State Tax Rulings
Free state tax letter rulings and advisory opinions with plain-English summaries, full citations, and the original source on every page.
No rulings match these filters
Try a different search term or clear the filters.
Was XYZ Corporation's equipment sale-and-leaseback a taxable lease or a nontaxable financing arrangement?
It was a nontaxable financing arrangement, not a true sale and lease. The customer never gave up possession or ownership responsibilities, the payments followed a principal-and-interest schedule, and …
What amount was subject to Texas motor vehicle sales tax when a lessor sold a vehicle retired from an operating lease to a retail buyer?
The taxable value was the amount the retail buyer paid the lessor-owner. A separate amount the lessee paid the lessor under the operating lease was not part of the retail sale and was excluded. Fair m…
If a Texas corporation converts into a limited partnership, does it still owe Texas franchise tax, and does a federal check-the-box election matter?
The corporation must settle its franchise tax through the conversion, and after conversion the partnership is not subject to it. A Texas S corporation converting to a Texas limited partnership stays l…
Could a Florida tenant subleasing an entire property stop paying sales tax to its landlord after providing a resale certificate?
Yes. Because the tenant subleased the entire property, it could provide a substantially compliant resale certificate, stop paying tax on the prime rent, and collect and remit tax on the subtenant's re…
Could a Florida city buy construction materials tax-free for a fire-station project under a direct-purchase contract addendum?
Yes, after proper execution of the addendum, if the city ordered and paid vendors directly, took title and liability at delivery, and bore the risk of loss before installation.
Does a freelance photographer charge Kansas sales tax on mileage and telephone charges billed along with the photography fee?
Yes — a photographer is a retailer, so Kansas sales tax is due on the entire gross receipts for the services, including separately billed mileage and long-distance telephone charges. A freelance photo…
How does a corporation that is the general partner of a Texas limited partnership apportion its franchise tax, and are its out-of-state affiliated limited partners subject to the tax?
The out-of-state limited partners are not taxed, and the general partner apportions using either the net or an eligible gross method. An Ohio manufacturer was the general partner of a Texas limited pa…
How did Florida's intangible personal property tax apply to fund shares backed by federal debt and to life-insurance cash values?
Fund shares were exempt in proportion to the fund's U.S.-government obligations, and the cash values of both permanent and flexible-premium variable life policies were exempt.
Was a country club's monthly member assessment for clubhouse capital improvements subject to Florida admissions tax?
No, if it met seven stated characteristics of a true capital assessment, including separate billing and accounting, no dues reduction, and exclusive use for capital costs rather than operations.
Which charges under three computer-outsourcing agreements were subject to Florida sales tax?
Computer hardware, noncustom software, services that were part of acquiring those items, and warranties covering their maintenance or repair were taxable under the agreements reviewed.
Does a parent-teacher association collect Kansas sales tax when it sells admission tickets, and can it buy the tickets tax-free?
It splits two ways: a PTA's sales of tangible personal property are exempt, but selling admission tickets — a taxable service — to the final user is taxable, even though the PTA can buy the tickets ta…
Is a business that transcribes printed documents into Braille required to charge Kansas sales tax?
No — transcribing printed documents into Braille is a non-enumerated service that Kansas does not tax, so the provider does not charge sales tax (but pays tax on its own inputs). A proposed business w…
A materials vendor sold fencing materials for a zoo exhibit to a construction contractor. The zoo's bid documents said the owner was tax-exempt and taxes should NOT be included in the contract price, but the contractor's purchase order listed 'Sales tax: Included' and told the vendor not to charge Texas sales tax because the contractor 'pays direct.' The contractor now wants to deduct that 'included' tax amount from what it owes the vendor, claiming the vendor collected it. Can the contractor do that?
Not just by pointing to the purchase order's 'Sales Tax: Included' language. The vendor's own invoice showed a price with no indication tax was included, and the vendor issued no tax receipt -- so des…
When a mailing list broker charges for lists that mix Texas and out-of-state addresses, is the sale taxable based on the percentage of Texas names on the list, and does that change if the list is sold to an out-of-state customer?
Yes to the percentage test: under Rule 3.342(b)(3), the taxable portion of a mailing list sale is based on the percentage of names on the list located in Texas. But an information service (like a mail…
If a company reorganizes its Texas operations into a Texas limited partnership that elects under the federal 'check-the-box' rules to be taxed as a corporation and joins the company's consolidated federal tax return, does Texas's Intercorporate Services exemption cover services the company provides to that limited partnership?
