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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Is a purchase exempt from Utah sales tax if it's paid for with a U.S. government purchase, travel, or fleet credit card?
It depends on how the charge is billed. Utah sales tax does not apply to purchases made with a U.S. government purchase, travel, or fleet credit card when the transaction is billed directly to and…
Does a group have to collect Kansas sales tax on a food fundraiser it holds on behalf of an exempt youth development organization?
No tax to collect. K.S.A. 79-3606(ii) exempts sales of tangible personal property purchased directly by a nonprofit for nonsectarian comprehensive multidiscipline youth development programs, and…
Are repair and installation labor services taxable in Kansas, including when performed for farmers?
Generally taxable. Under K.S.A. 79-3606(q), the service of repairing, servicing, altering, or maintaining tangible personal property is taxable, so servicing a lawnmower for a farmer or business…
Can a city split its taxable Solid Waste fee into a separate, untaxed 'Environmental Fee' covering community cleanup and environmental services?
No -- the whole fee stays taxable. A city proposed splitting its taxed Solid Waste fee into two components: a Waste Fee and a separate Solid Waste Environmental Fee (funding cleanup days,…
Can a company building a facility through an Industrial Development Agency deal buy, lease, install, and maintain the project's property tax-free when it acts as the agency's disclosed agent?
Yes, largely. When a company acts as the disclosed agent of an Industrial Development Agency (IDA) -- with purchase invoices and contracts naming the IDA as purchaser, lessor, or lessee -- its…
A stucco subcontractor had a nontaxable transaction certificate but lost it and couldn't produce it during the audit. Can the state still deny the construction deduction — and does an early cashier's-check payment stop interest from running?
Both answers went against the taxpayer, and the protest was DENIED. Actionside Lath and Plaster, a stucco subcontractor, deducted $16,790 it received from a general contractor (Omega Sunspaces) as a…
Is a nonprofit 501(c)(3) science-education organization exempt from Kansas sales tax on its purchases?
Not exempt. The Department could find no subsection of K.S.A. 79-3606 that exempts the purchases of a nonprofit 501(c)(3) organized to promote science education. Kansas sales tax exemptions are…
When a customer both resells and personally consumes the same type of product, does the supplier charge sales tax on everything, or can the customer buy it all tax-free and self-report the tax on what it consumes?
Buy everything tax-free and self-report. When a purchaser (like a veterinarian) can't separate, at the time of purchase, which goods will be resold from which will be personally consumed, Utah…
Could the affiliated corporate group stop filing consolidated Florida income tax returns?
Yes. Florida found good cause in the group's major seven-year business reorganization and allowed separate returns beginning in 1997, subject to four conditions addressing the effective date,…
Is a homeowners association exempt from Kansas sales tax on its purchases?
Not exempt. Although 1998 Senate Bill 493 added sales tax exemptions for certain organizations (such as nonprofit zoos and parent-teacher organizations), the Department advised that 'not every…
Are oil and grease used in a commercial printer's presses exempt from Kansas sales tax as consumed in production?
Yes. The Department concluded that oil and grease used in a commercial printer's printing presses are exempt from Kansas sales tax as consumed in production. Lubricants used in manufacturing…
Is a computer systems-integration consulting firm's charges for hardware, software, and support services subject to New York sales tax?
It depends on which service is being billed. Pure consulting, project management, systems management, and technology planning are not taxable; selling and installing computer hardware is taxable;…
Was a court-ordered class-action settlement account subject to Florida corporate income tax or return filing?
No. The court-ordered bank account merely segregated and distributed class-action settlement funds under a consent decree. It was not a statutory artificial entity or Florida corporate-income-tax…
Does a prescribed medical device that treats a bodily malfunction qualify for the Kansas sales tax exemption for prosthetic and orthopedic appliances?
Exempt when prescribed. K.S.A. 79-3606(r) exempts sales of prosthetic and orthopedic appliances prescribed in writing by a licensed healing-arts, dentistry, or optometry practitioner, defined to…
Are Habitat for Humanity's materials and construction services for its housing projects exempt, and must it still collect tax on fundraising sales?
Materials and construction labor are exempt; fundraising sales are not. K.S.A. 79-3606(ww) lets Habitat for Humanity buy tangible personal property tax-free when it is incorporated into a housing…
Did a licensed Texas emergency shelter qualify for the residential child-care motor vehicle sales tax exemption?
