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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Does a company owe Texas use tax on a barge and tugboat it uses to haul waste from Louisiana to Texas, if it doesn't own both vessels?
A follow-up letter correcting an earlier ruling's assumed facts: because the third party actually owns the barge (rather than leasing it) and merely contracts for a manned tugboat from another…
Is the work of a consultant hired as an interim VP of sales and marketing -- recruiting reps, negotiating contracts, briefing the board, polishing sales materials -- taxable in Connecticut as a business consulting or advertising service?
Mostly taxable. A consultant hired as an interim VP of sales and marketing performed work that DRS treated as taxable business analysis, business management, business management consulting and…
Could a taxpayer recover IRT paid on an erroneously recorded security deed when the refund request came after the 30-day deadline?
No. Georgia denied the refund because the taxpayer requested it on January 5, 2001, after the August 10, 2000 deadline for claiming tax paid on the July 10 recording.
Is charging a client to integrate their software onto a company's web-hosting server a taxable data processing service, and does the seller's cash-basis sales tax reporting matter?
Software integration charges are taxable as part of a web-hosting/data-processing engagement — not a nontaxable professional service — when the integration work is performed in connection with…
Can a joint venture that tolls (processes) a gas stream owned by the federal government — extracting and cleaning a specific gas molecule — claim the manufacturing exemption on its processing equipment, even though it never owns or sells the gas itself?
Yes. A joint venture that operates a tolling facility — extracting, separating, and cleaning a specific gas molecule (helium) from a gas stream owned by the federal government, and returning the…
If a computer's price is discounted at checkout because the buyer agrees to subscribe to a specific internet provider, is sales tax owed on the original price or the discounted price?
Sales tax is due only on the discounted price actually charged for the computer, not the original pre-discount price — when a retailer reduces a computer's sale price at the point of sale in…
When a securities broker-dealer spins off its software-development operations into a separate subsidiary and licenses its trading software back, does that reorganization trigger New York sales or use tax on the software?
Generally no, as long as the software stays custom-built for one purchaser's own specifications and isn't resold to third parties. A joint venture's custom-built trading algorithm licensed to the…
If a Connecticut individual owns a mutual fund that invests in other funds holding Connecticut municipal bonds, are the exempt-interest dividends that flow through both funds still exempt from Connecticut income tax?
Yes -- the exemption flows through. A Connecticut individual who owns an upper-tier fund that in turn owns lower-tier funds holding Connecticut (and U.S.-territory) municipal bonds does NOT have to…
Are ventilators and related breathing equipment exempt from New York sales tax as prosthetic devices, or only as ordinary medical equipment and supplies?
It depends on function, not the equipment's name. Ventilators and related parts (circuits, filters, oxygen concentrators, suction units) qualify as exempt prosthetic aids when they completely or…
Is a large Manhattan health club's membership and initiation fee subject to New York's social/athletic club dues tax, or to New York City's separate tax on gyms and health salons?
No, on both counts. Manhattan Plaza Health Club's membership and initiation fees are not taxable as social/athletic club dues under state law, because members have no control over the club's…
Is an out-of-state manufacturer that keeps inventory at an unaffiliated New York firm which modifies the goods subject to Article 9-A franchise tax and required to register as a sales-tax vendor?
Yes to both. Company A, an out-of-state blower manufacturer, keeps inventory at unaffiliated Company B in New York, which attaches motors and pulleys to order before shipping to customers. Because…
Is a nonprofit youth baseball organization exempt from Kansas sales tax on its purchases and its concession, program, and admission sales?
Not exempt. The Department ruled that a nonprofit youth baseball organization is not exempt from Kansas sales tax. It must pay sales tax on its purchases of tangible personal property and taxable…
Did family-controlled rental-real-estate entities qualify for Tennessee's family-owned passive-investment franchise and excise tax exemption?
No. An S corporation owned 12 percent of the parent LLC, so individual family members owned only 88 percent—below the 95 percent statutory threshold. That defect also disqualified entities owned…
Can someone who buys manufacturing equipment avoid sales tax on the purchase by leasing it out, if the equipment lease is bundled together with a building lease?
No. When an individual buys manufacturing equipment and then leases it together with land and a building to a related company in a single bundled real estate lease — with no separate sales tax…
Is a section 183 utility's liquidation into its parent (or conversion to a single-member LLC) treated as paying a dividend for the section 183 franchise tax?
