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 a patient-specific medical-record information service subject to Florida sales tax?
No. The requested patient-specific record summaries were not taxable information or enumerated investigative services. The provider instead had to pay sales or use tax on the materials and supplies…
Are the gross receipts from selling discount dining cards subject to Kansas sales tax?
Taxable. The Department ruled that gross receipts from selling discount dining cards are subject to Kansas sales tax. An organization that sells coupons or discount cards redeemable by third-party…
Does Texas's use tax exemption for repair and replacement parts on licensed self-propelled carriers extend to pipeline components purchased out of state and installed in Texas?
No. Texas Tax Code § 151.330(i) exempts, from use tax, out-of-state repair/replacement parts affixed in Texas only to a self-propelled licensed and certificated carrier (like an aircraft, ship, or…
As an independent contractor, do I owe New Mexico gross receipts tax on the materials I buy and get reimbursed for, when the store already charged me tax?
Yes — the protest was DENIED. Larry L. Cotton worked in 1996 as an independent maintenance contractor for a rental-management company, billing an hourly rate plus reimbursement for materials he…
If we pay our New Mexico withholding tax on time but file the return a couple of days late, can the state still charge the full late-filing penalty?
Yes — the protest was DENIED. Moriarty Municipal Schools paid its March 2000 withholding tax on time (the payment arrived April 4) but a new pay manager forgot to enclose the CRS-1 return, which was…
Can a road contractor buy vehicle safety equipment (crash boxes) tax-free because the vehicles are used on a state highway job for the Texas Department of Transportation?
No. "Crash boxes" — devices mounted on the rear of a contractor's pickup trucks to lessen collision damage to the vehicle — do not qualify for exemption, even though the contractor's contract with…
Which parts of a new manufacturing plant — wiring, air conditioning, the building itself — qualify for New Mexico's manufacturing investment credit?
Partly — the protest was GRANTED IN PART and DENIED IN PART. Rea Magnet Wire Company built a magnet-wire plant in Las Cruces and applied for New Mexico's manufacturing investment credit (5% of…
Could a Florida consolidated group exclude section 338 asset sales from its sales factor?
No. The group had to include the elected asset-sale receipts in its Florida sales factor. A roughly 4.5% change in the overall apportionment formula was not gross distortion, especially where most…
Who had to prove Florida's residential-electricity exemption, and who owed tax after misuse?
The account owner had to prove exclusive residential household use. If a utility followed its tariffs and accepted a residential declaration in good faith, Florida generally pursued the customer for…
Who had to prove Florida's residential-electricity exemption, and who owed tax after misuse?
The account owner had to prove exclusive residential household use. If a utility followed its tariffs and accepted a residential declaration in good faith, Florida generally pursued the customer for…
Who had to prove Florida's residential-electricity exemption, and who owed tax after misuse?
The account owner had to prove exclusive residential household use. If a utility followed its tariffs and accepted a residential declaration in good faith, Florida generally pursued the customer for…
Who had to prove Florida's residential-electricity exemption, and who owed tax after misuse?
The account owner had to prove exclusive residential household use. If a utility followed its tariffs and accepted a residential declaration in good faith, Florida generally pursued the customer for…
Who had to prove Florida's residential-electricity exemption, and who owed tax after misuse?
The account owner had to prove exclusive residential household use. If a utility followed its tariffs and accepted a residential declaration in good faith, Florida generally pursued the customer for…
Who had to prove Florida's residential-electricity exemption, and who owed tax after misuse?
The account owner had to prove exclusive residential household use. If a utility followed its tariffs and accepted a residential declaration in good faith, Florida generally pursued the customer for…
Who had to prove Florida's residential-electricity exemption, and who owed tax after misuse?
The account owner had to prove exclusive residential household use. If a utility followed its tariffs and accepted a residential declaration in good faith, Florida generally pursued the customer for…
Who had to prove Florida's residential-electricity exemption, and who owed tax after misuse?
