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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Were receivables taxable on January 1 after a Florida business sold them for cash and assumed liabilities to an out-of-state purchaser?
No. The Florida business did not own or control the receivables on January 1 after selling them for cash and the assumption of liabilities. Its continued duties were only ministerial. The out-of-state…
Were three deeds issued during a confirmed Chapter 11 reorganization subject to Florida documentary stamp tax?
No. Florida concluded that the three real-property deeds were exempt from documentary stamp tax under the confirmed Chapter 11 plan and the bankruptcy transfer rule. The plan order covered transfers m…
Were a nonprofit mortgage bank's warehouse notes and collateral assignments exempt from Florida documentary stamp tax?
Yes. Florida treated the member-funded revolving credit arrangement as a wholesale warehouse mortgage agreement. Because documentary stamp tax had been paid on the developer notes serving as collatera…
Does a real estate agent or firm owe Texas sales tax on market analyses, feasibility studies, and property inspection reports sold to clients?
It depends on what the written report actually contains. Compiling data on sold or listed properties (comparable sales, listings for an area or subdivision) is a taxable 'information service.' But a r…
If our medical practice charges patients, insurers, or attorneys for copies of medical records, do we owe Texas sales tax on that charge?
No -- when a medical service provider charges for copies of medical records as part of its professional service (to a patient, an agent, a party in litigation, or an insurance carrier), that charge is…
My client makes and installs custom stone/marble tabletops and wood, vinyl, and stone flooring in homes -- when do I charge sales tax on the materials versus the labor, and can I buy materials tax-free for resale?
Installing tile, marble, stone, hardwood, or wall-to-wall vinyl flooring into a home is treated as an improvement to real property, so residential installation labor is not taxable, but the contractor…
New York Advisory Opinion TSB-A-96(30)S: Is applying a slip-resistant chemical treatment to tile, terrazzo, or concrete floors -- often done for ADA compliance -- subject to sales tax, and does it matter whether the floor is brand new or already existing?
It depends on whether the floor is new or existing. FST Services applies a permanent chemical treatment to hard mineral floors (ceramic, quarry tile, concrete, terrazzo) that boosts slip resistance fo…
Are payments to a Bermuda captive insurance company for New York risks subject to the section 1510 additional franchise tax on insurance corporations?
No. The section 1510 additional franchise tax reaches an alien insurance corporation only if it is authorized to transact business in New York under a certificate of authority from the Superintendent …
We run an electronic clearinghouse that scans, converts, and transmits medical insurance claims between healthcare providers and payors -- which of our fees (claims conversion, transaction, clearinghouse, archival) owe Texas sales tax, and do we owe use tax on the software and equipment we give customers?
Yes -- nearly all of the clearinghouse's fees are taxable. The Comptroller treated the claims-conversion, one-way transaction, clearinghouse, and archival fees as taxable data processing services (or,…
A private company operating an airport cogeneration plant under a Port Authority lease needs to refinance with new bonds. The Port Authority will assign its lease rents to the trustee (exempt, since it's a government instrumentality), and then our company will separately grant a leasehold mortgage and a security interest in our equipment to the same trustee as additional security. Is that additional security exempt too, riding on the Port Authority's exemption?
Exempt, as a supplemental mortgage riding on the Port Authority's own exemption. KIAC Partners operated an integrated cogeneration and central heating/refrigeration plant at JFK Airport, financed with…
Is a sewage-works corporation taxed under Article 9 (sections 183/184, 186, or 186-a) or under Article 9-A?
Under Article 9-A. A sewage-works corporation organized under the Transportation Corporations Law and not regulated by the Public Service Commission is not principally engaged in a transportation or t…
Does fuel and electricity used to recap (retread) tires qualify for Utah's noncommercial-use sales tax exemption that applies to mining, agriculture, and manufacturing?
No, the tire recapping company is not entitled to the fuel and electricity exemption. Utah Admin. Rule R865-19S-35 limits the noncommercial-use exemption to mining, agriculture, and manufacturing acti…
When a gas marketer sells natural gas to New York end-users with title passing outside New York, are its receipts taxed under sections 186, 186-a, 189, or the sales/use tax?
It turns on where the sale occurs, which depends on where title, possession, and risk of loss pass -- a factual question. Under this agreement, title, risk of loss, and transportation responsibility p…
Does Utah sales tax apply to a graphic designer's charges for brochures, newsletters, business cards, and web page design?
It depends on what's actually delivered. Selling printed material like business cards, brochures, and newsletters is taxable, and any design services billed as part of that sale are taxable too — you …
If I remitted sales tax by 'backing it out' of my total ticket receipts instead of adding it on top, can I get a refund of that tax directly?
