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 a website designer telecommuting from a California home create nexus for an out-of-state online retailer?
No under the assumed 1999 facts: design-only work, no customer or order involvement, and no home held out as the employer's business location.
How did Tennessee business tax apply to nightly vacation-rental owners and the third-party companies managing their properties?
Property owners owed business tax on the full amount charged guests, with no deduction for the management company's fee. Management companies separately owed business tax on their commissions or…
Were aircraft bought or leased by an FAA-certified charter company exempt when at least 90% of their use was interstate or international?
Yes. The FAA-certified charter operator was a commercial interstate or international air carrier, and at least 90% of aircraft use was outside Tennessee. Purchases and leases for that charter…
Did every Department-collected South Carolina local sales and use tax allow the same exemptions in June 1999?
No. The June 1999 chart compared Department-collected county and school-district taxes for state exemptions, maximum-tax items, casual-excise items, food-stamp purchases, certain food sales, and…
Is a dirt scraper designed for use with farm tractors exempt from Kansas sales tax as farm machinery and equipment?
Exempt — a dirt scraper designed for use with farm tractors falls within the Kansas farm machinery and equipment exemption in K.S.A. 79-3606(t), so its sale is exempt from Kansas sales tax. That…
Does a nonprofit organization owe Kansas sales tax on its purchases of medical supplies, durable medical equipment, office supplies, and building repairs?
Taxable — this nonprofit organization does not qualify for a Kansas sales-tax exemption just because it is nonprofit, so it must pay sales tax on its purchases, including medical supplies, the…
Are materials and services to repair railroad rolling stock used in interstate commerce exempt from Kansas sales tax?
Exempt — under K.S.A. 79-3606(y), all sales of materials and services used to repair, service, alter, maintain, manufacture, remanufacture, or modify railroad rolling stock for use in interstate or…
Could a taxpayer seek a refund after voluntarily paying tax on returns filed more than three years late?
The three-year period had already expired, but section 6902 still allowed a claim within six months after the late payment.
Were palm trees sold for landscaping exempt when they produced edible dates or palm hearts?
Yes, if their products were generally eaten as human food; fruitless palms and trees producing inedible or locally uneaten products remained taxable.
Did a foreign investment corporation create Texas franchise-tax nexus by hiring a Texas company to provide investor-relations services?
Yes. The foreign corporation invested only for its own account, but contracted with a Texas company whose employees received and answered inquiries from investors and potential investors. Those…
How did a bank report swap proceeds, repurchase-agreement securities, and federal-fund transactions under the former Texas franchise tax?
Swap gross proceeds were receipts when no capital asset or invested principal was involved, sourced to the payor; an unknown exchange buyer triggered a 6.5% Texas factor. A repo sale recorded as a…
Does an independent distributor of a Texas direct sales organization need their own sales tax permit to sell that company's products at a trade show?
No. Direct sales organizations, not their independent distributors, are responsible for collecting and remitting sales and use tax on Texas sales made by distributors, and sales tax permits are not…
Does a Nebraska retailer owe use tax on discounted cell phones given out to land service contracts?
The retailer owes consumer's use tax on the shortfall. Under Revenue Ruling 01-99-2, which supersedes Revenue Ruling 1-98-1, a retailer who furnishes cellular telephones at a substantially reduced…
Can a library buy books free of Kansas sales tax, and does it get a tax-exempt number?
It depends on the library's legal status — libraries as such do not qualify for a Kansas sales-tax exemption, but a library that operates as a political subdivision enjoys the exemption K.S.A.…
Do a manufacturer's transformer, rectifier, and bus bars qualify for the sales tax manufacturing equipment exemption, or are they taxable real-property electrical fixtures?
It depends on the wiring, not just the intent. A transformer, rectifier, and bus bars can qualify for Utah's manufacturing equipment exemption, but only if they sit on a supply line installed solely…
Could a reused hand-control extension installed on a new vehicle's emergency brake qualify the sale for Texas's disability exemption?
Yes, assuming the new vehicle itself was modified. The customer needed a hand control for the emergency parking brake because he had limited or almost no movement in his left leg. Reusing an…
Is the labor to replace a city's overhead electrical wiring with new underground wiring exempt from Kansas sales tax as original construction?
