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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How did Florida tax a condominium resort's room charges, amenity and promotional fees, housekeeping, repairs, reserves, and telephone services?
The resort manager had to register and collect tax as the owners' rental agent. Total guest rent—including mandatory amenity and housekeeping amounts—and promotional occupancy payments were taxable. I…
Did a testamentary trust or its Florida income beneficiary owe intangible tax when two of three co-trustees lived outside Florida and majority approval was required?
No. The trust lacked Florida situs because two of its three equal co-trustees were New York residents and every action required majority approval. The Florida income beneficiary could not alone revoke…
Could a sublessee recover sales tax paid on potentially exempt concession lease payments from 1983 through 1988 when the refund claim came years later?
No. The lease payments may not have been taxable under the food-and-drink concession exclusion, but the refund claim was filed after the applicable three-year deadline. Section 215.26 barred the claim…
Could a Florida wholesale motor-vehicle dealer register and plate a vehicle held for resale without triggering sales or use tax?
No. Florida found no exemption allowing a wholesale dealer to title, register, or obtain a regular license plate for an inventory vehicle tax-free. Those acts triggered use tax even when the vehicle r…
How did corporate expenses affect the two former Texas franchise-tax components?
Corporate expenses were generally deductible in computing taxable capital. They also reduced earned surplus to the extent the expenses were allowed as deductions when computing the corporation's feder…
Can I buy a recumbent bicycle tax-free in Texas if my doctor prescribed it for rehabilitation, and what does the prescription need to say?
Yes, but only if the prescription is written correctly. A recumbent bicycle can be purchased tax free with a prescription from a licensed practitioner of the healing arts, but the prescription must st…
Is renovating a specialty hospital taxed as work on nonresidential (commercial) real property, or as work on residential real property?
Taxable. The Comptroller ruled that hospitals are considered nonresidential (commercial) property, so the total charge to renovate an existing building into a specialty hospital is taxable, even thoug…
Did leasing airplanes and train cars that lessees used in Texas create franchise-tax nexus for the lessor?
Yes. The lessor was subject because it held a Texas certificate of authority. It also had nexus independently because it leased airplanes and train cars that lessees used in Texas, even though the les…
Did changing fiscal year-end require an extra former Texas franchise-tax filing, and which earned-surplus periods applied?
No additional report was required solely because the fiscal year-end changed. The 1997 annual report used August 1, 1995 through April 11, 1996 for earned surplus. The 1998 report used April 12, 1996 …
I'm leasing land, a car wash building, and the car wash equipment together to my own S corporation -- is that lease subject to Texas sales tax?
No. The Comptroller ruled that leasing the land, building, and equipment together to the S corporation is treated as a lease of real property, so no sales tax applies to the lease payments -- the same…
Did an out-of-state alarm-monitoring company have Texas franchise-tax nexus without Texas plant, equipment, or employees?
Yes. The alarm-monitoring company was subject because it held a Texas certificate of authority. Texas also found independent service nexus because it processed monitoring signals for Texas customers, …
Did an Indiana parent or its consumer-finance subsidiaries owe 1996 Florida intangible tax on receivables sold to the parent before January 1 and returned January 2?
No. The Indiana parent actually owned, bore the risk of loss, and managed the receivables outside Florida on January 1, while the subsidiaries performed only ministerial processing and accounting. The…
We had to completely rebuild an ice skating rink that never worked because of construction defects, before it ever opened to the public -- does the rebuild count as new construction or taxable repair?
New construction. The Comptroller ruled that rebuilding the ice rink qualifies as new construction (rather than a taxable repair to existing real property) because the original rink was never used for…
Did an irrevocable trust or its income beneficiary owe Florida intangible tax when trustees had to remain outside Florida and the beneficiary held only a limited appointment power?
No. An individual trustee could not reside in Florida, a corporate trustee could not qualify or do business there, and any trustee becoming taxable in Florida had to stop serving. The beneficiary's li…
Did an irrevocable trust or its income beneficiary owe Florida intangible tax when trustees had to remain outside Florida and the beneficiary held only a limited appointment power?
No. An individual trustee could not reside in Florida, a corporate trustee could not qualify or do business there, and any trustee becoming taxable in Florida had to stop serving. The beneficiary's li…
Did an irrevocable trust or its income beneficiary owe Florida intangible tax when trustees had to remain outside Florida and the beneficiary held only a limited appointment power?
