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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Which counties did South Carolina list for 2000 corporate-tax moratoriums and reduced fee-in-lieu investment?
It listed eight counties for the 2000 corporate income-tax moratorium and six counties where the fee-in-lieu minimum investment was reduced from $5 million to $1 million.
What newly signed 2000 legislation did South Carolina summarize in RIB 00-21?
It confirmed that three bills previously reported as awaiting gubernatorial action had been signed and summarized their income-, property-, and sales-tax effects, including nonprofit water-and-sewer…
How did Kansas source local tax on telephone service and handle a sales-tax rate change occurring during a customer billing cycle?
Under the 2000 rules, state and local sales tax generally applied to intrastate and interstate telephone charges for residential and commercial customers. Local tax was sourced to the billed…
Can an out-of-state buyer of used Texas manufacturing equipment issue a Texas manufacturing exemption certificate, even though the equipment will be shipped out of state and used at a California plant instead of in Texas?
Yes. There is no requirement in the Tax Code or administrative rules that manufacturing equipment purchased under the Section 151.318(a) exemption actually be used in Texas — so a California…
Can a Texas manufacturer buy wrapping and packaging equipment (and its repairs) tax-free, and does that exemption survive if the wrapping/packaging step is subcontracted out to another company?
Yes. A Texas manufacturer may buy stretch wrappers, strappers, and shrink wrappers — plus their repair parts and repair labor — tax-free under Tax Code § 151.318(a)(2), because packaging the…
Could the named taxpayers use Revenue Procedure 85-8 to compute California adjustments when changing from specific charge-offs to a bad-debt reserve?
Yes. FTB approved the Revenue Procedure 85-8 method for the named taxpayers' California change from specific charge-offs to a bad-debt reserve. Although the procedure was obsolete federally after…
Does software that links a manufacturer's computer to its production machines qualify for the Texas manufacturing exemption, even when the same software also tracks orders and calculates scrap?
Partly. Software that downloads pattern data directly into production machines and has a direct effect on the product being manufactured qualifies as exempt manufacturing equipment. But the same…
Are subscription receipts for newspapers, magazines, and periodicals mailed to Kansas subscribers subject to Kansas sales or use tax?
Taxable. The Department ruled that subscription receipts for newspapers, magazines, periodicals, trade journals, and other publications are subject to Kansas sales or use tax when the subscription…
When a private developer redevelops a city-owned historic building into an entertainment venue under a long-term ground lease, are the donated construction materials, consumables, design services, and historic-building renovation labor exempt from Texas sales tax?
Yes, on these facts. A developer redeveloping city-owned historic sites into an entertainment venue under a 40-year ground lease may issue an exemption certificate to its contractor for materials…
When a private company builds a city-owned entertainment venue on land it will later sell to the city, can materials the company donates to the city before installation be purchased tax-free?
Yes. Where a private company builds a facility that a city will own and lease back to the company, and the company donates specified materials to the city — with title passing up the contractor…
Were customized software, hardware, support services, and warranties taxable when sold together?
Generally yes on these facts. Hardware, customized software, enhancements, and support were taxable when part of the same transaction and intertwined with tangible property. A warranty solely on…
Could licensed locations sell liquor, beer, or wine on Sunday, December 31, 2000, and could they host private functions?
Sales depended on the license and local-option or temporary permits; qualifying private functions could allow consumption but not sales under the stated conditions.
How did Kansas tax internet skin-care sales when an out-of-state multilevel distributor had dependent agents operating in Kansas?
Under the 2000 rules, dependent agents operating in Kansas gave the out-of-state distributor Kansas sales-and-use-tax nexus even if the website and inventory were elsewhere. Internet orders shipped…
If an embezzling bookkeeper caused my company's taxes to go unpaid, can New Mexico waive the interest?
No — the protest was DENIED. Santa Fe Stone Corporation hired a bookkeeper in 1996 who prepared reports making it look as though the company's gross receipts taxes were being paid, but pocketed the…
Must a Kansas retailer charge sales tax on sales made at a craft show on a military base such as McConnell Air Force Base?
Taxable. The Department ruled that a registered Kansas retailer selling homemade baskets at a craft show on McConnell Air Force Base must charge both state and applicable local sales tax. Kansas…
What happens if an accountant stops filing his own gross receipts tax returns while telling clients they must file theirs?
