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 rate modifiers a Texas-based insurer buys to underwrite worker's compensation policies for insureds in other states taxed as data processing services or as insurance services, and does out-of-state use reduce the tax?
Rate modifiers are the purchase of data processing services, not insurance services. A Texas-based insurer's purchase is taxable to the extent the benefit of use is in Texas — the purchaser can issue …
Is a mutual redevelopment company organized and operating under Article 5 of the Private Housing Finance Law subject to the Article 9-A corporation franchise tax?
No. Two cooperative affordable-retirement housing corporations organized and operating as mutual redevelopment companies under Article 5 of the Private Housing Finance Law are not subject to the franc…
What did now-obsolete Florida TAA 99B4-015 say about a trust's deed to its limited partnership?
The published ruling is marked obsolete. Its original conclusion taxed the deed on the property's full fair market value because the partnership was a separate entity and the transfer increased the va…
Was recording a notice about billboard easement agreements subject to Florida documentary stamp tax?
No. The notice contained no unconditional promise to pay a sum certain, granted no real-property security interest, and did not expressly incorporate the related agreements. It was therefore neither a…
Which cattle-breeding and animal-care items sold to Kansas farmers and ranchers are exempt from sales tax?
Many cattle-breeding and animal-care items are exempt under three farm exemptions, with an exemption certificate required. The Department applied Kansas's three farm/ranch exemptions — ingredient or c…
Is the labor to install a central heating and air conditioning system in a commercial building exempt from Kansas sales tax?
The installation labor is exempt only if done as part of the building's original construction; installed any other way, it is taxable. The Department ruled that installing a complete central heating a…
Starting October 1, 1999, are information services and data processing services in Texas only taxed on 80% of their value, and how should that be reported on the sales tax return?
Yes. Effective October 1, 1999, new Tax Code Section 151.351 (added by Senate Bill 441) exempts 20% of the value of information services and data processing services, so only 80% is taxable. On a $1,0…
Is Texas sales tax due on drill team uniform items (leotards, tights, boots, hats) purchased through group orders for students at a public school?
It depends on who buys them. If the school purchases and pays for the uniforms itself for its own use (like band or sports team uniforms it owns), the purchase is tax-exempt. If individual drill team …
How does Texas sales tax apply to network installation services — evaluating a client's computer setup, installing or configuring hardware/software you didn't sell, initial computer setup, employee training, modifying existing software, and hardware repair?
It varies by service. Evaluating a client's computer configuration and writing a report is not taxable, unless the advice is really information on where to get the best price, which IS taxable as an i…
Is a company's stock-benefit-plan administration and reporting service subject to New York sales tax, and can it get a refund for the paper it uses to print reports that get mailed to out-of-state recipients?
The stock-plan administration and report-issuing service itself is not taxable, since it isn't one of New York's specifically enumerated taxable services. But the paper the company buys to print its r…
How did Texas tax mobile cranes supplied with or without operators, and when did the owner need a motor vehicle rental permit?
A crane mounted on a conventional truck chassis before purchase was taxed as a motor vehicle with an accessory. Supplying it with an operator was not a rental because the customer lacked exclusive use…
Did a trust have Florida intangible-tax situs when two of three equal trustees lived outside Florida?
No. With three trustees sharing management equally and a nonresident majority, the trust lacked Florida situs. The Florida trustee's remainder interest also was not taxable, but a later change to one …
Which delinquent South Carolina taxes could be paid by credit card under RR 99-12, and how?
Under the 1999 procedure, any tax type could be paid by credit card only after the Department assigned a receivable or tax-lien number. Visa or MasterCard payments went through the telephone TAPS syst…
Are sales of dietary and health care supplements exempt from Kansas sales tax?
No — dietary and health care supplements are taxable, and the seller must collect and remit the tax. Kansas imposes sales tax on the gross receipts from retail sales of tangible personal property unde…
A new business will offer computer-aided drafting (CAD) production, CAD training, computer consulting, customization/deployment recommendations, and custom programming, all billed hourly and without selling any hardware or software. Which of these services are subject to Texas sales tax?
Mixed. Computer-aided drafting production is taxable. General consulting not tied to a taxable-item sale is not taxable. CAD training is not taxable if separately stated. Customization, deployment, an…
Is Texas sales tax due on labor to build or repair fences, gates, cattle guards, and roads on a farm or ranch?
