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 parent-teacher organization fundraising sales are exempt in Kansas, and which — like carnival games and bingo — are taxable?
Mixed. K.S.A. 79-3606(yy) exempts sales of tangible personal property and services purchased by a parent-teacher association or organization, and its sales of tangible personal property. So tickets ex…
Is an educational institution that is exempt on its purchases also required to collect Kansas sales tax on its own sales?
Yes — being exempt on purchases does not excuse collecting on sales. Schools and educational institutions are exempt from paying Kansas sales tax on their purchases, and the 1998 legislature broadened…
Was an underwriting agreement for asset-backed certificates subject to Florida documentary stamp tax when payment depended on delivery of the securities?
No. The agreement did not create a written, unconditional obligation to pay a sum certain because the underwriters' payment was contingent on the subsidiary delivering the certificates. For this parti…
A husband sold and installed blinds on commission and his wife managed the office; part of their pay was reported as self-employment income. Do they owe gross receipts tax on it, and does the state's late assessment excuse the penalty and interest?
Yes to the tax, and no relief on penalty and interest — the protest was DENIED. Bill McConnell sold and installed window blinds for Blinds Direct on commission; his wife Sherri was the office manager.…
What Florida taxes applied when a municipality leased two power plants to an owner trust and immediately leased all the property back?
No sales tax applied to head-lease or sublease payments if the owner trust registered as a dealer before closing and issued resale certificates. Prepaid rent avoided documentary stamp tax only under t…
Who reported oil-and-gas lease receipts after an unrecorded written transfer of all equitable and beneficial ownership rights?
The equitable or beneficial owner reported the receipts. Although legal title remained with the managing partner, the written transfer moved all rights, obligations, liabilities, benefits, and propert…
How does a Nebraska individual recompute the 1998 federal alternative minimum tax to figure the Nebraska minimum tax?
Recompute the federal AMT on Nebraska terms. Under Revenue Ruling 22-98-1, Neb. Rev. Stat. §77-2715 requires an individual to recalculate the 1998 federal alternative minimum tax (Federal Form 6251, o…
Was a Florida country club's separately billed $636-per-member assessment for golf-course capital improvements subject to admissions tax as club dues or fees?
No. The assessment financed a one-time capital renovation, was billed separately in a fixed amount, did not entitle members to use the club, did not reduce ordinary dues, and was not used for operatin…
If you file a refund claim and the state never acts on it, then you refile after the deadline, can you still get your money back?
No. A carpet subcontractor who had overpaid gross receipts tax filed a refund claim in September 1997, but the Department never acted on it. When the state doesn't grant or deny a refund claim within …
Was a $17 million sale of a broadcaster's operating assets exempt from Florida sales tax as an occasional or isolated sale?
Yes, for the business's non-inventory tangible personal property other than aircraft, boats, mobile homes, and motor vehicles. The Department treated the contemplated transfer of all business assets i…
Which parent-teacher organization fundraiser sales are exempt, and which — like carnival games and pre-sold bingo — are taxable?
Mixed. This ruling (which supersedes a prior December-1998 letter) applies K.S.A. 79-3606(yy), exempting sales of tangible personal property and services purchased by a parent-teacher association or o…
Is hauling leftover nonrecyclable trash away from a recycling plant a taxable trash-removal service?
Yes. Hauling leftover nonrecyclable trash away from a recycling plant is a taxable trash and garbage removal service under Tax Law § 1105(c)(5), the same as trash removal from any other real property …
Are helicopter sightseeing rides and tours a taxable equipment rental or an exempt transportation service, and are aerial photos sold to passengers taxable?
Helicopter rides and sightseeing tours are an exempt transportation service, not a taxable equipment rental, because the operator retains 'dominion and control' -- it keeps possession of the helicopte…
Are a home electrical safety inspection ('survey') and mandatory municipal code-compliance electrical inspections subject to New York sales tax?
It depends on who buys it and why. A voluntary electrical safety inspection ('survey') is a taxable real-property-maintenance service when purchased by the property's owner or lessee, but is NOT taxab…
Does a New York business have to charge sales tax on dog-walking fees?
No. Dog walking is not subject to New York sales tax because Tax Law § 1105(c) only taxes specific enumerated services, and dog walking is not one of them.
Does a vendor selling zeppoles (fried dough) from a mobile trailer at festivals and carnivals have to charge New York sales tax?
No. Zeppoles sold cooled, bagged, and unheated for takeout from a mobile trailer at festivals and carnivals are exempt food products, similar to donuts, and are not taxed as restaurant food because th…
Can a centralized advertising subsidiary buy and resell promotional materials to its affiliated retail companies tax-free when the materials are mailed free to customers in New York?
