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 installation or application labor taxable in Nebraska, and what about agricultural chemicals and landscaping?
It is taxable when the underlying property sale is taxable. Under Revenue Ruling 01-02-8, Laws 2002, LB 1085 repealed the exemption for separately stated labor or services to install or apply…
Must an Option 1 contractor charge Nebraska sales tax on the labor to annex building materials to real estate?
Yes. Under Revenue Ruling 01-02-7, Laws 2002, LB 1085 imposed sales and use tax, effective October 1, 2002, on any labor associated with the sale of property annexed to real estate by a person who…
Are sales of magazine and journal subscriptions subject to Nebraska sales tax, and which sellers must be licensed?
Yes. Under Revenue Ruling 01-02-6, Laws 2002, LB 1085 repealed the exemption for subscriptions to magazines and journals issued at average intervals not exceeding one month, so beginning October 1,…
Is what I pay a software retailer for training on how to use the software subject to Nebraska sales tax?
Yes, effective October 1, 2002. Under Revenue Ruling 01-02-5, Laws 2002, LB 1085 repealed the sales and use tax exemption for the amount a software retailer charges for training customers in the use…
Are purchases by an elected Nebraska County Fair Board exempt from sales and use tax, and what about an appointed board?
Yes. Under Revenue Ruling 01-02-4 and Laws 2002, LB 123, purchases by an elected Nebraska County Fair Board are exempt from sales and use tax effective October 1, 2002. To buy tax free, the Board…
Are purchases by a Nebraska Drainage District exempt from sales and use tax, and how does the District claim the exemption?
Yes. Under Revenue Ruling 01-02-3 and Laws 2002, LB 123, purchases by a Nebraska Drainage District are exempt from sales and use tax effective October 1, 2002. To buy tax free, the District issues a…
Are refractory materials, lime, synthetic slag, mill rolls, and guides used to make steel or cement still exempt from Nebraska sales tax?
No -- they became taxable. Under Revenue Ruling 01-02-12, Laws 2002, LB 1085 repealed the sales and use tax exemption for the sale of refractory materials, lime, synthetic slag, mill rolls, and…
Is there a fee to apply for a Nebraska sales tax permit, and are there any charges left?
There is no application fee. Under Revenue Ruling 01-02-11, Laws 2002, Second Special Session, LB 32, Section 2 repealed the fee for applying for a Nebraska sales tax permit, effective October 1,…
Is sales tax charged on copies of public records sold by a Nebraska government agency, and when does the exemption not apply?
Copies of public records sold by government agencies are exempt. Under Revenue Ruling 01-02-10, Laws 2002, LB 57 provides a sales and use tax exemption, effective October 1, 2002, for sales of…
Does New York's manufacturing exemption cover a U.S. producer's equipment, tools, and studio-rental purchases used to create English-language 'master recordings' of foreign films, TV series, and music CDs that are then licensed to U.S. distributors?
Yes, largely exempt. Creating a marketable US master recording from a foreign film, TV series, or music master — through translation, dubbing, voice/sound mixing, and editing — counts as a…
Could a nonprofit corporation or governmental entity owning a qualified historic structure earn the Kansas historic-preservation tax credit?
Yes. The Kansas historic-preservation credit was available to owners of qualified historic structures, including individuals, nonprofit corporations, and governmental entities, if the other…
For the Texas franchise tax, may an oil and gas company exclude estimated well-abandonment costs from surplus by carrying them as accumulated depletion/depreciation - and can it amend to do so?
Before FAS 143 took effect, an oil and gas company could treat estimated well-abandonment costs as either an estimated liability or an allowance for depletion, depreciation and amortization (DD&A),…
Does a vehicle lessor owe Texas motor vehicle sales tax when buying a vehicle exclusively to lease to the American Red Cross?
No tax was due while the vehicle was purchased for lease to the American Red Cross, which the Comptroller treated as a federal instrumentality. If the vehicle stopped being leased to the Red Cross,…
Were federally insured student-loan notes held by a private program administrator immune or exempt from Florida intangible tax?
No. The administrator was a private corporation, not a federal agency or instrumentality; the loans used private funds and were not obligations issued or owned by the federal government. Because the…
Could a state insurance receivership division use its parent agency's Florida sales-tax exemption certificate?
