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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Which vehicle transfers in a multistep corporate, partnership, and LLC restructuring were exempt from Texas motor vehicle tax?
Qualifying Texas-titled transfers in a statutory merger were exempt, and lien assumptions in that merger were not consideration. Transfers to a new corporation for stock and to a new partnership for i…
Did a grantor trust have to file a Florida corporate income tax return even when it had no federal taxable income?
Yes. The grantor trust had no Florida taxable income when it had no federal taxable income, but it still had to file Form F-1120 and report beneficiary or investor amounts for as long as any federal i…
What investments qualified for the former Texas enterprise-zone deduction, and could property placed in service before project designation count?
A designated enterprise project could deduct qualifying investment that was federally depreciable, placed in service and used in the normal course of business in the enterprise zone, and not removed e…
Is a fee charged for a fast (under 3-minute), on-the-spot credit approval/denial decision a taxable credit reporting service, even if the vendor never furnishes the retailer any actual credit report or credit history document?
Yes. Even though the vendor doesn't assemble or hand over a credit history or credit report, the vendor is still performing a taxable credit reporting service as defined in Tax Code Section 151.0034 -…
Did a Texas vehicle buyer have to pay sales tax again when a licensed dealer collected the tax, went out of business, and failed to remit it or transfer title?
No. Payment to the licensed dealer satisfied the buyer's obligation even though the dealer failed to remit the tax or transfer title. An invoice itemizing the tax was acceptable proof, title could tra…
Does a company that manages conference calls (reserving lines, monitoring audio quality, running the bridge equipment) have to charge New York sales tax on its fees, the way a phone company charges tax on the calls themselves?
No. New York taxes telephone and telegraph transmission service, but a conference-call management company that only reserves lines, monitors call quality, and runs bridge equipment -- without itself s…
Does a city owe Kansas sales or use tax on a fuel truck it buys for its airport?
Exempt — a city's direct purchase of a fuel truck for its airport is exempt from Kansas retailers' sales and compensating (use) tax under K.S.A. 79-3606(b), which exempts all direct purchases by a cit…
Is the labor to build a new office where an old structure was torn down to bare dirt exempt from Kansas sales tax?
Exempt labor — the services to construct a brand-new office building, put up after the taxpayer tore the old structure down to bare dirt and built new, qualify as performed in connection with the orig…
Does a grant-funded 501(c)(3) nonprofit count as a political subdivision that can buy free of Kansas sales tax?
Taxable — a nonprofit 501(c)(3) corporation funded roughly 90% by grants from the State of Kansas and the U.S. Government is not a "political subdivision" of Kansas, so it does not get the political-s…
When a school rents hotel rooms, are the charges exempt from Kansas sales tax, and what makes it a qualifying direct purchase?
Exempt as a direct sale, but only if billed to and paid by the school — hotel room charges purchased directly by a qualifying public or private elementary/secondary school or nonprofit educational ins…
Which local sales tax does a Kansas retailer charge when it delivers goods to a customer in a different local jurisdiction?
Charge your own location's local tax — under the rule in effect for this 1999 ruling, a retailer with a fixed business location in Kansas collects the local sales tax at its business location on retai…
Are a contractor's purchases of materials to construct or modify the Kansas Turnpike Authority roadbed exempt from Kansas sales and use tax?
Exempt — a contractor's purchases of tangible personal property for the construction, reconstruction, or modification of the Kansas Turnpike Authority (KTA) roadbed are purchases made on behalf of the…
Did the former Texas taxable-capital throwback rule apply when goods were shipped from Texas to a state where the seller was not taxable?
Yes. When a corporation shipped tangible personal property from Texas to a purchaser in another state where the corporation was not subject to taxation, Rule 3.549(e)(41)(I) treated the sales as Texas…
Did Florida's 1999 TAA tax a delayed deed to a corporation when stock had already been issued for the intended property transfer?
Historically, yes—but this TAA is expressly marked obsolete. The Department treated the previously issued shares as noncash consideration for the delayed deed and taxed the conveyance based on the pro…
What did House Bill 2568 require of cigarette manufacturers and roll-your-own tobacco distributors in Kansas?
