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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Can a commercial landlord avoid sales tax on trash removal, painting, maintenance, and water-leak repair charges just by billing them to the tenant as 'additional rent'?
It depends on the specific charge -- a landlord's overtime freight elevator service, overtime heating, and overtime air conditioning tower cleaning charges are treated as untaxed real property rent be…
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…
Does a mobile home skirting/door/window installer owe sales tax on the charge to the dealer, or on the materials, when installing skirting on mobile homes treated as real property?
It depends on how you bill. For sales tax purposes a mobile home is treated as real property, so you can use either a lump-sum contract (you pay tax on materials, and your lump-sum charge to the deale…
When a caterer or event planner rents out a facility with recreational amenities and provides food, is the facility rental charge taxable as an amusement-service admission?
Yes, in most cases. Because the taxpayer's facility included a swimming pool, volleyball court, horse riding trails, baseball fields, and fishing area, the Comptroller ruled the facility rental itself…
If an out-of-state company builds and runs a client retailer's website and collects payment on the retailer's behalf, is the website operator responsible for collecting and remitting Utah sales tax, and does it create its own Utah nexus?
The website operator must collect sales tax on behalf of any client retailer that has Utah nexus, but whether the operator itself must also report and remit the tax (versus just collecting and handing…
How did an accounting-year and S-election change affect the 1997 former Texas report, and where were export commissions sourced?
Taxable capital used the December 31, 1996 financial condition and calendar-year receipts. Earned surplus combined February 1, 1995 through December 31, 1996, including short federal periods before an…
How did changing a corporation's year-end from July 31 to January 31 affect its 1997 and 1998 former Texas franchise tax reports?
The change created no additional filing requirement. The 1997 report used December 31, 1996 for taxable capital, the August 1, 1995-July 31, 1996 period for earned surplus, and the 1998 report used th…
When a city raises its local sales tax rate mid-project, does a construction contract signed before the increase still shield materials and subcontracts from the higher rate?
Yes, if the requirements are met. The Comptroller ruled that a written construction contract signed before a city's local sales tax rate increase takes effect can exempt the general contractor's mater…
As of late 1996, did a Utah retailer have to charge state sales tax on prepaid telephone calling cards at the point of sale?
As of this 1996 ruling, prepaid telephone calling cards were NOT subject to Utah sales tax at the point of sale, continuing a position the Commission had taken the prior year while it worked on an adm…
Which office facilities-management functions — copying, mailroom, courier, data entry, reception, and more — are taxable under Utah sales tax?
It varies by function. Taxable: copy center charges, unmanned "convenience copier" rentals, forms/printing services, and any equipment sold or rented to the client. Not taxable: mailroom services, fac…
Is renting out space to others a tax-exempt real-property lease, or a taxable license to use my property?
Mixed result: the rental receipts were taxable, but the penalty was abated. Quantum Corporation remodeled buildings into bingo halls and rented them to non-profit bingo operators for short 'sessions' …
Is electricity and gas used in an electroplating and precision-grinding business exempt from Texas sales tax, or does it matter whether the work is processing new parts versus repairing/regrinding existing ones?
It depends on what the power is used for. Gas and electricity used to chrome and grind parts as a sub-processor for original part manufacturers is exempt as processing personal property for sale, and …
When is help provided by a temporary help service exempt from Texas sales tax as a 'temporary employee,' even if the assignment lasts an extended period?
There is no fixed time limit that turns a 'temporary' worker into a taxable service. The Comptroller applies a three-part test under Tax Code 151.057: the help must supplement the customer's existing …
Is a farm or ranch scale exempt from Texas sales tax, and does it matter whether the scale is free-standing or built into the ground or a building?
It depends on whether the scale stays tangible personal property or becomes part of the real property. A free-standing scale used exclusively on a farm or ranch in producing or marketing agricultural …
Does Texas sales tax apply to a floral order that a Texas florist takes over the internet from an international customer, if the flowers are delivered outside the U.S. by an unrelated florist?
Yes, taxable. The Comptroller ruled that charges for floral orders taken in Texas over a web site are subject to Texas sales tax, even when the flowers are delivered outside the state or outside the c…
If the person who created a trust was a New York domiciliary when the trust became irrevocable, but every trustee later becomes domiciled outside New York and the trust's assets and income have no New York connection, does the trust still owe New York income tax?
