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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How did Texas distinguish a purpose-built concrete pump from a pump attached to a conventional truck chassis, especially when supplied with an operator?
A purpose-built, movable specialized concrete-pump unit was taxed under Chapter 151. A conventional cab chassis with a pump attached was a motor vehicle under Chapter 152. Supplying that truck with a …
How did South Carolina treat a single-member LLC for income tax, corporate license fees, and deed recording fees under RR 98-11?
South Carolina followed the LLC's federal classification. A disregarded LLC was treated as its individual owner's sole proprietorship or its corporate owner's division; an LLC electing corporate treat…
For an oil-field equipment lessor and its affiliated delivery company, which of their many charges -- delivery, installation, disassembly, sewage pumping, garbage removal, water hauling -- are subject to Utah sales tax?
It splits by service. Common-carrier delivery, sewage pumping, and garbage removal are not taxable; installing and disassembling the leased equipment is taxable; hauling water is not taxable but selli…
A corporation overpaid sales tax on manufacturing equipment, then dissolved and contributed that equipment to a new partnership. Can vendors assign their right to a tax refund directly to the successor partnership using the corporation's old assignment forms?
No. To assign a refund, the vendor must have a valid exemption certificate from the actual purchaser — and the dissolved corporation, not the partnership, was the purchaser. The partnership can't issu…
Was a partnership's transfer of vehicles to a titling trust taxable when the trust paid or assumed vehicle debt?
Yes, if the trust satisfied the partnership's debt by making payments or formally assuming it. Texas treated the partnership and trust as separate entities, so that debt relief was consideration and t…
Did an out-of-state reinsurer have to file Florida corporate income tax solely because it owned part of an LLC doing business in Florida?
No. Florida treated the LLC as a corporation, and merely holding an ownership interest in a corporation subject to Florida tax did not create nexus for the foreign reinsurer. The LLC itself had to fil…
Were dues paid to a mobile-home park homeowners' association subject to Florida sales tax?
No. Although the association was not a section 501(c)(3) organization and dues were not required for park occupancy, it provided no recreational or physical-fitness facilities. The park owners supplie…
When a company has a sales office in one city and stores/ships its product from a warehouse outside that city, which location's sales tax rate applies?
The warehouse/storage location controls, not the sales office. When a sale involves more than one Utah business location, Utah Admin. Code R865-12L-5(C) sources the sale to where the goods are located…
Can a trade-in allowance reduce the taxable gross receipts on a lease, and when does the trade-in count?
It depends on who owns the trade-in. Leasing tangible personal property is taxable under K.S.A. 79-3603(h). The Department ruled that a taxpayer may not reduce reported gross receipts by a trade-in al…
When were a Texas farm trailer, its repair labor, and its repair parts exempt from motor vehicle or limited sales tax?
A trailer could qualify for the Chapter 152 farm exemption if used primarily in qualifying farm or ranch production for sale; farm plates alone did not decide. Motor vehicle repair labor was untaxed. …
A monitoring/surveillance company collected Texas sales tax from Texas customers before it was permitted to collect Texas tax, and remitted that tax in good faith to a different state instead. Since it never got permitted in Texas until later, does it still owe that collected tax to Texas?
Yes, all of it. Under Tax Code Section 111.016(a), anyone who collects a tax or money represented to be a tax holds it in trust for Texas and is liable to Texas for the full amount collected — regardl…
A chemical processing plant is buying a redundant Honeywell computerized control system that runs its manufacturing operations. Is the computerized control system, and the software that runs it, exempt from Texas sales tax as manufacturing equipment?
Yes, if bought on or after October 1, 1997. House Bill 1855 amended Texas's manufacturing exemption to specifically cover electronic control-room equipment and computerized-control units that power, s…
Could a municipal airport authority buy construction materials tax-free for a replacement terminal managed by a contractor?
Yes. Under the amended direct-purchase procedures, the airport authority issued exempt purchase orders, received vendor invoices, paid vendors directly, took legal and equitable title, and bought insu…
Were final cleanup services required to complete new construction or renovation subject to Florida sales tax?
No. Removing construction debris and cleaning interior and exterior surfaces so a general contractor could complete the job and obtain final occupancy was classified as construction cleanup, not taxab…
Did PLR 98-3 include a supermarket's purchase-based supplier allowances in taxable gross proceeds when customers used its loyalty card?
No. The supplier allowances were based on the retailer's past purchases or negotiations, not on particular customer sales, so they were outside gross proceeds. Tax applied to the discounted amount the…
An out-of-state contractor is building 12 miles of fence on the Texas side of the border under a lump-sum contract with the U.S. Section of the International Boundary and Water Commission (IBWC). Is the contractor exempt from Texas sales tax on the materials and services for this job?
