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 PLR 98-4 exempt propane and a filled tank sold for a barbecue grill at a South Carolina residence?
Yes. Propane sold for an outdoor grill at a person's residence was exempt as residential fuel, and a filled tank was incidental to that exempt sale. Propane for a nonresidential location and an…
Does a religious organization qualify for the Kansas sales tax exemption, letting it buy ministry literature tax-free?
Exempt. K.S.A. 79-3606(aaa) exempts all sales of tangible personal property and services purchased by a 501(c)(3) religious organization and used exclusively for religious purposes. The Department…
Is converting a Texas corporation into a partnership a taxable event for franchise tax, and does electing to be taxed as a corporation federally make the partnership taxable in Texas?
No to both. The Comptroller's Franchise Tax Administration Division approved a taxpayer's requested rulings that (1) if converting a Texas corporation into a partnership is not a taxable event for…
For a company's 'procurement process management services,' which parts are taxable business management services and which qualify for Connecticut's outsourced computer-and-data-processing exemption?
It depends on the service. A company's 'procurement process management services' split two ways for Connecticut sales tax. Its accounts-payable and support functions are computer and data processing…
Did a treaty-country corporation with a Texas inventory warehouse owe earned-surplus tax when it filed no federal return and had no federal taxable income?
No earned-surplus tax, assuming the treaty meant the corporation filed no federal return and had no federal taxable income. The foreign corporation planned to establish a Texas inventory warehouse.…
Did Texas pass a law letting a corporation convert to a partnership to avoid franchise tax, and what are the franchise-tax consequences of such a conversion?
Partly true: a 1997 law created a 'conversion' transaction, and a corporation that converts to a Texas limited partnership does escape franchise tax at the partnership level — but the converting…
My company contracts with insurance companies to review their claims data and identify overlooked reinsurance recoveries they're entitled to but haven't collected — we don't touch the original claims or the relationship between the insurer and the insured. Is this service subject to Texas sales tax?
Yes. Even though you don't affect the original claim or the insurer-insured relationship, reviewing claim data to determine whether an insurance company is eligible for reinsurance recovery benefits…
Is a utility's charge to install a new residential natural gas line subject to New York State and local sales tax?
No state or local sales tax applies (beyond a possible school district utility tax), even though the customer here was charged the full 8.5% combined rate. The utility's charge for installing a new…
Did a state military organization's post exchange on a federal reservation have to collect Florida sales tax?
No. When federally activated, the state military organization was a federal instrumentality immune from Florida law. When not activated, the Department still found Florida sales-tax law preempted on…
How did Florida treat a county's lease, sublease, and leaseback of public facilities for sales, intangible, stamp, and property tax?
The described leaseback payments were not subject to sales tax: the first two leases qualified for resale treatment and the county's sub-sublease payments were government-exempt. The TAA also found…
If I pull a building permit in Kansas, will my property taxes go up by the value I wrote on the permit?
No -- not by itself. The Kansas Division of Property Valuation directs that a county appraiser 'shall not use the value stated on a building permit as the sole criteria for determining the fair…
Which parent-teacher organization fundraising sales are exempt in Kansas, and which — like carnival games and bingo — are taxable?
Mixed. K.S.A. 79-3606(yy) exempts sales of tangible personal property and services purchased by a parent-teacher association or organization, and its sales of tangible personal property. So tickets…
Is an educational institution that is exempt on its purchases also required to collect Kansas sales tax on its own sales?
Yes — being exempt on purchases does not excuse collecting on sales. Schools and educational institutions are exempt from paying Kansas sales tax on their purchases, and the 1998 legislature…
Was an underwriting agreement for asset-backed certificates subject to Florida documentary stamp tax when payment depended on delivery of the securities?
No. The agreement did not create a written, unconditional obligation to pay a sum certain because the underwriters' payment was contingent on the subsidiary delivering the certificates. For this…
A husband sold and installed blinds on commission and his wife managed the office; part of their pay was reported as self-employment income. Do they owe gross receipts tax on it, and does the state's late assessment excuse the penalty and interest?
Yes to the tax, and no relief on penalty and interest — the protest was DENIED. Bill McConnell sold and installed window blinds for Blinds Direct on commission; his wife Sherri was the office…
What Florida taxes applied when a municipality leased two power plants to an owner trust and immediately leased all the property back?