The trust is still technically a New York 'resident trust' under Tax Law § 605(b)(3)(C), because that status is fixed permanently by the grantor's domicile at the time the property was transferred and…
Were receivables sold before January 1 by a Florida parent to an independent Colorado subsidiary taxable when the parent continued routine servicing?
No. The Colorado subsidiary owned, managed, and controlled the receivables on January 1, had no Florida business or people, and operated independently. The Florida parent's listed servicing duties wer…
I'm buying vacant land for $550,000 and, on the same day, separately contracting with the same builder to construct a $1,000,000 custom home on that land -- together the deal is worth $1.55 million, well over the mansion tax's $1 million threshold. But the land purchase contract and the building contract are expressly written as separate, divisible agreements with no cross-default provisions, and only the vacant land (not a finished or partially-built house) will actually be conveyed to me. Do I owe the 1% mansion tax on this land purchase?
No mansion tax -- only unimproved vacant land was actually conveyed. Petitioner, Mitchel H. Engel, entered into two separate contracts with Thomas Wright Development Corp. on the same day: a $550,000 …
New York State condemned part of my land for a highway project and paid me an advance payment, with more expected after settlement or trial. Part of that money compensates me for damage to the LAND I'M KEEPING, not the part that was taken. Does that severance-damage portion count as taxable consideration under New York's Real Property Transfer Gains Tax?
No -- severance damages don't count as taxable consideration, to the extent the property owner can prove that's what the payment represents. Stefco Realty Corp. owned about 70,567 square feet of land …
If Utah exempts health insurance premiums from its own premium tax, does a foreign insurer still have to include health premium taxes imposed by its home state in Utah's retaliatory tax calculation?
Yes, it must be included. Even though Utah exempts health insurance premiums from its own direct premium tax under section 59-9-101(5), that exemption doesn't carry over to the separate retaliatory ta…
What certificate wording can apartment complexes and multifamily property managers use to claim the residential exemption on electricity purchased from utility companies?
Yes, with the right wording. The Comptroller approved two proposed certificate wordings utility companies could accept from customers: one for apartment complexes where 100% of a meter's electricity i…
Are industrial back/lumbar support belts sold as braces exempt from Texas sales tax?
Yes. The Comptroller ruled that the listed industrial back support belts/harnesses qualify for exemption as a brace under Texas Tax Code SEC. 151.313(a)(4) and Rule 3.284(a)(1) and (c)(1). Because bra…
Is Texas sales tax owed on claims processing services performed for the Texas Public Entity Excess Insurance Pool?
No. The Comptroller ruled that claims processing services performed for the Texas Public Entity Excess Insurance Pool, or for an administrator hired by the Pool, are not taxable — because the Pool its…
If I rent out a 'grip package' (electrical production equipment plus a 5-ton truck and driver) for one price, do I owe motor vehicle rental tax on the truck, and can I buy the equipment tax free for resale?
Pay motor vehicle tax when you buy the truck, and don't collect motor vehicle rental tax when you rent out the grip package, because you're renting production equipment with transportation, not rentin…
What former Texas franchise-tax reports and additional tax applied when a corporation planned to dissolve in 1996?
The corporation properly filed its 1996 annual report and a 1996 final report paying additional tax because dissolution would end its earned-surplus liability. If it did not dissolve by December 31, i…
Is a video production business's charge for taping and editing a wedding or event video subject to Utah sales tax, and how does the resale exemption work when buying blank tapes?
Yes, fully taxable when you sell a finished video. Like other photographic services, video production mixes professional services (taping, editing) with tangible personal property (the tape), but the …
Were weekly charges at a Chapter 509 motel for migrant, seasonal, or temporary workers exempt from Florida sales and tourist development tax?
No. The proposed Chapter 509 motel or transient apartment had no demonstrated migrant-labor-camp permit, and its license agreement expressly disclaimed a lease. Although the agreement stated a 185-day…
Are Jobst burn-treatment garments (pressure vests, gloves, garments with leg zippers, and vest-with-gloves-and-face-mask combinations) exempt from Texas sales tax as braces?
Yes, but only as braces, not as orthopedic devices. The Comptroller reversed part of an earlier opinion and ruled that the Jobst pressure gradient vest, Jobst pressure vest, Jobst pressure gradient gl…
Is a separately stated charge for air quality monitoring during an asbestos abatement project taxable in Texas?