It depends on new construction versus repair. Labor to newly construct fences, gates, cattle guards, or roads as an improvement to realty is NOT taxable, whether billed lump-sum or separately from mat…
Were mandatory homeowner assessments taxable because a residential developer also provided security services?
No, under the amended covenants reviewed. Although the developer's employees provided taxable-type security services to homeowners, the mandatory assessments did not expressly charge for security or p…
How did a Section 338(h)(10) stock sale affect the target's former Texas tax bases, loss carryforwards, and the seller's receipts?
Texas did not recognize the deemed asset sale in the target's taxable capital or taxable-capital receipts, but did recognize it in earned surplus because that component began with federal taxable inco…
Can a for-profit hospital or lab buy tangible personal property tax-free under the nonprofit-hospital or consumed-in-production exemptions?
No — a for-profit entity cannot use the nonprofit-hospital exemption, and because its testing services are nontaxable, it also cannot use the consumed-in-production exemption. The Department explained…
Is the labor of cleaning above-ground storage tanks and processing the removed sludge subject to Kansas sales tax?
No — cleaning above-ground storage tanks and processing the removed sludge is cleaning, not taxable servicing or maintaining, so the labor is exempt from Kansas sales tax. K.S.A. 79-3603(q) taxes the …
Do German nationals on a temporary Kansas work assignment, paid in Germany by a German employer, owe Kansas income tax?
It depends on federal law: Kansas income tax begins with federal adjusted gross income, so German nationals owe Kansas tax only on income that is included in their federal AGI and attributable to Kans…
Is a lease of tangible personal property to a Federal Home Loan Bank exempt from Kansas retailers' sales tax?
Yes — a lease of tangible personal property to a Federal Home Loan Bank is exempt from Kansas retailers' sales tax, because federal law bars states from subjecting these federal entities to sales tax.…
Does an organization qualify as a religious organization for the Kansas sales tax exemption on purchases used exclusively for religious purposes?
Yes — the Department found the organization qualifies as a religious organization, so its direct purchases used exclusively for religious purposes are exempt from Kansas retailers' sales tax under K.S…
Did a Texas lienholder owe motor vehicle sales tax when it repossessed and took title to a vehicle after an interstate carrier defaulted?
No. The Comptroller said repossession was not a retail sale, so the lienholder owed no motor vehicle sales tax when taking title. The policy applied whether the lien appeared on the certificate of tit…
Six general partnerships, each owning or leasing a different New York City property (some fee, some leasehold), are all beneficially owned by the same six family members in identical 16.66% shares. Each partnership plans to transfer its real property interest to a brand-new, separate LLC in exchange for 100% of that LLC's shares, then distribute those LLC shares out to the same six family members in the same 16.66% shares they've always held. Is each of these six partnership-to-LLC transfers exempt from New York's Real Estate Transfer Tax?
Exempt -- all six conveyances qualify for the mere-change-of-form exemption. Six separate general partnerships (149 Realty Associates, Shelburne Murray Hill, Patrick Denihan et al d/b/a Denart Company…
Are a book distributor's printed catalogs, a rented mailing list used to address them, and the photography/artwork/printing-plate materials used to produce them all exempt from New York sales tax when mailed free to customers?
Yes, on all three points. The catalogs are exempt printed promotional materials because they're mailed free of charge to customers and prospective customers within New York, with a Form ST-121.2 given…
Is a specialized suspended-ceiling-tile cleaning service taxable in New York, or does it qualify for the sales tax exclusion for 'laundering'?
Taxable. Cleaning suspended ceiling tiles with a specialized process and proprietary solution is a taxable maintaining/servicing service, not exempt 'laundering' -- New York's laundering exclusion is …
Does a corporation's section 1452(d) election to remain taxable under Article 9-A survive a merger of its parent bank, a name change, and a change in its business activities?
Yes. The corporation's one-time section 1452(d) election to continue being taxed under Article 9-A (rather than Article 32) was not revoked by the merger of its parent bank into another bank, by its n…
Could Lake Belt miners calculate and remit the mitigation fee at the first transfer after extraction?
Yes. Florida approved collection on the first transfer after extraction, including an internal company transfer, based on tons extracted and sold. Records of the transfer were required, the fee had to…
Could a Florida county buy performing-arts-center construction materials tax-free through direct purchasing?
Yes, under the amended procedures reviewed. The county issued purchase orders, received invoices and paid vendors directly, took title and liability at delivery, was insured against loss, and provided…
Who owed Florida tax on materials used in three types of air-conditioning repair contracts?
