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 a trust a Colorado 'resident trust' subject to Colorado income tax when its beneficiary lives in Colorado but the trust is administered by an out-of-state trustee?
No. A trust is a Colorado 'resident trust' only if it is administered in Colorado. Here the corporate trustee handles all day-to-day administration, books, and records from Delaware, so the trust is a…
If the state assesses gross receipts tax years late, and I had a bad accountant, can I at least get the penalty and interest waived?
No. The Administrative Hearings Office denied On-Site Case Management's protest. The owner, a case-management provider, had charged customers '7% sales tax' but never filed or paid New Mexico gross re…
Does a car-sharing company's base rental charge, membership fees, and various add-on fees get taxed under the Automobile Renting Tax, the sales/use tax, or neither?
The base rental charge for renting a car for a year or less is subject to the Automobile Renting Occupation and Use Tax (ART), not sales tax. Plain membership fees (with no included drive time) are ge…
Where can taxpayers find South Carolina Department of Revenue advisory opinions by tax topic through June 30, 2022?
Use the subject index attached to SC Information Letter #22-12. It organizes South Carolina Department of Revenue advisory opinions issued from 1987 through June 30, 2022 under administrative, alcohol…
How can taxpayers check whether a South Carolina Department of Revenue advisory opinion had been modified, superseded, or made obsolete through June 30, 2022?
Use the citator attached to SC Information Letter #22-11. It lists South Carolina Department of Revenue advisory opinions from 1987 through June 30, 2022 that the Department identifies as modified, mo…
Could a Florida travel agent sell an admission and restaurant gift card together as an exempt vacation package?
Yes, on the stated facts. The travel agent's bundled admission and restaurant gift card qualified as a vacation package because the gift card was treated as a nonincidental component, the package was …
Does transferring titled trucks from LLC members to the LLC itself qualify for the flat $15 Vehicle Use Tax rate as a business reorganization, instead of the regular vehicle-value-based tax?
The Department could not say. Based on the limited facts provided, Illinois could not determine whether transferring trucks from individual LLC members to the LLC qualified for the flat $15 Vehicle Us…
After I returned a used vehicle to the dealership and canceled my loan, can the Illinois Department of Revenue force the dealer to file a claim for credit to get back the sales tax I paid, so I can get my money back from the dealer?
No. The Department has no authority to compel a motor vehicle dealer to file a claim for credit for sales tax paid on a returned vehicle. Getting the dealer to file that claim (and to refund you the t…
Is a watercraft purchase from a licensed Illinois dealer exempt from Illinois sales tax if the watercraft itself is exempt from state titling and registration?
No. Buying a watercraft at retail from an Illinois dealer is subject to Illinois Retailers' Occupation Tax/Use Tax (commonly called sales tax) regardless of whether the watercraft is exempt from Illin…
What is the Kansas tax credit for contributions to community and technical colleges?
Kansas Notice 22-03 explains a tax credit for contributions to community colleges and technical colleges, created by 2022 House Bill 2239 (Section 42), which amended K.S.A. 79-32,261. For tax years 20…
Did Kansas repeal the accelerated monthly filing frequency for sales tax?
Kansas Notice 22-02 explains that 2022 House Bill 2136 (Section 18) amended K.S.A. 79-3607 to repeal the "Accelerated Monthly" sales tax filing frequency, effective July 1, 2022. Retailers' sales tax …
Is fencing for agricultural land or disaster repair exempt from Kansas sales tax?
Kansas Notice 22-01 explains a sales tax exemption for fencing, created by 2022 House Bill 2239 (Section 45), which amended K.S.A. 79-3606d. It provides two exemptions. First, a disaster-related exemp…
When was South Carolina's 2022 sales tax holiday, and which items could be bought tax-free?
South Carolina's 2022 sales tax holiday ran from 12:01 a.m. Friday, August 5, 2022 through midnight Sunday, August 7, 2022 (the annual 72-hour holiday under S.C. Code § 12-36-2120(57)). During it, eli…
What is South Carolina's tax interest rate for underpayments and overpayments for the period beginning July 1, 2022 (per SC IL #22-9)?
5%. SC Information Letter #22-9 sets South Carolina's interest rate on tax underpayments and overpayments at 5% for the period July 1, 2022 through September 30, 2022, up from 4% for the prior period …
What Illinois sales tax rate applies to home-baked goods (like flour-based baked goods vs. fudge or no-bake cookies) sold for pickup, delivery, or shipping, and does the rate change when selling at farmers' markets or other venues?