No. A liquidating distribution -- whether the utility is liquidated into its parent or converted into a single-member LLC and dissolved -- is not the payment of a dividend for purposes of the…
Is a section 183 utility's liquidation into its parent (or conversion to a single-member LLC) treated as paying a dividend for the section 183 franchise tax?
No. A liquidating distribution -- whether the utility is liquidated into its parent or converted into a single-member LLC and dissolved -- is not the payment of a dividend for purposes of the…
Is a section 183 utility's liquidation into its parent (or conversion to a single-member LLC) treated as paying a dividend for the section 183 franchise tax?
No. A liquidating distribution -- whether the utility is liquidated into its parent or converted into a single-member LLC and dissolved -- is not the payment of a dividend for purposes of the…
Is a section 183 utility's liquidation into its parent (or conversion to a single-member LLC) treated as paying a dividend for the section 183 franchise tax?
No. A liquidating distribution -- whether the utility is liquidated into its parent or converted into a single-member LLC and dissolved -- is not the payment of a dividend for purposes of the…
Is a section 183 utility's liquidation into its parent (or conversion to a single-member LLC) treated as paying a dividend for the section 183 franchise tax?
No. A liquidating distribution -- whether the utility is liquidated into its parent or converted into a single-member LLC and dissolved -- is not the payment of a dividend for purposes of the…
Is a section 183 utility's liquidation into its parent (or conversion to a single-member LLC) treated as paying a dividend for the section 183 franchise tax?
No. A liquidating distribution -- whether the utility is liquidated into its parent or converted into a single-member LLC and dissolved -- is not the payment of a dividend for purposes of the…
Is a section 183 utility's liquidation into its parent (or conversion to a single-member LLC) treated as paying a dividend for the section 183 franchise tax?
No. A liquidating distribution -- whether the utility is liquidated into its parent or converted into a single-member LLC and dissolved -- is not the payment of a dividend for purposes of the…
When a bank sells its auto-finance business to another bank before a custom software project is finished, does transferring the unfinished software contract trigger New York sales or use tax?
No. Because the custom software Citibank had contracted for was never completed, delivered, or paid in full before the business sale, it never lost its identity as exempt custom software — so…
Is a section 183 utility's liquidation into its parent (or conversion to a single-member LLC) treated as paying a dividend for the section 183 franchise tax?
No. A liquidating distribution -- whether the utility is liquidated into its parent or converted into a single-member LLC and dissolved -- is not the payment of a dividend for purposes of the…
Must a large bank recapture part of its New York bad debt reserve under Article 32 when current-year loans or the experience ratio fall below base-year levels?
No recapture is required. When a large bank's current-year loans outstanding or experience ratio fall below base-year levels, it simply gets no section 1453(i) deduction for that year. Section 1453…
May a newly registered bank holding company that elects financial-holding-company status file a combined Article 32 return without the Commissioner's permission, and can the Commissioner force separate filing?
It may file combined, and the Commissioner cannot force it apart. A bank holding company that during a taxable year beginning on/after Jan. 1, 2000 and before Jan. 1, 2001 (1) does business in New…
Is a section 183 utility's liquidation into its parent (or conversion to a single-member LLC) treated as paying a dividend for the section 183 franchise tax?
No. A liquidating distribution -- whether the utility is liquidated into its parent or converted into a single-member LLC and dissolved -- is not the payment of a dividend for purposes of the…
Is a section 183 utility's liquidation into its parent (or conversion to a single-member LLC) treated as paying a dividend for the section 183 franchise tax?
No. A liquidating distribution -- whether the utility is liquidated into its parent or converted into a single-member LLC and dissolved -- is not the payment of a dividend for purposes of the…
If a customer's business name contains the word 'Contracting' or 'Contractor,' does that alone bar a supplier from accepting a resale certificate from that customer in good faith?
No, not by itself. A business name containing 'Contracting' or 'Contractor' doesn't automatically make a resale certificate invalid, and the supplier isn't required to investigate further or demand…
May a corporate member of an LLC taxed as a partnership claim the investment tax credit (or empire-zone ITC) on the LLC's property, and qualify as a new business eligible for a refund?
