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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For an internet-based flower business that takes orders online and uses wire services to fulfill deliveries worldwide, when is Texas sales tax due, and to which local jurisdiction?
A planned Internet flower service bureau — taking web orders for worldwide delivery and using a flower wire service to fulfill them — got a full rundown under 34 TAC § 3.307 (Florists): Texas sales…
If a computer shop bench-tests a customer's computer to diagnose a problem, is that diagnostic charge taxable on its own, and what happens if the shop then repairs it?
Diagnostic testing and analysis of computer hardware — bench-testing a machine to find out what's wrong — is not subject to Texas sales tax by itself, unless the shop actually repairs the computer.…
Does a plumber charge Texas sales tax on labor for new construction plumbing, residential repairs, or commercial plumbing work, and how does the contract type (lump-sum vs. separated) affect materials tax?
No sales tax applies to labor when a plumber installs plumbing/fixtures in new construction or repairs/remodels residential property — the plumber is a "contractor," and how materials are taxed…
After Utah's 1998 legislative amendment removed the SIC-code / manufacturing-only limits, which businesses now qualify for the Utah enterprise zone tax credits, and how do the payroll and investment credits work?
After Utah's 1998 amendment removed the old SIC-code (manufacturing-only) limit, any business firm can qualify for the enterprise zone tax credits except retail trade and public utility businesses,…
Can a door manufacturer buy tax-free, as exempt wrapping/packaging supplies, the advertising brochures it includes with each manufactured door?
No. A door manufacturer's advertising brochures — describing additional options like screen doors or other door types — are taxable whether they're included with the manufactured product or placed…
Does an out-of-state reed manufacturer have to register for New York sales tax just because it employs three New York residents, working from their own homes, to test and pack its products before shipping them back out of state?
Yes. Simply having three New York-resident employees performing work for the company -- even work as limited as testing and packing product that gets shipped right back out of state, with no…
When a contractor buys cabinets from a Texas manufacturer for drop-shipment to a construction site in a different Texas city, is the local sales tax rate based on the manufacturer's location or the job site's location?
It depends entirely on the contract type — resolving the dispute between the contractor and manufacturer, both of whom were partly right. Under a lump-sum contract, the contractor is the consumer of…
Does an out-of-state mail-order computer company create New York sales tax nexus just by hiring an independent New York repair company to make on-site warranty repair visits to its New York customers?
Yes. Even though the mail-order computer company has no office, sales force, or sales representatives of its own in New York, hiring an independent New York-based repair company to perform on-site…
What charges must a caterer include in the Kansas sales tax base?
Tax the total. The Department ruled that a caterer must impose Kansas sales tax on the total selling price of its service, including charges for food, beverage, service charge, hall rental, flowers,…
Can a water/sewer materials supplier split a nonprofit Water Supply Corporation's account into taxable "water" purchases and exempt "sewer" purchases, since the sewer items are used in the wastewater treatment (manufacturing) process?
Not a clean split. Nonprofit water supply corporations are not exempt from sales tax generally — some of their purchases can qualify for a manufacturing exemption because processing water (or…
Is dialysate, the chemical solution used inside an artificial kidney during hemodialysis, an exempt prosthetic aid, or a taxable medical supply?
Dialysate qualifies as an exempt prosthetic aid, not a taxable medical supply. Because it performs an essential part of the kidney's lost filtering function inside the artificial kidney during…
Can a Manhattan co-op buy garage spaces at nearby third-party garages and resell the garaging rights to its own tenant-shareholders tax-free, either through the resale certificate or the homeowner's-association parking exclusion?
The co-op itself can buy the garaging rights from the third-party garages tax-free, using a properly completed resale certificate, since it's buying them exclusively to resell to its…
When a car dealer pays the up-front sales tax on a long-term lease on the customer's behalf and rolls that cost into higher monthly payments, how is the tax recalculated so the customer's after-tax payments come out to the intended amount?
There's no option to simply add the sales tax to each monthly payment as it comes due — New York taxes a long-term motor vehicle lease all at once, up front, on the total amount of all lease…
Which electric-power-plant and effluent-pipeline purchases qualified for Rhode Island sales and use tax exemptions, resale certificates, or manufacturer's exemption certificates?