Effective May 20, 1999, House Bill 2568 requires any tobacco product manufacturer that sells cigarettes to consumers in Kansas either to become a participating manufacturer under the November 23, 1998…
Three unrelated companies formed an LLC that was designated by a state development corporation to redevelop the old 14th Street Armory site into a mixed-use project -- retail, senior housing, and a university faculty residence -- with each company intending to end up owning and running its own separate piece. We have to hold the whole property through one LLC at first because NYC won't let us record separate condominium units until construction is 'as built,' and because the city wanted a joint venture team, not three separate developers. Once construction is done and we convert to a condominium, will distributing each finished unit to the company that's always been designated to own it trigger New York's Real Estate Transfer Tax?
Exempt -- no transfer tax on the conversion or the resulting unit conveyances. Armory Place LLC, formed by three separate companies (Orda, Chancellor of the Armory, and Armory Retail Associates), was …
If a bus company bought its large buses before New York's new omnibus sales-tax exemption took effect on December 1, 1997, can it get a refund of the tax it already paid on those buses, even partially?
No refund. New York's sales tax exemption for large omnibuses took effect December 1, 1997, and applies only to sales, services, and uses occurring on or after that date -- there's no provision, prora…
Is a construction project management consulting service -- coordinating architects, contractors, and schedules as the owner's agent, without doing any construction or design work itself -- subject to New York sales tax?
No. Project management consulting -- coordinating and monitoring designers, contractors, schedules, budgets, and quality control as the owner's agent, without performing any construction, design, or i…
Are membership dues at a member-governed golf and tennis country club subject to New York sales tax, even though it's a not-for-profit corporation?
Yes. Skaneateles Country Club's membership dues are subject to sales tax as dues paid to a social or athletic club, because its members elect the board of directors, sit on committees, participate in …
Does a multi-sport health and racquet club with initiation and membership fees have to charge New York State/local sales tax or New York City's separate gymnasium tax on its membership charges?
No. A multi-sport club's membership and initiation fees for participant sporting activities (swimming, tennis, squash, basketball, etc.) aren't taxable admission charges; they escape the separate athl…
Could a Florida county buy courthouse construction materials tax-free through a direct-purchase procedure?
Yes. The purchases were exempt when the county—not the contractor—issued purchase orders, received vendor invoices, paid directly, took title and liability at delivery, assumed insured risk of loss, a…
Did a county-arena concession services agreement create a taxable lease or license of real property?
No. The concession provider did not receive possessory rights or pay a license fee; instead, the parties jointly controlled operations and divided proceeds and losses. Payments and distributions under…
Were continuing-medical-education program fees and the provider's program purchases subject to Florida sales or use tax?
Program fees were not taxable because the provider rendered continuing-medical-education services rather than selling property or admissions. Direct program purchases were also exempt when made by the…
Were percentage payments to aircraft owners taxable rent when a charter company managed and operated their planes?
No. The owners retained control over the charter company's management and supervision, so the company lacked the possession and control needed to be a lessee. The payments were the owners' shares of n…
Is welding rod a farmer buys to repair or maintain farm machinery exempt from Kansas sales tax?
Taxable — welding rod (and a welding machine) that a farmer buys to repair or maintain farm machinery is subject to Kansas retailers' sales tax or compensating use tax. The farm machinery and equipmen…
What installment-sale gain entered a dissolving LLC's final Texas earned-surplus report after it distributed the note to its members?
The final report included installment-sale gain reported on the LLC's federal return for the period through dissolution. After the LLC distributed the installment note receivable to its members, later…
Are participation fees charged to youths under 18 for weekly races subject to Kansas sales tax?
Exempt — the fees charged to persons under 18 years of age for participating in the weekly races are exempt from Kansas sales tax under K.S.A. 79-3603(m). That statute taxes fees and charges for parti…
Did Company A's activities, including use of its name at Texas mall kiosks, remain protected from the former franchise tax by Public Law 86-272?
No. The Comptroller concluded that Company A was subject to both taxable capital and earned surplus because its activities—including use of the Company A name at kiosks in Texas malls—were not protect…
For a company that installs and operates in-room hotel entertainment systems (pay-per-view movies/video games, free cable/satellite channels, Internet access, and future special-events broadcasts) and bills guests through the hotel, which specific charges are subject to Utah sales tax, who has to collect and remit it, and how does this update the company's own 1996 advisory opinion now that some Commission policy has changed?
Pay-per-view movies and video games are now taxable user fees for entertainment activity under Utah Code Ann. § 59-12-103(1)(f), REGARDLESS of how they're technically delivered to the room — a policy …
If you overreported gross receipts tax in some months and underreported in others, can you offset the two to cut the interest you owe — and does an earlier refund mean the state agreed you owed nothing?