Not taxable. A separately stated charge for air quality monitoring performed during an asbestos abatement project is not taxable, though the monitoring and other equipment used is taxable to the servi…
Is the labor to set up a computer -- connecting the monitor, mouse, keyboard, and printer to the CPU -- taxable in Texas?
Yes. The Comptroller ruled that the initial set up of a computer -- connecting the monitor, mouse, keyboard, and printer to the CPU -- is considered assembly of tangible personal property and is subje…
Did installment-sale gain belong in a dissolving S corporation's former Texas franchise-tax final report?
Only to the extent the gain was reported on the S corporation return through dissolution. That portion entered receipts and taxable earned surplus on the final report. Installment income reported late…
Is ISDN internet equipment and connectivity used to transfer prepress printing files exempt from Texas sales tax as manufacturing equipment?
Mostly no. The Comptroller ruled that computers or equipment that directly drive digital printing presses qualify for the manufacturing exemption, but the ISDN line, routers, and other equipment used …
When were shares of out-of-state investment funds holding Florida municipal and U.S. government obligations exempt from Florida intangible tax?
Shares were wholly exempt when the fund's prior-year-end portfolio contained only exempt Florida municipal interests and U.S. government obligations. Taxable securities held earlier in the year did no…
Did a rabbi trust acquire Florida intangible-tax situs because one of its three or more trustees was a Florida trust company?
No. The trust required at least three trustees, at least two of them nonresidents, and management and control rested with a majority. Because the nonresident trustees controlled the assets and the Flo…
Which LoanLiner forms were taxable written obligations or renewals, and which forms were not taxable by themselves?
The signed BFL215 credit agreement and VFL065 advance request were taxable when read together because they supplied a promise, approved sum certain, and borrower signature. A signed MST053 extension w…
As a Federal Firearms Licensed Dealer handling interstate gun transfers, when do I collect Utah sales tax on the gun price, on my transfer fee, and on the federal NFA tax stamp — and does an individual owe tax on an NFA firearm even if it's for law enforcement training use?
It depends on the roles and billing details. Whether Utah sales/use tax applies to the gun's purchase price turns on nexus: if the out-of-state seller has sufficient contact with Utah, the seller (or …
Does a promotional-advertising company owe Texas sales tax on searchlights, inflatables, banners, balloon giveaways, and clowns it provides for grand openings and sales events?
It depends on the item. Imprinting balloons for giveaway and selling balloons is taxable, but searchlights, inflatables, banners, flyovers, decorating, and clowns/entertainment are nontaxable advertis…
Did a trust owe Florida intangible tax when its trustees had to remain outside Florida and its beneficiary held only a limited appointment power?
No. The trust barred individual trustees from Florida residence and corporate trustees from qualifying or doing business in Florida, so no trustee had Florida situs. The beneficiary's limited appointm…
Was interest from qualifying loans to a South Carolina business development corporation exempt from state income tax under RR 96-10?
Yes. Interest on loans made to a South Carolina business development corporation in accordance with Sections 33-37-250 and 33-37-460 was exempt from South Carolina income tax because Section 33-37-70 …
Is carpet bought for a minister's parsonage exempt from Texas sales tax, and does it matter who pays for it?
It depends on who pays. A church can buy carpet to refurbish a parsonage tax-free by giving the supplier an exemption certificate, but only if the materials are billed to and paid for by the church it…
Does a sale-and-leaseback of office equipment escape New York sales tax if it's really a disguised financing arrangement rather than a true sale?
No -- a proposed sale of office and computer equipment by a securities firm to an unrelated commercial lender, followed by a 'leaseback' with renewal/purchase/return options structured so the firm is …
What was the Florida intangible-tax result when a Florida parent transferred receivables to an out-of-state subsidiary over January 1 and received an intercompany note?
The Florida parent was not taxed on receivables it did not own, manage, or control on January 1. Its note from the subsidiary was taxable in principle, but a timely consolidated intangible-tax return …
Did a Florida beneficiary or non-Florida trustee owe intangible tax on an irrevocable foreign-situs trust when the beneficiary lacked current income and control rights?
No. The Florida beneficiary had no current right to income, power to revoke, power to invade corpus, or general power of appointment, so she held no taxable beneficial interest. The individual trustee…
How does Utah tax sale-leaseback lease payments, conditional-sale 'leases,' and secured loans on equipment, and how can a leasing company avoid taxing the same equipment twice?