The contractors could not use resale certificates for Exhibits A, B, or C. Company A could receive and pass through a manufacturer's exemption certificate for Exhibit B manufacturing property,…
Can a retailer switch from reporting sales tax on an accrual basis to a cash basis, and what happens to sales tax already reported under the old method?
Yes, it's permissible for a retailer to switch from an accrual basis to a cash basis of accounting for sales tax reporting purposes (remitting tax as payments are received), and no special forms…
Is a corporate aviation subsidiary's purchase of a new $30 million jet exempt from sales tax as a 'commercial aircraft,' when the plane is used mainly to fly employees and guests of affiliated companies who are charged an intercompany fee for using it?
Yes, exempt -- as long as more than 50% of the new aircraft's use is devoted to transporting employees, customers, and other business contacts of related companies for a fee that reasonably reflects…
Is a managing corporate partner of an electricity/steam generating partnership subject to section 186/186-a, and are IPP contract termination payments part of gross earnings or gross operating income?
The managing partner is taxed; the termination payments are not. A corporate partner deeply involved in running an electricity/steam generating partnership (more than 50% of its receipts from the…
Did an equipment lease, schedule, and acceptance certificate trigger documentary stamp tax?
No. The lease and equipment schedule were expressly incorporated, but rent was not fixed and unconditional until a separate acceptance certificate. That certificate neither incorporated the other…
Would a limited partnership taxed as a corporation be a California financial corporation when it serviced mortgages but did not make, buy, hold, or invest in the loans?
No. FTB held that the proposed limited partnership would not be a financial corporation under Revenue and Taxation Code section 23183 and the related regulation. Although more than half its gross…
Is a Procedural Spinal Needle exempt from Texas sales tax as a hypodermic needle, even though it's not listed by that exact name in the administrative rules?
Yes. A hypodermic needle is defined as a needle adapted for use in, or administered by, injection beneath the skin, and hypodermic needles are exempt from Texas sales tax. A Procedural Spinal Needle…
Which optical products were exempt prescription eyeglasses and which stock products were taxable?
Patient-specific prescription lenses, accompanying frames, and contact lenses were exempt. Finished, semi-finished, finished-stock, and semi-finished-stock lenses, stock frames, and related…
How does Kansas sales tax apply to 'core charges' on replacement parts?
The core charge is taxable when you charge it, and you refund the tax with it when the core comes back. The Department ruled that because a retailer cannot tell at the time of sale whether the…
Is a separately stated project consulting charge on a multimedia (CD-ROM) production invoice taxable as part of the overall taxable presentation, or can it be a nontaxable standalone service?
As billed here, it's taxable. A multimedia CD-ROM presentation (video, animation, interface design, interface programming, CD duplication, and project consulting) is taxable as a whole, and the…
How did Tennessee tax property installations when the installed item remained personal property versus becoming part of realty?
If the item remained tangible personal property, both the item and installation were taxable retail sales. If it became part of realty, the customer-facing transfer and installation were not retail…
Did a Tennessee home-office employee create nexus, and were qualifying cooperative direct-mail sales and distributions exempt?
Yes, the Tennessee employee and employer-provided home-office equipment created sales-tax nexus. But the described multi-advertiser coupon and leaflet packages qualified for the cooperative…
If a homebuyer pays extra for upgrade choices (change orders) on a new residential construction contract, can the builder charge sales tax on the labor portion of those change orders?
It depends on the base contract type, and change orders follow that same classification — a realtor's builder client cannot simply tax labor on change orders just because they're billed separately.…
When a car dealership signs a long-term lease with a customer and immediately assigns it to a separate leasing company, who is the 'original lessor' responsible for collecting the up-front sales tax, and is a trade-in credit applied to the lease taxable?
The dealer -- not the leasing company the lease gets assigned to -- is the original lessor and is responsible for collecting and remitting the sales tax due at the inception of the lease, since the…
Were lump-sum horse embryo-transfer services and separate horse boarding charges taxable?
No. Horse embryo-transfer and related professional services were exempt even when sold in an all-inclusive package. Separate horse-boarding charges were also exempt because boarding and kennel…
Were a country club's golf and social equity memberships and retained resale amounts taxable?