Yes. A newly formed advertising subsidiary can purchase promotional materials and related production services tax-free for resale, and its sales of those materials to affiliated retail companies are e…
Is a foreign corporation that stores goods in unaffiliated New York public warehouses using a fulfillment service, and does employees visiting to inspect warehouses and meet customers defeat its Public Law 86-272 protection?
Storing goods in unaffiliated New York public warehouses is the use of a fulfillment service under section 209.2(f), and it does not create nexus. Employees traveling into New York to examine those wa…
Does a foreign corporation become subject to Article 9-A by storing a day's inventory in a New York common-carrier warehouse for just-in-time delivery, or does the fulfillment-services exemption apply?
The storage would otherwise create nexus, but the fulfillment-services exemption applies. A foreign manufacturer's storage of about one day's inventory in a New York common-carrier warehouse for just-…
Does a manufacturer's tooling, provided free to New York subcontractors to make components for its own products, qualify for the investment tax credit?
Yes. Xerox's tooling (dies and molds) that it provides without charge to New York subcontractors -- usable only to make components for Xerox and used under Xerox's supervision -- is not leased within …
After the De Buono decision, is a qualified ERISA retirement plan subject to the New York Article 13 tax on unrelated business taxable income?
Yes. This modified opinion reverses TSB-A-97(10)C on the retirement plan. After the U.S. Supreme Court's De Buono decision -- holding that a New York tax of general applicability that merely burdens a…
Which purchases for a new natural-gas and distillate-oil electric generating unit qualified for Florida's power-production machinery exemption?
The generating machinery and integrated systems generally qualified at the time of purchase because the unit burned natural gas and No. 2 distillate oil—not residual oil—and produced electricity for s…
How did Texas tax trailers bought for 36-month operating leases, attached accessories, and a lessee's later balloon-payment purchase?
Trailers were motor vehicles, so the lessor paid motor vehicle sales tax when buying one for a 36-month operating lease. Accessories bought attached were included in that tax base; separately bought a…
Were revolving warehouse agreements, master notes, and mortgage assignments used to fund Florida mortgage loans exempt from documentary stamp tax?
Yes, for all four described structures, as long as actual advances did not exceed the pledged mortgage collateral and documentary stamp tax had already been paid on the collateral obligations. That co…
For leased equipment, who owes Utah personal property tax -- the lessor or the lessee -- under a conditional sales agreement versus a true lease with 'direct pay' terms?
Under a conditional sales agreement (lessee holds title with a mandatory purchase obligation at lease end), the LESSEE is treated as the true owner under Utah's 'essence of the transaction' test and i…
When a multinational company consolidates its delivery-truck fleets from several 100%-owned subsidiaries into one new 100%-owned transportation subsidiary, does that vehicle transfer trigger Utah sales tax?
No sales tax is due. A multinational company's plan to transfer delivery trucks from several wholly-owned subsidiaries into one newly formed, also wholly-owned transportation subsidiary qualifies as a…
Are sales of custom prosthetic and orthotic devices taxable in Kansas, and must the provider register as a retailer?
The described sales are not taxable, but the provider still must register. A company that provides custom prosthetic and orthotic devices, billed to Medicare, Medicaid, insurance, and patients in conj…
Are computer and internet business-center services provided to hotel guests subject to Kansas sales tax?
The services are not taxable, but the provider's own purchases are. A company planned hotel business centers giving guests 24-hour access to a computer, software, the Internet, e-mail, printing, faxin…
Did a Texas professional association become subject to franchise tax because it elected federal S-corporation treatment?
No. The Comptroller looked to the entity's legal formation for Texas franchise-tax status. Assuming the entity was legally organized as a professional association under the Texas Business Corporation …
Two affiliated trucking companies want to consolidate payroll by having a third related company become the formal employer of all their employees, providing payroll and benefits for a management fee — essentially an employee leasing arrangement. Is the management fee subject to Texas sales tax as a data processing service, and does an intercorporate-affiliate exemption apply?
Payroll services are normally taxable as data processing services, but this arrangement looks like it falls under Rule 3.364's staff leasing services category instead — if the requirements of Rule 3.3…
Is labor to maintain and repair a residential swimming pool exempt from Kansas sales tax after the 1998 residential-services exemption?
The labor is exempt; the materials are not. Effective July 1, 1998, 1998 Senate Bill No. 493 exempts services to install or apply tangible personal property when they involve the original construction…
We're restructuring ownership of several producing oil and gas leases (with production equipment already installed and in use) through a series of contributions between related companies, ending with a limited partnership selling the leases — always bundled with their production equipment, never separately — to outside purchasers for a lump sum. Are these sales subject to Texas sales/use tax?