The account owner had to prove exclusive residential household use. If a utility followed its tariffs and accepted a residential declaration in good faith, Florida generally pursued the customer for…
Who had to prove Florida's residential-electricity exemption, and who owed tax after misuse?
The account owner had to prove exclusive residential household use. If a utility followed its tariffs and accepted a residential declaration in good faith, Florida generally pursued the customer for…
Who had to prove Florida's residential-electricity exemption, and who owed tax after misuse?
The account owner had to prove exclusive residential household use. If a utility followed its tariffs and accepted a residential declaration in good faith, Florida generally pursued the customer for…
Who had to prove Florida's residential-electricity exemption, and who owed tax after misuse?
The account owner had to prove exclusive residential household use. If a utility followed its tariffs and accepted a residential declaration in good faith, Florida generally pursued the customer for…
Is a separately stated processing fee added to small orders subject to Kansas sales and use tax?
Taxable. The Department ruled that a flat processing fee added to small orders is subject to Kansas sales and use tax, even when set out as a separate line item on the invoice. Kansas tax is…
Did a Tennessee business owe sales tax on installing and maintaining commercial lighting and signs treated as real property?
No sales tax applied to installation and maintenance if the signs were real property and the business made no tangible-property sales. The business instead owed sales or use tax on materials and…
Were a country club's equity memberships, resale commission, and initiation fees taxable?
True equity membership contributions were not taxable if separately treated as paid-in capital, unused for operations or lower dues, and backed by qualifying asset-distribution rights. A 20% resale…
Are leases of stadium suites, hospitality chalet/tent rentals, and seat-rights memberships at sporting events subject to Kansas sales tax?
Mixed. The Department ruled that leasing a stadium suite is part of a taxable admission charge to a place providing amusement, and that a seat-rights membership is likewise taxable as part of an…
Are receipts from coin-operated air compressors at convenience stores subject to Kansas sales tax, and how is the tax computed?
Yes, they are taxable. In this follow-up letter the Department ruled that money collected from coin-operated air compressors at convenience stores is subject to both state and local Kansas sales…
If an IT services vendor asks a multi-state customer to issue a Texas multi-state benefit exemption certificate under a tax-included contract, is the customer required to issue one?
No. Issuing a Texas multi-state service benefit exemption certificate under Rule 3.330(f)(3) is a choice available to a multi-state customer buying data processing and similar taxable services that…
For a direct-mail company, is marked-up postage taxable, does labeling a task 'data processing' on an invoice make it taxable, and do they owe tax on printing they buy and mark up for mass mailings?
A direct-mail company received four answers: (1) a markup on U.S. postage is not subject to Texas sales tax, whether charged at cost or marked up; (2) calling a work activity "data processing" on an…
If a mailing company subcontracts address-imprinting work to another company that doesn't do the actual mailing, is that imprinting charge taxable — even though direct mail services themselves are nontaxable?
Yes, it's taxable — because the charge depends on who is actually doing the mailing. A company that imprints addresses onto mail pieces for another mailing service, but does not itself mail those…
When could a retailer deduct an unpaid taxable sale as a bad debt under the bulletin's historical rules?
A retailer could deduct the taxable sales price after a post-1999 account became worthless and was charged off for income-tax purposes, subject to the historical rules.
Were hot soft-baked pretzels taxable even when a bakery sold them for off-premises consumption?
Yes. In this revised ruling, hot soft-baked pretzels were taxable as hot prepared food even though the shop was licensed as a bakery, offered no dine-in seating, and sold the pretzels for…
Were an open-end credit application, disclosures, consent, and line agreement stamp-taxable?
Not by themselves. The reviewed documents lacked a signed written obligation to pay a sum certain and did not expressly incorporate one another. But a notice or check could create a taxable combined…
As a New Mexico artist, do I owe gross receipts tax on art a gallery sells for me, and can I deduct rent from letting a film crew use my studio?