Yes, for materials — because the contract is with the United States Section of the IBWC, which counts as a federal government agency under Rule 3.322(c)(1)(C), the contractor can use a Tax Code Sectio…
Is telecommunications service sold between related corporate affiliates exempt from Texas sales tax under the intercorporate services exemption?
No. Sales tax is due on telecommunications service charges even between related corporate affiliates. Texas started taxing telecommunications services in 1985, and Tax Code Section 151.346(c) specific…
A company runs credit and criminal background checks on prospective apartment tenants for property managers, faxing back the results for a fee. Is that service subject to Texas sales tax?
At least partly, yes, as of 1998. Furnishing credit information on a prospective tenant for a fee is taxable as a credit reporting service under Tax Code Section 151.0034. Whether the criminal-backgro…
What had to be present for a location to qualify as a corporate office facility for South Carolina job-credit and property-tax purposes?
The location needed managerial, professional, technical, and administrative personnel, and it had to perform the listed financial, personnel, legal, technical, support, and other business functions fo…
Could a New Mexico securities broker avoid penalty and interest because he did not know commissions were taxable, could not pass the tax to clients, and believed enforcement was unfair?
No — Gary Tixier conceded the securities commissions were taxable, and his fairness, selective-enforcement, delay, and hardship arguments did not defeat penalty or interest, so the protest was DENIED.…
How did Texas tax the Harris County/Houston Sports Authority charge, recovery fees, and airport franchise fee on a short-term rental?
The 5% Harris County/Houston Sports Authority tax was not included in the state rental-tax base. But line-item recovery of property tax, title, and registration expenses—and the 10% airport franchise …
For former earned-surplus apportionment, was a federal capital-loss carryforward used in the year applied or the year the loss actually occurred?
The actual-loss year controlled. Rule 3.557(e)(4) required excess capital losses carried back or forward for federal purposes to be used in computing receipts in the year the loss occurred, not the ye…
Did Texas tax vehicle transfers to a new subsidiary for stock and then to a new limited partnership for partnership interests?
No tax was due if the new subsidiary and partnership gave no consideration other than their stock or partnership interests. Assumed debt was consideration and would change the result. The limited part…
Did trusts become subject to Florida intangible tax after their corporate trustee merged into a successor with other Florida activities?
No, under the described administration. Existing and new trusts remained outside Florida intangible tax because the named trustee officers were domiciled outside Florida and the successor trust commit…
Does a rodent barrier used to protect stored farm machinery qualify as exempt farm machinery and equipment?
No. Kansas exempts sales of farm machinery and equipment under K.S.A. 79-3606(t), but the Department ruled that a product designed to keep mice from entering an encircled area around stored farm machi…
Must a Kansas buyer pay the compensating use tax billed by an out-of-state seller that has no Kansas warehouse, absent an exemption certificate?
Yes. An out-of-state seller registered to collect Kansas compensating (use) tax shipped equipment to a Kansas buyer and billed the tax; the buyer refused, arguing the seller had no Kansas warehouse. T…
How should Kansas county appraisers handle 'adverse influences' on agricultural land under the use-value formula so land is not adjusted twice for the same factor?
This 1998 memo from the Division of Property Valuation tells Kansas county appraisers how to handle 'adverse influences' when valuing agricultural land at use value. With detailed soil types now built…
Could Kids Love to Dance use nonprofit preschools' Type 9 NTTCs for dance lessons and costumes that it actually sold to the children's parents?
No — the Type 9 certificates did not support the deductions, and failing to read their restrictions was negligence, so the penalty-and-interest protest was DENIED. Type 9 NTTCs allowed governmental ag…
A planned Internet business will sell sports and horse-race betting selections to account holders for a fee, refunding a bonus amount if the pick loses. Can the business structure its fees so most of the charge counts as nontaxable consulting rather than a taxable information service?
No. Consultation services centered on the consultant's own expert or professional opinion are not taxable if unrelated to sales of taxable items, but consultation services that are really in the natur…
A permitted retailer is selling a used tug it had been using for its own hauling (not income-producing) to a company that plans to claim a ship/vessel sales tax exemption. Is the sale of the tug itself exempt?
No. The occasional-sale exemption (Tax Code Section 151.304, Rule 3.316) doesn't apply because the seller is a permitted retailer. And the ships-and-ship-equipment exemption for vessels in foreign or …
Was Comfort Air's president personally liable for employee withholding tax the company collected but its bookkeeper failed to send to New Mexico?