Yes. The Texas Department of Protective and Regulatory Services said a licensed emergency shelter qualified under the Human Resources Code to provide the described 24-hour residential care. The…
Is rebuilding the tee boxes on an existing golf course taxable remodeling, or nontaxable new construction, for Texas sales tax purposes?
Taxable remodeling, not new construction. A country club completely demolished and rebuilt the tee boxes on its golf course and asked whether that counted as nontaxable new construction since the…
Is a vacuum-truck company's charge for hauling and disposing of drilling mud and saltwater from oil and gas production wells subject to Texas sales tax?
No, not taxable. Hauling and disposal charges for waste are generally taxable real property services in Texas, but Rule 3.356(a)(3)(B) carves out materials resulting from oil, gas, or geothermal…
Is a nonprofit hospice group exempt from Kansas sales tax on its purchases?
Not exempt. Although 1998 Senate Bill 493 added sales tax exemptions for certain organizations (such as nonprofit zoos and parent-teacher organizations), the Department advised that 'not every…
Are a community action group's materials and labor to repair or weatherize low-income housing exempt from Kansas sales tax?
Both are exempt. K.S.A. 79-3606(oo) exempts tangible personal property a community action group or agency buys to repair or weatherize housing occupied by low-income individuals, so the materials…
How did Texas tax a sole proprietor's motor vehicles leased to a corporation for more than 180 days versus rented for 180 days or less?
For one contract exceeding 180 days, the lessor's vehicle purchase was taxable and the lease payments were not, whether the vehicles had already been used or were newly bought for leasing. A…
Is a service that collects driving-complaint calls and reports them to the vehicle owner subject to New York sales tax?
No. A service that collects driving-complaint calls through a toll-free number and reports them only to the individual subscriber (never incorporated into reports shared with others) qualifies as…
Our nonprofit hospital is building a new emergency facility, ICU, and parking structure using an off-balance-sheet 'synthetic lease' financing: we'll ground-lease our own land to a trust controlled by our lender for 49 years (nominal $1/year rent), the trust will lease it right back to us on a triple-net basis for up to 15 years while we actually build and pay for the improvements, and at the end we'll almost certainly exercise an option to buy back the trust's position. We have a sales tax exemption certificate as a nonprofit. Does this lease-and-leaseback structure trigger sales tax on construction materials/services, mortgage recording tax on the lease documents, or New York's Real Estate Transfer Tax on any part of the transaction (including our eventual buyback)?
Exempt across all three taxes, though for different reasons in each case. Beth Israel Medical Center ('Petitioner'), a voluntary nonprofit hospital and Tax Law Section 1116(a)(4) exempt…
How are New York's College Choice Tuition Savings Program and its participants taxed for franchise tax, personal income tax, and estate and gift tax purposes?
The Program (and its trust fund and LLC) is a governmental arrangement, not a corporation or association, so it owes no franchise tax, income tax, or unrelated-business income tax. For participants:…
A Texas company plans to resell satellite phone service (from a Netherlands provider, with ground stations in South America) to customers mostly based in Texas. What Texas taxes apply?
Sourced by where the call originates, not by billing address alone. A company planned to resell satellite phone service -- purchased from a Netherlands-based provider using ground stations in…
Are purchases of medical supplies and equipment by a nonprofit nursing home exempt from Kansas sales tax?
Partly exempt. Under Senate Bill 309 (1987), all sales of medical supplies and equipment purchased directly by a nonprofit skilled nursing home or nonprofit intermediate nursing care home -- as…
How did California tax the four-year income from a 1998 traditional-to-Roth IRA conversion when the taxpayer moved into or out of California?
California included the four-year conversion installments attributable to periods when the taxpayer was a resident. An inbound taxpayer reported installments after becoming a California resident; an…
Was a subsidiary's transfer of furniture and fixtures to its parent taxable when both companies recorded it as a dividend?
No if the subsidiary received no consideration. Assumed debt, intercompany debt, or another benefit to the subsidiary could instead make the transfer a sale.
Was a mailing-list license taxable when the names and addresses were transferred only electronically?
No. Mailing-list information transferred directly from computer to computer was not taxable tangible personal property when no disk, tape, paper, or other physical property accompanied it. The…
Does an out-of-state manufacturer that sells into Utah through independent sales reps have sales tax nexus and need to register, even if it believes its sales are tax-exempt?