Yes. A limited partnership or limited liability partnership that makes a check-the-box election under Treas. Reg. 301.7701-3 to be treated as a corporation, and reports its income as a C corporation o…
Are pass-through charges a Competitive Local Exchange Carrier collects from customers -- municipal charges, expanded local calling service surcharges, number portability service charges, FCC-approved customer line charges, and federal presubscribed interexchange carrier charges -- subject to Texas sales tax?
Yes. Each of these pass-through charges becomes part of the sales price of the telecommunications service and is taxed the same way the underlying service itself is taxed, when passed through to the r…
Does the Kansas sales tax exemption for restoring fire- or flood-damaged buildings depend on whether the cause was natural or man-made?
It depends on the peril, not the cause: fire-damage restoration labor is exempt however the fire started, but water damage is exempt only if it results from an actual 'flood' — a broken pipe or roof l…
Was a festival operator's payment of 40% of ticket receipts to a Florida city taxable as a real-property license fee?
Yes. Because the contract did not assign a reasonable stated amount to the city's ticket-selling services, the full 40% payment was treated as taxable consideration for use of the festival site.
How did a corporation report the former Texas franchise tax after changing its accounting year-end from January 31 to December 31?
No additional filing was required solely because the corporation changed its year-end. For the 1999 report, taxable capital used the new December 31, 1998 year-end and January-December 1998 gross rece…
Did an electric parking brake, entry-assist handle, and quick-release steering device qualify a vehicle buyer with arthritis for Texas's disability exemption?
The electric parking brake qualified because the customer's arthritis prevented her from setting a manual brake and required the modification. The entry-assist handle and quick-release steering device…
Is the dollar limit on the economic development zone capital credit applied separately to each corporation in a combined group, or once at the combined-group level?
Per corporation. The total economic development zone capital credit allowable to a taxpayer -- the $300,000 aggregate cap and the $100,000 per-category cap under sections 210.20(a), 1456(d)(1) and 151…
Did business contributions to expand a nonprofit day-care center qualify for the former Texas employee child-care franchise-tax credit?
No, not on the facts provided. The proposed donations would expand a center that was not shown to operate primarily for children of employees of the contributing corporations. A corporation could inst…
In an oil refinery's crude distillation unit -- where a furnace, distillation tower, and stripper each perform one step of separating petroleum into fractions -- is the whole crude unit treated as a single item of manufacturing equipment under House Bill 3211, and which pipes, pumps, and fittings qualify for the manufacturing exemption?
The crude unit as a whole is NOT a single item of manufacturing equipment -- H.B. 3211's Sec. 151.318(f) treats an integrated group of machines working together as separate items, so the furnace, dist…
Could a Florida school district buy construction materials tax-free under its school-building direct-purchase program?
Yes, if the district directly ordered and paid vendors, took title and liability at delivery, and bore the risk of loss before the materials were incorporated into the schools.
When were federal employee credit-card purchases exempt from South Carolina sales tax under RR 99-8?
A purchase was exempt when the federal government was directly billed or paid by government check. It was taxable when the employee was personally billed and later reimbursed, because the sale was to …
Were XYZ, Inc.'s sales of feed used for horses exempt from South Carolina sales and use tax?
Yes. The Department concluded that XYZ, Inc.'s sales of feed used for horses were exempt from South Carolina sales and use tax because horses are livestock. It advised obtaining and retaining a signed…
Is a pathology proficiency-testing subscription taxable in Kansas, and does the provider owe use tax on specimens shipped in from out of state?
No — the proficiency-testing service is a non-enumerated service that Kansas does not tax, and the test materials are incidental, so the provider is their consumer and owes no Kansas use tax on specim…
Does a convention and tourism committee that certifies a tax levy to a county qualify as an exempt political subdivision in Kansas?
Yes — a convention and tourism committee that certifies a tax levy to its county is a political subdivision under K.S.A. 79-3602(n), so it qualifies for the Kansas sales tax exemption and can issue an…
Can a Kansas retailer close its sales tax registration once its supplier collects and remits the tax?
Yes — where the supplier now collects and remits the Kansas sales tax, it is appropriate for the retailer to close out its Kansas retailers' sales tax registration. The taxpayer bought food supplement…
A city owns a golf course but hires an independent private company to operate it under a management agreement giving the company exclusive use and day-to-day control of the facility. Are the green fees the company charges golfers exempt from Texas sales tax as a municipal amusement service, or taxable?
Taxable. Golf courses are amusement services under Rule 3.298, and amusement services are exempt only when EXCLUSIVELY provided by a municipality (Sec. 151.3101(a)(1)). Because the city contracted wit…
A nonprofit college runs a federally mandated proficiency testing program for pathology laboratories, charging labs a single subscription fee that bundles the testing service with disposable test-specimen materials the college buys and ships in. Is the college's subscription fee a taxable sale of the specimen materials, or a nontaxable service charge -- and does the college owe Texas use tax on specimens it ships into Texas from out of state?