No sales tax applied to head-lease or sublease payments if the owner trust registered as a dealer before closing and issued resale certificates. Prepaid rent avoided documentary stamp tax only under…
Who reported oil-and-gas lease receipts after an unrecorded written transfer of all equitable and beneficial ownership rights?
The equitable or beneficial owner reported the receipts. Although legal title remained with the managing partner, the written transfer moved all rights, obligations, liabilities, benefits, and…
How does a Nebraska individual recompute the 1998 federal alternative minimum tax to figure the Nebraska minimum tax?
Recompute the federal AMT on Nebraska terms. Under Revenue Ruling 22-98-1, Neb. Rev. Stat. §77-2715 requires an individual to recalculate the 1998 federal alternative minimum tax (Federal Form 6251,…
Was a Florida country club's separately billed $636-per-member assessment for golf-course capital improvements subject to admissions tax as club dues or fees?
No. The assessment financed a one-time capital renovation, was billed separately in a fixed amount, did not entitle members to use the club, did not reduce ordinary dues, and was not used for…
Which older California FTB Legal Rulings were withdrawn by Legal Ruling 1998-6?
FTB withdrew all 79 Legal Rulings identified in the official attachment to Legal Ruling 1998-6. The listed guidance was no longer applicable because of later appeals, court decisions, legislative…
If you file a refund claim and the state never acts on it, then you refile after the deadline, can you still get your money back?
No. A carpet subcontractor who had overpaid gross receipts tax filed a refund claim in September 1997, but the Department never acted on it. When the state doesn't grant or deny a refund claim…
Was a $17 million sale of a broadcaster's operating assets exempt from Florida sales tax as an occasional or isolated sale?
Yes, for the business's non-inventory tangible personal property other than aircraft, boats, mobile homes, and motor vehicles. The Department treated the contemplated transfer of all business assets…
Which parent-teacher organization fundraiser sales are exempt, and which — like carnival games and pre-sold bingo — are taxable?
Mixed. This ruling (which supersedes a prior December-1998 letter) applies K.S.A. 79-3606(yy), exempting sales of tangible personal property and services purchased by a parent-teacher association or…
Is hauling leftover nonrecyclable trash away from a recycling plant a taxable trash-removal service?
Yes. Hauling leftover nonrecyclable trash away from a recycling plant is a taxable trash and garbage removal service under Tax Law § 1105(c)(5), the same as trash removal from any other real…
Are helicopter sightseeing rides and tours a taxable equipment rental or an exempt transportation service, and are aerial photos sold to passengers taxable?
Helicopter rides and sightseeing tours are an exempt transportation service, not a taxable equipment rental, because the operator retains 'dominion and control' -- it keeps possession of the…
Are a home electrical safety inspection ('survey') and mandatory municipal code-compliance electrical inspections subject to New York sales tax?
It depends on who buys it and why. A voluntary electrical safety inspection ('survey') is a taxable real-property-maintenance service when purchased by the property's owner or lessee, but is NOT…
Does a New York business have to charge sales tax on dog-walking fees?
No. Dog walking is not subject to New York sales tax because Tax Law § 1105(c) only taxes specific enumerated services, and dog walking is not one of them.
Does a vendor selling zeppoles (fried dough) from a mobile trailer at festivals and carnivals have to charge New York sales tax?
No. Zeppoles sold cooled, bagged, and unheated for takeout from a mobile trailer at festivals and carnivals are exempt food products, similar to donuts, and are not taxed as restaurant food because…
Can a centralized advertising subsidiary buy and resell promotional materials to its affiliated retail companies tax-free when the materials are mailed free to customers in New York?
Yes. A newly formed advertising subsidiary can purchase promotional materials and related production services tax-free for resale, and its sales of those materials to affiliated retail companies are…
Is a foreign corporation that stores goods in unaffiliated New York public warehouses using a fulfillment service, and does employees visiting to inspect warehouses and meet customers defeat its Public Law 86-272 protection?
Storing goods in unaffiliated New York public warehouses is the use of a fulfillment service under section 209.2(f), and it does not create nexus. Employees traveling into New York to examine those…
Does a foreign corporation become subject to Article 9-A by storing a day's inventory in a New York common-carrier warehouse for just-in-time delivery, or does the fulfillment-services exemption apply?
