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 Kansas company owe sales tax on an internet-based, downloadable legal-information newsletter sold issue by issue?
No — the online legal newsletter is a service Kansas has not enumerated as taxable, so no state or local sales tax applies to its sale. A Kansas corporation produced an internet-based…
If a Texas company sells or licenses software to a customer in Canada, does it owe Texas sales tax?
No, as long as the software is used outside of Texas and the customer takes delivery — or the software is installed — outside of Texas. If the customer takes delivery in Texas, or the Texas company…
If a manufacturer (not the original retailer) buys back a defective appliance from a customer as a settlement, can the customer get the sales tax they originally paid refunded?
Not from the state, and not automatically from anyone. Because the manufacturer — not the original retailer — bought the refrigerator back as a settlement, the original retail sale was never voided;…
If a company delivers, sets up, and maintains its own gas compressor units at a customer's site for a single fee, is that a taxable lease of the equipment or a nontaxable compression service?
It depends on whether the customer gets possession/control of the compressor. If there's an actual lease contract for the compressors, it's a taxable lease under Rule 3.294. But if the customer…
At a nonprofit's one-day tax-free fundraising auction, is there a dollar cap on what can be sold tax-free, and does it matter whether the item was purchased, donated, or manufactured by the organization?
It depends on how the item came to the organization. An item donated to or manufactured by the exempt organization can be sold tax-free at any price at a qualifying one-day sale/auction (regardless…
Could a Texas vehicle seller accept a trade-in before delivering the replacement vehicle and hold the trade-in credit without a specified time limit?
Yes. The letter stated no specified time limit for holding the trade-in credit before delivery of the purchased vehicle. But the sale transaction had to occur when the trade-in was provided, and the…
Did Florida use tax apply when a dealer loaned inventory vehicles to nonemployees as restricted demonstrators?
No additional use tax applied while the untitled vehicles remained for-sale inventory, bore dealer plates, and were used solely for the dealer's business under restrictive demo agreements. The…
If a school district pays for and owns an education/video system, but part of the equipment is physically located and controlled at a private company's off-site headend facility, does that off-site equipment still qualify for the school district's sales tax exemption? Could the company itself buy that equipment tax-free instead?
Yes to the first: equipment the school district purchased and holds title to remains exempt even when physically located and controlled off-site at the company's facility, per Rule 3.322(f). But the…
Starting an air duct cleaning business in Texas, is the service taxable, and can equipment/materials be bought tax-free?
Yes, cleaning air ducts is taxable as a real property service under Rule 3.356 — the total charge (trip/service charge, materials, stand-by charges, etc.) is taxable. Equipment you buy to perform…
When a nonprofit hospital operates through a 50/50 limited partnership with a for-profit entity, whose charity care counts toward the partnership's sales tax exemption under the Sec. 151.310(e) charity-care requirement — the partnership's own charity care, or charity care provided separately by the individual partners?
Only charity care that the hospital partnership itself provides counts — charity care given separately by either partner (the tax-exempt partner or the for-profit partner), outside the partnership,…
Are rate modifiers a Texas-based insurer buys to underwrite worker's compensation policies for insureds in other states taxed as data processing services or as insurance services, and does out-of-state use reduce the tax?
Rate modifiers are the purchase of data processing services, not insurance services. A Texas-based insurer's purchase is taxable to the extent the benefit of use is in Texas — the purchaser can…
Is a mutual redevelopment company organized and operating under Article 5 of the Private Housing Finance Law subject to the Article 9-A corporation franchise tax?
No. Two cooperative affordable-retirement housing corporations organized and operating as mutual redevelopment companies under Article 5 of the Private Housing Finance Law are not subject to the…
What did now-obsolete Florida TAA 99B4-015 say about a trust's deed to its limited partnership?
The published ruling is marked obsolete. Its original conclusion taxed the deed on the property's full fair market value because the partnership was a separate entity and the transfer increased the…
Was recording a notice about billboard easement agreements subject to Florida documentary stamp tax?
No. The notice contained no unconditional promise to pay a sum certain, granted no real-property security interest, and did not expressly incorporate the related agreements. It was therefore neither…
Which cattle-breeding and animal-care items sold to Kansas farmers and ranchers are exempt from sales tax?
