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 retailer have to charge Kansas tax on the shipping and handling it bills to customers?
Yes. The Department ruled that shipping and handling charges are subject to Kansas sales and use tax as a matter of statutory definition. For sales tax, the base is 'gross receipts' / 'selling…
How did Senate Bill 226 change Kansas withholding tax for payments other than wages effective July 1, 2000?
Effective July 1, 2000, Senate Bill 226 brought Kansas withholding into closer conformity with federal law by requiring withholding on 'payments other than wages' made by 'payors' (anyone other than…
What restrictions and monthly reports apply to Kansas cigarette wholesalers on gray-market and imported cigarettes?
Under K.S.A. 79-3321(u)-(w) it is unlawful to sell or distribute in Kansas cigarettes packaged for foreign or export markets (for example labeled 'For Export Only,' 'U.S. Tax-Exempt,' or 'For Use…
If an outside company merely stores a business's physical data-storage media (magnetic tapes, computer discs) off-site and off-line — providing no electronic access to the data and no other services — is that off-site storage taxable as a data processing service?
No. When an outside company merely stores physical data media (tapes, discs, etc.) off-site and off-line — with no electronic access provided and no other data processing services performed — that…
Did Tennessee's local-option single-article tax cap apply to combined software-upgrade and phone-support maintenance agreements?
No. Tennessee treated the combined software upgrades and phone support as a taxable maintenance service, and the local-option single-article cap applied only to single articles of tangible personal…
A clothing manufacturer uses spreading tables with an attached cutting blade to spread and cut fabric. Does the whole table qualify for the manufacturing exemption because the blade is attached to it, or does only the blade itself qualify?
Only the blade qualifies, not the table. The spreading table itself does not qualify for the manufacturing exemption because it doesn't directly cause a chemical or physical change to the product.…
A medical device manufacturer sells a range of electrotherapy and rehabilitation products (TENS units, muscle stimulators, incontinence devices, iontophoresis systems, dynamic splints, cervical traction units, knee rehab devices, and related accessories) both to health care providers and directly to patients on prescription. How does Texas sales tax treat each product, and does it matter who buys it?
It varies by product and by buyer. For most of these therapeutic electrotherapy devices (TENS, NMES, sEMG, Innova incontinence device, Pronex cervical traction), the pattern is the same: taxable…
A new business installs automatic insecticide spray systems in homes. Does it need a Texas sales tax permit and have to collect tax on its charges, and can it buy the spray equipment it installs tax-free?
Yes to collecting tax, yes to buying equipment tax-free. Installing an automatic home insecticide spray system is a structural pest control service — a taxable real property service under Rule…
Am I liable for New Mexico gross receipts tax on my deceased spouse's business income if I never worked in the business?
Partly — the protest was GRANTED IN PART and DENIED IN PART. Kay Raines never worked in her husband James's appliance-installation business, but New Mexico gross receipts tax on income earned by…
Did a nursing-home vending machine void the facility's residential electricity exemption?
No. Electricity used in nursing-home areas connected to residents' care and daily life remained within the residential-household exemption. A vending machine used by staff, residents, and their…
Was a mandatory, separately itemized waste-removal reimbursement taxable as rent?
Yes. Tenants had to pay the landlord's waste-removal charge to remain in possession. The mandatory lease charge lost its separate identity and became part of taxable total rent, even when separately…
Were rents for municipal beach concession buildings exempt when the tenant sold food and drinks?
Yes. The tenant used municipally owned beach buildings to sell food and drinks, and the beach was a recreational facility under the ruling. The statutory exemption applied to payments for the right…
Is the Safehip hip protector — an undergarment designed to prevent hip fractures and injuries — exempt from Texas sales tax, and does it matter whether it's sold to an individual or to a hospital/nursing home?
It depends on the buyer. The Safehip hip protector qualifies for exemption as a therapeutic device and may be purchased tax-free by an individual with a doctor's prescription. But the same product…
Does a soy-based powdered beverage mix marketed as a milk substitute ('Better than Milk') qualify for Texas's sales tax food exemption?
Yes. "Better than Milk," a soy-based powdered beverage mix, qualifies for exemption from Texas sales tax as a food product milk substitute, based on the label the taxpayer submitted.
Can an insurance carrier calculate its Utah workers' compensation premium tax on a deductible policy using the self-insured employer's formula instead of the pre-deductible full premium?
No. An admitted insurer selling a deductible workers' compensation policy must calculate its premium tax on the full policy premium it would have charged without the deductible reduction, as…
How is Kansas tax applied to items a Kansas contractor buys for use in out-of-state construction projects?
