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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Is the sale and delivery of an aircraft in Kansas to a nonresident buyer exempt from Kansas sales tax if the plane is flown out of the state within ten days?
Yes, if two conditions are met. The Department agreed that a simultaneous sale and delivery of an airplane in Kansas is exempt from Kansas retailers' sales tax when every entity in the ownership…
A commercial mortgage held by a REMIC securitization trust is being defeased: the borrower gets a fresh loan secured by U.S. Treasury securities instead of real property, a new special-purpose successor entity takes over that Treasury-backed obligation, and the ORIGINAL mortgage and note get assigned to a brand-new lender as consideration -- with the original borrower still on the hook for the original mortgage debt, just now owed to the new lender. Does any of this trigger fresh mortgage recording tax, and can the new lender record a supplemental mortgage afterward tax-free?
No new mortgage recording tax on the assignment itself; a later supplemental mortgage stays tax-free too, unless it adds new debt. In a commercial mortgage defeasance, the original borrower owes a…
What CPI percentage did South Carolina publish for a local government's 2000 general-operating millage calculation?
It published 2.2% as the 1999 CPI-U increase used to determine how much a local governing body could increase its 2000 general-operating millage under the cited rule.
For a Kansas STAR bond project, do sales taxes on event tickets sold off-site count toward the bond repayment increment, and does the seller need an on-site office?
Off-site ticket sales still count. For a motorsports facility financed with STAR bonds, the Department ruled that all ticket sales the operator reports as gross receipts and pays sales tax on —…
In Kansas, can property a business rents out still qualify for the merchant's inventory property-tax exemption, or does depreciating it for federal taxes disqualify it?
Yes, it can. Following the Kansas Supreme Court's decision in Board of Sedgwick County Comm'rs v. Action Rent to Own, Inc., 266 Kan. 293 (1998), the Division directs that a capital asset depreciated…
In Kansas, is bare land with no building on it always taxed at the low 12% vacant-lot rate, even if a business is actually using it?
No. The Division directs that "[u]nimproved land should be classified as commercial real property when it is used for commercial or industrial purposes" -- which means a 25% assessment rate, not the…
Is a tenant's late rent fee subject to Texas sales tax as a taxable 'debt collection service,' and does it matter that a property management firm collects the fee on behalf of the property owner?
A tenant's late fee for paying rent late (a straightforward contractual sanction, not yet a delinquent-account collection effort) is not a taxable debt collection service under Rule 3.354, so the…
When a retailer sells its credit-card receivables to a financial institution, can the retailer claim a sales tax bad debt deduction for accounts the institution later writes off — and does it matter whether the sale to the institution is a true recourse arrangement or a discounted factoring sale?
It depends on which one the arrangement actually is: a retailer that factors receivables with a genuine recourse provision can claim a bad debt deduction on accounts written off as a result of that…
When could a homeowners' or property owners' association qualify for the former Texas franchise-tax exemption, and was there a fixed percentage of lots that had to be sold?
An association could be considered only if it was a nonprofit corporation organized and operated primarily for residential property, the development was legally restricted to residential use, and…
Does the Texas exemption for labor and materials to repair large commercial vessels (Rule 3.297(b)(2)) cover charges for renting equipment like scaffolds used during the repair?
No. Rule 3.297(b)(2)'s exemption covers labor and consumed materials (like sand for sandblasting or solvents) used to repair a commercial vessel over eight tons, but it does not cover equipment —…
Does forming a Montana holding company to buy and register a motor home avoid Utah sales and use tax if the vehicle is actually kept and driven in Utah?
No, it doesn't work. If a motor home is purchased and titled through a Montana holding company but is actually operated and stored in Utah, Utah law treats the vehicle as subject to Utah sales and…
A man took irregular 'draws' to run his mother-in-law's New Mexico store instead of a wage. Did that money owe New Mexico gross receipts tax, or was it exempt employee pay?
Denied. The $18,365 he drew for managing the family gas-station/grocery/bar in 1994 was subject to gross receipts tax. He was not an employee — no one supervised or directed his work and he…
Does Tennessee allow the same vehicle trade-in sales-tax credit when the traded vehicle is titled and registered in another state?
Yes. The location where the trade-in vehicle was titled and registered did not affect the Tennessee trade-in rule. For a qualifying like-kind vehicle trade-in, sales tax was computed on the new or…
A 501(c)(3) organization planned to sell taxable items at a Texas convention spanning two days. Does that use up both of its allowed one-day tax-free sales for the year, or does it still count as just one?