No, not directly to the seller in most cases. The Comptroller explains that if a seller calculated tax by dividing total receipts by 1.0825 and treating the difference as tax ('backing it out'), the s…
Do I have to charge sales tax on manual drafting services, or only on computer-aided (CAD) drafting?
Sales tax is due on drawings and blueprints produced by a draftsman regardless of whether they're drawn by hand (pen and pencil) or with Computer Aided Design (CAD) software. The Comptroller corrected…
Are breast prostheses and the special bras that hold them exempt from Texas sales tax?
Yes. The Comptroller ruled that silicone breast prostheses, breast forms, and breast pads that replace a missing breast are exempt from Texas sales tax as prosthetic devices under Rule 3.284(a)(10). B…
Is a Cell Tech 'Super Sun Smoothie' blue-green algae drink mix exempt from Texas sales tax as a food product if it's used as a meal replacement?
Yes, in this case. The Comptroller had previously told this seller that the Cell Tech Super 'Sun' Smoothie product was taxable, but after receiving additional information showing the product can be us…
Is renting a university recording studio, including a technician's time, subject to Texas sales tax, and what about the tapes used during the session?
No, the hourly charge for using the university's recording studio is not taxable, and the charge for the technician's time is not taxable either. However, the charge for the materials provided during …
If our company manages a jail or prison under contract with a government agency, can we buy materials and utilities tax-free using a resale certificate?
Yes, but only if set up correctly. A private company (ABC) managing prison facilities for exempt governmental entities can issue resale certificates to its vendors for materials that will pass to the …
Is a vehicle tracking/personal security monitoring service, sales of the tracking device itself, and 'extra' per-minute services (like remote unlock or directions) subject to Texas sales tax?
Yes, in part. Installing and monitoring a personal security/vehicle tracking device requires a private investigator/security license, so those monitoring charges are taxable as a Security Service unde…
If a tax-exempt agency like a Private Industry Council or the Texas Rehabilitation Commission pays for a sponsored student's books, tools, and meal tickets at our college bookstore, should we charge sales tax?
It depends on who is actually billed as the purchaser. If the exempt or governmental agency (like a PIC or the Texas Rehabilitation Commission) is invoiced directly and pays the college or bookstore i…
Five scenarios about bands playing at a club for door fees, tip-jar money, or free drinks instead of straight cash pay: which payments are taxable, and who -- the band or the club -- owes the tax?
PARTIALLY SUPERSEDED as to Scenario 1 (see note below). Five 1996 scenarios: (1) [SUPERSEDED] a band collecting and keeping its own door entry fee, with the club having no knowledge of the amount, was…
Does a state university have to collect sales tax on parking permit fees charged to its faculty, staff, and students?
No -- per this 1996 letter, a state university does not have to collect sales tax on parking permit fees charged to its own faculty, staff, and students, extending a previously issued policy that cove…
Does a nonprofit club that operates concession stands under a license from a school district have to collect sales tax on its concession sales?
Yes. Even though the club is an exempt organization, sales of taxable items it makes -- like concession stand food and drinks -- are still subject to sales tax. Per Rule 3.322(g)(1), the club can buy …
Were Florida-customer receivables taxable after a Florida business sold them to an out-of-state subsidiary before January 1?
No. Receivables owned on January 1 by the out-of-state subsidiary lacked Florida taxable situs, even though they arose from Florida customers. The Florida seller's servicing did not change that result…
Under Florida's 1996 intangible tax, were receivables sold before January 1 among non-Florida-domiciled affiliates taxable, and were the intercompany notes taxable?
No. The selling subsidiaries did not own the receivables on January 1, and the purchasing subsidiary was not taxable if it lacked Florida commercial domicile. If the affiliated group elected a consoli…
Can a county assessor require payment of the fee-in-lieu of property tax before issuing a salvage title on a damaged vehicle?
This request was WITHDRAWN by the Commission before it reached a substantive answer. Internal Commission staff raised the question on behalf of county assessors — who were split, with some counties re…
Can a Utah resident get credit on their Utah income tax return for income tax they also paid to another state on the same income?
Yes, within limits. A Utah resident who pays income tax to another state on income that is also reportable to Utah (for example, wages earned for services performed in that state, or business income a…
New York Advisory Opinion TSB-A-96(28)S: Is a 1,000-capacity concert hall a taxable "cabaret" because it also sells drinks at a bar during shows, or is admission exempt as a musical performance because the drink sales are merely incidental to the concerts?
