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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Did buying raw agricultural materials in Texas and picking them up with company employees and a truck create franchise-tax nexus?
No. The client bought raw agricultural product from a Texas seller, sent three employees and a company truck from Missouri to pick it up, and hauled all of it to the Missouri processing plant. It owne…
Was wine used in a New York winery's wine tastings exempt from sales and use tax before the wine-tasting exemption's December 1, 1997 effective date?
No. New York's wine-tasting exemption (Tax Law § 1115(a)(33)) only applies to wine used in tastings on or after its December 1, 1997 effective date; wine used in tastings before that date remains subj…
Is installing a retractable synthetic awning on a house a capital improvement, so it's exempt from New York sales tax?
Yes. Installing a retractable awning made of a durable synthetic fabric (not canvas), bolted to brackets on the roof so that removing it would damage the roof, is an exempt capital improvement, follow…
Are purchases made by federal employees using government-issued charge cards (like GSA SmartPay/IMPAC or a Department of Interior MasterCard) exempt from Texas sales and use tax?
Yes, exempt, under a three-part test. This combined record includes a short November 1998 letter confirming that an earlier April 2, 1998 ruling extends to a new Department of the Interior MasterCard,…
Are the display 'counterbooks' a sewing-pattern maker sells to retailers, and the equipment used to make them, exempt from New York sales tax?
Yes, largely. A sewing-pattern manufacturer's 'counterbooks' (retailer display catalogs) qualify for the resale exemption when purchased from an outside printer, and machinery and equipment used direc…
Is a membership magazine that's mostly advertising for the publisher's own services taxable when mailed to members, sold to non-members, or handed out free at the counter?
It depends on how the publication is distributed. AAA's 'Destinations' magazine doesn't qualify as an exempt periodical because it's mostly advertising for AAA's own services, but copies mailed free t…
Is a computer company's point-of-sale system maintenance agreement -- covering both hardware repairs and software support -- taxable, and what about travel charges and order-cancellation fees?
A point-of-sale system maintenance agreement that bundles taxable elements (prewritten software upgrades, hardware repair) with nontaxable elements (software consulting, diagnostics, training) is full…
Is rent paid to store inventory in a warehouse, where the space is controlled by the warehouse operator, included in the property factor of the Article 9-A business allocation percentage?
No. The amount a company pays to store its inventory at an unaffiliated warehouse, where the charge is computed by the cubic feet used for a designated space and the space is under the control of the …
Is rent paid to store inventory in a warehouse, where the space is controlled by the warehouse operator, included in the property factor of the Article 9-A business allocation percentage?
No. The amount a company pays to store its inventory at an unaffiliated warehouse, where the charge is computed by the cubic feet used for a designated space and the space is under the control of the …
When a utility buys its parent holding company's publicly traded stock on the open market and keeps it, is that a constructive dividend subject to the section 186 excess dividends tax?
No. When Rochester Gas & Electric buys the publicly traded common stock of its parent holding company on the open market and continues to hold it, there is no distribution of property to its sharehold…
If a nonresident is the sole general partner of a limited partnership that only buys and sells options for its own account through him as an AMEX Options Principal Member, is his distributive share of that income taxable as New York-source income?
No. Because Petitioner traded only as an Options Principal Member (OPM) - who may buy and sell options solely for the partnership's own account and can never act as a Specialist or execute customer/ag…
Does a ministry qualify for the 1998 Kansas religious-organization sales tax exemption, and how does it claim it?
Exempt, if claimed properly. The Ministry provided its by-laws and an IRS letter, which established that it qualifies as a religious organization within the meaning of 1998 Senate Bill No. 493. Accord…
Is a city's charge to install a new residential water line, water meter, or electrical meter subject to Kansas sales tax?
The installation service is not taxable; tax is paid on the materials. Kansas exempts labor to install tangible personal property when it involves the original construction of a building, and 'the con…
Must a non-resident professional athlete or entertainer who earns Kansas-source income file a Kansas income tax return?
Yes. The Department advised that non-resident professional athletes and entertainers who receive income from Kansas sources are obligated to file a Kansas individual income tax return, regardless of t…
A company lets customers come to its office to hold video conferences using its own equipment and phone lines, billing them for facility use plus re-billed long-distance charges. Is this equipment rental plus a telecom pass-through, or something else entirely for tax purposes -- and can the company buy its own phone service tax-free?