Mostly in the artist's favor — the protest was GRANTED and the assessment abated in full. Brian Blount, a Santa Fe artist, was assessed gross receipts tax after the IRS reported his 1994 business…
Did adding interactive navigation to a DVD change a motion picture into a computer program, and did including movie clips make a video game a qualified motion picture?
No to both. A navigable DVD remained primarily a motion picture, while a video game remained a computer program even if it contained qualified motion-picture clips.
If a contractor rents equipment for a government job and later sells it (leaving it on-site instead of taking it back), does it become tax-exempt "consumed" material instead of taxable equipment?
No refund. Crane mats rented to a contractor for a Texas Department of Transportation project, then sold to the contractor and left on the project site at the end of the job, do not qualify for the…
Are receipts from coin-operated air compressors at convenience stores subject to Kansas sales tax?
Yes. The Department ruled that money collected from coin-operated air compressors at convenience stores is subject to both state and local Kansas sales tax. The imposition is K.S.A. 79-3603(f),…
Are a church's telephone charges exempt from Kansas sales tax?
They are exempt if the church pays and uses the phones only for religious purposes. The Department ruled that telephone charges to a church are exempt from state and local sales tax when the church…
Was Georgia IRT due when an agreement both assumed an original note's outstanding balance and created a new note for additional advanced funds?
Yes. Georgia denied the refund because the agreement not only assumed the original note's outstanding balance but also established a new note for an additional advance of funds.
Could one $5,000 county-surtax cap apply to a weekly order of windows and related materials?
Yes. Each specified weekly order, delivery, and single invoice was one sale, and the windows, doors, screens, paint, glazing bead, and related installation materials were normally sold in bulk or…
Were sales of pre-cut submerged logs exempt as agricultural commodities or as resale inventory?
The logs were not exempt agricultural commodities because the definition excluded forestry products. But buyers manufacturing finished wood goods for retail sale could give the logger a resale…
Is diesel fuel used in the various steps of a sandpit operation exempt from Kansas sales tax as consumed in production?
Partly exempt. The Department ruled that diesel fuel used to pump sand from the pit and to screen and separate it is exempt as property consumed in production under K.S.A. 79-3606(n) and 79-3602(m).…
Can the Kansas Department of Revenue release a list of businesses by their sales tax filing frequency?
No — the Department cannot release it because the information is confidential. A person asked for a list of Wichita businesses that file sales tax monthly or quarterly. Because filing frequency is…
Is water used to water livestock held for resale subject to Kansas sales tax?
It is exempt from both state and local sales tax. The Department ruled that sales of water used exclusively to water livestock held for resale are exempt because the water is 'consumed in…
When did Florida credit upfront tax paid on an out-of-state motor-vehicle lease?
Florida allowed credit only when the other state mandatorily imposed a like upfront tax on the lessee and offered no removal refund or credit. Florida taxed any rate difference on monthly payments.…
Was a pre-1986 partnership property's unencumbered liquidating distribution stamp-taxable?
No. The partnership acquired the property before July 1, 1986, and distributed it unencumbered to its 85% corporate partner on dissolution. Florida applied the earlier law, which taxed that…
Did label-cutting dies and rubber flexographic plates qualify for Florida's printing exemption?
Yes. Dies used to cut designs in pressure-sensitive label material qualified as dies used for embossing and engraving, and rubber flexographic plates qualified as lithographic plates when used in…
Are management services subject to Kansas sales tax?
They are not taxable. The Department ruled that management services are not subject to Kansas sales tax because the sales tax applies only to services that are 'enumerated (specified) by statutes,'…
Does a new painting, faux-finishing, and stenciling business need to charge sales tax to customers, and does it matter whether the work is new construction, residential remodeling, or commercial remodeling?
It depends on the job and the contract type. New construction of realty, or repair/remodeling of *residential* realty, is done as a "contractor": under a lump-sum contract you pay tax on your own…
Are single-use yellow traffic-control tabs, thrown away after 2-3 days on a state road job, exempt from sales tax as consumable supplies used in an exempt government contract?
