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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A tow-and-storage contractor that sells seized and salvage motor vehicles at auction for the U.S. Marshals Service asks whether, after the January 1, 1996 law change, it must collect sales tax on those sales.
As of January 1, 1996, a salvage vehicle is no longer treated as a "motor vehicle" for tax purposes — it's treated as ordinary tangible personal property. So sellers of salvage vehicles must collect l…
When a Texas insurance company is placed into receivership, what priority does the Comptroller's claim for uncollected/unremitted sales tax and premium tax get, and does the Receiver (the Commissioner of Insurance) have to keep collecting and remitting tax going forward?
The Commissioner of Insurance acting as Receiver of an insolvent insurance company is NOT a governmental agency or otherwise exempt from tax, and sales tax owed by the receivership estate is a Class 3…
Did a contractor auctioning seized vehicles for the U.S. Marshals Service have to collect Texas motor vehicle or salvage-vehicle tax?
For ordinary motor vehicles, no: as agent for the unlicensed U.S. Marshals Service, the contractor did not collect motor vehicle sales tax but had to give buyers the title and tax-payment paperwork. F…
Under Florida's 1996 intangible tax, were receivables sold before January 1 to an out-of-state subsidiary taxable?
No. Receivables owned January 1 by an out-of-state subsidiary lacked Florida situs, and routine servicing or a later transfer back did not change the result. A nominal discount was acceptable, but an …
How does a contractor buy construction materials tax-free for a Utah public school project, and which items actually qualify?
Yes, but only for items that are actually converted to real property owned by the qualifying school. Effective January 1, 1996, a contractor or subcontractor may buy construction materials tax-free fo…
Is a commercial roofing contractor's reroofing, resaturation, regraveling, and panel-replacement work nontaxable 'scheduled and periodic maintenance,' or is it taxable repair/restoration under Rule 3.357?
It's taxable repair/restoration, not nontaxable maintenance. The Comptroller disagreed with the contractor's argument: the work described (reroofing, resaturation, regraveling, and panel replacement d…
New York Advisory Opinion TSB-A-96(9)S: Is admission to a converted concert-hall venue -- where bar sales make up 78% of total receipts even though the main draw is live music -- subject to New York's "cabaret" sales tax on admission charges?
Taxable, as a "cabaret" charge -- the opposite result from the companion case where bar sales were held merely incidental. Empire Management and Productions operates a converted 1912-era concert hall …
Under Florida's 1996 intangible tax, did loan transfers, Florida servicing, or recourse give Delaware bank subsidiaries Florida nexus?
No. The Delaware subsidiaries had no Florida nexus, and the transferred loans had no Florida taxable situs. The transfer form, ministerial servicing by Florida regional banks, and recourse rights did …
New York Advisory Opinion TSB-A-96(10)S: Are a corporate-communications consulting firm's charges for image/communications consulting, recommending and sourcing videos/slides, creating logos, and coordinating corporate meetings subject to New York sales tax -- and does billing structure or a client's Direct Payment Permit change the answer?
It depends entirely on whether tangible personal property is transferred and whether any related charges are separately billed. Arteffects, Inc. is a graphic design and corporate communications firm (…
Is a gut renovation that leaves the wall studs and floor/ceiling joists in place treated as nontaxable 'new construction,' or as a taxable service to existing commercial real property?
It's taxable -- not new construction. A renovation that converts a building to a new use but leaves the interior and exterior wall studs and the floor and ceiling joists in place is a taxable service …
Does a nonprofit/volunteer group have to collect sales tax on food and beverages sold at its annual fund-raiser, and can it get a refund of tax it already paid on two past fund-raisers?
No sales tax collection is required on food and beverages (like iced tea, sodas, coffee) sold at an annual fund-raising event if the sale lasts a week or less, is run exclusively by unpaid volunteers …
Is use tax due on complimentary (free) servings of beer that a bar brews on its own premises?
