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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Did an irrevocable foreign trust owe Florida intangible tax when its trustees could not be based in Florida and its beneficiary held only a limited appointment power?
No. The trust barred an individual Florida trustee and a corporate trustee doing or qualified to do business in Florida, so no trustee had Florida situs. The beneficiary's limited appointment power di…
Did an irrevocable foreign trust owe Florida intangible tax when its trustees could not be based in Florida and its beneficiary held only a limited appointment power?
No. The trust barred an individual Florida trustee and a corporate trustee doing or qualified to do business in Florida, so no trustee had Florida situs. The beneficiary's limited appointment power di…
Did an irrevocable trust owe Florida intangible tax when no trustee could be a Florida resident and the beneficiary held only a limited appointment power?
No. Because the trust prohibited any Florida-resident trustee, no trustee had Florida taxable situs. The beneficiary's limited appointment power, with no right to revoke the trust or invade principal,…
Did an irrevocable foreign trust owe Florida intangible tax when its trustees could not be based in Florida and its beneficiary held only a limited appointment power?
No. The trust barred an individual Florida trustee and a corporate trustee doing or qualified to do business in Florida, so no trustee had Florida situs. The beneficiary's limited appointment power di…
Did an irrevocable foreign trust owe Florida intangible tax when its trustees could not be based in Florida and its beneficiary held only a limited appointment power?
No. The trust barred an individual Florida trustee and a corporate trustee doing or qualified to do business in Florida, so no trustee had Florida situs. The beneficiary's limited appointment power di…
When are a Florida mailing service's labeling, folding, inserting, inkjet printing, and postage charges subject to sales tax?
It depends. Mailing jobs were taxable when the mailer supplied consequential items such as labels or envelopes, or printed on the mailing material. Jobs using only customer-supplied materials with no …
I'm a regulated telecommunications provider that buys basic local exchange network access so jail inmates can make collect outbound calls -- can I buy that access tax-free?
Yes -- this purchase is exempt from sales tax. The Comptroller confirmed that because the firm is a regulated provider of telecommunications services (verified through Public Utility Commission regist…
Did Texas tax short-term tractor and trailer rentals that began outside Texas but were renewed in Texas?
The out-of-state rentals were not subject to Texas motor vehicle rental tax because possession transferred outside Texas. A renewal occurring in Texas was taxable, and an owner renting in Texas needed…
Are a licensed engineering firm's photocopying charges for its final reports, billed as a reimbursable expense, subject to sales tax?
No -- when a licensed professional engineering firm bills a client a fixed photocopy charge (here, 15 cents per page) as a reimbursable expense incidental to its professional engineering services, tha…
Is an insured armored courier's daily bank-delivery service subject to New York sales tax?
Yes -- an insured courier's service of making daily armored-vehicle trips to banks for customers is a taxable protective and detective service under Tax Law § 1105(c)(8) (armored car and bonded courie…
Can the state base my tax bill on a sample of my sales, and who has to prove my exemption certificates covered the items?
McClintock Paper lost on every point. The Department audited this paper-products wholesaler by sampling — reviewing a couple of representative days in selected months and projecting the error rate acr…
The state taxed my equipment lease twice — once to me, once to my customer. Can I get credit for the tax already paid?
Both taxpayers lost. Teco Investments, a Florida company, leased about $7 million of mining equipment to Chino Mines for use at a New Mexico copper mine but never reported or paid New Mexico gross rec…
Is a print-and-mail company's service of printing financial statements, confirmations, and invoices and mailing them to customers subject to New York sales tax?
Printing monthly statements, confirmations, or invoices for financial institutions and businesses is a taxable printing service under Tax Law § 1105(c)(2) when the client furnishes the paper, but only…
Does a Florida training company create New York nexus by sending independent contractors to run free in-state workshops, requiring it to collect use tax on its mail-order home-study program sales to New York students?
Yes -- a Florida-based factoring-training company that hires independent contractors to conduct regular free informational workshops in New York (aimed at enrolling students and promoting its programs…
Were receivables sold before January 1 by Florida subsidiaries to their Canadian parent taxable when the subsidiaries continued collection services?
No. Receivables owned and controlled on January 1 by a Canadian parent with no Florida business, people, or assets lacked Florida taxable situs. The subsidiaries' listed collection services were minis…
Did an irrevocable foreign trust owe Florida intangible tax when its trustees could not be based in Florida and its beneficiary held only a limited appointment power?
