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 the full lump-sum price for turnkey school communication and sound systems taxable in Florida?
Yes. The full turnkey contract price was taxable because the system's essential nature was telecommunications and wired television, whose installation was specifically taxable. Structural wiring could…
Does an association of churches with an IRS 501(c)(3) letter qualify as a Kansas 'religious organization' exempt on its purchases?
Yes. An organization made up of religious organizations, holding its own IRS 501(c)(3) recognition, qualifies as a 'religious organization' under the exemption added by 1998 Senate Bill 493. Because i…
Are the oxygen, acetylene, and de-ionized water resin a tool maker uses in production exempt from Kansas sales tax?
They are exempt. A company that manufactures tools for resale asked about the oxygen and acetylene it uses to silver-solder carbide to steel and the de-ionized water regeneration resin used in its ele…
Which of a network marketing company's charges — labels, diskettes, reports, online access, clubs, leads, admissions — are taxable in Kansas?
Only the mailing labels and the sales-lead videotapes are taxable. The Department ruled that a network marketing company's sales of pre-addressed mailing labels and its separately-charged sales-lead v…
Can a print shop buy copier toner tax-free for resale copies, and are its copier maintenance agreements taxable?
Toner is exempt; the maintenance agreements are taxable. A company that runs printing presses and copiers to make copies for resale should buy its toner exempt from Kansas sales tax as an ingredient o…
Can a contractor give a resale exemption certificate to rent a personnel lift tax-free for a repair job in Kansas?
No. A welding contractor cannot use a resale exemption certificate to rent a personnel lift tax-free. Under K.A.R. 92-19-66c, contractors, subcontractors, and repairmen are the final consumers of the …
Does an American Red Cross chapter owe Kansas sales tax on books it includes in the fee for its first-aid classes?
No. The Kansas Department of Revenue has historically treated the American Red Cross and its chapters as instrumentalities of the federal government that are exempt from Kansas retailers' sales tax. T…
If a foreign bank employee is repeatedly transferred to New York for training and then assigned there open-endedly, in which years does he become a New York statutory resident?
He was not a New York statutory resident for 1993, 1994, or 1997, because although his New York City apartment became a 'permanent place of abode' once he leased it on October 1, 1997 (his assignment …
Does an open-ended, year-to-year-renewable program that temporarily transfers a multinational bank's foreign employees to its New York City branch make those employees New York State statutory residents under Tax Law § 605(b)?
It depends on the tax year. Because the transfer program has no fixed end date and the assignment's goal - enlarging an employee's knowledge of multinational banking - is a general purpose rather than…
Are sales of nutrition supplements taxable in Kansas?
Yes. Kansas sales and use tax law provides no exemption for the sale of nutrition supplements, so a company selling them must collect and remit Kansas sales/use tax on those sales under K.S.A. 79-3603…
Did a Chapter 42 child-care license by itself qualify a Texas facility's van purchase for motor vehicle sales tax exemption?
No. A Chapter 42 license alone was not enough. The facility also had to qualify to provide the specified 24-hour residential care for children, including the described groups that did not need special…
Are parts and labor for a restaurant's fire suppression unit (attached to fryers and grills) exempt from Texas sales tax as manufacturing equipment?
It depends on exactly what the fire suppression unit is attached to. A restaurant was being billed for parts and labor on a fire suppression unit -- some units needed full replacement (not up to code)…
Is a garage or covered parking space that comes bundled into an apartment lease (with no separate parking charge) taxable as a 'motor vehicle parking and storage service'?
Yes, taxable -- and the Comptroller's position is reinforced by the legislative acceptance doctrine. An apartment owner argued that garages and covered parking bundled into a unit's lease (with no sep…
Are a contractor's purchases of construction materials for a town-owned recreation facility exempt from New York sales tax, even though the contractor pays for construction and later gets a license fee to operate the facility?
Yes. Because the Town of Tonawanda will own and hold title to the recreation facility throughout construction and afterward, the contractor's purchases of materials that become an integral part of the…
If a mail-order retailer closes all its physical New York stores but keeps selling by catalog and internet, does it still need to collect New York sales tax?
No, once its physical presence ends. A mail-order retailer that closes all its New York retail stores and no longer employs in-state salespeople loses its New York sales tax nexus, even if it continue…
Is a moisture-survey company's roof inspection service subject to New York sales tax?
