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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Do out-of-state consultants who work in Utah during the week but fly home on weekends have to register their vehicles in Utah?
Yes, they must register in Utah. A consultant who works at a Utah job site during the regular work week -- renting or otherwise establishing a place to stay in Utah, and commuting locally from that re…
Does replacing an old golf course sprinkler/irrigation system with a completely new one, laid in new trenches, count as nontaxable new construction?
Yes. A golf course, per TR 1263, is not as a whole an improvement to realty — rather, it's made up of a number of separate improvements to realty, each analyzed on its own. Installing a brand-new in-g…
When is a staff leasing arrangement exempt from Texas sales tax, and what happens if the leased employees perform otherwise-taxable services like data processing, security, or collections?
A staff leasing arrangement is exempt from sales tax only if it meets ALL of Rule 3.364(b)'s conditions: at least 75% of the assigned employees were previously the client's own employees for at least …
How may seal card and coin board games be built, approved, and sold under Nebraska's Pickle Card Lottery Act?
Seal card and coin board games are a legal form of pickle-card lottery, subject to detailed manufacturer standards. Under Revenue Ruling 35-97-2 (which supersedes 35-96-4), the Nebraska Pickle Card Lo…
Is a hotel's separately billed 'booking agent' fee part of the taxable hotel room rent, even when a foreign travel agent pays the room charge and fee separately?
Yes -- the 20-25% fee a hotel's own booking-agent entity charges a foreign travel agent for negotiating discounted room rates is part of the taxable rent for hotel occupancy, because the traveler can'…
Were typesetting charges for business forms exempt professional services when customers received a camera-ready board or computer file for approval?
No. The board or computer file was not an inconsequential part of the transaction, so the provider had to collect tax on the full typesetting charge.
Could a city agency buy materials tax-free for parkway landscaping, lighting, utilities, and road work while a general contractor managed the project?
Yes, after the contract adopted direct-purchase procedures making the city the real purchaser. Earlier purchases under the unamended contractor-purchase terms were not exempt.
Is a rental car company's separately billed 'booking agent' fee part of the taxable rental charge (and subject to the 5% special tax), even when a foreign travel agent pays the fee separately?
Yes -- the roughly 20-25% fee a rental car company's own booking-agent entity charges a foreign travel agent for negotiating discounted weekly rates is part of the taxable passenger car rental charge,…
Is an internet lead-generation company's sale of custom prospect reports to its clients subject to New York sales tax?
No -- "X"'s custom monthly reports of website-generated sales leads, delivered electronically or by mail to each client and billed per lead, aren't subject to sales tax, because each report is persona…
Are the initiation fees, dues, listing fees, and office assessments that local real estate boards charge for operating a multiple listing service subject to New York sales tax?
No, for most of it -- the one-time initiation fees, periodic dues/participation fees, listing fees, and office assessments that a multiple listing service charges participating brokers all escape New …
Does a foreign life insurer with no New York certificate of authority owe New York tax if it makes mortgage loans on New York commercial real property?
It is doing business under Article 33 but, in practice, owes no tax. A life insurer that makes mortgage loans on New York commercial real property (sending employees in to find borrowers, do due dilig…
If a Utah telecom company bundles internet access, paging, and calling minutes into one monthly price, does the whole bundle owe sales tax?
It depends on how the bill is written. Intrastate telephone service, paging, and related charges are taxable in Utah, while internet/online access isn't -- but if a company bundles taxable and non-tax…
Is a 16-ounce packaged jar of hot sauce subject to Texas sales tax?
No. A 16-ounce jar of hot sauce is presumed to be sold for home consumption rather than immediate consumption because of its packaging and size, so no Texas sales tax is due on the sale.
Could a company use an intended later restructuring or another entity's apportionment factor to reduce former Texas taxable capital?
No. Texas required the taxpayer's taxable-capital component to reflect its actual financial condition at the relevant period end and its own apportionment activity. The Comptroller rejected using anot…
Can an employee get a refund of all New Mexico income tax withheld by filing a return that reports zero income on tax-protester theories that wages aren't taxable?
No — the refund was denied. Wages are income under both federal and New Mexico law, so an employee who filed a 'zero income' return to reclaim all the tax withheld from his $49,000 salary was not enti…
If a subcontractor never gets a resale certificate from the general contractor on a separated construction contract, who owes sales tax on the materials -- even though the ultimate customer holds a direct-pay permit?