The contractor did. For time-and-material, lump-sum, and not-to-exceed repairs, the contractor was the ultimate consumer because materials were not fully identified and priced before work began. It pa…
Must the New Mexico Property Tax Division tell a telecommunications company it may elect a different valuation method, and can the company switch methods later if it wasn't told?
No, and no — the protests were denied. Two e.spire telecom subsidiaries wanted their New Mexico plant revalued for 1999 under the 'unit appraisal' method instead of the 'cost' method the Department ha…
What former Texas franchise-tax relief applied when a corporation's gross receipts for both tax components were below $150,000?
For reports due on or after January 1, 2000, Senate Bill 441 provided that a corporation owed no franchise tax if gross receipts from its entire business were each below $150,000 for both taxable capi…
How does a direct sales/multi-level marketing organization collect Texas sales tax on its independent distributors' sales, and are sales the distributor makes to customers in Mexico exempt?
The direct sales organization -- not the distributor -- is responsible for collecting and remitting tax on distributor sales, since distributors of direct sales organizations aren't issued their own s…
How is a federal IRC section 338(h)(10) election treated for New York tax when the target sold is an Article 9 corporation, and how is the parent's stock-sale gain treated?
The TSB-M-91(4)C treatment of section 338(h)(10) elections is for Article 9-A purposes only. For the Article 9-A parent selling the target's stock: if the parent is a selling affiliate, the election i…
In a sale-leaseback/cash-advance arrangement -- where a customer sells an appliance to a business and then leases it back while receiving a cash advance, backed by a refundable security deposit and a separate rental fee -- which parts of the transaction are subject to Texas sales tax?
The purchase of the appliance from the customer qualifies as a purchase for resale (buyable tax-free with a resale certificate). The refundable security deposit is NOT taxable. But the rental/lease ch…
Can a high-volume home-based independent distributor of a direct sales company (Metabolife International) get their own Texas sales tax permit to streamline exempt out-of-state sales, instead of paying tax up front and waiting for a refund from the company?
Yes, under a specific administrative policy set out in this letter: an independent Metabolife distributor with total sales exceeding $24,000 a quarter may apply for a Texas sales tax permit. Once perm…
Did Florida deed tax apply when two partnerships converted and merged under Delaware law without deeds?
No, if Delaware law vested the Florida property in the converted and surviving partnerships by operation of law and no deed was required. The ruling also required compliance with the statutes and stat…
Does a leased color photocopier installed behind a drugstore's photo counter qualify for Utah's manufacturing machinery and equipment sales tax exemption?
No. The manufacturing equipment exemption under Utah Code section 59-12-104(14) only applies within an establishment classified under SIC Codes 2000-3999 (manufacturing), but a retail drugstore falls …
Were charges for in-flight air-ground radiotelephone service subject to Florida telecommunications taxes?
No, under the definitions then in effect. Florida found that the aircraft service was not local, toll, private, cellular, portable, or another listed telecommunications service, so neither gross recei…
Which per-capita income figures applied to South Carolina job and headquarters credit compensation tests under RR 99-11?
Taxpayers had to use the most recent state or county per-capita income data available on the last day of the tax year in which the qualifying jobs were filled. RR 99-11 supplied the figures available …
Did Florida documentary stamp tax apply to a foreign bank's vessel note, unrecorded ship mortgage, and contingent assignments?
The note was taxable if executed or delivered in Florida unless it qualified as an out-of-state or foreign note. The unrecorded mortgage and contingent security assignments were not taxable unless fil…
Is a dirt scraper designed for use with farm tractors exempt from Kansas sales tax as farm machinery and equipment?
Yes — a dirt scraper designed for use with farm tractors is exempt farm machinery and equipment under K.S.A. 79-3606(t), so its sale is exempt from Kansas sales tax. K.S.A. 79-3606(t) exempts all sale…
Does an out-of-state religious organization operating in Kansas qualify for the Kansas sales tax exemption on purchases used exclusively for religious purposes?
Yes — the Department found the organization is a religious organization, so its direct purchases used exclusively for religious purposes are exempt under K.S.A. 79-3606(aaa). A not-for-profit charitab…
Are excavation and backhoe services subject to Kansas sales tax?