No. The trust barred an individual Florida trustee and a corporate trustee doing or qualified to do business in Florida, so no trustee had Florida situs. The beneficiary's limited appointment power di…
Were automobile loans sold before January 1 to an out-of-state affiliate subject to Florida intangible tax when the Florida seller performed only servicing?
No. Loans owned on January 1 by an out-of-state affiliate with no Florida business lacked Florida taxable situs when the Florida seller performed only ministerial servicing. The exchange note was also…
How did Texas treat S corporations and their subsidiaries before addressing the 1996 Small Business Job Protection Act changes?
Under the existing 1994-Code reference, the S corporation and its C-corporation subsidiaries filed separately and reported earned surplus separately. The S corporation received no Schedule C deduction…
Is a Texas motor vehicle painting/repair shop's charge for painting materials, consumables (masking tape, sandpaper, solvents, etc.), and supplies taxable, and can the shop buy them tax-free for resale?
It depends on how the shop bills. Motor vehicle repair labor itself is not taxable, but tangible personal property furnished in the repair is. If the shop separately states labor and parts/materials o…
Did an irrevocable foreign trust owe Florida intangible tax when its trustees could not be based in Florida and its beneficiary held only a limited appointment power?
No. The trust barred an individual Florida trustee and a corporate trustee doing or qualified to do business in Florida, so no trustee had Florida situs. The beneficiary's limited appointment power di…
Who is responsible for collecting and remitting sales tax on parking garage fees -- the building owner, or the property management company that runs the garage?
The property owner, not the property management company, is responsible for collecting and remitting sales tax on motor vehicle parking services provided in the building's parking garage. Under Rule 3…
Did a Florida resident or an out-of-state trustee owe Florida intangible tax on closely held stock placed in the described irrevocable trust?
No. The trust lacked Florida situs because its sole non-Florida trustee held and managed the stock outside Florida. The Florida grantor-beneficiary also lacked a taxable beneficial interest because th…
Were securities held by an out-of-state investment partnership, or its Florida residents' general-partnership interests, subject to Florida intangible tax?
No. The partnership's securities lacked Florida taxable situs because its operations, meetings, accounts, banks, and brokerage management were outside Florida. The Florida residents' general-partnersh…
Which machinery and equipment for a combined-cycle cogeneration facility qualified for Florida's energy-production sales-tax exemption?
Most listed combustion-turbine, fuel, control, boiler, cooling, generation, piping, and switching equipment qualified under the integrated-plant theory. Three specified water-system items, chlorinatio…
How did SC Revenue Ruling 96-11 apply the utility license-tax credit for cash infrastructure contributions?
Under the 1996 ruling, a company subject to the Section 12-20-100 utility license tax could claim a credit for cash paid toward qualifying public-purpose infrastructure. A project needed to be eligibl…
Is chilled or heated water taxable in Texas, and does adding anti-corrosion chemicals to a closed water system change that?
No -- water is not taxable in Texas, whether it's sold chilled or heated, and adding chemicals to prevent corrosion in a closed system doesn't change that. The Comptroller reasoned this is the same as…
Is a nonprofit aircraft co-ownership club, formed to make light-plane ownership affordable, a taxable 'social or athletic club' under New York's dues tax?
No -- under its current bylaws, a nonprofit club formed so members can jointly own and use light aircraft affordably is not a 'social or athletic club' within the meaning of Tax Law § 1101(d)(13), bec…
Is a litigation-support videographer's entire fee for producing and delivering accident-reconstruction video/audio media to attorneys subject to sales tax?
Yes -- a planned business that produces, edits, duplicates, and delivers audio/video media (such as accident reconstructions) to attorneys or parties in litigation is making a taxable retail sale of t…
Were receivables sold at year-end by Florida entities to an out-of-state affiliate subject to Florida intangible tax when the sellers continued collection services?
No, if the proposed sale actually occurred before January 1 and the Florida sellers no longer owned, managed, or controlled the receivables on that date. Their listed collection work was ministerial w…
My predominant use utility study was rejected by the Comptroller -- what did it need to include, and why was mine found deficient?
The study was rejected as deficient. Rule 3.295(e)(1) requires a predominant use study to show all exempt and nonexempt uses of the utility, the times of usage, the energy used, twelve consecutive mon…
Is selling grocery-discount 'coupon certificate' books, redeemable by mail for manufacturer coupons, subject to sales tax?