The penalty stood — the protest was DENIED. Robert Pineda, a certified public accountant, stopped filing his own gross receipts tax returns in August 1995 even as he continued practicing and advised…
If a company keeps legal title but transfers the beneficial (equitable) ownership of its assets to limited partnerships, who owes Texas franchise tax on the income?
The income follows the beneficial owner, and only the corporate general partner owes the tax. A company kept legal title to its assets but transferred the equitable interest to two limited…
When gas service is unbundled -- one company sells the gas and the local utility only transports it -- are the utility's transportation charges subject to Connecticut sales tax?
It depends on who is the retailer of the gas. Taxable 'delivery' charges (Conn. Gen. Stat. § 12-407(8)/(9)) are only those charged BY the retailer of the property. So when a gas marketer sells the…
When natural-gas service is unbundled, how much of the gas-marketer's and the local utility's charges count as taxable gross earnings under Connecticut's utility company gross earnings tax?
Each company is taxed on its own slice, with no overlap. Under Conn. Gen. Stat. § 12-264(a), a local distribution company (LDC) counts its transportation revenue (income classified as operating…
Is renting miniature racecars and a racetrack to a customer for its employees to drive taxed the same way as operating those same racecars yourself as part of an advertising campaign?
No — the same equipment is taxed differently depending on who controls it. Renting miniature racecars and a racetrack to a customer so its own employees or customers can drive them is a taxable…
If an out-of-state company ships goods to New Mexico buyers with title passing at its out-of-state warehouse, are those sales still subject to New Mexico gross receipts tax?
Yes, mostly — the protest was GRANTED IN PART and DENIED IN PART. Apple Computer shipped computers to New Mexico customers from out-of-state warehouses, and its contracts said title passed at the…
How does the $150,000 franchise-tax gross-receipts threshold work, and how are 'gross receipts everywhere' computed for each component of the tax?
The $150,000 figure is an all-or-nothing threshold, not a deduction. For franchise-tax reports originally due on or after January 1, 2000, a corporation owes no franchise tax if its gross receipts…
Were letter-of-credit and mortgage documents securing industrial revenue bonds taxable?
No, if the documents arose from or secured repayment of bonds for a project financed under Part III of Chapter 159. That condition covered the reimbursement agreement, mortgage, assignment of rents,…
Did a single-member LLC and its Florida member both have intangible-tax filing duties?
Yes under the 2000 law applied. The LLC had to file and report its nonexempt intangible property with Florida situs, and the member had to file and report the LLC interest. Chapter 199 provided no…
Could a Florida school board directly buy school-construction materials without sales tax?
Yes. The school board's material purchases were exempt when it issued its own purchase orders with its exemption number, was invoiced and paid directly, held title and liability, and bore insured…
Could a Florida city use a direct-purchase program to buy public-works materials tax-free?
Yes. The city's direct purchases could be exempt when its contract preserved the city as the real purchaser through city purchase orders, direct vendor payment, title, and insured risk of loss. The…
I could have gotten the tax certificate any time — does it matter that I only obtained it after the state's 60-day deadline had passed?
It matters, and the protest was DENIED. David Montoya did construction work as a subcontractor for Robert Paiz Construction in 1995 but did not know his receipts were subject to gross receipts tax…
Are over-the-counter items sold at an optometry office — like nonprescription sunshades, contact solution, and eyeglass repair parts — exempt from Texas sales tax as drugs or medicines?
As of this 2000 letter, most of the listed items sold from an optometry office — eyeglasses, nose pads, nonprescription and clip-on sunshades, eyeglass cords, artificial tears, contact solutions,…
Must an out-of-state Florida dealer collect tax on a third-party drop shipment into Florida?
No, under the stated facts. With both vendor and buyer outside Florida, no buyer nexus, and delivery by common carrier, the vendor-to-buyer transaction was not a Florida sale. The Florida customer…
Are corporate-event production services and extra video copies taxable in Florida?
The production services were not taxable when no tangible property went to the client. The producer owed use tax on the tangible elements of master tapes it used, and extra copies sold to clients…
Under former RPB 00-3, could a taxpayer correct an error or obtain a refund after South Carolina's normal time limit expired?
