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 rebuilding the tee boxes on an existing golf course taxable remodeling, or nontaxable new construction, for Texas sales tax purposes?
Taxable remodeling, not new construction. A country club completely demolished and rebuilt the tee boxes on its golf course and asked whether that counted as nontaxable new construction since the tees…
Is a vacuum-truck company's charge for hauling and disposing of drilling mud and saltwater from oil and gas production wells subject to Texas sales tax?
No, not taxable. Hauling and disposal charges for waste are generally taxable real property services in Texas, but Rule 3.356(a)(3)(B) carves out materials resulting from oil, gas, or geothermal explo…
Is a nonprofit hospice group 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 a community action group's materials and labor to repair or weatherize low-income housing exempt from Kansas sales tax?
Both are exempt. K.S.A. 79-3606(oo) exempts tangible personal property a community action group or agency buys to repair or weatherize housing occupied by low-income individuals, so the materials are …
How did Texas tax a sole proprietor's motor vehicles leased to a corporation for more than 180 days versus rented for 180 days or less?
For one contract exceeding 180 days, the lessor's vehicle purchase was taxable and the lease payments were not, whether the vehicles had already been used or were newly bought for leasing. A contract …
Is a service that collects driving-complaint calls and reports them to the vehicle owner subject to New York sales tax?
No. A service that collects driving-complaint calls through a toll-free number and reports them only to the individual subscriber (never incorporated into reports shared with others) qualifies as exem…
Our nonprofit hospital is building a new emergency facility, ICU, and parking structure using an off-balance-sheet 'synthetic lease' financing: we'll ground-lease our own land to a trust controlled by our lender for 49 years (nominal $1/year rent), the trust will lease it right back to us on a triple-net basis for up to 15 years while we actually build and pay for the improvements, and at the end we'll almost certainly exercise an option to buy back the trust's position. We have a sales tax exemption certificate as a nonprofit. Does this lease-and-leaseback structure trigger sales tax on construction materials/services, mortgage recording tax on the lease documents, or New York's Real Estate Transfer Tax on any part of the transaction (including our eventual buyback)?
Exempt across all three taxes, though for different reasons in each case. Beth Israel Medical Center ('Petitioner'), a voluntary nonprofit hospital and Tax Law Section 1116(a)(4) exempt organization, …
How are New York's College Choice Tuition Savings Program and its participants taxed for franchise tax, personal income tax, and estate and gift tax purposes?
The Program (and its trust fund and LLC) is a governmental arrangement, not a corporation or association, so it owes no franchise tax, income tax, or unrelated-business income tax. For participants: c…
A Texas company plans to resell satellite phone service (from a Netherlands provider, with ground stations in South America) to customers mostly based in Texas. What Texas taxes apply?
Sourced by where the call originates, not by billing address alone. A company planned to resell satellite phone service -- purchased from a Netherlands-based provider using ground stations in Venezuel…
Are purchases of medical supplies and equipment by a nonprofit nursing home exempt from Kansas sales tax?
Partly exempt. Under Senate Bill 309 (1987), all sales of medical supplies and equipment purchased directly by a nonprofit skilled nursing home or nonprofit intermediate nursing care home -- as define…
Was a mailing-list license taxable when the names and addresses were transferred only electronically?
No. Mailing-list information transferred directly from computer to computer was not taxable tangible personal property when no disk, tape, paper, or other physical property accompanied it. The ruling …
Does an out-of-state manufacturer that sells into Utah through independent sales reps have sales tax nexus and need to register, even if it believes its sales are tax-exempt?
Yes. The Commission ruled that an Indiana manufacturer selling into Utah through independent manufacturers' representatives (not merely advertising or direct-mail solicitation) had sales tax nexus wit…
Does a part-time Park City homeowner who mainly lives and works in Chicago qualify for Utah's primary residential property tax exemption, and does a landscaper or the homeowner pay sales tax on a tree that's planted at a client's home?
On residency: an individual who mainly lives and works in Chicago, using a Utah home only 1-2 months a year, is not domiciled in Utah on those facts and does not qualify for the primary residential pr…
Must a church collect Kansas sales tax on a months-long consignment fundraiser selling greeting cards for UNICEF?
The church must collect tax on the card sales. Kansas's new exemption for religious institutions extends to their purchases, not their sales, and because of the duration of the event no exemption reac…
How does Kansas tax an out-of-state dealer that builds fabric-covered steel farm shelters in Kansas?