No. An individual trustee could not reside in Florida, a corporate trustee could not qualify or do business there, and any trustee becoming taxable in Florida had to stop serving. The beneficiary's li…
Were duty-free goods tax-exempt exports when ticketed international passengers took possession inside a secured Florida departure area before boarding?
Yes. Although passengers took possession in Florida and none of the statute's three listed shipment methods applied, the shop rebutted the domestic-sale presumption. Ticket verification, sealed packag…
How is local sales tax (like the Regional Transportation Authority tax) sourced on cellular telephone and cellular roaming charges?
Local sales tax (such as the Regional Transportation Authority tax) on cellular telephone service is sourced to the location of the cell site that receives and re-transmits the call. If the cellular c…
Are charges for telemarketing sales calls, list-based calling, and related services (compiling lists, mail fulfillment, final reports) subject to Texas sales tax?
Charges for making sales calls (soliciting sales and taking orders) are not subject to Texas sales tax. But charges tied to gathering or selling customer/prospect information -- such as calls made usi…
Are natural gas and electricity used at a personal care home taxed as residential or commercial utility service?
Residential -- provided the predominant use of the natural gas and electricity is by persons who initially contracted to live at the personal care home for periods exceeding 29 days. The Comptroller a…
Does a bank subsidiary's section 1452(d) election to be taxed under Article 9-A survive the merger of another bank subsidiary into it, with the electing company as the survivor?
Yes. Barclays Business Credit made the one-time section 1452(d) election to keep being taxed under Article 9-A rather than the Article 32 bank tax. Merging another bank subsidiary (BZWSI) into it, wit…
How did Florida apply sales and documentary stamp taxes to SEC-registered interests giving buyers recurring use and rental rights in hotel suites?
Florida reached mixed results. The security sale and common-expense reimbursements were not subject to sales tax, and interests accepted, signed, and issued outside Florida escaped original-issue tax.…
I'm a cotton ginner and I use gas and electricity to keep my warehouse or storage area cool and dry so cotton seed doesn't sprout, including during the off-season -- is that electricity exempt from Texas sales/use tax?
Mixed answer, split by predominant use. The electricity used to actively lower the temperature or humidity of stored cotton seed to a target level counts as exempt processing. But electricity used jus…
Did Canadian sales representatives soliciting Texas dealers create former franchise-tax liability, and did P.L. 86-272 protect the company?
Texas representatives soliciting dealer purchases of office furniture subjected the Canadian corporation to the former taxable-capital component. If their Texas activity was limited to soliciting orde…
How were intercompany receivable sales, collection gains, and servicing fees sourced under the former Texas franchise tax?
The parent's sale of receivables to its subsidiary created no gross receipts for either corporation. Any subsidiary gain collected above its purchase price was sourced to the customer-debtor's legal d…
Is a fee for gathering medical records from doctors and hospitals on behalf of an insurance company's underwriting department subject to Texas sales tax?
Yes, it's taxable. The Comptroller ruled that a firm's fee for contacting doctors, hospitals, and other medical service providers to obtain medical information for an insurance company's underwriting …
Could an S corporation deduct IRS payroll-tax penalties when computing former Texas earned surplus?
No. Texas treated shareholder-allocated S-corporation items as if the corporation were taxed as a C corporation. Because the Comptroller understood Section 162 to disallow deductions for U.S. governme…
Did the Florida grantor, out-of-state corporate trustee, or nonresident trust advisor owe intangible tax on the described irrevocable trust?
No. The sole non-Florida trustee exclusively held and managed the assets outside Florida, the grantor had no current income right or power to revoke, invade principal, or appoint beneficiaries, and th…
Did an out-of-state trustee keep trust assets outside Florida intangible tax when the Florida grantor could veto investment changes and replace the trustee?
No. The Florida grantor retained control by requiring consent before investment-strategy changes and by being able to remove and replace a trustee who departed from the grantor's prior investment patt…
Did a Florida grantor or trustee owe 1997 intangible tax on securities placed in the described irrevocable trust, or when the assets returned after January 1?