It depends on whether the item is "food," "candy," or a "soft drink" under 86 Ill. Adm. Code 130.310 -- not on the sales venue. Food for human consumption to be eaten off-premises (not prepared for im…
Does an out-of-state ESCO that resells electric power to Illinois commercial and industrial customers, without delivering or distributing the power itself, owe Illinois sales tax, electricity excise tax, electricity distribution tax, invested capital tax, or the Energy Assistance Charge?
No sales tax applies because electricity delivered by wire is excluded from the Retailers' Occupation Tax and Use Tax Acts. The Electricity Excise Tax, the Public Utilities Revenue Act's electricity d…
I filed a refund claim with my county for prior years' business tangible personal property tax, and the county denied part of it as filed too late under the appeal deadline -- but I thought refund claims had a longer filing window?
A locality can't treat your refund claim as if it were a formal "appeal" and then deny part of it under the shorter one-year appeal deadline -- refund claims have their own three-year statute of limit…
Did a Florida homeowners' association have to collect admissions tax on mandatory assessments used to maintain common recreational areas?
No. Mandatory assessments paid as a condition of property ownership and used to maintain common recreational facilities were not taxable admissions. The exception applied only while the fees met Fla. …
Are a contract manufacturer's fees and products for clinical-trial drugs subject to Tennessee sales tax, and does its equipment qualify for the manufacturing and R&D exemptions?
Mostly exempt. The Department ruled that the drugs a contract manufacturer makes for FDA-authorized clinical trials are exempt from Tennessee sales and use tax as prescription drugs for human use, bec…
Can a bakery avoid sales tax on the electricity and other utilities it uses to bake and freeze dough by claiming a manufacturing exemption?
No. The Missouri Department of Revenue ruled that a bakery's purchase of utilities (electricity, gas, water, etc.) used in its baking and freezing operations is NOT exempt from state sales tax. The Mi…
Do withdrawals from a federal Thrift Savings Plan (TSP) count as 'retirement benefits from sources other than privately funded sources' for the Missouri income tax subtraction under Section 143.124.5, RSMo?
MOSTLY YES, WITH ONE EXCEPTION: Withdrawals made in retirement from a Thrift Savings Plan (TSP) are treated as retirement benefits from sources other than privately funded sources under Section 143.12…
Can a trucking company use New Mexico's discounted one-way-haul rate without period-specific empty-mile records and exclude fuel or job-search miles?
No. Salaiz Trucking's protest of a $22,212.60 weight-distance tax assessment was denied. The two-thirds one-way-haul rate required customary one-way hauling, at least 45% empty mileage, a sworn applic…
Was an online platform a Florida marketplace provider when dealers invoiced customers and collected payment without the platform handling transaction funds?
No. The platform operated a marketplace by listing participating dealers' vehicle-parts inventory, but it was not a marketplace provider because it did not collect customer payments and transmit them …
Does Illinois's $100,000 economic-nexus threshold for sales tax also apply to corporate income tax, and does leasing a warehouse forfeit PL 86-272 protection?
IDOR would not determine whether any of the three specific companies had Illinois nexus, calling that question 'extremely fact specific.' But it confirmed two general rules: Illinois's $100,000/200-tr…
If a partnership or S corporation pays another state's pass-through entity tax, can a South Carolina resident owner claim South Carolina's credit for taxes paid to other states?
It depends on the TYPE of income. South Carolina taxes residents on their worldwide PERSONAL SERVICE income but NOT on out-of-state, non-personal-service business income. So when a partnership or S co…
Can a South Carolina employer that claimed the federal Employee Retention Credit deduct the wages that were disallowed on its federal return?
Yes. When an employer claimed the federal Employee Retention Credit (ERC) for 2020 or 2021, federal law reduced (disallowed) its wage deduction by the amount of the credit under 'rules similar to' IRC…
Are an online-learning company's subscription plans and its fees for referring prospective students to universities subject to Texas sales tax?
Split ruling. Most of the company's subscription plans (student tutoring, test prep, degree-sponsorship programs) are NOT taxable. But the teacher-focused classroom management plan (with lesson planni…
Is a cloud-based virtual patient simulation platform, sold to universities for nursing and healthcare courses, subject to Texas sales tax?
No. A cloud-based platform that lets nursing and healthcare students practice patient interactions through virtual patient simulations, graded with instructor feedback, is an educational service and n…
I got a 'Detail Bill Information' notice a month after my original assessment -- does that give me a fresh 90 days to appeal?
No -- only the Department's official "Notice of Assessment" starts the 90-day appeal clock; a later document like a "Detail Bill Information" notice, which just restates a balance already due, does no…
I live and work in Maryland now, but I still own my old Virginia house and renewed my Virginia driver's license -- doesn't the Virginia-Maryland reciprocity agreement mean I don't owe Virginia tax?