No, on the stated facts. The $85,000 golf and $30,000 sports-social equity contributions, including club-retained resale amounts, were not taxable when separately accounted for as paid-in capital,…
Was a custom personal-biography service taxable, and what about extra manuscript copies?
The custom biography service was exempt, including the manuscript delivered as an inconsequential part of the personal service. Additional manuscript copies were taxable. Because the interview was…
Was a computer-based real-time hearing and communication device exempt from Florida sales tax?
Only with a prescription. The system qualified as a prosthetic or orthopedic appliance used to alleviate a body-part malfunction, but it was not shown to be a hearing aid or listed exempt product.…
Were railcar lease charges exempt when the lessee was an electric cooperative, not a railroad?
Yes. The leases were exempt car service agreements even though the lessor was a bank and the lessee was an electric cooperative rather than a railroad. The railcars were leased for railroad hauling…
Were hot soft-baked pretzels taxable across mall, kiosk, food-court, and outlet locations?
Yes. Hot soft-baked pretzels were taxable at all eight described bakery formats, including locations with no seller-provided seating and off-premises sales, because the statutory food exemption did…
Does an out-of-state software company that licenses stock-trading software to Utah broker dealers and their customers have Utah sales tax nexus, and which of its license, tech-support, and installation fees are taxable?
Yes, nexus exists, and most fees are taxable. A Texas software company licensing canned trading software to Utah broker dealers or their customers has Utah sales and use tax nexus because it owns…
Must a non-profit hospital collect Kansas sales tax on admission charges to a fundraising concert?
It must collect sales tax if it is, or should be, a registered retailer. The Department ruled that admission charges to places of entertainment are taxable under K.S.A. 79-3603(e), and there is no…
Were prescribed low-vision devices and daily-living aids exempt from Tennessee sales tax as prosthetics or ophthalmic materials?
Mostly no. The listed low-vision devices and daily-living aids were not exempt prosthetics. Most were taxable when sold to patients, but spectacles, lenses, and prisms qualifying as ophthalmic…
Are sales of discount or prepaid legal service plans subject to Texas sales and use tax?
No. Sales of discount or prepaid legal services are not a taxable service under Texas Tax Code § 151.0101(a)'s list of taxable services, and Tax Code § 151.308(a)(8) separately exempts insurance…
Is a custom software development contract taxable when a Texas consulting company builds a program from scratch for an out-of-state client and transfers all exclusive rights to the customer with no license fee?
Not taxable. A computer consulting company was contracted to design and build, completely from scratch (not a combination or customization of existing software), a custom program for a California…
Do cotton gins need a predominant-use study to claim the manufacturing exemption on electricity, given that ginning is a seasonal activity rather than year-round?
No predominant use study is required for a cotton gin to qualify for the exemption on electricity measured through a single meter and used for both exempt (processing) and taxable purposes. But…
How did Tennessee business tax apply to a company coordinating dairy farmers' raw-milk deliveries and payments?
The farm-products exemption did not apply because the company sold coordination and bookkeeping services, not milk. If its office performed the services in Tennessee, business tax applied to its…
Is computer repair and maintenance performed at a home exempt from Kansas sales tax under the residential-repair exemption?
Still taxable. The Department ruled that computer repair and maintenance services are subject to Kansas sales tax whether performed at a residence or elsewhere. The residential repair/remodel…
Were separately billed software training and consulting services subject to Tennessee sales tax?
No, under the stated facts. Separately arranged, hourly training that only taught employees to use already installed software was not taxable. It would become taxable if it created, upgraded,…
Is an annual membership fee for access to an online hunting-lease database taxable as an information service, even though the company calls it a "membership" rather than a service, and charges a flat yearly fee instead of per-inquiry pricing?
Yes, it's taxable — calling the fee a "membership" rather than a per-use service charge doesn't change the outcome. A company selling yearly memberships giving instant access to an online database…
Working on a city airport construction contract, is EVERYTHING a contractor buys tax-exempt just because the customer is a government agency, including a rented crane?