Yes. The division was an integral part of the state agency, so it could use the agency's Consumer's Certificate of Exemption for qualifying receivership transactions and its own general-use…
After 2001's House Bill 2686, can a corporation still take the enterprise-zone franchise tax deduction, and what replaced it?
It depends on when the project was designated. House Bill 2686 (2001) repealed the enterprise-zone franchise tax deductions in Texas Tax Code Secs. 171.1015 and 171.1016, but only for enterprise and…
When does a homeowners association qualify for the Texas franchise tax exemption - and does it qualify while the developer still controls the votes?
Not yet. Under Texas Tax Code Sec. 171.082, a homeowners, residential property owners, or residential condominium association qualifies for the franchise tax exemption only if - among other…
Does a Canadian manufacturer with no New York office, warehouse, or resident sales staff have enough nexus with New York to be required to register and collect sales tax, based only on trade-show attendance and occasional sales-visit trips by its own traveling salespeople?
Yes, nexus exists. Trade-show attendance alone (two shows a year, no orders taken there) wouldn't be enough by itself. But Company X also sends its own salespeople into New York one to two times a…
Must a church-run ministerial alliance collect sales tax on thrift-shop sales, and are its building materials exempt?
Two answers. First, yes — a religious organization that makes retail sales (here, a thrift shop) must register for, collect, and remit Kansas retailers' sales tax on those sales. Second, materials…
Are an RV park's charges for overnight slip rentals and utility hook-ups subject to Kansas sales tax?
No. The Department advised that charges for RV slips and hook-ups — the per-night slip rentals with electricity, water, and waste-water dump — are not subject to Kansas sales tax. They are not…
Are a Texas company's out-of-state salespeople - who hand out business cards with a local phone number but no local address - protected by PL 86-272, so the throwback rule applies?
Business cards that show a local telephone number but no local address do not, by themselves, establish that a corporation has an office or place of business in another state. Under Rule…
Is 'mylar' used and disposed of in molding fiberglass tanks exempt as property consumed in production?
Yes. The Department's opinion is that 'mylar' — placed on the mandrel to keep the fiberglass from sticking, then removed and thrown away once each tank is finished — is consumed in the production of…
For Texas franchise tax, are a contractor's receipts apportioned as a sale of real property, a sale of goods, or a service - and when are rebilled (resold) services gross receipts?
Texas franchise tax apportionment follows the activity that generates the receipts. If a contractor buys real estate, constructs or refurbishes facilities on it, and sells the completed facilities,…
Could a corporate group end its Florida consolidated-return election after major business growth and industry-law changes?
Yes. Neither industry-law changes nor business expansion was sufficient alone, but together they established cause to end consolidated filing. Permission was subject to four conditions covering the…
How did Florida require a consolidated filer to calculate project income for the Capital Investment Tax Credit?
The taxpayer had to separately account for the certified project's annual taxable income in a pro forma attachment to its consolidated F-1120. The schedule had to show all project revenue, direct…
Does New York's alternative fuels credit under Tax Law section 606(p) get reduced by nonqualified nonrecourse financing, or limited by the federal at-risk (IRC section 465) or passive activity loss (IRC section 469) rules?
No. The Department held that section 606(p) does not require the credit base to be reduced by nonqualified nonrecourse financing and contains no limitation comparable to the federal at-risk rules…
As part of a $275 million corporate acquisition, the buyer took over an office lease with below-market rent (the tenant paid about $42/sq ft while fair market rent was about $75/sq ft) plus roughly $80-105 million in leasehold improvements. For Real Estate Transfer Tax purposes, is the taxable consideration for that lease assignment (a) the present value of the below-market-rent savings PLUS the leasehold improvements' value, and (b) can I reduce that amount for hypothetical leasing commissions or for the 50% share the landlord could have claimed if it had exercised its lease-recapture right instead?
Yes to the valuation method, no to both discounts. When a tenant assigns a lease with below-market rent as part of a larger transaction, the Department confirmed the taxable consideration for Real…
Does a Canadian nonprofit's new internet store, selling and renting films and videotapes to U.S. customers, have to collect New York sales tax on orders delivered to New York, given that it maintains a small New York City office?
Yes. Even though its web server, inventory, and operations are based in Canada, the National Film Board's small New York City office is enough to establish nexus and make it a New York vendor. Sales…
Is a corporate aviation subsidiary's acquisition of a temporary 'interim' aircraft and a permanent replacement aircraft, plus the third-party financing lease used to fund both purchases, exempt from New York sales and use tax?
