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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Was a utility's federally mandated transfer of transmission-grid control to a regional operator a taxable lease or a nontaxable management arrangement?
It was a nontaxable management arrangement. The utility kept ownership, FERC—not the operator—determined its revenue requirement, the operator collected that revenue on the utility's behalf, and…
When are a contractor's repairs for a school district exempt from Kansas sales tax, and when is a project exemption certificate required?
It depends on whether the work touches real property. The Department ruled that under K.S.A. 79-3606(d), a contractor's purchases of materials to construct, repair, or remodel a building for a…
Does a multi-level marketing company or its independent distributors have to collect and remit Texas sales and use tax on distributor sales?
The direct sales organization itself — not its independent distributors — is legally the retailer responsible for collecting and remitting Texas state and local sales and use tax on sales its…
Are data processing services subject to Kansas sales tax?
Not taxable. The Department ruled that because Kansas taxes only specifically enumerated services, data processing services are not currently subject to Kansas sales tax. The provider must, however,…
Could a corporate group stop filing Florida consolidated returns because of routine reorganizations, the parent's lost Florida nexus, and administrative cost?
No. The group's manufacturing and distribution business remained the same despite mergers, acquisitions, sales, and dissolutions. Neither the parent's lost Florida nexus nor the cost of preparing…
Were payments under a synthetic real-estate lease taxable commercial rent, or were they debt payments under a mortgage financing?
They were nontaxable financing payments. The special-purpose lessor held bare title as security, rent exactly matched loan interest and holder yield, the lessee was treated as owner outside…
Is a single-member LLC treated as a "person" and "vendor" that must collect and remit Utah sales and use tax, even though it's disregarded for federal income tax purposes?
Yes. A single-member LLC (SMLLC) is a "person" under Utah Code section 59-12-102(19) even though SMLLCs aren't named in that 1933-era statute, because Utah's Limited Liability Company Act treats an…
Does a snack/candy retailer located next to a movie theater — selling popcorn, hot dogs, fountain drinks, and other grab-and-go items — have to collect Utah's restaurant tax?
Yes, the business must collect the restaurant tax — the Commission denied the exemption request. Utah's restaurant tax applies to prepared foods/beverages sold by a 'restaurant,' defined broadly to…
Does a mail-order retailer owe Utah sales or use tax on catalogs mailed to Utah customers, and does using a Utah printer create nexus even if the retailer itself has none?
It depends on who has nexus. A mail-order retailer that already has Utah nexus owes use tax on catalogs mailed to Utah customers even if the catalogs are entirely printed and mailed from outside…
Was a qualifying lump-sum retirement distribution taxable to a Louisiana resident when it was excluded from federal adjusted gross income?
No, to the extent the lump-sum distribution was properly excluded from federal adjusted gross income. Louisiana tax-table income started with federal adjusted gross income and made no separate…
What Texas motor vehicle tax applied when a parent corporation transferred trucks to a subsidiary and leased them back?
The subsidiary owed motor vehicle sales tax on each truck acquired from the parent. Assuming a lease term of at least 180 days, the management-fee leaseback was not a taxable rental. A true…
Which county-park concession rents were exempt as food-and-drink services within publicly owned recreational facilities?
Only the snack-bar and food-concession contracts were exempt. They provided food and drink within publicly owned recreational facilities, and beach-merchandise sales did not defeat the exemption.…
Did a refinancing qualify for Georgia's unpaid-principal IRT exemption when the original borrower had transferred a half interest in the real property to her husband?
Yes. Georgia approved a partial refund because the original lender and original borrower refinanced unpaid principal. The borrower's transfer of a half interest to her husband did not defeat the exemption.
Does the Boys and Girls Clubs of America qualify as a qualified after-school care program operator for the Texas franchise-tax after-school care credit?
Yes. For purposes of the Texas franchise-tax credit for after-school care, the Comptroller confirmed that a local Boys and Girls Club is a qualified after-school care program operator. Franchise Tax…
Does a Texas car dealer owe use tax on parts used for a free repair when there's no written warranty, but the repair happens right after the sale?
A Texas motor vehicle dealer that makes a free repair within seven calendar days of selling the vehicle, where the repair isn't covered by any written warranty, owes no use tax on the parts because…
Are the gross receipts from coin-operated video games located in Kansas subject to sales tax?