No, it's much narrower than "everything is exempt because it's a government job." The city itself is exempt on its own purchases under Tax Code § 151.309, but the contractor's exemption under §…
For the taxable-capital component of the Texas franchise tax, are accrued reserves like warranty reserves or accrued employee costs treated as debt or as part of surplus?
They are part of surplus, not debt. For the taxable-capital component of the franchise tax, Tax Code Sec. 171.109(a)(1) defines surplus as a corporation's net assets minus its stated capital and…
What documents are covered by South Carolina's September 2000 advisory-opinion index?
It is a subject index of South Carolina advisory opinions and informational bulletins issued from 1987 through September 30, 2000, not substantive tax guidance.
What did South Carolina's September 2000 advisory-opinion citator cover?
It identified opinions believed affected by later advisory opinions through September 30, 2000, but did not account for changes from statutes, regulations, or court decisions.
How are hotel rooms rented long-term by a single corporation taxed under Kansas sales tax and transient guest tax?
Sales tax always; transient guest tax only for stays of 28 days or less. The Department ruled that all hotel room rentals are subject to Kansas state and local sales tax regardless of length of stay…
Is a business that advises clients about college, scholarships, financial aid, and occupations subject to Kansas sales tax?
It is not a taxable service. The Department ruled that a business advising clients about college, scholarships, financial aid, and occupations — compiling the information into a folder or notebook —…
Must a non-profit collect Kansas sales tax on its annual fundraising events?
Yes — a planned annual fundraiser is taxable. The Department confirmed that a non-profit must collect sales tax on its annual fundraising events even though the events are held only once a year, the…
How does Kansas sales and use tax apply to a quarry operator that also uses its rock to perform construction contracts?
The operator is a 'contractor-retailer' taxed under two different rules. The Department ruled that (1) selling quarried sand, rock, and gravel is a retail sale of tangible personal property, because…
Are retail sales of vegetable and garden seed packets subject to Kansas sales tax?
They are taxable. The Department ruled that seed sales are subject to Kansas sales tax because, unlike some states, Kansas does not exempt sales of groceries or food products. States that exempt…
If we hide sales records during an audit and only pay when the state catches the rest, can New Mexico add a 50% fraud penalty?
Yes — the protest was DENIED. Quality Exteriors, Inc. (formerly Caffey Construction), a Lubbock, Texas contractor that installed siding and windows in New Mexico, registered for gross receipts tax…
Is electricity used to run a mobile home community's shared sewer pump an exempt residential use, and does it matter that this letter corrects an earlier answer from the same Comptroller office?
Yes, exempt — and this letter explicitly corrects an earlier May 16, 2000 letter (200005305L) on the same account. Electricity used to operate a sewer pump serving a mobile home community is an…
Did investment partnerships holding interests in private limited partnerships qualify for Tennessee's venture-capital franchise and excise tax exemption?
Yes. The investment partnerships qualified as venture capital funds because they exclusively invested on their own behalf in securities of nonpublic limited partnerships, and more than 99% of their…
Were electronically downloaded software and free advertisements or trial software sent to Tennessee customers taxable?
Yes. Tennessee taxed canned software whether delivered on physical media or downloaded electronically. The seller also owed use tax on free printed advertisements and trial-offer software…
Can a private investigation firm exclude reimbursed overhead costs — rent, phone lines, payroll, management fee — from the taxable price it charges a debt-collection client for its investigation services?
No, the firm cannot exclude those reimbursed expenses. A private investigation firm's contract with a debt-collection client reimbursed the firm monthly for half its rent, an accounting fee, two…
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…
Which premises, equipment, and replacement purchases qualified for the RIIFC project exemption, and did the exemption continue after project completion while the bond remained outstanding?
Premises, equipment, and replacements acquired or leased and installed during the project were exempt when RIIFC held title or a leasehold or license interest. An affiliate's bond purchase and lease…
Does Texas's intercorporate services exemption cover computer services one bank buys from an affiliated bank if the buying bank is eligible to file a consolidated federal return but has chosen not to?
Yes, for services first made taxable after September 1, 1987 (like data processing). Two banks were both owned, directly or indirectly, by the same parent and were both eligible to file a…
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