Yes, both aircraft qualify. ABC is a separate legal entity with its own employees, payroll, bank account, and full operational control over its aircraft, using them to transport Parent's and…
Is a privately owned, for-profit public golf course's membership fee (prepaid greens fees, letting members reserve tee times a day or two early) subject to New York's social/athletic club dues tax?
No. New York's club-dues tax applies only to a genuine 'social or athletic club' — one where members have some real ownership stake or control over the organization's activities, management, or…
Is a privately owned, for-profit public golf course's membership fee subject to New York's social/athletic club dues tax, even though residents of an adjoining housing community get a discounted rate?
No. New York's club-dues tax only applies to a genuine 'social or athletic club' — one where members have real ownership or control over the organization's management, activities, or membership…
When several commonly-owned single-member LLCs each own a building and pay their own cleaning/maintenance staff through a shared managing agent, are those wages exempt from sales tax even though the LLCs are 'disregarded' for federal income tax purposes and use combined payroll-tax reporting?
Yes, the wages paid to each building's own cleaning and maintenance staff remain exempt from sales tax as employer-employee wages, even though the LLCs are treated as disregarded entities for…
Does an out-of-state seller lose Public Law 86-272 protection when its employees assemble machines and perform warranty service in New York?
Yes. The Illinois seller's New York employees assembled and disassembled large glass machines shipped in by common carrier and performed warranty and repair service. Those activities went beyond…
How did South Carolina's 2002 procedure let qualifying economic-development projects request an alternative income-allocation or apportionment method?
The taxpayer had to apply through the Council or Department, obtain the required economic-benefit certification, and execute a negotiated agreement before the first covered tax year closed.
What procedures did South Carolina use in 2002 for advisory opinions and informal tax advice?
The bulletin created written request, review, draft-comment, approval, publication, and reliance procedures, but the Department now labels the document Superseded.
Did California pay credit interest on the tax, penalty, and interest portions of a sales-tax refund?
No. Assuming a timely valid claim, credit interest applied only to overpaid tax; overpaid penalty and interest were refunded or credited without additional interest.
Can a homeowners association get the Texas franchise tax exemption if its declaration lets it lease common property for commercial (for-profit) use?
No. The Texas Tax Code Sec. 171.082 exemption for a homeowners, residential property owners, or residential condominium association applies only to residential property. Here the association's…
Which mattresses, pillows, and support products qualified for Florida's prescription-based orthopedic exemption?
The listed therapeutic mattress, neck and support pillows, transit and millennium pillows, seat wedge, travel set, mattress overlays, lumbar support, and leg spacer were exempt with a physician's…
If a company's bookkeeper forgets to file the monthly New Mexico CRS tax returns — or can't because of an accounting-software changeover — can the business get the late penalty and interest waived?
No. The protest was DENIED. Sarcon Construction's bookkeeper missed the January and February 2000 CRS filings during an accounting-software transition. Forgetting to file is negligence under…
If someone runs a construction business as a sole proprietorship but also sets up a same-name corporation, can they escape personal liability for unpaid gross receipts tax by claiming the corporation was really the taxpayer — and when does unpaid tax become a 50% fraud penalty?
The protest was DENIED. The New Mexico Administrative Hearings Office found the construction business actually operated as Gerald Tabet's sole proprietorship — not the never-funded 'Inc.' he pointed…
Is a dissolved corporation that merely holds record title to New York real property as a nominee, and is otherwise inactive, subject to Article 9-A tax?
No, not after dissolution. A corporation that merely remained the record title holder of New York real property as a nominee for a partnership -- never operating, managing, or controlling the…
Could an affiliated group end Florida consolidated filing after expanding its market and entering new business lines?
Yes. Florida concluded that neither the group's growth and new business lines nor the industry-law changes were sufficient alone, but together they established cause to deconsolidate. The approval…
Could a parent corporation end Florida consolidated filing after organizational growth, new business lines, and regulatory change?
Yes. Florida found sufficient cause when the parent's major growth and expanded business lines were considered together with industry-law changes. The approval imposed four conditions governing the…
If the New Mexico tax department takes a long time to finish an audit, can a trucking company get out of paying the interest that piled up on taxes it had underreported?