The subcontractor (Company B) must bill and collect sales tax on the materials under the separated contract, because it never received a valid resale certificate from the general contractor (Company A…
Do heavy trailers used only for on-site storage still qualify for Connecticut's commercial-truck sales-and-use-tax exemption if they weigh over 26,000 pounds?
Yes, they qualify. Trailers with a gross vehicle weight rating over 26,000 pounds can be bought or leased exempt under Connecticut's commercial-truck exemption (Conn. Gen. Stat. § 12-412(70)) even whe…
We're a nonprofit local development corporation that helps finance small-business construction projects through the SBA 504 loan program, using sale/leaseback, installment sale, or lease/leaseback structures where we briefly hold title or a leasehold interest. Are our purchases (or the contractor's purchases as our agent) exempt from sales tax, and is a mortgage where we're named as mortgagee exempt from mortgage recording tax?
Both exemptions are available, but with conditions. Greater Syracuse Business Development Corporation, a Not-For-Profit Local Development Corporation reincorporated under N-PCL § 1411, helps finance s…
Are a medical cost-containment company's case management, utilization review, bill audit, and other services subject to New York sales tax?
Mostly not taxable -- Petitioner's client's field/telephonic case management, first-report filing, utilization management, independent medical exams, peer reviews, hospital bill audits, and Social Sec…
Are a family-run sailboat charter operator's day-cruise fees (including a boxed lunch) subject to New York sales tax?
No -- Petitioner's day-charter sailing excursions on Lake Champlain (including the boxed lunch) are a nontaxable transportation service, not a taxable boat rental, because Petitioner personally retain…
Are a product-testing lab's testing fees, sales of test-swatches, and lab equipment purchases subject to New York sales tax?
It's split by category -- Petitioner's product-testing fees and confidential result reports aren't subject to sales tax at all, but its sales of dust-sebum swatches, soiled fabric, and testing soils t…
Is bottled water subject to Utah sales tax at retail and at wholesale, and what does an out-of-state bottler need to do to register and collect Utah sales tax?
Retail sales of bottled water — still or carbonated — are subject to Utah sales and use tax, because water in bottles, tanks, or other containers is expressly included in the statutory definition of t…
How does a refinery or chemical plant prove that turnaround maintenance work qualifies as tax-favorable "scheduled periodic" maintenance rather than taxable repair, especially before a repeat pattern has been established?
To support the "scheduled periodic" element under Rule 3.357(a)(4) even without an established repeat pattern, either the same work must be performed at each turnaround, or the turnaround contract its…
Does a defense contractor owe New Mexico gross receipts tax on federal R&D work performed for a New Mexico lab, when the reports were delivered in New Mexico even though the project ultimately failed?
Yes — the protest was denied. A Massachusetts defense contractor doing 'Star Wars' R&D support for a lab at Kirtland Air Force Base owed New Mexico gross receipts tax. Delivering its monthly reports t…
Did a Texas vehicle with a newly installed left accelerator qualify for the orthopedic-disability tax exemption?
No, on the facts presented. A left accelerator was qualifying adaptive equipment, but the vehicle already had more than 3,700 miles before the modification. The Comptroller treated that mileage as sho…
When did Florida's warehouse-mortgage exemption prevent documentary stamp and nonrecurring intangible tax on a lender's loan, collateral assignments, and purchased loans?
The out-of-state warehouse agreement was untaxed, and Florida collateral assignments were exempt if prior tax on the collateral obligations had been paid. Loan purchases, non-Florida assignments, and …
How should restricted company stock be valued for Florida intangible-tax purposes after a put option expired but a right of first refusal remained?
The stock had to be valued using the factors customarily considered in determining fair market value. The ruling did not approve a specific formula, price, or discount.
Were promissory notes subject to Florida documentary stamp tax when the principal depended on future advances and could not be fixed or determined before payment?
No. Because the notes stated no fixed or determinable sum at execution or before payment and the balance depended on future calculations, they were not taxed under section 201.08.
Is compensation an employer pays employees for using their own personal tools on the job subject to Texas sales tax as a taxable lease or rental?
Not automatically. The Comptroller's longstanding position is that additional compensation or reimbursement paid to employees for using their own personal tools is NOT taxable, as long as the employee…
Does owning an interest in — or being a partner in — a partnership that does business in Texas make a corporation 'doing business' in Texas for franchise tax?