The storage would otherwise create nexus, but the fulfillment-services exemption applies. A foreign manufacturer's storage of about one day's inventory in a New York common-carrier warehouse for…
Does a manufacturer's tooling, provided free to New York subcontractors to make components for its own products, qualify for the investment tax credit?
Yes. Xerox's tooling (dies and molds) that it provides without charge to New York subcontractors -- usable only to make components for Xerox and used under Xerox's supervision -- is not leased…
After the De Buono decision, is a qualified ERISA retirement plan subject to the New York Article 13 tax on unrelated business taxable income?
Yes. This modified opinion reverses TSB-A-97(10)C on the retirement plan. After the U.S. Supreme Court's De Buono decision -- holding that a New York tax of general applicability that merely burdens…
Which purchases for a new natural-gas and distillate-oil electric generating unit qualified for Florida's power-production machinery exemption?
The generating machinery and integrated systems generally qualified at the time of purchase because the unit burned natural gas and No. 2 distillate oil—not residual oil—and produced electricity for…
How did Texas tax trailers bought for 36-month operating leases, attached accessories, and a lessee's later balloon-payment purchase?
Trailers were motor vehicles, so the lessor paid motor vehicle sales tax when buying one for a 36-month operating lease. Accessories bought attached were included in that tax base; separately bought…
Were revolving warehouse agreements, master notes, and mortgage assignments used to fund Florida mortgage loans exempt from documentary stamp tax?
Yes, for all four described structures, as long as actual advances did not exceed the pledged mortgage collateral and documentary stamp tax had already been paid on the collateral obligations. That…
For leased equipment, who owes Utah personal property tax -- the lessor or the lessee -- under a conditional sales agreement versus a true lease with 'direct pay' terms?
Under a conditional sales agreement (lessee holds title with a mandatory purchase obligation at lease end), the LESSEE is treated as the true owner under Utah's 'essence of the transaction' test and…
When a multinational company consolidates its delivery-truck fleets from several 100%-owned subsidiaries into one new 100%-owned transportation subsidiary, does that vehicle transfer trigger Utah sales tax?
No sales tax is due. A multinational company's plan to transfer delivery trucks from several wholly-owned subsidiaries into one newly formed, also wholly-owned transportation subsidiary qualifies as…
Are sales of custom prosthetic and orthotic devices taxable in Kansas, and must the provider register as a retailer?
The described sales are not taxable, but the provider still must register. A company that provides custom prosthetic and orthotic devices, billed to Medicare, Medicaid, insurance, and patients in…
Are computer and internet business-center services provided to hotel guests subject to Kansas sales tax?
The services are not taxable, but the provider's own purchases are. A company planned hotel business centers giving guests 24-hour access to a computer, software, the Internet, e-mail, printing,…
Was investment income from cash exceeding a taxpayer's current and identified future business needs classified as business income merely because the cash remained available for business use?
No. Mere availability for possible business use did not make the investment income business income. Cash needed for the current business cycle or earmarked for identified future business needs could…
Did a Texas professional association become subject to franchise tax because it elected federal S-corporation treatment?
No. The Comptroller looked to the entity's legal formation for Texas franchise-tax status. Assuming the entity was legally organized as a professional association under the Texas Business…
Two affiliated trucking companies want to consolidate payroll by having a third related company become the formal employer of all their employees, providing payroll and benefits for a management fee — essentially an employee leasing arrangement. Is the management fee subject to Texas sales tax as a data processing service, and does an intercorporate-affiliate exemption apply?
Payroll services are normally taxable as data processing services, but this arrangement looks like it falls under Rule 3.364's staff leasing services category instead — if the requirements of Rule…
What sales-and-use-tax enforcement position did South Carolina announce under the original Internet Tax Freedom Act moratorium?
The Department said it would not enforce collection of South Carolina sales and use taxes from October 1, 1998 through October 21, 2001 with respect to Internet access and electronic commerce as…
Is labor to maintain and repair a residential swimming pool exempt from Kansas sales tax after the 1998 residential-services exemption?
The labor is exempt; the materials are not. Effective July 1, 1998, 1998 Senate Bill No. 493 exempts services to install or apply tangible personal property when they involve the original…
We're restructuring ownership of several producing oil and gas leases (with production equipment already installed and in use) through a series of contributions between related companies, ending with a limited partnership selling the leases — always bundled with their production equipment, never separately — to outside purchasers for a lump sum. Are these sales subject to Texas sales/use tax?