No on both points. A birth-center owner who underreported her 1994 gross receipts could not offset the months she overpaid against the months she underpaid to reduce the interest she owed the state, a…
Is gopher bait used exclusively on land for agricultural production exempt from Kansas sales tax?
Exempt — gopher bait used exclusively on land for agricultural production meets the definition of "property which is consumed" and falls within the consumed-in-production exemption in K.S.A. 79-3606(n…
Did Texas allow the federal Section 179 maximum-deduction phase-in when computing the 1999 franchise-tax report?
Yes. Because Section 171.001(b)(5) defined the applicable Internal Revenue Code by reference to the 1996 calendar-year code, and Public Law 104-188's 1996 changes included a phase-in of the Section 17…
After a 1999 spin-off required two short-period federal returns, did the corporation file one or two Texas franchise-tax reports for 2000?
One. The corporation's 2000 annual Texas report covered January 1 through December 31, 1999 for earned surplus, even though it filed one short-period federal return in the former consolidated group an…
Can a New Mexico couple get back all the state income tax withheld from their wages by arguing that Congress can only tax federal territories, that wages aren't taxable, and that they aren't really residents?
No. A Gallup couple who filed a 1997 return reporting zero income and demanded a full refund of the roughly $2,254 their employers had withheld got only the $260 the Department calculated they were ac…
Is canned computer software that a company owns and licenses out to many customers exempt from property tax as resale inventory, and how is its taxable value calculated when licensees pay monthly or yearly fees instead of a lump sum?
Canned (mass-marketed, unmodified) computer software licensed out to multiple customers is NOT exempt as resale inventory -- Utah treats a software license as a lease/rental, and leased/rented propert…
Were equity-membership contributions to a nonprofit Florida country club taxable as admissions, dues, or fees?
No. The contributions purchased genuine equitable ownership, shown by voting rights, liquidation rights, and an interest that could appreciate or depreciate. They were not taxable admissions fees, alt…
Does a Girl Scout troop's youth-development sales-tax exemption cover a hotel room rental?
Property yes, hotel rooms no — a Girl Scout troop is a "nonprofit organization" whose direct purchases of tangible personal property for nonsectarian comprehensive multidiscipline youth development pr…
Can a private investigator selling surveillance work to a television station use a resale certificate instead of charging sales tax, on the theory that the TV station resells the information to the public as part of its programming?
No. The private investigator is performing a taxable security service under Tax Code Section 151.0075 (services requiring a Private Investigators and Private Security Agencies Act license), not an inf…
Were employees titled vice president treated as officers for the former compensation add-back if they could not legally bind the corporation?
No, if the corporation could factually establish that the employees lacked legal authority to bind it to third parties by contracts or other legal documents. If the corporation had included those empl…
Can New Mexico collect a company's unpaid withholding taxes from a corporate officer by sending a demand letter, without ever issuing a tax assessment to the officer personally?
No — and the officer won. New Mexico could not collect a corporation's unpaid withholding taxes from a corporate officer it had never separately assessed. The officer was genuinely liable in substance…
Could a Texas lessor issue a resale certificate for a body and liftgate installed on an apportioned truck leased for interstate use?
Yes. Because the completed truck was a lease vehicle registered tax-free for apportioned interstate use, the lessor could issue a resale certificate to the company that sold and installed the body and…
If a company leases manufacturing equipment to a lessee who later incorporates it into a building (realty), does that later incorporation destroy the lessor's resale certificate, and when exactly does an operating lease's 'sale' happen for tax-reporting purposes?
No, incorporation into realty by the lessee does not destroy the lessor's resale certificate or trigger a 'divergent use' problem, because the equipment is still being used as claimed on the exemption…
What proof let Texas vehicle buyers transfer title without paying tax twice after a dealer collected but failed to remit the tax?
An itemized sales invoice showing tax paid to the licensed dealer was acceptable proof. That payment satisfied the buyer's obligation even though the dealer failed to remit it or transfer the vehicle,…
Was a short-term replacement vehicle taxable as a Texas motor vehicle rental when the manufacturer paid while the customer's car was repaired?
Yes. The customer received exclusive use of a motor vehicle for consideration for 180 days or less, so the arrangement was a taxable rental. It remained taxable whether the manufacturer paid during or…
Does a REIT that is part of a unitary group have to file on Utah's combined ('water's edge') return with the rest of the group, or does it file its own separate Utah return?