Taxable. The Department ruled that gross receipts from coin-operated video games located in Kansas are subject to sales tax under K.S.A. 79-3603(f), which taxes the operation of any coin-operated…
Could Louisiana garnish a resident seaman's or master's federal income-tax refund to collect past-due state tax?
Yes. The Department treated an income-tax refund as a debt owed to the taxpayer rather than protected wages, so the federal refund of a seaman or master who was a Louisiana resident could be…
Is the service of weighing vehicles on a commercial scale subject to Kansas sales tax?
Not taxable. The Department ruled that the service of weighing vehicles on a commercial scale is not subject to Kansas sales tax. Because it is a nontaxable service, the provider must pay sales tax…
Could a professional shopper avoid Florida sales tax on mandatory delivery charges by stating them separately from the delivered goods?
No. The independent contractor used its own funds, bore the risk of loss, and transferred title and possession when delivery succeeded, making it the retail seller rather than the consumer's…
Is plumbing labor taxable in Kansas, and how are the materials and non-residential jobs treated?
It depends on residence vs. materials. The Department ruled that plumbing labor services are exempt from Kansas sales tax when performed for a residence under K.S.A. 79-3603(p) (including the land…
Are retail sales of herbal fiberblend and barley green supplements subject to Kansas sales tax?
Taxable. The Department ruled that herbal fiberblend and barley green supplements are subject to Kansas sales tax. Unlike states that exempt food, Kansas taxes retail sales of food and food…
Which web, branding, campaign, direct-mail, and annual-report charges of a qualifying advertising agency were taxable?
Web production and hosting without tangible property were nontaxable, while qualifying branding, campaign, and related advertising services were exempt. Direct-mail development and design were…
Does a New Mexico resident owe gross receipts tax on pay for consulting work performed entirely outside the state?
No — the protest was GRANTED and the assessment was abated in full. Hilliard Griffin, a New Mexico resident, was assessed gross receipts tax after the IRS told the Department he had reported…
Did a secondary ticket seller collect Utah sales tax on its full resale price, including the markup over the original admission-ticket price?
No. Under the Commission's stated policy, the original seller collected tax on the original ticket price, while the secondary seller's additional markup was treated as payment for nontaxable…
For California's other-state tax credit, is S corporation business income sourced by the corporation's activities even if IRC section 469 calls it portfolio income?
Yes. For the California resident credit, FTB sourced an S corporation shareholder's share of business income by the location of the corporation's activities, using the same approach applied to…
Could a Tennessee warehouse operator offset customer charges as subrent against the rent included in its franchise-tax minimum measure?
No. Customer payments were not subrent because the storage contracts gave customers no right to possess the warehouse premises. The warehouse operator retained exclusive possession and control, so…
Were irrigation solutions, IV solutions, and sterile water used by a Tennessee healthcare provider exempt as prescribed drugs?
They were taxable tangible personal property unless a drug exemption applied. A specific solution qualified under the ruling when it was listed as a drug in the FDA Electronic Orange Book,…
How did Tennessee's $150 recreation-club dues exemption apply to annual contracts, monthly payments, renewals, and family memberships?
The first $150 per member applied to annual membership dues, including a separate $150 for each family member on the annual contract. The exemption could not be prorated across monthly installments,…
Could Tennessee impose excise tax on a foreign corporation whose goods were stored and shipped from an independent Tennessee warehouse?
No, under the stated foreign-commerce and treaty facts. Although the warehouse activity created Tennessee nexus and the ordinary excise tax passed the interstate-commerce tests, the Department found…
Were tickets to an athletic tournament hosted by a Tennessee 501(c)(6) nonprofit exempt from sales tax?
No exemption applied. The tournament tickets were taxable because the nonprofit host did not produce or control the entire event. The athletic group selected participants, pairings, times,…
Are surgically implanted items like pacemakers, hip/knee/shoulder replacements, bone, and cornea implants exempt from Utah sales tax as 'medicine' or as 'home medical equipment'?
No, neither exemption applies, contrary to informal phone guidance the hospital had received from a Tax Commission employee. The medicine exemption under § 59-12-104(10)/§ 59-12-102(16) is narrowly…
Is work on a private alley or drive tax-exempt just because the owner plans to eventually dedicate it to the city?
