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 the Flint Trust owe Florida intangible tax when its trustees had to remain outside Florida and its beneficiary held only a limited power of appointment?
No. No trustee had Florida situs because individuals could not reside in Florida and corporate trustees could not qualify or do business there. The beneficiary had only a limited appointment power and…
Did the Flint Trust owe Florida intangible tax when its trustees had to remain outside Florida and its beneficiary held only a limited power of appointment?
No. No trustee had Florida situs because individuals could not reside in Florida and corporate trustees could not qualify or do business there. The beneficiary had only a limited appointment power and…
Did the Flint Trust owe Florida intangible tax when its trustees had to remain outside Florida and its beneficiary held only a limited power of appointment?
No. No trustee had Florida situs because individuals could not reside in Florida and corporate trustees could not qualify or do business there. The beneficiary had only a limited appointment power and…
Did the Flint Trust owe Florida intangible tax when its trustees had to remain outside Florida and its beneficiary held only a limited power of appointment?
No. No trustee had Florida situs because individuals could not reside in Florida and corporate trustees could not qualify or do business there. The beneficiary had only a limited appointment power and…
Did the Flint Trust owe Florida intangible tax when its trustees had to remain outside Florida and its beneficiary held only a limited power of appointment?
No. No trustee had Florida situs because individuals could not reside in Florida and corporate trustees could not qualify or do business there. The beneficiary had only a limited appointment power and…
Did the Flint Trust owe Florida intangible tax when its trustees had to remain outside Florida and its beneficiary held only a limited power of appointment?
No. No trustee had Florida situs because individuals could not reside in Florida and corporate trustees could not qualify or do business there. The beneficiary had only a limited appointment power and…
Did the Flint Trust owe Florida intangible tax when its trustees had to remain outside Florida and its beneficiary held only a limited power of appointment?
No. No trustee had Florida situs because individuals could not reside in Florida and corporate trustees could not qualify or do business there. The beneficiary had only a limited appointment power and…
Did the Flint Trust owe Florida intangible tax when its trustees had to remain outside Florida and its beneficiary held only a limited power of appointment?
No. No trustee had Florida situs because individuals could not reside in Florida and corporate trustees could not qualify or do business there. The beneficiary had only a limited appointment power and…
Did the Flint Trust owe Florida intangible tax when its trustees had to remain outside Florida and its beneficiary held only a limited power of appointment?
No. No trustee had Florida situs because individuals could not reside in Florida and corporate trustees could not qualify or do business there. The beneficiary had only a limited appointment power and…
Did the Flint Trust owe Florida intangible tax when its trustees had to remain outside Florida and its beneficiary held only a limited power of appointment?
No. No trustee had Florida situs because individuals could not reside in Florida and corporate trustees could not qualify or do business there. The beneficiary had only a limited appointment power and…
Did the Flint Trust owe Florida intangible tax when its trustees had to remain outside Florida and its beneficiary held only a limited power of appointment?
No. No trustee had Florida situs because individuals could not reside in Florida and corporate trustees could not qualify or do business there. The beneficiary had only a limited appointment power and…
Did the Flint Trust owe Florida intangible tax when its trustees had to remain outside Florida and its beneficiary held only a limited power of appointment?
No. No trustee had Florida situs because individuals could not reside in Florida and corporate trustees could not qualify or do business there. The beneficiary had only a limited appointment power and…
Did the Flint 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 the Flint 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 the Flint 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 the Flint 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 the Flint 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…
Can a custom flexible packaging manufacturer bill for artwork and printing plates without charging sales tax if the customer provides a manufacturer's exemption certificate?
Yes. The Comptroller confirmed that when a company bills customers for artwork and plates used in manufacturing custom flexible packaging, no state or local sales tax needs to be charged, as long as t…
Does a California company that runs an internet 'mall' website for Texas retailers create Texas sales tax nexus for itself or for the retailer's out-of-state clients, and who is responsible for collecting and remitting the sales tax?
The Comptroller ruled that COMPANY A, a California business that built and ran e-commerce websites for retailers (including some in Texas) and collected payment on their behalf, was responsible for co…
Which fishing baits are exempt from Texas sales tax as perishable bait, and which baits are still taxable?