Often exempt — excavation and backhoe services escape Kansas sales tax in three situations: original construction of a building, remodeling of a residence, or whenever the excavation is separately bil…
Is a parent-teacher association exempt from Kansas sales and compensating tax on both its purchases and its sales?
Yes — a parent-teacher association is exempt under K.S.A. 79-3606(yy), so it neither pays Kansas sales or compensating (use) tax on what it buys and consumes nor collects tax on its sales of tangible …
Which services purchased by a hotel — maintenance, landscaping, security, extermination, employment placement — are taxable in Kansas?
It depends on the service: building maintenance, landscape maintenance, and extermination services performed at a hotel are taxable, while furnishing security personnel and employment placement servic…
Is sales tax due on equipment (microscope, vials, droppers, bottles, forceps, and collection vessels) sold to farmers and ranchers for performing fecal egg counts to check livestock for parasites?
Mostly exempt. Under Sec. 151.316, farm/ranch equipment used exclusively on a farm or ranch in agricultural production is exempt -- so the microscope, cleaning supplies, slides, flotation solution, dr…
Can a retailer exempt a sale as an export at the time of the transaction because it ships directly to a customs broker, and how soon can it refund tax to a purchaser once a licensed customs broker certifies the goods were exported?
No, a retailer cannot exempt the sale at the time of the transaction -- proof of export must come first (either a pedimento de importaciones, which takes one to three weeks, or a stamped certification…
Did a NASA contractor owe Florida sales or use tax on GSA vehicles assigned solely for official NASA contract work?
No. The contractor received no ownership or lease interest and could use the GSA vehicles only for official NASA work, so the assignment and reimbursed payments did not create a taxable sale, rental, …
Could a Florida health studio remit sales tax month by month as it collected installments under an annual membership agreement?
No. The agreement was a retail installment contract for future health-studio services, so the full tax was due when the membership agreement was entered into, as with a cash sale.
Can a Florida governmental entity buy construction materials tax-free for a public works project using a contractor's direct-purchase procedures?
Yes, if the government is the real purchaser: it must order, take title to, pay vendors for, and bear the risk of loss on the materials before they are incorporated into the project.
Should a Florida contractor collect sales tax from customers on installed structural cabling for telephone, computer, audio, or video systems?
No. Cabling installed behind walls, under floors, and above ceilings was treated as real property, so the contractor owed tax on its material cost rather than collecting tax on the contract price.
Was labor to replace a warranty-covered part on a bolted-down automotive lift subject to Florida sales tax?
Yes. Florida treated the automotive lift as taxable tangible personal property, not real property, and taxed the entire repair charge because the repairer furnished a replacement part even though the …
Does an organization qualify as a religious organization for the Kansas sales tax exemption, and what if it includes lay people and businesses?
Yes for this organization — the Department found it is a religious organization, so its direct purchases used exclusively for religious purposes are exempt under K.S.A. 79-3606(aaa). A qualifying reli…
Two aircraft were swapped in back-to-back sales a day apart -- Company A sold a Beechcraft King Air to Company B, and the next day Company B sold an IAI Westwind 1124 to Company A. Does the occasional sale exemption apply to these transactions, and does it matter that Company B holds an active Texas sales tax permit?
These are two separate transactions taxed on their own merits, not one combined deal. Company A's sale of the King Air may qualify as an exempt occasional sale under Sec. 151.304(b)(1) if Company A do…
When Connecticut municipal-bond interest flows through a partnership 'Portfolio' and then a mutual fund to an individual, does it stay exempt from Connecticut income tax?
Yes -- the exemption survives the pass-through. Interest on Connecticut (and U.S.-territory) municipal bonds held by a partnership-classified 'Portfolio' keeps its character as Connecticut-bond intere…
How did coupons and discount cards affect South Carolina's taxable sales price under RR 99-9?
Tax applied to everything the retailer received from the customer and a manufacturer for the sale. A retailer-funded coupon reduced the taxable price, while a manufacturer-reimbursed coupon generally …
How did South Carolina's repealed motion-picture project and production-facility credits work under RR 99-10?
The repealed statute allowed a 33% credit for qualifying cash investment in a South Carolina film project, capped at $15,000 per project, and a separate 33% facility-investment credit capped at $5 mil…
Were ethylene concentrate and generators used to ripen produce at warehouses exempt from South Carolina sales and use tax?
No. Ethylene concentrate sold for produce warehouses and generators bought for their use were taxable because the warehouses were distribution or storage facilities, not processing facilities. The rul…
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