No. Florida concluded that neither the grantor nor trustee owed intangible tax on the trust assets and that distributing the assets back to the grantor after January 1, 1997 did not create 1997 tax. T…
Which LoanLiner open-end credit forms created a taxable written obligation or renewal under Florida documentary stamp tax?
The signed BFL224 credit agreement and VFL065 advance request had to be read together and were taxable because they supplied a promise to pay, an approved sum certain, and the borrower's signature. A …
Was a motor-vehicle lease subject to Florida documentary stamp tax when it lacked an unconditional payment obligation and title stayed with the lessor?
No. The lease contained no unconditional obligation to pay money, and the lessee did not automatically become owner when total rentals equaled the vehicle's value. A purchase option and early-terminat…
Under the original, now-superseded ruling, did an out-of-state lender's unsigned, unrecorded unilateral loan-extension notice create Florida documentary stamp tax?
This ruling is superseded. It originally said no tax arose when the lender executed the notice outside Florida, the borrower neither signed nor returned it, nothing was recorded, and no connected docu…
Could owners change their land-trust beneficial interests by transferring stock in the corporate trustee without Florida documentary stamp tax?
No. When stock ownership in the corporate trustee determined each person's land-trust ownership and distributions, a later stock transfer effectively assigned a beneficial interest. Any post-contribut…
I wrongly accepted exemption certificates but I'd asked the state about it several times — can the penalty be abated even though I owe the tax?
The protest was granted in part and denied in part. Roadrunner Industrial Works, a small family equipment-rental and services company, accepted non-taxable transaction certificates (NTTCs) on equipmen…
Is the wastewater treatment system my manufacturing company must install to meet TNRCC environmental requirements exempt from Texas sales and use tax?
Partially exempt. The pollution control equipment itself qualifies for the Texas manufacturing exemption because it's necessary and essential to the manufacturer's production process, and the company …
Are closed-caption decoders and wireless phone jack extenders used by deaf people exempt from Texas sales tax?
Yes. The Comptroller ruled that a closed-caption decoder for televisions and a wireless phone jack extender used with a phone flasher are both exempt from Texas sales tax when used by a deaf person, a…
Can a buyer reduce the sales or use tax it already paid on equipment purchases when the vendor later gives back a cash or credit rebate or discount tied to those specific purchases?
Yes, in most of the scenarios described. The Comptroller ruled that volume discounts and cash rebates paid directly by a vendor to a purchaser -- including cooperative marketing funding, consigned-uni…
Who owed 1996 Florida intangible tax after a retailer transferred receivables to a new subsidiary for stock before January 1 and liquidated it January 2?
Neither company owed 1996 tax on the receivables because the subsidiary owned them on January 1, the assets lacked Florida situs, and the retailer performed only ministerial servicing. But the retaile…
Does Texas sales tax apply to charges for mechanical warranty inspections that determine what caused equipment or a motor vehicle to break down, without appraising the dollar amount of damage?
No. The Comptroller ruled that charges for inspecting tangible personal property are not taxable unless the inspections are performed under a policy or policies of insurance. Because mechanical warran…
Does Texas use tax apply to repair or replacement parts (such as retreaded tires) bought out of state and installed in Texas on a common carrier's self-propelled vehicle?
No, use tax is not due on repair or replacement parts acquired outside Texas and actually affixed in Texas to a self-propelled vehicle used as a licensed and certificated common carrier -- but the car…
Is a booting fee charged to remove a boot from an illegally parked car taxable as part of a taxable motor vehicle parking service?
Yes. The Comptroller ruled the parking violation (booting) fee is taxable because it is part of a taxable parking service -- booting a car parked in an illegal space in a garage constitutes an "impoun…
How did Texas source property sales, interest, rental-broker services, and railroad-car lease receipts under the former franchise tax?
Tangible-property sales were sourced where delivery occurred; interest followed the payor's legal domicile; lease-negotiation and car-rental management receipts followed where services were performed;…
How did Texas compute tax when a lessor bought a vehicle, used a retired vehicle's value, and later re-leased the unit?
The lessor's vehicle purchase was taxable, but the lease payments were not. A lessor could reduce taxable value by a qualifying Texas-titled retired vehicle's fair market value without trading it to t…
On a combined report, are a securities dealer's sales sourced to New York based on the selling activity of an affiliate in the same combined group?