It uses up both. A Texas-exempt 501(c)(3) organization gets two one-day, tax-free sale days per calendar year (and the same allowance applies to each bona fide chapter), but selling over a two-day…
When a business that provides a taxable service separately bills a client for its own travel expenses (airfare, meals, hotel), are those reimbursed expenses part of the taxable sales price?
Yes. Travel expenses billed by a provider of a taxable service are part of the taxable sales price and are subject to Texas sales tax — Tex. Tax Code § 151.007(a) does not allow the sales price of a…
Are membership dues paid to a professional/trade association subject to Texas sales and use tax?
No. Membership dues paid to a professional association are not subject to Texas sales and use tax.
If a Texas seller ships or personally delivers a taxable item to a customer outside Texas, is Texas sales tax due — and what proof should the seller keep?
No Texas sales tax is due when a Texas seller ships or delivers a taxable item to a location outside Texas. The seller should keep documentation proving the out-of-state delivery — a shipping…
Were fees for licensing country-club kitchens, ballrooms, and restaurant space to a food concessionaire subject to Florida sales tax?
No. Florida treated the golf course as a recreational facility, so licensing clubhouse dining areas to an operator providing restaurant and catering services qualified for the food-and-drink…
Where did Florida impose sales or use tax and local surtax when a contractor fabricated modular homes and erected them elsewhere?
Florida taxed the contractor's direct material costs where it fabricated the factory-built homes, even when it erected one in Georgia. Any local surtax was based on the fabrication county, not the…
When a country club bills its golf members a monthly assessment to pay for a capital improvement (like a new cart path), is that assessment subject to Texas sales tax — for both equity members (who've vested capital in the club) and non-equity members?
Yes for both. A capital improvement assessment billed to a private club's golf members is taxable regardless of whether the member is an equity member (who has vested capital and voting rights) or a…
A meat packaging plant uses a hot-water pasteurization cabinet, acetic acid sprays, dust-removal acid wash, sanitizing chemicals, conveyors, and a cooler as part of USDA-mandated processing. Which of these qualify for Texas's manufacturing/pollution-control sales tax exemption?
It's item-by-item, not all-or-nothing. The hot water pasteurization cabinet and acetic acid used to kill bacteria qualify for the exemption, and sanitizing/cleansing chemicals used on the processing…
Can a Texas local taxing jurisdiction impose local sales tax on direct-to-home satellite television programming?
No. The federal Telecommunications Act of 1996 preempts local taxing jurisdictions from imposing sales tax on direct-to-home satellite programming, so no local sales tax is due on satellite…
When a restaurant building is subleased to a franchisee together with a separately billed charge for the restaurant equipment, is sales tax due on the equipment rental charge?
No. Under Rule 3.294(k)(1), if a real property lease/rental contract also includes the lease or rental of tangible personal property (like restaurant furniture or equipment) as part of the same…
Is filter fabric used under railroad ballast an exempt railroad supply, and is the labor to install it in an existing track repair taxable?
The filter fabric itself is exempt, the same as the ballast, rails, cross ties, plates, and spikes it's installed alongside — it qualifies as a supply essential to the operation of locomotives and…
Does a financial-risk-analysis firm owe sales tax on the prewritten software it buys and uses to generate its reports, and does it have to charge customers sales tax on its portfolio risk-analysis and stress-test services?
Two different answers for two different things. The prewritten Algorithmics software the company buys and uses internally to help generate its risk reports is a taxable purchase, since it's used in…
Are pool tables and shuffleboard tables in a bar subject to Texas sales tax, and does it matter whether they're coin-operated?
It depends on how customers pay. Amusement services like pinball games, pool tables, and shuffleboard provided through coin-operated machines that the consumer operates directly are exempt from…
When did a trust administered by an out-of-state bank avoid Florida's annual intangible personal property tax?
A trust was exempt when the specified trustee location was outside Florida and no one in Florida managed or controlled its assets. A Florida employee's investment advice alone did not create taxable…
What periods do RIB 00-4's job-credit, corporate-moratorium, and fee-in-lieu county lists cover?
Its job-tax-credit rankings and per-job amounts apply to tax years beginning in 2000, while the bulletin expressly labels its corporate-tax-moratorium and reduced fee-in-lieu county lists as 1999 lists.
A radiator repair shop wants to charge customers an environmental disposal fee. Is that fee taxable, and does it matter whether the radiator being repaired belongs to a motor vehicle or to other equipment?
The environmental disposal fee is taxable only if the underlying radiator repair itself is taxable — it's treated as just another cost of the repair, folded into the taxable sales price under Sec.…
What did the original TAA 00B4-001 say about documentary stamp tax on Florida real estate transferred through two mergers?