No. None of the transactions are subject to sales tax. The true object of each sale from the limited partnership to a purchaser is the sale of a mineral lease — a nontaxable real property interest —…
A 501(c)(3) nonprofit is accepting an assignment of a lump-sum general construction contract for a low-income housing project (financed through a partnership with for-profit limited partners who bought low-income housing tax credits), and will serve as the substituted general contractor using separated subcontracts. Can the nonprofit's subcontractors buy materials tax-free, can the nonprofit pass along exemption certificates to them, and who ultimately owes tax on the incorporated materials?
The nonprofit, as a lump-sum general contractor, is the consumer of all building materials and pays tax on them itself — no tax is collected from the project partnership on the lump-sum charge.…
When a Florida pub posts tax-included drink prices and sells several drinks in one round, is sales tax computed per drink or on the combined transaction?
Per drink. Each posted drink price included a specific amount of sales tax, and buying several drinks together did not change the price or tax already embedded in each item. The pub could use its…
Were admissions charged by a section 501(c)(3) foundation that operated and bore the financial risk of a Florida aquarium exempt from sales tax?
Yes. The foundation qualified under section 501(c)(3) and met all four sponsorship criteria: it actively operated the aquarium, was responsible for safety and success, received the gross and net…
Must a youth baseball organization collect Kansas sales tax on its candy fundraising sales?
Taxable. A youth baseball program's participation fees are exempt as a 501(c)(3) youth recreation organization serving persons 18 or younger, but its retail fundraising sales are not. The Department…
Are utilities at a home used for a business taxed as residential or commercial in Kansas?
It depends on how the home is used. Kansas imposes state and local sales tax on gas, water, electricity, and heat sold to commercial consumers. Where a home's business use is de minimis or…
Why must a school student organization collect Kansas sales tax on its concession-stand sales?
Because the state requires retailers -- including schools, churches, and non-profits -- to collect sales tax on their taxable retail sales, and student concession-stand sales have been taxable in…
How could a multistate bank prove that notes executed outside Florida remained exempt when later stored and serviced by its Florida division?
The lender had to create contemporaneous documentary proof—within the note or in incorporated or accompanying documents—that execution, delivery, and acceptance all occurred outside Florida.…
Were a Florida gas utility's charges for transporting customer-owned natural gas subject to the state gross receipts tax?
Not after October 31, 1993, when customers retained ownership of the gas and the utility received payment only for transportation. Those receipts were separate from the sale of natural gas and were…
When did the Kansas religious-organization exemption take effect, and are a church's utilities exempt?
The exemption began July 1, 1998, with no refund for earlier purchases. 1998 Senate Bill No. 493 added a new sales tax exemption for religious organizations under K.S.A. 79-3606(aaa), effective July…
Do nonprofit associations that support member colleges qualify as exempt 'educational institutions' under the 1998 Kansas definition?
Yes, they qualify. K.S.A. 79-3602, as amended by the 1998 Kansas Legislature (L. 1998, ch. 130, sec. 29), defines 'educational institution' to include nonprofit endowment associations and…
When a corporation or LLC converts into a Texas limited partnership and the partnership sells its assets, who owes franchise tax, and what final filings are required?
The converting corporation files a final report; the resulting limited partnership and its sale gain owe no franchise tax, but a corporate or LLC general partner does. When a corporation (or LLC)…
We want to raise financing secured by five operating units within our petrochemical refinery, structured as a sale/leaseback: we'd transfer bare legal title to a lender trust and immediately lease the units back, keeping full operational control, maintenance responsibility, and a repurchase option, while continuing to own the land underneath. Is this transaction subject to Texas sales and use tax?
No. The transaction is a nontaxable financing arrangement using real property (and possibly substituted property) as collateral, not a taxable sale of tangible personal property. This holds even…
Were online-course marketing, tuition collection, revenue sharing, and banner-advertising fees taxable in Florida?
No. Under the proposed contracts, online-course tuition, marketing revenue shares, and internet banner-advertising payments were not subject to Florida sales, use, or gross receipts tax. The result…
Could a lease facilitator handle a lessee's trade-in without the dealer physically possessing the vehicle or title, and what records were required?
Yes. The dealer did not need physical possession of the trade-in, and an authorized lease facilitator could handle title documents under a vehicle-specific power of attorney. But the dealer's…
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