The subscription fee itself is not taxable: the 'true object' of the program is the testing/accreditation service, not a sale of the specimen materials, so the college (not the labs) is treated as the…
How does a contractor owe Kansas state, local, and use tax on materials and supplies it buys in- and out-of-state?
A contractor pays Kansas state and local sales tax on materials bought from an in-state retailer (local tax sourced to the retailer's place of business), and Kansas compensating (use) tax on materials…
A member of an online buying club (SITE ONE) purchases distressed/discounted merchandise from manufacturers using membership access, then resells it. Is the club's membership fee taxable, and what are the member-reseller's own sales tax obligations on the merchandise it resells over the Internet?
The club's membership fee IS taxable -- SITE ONE is selling a taxable information service (price lists, manufacturer information) and should collect tax on the fee from Texas members (effective Octobe…
A seller of specialized instruments (thin film deposition monitors, gas analyzers, leak detectors, gauges, and optical measurement products used in semiconductor cleanrooms and other manufacturing) asked which of these items its manufacturer-customers can buy tax-free with a manufacturing exemption certificate.
It depends on how each item is actually used. Equipment used directly to make or cause a physical/chemical change in the product qualifies. So does equipment a manufacturer uses for quality control te…
When an insurance carrier reimburses a service provider for travel, meals, and hotel expenses incurred while performing a taxable service, is that reimbursement itself part of the taxable sales price, even though it's separately stated and feels like a pass-through cost rather than a fee for the service?
Yes. Expense reimbursements like travel, meals, and hotel costs are taxable as part of the total price of the taxable service, even if separately stated on the bill -- Tax Code Sec. 151.007(a) defines…
How did Florida tax a synthetic lease and later substitutions of Florida mortgage collateral?
The arrangement was mortgage financing, so its payments were not taxable rent. The recorded trust mortgage and synthetic-lease mortgage were separate taxable debts, but qualifying collateral substitut…
Were payments under a lease-form real-property financing structure taxable as Florida commercial rent?
No. Considering all agreements together, Florida treated the structure as mortgage financing because it secured borrowed money and placed the financing economics and property risks on the lessee.
Is a chemical skin-peeling treatment exempt from New York sales tax as a 'drug or medicine,' even though the FDA and the state Board of Pharmacy both classify it as a drug?
Taxable. Even though the FDA and the New York State Board of Pharmacy both classify this chemical skin-peeling treatment as a drug, it's marketed and used as a cosmetic to improve appearance and treat…
Does a gas company get the lower 4% residential gross-earnings-tax rate on gas sold to multi-family apartment and condo buildings, even when it bills the landlord or property manager on a single meter?
Yes -- it's residential service. A local gas distribution company's gross earnings from selling and distributing gas to multi-family dwellings (apartments, duplexes, condominiums) are 'allocable to re…
Is a charity golf tournament whose proceeds go to a parks and recreation department exempt from Kansas tax?
No — the Kansas Department of Revenue found no provision in either the Kansas retailers' sales tax act or the Kansas income tax act that would exempt an annual golf tournament from tax, even though it…
Does the Kansas 'hand tools' sales tax exemption include hand-held power tools, or only manually powered tools?
The Department declined to narrow its definition: 'hand tools' under K.S.A. 79-3606(kk) include any hand-held power-operated or manually operated tool, not just tools powered by hand. It has defined t…
A jewelry manufacturer converting a former map-making facility into its plant added a silver-dust pollution control system: new concrete pads, dedicated electrical switchgear, and extra HVAC units to cool the air moving through the dust collector. Which of these items and which labor charges qualify for Texas's manufacturing/pollution-control equipment exemption?
Mixed results. New concrete pad materials are taxable, but the LABOR to build the new pads is exempt new-construction labor under Rule 3.357(a)(5) since there was no prior improvement to remodel. The …
Were patient and family accommodations provided by nonprofit healthcare organizations subject to Florida transient-rental tax?
No, for qualifying on-site and off-site care facilities and hotel rooms paid directly by exempt organizations for their charitable care purpose. A stated charge to patients or families could be taxabl…
Must an out-of-state manufacturer with no property or employees in Kansas file a Kansas corporate income tax return?
No — based on the facts presented, the Kansas Department of Revenue concluded the company is not required to file Kansas income tax returns. The company manufactures fixtures and sells them FOB Arizon…
Were transaction fees for processing nationwide telephone calls at a Texas operator center Texas franchise-tax receipts?
