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 cattle-management computer software and hardware bought by a farmer exempt as farm machinery and equipment?
Taxable -- it is not exempt farm machinery. Under K.S.A. 79-3606(t), the farm machinery and equipment exemption covers farm and aquaculture machinery and equipment, repair and replacement parts, and r…
Which repair items for a farmer's combine and tractor qualify for the Kansas farm machinery exemption?
It depends on the item. Under K.S.A. 79-3606(t), the Department's opinion is that bolts, nuts, washers, cotter keys, and hydraulic and motor oil used in the repair and maintenance of a combine and tra…
Could a Texas maquiladora exemption certificate be used to rent motor vehicles or trailers without motor vehicle rental tax?
No. The maquiladora exemption belonged to Chapter 151 limited sales tax, which generally covered tangible personal property other than motor vehicles. Chapter 152 governed motor vehicles and contained…
Is a motor vehicle rental tax-exempt when rented directly to a Texas agency or to a state employee on official business?
Direct rentals to a Texas state agency were exempt. STAR later superseded the letter's blanket denial for employee rentals: an employee on official business may issue an exemption certificate when the…
Is the admission fee to a children's indoor play center with climbing equipment subject to New York sales tax?
Yes. A single admission fee that lets children enter and use non-moving recreational equipment like climbing apparatus at an indoor play center is a taxable admission charge to a 'place of amusement,'…
Are dialysis machines and a dialyzer reprocessing system purchased by a dialysis clinic exempt from New York sales tax?
Dialysis machines are exempt as prosthetic devices under Tax Law § 1115(a)(4), regardless of who buys them or why -- but a dialyzer reprocessing system, which only cleans and readies the artificial ki…
Were a vendor's sales of disposable intrauterine monitoring catheters to Florida hospitals exempt from sales tax?
Yes. Florida's medical-device rule specifically listed catheters as exempt prosthetic and orthopedic appliances and did not limit the exemption to particular catheter types. Because the products were …
For an independent distributor of prepaid 'Discount Redemption Vouchers,' does the distributor need a sales tax permit, what's the tax base on non-fundraiser sales, and are fundraiser sales through booster clubs/churches/civic groups tax-exempt?
Three-part answer covering permits, tax base, and fundraiser exemption limits. An independent distributor purchases prepaid 'Discount Redemption Vouchers' from a direct-sales parent company (COMPANY A…
Was a lump-sum charge for a mobile medical laser unit, technician, setup, monitoring, and consumables taxable in Florida?
No. The lump-sum charge was for a medical service and involved no transfer of taxable property, so the customer charge was not taxed. The provider was the ultimate consumer of the supplies used during…
Is installing a new solid epoxy floor over an existing concrete floor a taxable service or an exempt capital improvement?
It's an exempt capital improvement, not a taxable service. A new solid epoxy floor built up in place over an existing concrete floor is 'flooring,' not 'floor covering,' so it isn't subject to New Yor…
Are the printing services and production equipment a stamp retailer buys to create 'first day cover' envelopes for resale exempt from sales tax?
Yes, mostly. Printing services a retailer buys to produce envelopes it resells to customers are exempt as purchases for resale (with a resale certificate), and the film negatives, color separations, a…
Does a licensed architect and engineer's litigation-support research, reports, and expert-witness testimony for attorneys get taxed as a service or as a sale of the drawings and reports it produces?
No, generally. Professional architectural and engineering services -- research, analysis, written reports, presentation drawings, and expert-witness testimony -- aren't among New York's enumerated tax…
Does a manufacturer of CV-joint grinding machines have to collect sales tax when it sells them to auto parts remanufacturers and repair shops?
It depends on how the buyer uses the machine. Sales to remanufacturers and parts distributors who use the grinder to produce CV joints for sale are exempt if over half the machine's use is in producti…
Could an expanding affiliated group stop filing Florida consolidated corporate income tax returns after its business changed?
Yes. Florida allowed separate returns effective for the fiscal year ending November 30, 1997, based on the group's substantial evolution and its claim that the original election lacked adequate advice…
Was Wheeler & Sons Trucking an employee of Western Mobile whose hauling receipts were exempt from New Mexico gross receipts tax?