No use tax is due on the beer itself, because its ingredients (corn, wheat, barley, salt, yeast, etc.) aren't taxable items to begin with — but use tax is still due on the cost of any non-reusable ite…
New York Advisory Opinion TSB-A-96(8)S: Is the removal, disposal, and decontamination of waste from tanks at an EPA Superfund cleanup site a taxable real-property maintenance service, or an exempt capital improvement, when the site's overall final remediation plan hasn't been determined yet?
Taxable, at least for now -- because the ultimate capital-improvement outcome can't yet be established. Frontier Chemical Royal Avenue Superfund Site is a group of companies designated "potentially re…
If a high-income New York taxpayer's gambling losses are fully deductible up to gambling winnings for federal tax purposes, are those losses just as fully deductible on the taxpayer's New York return?
Not necessarily. Federal law (IRC § 165(d)) lets the taxpayer deduct gambling losses up to the amount of gambling winnings without any 2%-of-AGI floor or overall itemized-deduction cap. But New York T…
I came back to the U.S. between jobs and would have moved anywhere for work — was I really a New Mexico resident for tax purposes that year?
Yes. You cannot be domiciled 'nowhere,' so an unsettled job search does not make you a resident of no state. Hannibal Madden, a physicist who had lived and paid tax in New Mexico for years, left for a…
I served in the military entirely while living outside New Mexico — is my military retirement pay taxable now that I live here?
Yes. Military retirement pay is taxable New Mexico income in the year you receive it if you are a New Mexico resident then — even if you served your entire military career while living outside the sta…
Did Florida treat a permanently installed marina security system as tangible personal property or a real-property fixture?
Florida treated the installed system as a real-property fixture when the contract did not retain title or say it remained personal property until paid. The contractor paid tax on materials—or on full …
A direct-sales/multi-level-marketing company asked how it should collect and remit Texas state and local sales/use tax on sales made through its independent distributors.
Under Rule 3.286(a)(3), the company is treated as a distributor and must obtain a Texas sales and use tax permit and collect/remit state tax (then 6 1/4%) plus applicable local taxes on sales made thr…
Which cleanroom facilities and related equipment used in semiconductor (microchip) fabrication qualify for the Texas manufacturing exemption — specifically a chemical analysis lab and equipment air lock, chemical/gas dispense and storage rooms with their safety/cleanroom controls, and an electrical distribution room?
The chemical analysis lab and equipment air lock cleanrooms and their associated equipment are exempt under Sec. 151.318(q). For the chemical/gas dispense and storage rooms, the piping, filters, and s…
Are satellite-based data communications services (monitoring pipelines, messaging trucks, sending distress signals, tracking cargo) taxed in Connecticut as telecommunications services, or as computer and data processing services?
It turns on the label, and it's still taxable either way the company hoped to avoid. Connecticut's satellite-based data communications service is NOT taxable as a telecommunications service under Conn…
My tax check got lost in the mail even though I filed on time — do I still owe interest for the months the tax went unpaid?
Yes — interest keeps running until the tax is actually paid, even if your check was lost in the mail. Franklin and Shirley Niles mailed their 1994 New Mexico income tax return in early April 1995 and …
When a contractor pulls materials out of a valid tax-free inventory located inside a city and MTA (mass transit authority) taxing jurisdiction, and uses those materials on a lump-sum new construction job located outside that city/MTA area, which city's and MTA's local use tax applies?
The local (city and MTA) use tax is based on where the tax-free inventory is stored/kept at the time of or just before the materials are removed for use — not on where the construction job itself is l…
Does a nonprofit civic organization (and the nonprofit/school booster groups selling food in its festival concession area) have to collect sales tax on food and beverages sold as an annual fundraiser?
No — not if the sale is an annual event lasting a week or less, is run exclusively by unpaid volunteers of the participating nonprofit organizations, is entirely noncommercial (no caterer, restaurant,…
New York Advisory Opinion TSB-A-96(7)S: Does a computer-services tenant in an Economic Development Zone building qualify for the sales tax refund/credit on construction materials used to build or rehabilitate the building, even though it isn't the one buying the materials?