It depends on how the transaction is structured. A true sale-leaseback avoids double taxation on the lease payments only if three conditions are all met: the lessee already paid sales tax on its own o…
Did a corporation independently tax two short federal periods after its stock changed owners, or combine them on its former Texas report?
It combined them. Because the stock sale changed ownership but not the corporation's legal status, the 1996 annual report used the full 1995 calendar year. The corporation added both short-return amou…
How did Texas tax a leasing company's purchase of another lessor's vehicles, loans, and lease contracts?
A financing takeover was only a lienholder change and was not taxable. Apportioned carrier units could transfer under the carrier's IMC permit. Other vehicles could be acquired for resale tax-free by …
Did an irrevocable trust owe Florida intangible tax when its trustees had to remain outside Florida and its beneficiary held only a limited power of appointment?
No. The trust barred an individual trustee from residing in Florida and a corporate trustee from qualifying or doing business there, so no trustee had Florida situs. The beneficiary's limited power of…
Did an irrevocable trust owe Florida intangible tax when its trustees had to remain outside Florida and its beneficiary held only a limited power of appointment?
No. The trust barred an individual trustee from residing in Florida and a corporate trustee from qualifying or doing business there, so no trustee had Florida situs. The beneficiary's limited power of…
Is a fee-based Internet dating service that maintains a database of interested persons taxable as an information service in Texas?
Yes, taxable. The Comptroller ruled that charging a fee for individuals to access a database of interested persons built for an Internet dating service constitutes an information service, and charges …
Are elevator consulting firms' inspection, evaluation, design, and expert-witness services subject to New York sales tax?
No -- a group of elevator consulting firms' inspections, performance evaluations, code-compliance reviews, modernization studies, traffic-capacity studies, design/specification work, bid analysis, pos…
How does New York sales and use tax apply to a kitchen cabinet and countertop manufacturer that sells its products both installed and uninstalled?
It depends on whether the sale is installed or uninstalled -- a kitchen cabinet and countertop manufacturer must collect sales tax when selling cabinets uninstalled, but when it installs cabinets or c…
Is a rail carrier exempt from Texas sales and use tax on its own purchases, and can Texas make it collect local sales tax on food and beverages sold aboard its trains?
The rail carrier itself is exempt from state and local tax on its own purchases under 49 U.S.C. § 24301(k). But that federal exemption does not let the Comptroller force the carrier to collect local a…
Was a warehouse loan exempt from Florida documentary stamp tax when fully supported by pledged mortgage notes on which the required tax had been paid?
Yes. The owner pledged promissory notes secured by Florida real-property mortgages under a wholesale warehouse mortgage agreement, and all documentary stamp tax on those collateral obligations was to …
Does Utah's industrial-use sales tax exemption for gas, electricity, and other fuels cover processing activities like washing, crushing, and sizing minerals at a mine site, not just the extraction itself?
Yes. Fuel and electricity used for washing, crushing, and sizing minerals counts as 'mining or extraction of minerals' for Utah's industrial-use sales tax exemption, as long as that processing happens…
How does Utah sales and use tax apply to an out-of-state alarm/security company's equipment sales, leases, installation, monitoring, maintenance, and repair services for Utah customers?
It depends on the specific charge, and the outcome hinges heavily on whether the alarm system is 'converted to real property' upon installation (affixed to the building) versus staying tangible person…
Is electricity used in vacant apartment, duplex, condominium, or townhouse units exempt from Texas sales tax as residential use?
It depends on the type of unit. Once at least one unit in a multifamily apartment complex is occupied, electricity in the complex's other vacant units and common areas is exempt as residential use -- …
Was a nonprofit charitable organization that may have done business in Texas during 1995 subject to former Texas franchise tax?
Possibly, but the letter did not decide the organization's liability. It said liability depended on whether the nonprofit was a corporation or other taxable entity, had Texas nexus under Rule 3.546, a…
Is a 7-Eleven franchisee personally liable for sales tax on store sales even though the franchisor prepares, signs, and files the sales tax returns?
Yes -- a 7-Eleven franchisee who makes taxable retail sales is a "vendor" personally liable for the sales tax collected at the store, even though the franchise agreement has the franchisor (Southland)…
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