Many cattle-breeding and animal-care items are exempt under three farm exemptions, with an exemption certificate required. The Department applied Kansas's three farm/ranch exemptions — ingredient or…
Is the labor to install a central heating and air conditioning system in a commercial building exempt from Kansas sales tax?
The installation labor is exempt only if done as part of the building's original construction; installed any other way, it is taxable. The Department ruled that installing a complete central heating…
How did Rhode Island sales tax apply when Company B leased cranes to Company A for re-leasing, Company A rented cranes with operators, and Company B used re-leased cranes in rigging services?
Company B's lease to Company A for later re-leasing was a nontaxable sale for resale. Company A's crane rentals were taxable, including separately charged operators because lessees had direction and…
Starting October 1, 1999, are information services and data processing services in Texas only taxed on 80% of their value, and how should that be reported on the sales tax return?
Yes. Effective October 1, 1999, new Tax Code Section 151.351 (added by Senate Bill 441) exempts 20% of the value of information services and data processing services, so only 80% is taxable. On a…
Is Texas sales tax due on drill team uniform items (leotards, tights, boots, hats) purchased through group orders for students at a public school?
It depends on who buys them. If the school purchases and pays for the uniforms itself for its own use (like band or sports team uniforms it owns), the purchase is tax-exempt. If individual drill…
How does Texas sales tax apply to network installation services — evaluating a client's computer setup, installing or configuring hardware/software you didn't sell, initial computer setup, employee training, modifying existing software, and hardware repair?
It varies by service. Evaluating a client's computer configuration and writing a report is not taxable, unless the advice is really information on where to get the best price, which IS taxable as an…
Is a company's stock-benefit-plan administration and reporting service subject to New York sales tax, and can it get a refund for the paper it uses to print reports that get mailed to out-of-state recipients?
The stock-plan administration and report-issuing service itself is not taxable, since it isn't one of New York's specifically enumerated taxable services. But the paper the company buys to print its…
Did load-and-leave software remain nontaxable when the seller installed a physical dongle required for the program to function?
No. The required dongle made each software-license payment taxable; a truly optional support contract remained nontaxable, with the seller consuming its repair and upgrade parts.
How did California shorten the aircraft common-carrier receipts test and the out-of-state-use test when the owner sold the aircraft early?
Both tests ended at an arm's-length early sale. The common-carrier receipt thresholds were prorated, while the California-use test covered only the ownership period after first entry into the state.
How did Texas tax mobile cranes supplied with or without operators, and when did the owner need a motor vehicle rental permit?
A crane mounted on a conventional truck chassis before purchase was taxed as a motor vehicle with an accessory. Supplying it with an operator was not a rental because the customer lacked exclusive…
Did a trust have Florida intangible-tax situs when two of three equal trustees lived outside Florida?
No. With three trustees sharing management equally and a nonresident majority, the trust lacked Florida situs. The Florida trustee's remainder interest also was not taxable, but a later change to…
Which delinquent South Carolina taxes could be paid by credit card under RR 99-12, and how?
Under the 1999 procedure, any tax type could be paid by credit card only after the Department assigned a receivable or tax-lien number. Visa or MasterCard payments went through the telephone TAPS…
Are sales of dietary and health care supplements exempt from Kansas sales tax?
No — dietary and health care supplements are taxable, and the seller must collect and remit the tax. Kansas imposes sales tax on the gross receipts from retail sales of tangible personal property…
A new business will offer computer-aided drafting (CAD) production, CAD training, computer consulting, customization/deployment recommendations, and custom programming, all billed hourly and without selling any hardware or software. Which of these services are subject to Texas sales tax?
Mixed. Computer-aided drafting production is taxable. General consulting not tied to a taxable-item sale is not taxable. CAD training is not taxable if separately stated. Customization, deployment,…
Is Texas sales tax due on labor to build or repair fences, gates, cattle guards, and roads on a farm or ranch?
It depends on new construction versus repair. Labor to newly construct fences, gates, cattle guards, or roads as an improvement to realty is NOT taxable, whether billed lump-sum or separately from…
Were mandatory homeowner assessments taxable because a residential developer also provided security services?
No, under the amended covenants reviewed. Although the developer's employees provided taxable-type security services to homeowners, the mandatory assessments did not expressly charge for security or…
How did a Section 338(h)(10) stock sale affect the target's former Texas tax bases, loss carryforwards, and the seller's receipts?