Exempt labor — replacing a city's aboveground electrical wiring with new underground wiring qualifies as "original construction" of a municipal utility facility, so the installation labor services…
How does a retailer/contractor that both sells and installs equipment handle Kansas sales tax when working for an exempt entity like a school or nonprofit hospital?
Use a project exemption certificate — a business that both sells and installs boilers, burners, and related equipment is a retailer/contractor, and when it does an installation job for an exempt…
Does a private elementary or secondary school qualify for a Kansas sales-tax exemption on its purchases and construction projects?
Exempt — a qualifying private elementary or secondary school is exempt from Kansas sales tax on its direct purchases of tangible personal property and services under K.S.A. 79-3606(c), provided the…
Does Texas treat a direct sales organization's distributor with a physical retail store in a mall or shopping center the same way it treats a home-based independent distributor, for sales tax permit and resale-certificate purposes?
No. Home-based independent distributors of a direct sales organization are never issued sales tax permits and may not give a resale certificate -- they pay tax on the suggested retail price, with a…
For a bank's Texas franchise tax, are 'available-for-sale' securities treated as inventory, and how are proceeds from called or matured securities counted as gross receipts?
Yes — available-for-sale securities are generally treated as inventory, and proceeds from calls or maturities are gross receipts to the extent they are revenue under GAAP or federal tax rules. For a…
Is a custom software developer's work for clients subject to New York sales tax, and does it matter whether the software, artwork, or a web site is delivered on disk or transmitted electronically?
It depends on what's actually built and how it's delivered. Genuinely custom software designed to one client's specifications is exempt regardless of delivery method, but software built by modifying…
What Kansas property-tax changes did the Department summarize from the 1999 legislative session?
Kansas summarized new and revised property-tax exemptions, expanded valuation-notice and appeal duties, a six-year inspection cycle, new rules for leased property and commercial valuation appeals,…
Were separately bid engineering, setup, movement, and placement services for production sets and trade-show booths taxable?
No. The separately bid and itemized labor was outside the taxable sales price because customers could reject each service, buy the set without labor, or buy labor independently, and the work was…
Are Internet-based click-to-call and voice mail services taxable as telephone or telephone-answering services in Kansas?
No. The Department's opinion is that the described Internet-based services -- a click-to-call feature that connects a web-page owner with a website visitor, billed per minute, plus related voice…
Was the Department of Justice firearm-record fee part of a gun dealer's taxable gross receipts?
Historically yes when imposed on dealers and passed through; for transactions from January 1, 1999, the source says no because the fee shifted to purchasers.
Did an out-of-state company create Florida tax nexus by buying auto sales contracts through a Florida-based employee?
Yes. The company conducted financing activity through a Florida employee and earned income from Florida auto sales contracts, creating corporate-income-tax nexus and a Florida business situs for…
Does a nonprofit spouses' club have to collect Kansas sales tax on its fundraising sales?
Taxable — a nonprofit enlisted spouses' club does not qualify for a Kansas sales-tax exemption just because it is nonprofit, so it must register, collect, and remit both state and local sales tax on…
Are sales of truck tarps to interstate common carriers exempt from Kansas sales tax?
The Department's opinion is that the truck tarps come within the sales tax exemption in K.S.A. 79-3606(f), so their sale is not subject to Kansas sales or use tax. That statute exempts tangible…
For a Texas-based interstate trucking company, does it matter whether repair parts are bought in-state or out-of-state, and whether they go on the tractor (truck) versus the trailer?
Yes, both distinctions matter. Repair/replacement parts (including tires and tubes) bought OUTSIDE Texas and affixed in Texas to the self-propelled vehicle (the tractor/truck) of a licensed,…
Can a New Mexico worker escape state income tax with the 'Section 861' theory — that wages for U.S. labor aren't taxable income, that a private employee isn't an 'employee,' or that Form 1040 isn't really required?
No. Wages for services performed in New Mexico are taxable income, and the protest was denied on that core point. An Intel technician relied on a 'Taxgate' website claiming that only income tied to…
Is an annual fee a company charges its independent sales agents to access their own personal sales data on a company web page a taxable service in Texas?