The original ruling said no tax applied if the governing out-of-state law vested the property in each surviving entity by operation of law without a deed. The document expressly directs readers to…
A mobile-home set-up contractor's Type 5 resale certificates were lost in a move and the dealers had gone out of business. Could he still deduct those receipts from New Mexico gross receipts tax?
Denied. To deduct receipts from selling a service for resale (Section 7-9-48), the contractor had to have the buyers' nontaxable transaction certificates (NTTCs) in hand within 60 days of the…
What local sales tax rate does a lump-sum contractor pay on materials for a new construction project, when the contractor buys those materials from a Houston vendor?
A lump-sum contractor performing new construction is the consumer of the materials incorporated into the building and pays sales tax based on the VENDOR'S location and delivery point — not the job…
Is 'fishing' (retrieving lost tools or equipment from a wellbore) a taxable service under Texas's oil and gas well service rules?
It depends on when the fishing happens. Rule 3.324(d)(1)(C) generally makes fishing for rods or tubing a taxable activity, but Rule 3.324(d)(4) carves out an exception: fishing services are NOT…
How did Tennessee sales and use tax treat a QSSS and a federally disregarded single-member LLC?
Tennessee reached different results. A QSSS remained a separate sales-and-use-tax filer, so related motor-vehicle transfers were taxable and manufacturer status did not transfer or combine. A…
When is a Kansas sale exempt because the goods are shipped out of state, and what proof of out-of-state delivery does Kansas accept?
It depends on how the goods leave Kansas. When a Kansas seller is obligated to deliver property to a point outside Kansas, or delivers it to an interstate common carrier or the mails for shipment…
Can a Kansas retailer buy promotional merchandise tax-free for resale, and how is tax handled when the items are given away as premiums or prizes?
Yes, with a resale certificate — and the give-away treatment varies. A Kansas retailer can buy promotional merchandise exempt with a resale exemption certificate, because at purchase it isn't known…
Did an electric utility's securitization issuer owe pre-2008 franchise tax on transition charges or short-term earnings, and did the letter decide property tax?
The described issuer excluded transition-property transactions, transition charges, and short-term earnings on accumulated bond funds and the initial cash requirement from taxable capital and…
How is scaffolding erection and dismantling labor taxed for a Texas contractor across five different scenarios: periodic maintenance, a taxable service, new construction, re-renting scaffolding as the rental company, and erecting/dismantling a customer's own scaffolding?
There is no single answer — it depends entirely on what's actually being sold. As a general rule, contractors performing real property services are the 'consumer' of scaffolding they use and must…
Can a security company buy its 'security vehicles' tax-free for resale, when some vehicles are leased out with a uniformed driver providing patrol services and others are leased out empty for customers to park and move themselves?
It depends on how each vehicle is used, and it can't be mixed. Vehicles the company leases out WITH a licensed security-guard driver are an inseparable part of a taxable protective/patrol service --…
Is an online service that authenticates a customer's identity and electronically delivers a 'Digital ID' (a digital certificate for secure internet transactions) subject to New York sales tax?
No. Delivering a Digital ID -- an electronic identity credential, not a text file or software product -- over the internet doesn't match any of New York's specifically listed taxable services, so…
Is professional 'proficiency testing' of Connecticut labs a taxable service, and does the out-of-state provider owe Connecticut use tax on the test materials it ships into the state?
Two answers. The proficiency-testing service itself is NOT taxable: though it looks like taxable 'business analysis,' it's excluded because it is performed by a profession (pathologists) under the…
Are receipts from coin-operated car washes subject to Kansas sales tax, and how does the operator calculate the tax from the money in the machine?
Yes, they are taxable. The Department ruled that receipts from car washes of all types are subject to Kansas sales tax, including every coin-operated wash whether fully automatic or a manually…
How is a water softener sold and installed in a Kansas residence taxed?
Tax the softener, not the residential installation. The Department ruled that when a vendor sells a water softener to a homeowner, it charges sales tax on the full retail selling price of the…
Does an aircraft-owning LLC's lease of its jet to an aviation operator, which then charters the plane exclusively to one affiliated company at cost-reflecting rates, qualify for New York's commercial-aircraft sales tax exemption even though the plane serves only a single customer?
Yes. Because the charter payments the aviation operator receives reasonably reflect its actual costs of maintaining and flying the aircraft -- and the plane is devoted entirely to providing…
Is a country club's capital improvement fee on its members subject to Kansas sales tax?
Yes, based on the facts given — the capital improvement fee is taxable dues. The Department ruled that under K.A.R. 92-19-73, which taxes dues charged for the use of club facilities for recreation…
Could New Mexico tax Kmart's Michigan trademark subsidiary on royalties from New Mexico store sales even though it had no offices or employees in the state?