Generally yes. A roof moisture-inspection service is taxable as maintaining or servicing real property, but it's not taxed if it's performed solely for mandatory government code compliance, or if the …
Can a tire retailer buy tire-disposal service tax-free for resale when it charges customers a separate disposal fee for their old tires?
No. A tire retailer's charge to customers for disposing of old tires isn't itself an enumerated taxable service, so the retailer cannot treat its purchase of trash-removal service from a scrap tire pr…
Are fees for commercial security alarm monitoring, the sale/installation of the alarm system, and maintenance/repair charges subject to New York sales tax?
Yes, largely. A commercial security alarm system generally isn't a capital improvement (except separately stated wiring and cables sold to a property owner), so its sale, installation, monitoring fees…
Are fees for residential security alarm monitoring, the equipment used to provide it, and related installation/repair charges subject to New York sales tax?
Yes, largely. Fees for residential security alarm monitoring services, installation and repair of the equipment, and patrol car services are all taxable protective and detective services or installati…
Is buying and installing custom wood athletic lockers at a private golf club a capital improvement exempt from New York sales tax?
Yes. Custom wood athletic lockers built to a golf club's specific dimensions and installed like kitchen cabinets, with matching spacers, fillers, and moldings, qualify as a capital improvement because…
Are floating docks and their connecting ramps a capital improvement, so their sale and installation are exempt from New York sales tax?
No. Floating docks and their connecting ramps are not capital improvements because they aren't affixed to the shore or bottom with any real permanency -- they must move minimally with the tide, are de…
Is a bank trade-processing software license taxable as prewritten software even when the vendor must customize hundreds of settings before delivery, and are later custom modifications and support separately taxed?
Yes, mostly. The base trade-processing software license is taxable prewritten software even though the vendor must configure over 900 system settings for each customer before delivery, because the sof…
Is a telephone answering service subject to the section 186-e excise tax on telecommunication services, and is it taxed as a telephone business under sections 183 and 184?
No to both telephone-tax treatments. Viewed from the customer's perspective, an answering service is a general business -- the receptionist takes calls, distills messages, and relays them -- so it is …
Are foreign Importer Notes that PEFCO holds -- notes fully guaranteed and controlled by the Export-Import Bank -- investment capital under section 208.5, or are they loans made in the business of lending funds?
They are investment capital. Although PEFCO advances the funds, the Export-Import Bank controls the Importer Notes -- it selects the obligors, sets the interest rate by its formula, and drafts the cre…
Could a travel agent use a hotel lease longer than six months to avoid tax on rooms included in vacation packages?
No. The travel agent did not have the exclusive use required for the long-term hotel-lease exemption because it assigned rooms to vacation customers for short stays. For lump-sum packages with no item…
Under RR 98-19, did South Carolina's manufacturing exemption cover computers and machines used in CAD, CAM, or integrated CAD/CAM systems?
Design-only CAD equipment was taxable because design preceded production. CAM equipment used in manufacturing goods for sale was exempt. Integrated systems were divided by function, and a dual-use mac…
For a company with both Texas and California offices sharing software licenses across state lines (via servers in either state, or a single floating license), how is each scenario taxed by Texas?
Three separate scenarios, each turning on where the software was purchased and where it's actually used. SITUATION 1 (software delivered to and purchased in Texas, later a California license added): t…
Is sales tax due on merchandise (like employee-discounted logo shirts, or safety training videos/workbooks sold to dealers) even when it's sold below the seller's actual cost?
Yes, taxable on the actual price charged, regardless of the seller's cost. A company asked two questions: (1) whether it needs to charge tax when it sells company-logo golf shirts to employees at 15% …
If a family sets up a tiered limited partnership and LLC structure, run by New York-based employees out of a New York office, purely to trade securities for the family's own account, do the nonresident family members owe New York State income tax or the New York City nonresident earnings tax on their share of the trading income?
No to both. Because the petitioner, Portfolio LP, and the Series G and Series J LLCs only buy, hold, and sell securities and financial instruments for their own account - with no broker/dealer activit…
How does an interstate trucker that switches from Article 9 (sections 183/184) to Article 9-A as a New York S corporation compute its short-period entire net income, and how does that flow through to nonresident shareholders?