No. None of the transactions are subject to sales tax. The true object of each sale from the limited partnership to a purchaser is the sale of a mineral lease — a nontaxable real property interest — w…
A 501(c)(3) nonprofit is accepting an assignment of a lump-sum general construction contract for a low-income housing project (financed through a partnership with for-profit limited partners who bought low-income housing tax credits), and will serve as the substituted general contractor using separated subcontracts. Can the nonprofit's subcontractors buy materials tax-free, can the nonprofit pass along exemption certificates to them, and who ultimately owes tax on the incorporated materials?
The nonprofit, as a lump-sum general contractor, is the consumer of all building materials and pays tax on them itself — no tax is collected from the project partnership on the lump-sum charge. Becaus…
When a Florida pub posts tax-included drink prices and sells several drinks in one round, is sales tax computed per drink or on the combined transaction?
Per drink. Each posted drink price included a specific amount of sales tax, and buying several drinks together did not change the price or tax already embedded in each item. The pub could use its deta…
Were admissions charged by a section 501(c)(3) foundation that operated and bore the financial risk of a Florida aquarium exempt from sales tax?
Yes. The foundation qualified under section 501(c)(3) and met all four sponsorship criteria: it actively operated the aquarium, was responsible for safety and success, received the gross and net proce…
Must a youth baseball organization collect Kansas sales tax on its candy fundraising sales?
Taxable. A youth baseball program's participation fees are exempt as a 501(c)(3) youth recreation organization serving persons 18 or younger, but its retail fundraising sales are not. The Department f…
Are utilities at a home used for a business taxed as residential or commercial in Kansas?
It depends on how the home is used. Kansas imposes state and local sales tax on gas, water, electricity, and heat sold to commercial consumers. Where a home's business use is de minimis or insubstanti…
Why must a school student organization collect Kansas sales tax on its concession-stand sales?
Because the state requires retailers -- including schools, churches, and non-profits -- to collect sales tax on their taxable retail sales, and student concession-stand sales have been taxable in Kans…
How could a multistate bank prove that notes executed outside Florida remained exempt when later stored and serviced by its Florida division?
The lender had to create contemporaneous documentary proof—within the note or in incorporated or accompanying documents—that execution, delivery, and acceptance all occurred outside Florida. Accountin…
Were a Florida gas utility's charges for transporting customer-owned natural gas subject to the state gross receipts tax?
Not after October 31, 1993, when customers retained ownership of the gas and the utility received payment only for transportation. Those receipts were separate from the sale of natural gas and were no…
When did the Kansas religious-organization exemption take effect, and are a church's utilities exempt?
The exemption began July 1, 1998, with no refund for earlier purchases. 1998 Senate Bill No. 493 added a new sales tax exemption for religious organizations under K.S.A. 79-3606(aaa), effective July 1…
Do nonprofit associations that support member colleges qualify as exempt 'educational institutions' under the 1998 Kansas definition?
Yes, they qualify. K.S.A. 79-3602, as amended by the 1998 Kansas Legislature (L. 1998, ch. 130, sec. 29), defines 'educational institution' to include nonprofit endowment associations and foundations …
When a corporation or LLC converts into a Texas limited partnership and the partnership sells its assets, who owes franchise tax, and what final filings are required?
The converting corporation files a final report; the resulting limited partnership and its sale gain owe no franchise tax, but a corporate or LLC general partner does. When a corporation (or LLC) conv…
We want to raise financing secured by five operating units within our petrochemical refinery, structured as a sale/leaseback: we'd transfer bare legal title to a lender trust and immediately lease the units back, keeping full operational control, maintenance responsibility, and a repurchase option, while continuing to own the land underneath. Is this transaction subject to Texas sales and use tax?
No. The transaction is a nontaxable financing arrangement using real property (and possibly substituted property) as collateral, not a taxable sale of tangible personal property. This holds even thoug…
Were online-course marketing, tuition collection, revenue sharing, and banner-advertising fees taxable in Florida?
No. Under the proposed contracts, online-course tuition, marketing revenue shares, and internet banner-advertising payments were not subject to Florida sales, use, or gross receipts tax. The result de…
Could a lease facilitator handle a lessee's trade-in without the dealer physically possessing the vehicle or title, and what records were required?