The builder is a contractor-consumer and owes Kansas use tax on its materials. Fabric-covered steel-arch farm shelters are 'buildings,' so the dealer that builds them is a contractor and the consumer …
Are hauling and transporting services subject to Kansas sales tax?
Not taxable, with a catch on your own purchases. Kansas taxes only enumerated services, and transporting (hauling) services are not currently among them -- so long as you are not engaged in the sale o…
Were Florida residents' fund shares exempt from annual intangible tax when the portfolio held exempt securities?
Yes, if the portfolio held only exempt securities on the last business day of the prior year. Direct U.S. government obligations were separately exempt, but if any other portfolio asset was taxable, t…
Must an alarm company charge Kansas sales tax on security monitoring fees, and how is a bundled monitoring-plus-equipment charge taxed?
Don't tax the monitoring fee; the provider pays tax on the equipment. Security monitoring is not an enumerated taxable service under K.S.A. 79-3603, so monitoring fees are not subject to Kansas sales …
A company bought a business division without getting a tax clearance, and years later the state demanded it pay gross receipts tax the seller was later audited and assessed. Is the buyer on the hook — and can it even challenge a tax bill that was issued to the seller?
The buyer was liable as a 'successor in business,' but — because it never got notice of the seller's assessment — it was allowed to challenge that assessment, and part of the audit math was thrown out…
Was a Texas motor vehicle rental exempt when the federal government or a federal employee traveling on official business rented the car?
Yes. The federal government and federal employees traveling on official business were exempt from Texas motor vehicle rental tax. The rental company was to have the renter complete a motor vehicle ren…
Did a homeowners' association qualify for the former Texas franchise-tax exemption when the development included commercial ranching property?
No. Section 171.082 required the development or project to be legally restricted to residential use. Because the development included commercial-use ranching property, the corporation did not qualify …
Can a money-losing, tax-subsidized public swimming pool program get a sales tax exemption on its admission and equipment rental fees just because charging tax feels like double taxation?
No. However sympathetic the district's situation, the Utah Tax Commission has no power to create a sales tax exemption on its own -- it can only administer exemptions the Legislature has already enact…
Is an aircraft delivered in Kansas through a chain of simultaneous transfers to a foreign buyer exempt from Kansas sales tax?
Exempt, if two conditions are met. The Department agreed that the simultaneous sale and delivery of the aircraft in Kansas is exempt from Kansas retailers' sales tax if (1) each entity in the chain of…
Are an interexchange carrier's gross receipts from 800-number calls exempt from Kansas sales tax?
It depends on whether the 800 service is WATS. Under K.S.A. 79-3603(b), only interstate wide area telephone service or wide area transmission ('WATS') service, as described in the statute, qualifies f…
Can a county assessor deviate from Utah's standard personal property depreciation schedules -- or use an income-approach impairment charge for real property -- when a taxpayer presents evidence of reduced value?
It's fact-dependent, not a blanket yes or no. A county assessor generally must use Utah's standard personal property depreciation schedules, but Rule R884-24P-33(B.3) allows deviation for a specific i…
Of the federal excise tax, state fuel taxes, and the state environmental assurance fee that appear on a petroleum invoice, which ones count toward the Utah sales and use tax base?
Only one of the five charges counts. The federal excise tax on petroleum products is excluded from the Utah sales tax base if separately stated, and Utah's own motor gasoline, aviation fuel, and speci…
Were foreign military personnel attached to NATO exempt from Texas motor vehicle sales tax, and what proof supported a refund?
Yes. Foreign military personnel attached to NATO were exempt, and tax already paid was refundable. The requester had to provide the county title-application and tax receipt, identification showing NAT…
Were one-time and monthly charges for shared web-hosting services subject to Florida sales and use tax?
No. Shared web-hosting charges were nontaxable service fees where the provider retained ownership and control of the server and did not sell, rent, lease, or license hardware, canned software, or tele…
Does Connecticut's controlling interest transfer tax apply when a parent merges one wholly-owned subsidiary that owns Connecticut real estate into another wholly-owned subsidiary of the same parent?
No tax. Merging one wholly-owned subsidiary of a parent into another wholly-owned subsidiary of the same parent does not transfer a controlling interest to anyone new -- the parent controls the real-p…
Two owners of closely held companies were paid by their own corporations but reported the pay as 1099 nonemployee compensation, not wages. Can they still claim the employee wage exemption from gross receipts tax?