Yes. The Commission ruled that an Indiana manufacturer selling into Utah through independent manufacturers' representatives (not merely advertising or direct-mail solicitation) had sales tax nexus…
Does a part-time Park City homeowner who mainly lives and works in Chicago qualify for Utah's primary residential property tax exemption, and does a landscaper or the homeowner pay sales tax on a tree that's planted at a client's home?
On residency: an individual who mainly lives and works in Chicago, using a Utah home only 1-2 months a year, is not domiciled in Utah on those facts and does not qualify for the primary residential…
Must a church collect Kansas sales tax on a months-long consignment fundraiser selling greeting cards for UNICEF?
The church must collect tax on the card sales. Kansas's new exemption for religious institutions extends to their purchases, not their sales, and because of the duration of the event no exemption…
How does Kansas tax an out-of-state dealer that builds fabric-covered steel farm shelters in Kansas?
The builder is a contractor-consumer and owes Kansas use tax on its materials. Fabric-covered steel-arch farm shelters are 'buildings,' so the dealer that builds them is a contractor and the…
Are hauling and transporting services subject to Kansas sales tax?
Not taxable, with a catch on your own purchases. Kansas taxes only enumerated services, and transporting (hauling) services are not currently among them -- so long as you are not engaged in the sale…
Were Florida residents' fund shares exempt from annual intangible tax when the portfolio held exempt securities?
Yes, if the portfolio held only exempt securities on the last business day of the prior year. Direct U.S. government obligations were separately exempt, but if any other portfolio asset was taxable,…
Must an alarm company charge Kansas sales tax on security monitoring fees, and how is a bundled monitoring-plus-equipment charge taxed?
Don't tax the monitoring fee; the provider pays tax on the equipment. Security monitoring is not an enumerated taxable service under K.S.A. 79-3603, so monitoring fees are not subject to Kansas…
A company bought a business division without getting a tax clearance, and years later the state demanded it pay gross receipts tax the seller was later audited and assessed. Is the buyer on the hook — and can it even challenge a tax bill that was issued to the seller?
The buyer was liable as a 'successor in business,' but — because it never got notice of the seller's assessment — it was allowed to challenge that assessment, and part of the audit math was thrown…
Was a Texas motor vehicle rental exempt when the federal government or a federal employee traveling on official business rented the car?
Yes. The federal government and federal employees traveling on official business were exempt from Texas motor vehicle rental tax. The rental company was to have the renter complete a motor vehicle…
Did a homeowners' association qualify for the former Texas franchise-tax exemption when the development included commercial ranching property?
No. Section 171.082 required the development or project to be legally restricted to residential use. Because the development included commercial-use ranching property, the corporation did not…
What material did South Carolina's September 1998 policy-document index cover?
The index organized Department Revenue Rulings, Revenue Procedures, Private Letter Rulings, Technical Advice Memoranda, and Information Letters concerning taxation from 1987 through September 30,…
What did South Carolina's September 1998 policy-document citator show?
The citator identified Department Revenue Rulings, Revenue Procedures, Private Letter Rulings, Technical Advice Memoranda, and Information Letters issued from 1987 through September 30, 1998 that…
How did Utah tax continuing-education registration fees, attendee manuals, direct-mail brochures, mailing lists, and small use-tax amounts?
Utah did not tax continuing-education registration fees. A seminar manual was taxable to the attendee if separately charged; if included without a separate charge, the seminar company owed use tax…
Can a money-losing, tax-subsidized public swimming pool program get a sales tax exemption on its admission and equipment rental fees just because charging tax feels like double taxation?
No. However sympathetic the district's situation, the Utah Tax Commission has no power to create a sales tax exemption on its own -- it can only administer exemptions the Legislature has already…
Is an aircraft delivered in Kansas through a chain of simultaneous transfers to a foreign buyer exempt from Kansas sales tax?
Exempt, if two conditions are met. The Department agreed that the simultaneous sale and delivery of the aircraft in Kansas is exempt from Kansas retailers' sales tax if (1) each entity in the chain…
Are an interexchange carrier's gross receipts from 800-number calls exempt from Kansas sales tax?
It depends on whether the 800 service is WATS. Under K.S.A. 79-3603(b), only interstate wide area telephone service or wide area transmission ('WATS') service, as described in the statute, qualifies…
What South Carolina interest rate applied to tax underpayments and overpayments for the quarter beginning October 1, 1998?