It depends on the type of partner: a general partner is doing business in Texas if the partnership is, but a limited partner is not — if its only Texas connection is the partnership interest. The Comp…
If a bulletin-board-service (early internet) provider mistakenly paid sales tax for years on dedicated phone lines it actually bought tax-free for resale, how does it get that overpaid tax refunded?
The dedicated telephone lines were purchasable tax-free for resale under Tax Code § 151.006(1), since the provider was reselling the taxable telecommunications service to its bulletin-board clients. H…
Was a free monthly city publication containing 60% to 70% advertising exempt as a shopper or community newspaper, or taxable as a magazine?
It was taxable as a magazine. Its look, content, and repeated self-description as a magazine were incompatible with the narrowly construed shopper and community-newspaper exemption.
Was a separately stated, voluntary GAP charge included in the taxable sales price of a financed motor vehicle?
No. Because the buyer alone chose whether to purchase the GAP product and its charge was separately stated, it was incidental to the vehicle sale and outside the taxable sales price.
Can a private developer get a refund of sales tax paid on materials used to build an office building that it then leases to the State of Texas under a lease-with-option-to-purchase?
No refund here. Section 151.311 exempts materials incorporated into realty improvements built for the primary use and benefit of an entity exempt under § 151.309 (governmental) or § 151.310, but on pr…
Is acid used to clean out a farm/ranch irrigation well, or the well-bailing service itself, exempt from Texas sales tax as agricultural machinery repair?
Yes, both are exempt. Bailing sand out of a farm/ranch irrigation well is nontaxable as the repair of agricultural machinery or equipment, and the acid sold to clean out the well for that purpose is l…
Does a funeral home need to collect sales tax on additional prayer cards, crucifixes, flowers, or motor escorts that get added to and separately invoiced under an existing itemized funeral service contract?
No, the funeral home does not have to collect and report sales tax on those additional items, because they are furnished under the original itemized funeral service contract (as required by state and …
Is a company's business of standardizing and structuring MRO (maintenance, repair, and operating) materials descriptions for clients a taxable data processing service in Texas, even for the parts of the work not actually done on a computer?
Yes. Providing customized materials cataloging is a taxable data processing service under Tax Code § 151.0035 and Rule 3.330(a), which cover information compilation and computerized data manipulation …
Is a chartered ocean-liner business conference held in international waters subject to New York sales tax?
No -- because Richmond Events' entire business-conference program (meetings, meals, accommodations, and use of the ship's facilities) takes place after the chartered ocean liner has left New York Stat…
Should a hotel pay sales tax on a vendor's labor and material charges for repairing a large neon sign permanently attached to the building?
No. The sign was an improvement to real property, and without an advance itemized contract the repairer was the taxable consumer of materials. It should pay tax on parts but not charge tax on the hote…
Could a Texas rental company separately charge customers for title, registration, property-tax, and toll-road costs?
Yes. The 1997 letter allowed a rental company to separately charge customers for title fees, registration fees, and prior-year fleet property taxes, but the invoice had to label the charge as a reimbu…
What portions of an assisted-living operator's facility lease and resident payments were subject to Florida sales tax?
Only the operator's pro rata rent for commercial areas and unimproved grounds was taxable. Resident areas and care-support spaces were dwelling use, and one-year resident leases were exempt.
On a New York combined report, are a securities dealer's sales sourced to New York if they are made through a New York office of an affiliate in the same combined group?
Yes. On a combined report the receipts factor is computed as though the combined group were one corporation, with intercorporate receipts eliminated (20 NYCRR 4-4.7, 4-1.2). So a securities dealer's (…
If New Mexico wrongly denies my investment credit and grants it years later, does the state owe me interest for the delay?
The claim for interest was denied. Tortilla, Inc. — which runs Garduno's of New Mexico and Yesterdaves' Grill — had paid compensating tax on out-of-state food-preparation equipment and applied for a $…
Is a gas compression service taxable, and does it matter whether the compressor is instead leased or rented out to the customer?
Gas compression services performed under a contract where the provider never transfers possession or control of the compressor to the customer are NOT taxable -- it's a service, not a rental or lease,…
Were mandatory social-membership dues paid to a homeowners association for common recreational facilities subject to Florida sales tax?
No. The dues were required as a condition of property ownership, enforced by a lien and foreclosure rights, and supported common-area facilities. Optional golf, tennis, food, and beverage charges rema…
Is the sale of a house that a house-moving business removes from one lot and relocates to another taxable, and does it matter how the contract itemizes the house price, moving cost, and foundation work?