No -- Virginia's reciprocal income tax agreement with Maryland only exempts someone who's purely a Maryland resident with no Virginia domiciliary ties; it doesn't apply to a 'dual resident' who remain…
The Department asked me for more documents to support my domicile-change claim and I haven't responded yet -- what happens to my assessment?
If you don't respond to the Department's follow-up requests for supporting documentation on a claimed domicile change, the Department will find you haven't met your burden of proving the change and tr…
Another state audited and corrected my tax return years after I originally filed -- can I still amend my Virginia return to claim a bigger credit for the extra tax I ended up owing that state?
Yes -- Virginia gives you a special one-year window, running from the final determination of a change or correction to your income tax in another state, to amend your Virginia return and claim any res…
My auditor estimated my sales tax assessment because I couldn't provide records during the pandemic -- can I still submit the documentation now to get the assessment corrected?
Yes, generally -- if you failed to provide requested records during a sales tax audit (here, because of pandemic-related disruptions) and the Department estimated your assessment using the best inform…
Does a personal chef who prepares and delivers custom meals for private clients qualify for a special 'de minimis serviceman' exemption from Illinois Retailers' Occupation (sales) Tax, since the chef already pays sales tax on the raw ingredients?
No special exemption applies. The Department explained that custom-made items substantially similar to stock or standard items (like tailor-made clothing) remain subject to Retailers' Occupation Tax, …
How is Illinois Service Occupation Tax calculated when a business (serviceman) transfers tangible personal property—like advertising materials—as part of providing a service, including when a secondary serviceman/subcontractor is involved and when materials are shipped outside Illinois?
Illinois taxes servicemen (businesses that sell services) on the tangible personal property they transfer as part of that service, not under regular sales tax but under the separate Service Occupation…
Does Illinois sales tax apply when a nonresident buys a vehicle from an Illinois dealer and has it titled in another state?
It depends on reciprocity and where the vehicle actually went. Illinois exempts a vehicle sale to a nonresident from Retailers' Occupation Tax only if the buyer's titling state gives Illinois resident…
Must an auto glass repair and replacement company include its over-the-counter retail and wholesale glass sales when calculating its 35% 'de minimis' cost ratio, and how must it collect tax on its repair and replacement services?
Retail and wholesale sales of glass are excluded from the cost-ratio calculation used to determine 'de minimis' serviceman status; only the cost of materials transferred as part of a repair or replace…
Does an out-of-state ticket broker have to collect Missouri sales or use tax when it resells event tickets it bought at arms' length from unaffiliated venues?
No to both. Applicant, an out-of-state ticket broker, is not required to collect and remit Missouri sales tax or use tax on its resales of event tickets, because it bought the tickets in arms' length …
Were voluntary donations from shopping-complex retailers to an affiliated nonprofit taxable as part of the retailers' commercial rent?
No. The retailers' donations to the nonprofit were not taxable commercial rent because they were voluntary, were not required by the lease, and bought no goods, services, or right to use the property.…
I print and mail direct-mail advertising to people in Virginia from out of state -- do I have to charge Virginia sales tax on that?
It depends on who your customer actually is. Virginia exempts "advertising" -- including direct mail -- from retail sales and use tax, and treats an advertising business as the user/consumer (not rese…
My employer paid my moving expenses in 2018 and I thought the Tax Cuts and Jobs Act let me subtract that from my Virginia income -- why was my subtraction denied?
There's no Virginia subtraction available for employer-paid moving expenses for the 2018 tax year -- the taxpayer had it backwards. The federal Tax Cuts and Jobs Act (TCJA) didn't create a new deducti…
My husband is in the military and we were stationed overseas -- I thought the Servicemembers Civil Relief Act meant I couldn't be taxed by Virginia during that time, but the Department disagreed. Why?
The Servicemembers Civil Relief Act (SCRA) and its Military Spouses Residency Relief Act (MSRRA) amendment only protect a spouse who SHARES the servicemember's domicile -- they don't apply if the spou…
I got severance and unused vacation pay from my Virginia employer when I separated, but part of my ten years of service was spent working out of state -- can I subtract that portion on my Virginia return?
No -- Virginia doesn't provide any subtraction for severance pay or unused vacation pay, even for the portion attributable to work you performed in another state, when the payment comes from a Virgini…
My business designs, builds, and installs custom millwork and casework for institutional buildings -- am I a contractor, a wholesale merchant, a service provider, or do I need multiple business licenses?
Mostly a contractor, based on the evidence in the record -- but the case was sent back for more fact-finding on the details. A business that designed, built, and installed architectural millwork, inst…
Can a dealer fix a sales tax assessment by getting an exemption certificate from a customer after an audit has already started, and are service fees like diagnostic or roadside charges taxable when billed with a repair?