Yes. The corporation processed calls from across the United States at its Texas operator center and charged a transaction fee. Because the processing service was performed in Texas, the fee was a Texa…
How did Florida tax later advances under a multistate revolving credit line partly secured by Florida real estate?
No additional documentary stamp tax applied to advances while the Florida collateral stayed the same, but nonrecurring intangible tax was due on later draws allocated to the proportional Florida amoun…
Did Florida deed tax apply when two mergers under another state's law vested Florida real property in the surviving entities without deeds?
No. The transfers were not taxable when foreign law governed the surviving entities and vested the Florida property by operation of law without requiring execution and delivery of a deed.
When could a Florida utility treat electricity sold to a residential household or model home as sales-tax exempt?
The account had to be properly coded residential under filed tariffs, supported by a customer certification of exclusive household use, and accepted in good faith. Any nonexempt use made the entire sa…
An independent contractor sold his services for resale but got the resale certificates a few months late. Can he still claim the deduction and a refund of the gross receipts tax he paid?
No — the refund was denied. A retired radiation-safety expert worked as an independent contractor for two Department of Energy contractors and later learned he owed New Mexico gross receipts tax. His …
A direct-sales company gives a home-party 'hostess' credits based on the volume of orders she collects (a percentage of merchandise total, plus bonus credits for hitting order-count and dollar thresholds), which she can apply toward her own order including the sales tax due. Do these hostess credits reduce the taxable sales price of the goods she buys, or are they just a form of payment?
The hostess credits do NOT reduce the taxable sales price -- tax is still computed on the full regular retail value of the goods. The credits are treated as consideration the hostess earned in a barte…
How did 1999 Texas legislation affect dentist professional associations and corporations with less than $150,000 in gross receipts?
Senate Bill 1085 allowed dentists to organize as professional associations effective September 1, 1999, and the letter said professional associations were not subject to franchise tax. Separately, Sen…
Did Florida deed tax apply when Florida partnerships merged into non-Florida limited partnerships without deeds?
No, if the surviving entities' governing law vested the Florida real property by operation of law without requiring execution and delivery of deeds.
What did the original Florida TAA 99B4-009 say about deed tax on property transferred in a partnership conversion?
The original ruling said only minimum deed tax applied if the same partnership validly converted and held fee-simple title before conversion. The document directs readers to revised TAA 99B4009R, so t…
Is food a church buys for Vacation Bible School or a church-sponsored religious education event exempt from Kansas sales tax?
Exempt — food a qualifying 501(c)(3) religious organization buys with a church check, prepares for service at a church religious function, and serves as part of that function is exempt from Kansas sal…
A direct sales organization selling vitamins through independent Texas distributors needs a Texas sales tax permit. What state and local sales tax rates apply, and how should the organization collect and account for local taxes across all of its distributors' sales?
The direct sales organization -- not its distributors -- is responsible for collecting and remitting sales and use tax on all Texas distributor sales, under Rule 3.286. On top of the 6.25% state rate,…
A direct payment permit holder already paid sales tax to its vendor on past purchases. Can it now retroactively issue a direct payment exemption certificate for those same past purchases so it can get a full refund of the tax and instead accrue and pay the tax itself directly to the state?
No. A direct pay permit holder must choose, at the time of each purchase, between giving the supplier a direct payment exemption certificate or having tax paid directly to the supplier -- once tax has…
Is a Kansas sale exempt when the seller ships the goods out of state by common carrier or the mail?
No — Kansas sales tax does not apply when the seller of tangible personal property is obligated to deliver the property to a point outside Kansas, or delivers it to an interstate common carrier or the…
Are a retailer's freight and shipping charges taxable in Kansas when the item sold is taxable?
Yes — if the item being sold is subject to Kansas sales tax, the retailer's shipping and freight charges are also subject to tax, whether they are included in the total product price or separately sta…
When utility services are unbundled, how is Kansas sales tax computed and who must collect it?
When electric and natural gas services are unbundled into a commodity charge and a distribution charge, Kansas sales tax should be computed individually on each component. How the charges and tax appe…
A taxpayer sought a refund of sales tax it charged clients (employers) for case management/risk management consulting services, on the theory that because those clients were 'nonsubscribers' to Texas Worker's Compensation, the services couldn't be taxable insurance services. Is that refund claim valid?
Largely no -- an internal Tax Policy Division memo to the Comptroller's refund-review staff concludes the taxpayer's reliance on the 'nonsubscriber' label is misplaced. Being a Worker's Compensation n…
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.