Yes — Pete Sisneros controlled wage payments and was an 'employer' under the Withholding Tax Act, so he was personally liable for $18,603.04 of Comfort Air's withheld-but-unpaid tax and the protest wa…
Did Florida's sales-tax exemption for a nonprofit youth organization cover both its purchases and its sales or leases of donated property?
No. The qualifying youth organization could buy items tax-free for its customary nonprofit activities, but it still had to collect and remit tax when selling or leasing boats and other tangible proper…
Did internal journal entries allocating common-area maintenance costs to wholly owned subsidiaries create taxable Florida rent?
No on the unique facts. The parent recorded receivables and later offset them against its investment accounts, but subsidiaries transferred no cash, services, credit, or other value. Because the paren…
A seller lost its resale deduction because it didn't have the up-to-date exemption certificate in time. Can a later, more lenient law be applied backward to save the deduction?
No — the 1997 law that restored a 60-day grace period does not apply retroactively, and the seller's negligence penalty stood, so the protest was DENIED. Jobe Concrete Products, an El Paso company, so…
Did a Texas corporation's gain from selling an interest in a Texas LLC to a Delaware-formed LLC produce Texas gross receipts?
No, to the extent the gain was recognized as federal revenue. The Comptroller treated the 87.5% LLC membership interest as an intangible asset. Because the acquiring payor was legally formed in Delawa…
The FCC assesses telecommunications carriers for the Federal Universal Service Fund (USF), similar to the state's Telecommunications Infrastructure Fund (TIF) assessment. When a carrier bills this USF charge through to its customers as a reimbursement, is it subject to Texas sales tax?
Yes. The USF assessment is made against the telecommunications carrier, not directly against the customer — whether it counts as a 'tax' or 'surcharge' is a question for the FCC, not the Comptroller. …
Did a corporation have Texas nexus when its only Texas activity was employees developing software rather than soliciting business?
Yes. The corporation had no other Texas operations, but Texas employees wrote software code for products sold to real-estate-industry customers. Even though those employees did not solicit business, t…
Were 40-30-30 nutrition bars exempt from Florida sales tax as food rather than taxable candy?
Yes. After reviewing the labels and ingredients, Florida agriculture specialists classified the bars as a food supplement designed for specific physiological requirements. Because they were marketed a…
Was a school board's sale and leaseback of K-12 instructional textbooks subject to Florida sales tax?
No. The registered lessor bought the textbooks exclusively for leasing and gave the school board a valid resale certificate, so the initial sale was exempt. The leaseback was also exempt because the b…
Does Kansas use tax apply to promotional materials a printer is obligated to deliver to a Kansas address?
Yes. Kansas use tax is levied for the privilege of using, storing, or compounding tangible personal property in the state, at a rate of 4.9% of the consideration paid. The Department ruled that a comp…
A school district paid its state taxes late because of computer problems and argued a penalty just takes money from classrooms. Does it still owe the penalty?
Yes — the negligence penalty was upheld and the protest was DENIED, because a public school district is held to the same standard as any other taxpayer. Los Alamos Public Schools files and pays gross …
A company bought a tetrafluoroethane reclaimer machine to recapture refrigerant from truck air conditioners during repairs, instead of letting it vent into the atmosphere. Is the machine exempt from Texas sales and use tax because it protects the environment?
No. The purchase of the tetrafluoroethane reclaimer machine is subject to Texas sales tax. The Tax Code contains no exemption for equipment purchased to repair air conditioning systems, even though th…
A retail-building developer had its lot cleared and several large liveoak trees removed, then replanted the trees elsewhere on the same lot to meet City of Austin environmental guidelines. Is the tree removal/replanting taxable as a landscaping service, and can it be billed separately from the (nontaxable) land-clearing work?
Removing trees for the purpose of replanting them is a taxable arborist service (arborist services are landscaping services, which are taxable), even though clearing land for construction purposes is …
Were points paid to buy down a mobile-home loan's interest rate included in the Florida taxable sales price?
Yes. Although an earlier contract and disclosure separated the $2,019 interest-rate buydown from cash price, the buyers signed a later contract that included the points in the cash sales price and sup…
A New Mexico subcontractor didn't charge gross receipts tax because the company she worked for resold her services. Does she still owe the tax, and a penalty?
Yes on both — the subcontractor owed gross receipts tax on her own receipts and a negligence penalty, so the protest was DENIED. Dona Curl worked as an independent contractor for Integral Systems, Inc…
A traffic-engineering consultant sells market reports, expert-witness reports, and subject-expert reports to TxDOT and others, and separately performs consulting-style services (expert witness testimony, teaching training courses, nonprofit director work). Which of these are subject to Texas sales tax, and does it matter that the main customer is a state agency?