It's not a taxable "cabaret," so admission is exempt. The Water Street Music Hall is a 1,000-capacity concert venue with no seating, no tables, and no food, that hosts touring musicians and runs a cas…
New York Advisory Opinion TSB-A-96(27)S: Does a banking-software license and maintenance contract signed in 1988 -- before a 1991 New York law change made pre-written software taxable -- still get the OLD exempt treatment for its ongoing annual maintenance fees, or does the new tax apply going forward regardless of when the contract was signed?
The new tax applies to charges from September 1, 1991 forward, even under a contract signed years earlier -- there's no grandfathering here. ALLTEL Financial Information Services, Inc. (formerly Syste…
New York Advisory Opinion TSB-A-96(26)S: When a commercial landlord bills a tenant "additional rent" for building services beyond the basic lease package -- overtime elevator/porter/heat, plus separate categories like extra cleaning, mechanical maintenance, and rubbish removal -- which of those charges are subject to sales tax?
It splits by service type, regardless of the "additional rent" label. Midtown Realty Company's lease bundles basic cleaning, elevator, porter, and heat/AC service into base rent during normal business…
New York Advisory Opinion TSB-A-96(25)S: A driving school that switches from renting road-test cars to buying its own vehicles asks whether it now owes sales tax on those purchases (and on repair parts), and whether it can get a credit for the 25% of its student fee that's allocated to "providing the car."
Yes, both are taxable, and no, there's no credit. Model Auto Driving School, Inc. charges students a fee split 75%/25% between driving instruction and providing a car for the practical road test -- th…
After a corporation claims the investment tax credit and spins the property off to an LLC in a tax-free section 721 exchange, who keeps the credit and is it recaptured?
The corporate taxpayer that claimed the credit keeps it, with no recapture. A film company bought qualifying ITC equipment, claimed the credit in the first qualified-use year, then contributed the vid…
Is sales tax owed on cleaning, polishing, and restoring granite, marble, and terrazzo floors, walls, vanities, and tabletops?
It depends on what kind of work is done and on what type of property. Cleaning, polishing, waxing, and sealing natural stone surfaces (residential or nonresidential, or on furniture) is always a taxab…
Did an out-of-state corporation have Florida corporate income tax nexus when eight officers, including key officers, lived and worked in Florida?
Yes. The corporation had sufficient Florida nexus and a corporate income tax filing requirement because eight of its fifteen officers lived in Florida and performed corporate duties there, including k…
Are specialized therapeutic beds and mattress overlays that a company rents out exempt from Texas sales tax as hospital beds?
Mostly yes: the Comptroller found that most of the specialized beds and pressure-relieving mattress/flotation systems the company rents out qualify for Texas's hospital bed exemption under Tax Code § …
Were a retailer's separately stated home-delivery charges taxable when customers could avoid them by picking up purchases?
No. The retailer's transportation charges were not taxable because they were separately stated and each customer could avoid them by picking up the merchandise. Inadequate documents about where title …
Who owed Florida's rental car surcharge, battery fee, and waste tire fee when a dealer originated a vehicle lease and assigned it to a leasing company?
The originating dealer owed the rental car surcharge for the first 30 days and the lead-acid battery and waste tire fees when it first leased the vehicle. The assignee leasing company owed no second t…
Could a Florida cable provider buy converter boxes and remote controls tax free for resale when it separately leased them to subscribers?
Yes. A registered cable provider could give its vendor a resale certificate and buy converter boxes and remote controls tax free when the equipment was purchased exclusively for taxable leasing to sub…
Can a corporation deduct its gross receipts for administrative services it performs for an affiliated limited partnership under the affiliated-corporation deduction?
No. The Section 7-9-69 deduction covers only administrative services performed for an affiliated *corporation*, and a limited partnership is not a corporation. Sprint/United Management Company (SUMC) …
Is a pay-per-view order-verification and database service that a company runs for cable operators taxable as a Texas 'data processing service'?
Yes. The Comptroller ruled that a company operating a National Transaction Center to verify and route cable pay-per-view orders -- identifying callers via ANI, checking eligibility, compiling transact…
Is a university's alumni newsletter subscription fee, its $50 alumni placement-office registration fee, and its $100 lump-sum career-fair fee to companies subject to Texas sales tax?
Mixed answer for a university with three separate fees. (1) Charges for alumni/general-public newsletters -- whether sold by single copy or by subscription -- are taxable. (2) The $50 fee alumni pay t…
Was the electricity portion of a shopping-center common-area maintenance charge taxable when the landlord separately identified actual utility cost?
No, if the landlord had paid sales tax to the utility and separately identified the tenant's share at the same or lower price than the landlord's cost. Monthly estimates reconciled to actual year-end …
Is a BiPAP breathing machine (face mask, head strap, and air-compressing pump) exempt from Texas sales tax as a prosthetic device?