It depends on how and where the items are bought. The Department ruled that items a Kansas contractor buys from an out-of-state vendor for a specific out-of-state job, then ships to its Kansas…
Does clothing that provides UVA and UVB sun protection qualify for Texas's over-the-counter drug or medicine exemption (effective April 1, 2000)?
No. Clothing, even clothing that provides UVA and UVB sun protection, does not meet the definition of an over-the-counter drug or medicine, so it doesn't qualify for the exemption effective April 1,…
Did three free advertising publications qualify for Florida's shopper exemption?
Yes. The apartment, new-home, and automobile publications were distributed free through newsstands, published regularly, and primarily contained advertising by unrelated businesses. Each met the…
How did House Bill 2013 change Kansas bingo laws and taxes effective July 1, 2000?
Effective July 1, 2000, House Bill 2013 overhauled Kansas bingo regulation and its taxes. The 3% bingo enforcement tax on the sale of bingo (hard) cards was replaced by a $0.002 (2/10 of a cent)…
If I do accounting work in New Mexico for a local business owned by an out-of-state parent, can I skip gross receipts tax as an out-of-state sale of services?
No — the protest was DENIED. Santa Fe Business Services (a Santa Fe accounting firm, then a sole proprietorship) was assessed gross receipts tax on two chunks of receipts it had not taxed: contract…
How did RPB 00-1 tell South Carolina Department employees to assess penalties for video-game-machine and coin-operated-device violations?
It used progressive recommended sanctions for most violations but allowed more or less severe penalties within statutory authority based on the circumstances.
How is land enrolled in the federal Wetlands Reserve Program valued for Kansas property tax?
For the 2000 valuation year and after, land enrolled in the federal Wetlands Reserve Program (WRP) or emergency Wetlands Reserve Program (EWRP) is classified as native grassland and valued that way…
When a taxable (non-exempt) lessor remodels facilities it leases to an exempt entity, how does the Comptroller decide whether the exempt lessee has 'primary use and benefit' of the remodeling services (making them exempt) versus the taxable lessor (making them taxable) — specifically, how is the 'long-term lease' prong measured?
The Comptroller applies a two-prong test: (1) the lessee must be an exempt entity under § 151.309 or § 151.310, and (2) the lease must be long-term in reasonable relationship to the LIFE of the…
A company runs a subscription website where college students pay to access professor-posted class content, pay extra to print pages, and pay a copyright surcharge to view certain copyrighted articles. Which of these charges are taxable Texas information services, and how does the company determine Texas vs. out-of-state tax treatment for students located both inside and outside Texas?
Mostly taxable, with multistate nuance. Student subscription fees, printing fees, and copyright surcharges are ALL taxable information services (20% exempt per § 151.351). A separate copyright…
Did Florida let a diversified corporate group stop filing consolidated returns?
Yes. Florida permitted separate corporate income tax returns because the group had expanded beyond Florida, developed distinct business lines and management strategies, and wanted to separate an…
Did Florida allow a reorganized corporate group to stop filing consolidated returns?
Yes. Florida permitted the group to file separate corporate income tax returns for 1999 and later years because its business had substantially changed and its newly acquired group used a different…
Does a 501(c)(3) nonprofit that serves troubled youth qualify for exemption from Kansas sales tax on its purchases?
No. The Department ruled that a 501(c)(3) nonprofit organized to provide alternatives to institutional placement of troubled youth does not qualify for exemption from Kansas sales tax. Reviewing the…
A company runs a broad errand-service business — document delivery, transporting seniors and pets, personal/grocery shopping, dry cleaning pickup/delivery, lunch delivery, notary services, and process serving. Are any of these services subject to Texas sales tax?
None of the nine services described are taxable. Delivering documents/x-rays/medical records, transporting seniors or pets, grocery/gift shopping, dry cleaning pickup/delivery, lunch delivery,…
Does an out-of-state company that sells customizable web-center subscriptions to Kansas customers, with no property or employees in Kansas, have to file Kansas income tax or collect Kansas sales tax?
No, on these facts. The Department ruled that an Arizona-based company selling customizable 'web center' subscriptions, with no real or personal property, inventory, or employees in Kansas, is not…
How did Kansas distinguish salvage, rebuilt-salvage, and non-repairable vehicle titles beginning July 1, 2000?
A salvage vehicle needed substantial repair because its condition threatened highway safety; a rebuilt-salvage vehicle had been restored after a salvage title and required Highway Patrol inspection;…
Does a pagination system — computer hardware and software used to design, edit, and assemble page layouts for commercial printing and newspaper production — qualify for Texas's manufacturing exemption from sales and use tax?