Generally no. A timely claim was required unless a written extension or a narrow doctrine such as setoff, equitable recoupment, or mitigation applied.
Are concrete cutting and coring services (core drilling, wall sawing, hydro-sawing) taxable in Kansas?
They are taxable, with a highway exception. The Department ruled that core drilling, wall sawing, and hydro-sawing of concrete are taxable services under K.S.A. 79-3603(q), which taxes 'repairing,…
I used H&R Block and paid my income tax, but nobody told me about New Mexico gross receipts tax. Do I still owe the penalty and interest?
Yes — the protest was DENIED. Debbie Garcia (Ingram) worked as an independent contractor for the Cibola County DWI Program in 1996–1998 and had H&R Block prepare her income tax returns from her…
What South Carolina interest rate applied to tax underpayments and overpayments from January through March 2001?
The rate was 9% for January 1 through March 31, 2001, compounded daily except that simple interest applied to underpaid declarations of estimated tax.
When did bottled distilled water qualify as exempt food for human consumption based on labels showing drinking, nonfood, mixed, or no intended use?
A human-consumption label made the sale exempt even with mixed uses. No use statement or a nonfood-only label made the distilled water taxable.
Do a home-improvement retailer's cardboard baler and its in-store lumber, pipe, and flooring cutting machines qualify for New York's manufacturing/production sales tax exemption?
No, none of them. Lowe's cardboard baler/compactor doesn't qualify because Lowe's isn't producing anything for sale with it — it just compacts scrap for a hauler to remove and later resell. The saws…
If a utility spins off its retail gas and electricity supply business into a separate company while keeping its transmission and distribution operations, does the phased-out reduced sales tax rate on transmission and distribution charges still apply?
Yes. Once a utility's transmission-and-distribution (T&D) charges are billed separately from a different company's sale of the actual gas or electricity, those T&D charges qualify for the…
Are sales of large decorative carved wooden horses (Dala Horses) for a community purpose subject to Kansas sales tax?
Yes, they are taxable. The Department ruled that sales of large Dala Horses — carved, gaily colored wooden horses used as a community-development display in Lindsborg — are subject to Kansas sales…
Are monthly satellite radio subscription fees subject to Kansas sales tax?
Yes. The Department ruled that monthly fees for a satellite radio service — here, transmissions of music and advertisements played over grocery-store intercoms — are subject to Kansas sales tax.…
If I lose the paperwork proving my sales commissions came from tax-free sales, can New Mexico still tax those commissions?
Yes — the protest was DENIED. Kimberly Ann Caylor worked in 1996 as an independent commissioned salesperson for a store selling antiques and fabrics. Commissions earned on nontaxable sales —…
Could an olive processor buy carbon dioxide for resale when it lowered pH during processing but none remained in the finished olives?
No. Because no carbon dioxide component remained in the olives, the gas was a taxable manufacturing aid; salt left by the process did not make the carbon dioxide a resold ingredient.
Must state employees informally reselling used books for charity collect Kansas sales tax, and can they give donors a deduction receipt?
No tax, and no donor receipt. The Department ruled that an informal, ad hoc group of state-agency employees reselling used books to raise money for a good cause — where the agency does not collect…
Is a wholesaler of prepaid telephone calling cards required to collect Texas sales tax when selling the cards to a retailer who will resell them?
A wholesaler selling telephone prepaid calling cards is engaged in selling taxable tangible personal property — Tax Code § 151.01032 defines a prepaid calling card (a card, item, or access code…
Can a taxpayer carry over a Business and Job Development Credit in a year when it no longer maintains the required number of qualified employees?
No -- the denial was sustained. Under K.S.A. 79-32,160a(d), a taxpayer must continue to maintain the required minimum number of qualified business facility employees to carry over an unused Business…
What consideration was taxable when homeowners granted avigation easements for sound insulation?
Documentary stamp tax was due on $2,400 for each easement, the value approved by the FAA. The sound-insulation construction was a separate program benefit and did not add to consideration for the…
Could a taxpayer recover IRT after a deed was recorded in the wrong county when the refund request did not meet the 30-day claim rule?
No. Georgia denied the refund after the deed was recorded in the wrong county and applied O.C.G.A. § 48-6-76's rule requiring a written refund request within 30 days after collection.