Possibly exempt, but it depends on facts the Comptroller couldn't confirm from this letter alone. Disposable yellow traffic-control tabs placed on a road for 2-3 days, then pulled up and thrown away…
Does an out-of-state touring band's corporation owe Texas franchise tax if it performs in Texas only a few days a year, even without corporate-income nexus?
Yes. A corporate touring band that performs in Texas - even about seven days out of the year - is 'doing business' in Texas and is subject to the franchise tax. Tax Code Sec. 171.001 imposes the tax…
Is wax paper a restaurant buys to microwave-heat sandwiches on exempt as a manufacturing item, or taxable because it's really used to store or separate food?
It depends entirely on how the wax paper is actually used, and the taxpayer bears the burden of proof either way. If the restaurant can show the wax paper is used in preparing, warming, or reheating…
Are health food products and herbal supplements subject to Kansas sales and use tax?
They are taxable. The Department ruled that health food products and herbal supplements — caplets of beet, carrot, and barley extract; aloe vera juice; pollen and trace-mineral supplements; coenzyme…
Was paying $12,000 for temporary title to a scrap vessel taxable when the buyer only wanted its Dungeness crab permit?
Yes. The permit could not be sold separately and was an incident of vessel ownership. The buyer had to acquire legal title to the vessel to move the permit, so the entire transaction was a taxable…
Can a manufacturing customer use a single manufacturing exemption certificate to buy everything tax-free — including hand tools, brooms, and sports drinks — and just self-assess use tax later on its own return?
No. A manufacturer may only buy tax-free, under a manufacturing exemption certificate, items that will be incorporated into a product for sale or that otherwise qualify for exemption under Tax Code…
Does an individual who pays sales tax on an item, then donates it to a nonprofit's charity auction where it resells for more than $5,000, get taxed twice — and does the nonprofit's $5,000 one-day-sale limit apply to every 501(c) organization or just colleges?
No double taxation, with a fix available: a purchaser can avoid paying sales tax twice by giving the retailer an exemption certificate at the time of purchase for an item intended for donation to an…
Does a tax-exempt nonprofit hospital have to collect sales tax when it leases radiology equipment to a for-profit joint venture it forms with a group of radiologists?
No. A Section 501(c)(3) nonprofit hospital's sales and leases are generally exempt from New York sales tax, and leasing radiology equipment to a single for-profit joint venture on the hospital's own…
Does an out-of-state manufacturer that only makes wholesale sales for resale, and whose sole New York presence is two traveling sales representatives, have to register as a New York sales tax vendor?
Yes. Having even just two traveling sales representatives soliciting business in New York is enough of a physical presence to satisfy the constitutional nexus requirement, so the out-of-state…
Was a Texas highway sweeper taxed as a motor vehicle or as moveable specialized equipment?
It depended on construction. Sweeper equipment mounted on a cab chassis was a motor vehicle. A sweeper manufactured from beginning to end was moveable specialized equipment subject to limited sales…
Is repairing a central air conditioning system taxed the same as repairing a window AC unit, and does it matter whether the building is residential or commercial?
No, they're taxed differently. A charge to repair a central air conditioning system in a nonresidential (commercial) building has been taxable since January 1, 1988, but the same repair on a…
Is the lane-rental portion of a bowling alley's private 'bowling party' package subject to sales tax, and does bundling it with taxable food and beverage charges change the answer?
No sales tax on the lane-rental charge. Bowling is a participant sporting activity, so admission charges for the use of a bowling lane are specifically excluded from New York sales tax, even when…
How did Florida tax repairs, additions, and installations of fire and security alarm systems?
Repairs to an existing alarm system were taxable protection services, with parts also taxable unless separately sold for resale treatment. New or expanded systems were taxed as tangible-property…
Is dredging silt out of a nonprofit country club's irrigation reservoir a nontaxable maintenance activity, or a taxable repair to real property?
It's taxable, not exempt maintenance. If a country club's water reservoir is manmade, dredging silt and sediment out of it is a repair, remodel, or restoration of a nonresidential improvement to…
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