Texas did not recognize the deemed asset sale in the target's taxable capital or taxable-capital receipts, but did recognize it in earned surplus because that component began with federal taxable…
Can a for-profit hospital or lab buy tangible personal property tax-free under the nonprofit-hospital or consumed-in-production exemptions?
No — a for-profit entity cannot use the nonprofit-hospital exemption, and because its testing services are nontaxable, it also cannot use the consumed-in-production exemption. The Department…
Is the labor of cleaning above-ground storage tanks and processing the removed sludge subject to Kansas sales tax?
No — cleaning above-ground storage tanks and processing the removed sludge is cleaning, not taxable servicing or maintaining, so the labor is exempt from Kansas sales tax. K.S.A. 79-3603(q) taxes…
Do German nationals on a temporary Kansas work assignment, paid in Germany by a German employer, owe Kansas income tax?
It depends on federal law: Kansas income tax begins with federal adjusted gross income, so German nationals owe Kansas tax only on income that is included in their federal AGI and attributable to…
Is a lease of tangible personal property to a Federal Home Loan Bank exempt from Kansas retailers' sales tax?
Yes — a lease of tangible personal property to a Federal Home Loan Bank is exempt from Kansas retailers' sales tax, because federal law bars states from subjecting these federal entities to sales…
Does an organization qualify as a religious organization for the Kansas sales tax exemption on purchases used exclusively for religious purposes?
Yes — the Department found the organization qualifies as a religious organization, so its direct purchases used exclusively for religious purposes are exempt from Kansas retailers' sales tax under…
Did a Texas lienholder owe motor vehicle sales tax when it repossessed and took title to a vehicle after an interstate carrier defaulted?
No. The Comptroller said repossession was not a retail sale, so the lienholder owed no motor vehicle sales tax when taking title. The policy applied whether the lien appeared on the certificate of…
Six general partnerships, each owning or leasing a different New York City property (some fee, some leasehold), are all beneficially owned by the same six family members in identical 16.66% shares. Each partnership plans to transfer its real property interest to a brand-new, separate LLC in exchange for 100% of that LLC's shares, then distribute those LLC shares out to the same six family members in the same 16.66% shares they've always held. Is each of these six partnership-to-LLC transfers exempt from New York's Real Estate Transfer Tax?
Exempt -- all six conveyances qualify for the mere-change-of-form exemption. Six separate general partnerships (149 Realty Associates, Shelburne Murray Hill, Patrick Denihan et al d/b/a Denart…
Are a book distributor's printed catalogs, a rented mailing list used to address them, and the photography/artwork/printing-plate materials used to produce them all exempt from New York sales tax when mailed free to customers?
Yes, on all three points. The catalogs are exempt printed promotional materials because they're mailed free of charge to customers and prospective customers within New York, with a Form ST-121.2…
Is a specialized suspended-ceiling-tile cleaning service taxable in New York, or does it qualify for the sales tax exclusion for 'laundering'?
Taxable. Cleaning suspended ceiling tiles with a specialized process and proprietary solution is a taxable maintaining/servicing service, not exempt 'laundering' -- New York's laundering exclusion…
Does a corporation's section 1452(d) election to remain taxable under Article 9-A survive a merger of its parent bank, a name change, and a change in its business activities?
Yes. The corporation's one-time section 1452(d) election to continue being taxed under Article 9-A (rather than Article 32) was not revoked by the merger of its parent bank into another bank, by its…
Could Lake Belt miners calculate and remit the mitigation fee at the first transfer after extraction?
Yes. Florida approved collection on the first transfer after extraction, including an internal company transfer, based on tons extracted and sold. Records of the transfer were required, the fee had…
Could a Florida county buy performing-arts-center construction materials tax-free through direct purchasing?
Yes, under the amended procedures reviewed. The county issued purchase orders, received invoices and paid vendors directly, took title and liability at delivery, was insured against loss, and…
Who owed Florida tax on materials used in three types of air-conditioning repair contracts?
The contractor did. For time-and-material, lump-sum, and not-to-exceed repairs, the contractor was the ultimate consumer because materials were not fully identified and priced before work began. It…
Must the New Mexico Property Tax Division tell a telecommunications company it may elect a different valuation method, and can the company switch methods later if it wasn't told?
No, and no — the protests were denied. Two e.spire telecom subsidiaries wanted their New Mexico plant revalued for 1999 under the 'unit appraisal' method instead of the 'cost' method the Department…
What former Texas franchise-tax relief applied when a corporation's gross receipts for both tax components were below $150,000?