A REIT files separately. Even though a Real Estate Investment Trust may otherwise qualify as a member of a unitary group, Utah does not include it in the group's combined water's-edge return -- becaus…
If an out-of-state software company places an unstaffed backup server computer in Texas, does merely owning that computer create nexus requiring the company to collect and remit Texas sales tax?
Yes. A New Hampshire-based software company's ownership of a computer physically located in Texas -- even one used only as a backup server, with no Texas employees, and only an outside Internet compan…
Is monthly storage of RVs, campers, and boats at a converted airport storage yard taxable in Texas, and does it matter if a boat is sitting on a boat trailer?
RVs and campers are motor vehicles, so their monthly storage charges ARE taxable. But boats are NOT taxable to store, even when the boat is sitting on a boat trailer -- Texas's storage tax applies onl…
In a related-party sale-leaseback used to restructure debt within a corporate group, are the lease payments taxable, and does it matter whether the leaseback is structured as an operating lease or a financing lease?
It depends entirely on how the leaseback is structured, even though the initial asset sale itself qualifies as a tax-exempt resale under Rule 3.285. If the leaseback is an OPERATING lease, the periodi…
Did a free quarterly community advertising guide qualify for Florida's sales-tax exemption for a shopper publication?
Conditionally, yes. The guide met the free, regular, mailed community-publication and consistent-content tests, but final exemption depended on proving over 12 months that advertising exceeded half th…
Which pull-tab bingo games did Kansas declare illegal in Notice 99-04?
The notice declares two pull-tab game types illegal. The first ('Gator' or 'American Flash') has the player match a number on an instant bingo ticket (pull-tab) with the winning number from a call bin…
Is bottled, purified mineral water taxable in Texas, whether sold directly or through vending machines?
No. Water, spring water, sparkling water, and mineral water are not taxable in Texas, whether sold through direct retail sales or vending machines. This includes water that has been purified through r…
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…
Is the Nebraska Universal Service Fund (NUSF) surcharge on a phone bill subject to Nebraska sales tax?
No — the NUSF surcharge is not subject to sales tax. Under Revenue Ruling 01-99-1, the Nebraska Universal Service Fund (NUSF) surcharge assessed against certain retail, end-user telecommunications rev…
Is the equipment a touring circus-style show rents (tent, stage, costumes, lighting, sound) exempt from New York City sales tax as property used in a dramatic or musical arts performance?
No. New York's sales tax exemption for property used in live dramatic or musical arts performances doesn't cover Cirque du Soleil's touring show, because the Department already determined in an earlie…
How is Kansas sales tax applied to carpet sales and installation in a hotel — replacement versus a newly built hotel?
It depends on new build versus replacement — Kansas has no separate carpet rule, so carpet installation follows the general labor rule: installation labor for commercial buildings is taxable unless th…
How do oil and gas working interest owners and pass-through owners claim the Kansas business machinery and equipment income tax credit?
For tax years after December 31, 1997, the Kansas income tax credit for personal property taxes paid on business machinery and equipment (K.S.A. 79-32,206) is claimed on Kansas Schedule K-64. Under th…
Is a concrete pumping charge (using a primer to slick the pump's pipe) taxable, and is concrete sawing taxable on new construction versus a remodeling job?
A charge for pumping concrete that was sold by a third-party retailer to a foundation contractor is NOT subject to sales tax. Charges for sawing concrete as part of a NEW CONSTRUCTION contract are NOT…
How does Texas sales tax and the Telecommunications Infrastructure Fund (TIF) assessment apply to toll calls, 800-number calls, and prepaid telephone calling cards sold by a switchless telecom reseller?
Telecommunications services (toll calls, intrastate 800 calls, calling card usage) that originate in Texas and are billed to a Texas telephone number or billing/service address are subject to Texas sa…
When did Florida's 1999 mail-order rule exempt deliveries from county discretionary sales surtax?
Qualifying orders received by the out-of-state store were exempt from county surtax because the dealer and order location were not in a surtax county. In-person out-of-state purchases and orders place…
Can a pilot renting an aircraft to accumulate flight hours toward an Airline Transport Pilot (ATP) rating claim Texas's flight-training aircraft tax exemption, and what proof does the exemption require?
Yes. Tax Code Section 151.328(a)(2)(B) exempts both lessor and lessee from sales/use tax on aircraft use when the renting pilot is using the aircraft in a way designed to lead to an FAA pilot certific…
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