No — Wheeler & Sons Trucking was an independent contractor, not Western Mobile's employee, so its hauling receipts were not exempt and the protest was DENIED. Western Mobile set haul rates, expected d…
How did Texas tax an insurer-declared total-loss vehicle before repair and a later sale after the vehicle was repaired?
Before repair, a vehicle declared a total loss by an insurer was taxed under Chapter 151 limited sales tax rather than Chapter 152. After repair, later sales were again subject to motor vehicle sales …
When refinery units purchased from another company are dismantled and re-erected at a new location owned by the buyer, does incorporating them into realty count as nontaxable new construction or taxable remodeling?
New construction -- lump-sum labor charges are not taxable. A refinery operator bought refinery processing units from another company, planning to completely dismantle them, move them to a different l…
Is a yacht charter company's cruise fee taxable as an equipment rental, and are its liquor and catering charges taxable too?
The bare cruise fee is an exempt transportation service, not a taxable rental, because the company keeps full dominion and control of the yacht -- but once the company sells liquor or arranges caterin…
Does a nonprofit news cooperative owe sales tax on the information services it buys for its members, or on production equipment and utilities it provides at member newspapers?
No, mostly. Because a nonprofit news cooperative's information-service purchases (like stock quotes and weather data) are used by its member newspapers and broadcasters in the collection and dissemina…
How do the real estate transfer tax, sections 186 and 186-a, the petroleum business tax, the subsidiary capital tax, and the stock transfer tax apply to a utility's PSC-mandated restructuring into a holding-company structure?
Across five taxes, the PSC-mandated restructuring is largely tax-neutral. Real estate transfer tax: the share exchange, subsidiary spin-offs, and generation-asset transfers within the affiliated group…
When a PSC-mandated restructuring forces a utility to transfer its generating assets to a subsidiary and auction them, are the proceeds and distributions taxable under sections 186 and 186-a?
Largely not taxable under section 186. Because the New York Public Service Commission's Competitive Opportunities order forced NYSEG to restructure and auction its generating assets, the asset transfe…
Was an auction buyer's premium or broker commission included in consideration for Florida documentary stamp tax?
Yes. The auction terms added the broker's premium or commission to the winning bid, and the purchase agreement stated one total contract price that included it. Because documentary stamp consideration…
Can a multi-level-marketing company let its mall-kiosk distributors buy tax-free with a resale certificate, the way a home-based distributor can't?
Yes -- distributors with a real retail outlet (a store or kiosk) can get their own sales tax permit and use a resale certificate, unlike home-based distributors. A multi-level-marketing company sellin…
Does a corporation's section 1452(d) election to stay taxable under Article 9-A survive its purchase by a bank holding company and later mergers and business transfers into it?
Yes. A corporation (B) that made the section 1452(d) grandfather election to remain under Article 9-A keeps that election after a bank holding company buys all its stock and after the three proposed s…
Could a changed multistate group end Florida consolidated filing, and how would its disregarded single-member LLC be treated?
Yes. Florida allowed separate returns from the 1997 year based on long-term changes in the group's business lines, subject to deferred-item, tax-difference, and reconsolidation conditions. A planned s…
Is tangible personal property used to align a vehicle with a trailer, boat, or camper taxable in Kansas, and is there a safety-equipment exemption?
Yes. Under K.S.A. 79-3603(a), the retail sale of tangible personal property used to align a vehicle with a trailer, boat, or camper is subject to Kansas sales tax. The Kansas Sales Tax Act contains no…
Did Florida sales and gross receipts taxes apply to calls merely forwarded through Florida for customers outside the state?
No. The provider sold toll telephone service, but its calls were only bridged through Florida: no call began or ended there, and no charge went to a Florida number, device, telephone, or customer. It …
What must a seller obtain to make tax-exempt sales of pianos, repair labor, and parts to a religious organization?
A seller making tax-exempt sales to a religious organization — including selling a piano, labor to repair and maintain pianos, and repair or replacement parts — must obtain a properly completed exempt…
Is a Kansas sale exempt when the buyer's affiliated common carrier picks up the goods and hauls them out of state?
The sale is not subject to Kansas sales tax if it meets the conditions of K.A.R. 92-19-29. A manufacturer sold goods to Corporation A (a member of an affiliated group, not a common carrier), which dir…
Does Texas sales tax apply to a sale-leaseback financing of pipeline separators and meters that stay attached to an existing pipeline?