The building itself qualifies for the EDZ construction-materials refund, but Petitioner personally does not, unless Petitioner is the one who actually buys the materials and pays the tax. Gloria S. Fr…
Under Florida's 1996 intangible tax, were loans participated before January 1 to Delaware bank subsidiaries taxable?
No. Loans owned on January 1 by Delaware subsidiaries without Florida situs were not taxable, and the Florida banks' ministerial servicing did not create control. The purchase-money notes were taxable…
If a Utah parent company spins off a wholly-owned subsidiary to hold an office building (leasing space back to affiliates) or to centralize intercompany financing (borrowing, lending, and investing for the group), is the new subsidiary automatically part of the parent's unitary combined-report group from inception, are the intercompany rent/interest and dividends eliminated from combined income and the sales/property factors, and is income from unrelated third parties business income?
Yes, with one nuance on investment income. Both a new office-building-holding subsidiary and a new centralized-financing subsidiary are unitary from their inception because they're wholly owned, centr…
Does a school district's fuel-tax exemption carry over to a private contractor that operates the district's school buses, if the district still buys and dispenses the fuel from its own tanks?
No. Utah's fuel tax is imposed on the end user of the fuel, not on whoever purchases or dispenses it, so a private contractor operating school buses under contract must pay fuel tax on all gasoline an…
Is an electric cooperative exempt from Texas sales tax on the materials it buys to build a distribution line, and is the cooperative's charge to a customer for that line taxable?
The electric cooperative itself owes no sales or use tax on the materials it buys to build the distribution line — the Electric Cooperative Act (Article 1528b, Sec. 30) exempts electric cooperatives f…
How did Florida tax a municipal utility's emissions monitoring system, installation labor, and liquidated damages?
Florida taxed the full contract price, including separately stated installation labor, because the oil-fired generating equipment did not qualify for the exemption. Contract liquidated damages did not…
Does Utah sales tax apply to charges for converting customer drawings or ideas into computer-generated drawings and prototypes?
Yes, generally taxable — but the reasoning depends on what you're really selling. The Commission's final position: under Utah Admin. Rule R865-19S-92, charges for producing computer-generated output (…
If I sell and install storm doors, do I charge my customer sales tax, or do I just pay sales tax myself when I buy the doors?
It depends on whether you install the door. If you sell AND install a storm door, converting it from personal property into part of the building, you're a 'real property contractor' under Utah Admin. …
Under Florida's 1996 intangible tax, how were stock, a Nevada partnership interest, and a revocable-trust interest treated?
The trust's remaining corporation stock was taxable, but its interest in a non-SEC-registered Nevada limited partnership was exempt. The resident beneficiary had a taxable trust interest because he co…
Is a utility-line-locating 'damage prevention' service — where a contractor uses a computer-dispatched service to find and mark underground utility lines before excavation — taxable in Texas?
No. In this internal Comptroller memo, Tax Administration audit staff described a 'damage prevention' service in which a company, under contract with utility companies, uses a one-call center and a co…
Under Florida's 1996 intangible tax, were receivables sold before January 1 by a Florida parent to a Delaware subsidiary taxable?
No. Receivables owned January 1 by a Delaware subsidiary with no Florida domicile or business situs were not taxable. The parent's listed servicing remained ministerial whether performed inside or out…
Under Florida's 1996 intangible tax, were receivables sold before January 1 by three affiliates to a Delaware subsidiary taxable?
No. Receivables owned January 1 by a Delaware subsidiary without Florida domicile or business situs were not taxable. The three sellers' listed servicing remained ministerial whether performed inside …
Did a Florida tour operator collect sales tax on an unitemized vacation package, vehicle subleases, and gift-shop sales?