Exempt. Sales tax is no longer due on perishable fishing bait such as worms, minnows, water dogs, crawfish, live or frozen shrimp, frozen shad, frozen squid, blood baits, and crickets. Fishing lures, …
Did a Texas-organized LLC owe former franchise tax and have to file an initial report even if taxed federally as a partnership?
Yes. Organization under Texas law made the LLC subject to former franchise tax despite federal partnership treatment. Its initial report used Rule 3.562 for taxable capital and earned surplus, includi…
Is installing or removing window tinting/sunshield film on a commercial building taxable, and does it matter whether the building is residential or nonresidential?
Taxable, if the building is nonresidential. The Comptroller ruled that adding or removing window film or tinting on an existing commercial building (like a store front or office building) is taxable r…
When an event planner bills a client for a mix of food, rentals, decorations, and entertainers, which of those charges are subject to Texas sales tax?
It depends on the item. The Comptroller ruled that food, rentals (tables, chairs, decorations, tents), and most goods transferred to the customer are taxable, while charges purely for live entertainer…
How long does the statute of limitations run on the manufacturing phase-in exemption, and does it differ if the exemption was claimed at the time of purchase versus refunded later?
A four-year statute of limitations applies to purchases made during the last quarter of 1993, 1994, and later periods when the manufacturing phase-in exemption is claimed at the time of purchase (gove…
What former Texas franchise-tax penalties applied when a report was more than 60 days late and a tax determination remained unpaid?
A report more than 60 days late incurred a 10% penalty on unpaid tax. If the taxpayer had also received a deficiency or jeopardy determination and failed to pay it on time, the letter said an addition…
What counts as exempt 'machinery and equipment' for a Texas enterprise project, and how do the related sales tax refunds work?
The Comptroller ruled that 'machinery and equipment' for a Texas enterprise project under Section 151.429(a) covers essentially all depreciable property purchased for use in the zone -- production mac…
Does the Texas fishing bait exemption put fishermen on the same footing as hunters, and are ice and small containers of honey taxable?
The Comptroller confirmed the perishable bait exemption puts fishermen on an equal footing with the exemptions available for hunters. Separately, ice is taxable even though it is for consumption, beca…
Can a Texas manufacturer buy external packaging supplies like corrugated void-filler and air bags tax free?
Yes. The Comptroller ruled that a manufacturer may give a vendor a properly completed exemption certificate to buy external packaging supplies -- including corrugated void-filler and air bags used to …
Is a service that posts a client's website link and information to other websites' free submission forms taxable in Texas?
Not taxable. The Comptroller ruled that a business which posts a client's website link and information to free listing/submission sites around the internet is providing a service that is not taxable.
Is a foreign corporation that is the general partner of a Texas-active limited partnership subject to Texas franchise tax, and what about its shareholders and out-of-state limited partners?
The foreign corporation is subject to Texas franchise tax as the general partner of a Texas-active partnership; its individual shareholders and any out-of-state limited partners are not. A Florida S c…
Is an environmental consulting firm's installation of a petroleum-leak remediation system, its water/soil sampling, and its reports subject to New York sales tax?
It depends entirely on the capital-improvement test -- if an environmental consulting firm's installation of a petroleum-leak remediation system (and any related tank removal/replacement) satisfies al…
Is a group self-insurance workers' compensation trust taxed as an insurance company under Article 33, or under another article of the Tax Law?
Under Article 9-A, not Article 33 or the personal income tax. Because the trust is not licensed by the Superintendent of Insurance and is not regulated under the Insurance Law, it is not 'doing an ins…
Are funds a bank receives from a subsidiary's issuance of commercial paper 'deposits' includible in the bank's deposits allocation factor?
No. The deposits factor of a bank's Article 32 allocation percentage uses 'deposits' as defined in 20 NYCRR 19-7.2, which is modeled on the federal FDIC definition (12 USC 1813). Money a wholly owned …
We're buying a 127-acre parcel for commercial redevelopment. The land has one large structure that used to be a house but has been converted to office space (leased to an architecture firm and a law firm), plus five smaller ancillary structures (a couple of small houses, a vacant house, a stable/loft, and a caretaker's apartment over a garage). The main building will be demolished before or shortly after closing; some ancillary structures will also be demolished, and the rest converted to a day care center. Total consideration is over $1 million, but no single structure is worth anywhere near that. Does New York's 'mansion tax' -- the additional 1% Real Estate Transfer Tax on residential property sales of $1 million or more -- apply to this purchase?