Yes. The dealer did not need physical possession of the trade-in, and an authorized lease facilitator could handle title documents under a vehicle-specific power of attorney. But the dealer's records …
Rule 3.288(f) says we can never accept a direct payment exemption certificate from a contractor performing a lump-sum contract, but Rule 3.357(b)(2) says the lump-sum-vs-separated distinction no longer matters for repair/remodeling/restoration work. Can we accept a direct pay certificate for repairing, remodeling, or restoring nonresidential real property under a lump-sum contract?
Yes. When you repair, remodel, or restore real property, you're acting as a taxable service provider rather than a "contractor" improving realty — so your total charge is taxable whether billed lump-s…
Could an oil and gas taxpayer use Rule 3.553 reserve methods for its full-cost pool, and when could proved producing reserves be used?
No. Rule 3.553's four reserve-estimation methods applied only to amortizing intangible drilling costs, not the full-cost pool including leasehold costs and equipment. The ad valorem method required ce…
Our contracts with the Texas Department of Transportation require us to build and equip a fully-equipped lab, for the exclusive use of State Engineers, at our own privately-owned hot-mix plant facility. Are the materials to build and equip that lab subject to Texas sales tax, even though the lab sits on our own private property?
No. Even though the lab is built at your privately-owned plant facility, materials to build and equip it may be purchased tax-free by giving your suppliers exemption certificates, because the lab is c…
Can an asbestos-removal contractor get a refund of the sales tax it paid on disposable supplies (bags, suits, filters, encapsulant) that get contaminated and are transferred to its clients as part of the job?
Yes, mostly. An asbestos-removal contractor may claim a refund or credit for sales tax paid on disposable supplies (filters, bags, suits, gloves, tape, encapsulant, and similar items) that become cont…
Must a church athletic foundation collect Kansas sales tax on sports participation fees paid by its members?
No — the participation fees are exempt, but the foundation's purchases are not. K.S.A. 79-3603(m) taxes fees charged to participate in sports and other recreational activities, but as amended by 1998 …
How can a wholesaler stop being charged Kansas compensating tax on goods it buys and resells to Kansas retailers?
Register and give the vendor a resale exemption certificate. The wholesaler buys refrigerants that its out-of-state vendor (DuPont) ships directly to Kansas retailers and bills to the wholesaler, and …
Does a marriage counseling group qualify for the Kansas religious-organization sales tax exemption?
Not exempt. K.S.A. 79-3606(aaa) exempts purchases by a 501(c)(3) religious organization used exclusively for religious purposes, and defines a 'religious organization' as a group that gathers for wors…
Can a plumbing company cancel its sales tax registration and just pay tax on the materials it buys?
No. The Department advised that the advice to cancel registration and simply pay tax on material and supply purchases was incorrect. A plumbing company typically makes some retail sales and performs l…
Does a 501(c)(3) foundation qualify for a Kansas sales tax exemption because similar named health charities are exempt?
Not exempt. K.S.A. 79-3606(vv) grants a Kansas sales tax exemption to a specific list of named health-related charities, and the general exemptions for schools, educational institutions, hospitals, an…
Did Texas motor vehicle tax or limited sales tax apply to truck-mounted concrete pumps sold as a unit or installed on a customer's truck?
A heavy-duty truck and installed concrete pump sold together in one transaction were entirely subject to motor vehicle sales and use tax, with no portion under limited sales tax. If the seller sold on…
If a company sells computer training classes whose fee includes manuals participants keep, does it charge sales tax on the manuals?
Don't charge tax on the class fee — but pay tax when you buy the manuals. Kansas does not tax gross receipts from the service of providing training or instruction, so the lump-sum fee for computer tra…
Our client sells nationwide Internet-based e-mail/fax subscriptions through a toll-free number, using hand-held devices manufactured overseas by OEMs (who license our client's audio-coupling software into the devices) and sold through unrelated third-party Texas retailers. Our client has no office or server in Texas. Does this create Texas sales tax nexus, is the e-mail/fax service itself taxable, and how do we figure out which local tax rate applies?
Yes, nexus exists, on two independent grounds: the client's licensed software resides in hand-held devices used by Texas customers (creating nexus in every local jurisdiction those devices are used), …
Could Osceola County buy construction materials tax-free for its courthouse and government-center project?
Yes. Materials bought under the county's direct-purchase program were exempt because the county issued purchase orders, documented its exemption, received vendor invoices, paid vendors directly, took …
Are repair, refurbishing, and rebuilding services performed in Texas on equipment owned by a company with both Texas and Mexican maquiladora operations subject to Texas sales tax?
Depends on the equipment's own exemption status and where it's used, not on where the repair happens. A company with a Texas manufacturing/warehouse location and Mexican maquiladora operations (holdin…
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