Could an expanded affiliated group stop filing Florida consolidated corporate returns?
Yes, conditionally. Florida approved separate returns because the affiliated group had changed substantially in size and business mix. The approval depended on four stated conditions and, for the…
Can a building-supply store accept a government or nonprofit customer's Type 9 tax certificate to sell construction materials tax-free in New Mexico?
No — the protest was DENIED. Roswell Lumber Co., a building-materials retailer, accepted Type 9 nontaxable transaction certificates (NTTCs) from government agencies and nonprofit organizations and…
If a janitorial vendor bills separately for general building cleaning and for special decontamination cleaning inside a semiconductor cleanroom, is the cleanroom-specific charge exempt from Texas sales tax?
Yes, when separately billed. General building janitorial services are a taxable service under 34 TAC § 3.356(a)(7), but the separate line-item charge for daily decontamination cleaning performed…
In a motor-vehicle leasing like-kind exchange under IRC § 1031, does the Qualified Intermediary that holds the escrow funds have to register as a New York sales tax vendor?
No. A Qualified Intermediary that only receives, holds, and disburses escrow funds in a like-kind exchange — without ever taking title to or possession of the vehicles — isn't a 'vendor' under New…
When an auto-leasing finance company sells 60% of its vehicle lease portfolio (with the leases already assigned and the leased vehicles already taxed) to a related finance company, is that bulk transfer of vehicles a tax-exempt resale, and who owes tax going forward?
Yes, the bulk transfer of the leased vehicles is a tax-exempt sale for resale, since the buyer will exclusively re-lease them to the existing lessees rather than use them itself — but the buyer must…
Are materials and supplies a federal government contractor purchases in its own name, for use in performing a cost-reimbursement services contract, excluded from sales tax as purchases for resale even though the government takes title to them?
No, they're not resale-exempt. Even though the U.S. government eventually takes title to the materials and reimburses the contractor for their cost, the contractor is buying them to use in…
We're the Habitat for Humanity NYC affiliate's housing development fund company. We give 20-30 year interest-free mortgage loans to low-income homebuyers to finance construction, and take back a mortgage from each homeowner as security. Are those mortgages -- where WE are the lender/mortgagee, not the borrower -- exempt from mortgage recording tax?
Exempt. Habitat for Humanity Housing Development Fund Company, Inc. is the contracting entity for Habitat for Humanity - New York City (HFH-NY), a 1984-founded affiliate of Habitat for Humanity…
Are FCC-licensed personal communications services a local telephone business under section 184, and does section 184 reach such a business conducted through a partnership with corporate partners?
Yes, PCS is a local telephone business, and section 184 reaches the corporate partners. Personal communications services provided under FCC licenses are 'telecommunication services' constituting a…
Is a GAP (Guaranteed Auto Protection) premium subject to Kansas sales tax?
Not taxable. The Department ruled that a GAP (Guaranteed Auto Protection) premium is viewed as the sale of insurance in Kansas, so it is not subject to Kansas sales tax. Kansas sales tax applies to…
Is labor to build and paint a new water tower exempt from Kansas sales tax as original construction, and is later repainting taxable?
Exempt for the new build, taxable for later work. The Department ruled that the original construction of a new water tower qualifies as the original construction of a building (an enclosure that…
May a contractor deduct overhead and profit when figuring the Kansas sales tax base on an installation contract?
No deduction. The Department ruled that on a taxable contract to install or apply tangible personal property, a contractor may not deduct overhead expenses or profit when figuring the Kansas sales…
Could equipment drop-shipped to a Tennessee end user be sold tax-free through an out-of-state dealer and a Tennessee leasing company?
Yes. The manufacturer could treat the sale to the out-of-state dealer as a resale because the dealer resold the equipment to a Tennessee-registered lessor, not directly to the end user. The…
Could a public authority directly buy wastewater-project materials without sales tax?
Yes. The authority's direct material purchases were exempt when it issued purchase orders, paid vendors, held title and liability, and bore insured risk of loss under the contract.…
When were prescription pet food and veterinary health products exempt from Florida sales tax?
They were exempt when a licensed veterinarian ordered and dispensed curative or remedial products as treatment or prevention for a diagnosed health disorder. Independent off-the-shelf sales without…
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