Yes. The storage of a sales agent's sales information on a web page is a taxable data processing service, even though the company isn't providing general Internet access and the agents aren't…
Were deeds transferring utility property to counties or a public authority under threat of condemnation exempt from Florida documentary stamp tax?
Yes. Written county decisions to acquire the utility assets for public use, backed by the stated prospect of eminent-domain proceedings if no voluntary sale occurred, made the deeds exempt even when…
Is the first Connecticut sale of No. 2 heating oil exempt from the petroleum products gross earnings tax when the buyer burns the oil to make steam that it pipes to customers to heat their buildings?
Exempt. When a petroleum distributor makes the first Connecticut sale of No. 2 heating oil to a business that burns it to heat water into steam and pipes that steam to customers to heat their…
Did tanks temporarily holding intermediate material between two manufacturing stages qualify as exempt industrial machinery?
Yes. The tanks were necessary to the integrated reactor-and-blending process, held only intermediate material for short periods, maintained needed condition, and were used exclusively within…
What refundable income tax credit did Senate Bill 45 give Kansas oil lease working interest owners?
Senate Bill 45 gives working interest owners a refundable Kansas income tax credit for property tax paid on the working interest of an oil lease whose average daily production per well is 15 barrels…
Can a warehouse get a refund of tax on the electricity it uses to refrigerate and store already-finished products, based on a predominant-use exemption certificate claiming the electricity is used in manufacturing/processing?
No. Warehouses generally provide a storage commodity/service rather than sell tangible personal property, so their electricity use generally does not qualify for the manufacturing/processing…
Did a Texas customer owe motor vehicle sales tax again when refinancing required selling the vehicle through a dealer and buying it back?
Yes. Assigning the vehicle to the dealer and moving it through dealer inventory was a sale, and reassigning it to the customer under the new financing contract was another taxable transaction. The…
Is power-washing a restaurant's kitchen vent hood taxable in Texas?
It depends on what the vent hood legally is. If the vent hood is affixed to the building as an improvement to realty (part of the ductwork), cleaning it is a taxable real property service under Rule…
How did Florida calculate the taxable portion of rent when a hotel lease included guest areas, operator space, and subleased commercial space?
Florida multiplied total rent by a square-footage fraction: space the hotel operator consumed for its own business went in the numerator, while all leased space went in the denominator. Guest…
Were separate charter-boat operating-license fees taxable as part of rent for boat slips, a kiosk, and pushcart space?
Yes. The operating-license fees were taxable rental consideration because the license and dock lease shared terms and cross-default provisions, and neither the leased space nor the charter right had…
Is concrete cutting, coring, drilling, and repouring taxable in Texas, and does it matter whether the job is new construction, residential, or nonresidential repair/remodeling?
Charges for cutting/coring concrete tied to a repair or remodeling job on NONRESIDENTIAL real property are fully taxable, including any repouring charges afterward. But labor charges for the same…
Which vehicle transfers in a multistep corporate, partnership, and LLC restructuring were exempt from Texas motor vehicle tax?
Qualifying Texas-titled transfers in a statutory merger were exempt, and lien assumptions in that merger were not consideration. Transfers to a new corporation for stock and to a new partnership for…
Were document cataloging, storage, and CD-ROM production taxable in Tennessee, and was separate computer consulting taxable?
The document service was taxable because its crucial result was a CD-ROM containing the medical records. Separate computer consulting was not taxable when it only advised on hardware and software…
Did a grantor trust have to file a Florida corporate income tax return even when it had no federal taxable income?
Yes. The grantor trust had no Florida taxable income when it had no federal taxable income, but it still had to file Form F-1120 and report beneficiary or investor amounts for as long as any federal…
What investments qualified for the former Texas enterprise-zone deduction, and could property placed in service before project designation count?
A designated enterprise project could deduct qualifying investment that was federally depreciable, placed in service and used in the normal course of business in the enterprise zone, and not removed…
Is a fee charged for a fast (under 3-minute), on-the-spot credit approval/denial decision a taxable credit reporting service, even if the vendor never furnishes the retailer any actual credit report or credit history document?