No — they are bound by how they reported the pay to the IRS, so the wage exemption did not apply and the protest was DENIED. Louis and Carolyn Bortot managed two closely held family corporations that …
Which payments between a sole shareholder-landlord and the wholly owned corporate tenant were taxable in Florida?
Rent, the landlord's mortgage, insurance and property-tax payments, and required improvements were taxable rent even without a written lease. Qualifying utilities, minor repairs, and the tenant's own …
Are sales of discount cards and prepaid telephone cards subject to Kansas sales tax, and what use tax applies to promotional magazines?
Discount-card sales are not taxed as admissions; use tax reaches the magazines. The Department found K.S.A. 79-3603(e) does not tax the retail sale of discount cards that give holders access to discou…
Are a club's fundraising sales exempt from Kansas sales tax because the proceeds go to youth groups like 4-H and Boy Scouts?
No. A club asked whether its fundraising sales were exempt because the bulk of the proceeds went to groups like 4-H, the Boy Scouts, and youth swim and track teams. The Department ruled that the fundr…
If you had a resale certificate but lost it, and you only get a replacement after the state's 60-day deadline, can you still deduct those receipts?
No. An architectural consultant sold his services to a firm that he believed had given him a Type 5 nontaxable transaction certificate (NTTC) showing the services were bought for resale, which would l…
Is a prescription bone growth stimulator exempt from Utah sales tax as home medical equipment?
Yes. The Utah State Tax Commission ruled that a prescription bone growth stimulator, owned by the patient (not the physician) and used only by that patient to treat a nonunion fracture, qualifies as e…
How does Kansas sales tax apply to a company's shipping/handling charges, distributor support fees, carrier damage payments, and newsletters mailed into Kansas?
A mix of results. Kansas sales tax is based on the retail selling price plus shipping, handling, or freight charged to the distributor. A carrier's payment to a retailer for damaged goods is recovery …
If an aircraft parts repair company does 90%+ of its work for licensed carriers but also repairs some pre-sale manufacturer components and used/military aircraft equipment, is the machinery and equipment it uses for ALL that repair work exempt from Texas sales and use tax?
Taxable -- the exemption requires EXCLUSIVE qualifying use, and this client doesn't have it. An aircraft parts repair company holding a Texas Direct Pay Permit does about 90% of its work repairing com…
Is an FDA-registered, prescription-only Vacuum Erection Technology (V.E.T.) system used to treat male impotence exempt from Texas sales tax when sold under a physician's prescription?
Exempt, when sold under a prescription. The V.E.T. (Vacuum Erection Technology) System is FDA-registered and sold only by prescription to treat male impotence. The Comptroller confirmed it qualifies a…
Did Florida documentary stamp and nonrecurring intangible taxes apply to the revised warehouse-loan securitization and its collateral assignments?
No, under the stated structure. The out-of-state bonds and warehouse agreement were not taxed; ownership transfers of the loan obligations did not create new tax; and Florida collateral assignments qu…
Were single-patient Vasoseal medical kits sold to for-profit Florida hospitals exempt from sales tax?
Yes, but only when both conditions were met: the single-patient medical device had to be dispensed under a prescription, and the for-profit hospital had to give the seller a blanket resale certificate…
Who owed Florida tax on repairs to a grocery warehouse's real-property refrigeration system?
The refrigeration system was real property, so repair labor was not taxable. For most contracts, the contractor was the consumer and paid tax on materials without separately charging the customer. Sal…
Could a Florida dealer keep resale and exemption certificates as computer-scanned records instead of paper?
Yes. Florida allowed computer storage of resale and exemption certificates if every required item was captured and the records remained legible, readable, locatable, reproducible, and available withou…
Is a maintenance contract on leased equipment taxable in Kansas, and does the repair shop charge the contract company tax?
The maintenance contract is taxable, but the repair under it is a resale. A company that leases trucks, cranes, and forklifts must buy required maintenance contracts and pay Kansas sales tax on the ma…
A contractor says a state tax employee's phone advice led it to pay its gross receipts tax late. Can that phone call get the interest excused?
No — relying on the oral advice of an unidentified Department employee does not estop New Mexico from collecting the mandatory interest on late-paid tax, so the protest was DENIED. Lauren Constructors…
Under the now-superseded RR 98-20, when was kerosene subject to South Carolina motor-fuel tax?
RR 98-20 imposed motor-fuel tax when kerosene was delivered into a highway vehicle's fuel tank or blended with undyed diesel fuel or gasoline. RR 18-3 expressly superseded and updated this ruling.