The market reports and expert-witness reports are proprietary information services gathered/compiled specifically for one client and not resalable by the consultant — so under Rule 3.342, they're not …
A medical-information researcher compiles reports from public-access databases into a bound booklet sold to only one client at a time, with the information not resalable by either her or that client. She also plans to do similar market research using databases and interviews. Does the fact she sells each report to just one client, with no resale rights, make her service exempt from sales tax as proprietary information?
No, it's still a taxable information service. The Rule 3.342(d)(1) exclusion for proprietary information requires the CLIENT to have enforceable property rights in the raw information — enough to stop…
A new computer hardware reseller is paying sales tax on components bought locally (rather than issuing a resale certificate), then charging its own customers sales tax again on the marked-up resale price — effectively taxing the item twice. Is that illegal, and how should it be handled? The reseller also does computer consulting, software installation, and system setup work — which of those are taxable?
Double-paying isn't illegal, but it isn't the correct procedure either: the reseller should issue a Rule 3.285 resale certificate to its local suppliers instead of paying tax upfront, and can seek a r…
How is Texas sales tax calculated and collected on a financing lease — is it based on the aggregate total of all lease payments, collected all at once, or spread out like an ordinary rental?
Under Rule 3.294(f)(3)(B), a financing lease is taxed differently from an ordinary lease: the lessor must collect ALL tax due under the entire lease at the earlier of when the lessee takes possession …
A customer gave a seller of cut limestone an exemption certificate claiming the limestone is exempt 'unprocessed material, merely sorted, sized, screened, washed or dried.' Can the seller accept that certificate in good faith?
No. The Comptroller considers cut limestone to be 'processed material,' not unprocessed material, and it is therefore taxable. The seller should not accept an exemption certificate from a customer on …
If an out-of-state S corporation leases its employees to companies that use them to promote products in Utah, does the leasing company itself have Utah income tax nexus?
Yes. The Utah State Tax Commission ruled that the out-of-state S corporation has Utah income tax nexus -- not because of what its leased employees (detailmen) do in Utah, but because the S corporation…
Was a commission-only advertising salesperson an employee whose Quick Quarter commissions were exempt from New Mexico gross receipts tax?
No — Gay Wynnett Stracener was an independent contractor, not Quick Quarter's employee, so her advertising-sales commissions were taxable and the protest was DENIED. She received no salary, Form W-2, …
A fuel dealer overpaid a New Mexico petroleum fee for years, then filed for a refund. Can it get back the overpayments from more than three years ago by blaming the state's forms?
No — the refunds for the oldest periods were time-barred and the Department was not estopped from raising the statute of limitations, so the protest was DENIED. Tedken Oil Co., a Farmington fuel deale…
Were private investigations performed for insurance companies subject to Florida sales tax?
No. Investigations performed for insurance purposes fell under SIC 6411, not the taxable SIC 7381 or 7382 services. If someone other than the insurance company was billed, the invoice had to name the …
Is labor to install or apply property during the original construction of a new building subject to Kansas sales tax?
No. Kansas taxes the service of installing or applying tangible personal property under K.S.A. 79-3603(p), but that statute expressly exempts installation or application performed in connection with t…
How did two successive mergers affect receivable collections, final reporting, and the new surviving corporations' initial franchise-tax reports?
Company C's collection of Company A's existing trade receivables produced no gross receipts for C. A still owed its 1998 annual report and a final report within 60 days after merging out of existence.…
Could insurance settlement money or proceeds from a separate wholesale sale reduce Texas tax on a new vehicle purchased with a damaged trade-in?
No. Only the value of the damaged motor vehicle actually received by the new-vehicle seller as consideration could reduce taxable value. Insurance proceeds were money, not a motor vehicle, and proceed…
Are an auto club's member Triptiks, maps, tourbooks, and membership kits exempt from sales tax as promotional materials?
Mostly yes, with limits. An auto club's personalized Triptiks, maps, tourbooks, membership kits, and applications qualify as exempt promotional materials when mailed or shipped free of charge to membe…
Which computer repair, software, and support charges are taxable in New York, and which are exempt if separately stated?
It depends on what's being worked on: repairing physical computer hardware is always taxable, but installing, servicing, or troubleshooting software is exempt if the charge is reasonable and separatel…
Are fees for an electronic B2B catalog platform, EDI document exchange, and inventory-replenishment forecasting subject to New York sales tax?
It varies by service: fees for an electronic wholesaler catalog platform and for inventory-replenishment forecasting aren't taxable, but fees for transmitting EDI business documents between trading pa…
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