The operator did not collect tax on the unitemized package but paid tax on taxable components it bought. It did collect tax on stand-alone vehicle subleases, with a prorated credit for lease tax paid,…
Which schools and institutions qualify for Utah's tax-free construction materials exemption, and what paperwork does a contractor need for each purchase?
Public elementary and secondary schools qualify automatically. Private or religious schools qualify only if they're recognized by the IRS as tax-exempt under Section 501(c)(3) — for-profit schools nev…
Is a $1 surcharge that a private club must collect from baseball ticket purchasers and remit to a sports facility authority (as required under the Development Corporation Act of 1979) subject to Texas sales tax?
No. A $1 surcharge that a sports facility authority requires a private club to collect from ticket purchasers and remit directly to the authority — authorized under the Development Corporation Act of …
When a grocery store's gas-pump trading stamp promotion is redeemed for a mix of taxable and nontaxable food items, how is sales tax computed?
Redeeming trading stamps for merchandise is treated as a retail sale. The retailer must collect and remit sales tax on the taxable items redeemed (here, soda), based on whichever is larger: the redemp…
Under Florida's 1996 intangible tax, were receivables sold before January 1 to a Texas subsidiary taxable?
No. Receivables owned January 1 by a Texas subsidiary without Florida situs were not taxable. The parent's listed servicing remained ministerial whether performed inside or outside Florida, and its pu…
Under Florida's 1996 intangible tax, were receivables contributed before January 1 to a Delaware subsidiary taxable?
No. Receivables held January 1 by a Delaware subsidiary without Florida situs were not taxable, and returning them about a week later as dividends or for the subsidiary stock did not change that resul…
Under Florida's 1996 intangible tax, were receivables contributed before January 1 to two Illinois subsidiaries taxable?
No. Receivables held January 1 by two Illinois subsidiaries without Florida situs were not taxable, and returning them about a week later as dividends did not change that result. The subsidiaries' sto…
New York Advisory Opinion TSB-A-96(6)S: Is electricity used to power pipeline pumping stations that transport partially refined petroleum products between a refinery and terminals -- where the products get further blended before final retail sale -- exempt production electricity under Tax Law Section 1115(c)?
Not exempt -- taxable. Atlantic Pipeline Corporation, a Sun Company subsidiary, operates a FERC-regulated interstate pipeline network partly in New York that transports petroleum products (85% gasolin…
Under Florida's 1996 intangible tax, did a trust or its income beneficiary owe tax when no Florida-situs person could serve as trustee?
No. The trust barred any person with Florida tax situs from serving as trustee, and the income beneficiary waived revocation, amendment, trustee-removal, and appointment powers. Neither the trust nor …
Under Florida's 1996 intangible tax, did a trust or its income beneficiary owe tax when no Florida-situs person could serve as trustee?
No. The trust barred any person with Florida tax situs from serving as trustee, and the income beneficiary waived revocation, amendment, trustee-removal, and appointment powers. Neither the trust nor …
Under Florida's 1996 intangible tax, did an out-of-state corporation or partnership file when Florida owners made investment decisions?
Neither out-of-state entity had to file because its operations were carried out at its non-Florida office. The Florida residents' partnership interests were exempt because the partnership was not SEC-…
As a direct sales organization (multi-level marketing company), who is responsible for collecting and remitting Texas sales/use tax on sales made by its distributors, and how should local tax be tracked?
The direct sales organization itself — not each individual distributor — is responsible for collecting and remitting sales or use tax on Texas sales made through its distributors, per Rule 3.286(a)(3)…
Under Florida's 1996 intangible tax, were receivables sold before January 1 by a Florida-office parent to an out-of-state subsidiary taxable?
No. The out-of-state subsidiary owned, managed, and controlled the receivables outside Florida on January 1 and had no Florida office, assets, employees, agents, or representatives. The parent's servi…
Did a city's public-works equipment purchases qualify for Florida's government sales-tax exemption under its construction contract?