No. The protest was DENIED. Chaparral Van Lines conceded it had underreported weight distance and IFTA taxes and only fought the interest, blaming the Department's slow audit. But interest under…
Which prescription-only vitreoretinal surgical products were exempt from Florida sales tax?
Retinal implants were exempt prosthetic devices. Other medical products were exempt when intended for one patient or one-time use and required to carry the federal prescription legend. Reusable…
What South Carolina interest rate applied to tax underpayments and overpayments from October through December 2002?
The rate was 6% for October 1 through December 31, 2002, compounded daily except that simple interest applied to underpaid declarations of estimated tax.
Were goods shipped from Tennessee to out-of-state customers taxable when the contract passed title at the Tennessee facility?
Yes. The sales terms transferred title when the goods left the seller's Tennessee facility. Because Tennessee treated a transfer of either title or possession in the state for consideration as a…
Which vendor charges for software modification, programming, integration, consulting, design, testing, and training were taxable in Tennessee?
Software modification and programming performed in Tennessee were taxable sales of tangible personal property. Consulting, design, testing, and training were nontaxable standing alone but taxable…
Did an SBA-backed limited partnership qualify for Tennessee's venture-capital-fund franchise and excise tax exemption?
Yes. The limited partnership operated exclusively to buy, hold, and sell securities of primarily nonpublic companies for its own account, and more than half of its capital came from the SBA, which…
Did an entire manufacturing process unit, including its specially designed enclosure, qualify as exempt industrial machinery?
Only partly. The machinery and equipment inside the manufacturing unit qualified as industrial machinery, but the enclosure did not. Even though the enclosure was necessary for drying, product…
Who had to withhold South Carolina income tax when buying real property from a nonresident seller under the historical rules?
The buyer generally had to withhold and remit tax when purchasing South Carolina real property, or related personal property, from a nonresident seller unless an exception applied.
When did a Tennessee site qualify as a manufacturer, and which packaging-line equipment qualified as industrial machinery?
If traditional manufacturing produced most of the location's revenue, the site qualified as a manufacturer and machinery installing blister packaging that accompanied the retail product was exempt.…
When could individual shareholders exclude income flowing through from a bank organized as an S corporation and subject to Louisiana bank shares tax?
For taxable periods beginning on or after January 1, 2003, the exclusion applied to qualifying S-bank flowthrough income. For earlier periods, the bank's corporate exemption did not extend to its…
What tax-law changes did South Carolina summarize in its 2002 legislative update?
It is a 2002 session summary covering significant changes to income and withholding, property, sales and use, miscellaneous tax and procedure, regulatory, and regulation matters.
When a party-plan hostess or independent business owner uses sales-incentive credits to buy products, is Utah sales tax calculated before or after the credit is subtracted?
It depends what's being purchased. Under a standard multi-level marketing agreement, a hostess or IBO's incentive credit used toward the suggested retail price of products is treated as a form of…
Does Utah require taxpayers to add back the federal foreign earned income exclusion (IRC § 911) when computing Utah taxable income?
No. Utah taxable income starts from federal adjusted gross income (FAGI) with only the specific modifications listed in § 59-10-114, and none of them address the federal foreign earned income…
Can a partner who owns only a tiny fraction of a low-income housing project be allocated 100% of Utah's state low-income housing tax credit?
Yes. Utah's low-income housing tax credit is allocated by agreement between the taxpayer and the housing sponsor, not by ownership percentage. A partner who owns as little as 0.01% of a qualifying…
Were project materials owned by Company X or its affiliates exempt from Rhode Island sales and use tax for the EDC-designated manufacturing expansion?
Yes. Qualifying materials owned by Company X or its affiliates were exempt as if the EDC held title, subject to the Development Agreement's investment limitation. The exemption excluded short-lived…
Did a city's direct-purchase procedure exempt construction materials for a public library from Florida sales tax?
Yes. The city was the purchaser in substance and form because it issued purchase orders with its exemption number, was invoiced and paid vendors directly, took title and liability at job-site…
What Louisiana credit applied when a Louisiana domiciliary working in a Washington, D.C. office of the state's congressional delegation paid income tax to a temporary-residence state?
A nonrefundable Louisiana individual income-tax credit equaled the net income tax imposed by and paid to the temporary-residence state on income also taxed by Louisiana. The ruling was limited to…
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