Yes — New Mexico could impose corporate income, franchise, and gross receipts taxes on Kmart Properties, Inc. (KPI), but the negligence penalties were improper, so the protest was GRANTED only as to…
Could an affiliated group stop filing Florida consolidated corporate income-tax returns after major business expansion?
Yes, with Department permission and stated conditions. Although continued consolidation caused no identified adverse tax effect or income distortion, the group's acquisitions, increased size, and…
A company plans to hold a Texas seminar training pharmacists on preparing compounded pharmaceutical products, and will provide notebooks and workbooks as part of the training. Is the training taxable, and who pays sales tax on the materials?
The training itself is not subject to Texas sales tax. If the seminar provider gives materials like notebooks or workbooks to attendees as part of the seminar (bundled into the price), the PROVIDER…
In a four-party chain — a telecom provider (Company A) selling to a reseller (Company B), which sells a bundled WAN service to a service company (Company C), which in turn charges a property owner (Company D) — where in the chain is Texas sales tax actually due?
Wide-area network (WAN) charges are taxable as telecommunications services, but the tax only attaches at certain points in this four-party chain. Company A's charge to Company B is taxable. Company…
Is replacing the vinyl liner of an in-ground swimming pool -- pumping out the water, removing the old liner, repairing the pool walls, and installing a new liner -- a tax-exempt capital improvement, or a taxable repair?
It's a capital improvement, not a taxable repair. Replacing the vinyl liner of an in-ground pool -- along with the related draining, removal, wall repair, and reinstallation work -- substantially…
Is a public university's $5 'vehicle registration fee' -- which the university says isn't a parking fee, but which its own rules describe as buying a parking permit -- subject to sales tax as a charge for parking?
Yes. Even though the university calls it a 'vehicle registration fee' rather than a parking fee, its own parking rules repeatedly describe the same $5 payment as buying a 'parking permit' that lets…
When a company buys a 25% 'interest' in a private jet through a fractional-ownership program -- where a separate management company controls scheduling, pilots, maintenance, and can substitute other aircraft -- is that purchase a taxable acquisition of an aircraft, or a nontaxable transportation service?
It's a nontaxable transportation service, not a taxable purchase of an aircraft. Because the fractional-ownership program's independent Manager -- not the purchasing company -- retains real dominion…
When disregarded single-member LLCs charge their tenants for utility services, which entity files the Form CT-186-A utility services tax return?
Each LLC files its own return, not the parent. Where domestic single-member LLCs (S1, S2, S3) -- disregarded for federal income tax but each owning an office building and charging tenants for…
A contractor performs actual repairs (not maintenance) to nonresidential real property and buys parts/materials at a hardware store to incorporate into the job. Can the contractor use a resale certificate to buy those materials tax-free, and does it matter whether the bill to the customer separates labor from materials?
Yes — because nonresidential real property repair is itself a taxable service, the contractor may give the hardware store a resale certificate and buy the materials tax-free, since the materials…
Are rented uniforms and 'lab coats' costing less than $50 exempt from Connecticut sales tax, or are they taxable 'protective' clothing?
Exempt. Rented uniforms and 'lab coats' that cost less than $50 each and simply identify employees or protect against soil and stain are exempt articles of clothing under Conn. Gen. Stat. §…
Did a Tennessee municipality owe sales tax on fees from its family recreation center, meeting rooms, and fitness counseling?
No. Tennessee found none of the described receipts taxable: municipal recreation and amusement fees were expressly exempt, meeting-room rentals were not transient lodging, and fitness or nutrition…
I inspect homes and buildings, sometimes for insurance purposes and sometimes just because someone is buying or selling the property. Which of these inspections are taxable, and do I need a sales tax permit?
Inspections performed for insurance purposes (evaluating property risk for insurance coverage) are taxable insurance services under Rule 3.355. But an inspection done for the purpose of selling or…
How much of a mobile-home park ground lease was subject to Florida sales tax when most pads were long-term dwelling units?
Only the share attributable to office, storage, and other non-dwelling or lessee-exclusive areas was taxable. The park could multiply total base and additional rent by a fraction using those taxable…
A company plugs holes drilled to record seismic data for an oilfield service company. Is this service taxable, and does it matter whether the bill separates the materials (bentonite) charge from the labor charge?
The hole-plugging service itself is not a listed taxable service, so a lump-sum charge (labor and materials not separately stated) is not subject to Texas sales tax — though the company must pay…
Do I need to periodically renew resale and exemption certificates I've collected from customers, and do I need my customers to show me a copy of their Texas sales tax permit?
No to both. There's no requirement to renew resale or exemption certificates once you have them on file, though it's wise to verify the customer's information (address, phone number, etc.) is still…
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