Not under the existing contract. The documents showed an intent for city purchases but did not clearly satisfy all six direct-purchase criteria. A conforming addendum could make the purchases exempt; …
How did Florida calculate sales or use tax on no-charge loaner vehicles provided while customers' cars were repaired?
Tax was based on the greater of the normal daily rental rate multiplied by loaner days or the internal business-expense charge recorded for the lease. The vehicles could still qualify as purchased exc…
Can a Utah vendor scan customer sales tax exemption certificates and store them electronically instead of keeping the paper originals?
Yes. A vendor may scan a customer's sales tax exemption certificate and store it electronically instead of keeping the paper original, as long as the electronic version captures essentially the same i…
New York Advisory Opinion TSB-A-96(5)S: Is admission to a no-seating, no-food 1,000-capacity concert hall subject to New York's "cabaret" sales tax on admission charges, given that a cash bar accounts for roughly a third of the venue's revenue?
Not taxable as a cabaret charge -- this venue passes the "merely incidental" test its sister ruling failed. "The Music Hall," a 1,000-capacity venue, will host only touring-musician concerts, with tic…
How did Florida apply the county surtax $5,000 cap to computer leases under a master agreement and separate supplements?
Each supplement was a separate lease. For operating leases, the $5,000 county surtax cap applied independently to each installment. For a conditional-sale supplement with a nominal purchase option, th…
I paid extra tax after an audit but before the Department issued any formal assessment notice — does my refund clock start from the audit or from the original due date?
From the audit — the producer won. BTA Oil Producers paid additional New Mexico oil and gas production taxes in October 1990 after a Department audit, remitting the underpayment shown in the Departmen…
A towing company asks whether towing/transfer charges billed in connection with vehicle repossessions — including a "second tow" from a storage facility to an auction — are taxable debt collection services or nontaxable towing/transportation.
It depends on whether a repossession actually occurred. If a towing company is hired only to move a vehicle the lender already has access to (e.g., after the borrower voluntarily drops it at a dealers…
A business sold all its operating assets (except two officers' cars and equipment it leased from a third party under an operating lease, which it couldn't transfer). Does the sale still qualify for the occasional sale exemption?
Yes. The Comptroller ruled that the sale still qualifies for the occasional sale exemption. The two automobiles didn't count because they were used for general business purposes, not operations. And b…
We're trustees of two charitable lead annuity trusts, created under the same family trust instrument with currently identical beneficiaries, that co-own New York real property as tenants-in-common. We're proposing to combine them into one 'Surviving Trust' by court order because their income no longer covers required annual charitable payments. To protect the separate remainder beneficiaries' interests, we're setting up a detailed 'Pro Forma Account' formula (tracking what each set of beneficiaries would have received had the trusts stayed separate, adjusted for years of investment gains/losses and a complex liquidity test) plus a 'Loan-Back Agreement' so that if a 2003 distribution requires deeding out New York real property, the recipients can immediately loan the property back to the Surviving Trust. Will combining the trusts -- or the later Pro-Forma-driven mechanism -- trigger New York's Real Estate Transfer Tax or Real Property Transfer Gains Tax?
Exempt -- the proposed combination wouldn'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…
Is tire retreading for interstate common carriers subject to Kansas sales tax?
In this letter to the Kansas Tire Dealers Association, the Secretary of Revenue determined that the sale of retread tires to interstate common carriers is not subject to Kansas sales tax. Interstate c…
Could a Florida county directly buy building materials for a public facility without paying sales tax under its revised purchasing procedures?
Yes. The county's direct purchases of construction materials could be exempt because it issued purchase orders, received invoices, paid vendors directly, took title at delivery, and bore insured risk …
Can an authorized agent for a mechanic or towing company access a protected vehicle registration record to send a legally required lien notice to the owner?
Yes. The Commission adopted a broader reading of the 'advisory notice' exception in Utah Code Ann. § 41-1a-116(4), holding it now covers not only vehicle-safety notices from manufacturers/government b…
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