Yes. A corporate member of an LLC treated as a partnership may claim the investment tax credit (or the empire-zone ITC) on its allocable share of qualifying property the LLC places in service, just…
What Florida documentary stamp and intangible tax applied when a partnership-converted LLC assigned and refinanced its mortgage?
No documentary stamp or nonrecurring intangible tax applied to assigning the original mortgage to the new lender. If the original mortgage remained unsatisfied and section 201.09's conditions were…
Which documents in a bank's open-end line-of-credit program were subject to Florida documentary stamp tax?
The acceptance letter and waiver were not taxable, and an unrecorded line agreement lacked a taxable sum-certain obligation. A modification was also untaxed unless recorded. If the line agreement or…
Were charges for designing, hosting, and maintaining funeral-home and memorial websites subject to Florida sales tax?
No. Charges for designing, building, hosting, and maintaining funeral-home websites were not subject to Florida sales tax. The same result applied to a single fee for a two-year memorial website and…
Could a public sports authority buy furnishings and equipment tax-free for a facility leased to a professional team?
Yes, when the authority used public funds and was the actual purchaser: it issued purchase orders, was invoiced, paid vendors, took title at delivery, and bore the insured risk of loss. The items…
Could a Florida county buy airport access-road materials tax-free while its design-build contractor handled procurement tasks?
Yes, if the controlling documents and actual purchases followed the stated safeguards. The county had to issue and approve its own purchase orders, give vendors its exemption certificate, receive…
Did an out-of-state catalog seller's limited Florida employee and trade-show visits create sales-tax nexus under this 2001 ruling?
Not conclusively. The Department said the seller lacked nexus only if it had none of the listed Florida contacts, including representatives who solicited or handled orders, in-state property or…
Is leasing a railcar to ship a company's own product exempt from Texas sales tax?
Yes. Leasing a railcar for the purpose of shipping a company's own product is exempt from Texas sales tax as rolling stock, under Comptroller Rule 3.297 and Tax Code § 151.331.
Is demolishing an old building and constructing a separate new one, with no shared wall, taxed as new construction, and can tax mistakenly paid on the demolition be recovered?
Constructing a new two-story building that is a genuinely separate structure — not sharing a common wall with an existing building — qualifies as new construction, so tax is due on incorporated…
Which local sales-and-use-tax exemptions did South Carolina's RIB 01-1 chart address?
It compared exemptions under general county and school-district sales and use taxes collected by the Department, including state exemptions, capped-tax items, casual-excise items, food-stamp…
Was electricity used in restricted residential-condominium common areas exempt from Florida sales tax?
Yes. Electricity for the cooling tower, hallways, elevators, laundry machines, vending machines, and game machines qualified while those common areas were restricted to owners, tenants, and guests…
Do bolted-down control panels for water treatment facilities stay tangible personal property after installation, or do they become part of the real property — and who owes the sales tax?
The control panels remain tangible personal property after installation, not real property, so the sale is taxable to the final purchaser (not to the installing contractor). The Commission based…
Are Kansas Department of Revenue notices, guidelines, information guides, revenue rulings, and letters legally binding regulations?
Generally no. Department guidelines, instructions, memoranda, booklets, guides, notices, revenue rulings, and letters were informational and instructive rather than administrative rules or…
When a city airport board hires a manager and contractors to build and operate a terminal hotel, who can buy supplies, equipment, and construction materials tax-free, and under what conditions?
An airport board is exempt from Texas sales tax as a local government entity under § 151.309(5), so its own purchases (including hotel tangible personal property) aren't taxed; its authorized…
Was Florida documentary stamp tax due on both deeds in a reverse section 1031 exchange using an accommodation titleholder?
No. When the accommodation titleholder acted only as the exchanger's agent in the qualifying reverse exchange, documentary stamp tax was due on either the seller-to-accommodator deed or the…
Could a qualifying Florida youth nonprofit lease donated boats and other property without collecting sales tax?
Yes. The qualifying nonprofit's leases of property donated for less than 50% of fair market value were exempt, and it could not pass tax to lessees. It should document leases with the lease and…
What documents are covered by South Carolina's December 2000 advisory-opinion index?
It is a subject index of South Carolina advisory opinions and informational bulletins issued from 1987 through December 31, 2000, not substantive tax guidance.