No -- the additional ("mansion") transfer tax doesn't apply. Swiss Re America Holding Corporation was considering buying, for commercial development, a 127-acre New York parcel containing a large form…
Could a closely held corporation use a minority-interest discount when valuing its stock for Florida intangible tax paid for shareholders?
Yes. Florida ruled that a minority interest is a factor normally considered in valuing closely held stock, so the corporation could account for that discount when paying intangible tax for its shareho…
Does a federally chartered production credit association (a farm-credit lending institution) have to pay Utah sales and use tax on its own purchases?
No. A production credit association (PCA) is a federally chartered instrumentality of the United States under the Farm Credit Act, and federal instrumentalities are constitutionally immune from state …
Two charitable lead annuity trusts, created under the same family trust instrument with identical remainder beneficiaries, are being combined into one 'Surviving Trust' by court order because their income no longer covers their required annual charitable payments. The trusts jointly own New York real property as tenants-in-common. To protect the separate remainder beneficiaries' interests despite the combination, we're setting up a bookkeeping 'Pro Forma Account' that tracks what each set of beneficiaries would have received had the trusts stayed separate, plus a 'Loan-Back Agreement' so that if a 2003 distribution from that account requires deeding out New York real property, the recipient beneficiaries can immediately loan the property interests back to the Surviving Trust instead of the trust having to sell real estate to raise cash. Does combining the trusts -- or the later Pro-Forma-driven deed-and-loan-back mechanism -- trigger New York's Real Estate Transfer Tax or Real Property Transfer Gains Tax?
Exempt -- combining the two trusts didn't change who beneficially owned the underlying New York real estate. Lew R. Wasserman, Jean Stein, Gerald H. Oppenheimer, and Andrew Shiva, as trustees of two c…
Is a residents' association that was specially chartered by the legislature with municipal powers, and treated by the IRS as a political subdivision, subject to Connecticut's corporation business tax?
No. A residents' association chartered by a 1931 Special Act as a body politic and corporate, exercising municipal-type powers (fire protection, streets, beaches, police, and a real-estate tax) and tr…
When restaurant/food-processing equipment like an ice machine is bought tax-free under the manufacturing exemption but later put to a different use, who owes the tax, and how much?
It depends on when the equipment was bought. A vendor who accepts an exemption certificate in good faith isn't liable for the tax -- the purchaser is. For an ice machine bought tax-free between Octobe…
Is Texas sales tax owed on direct-to-home satellite TV installation, equipment rental, and programming charges, and does local tax apply?
Yes, the tax charge was correct. Equipment rental and installation for direct broadcast satellite TV are taxable at the full state-plus-local rate (6.75% in this case), but programming charges are tax…
Is overhauling a compressor used to lift oil and maintain well pressure a taxable service in Texas, or is it exempt as manufacturing equipment repair?
Taxable. The Comptroller ruled that a compressor used to lift oil from wells and maintain pressure for recovering additional oil is production equipment, not exempt manufacturing equipment, so the ser…
Are hearing aid batteries exempt from Texas sales tax, and does a retailer need an exemption certificate to sell them tax-free?
Exempt. The Comptroller confirmed that hearing aid batteries are exempt from Texas sales tax as a supply or replacement part for hearing aids, which are themselves exempt by statute. The purchaser doe…
Were receipts from goodwill and other intangibles sold to a Florida corporation included in former Texas receipts?
No. Assuming the asset-sale income was unitary, receipts allocated to goodwill and other intangibles followed the payor's legal domicile. Because the buyer was a Florida corporation and the tangible-p…
Did holding interests in limited partnerships doing business in Texas create former franchise-tax liability for a corporation?
Not if the corporation's only activity was holding limited-partnership interests. But if it was a general partner in any partnership doing business in Texas, the corporation was subject to former Texa…
Did the former Texas throwback rule cover interstate solicitation and products sold to customers outside the United States?
For interstate sales, independent solicitation created taxable-capital nexus but was protected under Public Law 86-272 for earned surplus, so the same shipments could avoid throwback for one component…
Are concession stand food sales taxable when a school district runs the stands at sporting events instead of during the regular school day?