A house attached to realty is generally not taxable to sell, but once it's detached from realty and sold WITHOUT installation, it becomes a sale of tangible personal property, and sales tax is due on …
Could a seller claim a Texas motor vehicle sales tax refund or deduction for bad debt?
No. The Comptroller said motor vehicle sales were taxed under Tax Code Chapter 152 and that Chapter 152 contained no bad-debt provision. The letter did not decide the separate treatment of items taxed…
Does Farm Credit Bank of Texas have to charge and collect Texas sales tax on the payroll, appraisal, marketing, and other administrative support services it provides to farm credit associations across the state?
No -- the Comptroller cannot require Farm Credit Bank of Texas to charge and collect Texas sales and use tax, because it and its chartered associations are instrumentalities of the United States Gover…
Could a borrower credit Florida stamp and nonrecurring intangible tax paid on existing mortgages when recording a new mortgage securing the same out-of-state debt?
Yes. Previously paid tax could offset tax on the new mortgage, leaving tax tied to the added Florida collateral. Prior intangible-tax overpayment eliminated new tax, but any refund required a separate…
Is a long-standing workforce-provision contract for a chemical plant's operational staff nontaxable as staff leasing, even though the contractor directs supervision, assumes liability, and can subcontract work?
No -- based on the contract terms described, this arrangement is an independent-contractor services agreement, not staff leasing, so Rule 3.364(c)'s staff-leasing exclusion doesn't apply. Tasks perfor…
If a New York real estate partnership contributes each of its properties to its own single-member LLC, does the partnership still file one combined NY partnership return, or must each LLC file its own return and pay the LLC filing fee?
One combined return. Because none of the LLCs elect corporate ('association') tax status, each single-member LLC is disregarded as an entity separate from the Partnership under the federal check-the-b…
If a divorce separation agreement directs part of a partner's accrued partnership income to be paid directly to his ex-wife, does he still have to report that amount as his own income for New York tax purposes?
Yes. Because the payments to the ex-wife represented income the taxpayer himself earned as a partner (not a transfer of property), the assignment-of-income doctrine applies and he must include the ful…
Is a 21-unit residential condominium whose only revenues are common charges and interest subject to the Article 9-A franchise tax for tax years 1991 through 1995?
Yes. A residential condominium -- even a small one with only common-charge and interest income and no commercial or recreational facilities -- is generally an association taxable as a corporation unde…
Is a residential condominium association that files federal Form 1120-H subject to the New York Article 9-A franchise tax for tax years 1991 through 1995?
Yes. A residential condominium association is generally classified as an association taxable as a corporation under IRC section 7701(a)(3), so it meets the New York definition of corporation in Tax La…
Are companies that provide enhanced fax services (formatting, merging, and broadcasting documents) taxed as telephone/transmission companies, telecommunications providers, or utilities, or under Article 9-A?
They are taxed under Article 9-A, not as a telephone or transmission business. Enhanced fax services -- merging and formatting a customer's data, broadcasting it to many recipients at once, and report…
If a company calls its charges 'membership dues,' does that keep them out of Utah sales tax even though members are really paying for software access and an online database?
It's split. The Utah Tax Commission looked past the 'membership fee' label: the part of the fee that pays for using the company's canned computer software is taxable tangible personal property, but th…
Can a retailer use a single, electronically generated multi-purpose exemption statement at the point of sale instead of Utah's exemption-specific paper forms (TC-721)?
Eventually, yes, for a defined set of transactions. Utah initially resisted a single all-purpose exemption statement in place of its exemption-specific TC-721 forms, worried that a generic form skips …
If my bank wires a New Mexico tax payment one day late or to the wrong account, can the state still charge a penalty and a full month's interest?
The protest was denied. Southwestern Public Service Company — a utility that must pay its combined New Mexico taxes by wire under the special-payment rules — had its bank misdirect an October 25, 1995…
If a club's mandatory 18% gratuity is split between direct employee payments and employee benefits, does retaining part of it for benefits make the whole gratuity taxable -- and can "total direct compensation" include those benefits to satisfy the full-disbursement test?
A club charged an 18% mandatory gratuity on food and beverage sales, paying 15% directly to service employees and crediting the remaining 3% toward employee benefits (health/life insurance, holiday ti…
Were hourly aircraft-engine power charges taxable when they covered future inspection, maintenance, and repair costs?
Yes. The agreement indemnified the owner against covered aircraft repair costs, making each power charge taxable as service-warranty consideration when received, regardless of later repair timing or l…
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