Yes. On a combined report under Article 9-A the receipts factor is computed as though the corporations in the group were one corporation, with intercorporate receipts eliminated (20 NYCRR 4-1.2, 4-4.7…
Did a grantor-beneficiary have a taxable trust interest when the trust allowed reacquisition of principal by substituting other property?
Yes. The power to reacquire trust principal by substituting other property gave the grantor-beneficiary a taxable beneficial interest under the trust provisions reviewed by Florida. A Florida intangib…
How could fuel moved from a Florida terminal by tank trailer and vessel to the Bahamas qualify for Florida export-tax refunds?
Florida rack tax had to be paid first because trailer movement to the vessel was not a bulk transfer. A licensed exporter could buy the fuel, pay the tax, and seek a refund with proof of Florida expor…
When can Nebraska tax a nonresident motor carrier employee who works in more than one state?
It cannot. A nonresident motor carrier employee (as defined by federal law) who regularly performs duties on a commercial motor vehicle in more than one state can be taxed only by their state of resid…
Which nonresident rail carrier employees are exempt from Nebraska income tax when they work in more than one state?
A nonresident rail employee who regularly works on the railroad across multiple states is taxed only by their home state. Under Revenue Ruling 22-96-1, compensation paid to rail carrier employees who …
Does Nebraska sales tax apply to Internet or on-line service connection and access charges?
Access is never taxed; the initial connection is taxed only if it comes with software. Under Revenue Ruling 1-96-1 (sales and use tax), charges to end users for the initial connection to the Internet …
Is graphic design artwork (camera-ready art) subject to Utah sales tax, and does it matter whether the designer also does the printing or bills the art separately?
Sales of artwork or printed material are taxable, including design services, whenever you're selling a final printed product or the artwork itself to a client. Who owes the tax depends on the transact…
Does Utah tax a nonresident partner's share of income from an investment partnership that itself invests in a Utah-based fund, the way New York, California, and North Carolina exempt this kind of investment-only income?
It depends on what the underlying investment is, not on where the investment partnership itself is located. Under Utah Code Ann. § 59-10-303, a nonresident partner is taxed on Utah-source distributive…
Can a charitable foundation buy construction materials tax-free and donate them toward a university research building?
Only partially, and not the way the foundation proposed. The university does NOT get a tax exemption on materials it purchases for the building (it's a higher-education entity, not part of the K-12 "p…
Is a cable company's "Technical Access Fee" taxable, and should local sales tax on cable service be based on the provider's business location or the customer's service location?
Yes, the fee is taxable. The Comptroller ruled that a cable provider's "Technical Access Fee" is part of the taxable charge for cable television service under Section 151.007(a) of the Texas Tax Code,…
Did pharmaceutical manufacturers owe Florida use tax when they gave free prescription-drug samples to practitioners and hospitals for patient treatment?
No. Florida did not impose use tax when permitted prescription-drug manufacturers and distributors gave properly labeled free samples to practitioners and hospitals for use in medical treatment. The g…
What documentation does a Texas seller need to prove a sale was shipped out of state and is exempt from Texas sales tax?
Shipping documents such as a bill of lading, federal express receipt, or postal receipt, together with an invoice showing an out-of-state shipping address, are acceptable proof of an exempt out-of-sta…
Was a one-year water-truck agreement a taxable Texas motor vehicle rental or a lease?
It was a lease, not a rental. The agreement ran for one year and did not require an earlier return, while the historical rental definition covered exclusive use for 180 days or less. The customer's pa…
Who owes sales/use tax on materials, equipment, and labor when a contractor builds a highway improvement for the tax-exempt State of Utah (UDOT)?
The contractor (or subcontractor) who last owns construction materials as tangible personal property before they're converted to real property is the taxable "end user" and owes sales or use tax on th…
I run a cleaning business and never knew about New Mexico's gross receipts tax — can I get the penalty and interest refunded?
The protest was denied. Elke Foster ran a residential cleaning business as a sole proprietor and kept careful records, but didn't know New Mexico imposes a gross receipts tax on services. Her bookkeep…
How is Texas sales tax applied to charges for designing, coding, and updating a web page for a client?
Taxable as a data processing service. The Comptroller ruled that web pages are electronic data and graphics rather than computer programs, so charges for designing, programming, and updating a web pag…
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