Yes. The Comptroller ruled that food sales from concession stands a school district operates during sporting events are taxable, because the Tax Code 151.314(d)(1) exemption for school food sales only…
Can a retailer avoid collecting and later refunding Texas sales tax on items sold for export to Mexico by routing delivery through a customs broker at the border?
Yes. A retailer can avoid collecting and then refunding sales tax on items sold for export to Mexico by shipping the item to a licensed customs broker at the border and having the broker deliver it to…
When a landlord bills a commercial tenant separately for electricity measured through the tenant's own sub-meter, is that billing a taxable sale of electricity, and can a predominant-use manufacturing study exempt it?
No. The Comptroller ruled that billing a tenant for electricity through a separate sub-meter is not a sale of electricity by the landlord -- it's just part of the rental/lease price of the real estate…
Were separately stated delivery and tank-cleaning charges subject to Texas motor vehicle rental tax?
No. The Tax Policy Division said separately stated cleaning and delivery charges were not subject to motor vehicle rental tax. The letter attributed that treatment to a recent motor vehicle administra…
Is cleaning, inspecting, and applying a protective monel coating to oilfield equipment like submersible pumps and tank batteries a taxable repair or remodeling service in Texas?
Yes. Coating and re-coating oilfield equipment such as submersible pumps and tank batteries counts as taxable maintenance, remodeling, or repair of tangible personal property under Rule 3.292, so the …
Were an out-of-state manufacturer's receivables from Florida customers subject to Florida intangible tax when its salesperson regularly visited the state?
Yes. Florida ruled that receivables from Florida customers had Florida business situs because the manufacturer's salesperson regularly entered the state to call on customers and solicit orders, and th…
Is a package of disposable products sold to hospitals for use in a heart-lung pump during open heart surgery exempt from Texas sales tax?
Yes. The package of disposable products sold to hospitals for use in a heart-lung pump during open heart surgery is exempt from Texas sales tax, because a heart-lung pump and its accessories and attac…
Are the annual membership fees, supplier commissions, and consulting charges earned by an operator of computer-equipment buying groups subject to New York sales tax?
Mixed result -- a computer buying group operator's annual membership fees (not club dues) and supplier commissions (agency fees) are not subject to New York sales tax, and its software training or net…
Is a personal matchmaking and dating service subject to New York sales tax?
No -- a dating service that matches clients based on interviews and profiles, or lets clients browse an album of prospective dates, is not subject to New York sales tax, because bringing people togeth…
When is a staffing or subcontractor arrangement exempt as a 'temporary employee' under Texas law, versus a taxable temporary help service?
It depends on meeting all four requirements of Tex. Tax Code § 151.057: the work must normally be done by the client's own employees, the client must supply the equipment, the client must directly or …
How should an apartment complex handle sales tax refunds for electricity used in vacant apartment units that were taxed as commercial accounts, and can it still use exemption certificates for residential accounts billed at commercial rates?
When several tenants' electricity accounts are billed in the apartment complex's name, the complex itself is the buyer and can receive the tax refund directly rather than needing a separate request fr…
When a multi-level marketing company sells vouchers to its distributors that are redeemed for printed goods like trading cards, who owes sales tax on the sales to the final customer?
The company itself, not just its independent distributors, is a 'direct sales organization' responsible for sales tax on the full selling price of the vouchers and related items sold through its distr…
Is the electricity a paper mill uses to run dedicated air conditioning for rooms housing its production equipment's electrical controls exempt from New York sales tax?
Yes -- a paper mill's electricity used exclusively to run dedicated air conditioning systems that keep separate, restricted-access control rooms cool enough to prevent the electrical components (switc…
Does a school owe Utah sales tax when it sells discount cards that let students buy discounted goods and services from outside vendors?
No. When a school sells discount cards that are honored by a number of outside vendors — rather than selling the cards itself as the vendor of the underlying goods or services — the sale of the card t…
Does a company that operates a can-crushing prize machine owe sales tax on the advertising fees it charges, or on the machine and prizes it buys?
No, the advertising fee charged to companies for placing their logos on the machine is not taxable. But the machine's operator must pay sales tax on the taxable items it buys to run the promotion, inc…
How these rulings are useful
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