No -- the Comptroller ruled that a BiPAP STD breathing unit (a face mask with a head strap connected by hose to an air-compressing pump) does not qualify for Texas sales tax exemption as a prosthetic …
Does a company that builds a federal hospital on an Indian reservation have to pay New Mexico gross receipts tax, or is the tax preempted by federal law?
Yes — the contractor owes New Mexico gross receipts tax, and the tax is not preempted. Centex Bateson built the 75-bed Shiprock Comprehensive Health Care Facility, an Indian Health Service hospital lo…
New York Advisory Opinion TSB-A-96(24)S: Is a company that supplies custom decorative table linens for one-time special events (weddings, parties) performing an exempt "laundering" service, or is it making a taxable rental of tangible personal property?
It's a taxable rental of tangible personal property, not an exempt laundering service. Table Wraps, Ltd. supplies custom-made decorative table linens for one-time events like weddings and parties unde…
Did either party owe Florida intangible tax after receivables were sold before January 1 and repurchased after January 2?
No. The seller did not own the receivables on January 1 and performed only ministerial collection and recordkeeping while the purchaser owned them. The Department also approved the purchaser's no-liab…
What did Florida's original, later-revised response say about receivables sold among non-Florida subsidiaries before January 1?
The original response said the sellers owed no tax because they did not own the receivables on January 1, the buyer owed no tax if it lacked Florida commercial domicile, and affiliate notes could be e…
How much of the mortgage balance was subject to documentary stamp tax when partnership property passed to the remaining partner on dissolution?
The deed was taxable based on 50% of the mortgage balance when recorded. The remaining partner had previously borne half the partnership debt through its partnership interest and would bear all of it …
Which payments under a Florida mineral-extraction agreement were taxable as rent or mineral sales?
Cash and in-kind mineral royalties were payments for extracted materials, not rent, and were exempt sales for resale when the lessee gave a valid resale certificate. The $500 minimum payment and the l…
Which enteral feeding products were exempt from Florida sales tax when sold to hospitals or physicians, and which remained taxable?
Florida exempted the listed pump sets, feeding bags, tubes, connectors, fasteners, adapters, and prescribed ambulatory feeding package when the required resale certificate and physician-order conditio…
Could a tax-exempt governmental project owner buy construction materials tax free when subcontractors coordinated the orders?
Yes. The governmental owner could buy project materials tax free when purchases used its purchase orders and credit, vendors billed it directly, it paid vendors directly, title vested at delivery to i…
When a 1995 rate increase to Utah's utility gross receipts tax has a January 1, 1995 effective date, how does that apply to a taxpayer whose fiscal tax year doesn't start on January 1?
The increased rate applies starting with the taxpayer's first taxable year BEGINNING on or after January 1, 1995 — not to any taxable year merely ending after that date, and not by splitting a single …
If my company moves, disassembles, and reassembles office furniture, and also sells, delivers, or repairs furniture, which of these charges are taxable in Texas?
A pure moving service -- relocating a customer's modular furniture, even if you must disassemble and reassemble it to do so -- is not taxable in Texas. But if you are selling, renting, repairing, or r…
If I store business forms I sold to a customer in my warehouse and later ship them out one box at a time, do I owe sales tax on the freight and handling charges billed separately later?
Yes. Because the seller stored the pre-purchased business forms in its own Texas warehouse rather than shipping them directly to the customer under the sales contract, the sale was already taxable in …
Can I use taxes I overpaid in earlier years to offset a later assessment if my refund claim for those years is now too late?
No. A refund of overpaid tax can only offset a later bill if the refund claim was filed within the three-year deadline — and here it wasn't. Wilson and Frances Lundy, New Mexico residents, had paid ta…
New York Advisory Opinion TSB-A-96(23)S: When an out-of-state industrial auctioneer sells equipment at a New York auction site "as is, where is" to a buyer who arranges common-carrier shipment to an out-of-state destination, is the sale taxable in New York, and what records must the auctioneer keep to prove it isn't?
Not taxable in New York -- as long as the buyer never takes physical possession within the state. Norman Levy Associates, a Michigan-based industrial auctioneer and appraiser, conducts public auction …
Did an equipment seller's support and consulting agreement create a taxable Florida service warranty?
No. The support agreement did not indemnify the customer for maintenance, repair, or replacement costs, so it was not a taxable service warranty. The customer used its own mechanics and bore those cos…
I paid gross receipts tax and only later got the nontaxable transaction certificate — can I still get a refund by claiming the deduction now?
No. A nontaxable transaction certificate (NTTC) must be in the seller's possession at the time the gross receipts tax return is due — not merely by the time the deduction is later claimed. Basin Elect…
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