For reports due on or after January 1, 2000, Senate Bill 441 provided that a corporation owed no franchise tax if gross receipts from its entire business were each below $150,000 for both taxable…
How does a direct sales/multi-level marketing organization collect Texas sales tax on its independent distributors' sales, and are sales the distributor makes to customers in Mexico exempt?
The direct sales organization -- not the distributor -- is responsible for collecting and remitting tax on distributor sales, since distributors of direct sales organizations aren't issued their own…
How is a federal IRC section 338(h)(10) election treated for New York tax when the target sold is an Article 9 corporation, and how is the parent's stock-sale gain treated?
The TSB-M-91(4)C treatment of section 338(h)(10) elections is for Article 9-A purposes only. For the Article 9-A parent selling the target's stock: if the parent is a selling affiliate, the election…
What major South Carolina tax-law changes did the Department summarize from the 1999 legislative session?
The update summarized most significant 1999 changes across income taxes, corporate license fees, withholding, property taxes, fee-in-lieu arrangements, sales and use taxes, administrative procedure,…
In a sale-leaseback/cash-advance arrangement -- where a customer sells an appliance to a business and then leases it back while receiving a cash advance, backed by a refundable security deposit and a separate rental fee -- which parts of the transaction are subject to Texas sales tax?
The purchase of the appliance from the customer qualifies as a purchase for resale (buyable tax-free with a resale certificate). The refundable security deposit is NOT taxable. But the rental/lease…
Can a high-volume home-based independent distributor of a direct sales company (Metabolife International) get their own Texas sales tax permit to streamline exempt out-of-state sales, instead of paying tax up front and waiting for a refund from the company?
Yes, under a specific administrative policy set out in this letter: an independent Metabolife distributor with total sales exceeding $24,000 a quarter may apply for a Texas sales tax permit. Once…
Did Florida deed tax apply when two partnerships converted and merged under Delaware law without deeds?
No, if Delaware law vested the Florida property in the converted and surviving partnerships by operation of law and no deed was required. The ruling also required compliance with the statutes and…
Does a leased color photocopier installed behind a drugstore's photo counter qualify for Utah's manufacturing machinery and equipment sales tax exemption?
No. The manufacturing equipment exemption under Utah Code section 59-12-104(14) only applies within an establishment classified under SIC Codes 2000-3999 (manufacturing), but a retail drugstore…
Were charges for in-flight air-ground radiotelephone service subject to Florida telecommunications taxes?
No, under the definitions then in effect. Florida found that the aircraft service was not local, toll, private, cellular, portable, or another listed telecommunications service, so neither gross…
Which per-capita income figures applied to South Carolina job and headquarters credit compensation tests under RR 99-11?
Taxpayers had to use the most recent state or county per-capita income data available on the last day of the tax year in which the qualifying jobs were filled. RR 99-11 supplied the figures…
Which common-carrier aircraft repair items qualified as component parts: secured cargo containers, galley carts, or passenger telephones?
Secured cargo containers could qualify, but food-and-beverage carts and passenger telephones did not. The latter were comfort-related rather than functional or safety-related aircraft parts.
Did Florida documentary stamp tax apply to a foreign bank's vessel note, unrecorded ship mortgage, and contingent assignments?
The note was taxable if executed or delivered in Florida unless it qualified as an out-of-state or foreign note. The unrecorded mortgage and contingent security assignments were not taxable unless…
Is a dirt scraper designed for use with farm tractors exempt from Kansas sales tax as farm machinery and equipment?
Yes — a dirt scraper designed for use with farm tractors is exempt farm machinery and equipment under K.S.A. 79-3606(t), so its sale is exempt from Kansas sales tax. K.S.A. 79-3606(t) exempts all…
Does an out-of-state religious organization operating in Kansas qualify for the Kansas sales tax exemption on purchases used exclusively for religious purposes?
Yes — the Department found the organization is a religious organization, so its direct purchases used exclusively for religious purposes are exempt under K.S.A. 79-3606(aaa). A not-for-profit…
Are excavation and backhoe services subject to Kansas sales tax?
Often exempt — excavation and backhoe services escape Kansas sales tax in three situations: original construction of a building, remodeling of a residence, or whenever the excavation is separately…
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