No. Work on an alley or drive is only exempt as work performed for a city on city property if the property has actually been dedicated to and accepted by the city (even conditionally or as of a…
What did the original 2001 advisement say about a club's separately billed employee service charge, and was that answer later revised?
The original advisement said the charge was nontaxable because it was separately stated, fully distributed to employees, and gave the club no benefit, regardless of billing frequency. Florida later…
Would amended building leases become mortgage financing when the lessee acquired the lessor but retained title and leases to preserve bond debt?
Yes. The taxpayer would acquire and control the lessor, keep title there only as security for existing notes, pay amounts tied to debt service, bear ownership duties and risk, grant mortgage and…
When did Kansas's one-cent-per-gallon environmental assurance fee apply?
Kansas's published schedule shows the one-cent-per-gallon fee switching on and off across specific date ranges from April 1, 1990 through 2019, then lists it as applicable beginning January 1, 2020…
How did Florida sales tax apply to a section 501(c)(3) rodeo's admissions, facility rentals, exempt purchases, and merchandise sales?
Rodeo admissions were exempt, and purchases for the organization's exempt purposes were exempt when invoiced to and paid by the organization using its certificate. Facility rentals were generally…
Are a nonprofit museum's renovation purchases (including for its gift shop) exempt from Kansas sales tax, and are visitor donations taxable as admissions?
Exempt. The Department ruled that the nonprofit organization qualifies as a museum under K.S.A. 79-3606(qq), so its direct purchases of tangible personal property and services used to renovate the…
Were prefabricated wall panels designed to be removed and reconfigured tangible personal property or permanent real-property improvements?
They were tangible personal property. Their modular appearance, generic adaptability, advertised movability, and easy reconfiguration showed no intent of permanence.
If the state wrongly applies my income tax refund to someone else's tax bill, can I get it back years later or just stop paying my current taxes to make up for it?
No — the protest was DENIED. Satya Deb Misra was one of four partners in the Redwood Lodge motel partnership, which had registered for New Mexico's combined reporting system (CRS) taxes. He withdrew…
Was a charity exempt from Texas motor vehicle sales tax when purchasing a van to transport schoolchildren?
No general charity exemption existed under Chapter 152 for the schoolchildren's van. A STAR alert adds narrow exemptions effective September 1, 2025, for qualifying nonprofit food-bank vehicles and…
Did a county's direct-purchase procedures make convention-center construction materials exempt from Florida sales tax?
Yes, if the county remained the purchaser in substance and form. It had to issue purchase orders and its exemption certificate, receive direct vendor invoices, pay vendors directly, take title and…
How should a corporation document the Kansas sales-tax exception when vehicles or trailers transfer with all of its assets to another corporation?
Complete the Kansas Designated or Generic Exemption Certificate, Form ST-28, and present it to the county treasurer instead of paying sales or use tax when title transfers. The form should cite…
Is cable television installation subject to Kansas sales tax at a residence, and does the answer change at a commercial building?
Not taxable at a residence. The Department ruled that installing cable television at a residence is exempt from Kansas sales tax under K.S.A. 79-3603(p), which exempts services to install or apply…
May a seller accept a Missouri exemption certificate for carpet shipped to a Kansas retailer before the carpet is transported to Missouri for installation?
Do not accept the Missouri exemption certificate for a sale shipped to a Kansas retailer. The carpet nevertheless qualified for Kansas's temporary-storage exemption because it entered Kansas only…
Were repair parts and repair services for exempt Kansas manufacturing machinery taxable after July 1, 2000?
No, for qualifying exempt machinery. Since July 1, 2000, repair parts and repair services for exempt manufacturing machinery and equipment were exempt from Kansas sales tax. Earlier periods…
Can I stop owing New Mexico income tax by registering to vote and renting an apartment in a no-income-tax state, if I keep actually living in New Mexico?
No — the protest was DENIED. Paul and Nancy Jacobs sought a $244,870 refund of New Mexico income tax withheld from Mr. Jacobs's 1998 compensation, claiming they had changed their residence and…
Did installing a remote electric rear-hatch assist qualify a vehicle for Texas's orthopedically handicapped exemption?
No. The spouse's condition did not prevent operating or entering an unmodified vehicle, and the electric rear-hatch assist was not one of Rule 3.84's qualifying control alterations or…
When did mileage on a dealer's tax-free resale vehicle indicate taxable use rather than minimal customer demonstration?