Did selling all LLC membership interests trigger sales tax on the LLC's underlying tangible property?
No, under the stated governing documents. Because the LLC continued and members had no interest in specific LLC property, California treated the interests like corporate stock—as intangible property…
How does a Nebraska estate or trust figure the 2000 credit for prior year minimum tax on the Nebraska return?
Recompute the federal credit for Nebraska. Under Revenue Ruling 23-00-2, Neb. Rev. Stat. §77-2717 requires an estate or trust to recalculate the federal credit for prior year minimum tax (Federal…
How does a Nebraska estate or trust recompute the 2000 federal alternative minimum tax to figure the Nebraska minimum tax?
Recompute the federal AMT on Nebraska terms. Under Revenue Ruling 23-00-1, Neb. Rev. Stat. §77-2717 requires estates and trusts to recalculate the 2000 federal alternative minimum tax (Federal Form…
How does a Nebraska individual figure the 2000 credit for prior year minimum tax on the Nebraska return?
Recompute the federal credit for Nebraska. Under Revenue Ruling 22-00-2, Neb. Rev. Stat. §77-2715(2) requires an individual to recalculate the federal credit for prior year minimum tax (Federal Form…
How does a Nebraska individual recompute the 2000 federal alternative minimum tax to figure the Nebraska minimum tax?
Recompute the federal AMT on Nebraska terms. Under Revenue Ruling 22-00-1, Neb. Rev. Stat. §77-2715 requires a Nebraska individual to recalculate the 2000 federal alternative minimum tax (Federal…
Did a California partnership's long-term notes secured by California real estate produce California-source income requiring withholding for its nonresident partner?
No. FTB ruled that the partnership's long-term notes were qualifying debt securities and that the partnership qualified as an investment partnership under section 17955. The notes—not the California…
Is an infant incubator exempt from Texas sales tax, and what about a transport device, surgical gloves, or a motility measurement system sold to hospitals?
An infant incubator is exempt from Texas sales tax because it qualifies as a prosthetic device under Comptroller Rule 3.284 — it maintains an oxygenation, humidity, and temperature environment that…
Could an affiliated group stop filing Florida consolidated returns after substantial changes in its organization and business?
Yes. Although no adverse tax-law change was shown, the Department found that the affiliated group's size, market, and activities had changed enough to justify separate filing. Approval was subject…
How did Florida apportion taxable rent under a mixed-use hotel land lease?
Florida required a square-footage method, not a room-revenue percentage. Tax applied to the fraction of total rent represented by business-only and non-guest space over the total leased land and…
Could government and qualifying nonprofit owners directly buy project materials tax-free?
Yes. Government and qualifying nonprofit owners could buy project materials tax-free when they issued purchase orders, paid vendors directly, took title and liability, and bore insured risk of loss.…
Did a parent company's California stores create nexus for an online subsidiary by selling and promoting gift cards redeemable on its websites?
Yes under the 2000 facts. The stores acted as the online retailer's authorized representatives by promoting and selling cards that encouraged website purchases.
How is a graphic arts business taxed on its sales of negatives and color proofs, and can it buy its film, paper, and chemicals tax-free?
Tax the sale, buy inputs exempt. The Department ruled that a graphic arts business must collect Kansas sales tax on the full amount it invoices clients for negatives and color proofs - including…
Could a taxpayer obtain an IRT refund after a security deed was filed in the wrong Georgia county?
No. Georgia denied the refund after the security deed was filed in the wrong county and cited O.C.G.A. § 48-6-76's requirement that a refund claim be filed within 30 days after payment.
Can a Nebraska nonprofit run a 'duck race' lottery or raffle, and when does it need a license and permit?
Yes, with conditions. Under LB 248 (effective June 6, 1997) and LB 1086 (effective July 13, 2000), a Nebraska nonprofit may conduct a lottery or raffle that uses a race of inanimate buoyant objects…
Does Texas's semiconductor-manufacturing exemption cover cleanroom printer supplies, laundering exempt cleanroom gowns, a failure-analysis lab that supports the fab, and cleanroom partition repairs?
Texas's semiconductor fabrication cleanroom exemption (Tax Code § 151.318(b)(2), (q)) reaches well beyond the cleanroom's core machinery: printer toner and special cleanroom paper used for…
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