No -- because the separators and meters are attached to and part of a transmission pipeline that Texas treats as real property, the sale-leaseback of them is a real-property transaction, not a taxable…
Could a closely held corporation avoid negligence penalty when its treasurer secretly failed to file and pay CRS taxes while telling the other officers everything was current?
No — the treasurer acted in a managerial capacity, so his negligent nonfiling and nonpayment were acts of Fluorescent Technology International itself, and the protest was DENIED. Treasurer John McEown…
Did Florida documentary stamp tax apply when four equipment-lease documents did not expressly incorporate one another?
The original ruling said no. No single document created an unconditional obligation to pay a sum certain, and the four documents did not expressly incorporate one another, so Florida would not read th…
Could a counselor deduct services actually resold by a treatment center without obtaining that buyer's NTTC within New Mexico's 60-day audit deadline?
No — proof that Desert Hills resold Eileen Cahoon's counseling services did not replace the buyer's required NTTC, so the tax and interest stood; only the $98.50 penalty was abated. Section 7-9-48 req…
Does a Texas Water Control and Improvement District need a sales tax permit or number to buy things tax-free?
No -- a Water Control and Improvement District is exempt from Texas sales tax on its purchases as a political subdivision of the state, and it does not need a sales tax number to use an exemption cert…
Did Florida documentary stamp and nonrecurring intangible taxes apply to a warehouse-loan securitization and collateral assignments?
The original ruling found no tax on the out-of-state bonds and warehouse agreement, qualifying transfers of previously taxed loan obligations, or Florida collateral assignments covered by the warehous…
Was Florida sales tax computed before or after a supermarket's loyalty-card discount funded partly by supplier allowances?
Tax applied after the loyalty-card discount. The supermarket controlled its supplier allowances and they were not reimbursements tied to specific current customer purchases, so the card reduction oper…
Could a nonresident exempt an unfinished boat purchase and also avoid tax on later Florida completion work?
The initial boat sale could be exempt if every nonresident-purchaser and timely-removal condition was met. But work performed after the buyer took title and possession was taxable because it arose fro…
Did a church have to collect Florida sales tax on property sold through fundraising for its own private school?
No. The church operated the not-for-profit school as an activity of the same corporate entity, and the fundraising sales supported the school's operation. Florida treated the school as included within…
My underreporting was an honest blunder and I can't afford to pay more. Can the state forgive the penalty and interest on my back gross receipts tax?
No — interest is mandatory and the negligence penalty was upheld because sloppy records and a misunderstanding of the rules are negligence, even without any intent to cheat, so both protests were DENI…
The state gave me 60 days to produce exemption certificates but assessed the tax before the 60 days ran out — right before the statute of limitations expired. Was that allowed?
Yes — the Department may issue an assessment before the 60-day certificate window closes (here, to beat the statute of limitations), and doing so does not strip the taxpayer of the right to still subm…
Can I buy a mattress tax-free in Texas just by getting a doctor's prescription for it?
No -- a doctor's prescription alone doesn't make a mattress tax-exempt; the mattress itself must be specifically designed to alleviate pain or treat a medical condition, not just an ordinary mattress.…
Could a seller rely on customers' Florida export exemption certificates without separately proving each shipment left the state?
Yes. Both customers held valid Florida export sales tax numbers and supplied compliant Purchaser's Blanket Resale and Exemption Certificates claiming purchases for export. Those certificates were suff…
Was a burglar-alarm installation a real-property improvement when the security company retained title until payment?
No. Although permanently affixed alarm systems normally could be real-property improvements, the security company retained title until payment. Florida therefore treated the contract as a taxable sale…
How did the former Texas throwback rules treat out-of-state delivery to a Texas buyer, independent solicitation, and foreign-country sales?
Delivery to another state was non-Texas unless throwback applied, and the buyer's Texas incorporation did not change that. Independent solicitation in the destination state created taxable-capital nex…
Were telemarketing, telephone support, and answering-service fees taxable as telecommunications in Florida?
No. The companies sold business services rather than local, toll, private, or other statutory telecommunications, so customer monthly fees were not subject to sales or gross receipts tax. The companie…
Did RR 98-17 allow state reimbursement for extra depreciation on manufacturers' machinery in joint industrial parks or fee-in-lieu arrangements?
