Delaware law automatically vested the Florida parcel in the surviving limited partnership without a deed, so Florida found no taxable conveyance instrument. The result depende…
How does a Nebraska estate or trust figure the 1999 credit for prior year minimum tax on the Nebraska return?
Recompute the federal credit for Nebraska. Under Revenue Ruling 23-99-2, Neb. Rev. Stat. §77-2717 requires an estate or trust to recalculate the federal credit for prior year minimum tax (Federal Form…
How does a Nebraska individual figure the 1999 credit for prior year minimum tax on the Nebraska return?
Recompute the federal credit for Nebraska. Under Revenue Ruling 22-99-2, Neb. Rev. Stat. §77-2715(2) requires an individual to recalculate the federal credit for prior year minimum tax (Federal Form 8…
Could a Florida insurer include payments to independent automobile-damage appraisers in its salary tax credit?
No. The appraisers worked job by job for multiple companies, were not common-law employees of the insurer or its consolidated group, and did not fall within the licensed insurance roles treated as emp…
A restaurant's game room has coin/token-operated video arcade games and rides, plus a bumper car ride that also requires depositing tokens into a turnstile but is controlled by an employee. Are the receipts from all of these exempt as coin-operated amusement machines?
Not all of them. Receipts from coin-operated video arcade games and rides that require a token/coin to play and display the required $60 annual occupation tax stamp are NOT subject to sales tax (thoug…
Was a regulated nuclear-plant decommissioning trust subject to Florida intangible personal property tax?
No. Although the Florida utility could appoint trustees and investment managers, federal and state utility rules restricted the fund to decommissioning, barred the utility from daily management and sp…
Did Florida documentary stamp tax apply when out-of-state notes were later brought into Florida for safekeeping and servicing?
No, when the notes were both executed and delivered outside Florida and the bank used the approved statements, certifications, or affidavits to prove that fact. Later warehousing and ministerial servi…
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