Yes. Even though the vendor doesn't assemble or hand over a credit history or credit report, the vendor is still performing a taxable credit reporting service as defined in Tax Code Section 151.0034…
Did a Texas vehicle buyer have to pay sales tax again when a licensed dealer collected the tax, went out of business, and failed to remit it or transfer title?
No. Payment to the licensed dealer satisfied the buyer's obligation even though the dealer failed to remit the tax or transfer title. An invoice itemizing the tax was acceptable proof, title could…
Does a company that manages conference calls (reserving lines, monitoring audio quality, running the bridge equipment) have to charge New York sales tax on its fees, the way a phone company charges tax on the calls themselves?
No. New York taxes telephone and telegraph transmission service, but a conference-call management company that only reserves lines, monitors call quality, and runs bridge equipment -- without itself…
Does a city owe Kansas sales or use tax on a fuel truck it buys for its airport?
Exempt — a city's direct purchase of a fuel truck for its airport is exempt from Kansas retailers' sales and compensating (use) tax under K.S.A. 79-3606(b), which exempts all direct purchases by a…
Is the labor to build a new office where an old structure was torn down to bare dirt exempt from Kansas sales tax?
Exempt labor — the services to construct a brand-new office building, put up after the taxpayer tore the old structure down to bare dirt and built new, qualify as performed in connection with the…
Does a grant-funded 501(c)(3) nonprofit count as a political subdivision that can buy free of Kansas sales tax?
Taxable — a nonprofit 501(c)(3) corporation funded roughly 90% by grants from the State of Kansas and the U.S. Government is not a "political subdivision" of Kansas, so it does not get the…
When a school rents hotel rooms, are the charges exempt from Kansas sales tax, and what makes it a qualifying direct purchase?
Exempt as a direct sale, but only if billed to and paid by the school — hotel room charges purchased directly by a qualifying public or private elementary/secondary school or nonprofit educational…
Which local sales tax does a Kansas retailer charge when it delivers goods to a customer in a different local jurisdiction?
Charge your own location's local tax — under the rule in effect for this 1999 ruling, a retailer with a fixed business location in Kansas collects the local sales tax at its business location on…
Are a contractor's purchases of materials to construct or modify the Kansas Turnpike Authority roadbed exempt from Kansas sales and use tax?
Exempt — a contractor's purchases of tangible personal property for the construction, reconstruction, or modification of the Kansas Turnpike Authority (KTA) roadbed are purchases made on behalf of…
Did the former Texas taxable-capital throwback rule apply when goods were shipped from Texas to a state where the seller was not taxable?
Yes. When a corporation shipped tangible personal property from Texas to a purchaser in another state where the corporation was not subject to taxation, Rule 3.549(e)(41)(I) treated the sales as…
Did Florida's 1999 TAA tax a delayed deed to a corporation when stock had already been issued for the intended property transfer?
Historically, yes—but this TAA is expressly marked obsolete. The Department treated the previously issued shares as noncash consideration for the delayed deed and taxed the conveyance based on the…
What did House Bill 2568 require of cigarette manufacturers and roll-your-own tobacco distributors in Kansas?
Effective May 20, 1999, House Bill 2568 requires any tobacco product manufacturer that sells cigarettes to consumers in Kansas either to become a participating manufacturer under the November 23,…
Three unrelated companies formed an LLC that was designated by a state development corporation to redevelop the old 14th Street Armory site into a mixed-use project -- retail, senior housing, and a university faculty residence -- with each company intending to end up owning and running its own separate piece. We have to hold the whole property through one LLC at first because NYC won't let us record separate condominium units until construction is 'as built,' and because the city wanted a joint venture team, not three separate developers. Once construction is done and we convert to a condominium, will distributing each finished unit to the company that's always been designated to own it trigger New York's Real Estate Transfer Tax?
Exempt -- no transfer tax on the conversion or the resulting unit conveyances. Armory Place LLC, formed by three separate companies (Orda, Chancellor of the Armory, and Armory Retail Associates),…
If a bus company bought its large buses before New York's new omnibus sales-tax exemption took effect on December 1, 1997, can it get a refund of the tax it already paid on those buses, even partially?
No refund. New York's sales tax exemption for large omnibuses took effect December 1, 1997, and applies only to sales, services, and uses occurring on or after that date -- there's no provision,…
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