No -- selling 'Coupons on Demand' coupon certificate books, which entitle the book owner to request manufacturer-issued grocery coupons by mail, is not subject to New York sales and compensating use t…
Is selling a discount-coupon directory of health and fitness vendors subject to sales tax?
No -- the 'Healthy Step Directory,' a compilation of coupon-style discount advertisements for health, fitness, and wellness vendors, is not subject to sales and use tax when sold (whether through cons…
Does a free-brochure publisher, whose revenue comes only from selling ads printed in the brochures, owe sales tax on its own printing costs even though it gives the brochures to the State for free?
Yes -- a publisher that produces brochures and maps promoting State campgrounds and parks, gives them to New York State free of charge, and earns its revenue solely from selling advertising space prin…
Is the electricity my golf club charges to recharge members' own golf carts, stored in the club's cart barn, taxable?
Yes, taxable. The electricity used to recharge golf carts that belong to members (not the club) is taxable, because the cart barn storage space is sold as part of a taxable club membership -- an amuse…
I operate a landfill and am reorganizing into a separate management company -- is operating the landfill itself taxable, and does adding a transfer station change that?
Operating and managing the landfill itself -- receiving trash already delivered to the dump site, separating, compacting, and covering it -- is not a taxable service, because it is not the removal or …
Is avionics installation, equipment addition, and interior modification/remodeling work on a privately owned aircraft taxable under Texas sales and use tax, and how is a lump-sum repair/remodeling contract taxed?
No sales or use tax applies to the charge for the repair/remodeling service itself -- the Comptroller ruled this work (avionics installation and interior modification/installation) on a private aircra…
Did Texas change its franchise tax treatment of municipal bond income for 1996 or 1997?
No changes. This December 1996 Comptroller letter confirmed there were no 1996 changes to the Texas franchise tax code and no tax-code changes affecting holders of municipal bonds set to take effect i…
Did the trustee or beneficiary owe Florida intangible tax when the irrevocable trust barred Florida trustees and granted only a limited power of appointment?
No. The trust required every trustee to be outside Florida, so no trustee had Florida taxable situs. The beneficiary's limited power of appointment could not benefit the beneficiary, estate, or estate…
Was gain from selling a Georgia apartment complex nonbusiness income allocable entirely outside Florida, or business income subject to Florida apportionment?
It was business income subject to formulary apportionment. The affiliated financing, management, ownership, and apartment operations formed a unitary business: the group controlled the properties, rep…
When was Florida sales tax due on preneed funeral merchandise, and when did the complete-funeral exemption apply?
Tax on a merchandise-only preneed contract was due when the merchandise was actually or constructively delivered after full payment, not when the contract was signed. A complete funeral package market…
I run an FAA repair station that services aircraft components for airlines -- are the machinery, tools, manuals, wire, chemicals, hardware, and shipping supplies I use exempt from Texas sales tax?
Mostly exempt. Tax Code 151.328(d) exempts machinery, tools, supplies, and equipment used or consumed exclusively in repairing, remodeling, or maintaining aircraft, aircraft engines, or aircraft compo…
I run a computer backup service and also install software and do on-site hard disk maintenance for small businesses -- which of my fees are subject to Texas sales/use tax, and at what local rate?
All of it is taxable. The monthly service fee for data storage/backup, the software installation charges, the on-site maintenance fee, and the file-restoration fee are all subject to Texas sales and u…
Was a buyer taxed on petroleum moved from a Florida terminal by trailer to export vessels, and could the terminal supplier recover rack taxes?
The buyer's purchase was not subject to Florida tax on the stated export facts. Rack removal still made the terminal supplier accrue Florida fuel taxes, but the supplier could claim a documented expor…
I bottle and resell water in returnable bottles that I get back from customers and refill -- can I buy those bottles tax-free as packaging/manufacturing supplies?
No -- the purchase is taxable. The Comptroller ruled that returnable water bottles do not qualify for the packaging-supplies exemption. Rule 3.314(b)(1) exempts items like boxes and pallets, but (b)(3…
I have an operating lease on a printing press that started before 10/1/95 -- can I cancel it and sign a new letter agreement so the equipment qualifies for the manufacturing exemption going forward?
Yes. The Comptroller confirmed that canceling the existing lease and replacing it with a new lease (via a letter agreement attached to the canceled lease, same terms, taking effect on the cancellation…
Did proceeds from selling treasury stock enter taxable-capital gross receipts under the former Texas franchise tax?