The trucking company computes entire net income as if it were a New York C corporation for its full federal taxable year, then prorates that income under section 208.9(h)(1) for the six-month short pe…
How is Kansas sales tax applied to leases of tangible personal property, and when is a lease taxed as a sale instead?
It depends on the lease type. Under K.S.A. 79-3603(h), a true lease is taxed on the total of each lease payment as it comes due; Kansas has no provision letting a lessor prepay tax up front on a true …
Are admission charges to an ice skating rink taxable in Kansas, and who can buy admissions tax-free?
Admissions are generally taxable. Charges to admit organizations into an ice skating rink are subject to Kansas sales tax under K.S.A. 79-3603(e), which taxes admissions to places providing amusement,…
Could an independent sales consultant for a plumbing subcontractor deduct his fees as construction services by obtaining a late NTTC?
No — Jeffery Williams's sales consulting was taxable business activity, not a construction service, and his late NTTC could not support a deduction, so the protest was DENIED. Williams found residenti…
Were oil-and-gas lease receipts partnership receipts when a corporation transferred title by executed but unrecorded documents and kept collecting payments as agent?
Yes. Properly executed transfer documents vested ownership of the oil-and-gas leases in the partnership for franchise-tax purposes even if they were not recorded. The corporate general partner could c…
How does Kansas tax money converted from a traditional deductible IRA to a Roth IRA?
Kansas follows the federal rule. Kansas conforms to the federal treatment of converting a traditional deductible IRA to the new Roth IRA. For a conversion made in tax year 1998, the income is spread o…
Did Michael Beglau qualify as disabled for New Mexico's 1996 child day care credit while retraining for work that did not require heavy labor?
Yes — Beglau was disabled under Section 7-2-18.1(A)(4), so he and his wife were entitled to the $707 child day care credit and their protest was GRANTED. The Department argued that a person was disabl…
Is sandblasting sand (or similar raw materials like rock, gravel, dirt) taxable when purchased, and does it matter whether the sand has been sorted, washed, or crushed?
Depends on whether the material is 'processed' -- and specifically, crushing or mixing is what triggers tax, not sorting or cleaning. This is a CORRECTED letter (the Comptroller's original August 7, 1…
How does Kansas tax a residential security company's monitoring fees, equipment, add-ons, installation, and repairs?
Monitoring is not taxed; the provider is the consumer of its gear. Because security monitoring is not an enumerated service under K.S.A. 79-3603, the residential provider does not charge tax on monito…
For a commercial security company, when is a system a taxable sale versus a non-taxable monitored service, and how is each taxed?
It depends on the contract. If a commercial customer buys the system outright, that sale is taxable and the monitoring fee is not (monitoring is not an enumerated service under K.S.A. 79-3603). If the…
Are theatre membership fees subject to Kansas sales tax?
Taxable. Under K.S.A. 79-3603(n), Kansas taxes the gross receipts from dues charged by clubs, organizations, and businesses when payment entitles a member to use of facilities for recreation or entert…
Is a third-party restaurant delivery service's own delivery fee taxable, when the service isn't the seller of the food itself?
Not taxable -- because the delivery company isn't the seller of the food. This is a CORRECTED letter (the Comptroller withdrew an earlier August 11, 1998 response on the same question). A restaurant d…
Which chemicals added to natural gas — odorants, dehydrating glycol, anticorrosion chemicals — are exempt from Kansas tax?
It depends on the chemical and the buyer. Odorants (capstan or thiophane) are an integral component of natural gas and are exempt no matter who buys them. Dehydrating chemicals like triethylene glycol…
Does the $2,500 alternative-fuel income tax credit cap apply per vehicle or to all alternative-fueled motor vehicle property?
The cap applies per qualified property expenditure. It is the opinion of the Department that the $2,500 cap ($2,000 on or after January 1, 1999) under K.S.A. 79-32,201 limits the tax credit for each q…
Were Berryman Ranch's receipts for nonexclusive hunting access deductible as a sale or lease of New Mexico real property?
No — the ranch sold taxable licenses to use real property, not a profit a prendre or a lease, so the protest was DENIED on the legal issue. Berryman charged three hunters $2,000 each per year for none…
Did Texas motor vehicle rental tax apply to airport franchise fees, separately stated insurance, and collision damage waiver charges?