The company isn't renting equipment and separately re-billing phone charges -- it's providing a single taxable TELECOMMUNICATIONS SERVICE, and the ENTIRE charge to customers (facility/equipment use pl…
For a company that leases PCs and other equipment routed through Texas for tagging and staging before final delivery to offices in and out of Texas, is Texas sales tax due on equipment ultimately installed and used at out-of-state offices?
No Texas tax on the out-of-state-installed equipment -- correctly handled. A Texas-headquartered company leases computer equipment (including PCs) from an out-of-state lessor permitted to collect Texa…
Is a Texas travel group's lump-sum charge (event ticket plus hospitality access) for an out-of-state amusement event, like the Ryder Cup, subject to Texas sales tax?
No Texas sales tax is due. A group organized to attend the following year's Ryder Cup golf tournament in Massachusetts charged each member a lump-sum fee covering an event ticket and access to hospita…
Were fees for an online bond-information system taxable in Florida, and did its Florida activities create collection nexus?
The electronic access fees were not subject to Florida sales, use, or gross receipts tax, but separately sold hardware and canned software on tangible media were taxable. Under the 1998 nexus analysis…
When was a replacement rental vehicle provided during repairs exempt from Florida's rental car surcharge?
The surcharge did not apply when the dealer, body shop, or other repairer paid the entire vehicle rental and provided it to the repair customer at no charge, supported by a resale and exemption certif…
Are subscription receipts for newspapers, magazines, periodicals, and trade journals mailed to Kansas subscribers subject to Kansas sales tax?
Taxable. When subscriptions for newspapers, magazines, periodicals, trade journals, and publications are taken within Kansas, sent to a printer or publishing house (inside or outside Kansas), and the …
When a hotel charges guests a fee for in-room pay-per-view movies supplied through a video company's equipment, who collects Kansas sales tax and who pays tax on the equipment?
The hotel collects sales tax on the guest movie fee; the video company pays tax on its equipment. The Department ruled the hotel 'should impose and remit Kansas state and local retailers' sales tax on…
Does a sale of a subsidiary in an IRC section 338(a) transaction require the target to recapture the investment tax credit it previously claimed under section 210.12?
Yes. When a section 338(a) election treats the sale of a target's stock as a deemed sale of all its assets, that is a 'disposition' for New York investment tax credit purposes, so the old target must …
Is buying shelving and store fixtures from a business that is closing down subject to Kansas sales tax?
Likely exempt as an isolated or occasional sale — if the facts fit. Kansas exempts 'all isolated or occasional sales of tangible personal property' (K.S.A. 79-3606), meaning a nonrecurring sale by a p…
For a software company that labels its programmers' department 'Research and Development,' does the computer equipment those programmers use to write mass-market software for sale qualify for the Texas manufacturing exemption?
Yes, exempt -- the department label doesn't control. A software company organizes development into marketing, research & development, and production departments, with the 'R&D' department's programmer…
We're an investor-owned utility. Years ago, a state energy authority issued bonds to finance pollution-control facilities at our power plants, backed by our first mortgage bonds, and the Department ruled that arrangement was exempt from mortgage recording tax. Now the authority wants to refinance (refund) those bonds with new ones, requiring us to amend and restate the same mortgage bonds. Does the exemption still apply to this refunding transaction?
Still exempt. Niagara Mohawk Power Corporation's first mortgage bonds had originally secured 1985 pollution-control revenue bonds issued by the New York State Energy Research and Development Authority…
Does a company owe Utah's oil recycling fee on motor oil bottles shipped through its Utah distribution center for resale outside the state, and does the environmental assurance fee apply to its packaged automotive products?
Split answer. The oil recycling fee ($0.16/gallon) properly applied when Mobil sold the motor oil to the company as the FIRST sale of that lubricating oil in Utah (§ 19-6-714) -- but if the company su…
Which of a farmer's water-well and irrigation purchases are exempt as farm machinery and equipment, and which are taxable?
It depends on the item. Under K.S.A. 79-3606(t), farm machinery and equipment — including irrigation pivot systems, pumps, motors, valves, and the well pump assembly — is exempt when purchased for far…
Did FCC satellite and two-way-radio licenses disqualify separate television-production companies from Florida's production-equipment sales-tax refund?
No. The parent and subsidiary were producers, not television broadcasters: their FCC licenses covered satellite facilities and two-way radios but did not authorize them to broadcast the programs. Thei…
Is a table whose sole purpose is to support an electric rotisserie or mixer exempt from Texas sales tax as manufacturing equipment?