When a Texas company buys software hosted on an out-of-state server, with modification services performed partly in Texas and partly out of state, how is the license price and modification labor taxed based on where the licenses are used?
A layered answer that splits by delivery point, license location, and where labor happens. A Texas company (Company A) plans to buy software from an out-of-state vendor, installed on the vendor's serv…
Could an S corporation include capital losses, including excess losses after netting gains, in the former Texas earned-surplus calculation?
Yes. Rule 3.556(e)(9) included both capital gains and capital losses in the S corporation's federal-taxable-income and earned-surplus calculation. Gains and losses were netted, and any excess capital …
Were separately stated delivery charges for precast construction materials taxable after the buyer gained delivery choice?
Prospectively, no. A contract addendum gave the contractor sole discretion to pick up the materials, hire a carrier, or use the supplier, and the delivery charge was separately stated. But the change …
Does a nonprofit support group qualify for an exemption from Kansas sales tax?
No, not automatically. Being a nonprofit does not by itself exempt an organization from Kansas sales tax -- the exemption has to come from a specific statute. Senate Bill 493, signed by Governor Bill …
A company had refunds coming on some years' returns and an underpayment on others. Can it make the state offset the overpayments against the underpayment to cut the interest it owes?
No — New Mexico has no statutory authority to offset a tax overpayment against a past-year underpayment when calculating interest, so the protest was DENIED. CRST, Inc., an interstate trucking company…
Can a direct-sales company reduce the sales tax it collects on prepaid discount vouchers to reflect that only about 1% of the vouchers are ever actually redeemed?
No. A direct-sales/multi-level-marketing company sells 'Discount Redemption Vouchers' to independent distributors, who resell them (often at a steep discount) to purchasers who can later redeem a vouc…
Which of two related religious entities qualifies for the Kansas religious-organization sales tax exemption, and how must exempt purchases be documented?
One entity qualifies, the other does not — and exempt buys must be direct. An organization carrying out the ministry of the church met the Notice 98-05 criteria for the K.S.A. 79-3606(aaa) religious-o…
Is equipment or machinery that a contractor rents or leases to perform a realty-improvement job for a tax-exempt government or nonprofit entity itself exempt from Texas sales tax?
No -- machinery and equipment purchased, leased, or rented by a contractor is NEVER exempt, even on a job for a tax-exempt entity. A contractor was incorrectly told by another Comptroller staffer, cit…
Do a public warehouse's added services -- contract negotiation, site visits, and quality-control inspections -- change its status as a fulfillment-services provider, and do out-of-state customers get New York nexus by using it?
The added steps do not change the result. Distribution Unlimited's public-warehousing activities -- including the new contract-negotiation, site-evaluation, and periodic inventory and quality-control …
After a mail-order retailer closes its New York stores, does holding over the now-vacant leased store space until the leases can be terminated keep it taxable, or is that property de minimis under Public Law 86-272?
Exempt, with a final return required. After Egghead closed all its New York retail stores, its remaining New York activity is mail-order solicitation (catalogs and a web page, orders approved and ship…
Did converting a general partnership into a Florida limited partnership trigger documentary stamp tax?
Only minimum documentary stamp tax applied to the deed transferring the real estate to the converted limited partnership. The converted entity remained the same entity and original obligor, so qualify…
Does a company owe Kansas sales tax for hooking up a network computer, selling parts, or servicing tangible personal property?
It depends on what the company does. Merely plugging a network computer into an electrical outlet does not obligate the company to collect Kansas sales tax. But if it sells parts to the end consumer, …
Does the Texas sales tax definition of 'licensed practitioner of the healing arts' (the professional whose prescription can trigger a medical exemption) include nurses or licensed therapists?
No -- nurses and licensed therapists are excluded. A taxpayer asked the Comptroller for a clearer definition of 'licensed practitioner of the healing arts,' the category of professional whose prescrip…
Why did a 1998 Texas short-term motor vehicle rental carry a 15% total tax rate?
The letter attributed the 15% total to a 10% state tax on rentals of 30 days or less plus a 5% tax imposed by a redacted sports or community venue authority. The ruling body does not identify the loca…
Is a gas well foamer product ('soapsticks' or 'acidsticks') purchased by a well operator and injected downhole to stimulate gas flow subject to Texas sales tax?
Taxable. A well operator purchases a gas well foamer product (also called soapsticks or acidsticks) and injects it downhole to turn water blocking a low-pressure gas well into suds/bubbles, lowering w…
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