The rate was 8% for the three-month period beginning October 1, 1998. Interest was compounded daily, except that simple interest applied to an underpayment of a declaration of estimated tax.
Can a county assessor deviate from Utah's standard personal property depreciation schedules -- or use an income-approach impairment charge for real property -- when a taxpayer presents evidence of reduced value?
It's fact-dependent, not a blanket yes or no. A county assessor generally must use Utah's standard personal property depreciation schedules, but Rule R884-24P-33(B.3) allows deviation for a specific…
Of the federal excise tax, state fuel taxes, and the state environmental assurance fee that appear on a petroleum invoice, which ones count toward the Utah sales and use tax base?
Only one of the five charges counts. The federal excise tax on petroleum products is excluded from the Utah sales tax base if separately stated, and Utah's own motor gasoline, aviation fuel, and…
Were foreign military personnel attached to NATO exempt from Texas motor vehicle sales tax, and what proof supported a refund?
Yes. Foreign military personnel attached to NATO were exempt, and tax already paid was refundable. The requester had to provide the county title-application and tax receipt, identification showing…
Were one-time and monthly charges for shared web-hosting services subject to Florida sales and use tax?
No. Shared web-hosting charges were nontaxable service fees where the provider retained ownership and control of the server and did not sell, rent, lease, or license hardware, canned software, or…
Does Connecticut's controlling interest transfer tax apply when a parent merges one wholly-owned subsidiary that owns Connecticut real estate into another wholly-owned subsidiary of the same parent?
No tax. Merging one wholly-owned subsidiary of a parent into another wholly-owned subsidiary of the same parent does not transfer a controlling interest to anyone new -- the parent controls the…
Two owners of closely held companies were paid by their own corporations but reported the pay as 1099 nonemployee compensation, not wages. Can they still claim the employee wage exemption from gross receipts tax?
No — they are bound by how they reported the pay to the IRS, so the wage exemption did not apply and the protest was DENIED. Louis and Carolyn Bortot managed two closely held family corporations…
Which payments between a sole shareholder-landlord and the wholly owned corporate tenant were taxable in Florida?
Rent, the landlord's mortgage, insurance and property-tax payments, and required improvements were taxable rent even without a written lease. Qualifying utilities, minor repairs, and the tenant's…
Are sales of discount cards and prepaid telephone cards subject to Kansas sales tax, and what use tax applies to promotional magazines?
Discount-card sales are not taxed as admissions; use tax reaches the magazines. The Department found K.S.A. 79-3603(e) does not tax the retail sale of discount cards that give holders access to…
Are a club's fundraising sales exempt from Kansas sales tax because the proceeds go to youth groups like 4-H and Boy Scouts?
No. A club asked whether its fundraising sales were exempt because the bulk of the proceeds went to groups like 4-H, the Boy Scouts, and youth swim and track teams. The Department ruled that the…
If you had a resale certificate but lost it, and you only get a replacement after the state's 60-day deadline, can you still deduct those receipts?
No. An architectural consultant sold his services to a firm that he believed had given him a Type 5 nontaxable transaction certificate (NTTC) showing the services were bought for resale, which would…
Is a prescription bone growth stimulator exempt from Utah sales tax as home medical equipment?
Yes. The Utah State Tax Commission ruled that a prescription bone growth stimulator, owned by the patient (not the physician) and used only by that patient to treat a nonunion fracture, qualifies as…
How does Kansas sales tax apply to a company's shipping/handling charges, distributor support fees, carrier damage payments, and newsletters mailed into Kansas?
A mix of results. Kansas sales tax is based on the retail selling price plus shipping, handling, or freight charged to the distributor. A carrier's payment to a retailer for damaged goods is…
If an aircraft parts repair company does 90%+ of its work for licensed carriers but also repairs some pre-sale manufacturer components and used/military aircraft equipment, is the machinery and equipment it uses for ALL that repair work exempt from Texas sales and use tax?
Taxable -- the exemption requires EXCLUSIVE qualifying use, and this client doesn't have it. An aircraft parts repair company holding a Texas Direct Pay Permit does about 90% of its work repairing…
Is an FDA-registered, prescription-only Vacuum Erection Technology (V.E.T.) system used to treat male impotence exempt from Texas sales tax when sold under a physician's prescription?
Exempt, when sold under a prescription. The V.E.T. (Vacuum Erection Technology) System is FDA-registered and sold only by prescription to treat male impotence. The Comptroller confirmed it qualifies…
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