Taxable. A business asked whether a table whose sole purpose is to support an electric rotisserie or mixer would be exempt as manufacturing equipment. The Comptroller said the table is taxable, citing…
Does a 'Vapor Scrubber' that controls pollution while a finished product is in storage (after manufacturing is complete) qualify for the Texas manufacturing pollution-control exemption?
No, not exempt (as of this 1998 letter, but see the currency alert below). Pollution control equipment located within the actual manufacturing process area still qualifies for the Tex. Tax Code Sec. 1…
How is Kansas sales tax calculated on funeral charges, and is the state-paid portion of a burial taxable?
Under K.A.R. 92-19-15, the portion of a burial paid directly by the state of Kansas (or another political subdivision) is not subject to sales tax. For the rest, the taxation depends on how the funera…
Is a school choir's sale of 'Music Cards' -- which give the buyer a discount on future CD/audio tape purchases -- subject to Texas sales tax?
Not taxable -- the card itself is an intangible. A school choir contracted with a company to sell 'Music Cards' as a fundraiser: buyers pay a set price per card, the choir keeps a portion, and the car…
How should Kansas county appraisers adjust the agricultural use value of farmland that floods frequently, and under what legal authority?
Agricultural land that floods frequently gets a 20% reduction in its agricultural use value. This 1998 Division of Property Valuation memo tells county appraisers that if flooding has occurred at leas…
Does a nonprofit endowment association qualify as an exempt educational institution in Kansas, and must it still collect sales tax on its own sales?
Exempt on purchases, but it must collect tax on its own sales. The 1998 Legislature broadened 'educational institution' to include nonprofit endowment associations and foundations operating exclusivel…
Were client-paid employee health-insurance charges part of the taxable price of Florida security services?
Yes. The client's share of health-insurance premiums for the security company's employees was part of the taxable sales price of the security service. Separate monthly invoicing did not make the charg…
A surveyor got the required nontaxable transaction certificates from his customers during the audit, but the version of the law in force then required him to have held them when he claimed the deduction years earlier. Does obtaining them late save the deduction?
No — under the stricter 1992–1997 version of the law, the certificates had to be in the taxpayer's possession when the deduction was claimed, so getting them during the audit was too late, and the pro…
Did Florida documentary stamp tax apply to the bank's revolving-credit, business-line, and margin-loan forms?
No. The submitted account agreements, withdrawal and check forms, business-line documents, applications, and margin agreement were not subject to documentary stamp tax because they did not contain a f…
Under the now-superseded RR 98-21, how were hotel room charges, mandatory fees, optional services, packages, and cancellations taxed?
Room charges and mandatory services generally used the ruling's 7% accommodations rate. Optional guest services often used a 5% additional-guest-charge rate or another sales-tax rule. RR 14-5 expressl…
Does a nonprofit that gives administrative support to a medical school's teaching faculty qualify as an exempt 'educational institution' in Kansas?
Not exempt. The 1998 broadened 'educational institution' definition (1998 Senate Bill 493) reaches groups of schools, endowment associations, athletic-receipt entities, and research foundations organi…
What must an organization show to qualify as an exempt 'religious organization' under Kansas sales tax law, and did this taxpayer qualify?
Not exempt on these facts. K.S.A. 79-3606(aaa) exempts purchases by a 501(c)(3) 'religious organization' used exclusively for religious purposes, but the statute defines that term narrowly: a group th…
If a manufacturer generates its own electricity on-site using natural gas engine generators, does the natural gas used to make that electricity qualify for the same manufacturing sales tax exemption as purchased electricity?
Yes, exempt. A plastic injection molding company already had a sales tax exemption on purchased electricity (backed by an engineering study showing 95% use in the molding process) and planned to start…
For a fine-art and antiques handling company, which of its services (airport supervision, packaging/crating, moving, installation, and storage) are subject to Texas sales tax?
Mixed, service by service. A company that handles and stores fine art and antiques asked the Comptroller to confirm the taxability of five services. Airport supervision of art transfers is TAXABLE as …
Did a foreign corporation create Texas franchise-tax nexus when its only asset and activity was an interest in an LLC doing business in Texas?
No. The foreign corporation's sole asset was a membership interest in an LLC doing business in Texas, it conducted no other activity, and it had no Texas certificate of authority. The Comptroller conc…
Does a funeral home or cemetery need to charge sales tax on an outer-burial container sold as part of a preneed or at-need funeral contract?
Depends on whether services come with it. A funeral home or cemetery should NOT charge sales tax on an outer-burial container -- whether sold preneed or at-need -- if it also provides services like th…
Is a purchase exempt from Utah sales tax if it's paid for with a U.S. government purchase, travel, or fleet credit card?