The assumed airport franchise fee was the rental company's expense and part of the taxable rental price. A separately stated true insurance charge was not taxed. But a collision damage waiver was not …
Were lump-sum hospital housekeeping contracts taxable when one included cleaning workers and the other supplied only management?
The contract supplying both management and cleaning workers was taxable on its full lump-sum price. The management-only contract was exempt because the hospital's employees performed the cleaning and …
Does a 501(c)(3) nonprofit automatically get a Kansas sales tax exemption on its purchases?
No. Kansas does not extend a general sales tax exemption to not-for-profit organizations, so a 501(c)(3) center is exempt only if it fits one of the specific exemptions listed in K.S.A. 79-3606. The D…
Are internet charges to customers taxable in Kansas, and can an internet provider buy telephone lines for resale?
Internet charges to customers are not taxed, but the provider's telephone charges are. Because internet service is not enumerated in K.S.A. 79-3603, charges to customers for internet use are not subje…
Could Dain Rauscher obtain a retroactive extension after missing the deadline to protest New Mexico's failure to act on its tax-refund claim?
No — Section 7-1-24(B)'s extension authority applied only to protests of assessments and other peremptory notices or demands, not to protests involving a refund claim, so the late protest was DENIED. …
Are labor services to repair residential pools and spas exempt from Kansas sales tax, and what about materials or shop repairs?
The on-site repair labor is exempt; materials and shop repairs are not. Under 1998 Senate Bill 493 (effective July 1, 1998), gross receipts from repair services on residential pools and spas are exemp…
Is a mobile paper shredding and recycling service subject to Kansas sales tax?
No. A company that shreds and recycles paper at customer locations asked whether its service is taxable. The Department ruled that the service is essentially trash removal, and Kansas does not tax tra…
Is leasing hard-drive space on a computer system for storing voice and fax messages subject to Kansas sales tax?
No. A business that leases space on its computer system's hard drive — used by customers to store voice or fax messages that callers can access — asked whether the charge is taxable. The Department ru…
Under the original TAA 98A-068, when was electricity used at residential or transient-rental property exempt from Florida sales tax?
The original ruling exempted electricity only when it served a residential household with no commercial or other nonexempt use. It treated transient rentals as commercial use, made all electricity thr…
Does a catering business have to collect Kansas sales tax, and how is the tax sourced when food is delivered across state lines?
Yes. A catering business is a retailer that must collect Kansas retailers' sales tax on the total gross receipts from the food, meals, and drinks it caters. The tax is sourced to where the food and se…
Is a church's telephone service exempt from Kansas sales tax, and how does the church claim the exemption?
A church's telephone service used exclusively for religious purposes is exempt from Kansas retailers' sales tax under K.S.A. 79-3606(aaa), which exempts purchases by a 501(c)(3) religious organization…
Which buyers of horse feed can purchase it exempt from Kansas sales tax, and which exemption certificate applies?
It depends on the buyer. Horse feed can be bought exempt from Kansas sales tax by a feed dealer buying for resale, a horse breeder that will sell the offspring, a livestock operator feeding horses int…
Can a church buy its utilities free of Kansas sales tax, and what if the utility serves both exempt and taxable uses?
Yes, when used exclusively for religious purposes. Under K.S.A. 79-3606(aaa), a 501(c)(3) religious organization's purchases used exclusively for religious purposes — including utilities — can be boug…
Does a company owe Kansas sales tax when it only supervises subcontractors versus when its own employees perform the taxable labor?
It depends on who does the work. Where the company merely provides an employee to supervise taxable labor performed by subcontractors, it owes no Kansas sales tax on those receipts — the subcontractor…
How does a Kansas religious organization claim its sales tax exemption, and does it cover fuel or out-of-state purchases?
A religious organization claims the exemption with a certificate, not an exemption number, by giving vendors a completed exemption certificate for qualifying purchases under K.S.A. 79-3606(aaa). The e…
Is drug testing/screening (pre-employment, random, or post-accident) subject to Texas sales tax?
Depends entirely on the PURPOSE of the screening, not the type. Drug screening is NOT taxable unless it's performed for insurance-related purposes. Pre-employment and random drug screenings are NOT ta…
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