No. Texas treated the treasury-stock sale as an issuance of the corporation's capital stock, so none of the proceeds entered Texas or everywhere gross receipts for taxable-capital apportionment. Divid…
When could a Comptroller sales-tax audit sample be used to project the former franchise-tax credit for manufacturing equipment?
Only a sample selected and projected by a Comptroller auditor could be used; taxpayer-created samples were not allowed. Projection was limited to the audited October 1, 1991 through September 30, 1993…
My corporation is merging with a subsidiary of another company: shareholders will automatically have their shares converted into a set ratio of the acquirer's newly issued shares (with cash instead of any leftover fractional share), and separately, the merger subsidiary's own shares will convert into 1,000 shares apiece of the surviving company. Is any of this share conversion activity subject to New York's Stock Transfer Tax?
No. NYNEX Corporation ('Old NYNEX') merged with a wholly-owned merger subsidiary of Bell Atlantic Corporation, with Old NYNEX surviving as 'New NYNEX,' a Bell Atlantic subsidiary. Under the merger agr…
Did a Florida retailer owe tax on free, one-time-use gift boxes and wrapping paper that accompanied purchased merchandise?
Yes. The retailer owed use tax on its cost of the free gift boxes and wrapping paper. Although the materials were used once and accompanied purchased goods, the Department found they were not necessar…
Can a utility company rely on an exemption certificate from an apartment complex owner or property management company to exempt utility service from sales tax, without checking whether the property actually qualifies?
Yes, in most cases -- a utility company may accept and rely on a complete exemption certificate from an apartment complex owner or property management company without demanding proof that the property…
Is the money a customer pays directly to a table/couch dancer at a topless club subject to Texas sales tax as an amusement service?
No. The Comptroller ruled that a table dance or couch dance is an amusement, but the payment a customer makes directly to the dancer is not a taxable sale of an admission to an amusement service under…
When must a Nebraska insurance company include reinsurance premiums in its one-factor apportionment formula?
Reinsurance premiums are normally left out -- unless they exceed one-third of premiums received. Under Revenue Ruling 24-96-1 (corporate income tax), an insurance company or unitary group apportions i…
Were charges taxable when telegrams were transcribed outside Florida, faxed to Florida couriers, and delivered to Florida recipients?
Yes. A telegram terminated in Florida when a courier delivered it there, even though the message was transcribed outside the state and sent to the courier by facsimile. When billed to a Florida custom…
Which purchases and leases by a federal management contractor were exempt as direct government sales or purchases for resale?
None of the contractor's purchases or leases were direct government sales because the contractor, not the government, paid the vendors. Most consumables, real-property materials, equipment leases, and…
Could a corporation extend the deadline to amend its former Texas franchise-tax report after an IRS audit?
No. If a finalized IRS Revenue Agent's Report changed amounts used for Texas franchise tax, Rule 3.544(d)(2) required an amended Texas report within 120 days. The RAR became final when IRS administrat…
I bought subsurface pumps for my gas/oil wells to remove water so gas can flow to the surface -- do they qualify for the sales tax manufacturing exemption?
No -- the pumps are taxable. The Comptroller ruled that bringing oil or gas to the surface is "production," not "manufacturing, processing, or fabrication" under Tax Code 151.318. Even though the subs…
Could a lessee's own vehicle reduce the taxable value of the lessor's purchase of a new vehicle?
Yes, but only if the lessee's old vehicle was delivered to the new-car dealer as part of the lessor's purchase. If the vehicle went to the leasing company and was then sold to a neighbor, the lessor r…
Was a qualified settlement fund subject to the former Texas franchise tax?
No, on the Comptroller's stated understanding. The letter said a qualified settlement fund could not be a corporation, LLC, bank, or savings and loan association under state or foreign law. Because it…
Does a New Jersey document-storage company owe New York tax on its various service charges (storage, retrieval, filing, faxing, photocopying) to New York customers?
A New Jersey document-storage company's storage, retrieval, filing, disposal, and similar labor services -- all physically performed in New Jersey -- are not subject to New York sales or use tax even …
Could a corporate group stop filing consolidated Florida income-tax returns after acquisition restrictions separated a subsidiary's operations and reporting?
Yes. Florida found good cause to discontinue consolidated returns because indefinite acquisition-related restrictions sharply limited communications and operational knowledge, while the acquired compa…
How these rulings are useful
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