Yes. A pagination system — a combination of computer hardware and software that lets a printer/publisher design, edit, and assemble page layouts before the files are sent to pre-press to make…
Did approximately 1,200 former Company B employees hired by Company A after an arm's-length facilities acquisition count as new employment under Rhode Island's Jobs Development Act?
Yes. The former Company B employees entered new employment relationships with Company A and had not previously worked for Company A or an affiliate. The acquisition and hiring were not an artifice…
Was replacement equipment built to meet pollution rules exempt from Florida sales and use tax?
Yes. Florida found the condensate collection system and the integrated chlorine-dioxide facility and replacement bleach plant exempt because they were installed to meet environmental requirements…
Is a corporate 'in-house bank' that mainly lends to its own affiliates a 'financial service company' for Connecticut corporation business tax -- even though the loans are to related parties?
Yes. A corporate 'in-house bank' subsidiary that derives more than 50% of its gross income from loans is a 'financial service company' under Conn. Gen. Stat. § 12-218b(a)(6)(J) -- and it does NOT…
Which medical products in the company's item list were taxable?
It depended on the item. Florida marked each of approximately 250 listed products as taxable or exempt. Prescription-dispensed products and specifically exempt categories could qualify, while…
Was a hotel tradename fee taxable, and how was taxable rent allocated?
The separately stated tradename fee was not taxable because the name had independent value and the arm's-length lease reasonably allocated 30% of the payment to it. For the real-property rent,…
What property-tax changes did the Kansas Division of Property Valuation identify from the 2000 legislative session?
Kansas identified new or clarified exemptions for transit vehicles, some greenhouses, and renewable-energy property; wetlands and oil-and-gas valuation changes; written-reason requirements and…
I paid income tax on my contractor income but didn't know New Mexico gross receipts tax applied — can I get back the penalty and interest?
No — the protest was DENIED. Johnny Griego spent 18 years as an independent contractor delivering bulk mail for the Post Office, paying income tax but never gross receipts tax, unaware it applied to…
When a single invoice includes items taxed at two different combined local tax rates (e.g., because they ship to different taxing jurisdictions), should the seller compute and round tax separately for each rate group, or add all the taxable amounts together first and round once at the end?
Round separately by rate group, not combined. Rounding tax due is generally prohibited — tax must be added to the sales price using the statutory bracket system (Rule 3.286(d)(5)). When an invoice…
When a company leases construction equipment (with its own employees as operators) from its parent, and uses that equipment to unload, transport, and rough-set heavy generators for a general contractor, who owes Texas sales/use tax at each step — and should equipment bought for this purpose be purchased under a resale certificate or with tax paid up front?
It depends on what the equipment is actually used for. A company that uses leased equipment and its own employees to receive, unload, transport, and rough-set items for a customer is providing a…
Can I move real estate into an LLC, partnership, or corporation without paying Connecticut real estate conveyance tax, if my beneficial ownership doesn't change -- even though I might transfer interests later?
Yes. A transfer that merely changes the form or identity of ownership -- with no change in beneficial ownership -- is exempt from Connecticut real estate conveyance tax under Conn. Gen. Stat. §…
If a vendor refuses to accept a properly completed Texas resale certificate, can the buyer still avoid paying sales tax on items it intends to resell?
Yes, indirectly. A vendor is not required to accept a resale certificate even if it is properly completed. If a supplier refuses one, the buyer can reimburse itself for the Texas sales tax it paid…
Could a seller initially rely on a nonresident dealer's export statement instead of charging Florida tax?
Yes. The seller could accept a nonresident dealer's statement and initially ship without Florida tax, including for multiple shipments, foreign dealers, and goods temporarily stored in Florida…
Does an independent contractor who performs state-required accessibility (TAS) plan reviews and inspections on buildings, and also does related consulting, owe Texas sales tax or need a sales tax permit?
No sales tax is due on the review and inspection fee charged to determine compliance with the Texas Accessibility Standards (TAS), and expert or professional consultation services are not taxable…
Can an architecture firm get a Texas sales and use tax permit to buy computer equipment for a project, and avoid paying tax on that purchase by reselling the equipment to a tax-exempt government customer (a municipal airport)?
Yes. An architecture firm — even one not typically in the business of reselling equipment — can obtain a Texas sales and use tax permit in order to purchase computer equipment that will be resold,…
When an advertising agency has printed folding advertisement cards made and places them in racks at hotels/motels for tourists to take, and charges restaurant clients a flat fee to be featured on the cards, is the agency selling a nontaxable advertising service or a taxable sale of tangible personal property?