The Comptroller rejected 2,000 miles as extremely excessive. More than 50 miles could reasonably indicate use beyond customer demonstration and trigger tax, but the dealer could document…
Could a retailer or lender use an alternative method to compute a bad-debt loss under proposed Regulation 1642?
Yes, subject to Board approval. A method could be denied if it did not fairly compute the loss, but the Board needed an articulated basis.
Six unrelated companies formed an LLC to jointly develop a large multi-use condominium project (offices, hotel, residential, retail, garage, plus a donated cultural-facility unit) on a single physically integrated site near Columbus Circle in Manhattan -- with each company always intended to end up owning only its own unit, and a not-for-profit organization set to receive one unit as an outright gift. We have to hold the whole project through one LLC during construction for practical reasons (single construction contracts, single mortgage, and NYC condominium recording rules). Once construction is done and we convert to a condominium, will distributing each finished unit to its intended owner -- and donating the cultural-facility unit -- trigger New York's Real Estate Transfer Tax?
Exempt across the board -- both the unit distributions and the charitable donation. Columbus Centre LLC ('Petitioner'), formed by six members (the TWI, Hotel, Residential, Office, Retail, and Garage…
Is selling music downloads delivered electronically over the Internet subject to New York sales tax, either as a sale of tangible personal property, a taxable information service, or a taxable entertainment service?
No, on all three theories. Digitized music delivered electronically over the Internet and stored on a customer's own hard drive is a sale of intangible property, not taxable tangible personal…
Did borrower extension options carrying a February 2001 note to 2006 and 2007 make it long-term for Georgia IRT?
Yes. Georgia denied the refund because borrower options could extend the February 2001 note first to March 2006 and then March 2007, allowing payment beyond three years from execution.
Was Georgia IRT due on a deed that substituted real-property collateral for collateral securing an existing note on which the original tax had been paid?
No. Georgia approved the refund because the new deed merely substituted collateral securing an existing note, and the original instrument had already borne the required IRT.
Did a borrower-held extension provision make a December 2000 note long-term when it could push principal or interest beyond three years?
Yes. Georgia denied the refund because the borrower could extend the December 2000 note after meeting stated conditions, allowing principal or interest to become due more than three years after execution.
Do a provider's sales of telecommunication services to a foreign carrier that resells them qualify for the section 186-e sale-for-resale exclusion?
Yes, if the buyer qualifies as a carrier and resells the service as telecommunications. Under section 186-e.2(b)(1), sales of telecommunication services for resale are excluded from the excise tax…
Does New York's sales-tax exemption for manufacturing/production equipment cover the equipment, materials, and supplies bought to build a sewage treatment plant that will be dedicated to a county government once finished?
No. Materials, equipment, and supplies purchased to construct a sewage treatment plant are not exempt under New York's production exemption, because neither the developer building the plant nor the…
If a vendor separately bills a New York client for reimbursed travel expenses (airfare, hotel, meals) on top of its service fee, does sales tax apply to the travel-expense portion of the bill too?
Yes, if the underlying service itself is taxable. Travel expenses a vendor incurs performing its work — even if reimbursed dollar-for-dollar and separately stated on the invoice — are treated as the…
Does a personal chef who cooks and freezes meals in a client's home owe New York sales tax, and does the answer change depending on who buys the groceries, or whether the chef splits grocery-buying and cooking into two separate companies?
It depends on who sells the food. If the client already owns the groceries and only pays the chef to cook and package them, the chef's charge is a nontaxable cooking service (though the chef must…
If my employer wrongly treated me as an independent contractor on a 1099, can I avoid gross receipts tax as an employee — even though I reported the income as business income to the IRS?
Partly — the protest was GRANTED IN PART and DENIED IN PART. Dr. Thomas Strain worked in 1994 as State Medical Director for Correctional Medical Services (CMS), overseeing inmate medical care. His…
When the IRS revokes a Texas nonprofit's federal 501(c)(3) status but the nonprofit appeals, what happens to its Texas sales-tax and franchise-tax exemptions, and from when?
The state exemptions continue during a bona fide federal appeal, and any loss is prospective from the IRS notice date. The Comptroller normally accepts the IRS's final determination and…
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