It depends on how the charge is billed. Utah sales tax does not apply to purchases made with a U.S. government purchase, travel, or fleet credit card when the transaction is billed directly to and pai…
Does a group have to collect Kansas sales tax on a food fundraiser it holds on behalf of an exempt youth development organization?
No tax to collect. K.S.A. 79-3606(ii) exempts sales of tangible personal property purchased directly by a nonprofit for nonsectarian comprehensive multidiscipline youth development programs, and 'all …
Are repair and installation labor services taxable in Kansas, including when performed for farmers?
Generally taxable. Under K.S.A. 79-3606(q), the service of repairing, servicing, altering, or maintaining tangible personal property is taxable, so servicing a lawnmower for a farmer or business owner…
Can a city split its taxable Solid Waste fee into a separate, untaxed 'Environmental Fee' covering community cleanup and environmental services?
No -- the whole fee stays taxable. A city proposed splitting its taxed Solid Waste fee into two components: a Waste Fee and a separate Solid Waste Environmental Fee (funding cleanup days, illegal-dump…
Can a company building a facility through an Industrial Development Agency deal buy, lease, install, and maintain the project's property tax-free when it acts as the agency's disclosed agent?
Yes, largely. When a company acts as the disclosed agent of an Industrial Development Agency (IDA) -- with purchase invoices and contracts naming the IDA as purchaser, lessor, or lessee -- its purchas…
A stucco subcontractor had a nontaxable transaction certificate but lost it and couldn't produce it during the audit. Can the state still deny the construction deduction — and does an early cashier's-check payment stop interest from running?
Both answers went against the taxpayer, and the protest was DENIED. Actionside Lath and Plaster, a stucco subcontractor, deducted $16,790 it received from a general contractor (Omega Sunspaces) as a c…
Is a nonprofit 501(c)(3) science-education organization exempt from Kansas sales tax on its purchases?
Not exempt. The Department could find no subsection of K.S.A. 79-3606 that exempts the purchases of a nonprofit 501(c)(3) organized to promote science education. Kansas sales tax exemptions are strict…
When a customer both resells and personally consumes the same type of product, does the supplier charge sales tax on everything, or can the customer buy it all tax-free and self-report the tax on what it consumes?
Buy everything tax-free and self-report. When a purchaser (like a veterinarian) can't separate, at the time of purchase, which goods will be resold from which will be personally consumed, Utah Admin. …
Could the affiliated corporate group stop filing consolidated Florida income tax returns?
Yes. Florida found good cause in the group's major seven-year business reorganization and allowed separate returns beginning in 1997, subject to four conditions addressing the effective date, deferred…
Is a homeowners association exempt from Kansas sales tax on its purchases?
Not exempt. Although 1998 Senate Bill 493 added sales tax exemptions for certain organizations (such as nonprofit zoos and parent-teacher organizations), the Department advised that 'not every non-pro…
Are oil and grease used in a commercial printer's presses exempt from Kansas sales tax as consumed in production?
Yes. The Department concluded that oil and grease used in a commercial printer's printing presses are exempt from Kansas sales tax as consumed in production. Lubricants used in manufacturing equipment…
Is a computer systems-integration consulting firm's charges for hardware, software, and support services subject to New York sales tax?
It depends on which service is being billed. Pure consulting, project management, systems management, and technology planning are not taxable; selling and installing computer hardware is taxable; sell…
Was a court-ordered class-action settlement account subject to Florida corporate income tax or return filing?
No. The court-ordered bank account merely segregated and distributed class-action settlement funds under a consent decree. It was not a statutory artificial entity or Florida corporate-income-tax taxp…
Does a prescribed medical device that treats a bodily malfunction qualify for the Kansas sales tax exemption for prosthetic and orthopedic appliances?
Exempt when prescribed. K.S.A. 79-3606(r) exempts sales of prosthetic and orthopedic appliances prescribed in writing by a licensed healing-arts, dentistry, or optometry practitioner, defined to inclu…
Are Habitat for Humanity's materials and construction services for its housing projects exempt, and must it still collect tax on fundraising sales?
Materials and construction labor are exempt; fundraising sales are not. K.S.A. 79-3606(ww) lets Habitat for Humanity buy tangible personal property tax-free when it is incorporated into a housing proj…
Did a licensed Texas emergency shelter qualify for the residential child-care motor vehicle sales tax exemption?
Yes. The Texas Department of Protective and Regulatory Services said a licensed emergency shelter qualified under the Human Resources Code to provide the described 24-hour residential care. The facili…
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