It's a taxable sale of tangible personal property, not a nontaxable advertising service. Rule 3.321(c) treats an advertising agency in this fact pattern as a retailer of the advertising cards it…
When a commercial-production company gives its raw daily footage ('dailies') to the client at no extra charge, alongside the paid final production, does it owe sales tax on that transfer?
No. Sales tax is not due on the transfer of dailies (raw, unedited daily footage from filming) to the client when the client pays nothing extra for them and receives no separate consideration in…
Is the ink-jet addressing equipment a mailing house uses to address envelopes exempt from tax, and does charging sales tax on a single combined bill for printing and mailing services matter?
The ink-jet addresser itself does not qualify for a tax exemption, because it's used to provide a nontaxable mailing service rather than to manufacture a product for sale. But a separately stated…
Can a designated Enterprise Project get a state sales/use tax refund on building materials where the tax was paid by its contractor under a cost-plus construction contract, if the invoices separately itemize the material cost and tax passed through to the client?
It depends on whether the underlying contract is genuinely lump-sum or separated — the Comptroller couldn't answer definitively without reviewing the actual contract and billings, but cautioned that…
If a tax-exempt nonprofit hires a for-profit company to produce a carnival-style amusement event on its behalf, does the for-profit company's ownership of the amusement rights and share of any profit make the event's admission charges subject to Texas sales tax?
No. A nonprofit (non-governmental) organization can hire a for-profit company to produce an amusement event without losing its sales tax exemption, as long as the nonprofit holds itself out as the…
Can a private boat/yacht club buy the floating drums for its members' boat-slip docks tax-free under a resale certificate, since the club already charges its members sales tax on boat slip rental? And can it buy free-to-use member boats tax-free the same way?
No for the floating docks, yes for the boats transferred to members. A private boat/yacht club cannot buy the floating drums and materials for its members' boat docks tax-free under a resale…
When is a portable building, prefabricated steel shelter, or similar item like playground equipment or picnic tables just taxable tangible personal property, and when does installing it turn the deal into a real-property improvement contract instead?
It depends on the installation. Items sold free-standing or that only need above-ground mounting/anchoring (like playground equipment, picnic tables, benches, and outdoor athletic equipment) stay…
Did a proficiency-testing organization sell test specimens to South Carolina laboratories, or did it owe use tax as the user of those materials?
The organization used the specimens to provide its testing service and owed South Carolina use tax when they were sent to in-state laboratories. Qualifying tax due and paid to another state could be…
What South Carolina interest rate applied to tax underpayments and overpayments from July through September 2000?
The rate was 9% for July 1 through September 30, 2000, compounded daily except that simple interest applied to underpaid declarations of estimated tax.
Does simply exhibiting at a trade show in Texas create nexus, requiring an out-of-state exhibitor to hold a Texas sales and use tax permit?
Yes, if the exhibitor sells taxable items at the show, takes orders there that are later accepted out of state, or uses the show to promote future sales. Per Comptroller Publication 96-276, any…
Can an engineering firm doing work for tax-exempt entities (like municipalities) buy surveying/CAD services, software, and testing materials tax-free, on the theory that those items end up transferred to the exempt client as part of the engineer's service?
No — the engineer must pay tax on those items when it buys them, even though they end up transferred to the exempt client after the engineer uses them. Under Tax Code § 151.151, a purchaser may only…
For a software/hardware consulting company doing internet-era work — rendering vs. creating HTML documents, server co-location/administration tasks, and charging for access to a database it maintains online — which of these services are taxable in Texas, and how?
A mixed bag. Rendering (reformatting) an existing HTML document is taxable data processing, same as creating one (Rule 3.330(a)); as of October 1, 1999, 20% of data processing/information service…
When a company leases GPS units to golf courses that in turn charge golfers a fee to use them, who owes Texas sales tax — the company leasing to the course, or the course charging the golfer?
The golf course collects the tax, on the rental payment from the golfer — not the leasing company on its lease to the course. The golf course may issue the leasing company a resale certificate for…
Is power/pressure washing taxable in Texas, and does it matter whether you're washing a motor vehicle, other tangible personal property, or a building/sidewalk/parking lot?
It depends on what's being washed. A charge for power washing a motor vehicle (including tractor-trailer rigs, commercial vans, armored vehicles, tree-trimming vehicles, and bread vans) is NOT…
Were privately funded stadium furnishings exempt because a public authority placed the orders?
No. Florida treated the private team as the real purchaser because it funded and selected the furnishings, bore insurance and other ownership costs, and had exclusive use for their useful life. The…
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