Yes. RR 98-17 said machinery and equipment in a joint industrial or business park, or under a negotiated fee-in-lieu arrangement, qualified for state reimbursement tied to depreciation above 80 percen…
How did RR 98-16 apply South Carolina sales tax, admissions tax, and alcohol rules to nonprofit fundraising dinners, shows, festivals, and auctions?
Treatment depended on what attendees were paying for, whether a statutory nonprofit exemption applied, who made the sale, and whether alcohol was sold or provided for consideration. A genuine donation…
Under the now-superseded RR 98-15, how did coupons and discount cards change South Carolina's taxable sales price?
Tax was based on what the retailer received from the customer plus any reimbursement tied to that sale. Store-funded coupons and purchase-based supplier allowances reduced the taxable price; manufactu…
Can a company avoid Utah's private rail car property tax on a rail car it uses free of charge as a mobile safety-training classroom for emergency responders?
No. The Utah State Tax Commission ruled that a company's private rail car, used as a free mobile classroom to train emergency responders, is still subject to Utah's private rail car property tax. The …
Is engineering and design work for a piping-system prototype a taxable sale of tangible personal property, or a nontaxable professional service, in Texas?
Nontaxable services -- the design, engineering, and management charges are not taxable, though the company still owes tax on the materials and equipment it uses to build the prototype itself. An engin…
Is HVAC remodeling work on a leased Texas airport terminal exempt from sales tax, and does it matter who pays for it or whether the space is used by the public?
It depends on who's paying and who benefits: HVAC remodeling work in areas the public actually uses for air travel is exempt as repair/remodeling of public-use property, but work benefiting only priva…
Were charges for value-added computer network management services subject to Florida sales or gross receipts tax as telecommunications?
No. The described data manipulation, transmission security, encryption, messaging, protocol conversion, bandwidth management, frame relay, network management, and customer support were not telecommuni…
Were a New Mexico broker-dealer's mutual-fund dealer concessions and 12b-1 trail fees taxable even though receipts from selling securities were exempt?
Yes — both revenue streams were taxable gross receipts, so Rauscher, Pierce, Refnes's protest was DENIED. The mutual-fund shares themselves were exempt securities, but the dealer concessions were comm…
Could a school board make tax-exempt direct purchases for a project managed through a government agent and construction manager?
Yes. Even though a government management agent and construction manager coordinated the work, the school board was the actual purchaser because it approved and issued purchase orders, paid suppliers d…
Could a Florida school board buy materials tax-free for a school construction project managed by a private contractor?
Yes, for purchases made under the binding direct-purchase program. The school board issued purchase orders carrying its exemption number, paid vendors directly, took title and liability at delivery, a…
Could a corporation amend its 1994 franchise-tax report to claim the temporary credit for sales tax paid on qualifying manufacturing equipment?
Yes, assuming the equipment qualified and the corporation had a valid filing extension. An amended report claiming the temporary credit could be filed within four years of the report due date, includi…
Did a domestic nonprofit corporation have to file and pay Texas franchise tax before the Comptroller approved its exemption?
Yes. Nonprofit formation alone did not create franchise-tax exemption. Sections 171.001 and 171.051, with Rule 3.541, required a domestic nonprofit corporation to apply and provide evidence of qualifi…
May a subsidiary's unused investment tax credit carryover survive after its parent is bought by an unrelated corporation and the subsidiary is later merged into the acquirer?
Yes. When Miles bought all the stock of Diagnostics, the 'target corporation' under section 208.15 was Diagnostics, not its subsidiary Instruments -- so Instruments' unused investment tax credit carry…
Can a construction contractor buy materials tax-free using a customer's Direct Payment Permit?
No. A contractor must still pay sales tax on all materials it buys for repair or capital-improvement work, even when the customer holds a Direct Payment Permit -- the permit only excuses the contracto…
Does New York sales tax apply when an artist sells or licenses a design rendering to an architect, interior designer, fashion house, or manufacturer?
It depends on what's actually transferred: selling an original rendering, or letting a client alter or keep it, is a taxable sale of tangible personal property, but temporarily loaning a rendering sol…
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