NO, the assessment was upheld -- once a customer with no exemption certificate on file goes out of business before an audit-time certificate can be obtained, the dealer cannot meet its burden of provi…
My auto repair shops bill customers a lump sum for parts and labor, and I also thought accepting a government ID or license plate proved a sale to a government customer was tax-exempt -- why did my audit assessment include both?
Two different results for two different issues. A multi-state vehicle repair shop was audited and assessed sales tax on lump-sum-billed invoices (where parts and labor charges weren't separately state…
If a business pays for an employee's hotel room for more than thirty days, does the hotel still have to charge sales tax on that rental?
No -- Applicant should not charge sales tax on a room rental of thirty consecutive days or more, even when a business (not the individual staying there) pays for it. Missouri's 'permanent resident' ex…
What does Missouri LR 8193 conclude about Plants Sold at Plant Sales are Subject to Sales Tax?
Yes. Missouri LR 8193 holds that a charitable organization's spring plant sales are subject to sales tax because the sales are open to the general public and compete with commercial plant sellers, so …
What does Missouri LR 8192 conclude about Items Offered for Donations are Subject to Sales/Use Tax?
Yes. Missouri LR 8192 holds that a political action committee owes sales tax (on in-state purchases) or use tax (on out-of-state purchases) on branded promotional gift items it buys and then gives to …
I'm a full-time college student and my parents claim me as a dependent -- do I still owe the tax due shown on my own Virginia return?
Yes -- being a full-time college student claimed as a dependent on your parents' return doesn't exempt you from Virginia's filing and payment requirements if your own income exceeds the applicable thr…
My S corporation had subpart F/repatriation income under the Tax Cuts and Jobs Act, and it flowed through to my personal return -- can I subtract my share on my Virginia individual income tax return the same way a corporation could?
No -- even though Virginia's own corporate income tax statute allows a subtraction for subpart F income, that particular subtraction doesn't flow through from an S corporation to its individual shareh…
The IRS audited me and found unreported income, and Virginia assessed me for the same change plus interest -- can I get the interest waived since I didn't know about the federal adjustment right away?
No -- interest on a Virginia assessment can't be waived just because you didn't get around to amending your Virginia return promptly after an IRS audit adjustment; interest is mandatory unless the und…
Do erroneous SSA Forms 1099 create New Mexico gross receipts tax when an employee attorney never received the reported fees?
No. The Administrative Hearings Office fully abated an $18,929.08 gross receipts tax assessment based on Social Security Administration Forms 1099-MISC that incorrectly reported more than $200,000 of …
When a customer returns merchandise, how should an Illinois retailer report the refunded sales tax on Form ST-1/ST-2, and can the amended return show a negative number?
The retailer must refund the sales tax it collected to the customer and may then deduct the corresponding gross receipts on the return for the period the refund was made. But sellers cannot file a ret…
Does an outdoor walking tour company owe Illinois sales/use tax when its tour price includes stops for food and drinks at third-party restaurants and bars?
It depends on whether tangible personal property (food or drinks) is transferred as part of the sale. A walking tour by itself, with no food or drink included, is a nontaxable service. But if the tour…
I run a saw-blade sharpening business and add small amounts of metal alloy and plastic to the blades -- do I owe use tax on those materials, or can my customers be charged sales tax on them instead?
The sharpening business itself owed the use tax -- it couldn't shift that cost by taxing its customers instead. A company that sharpened industrial saw blades sometimes added a small amount of metal a…
The Department disallowed my Form 2106 employee business expenses and my Schedule C business expenses for lack of documentation -- can it do that, and do I get another chance to prove them?
Yes, the Department can disallow undocumented expenses, and this taxpayer didn't provide any documentation for either one. He claimed employee business expenses on a 2019 federal Form 2106, but for th…
I filed an amended Virginia return switching from the standard deduction to itemized deductions, which eliminated the tax I owed -- why did the Department reject it and keep the original assessment?
Because she hadn't provided proof the IRS accepted the corresponding federal amendment, and Virginia regulations specifically require that proof before an amended state return based on a federal chang…
Is the gain from selling a non-unitary limited-partnership interest taxed by Illinois, or allocated to the seller's home state?
Conditionally, yes: IDOR concluded the gain would be allocated to the taxpayer's out-of-state commercial domicile, not apportioned to Illinois, but only because it took the taxpayer's own representati…
The IRS let me exclude up to $10,200 of my 2020 unemployment benefits under the American Rescue Plan Act, but Virginia added it back and assessed me -- is that right?
Yes, the assessment was correct -- Virginia's fixed-date conformity to the Internal Revenue Code hadn't caught up to the ARPA yet when this taxpayer filed her 2020 return. The American Rescue Plan Act…
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