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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Under Florida's 1996 intangible tax, did receivables remain taxable after an out-of-state retailer transferred them to a new out-of-state subsidiary before January 1?
No. The retailer did not own, manage, or control the transferred Florida receivables on January 1, and the new out-of-state subsidiary had no Florida taxable situs. Federal treatment of the brief tran…
When an employer stays fully liable for its own employees' health claims and just pre-funds an account the insurer draws from to pay them, are those claim payments and the insurer's admin fee taxed as insurance 'gross direct premiums' in Connecticut?
No. When the employer remains solely liable for its employees' health benefit claims below a liability limit and simply pre-funds a claims account that the insurer draws on to pay those claims as the …
We're a nonprofit local development corporation. Under the SBA 504 loan program, we plan to take a construction-phase mortgage from a borrower, immediately have it enforced by a private lender who's actually funding the advances, then take it back once permanent SBA financing kicks in. Is that mortgage exempt from mortgage recording tax through both phases?
Exempt throughout, including during the construction phase when a private lender is really funding and enforcing it. This is the origin ruling for Greater Syracuse Business Development Corporation's (…
If a broker pays a financial-information company's subscription fee for a customer, and also pays the information company a separate premium/commission based on the customer's brokerage business, is that premium/commission subject to Texas sales tax — and does it matter that the broker is out of state?
The premium/commission a broker pays an information-service provider is NOT subject to sales tax as long as it's separately stated and represents genuine, separate compensation to the provider (not pa…
A vendor sells equipment to a leasing company, which then leases it to the original customer under a deal labeled a 'financing lease' with declining monthly payments and a buyout/return/renew option at the end of each year — is that a financing lease or an operating lease for Texas sales tax purposes?
It's actually three separate leases, not one financing lease. Because the customer can return the equipment, buy it, or roll into a new lease with a new rental amount at the end of each year, the Comp…
New York Advisory Opinion TSB-A-95(43)S: In a 22-year NYC IDA bond financing to keep CS First Boston headquartered in the city, are the layered purchase, lease, resale-certificate, service-contract, rent, and eventual buyout transactions among Purchasing, Leasing, the Group Agents, and the IDA exempt from New York State and City sales and use tax?
Yes, exempt across all 13 questions raised -- provided every layer of the structure follows the documented agency/resale-certificate paperwork. To keep CS First Boston Corporation ("CSFB") headquarter…
How did RR 95-18 treat current-year property taxes in a South Carolina delinquent-tax sale and redemption?
RR 95-18 required the forfeited land commission's minimum bid to include taxes levied for the year the redemption period began. A sale had to wait until those taxes could be computed. A redeemer paid …
Are charges for Internet access taxable in Utah as telephone/telecommunications service, back when Internet service providers first emerged?
No. In one of Utah's earliest rulings addressing the internet, an Internet service provider operating in Salt Lake City, Ogden, and Provo asked the Commission to clarify whether it had to charge sales…
If a Texas business creates a website for a customer located in Mexico, does it still owe Texas sales tax on the charge?
Yes. The Comptroller confirmed that creating website software is taxable as tangible personal property, and that tax applies even when the customer is located in Mexico, because the software resides o…
Is the Tarjeta Nacional De Inscripcion (a Mexican vehicle-registration document a customer gave a Texas seller) valid proof that goods were exported to Mexico for the Texas export exemption?
No. The Tarjeta Nacional De Inscripcion is not acceptable proof of export because it doesn't document that the specific goods sold were actually shipped into Mexico. Valid proof of export instead requ…
For a company that sells and rents equipment used on a tribal reservation inside Connecticut's borders, do those receipts count in the Connecticut receipts factor when it apportions its corporation business tax?
Yes — they count. A company that sells or rents construction equipment for use on a federally-recognized tribe's reservation that sits within Connecticut's borders must include those receipts in BOTH …
Is Utah sales tax owed on dog grooming charges, and how does that compare to veterinary services and animal boarding?
Yes, dog grooming charges are subject to Utah sales tax. Animals are tangible personal property (per a 1970 Attorney General opinion), and Utah Admin. Rule R865-19S-78 taxes charges for services that …
Does a company that drafts customers' bank accounts electronically (EFT/ACH) on behalf of its business clients have to charge Texas sales tax on its drafting fees?
No. The Comptroller told the taxpayer that the fee it charges for its bank drafting service is not a taxable service, so it should not collect sales tax on those fees from its customers. However, beca…
New York Advisory Opinion TSB-A-95(42)S: In CS First Boston's proposed NYC IDA headquarters-retention deal -- where the building owner, Metlife, pays for and owns most leasehold improvements for regulatory-capital reasons while the IDA holds legal title -- are the purchases of Eligible Personalty, the Improvements, Metlife's reimbursements, and CS First Boston's debt-service payments exempt from sales and use tax?
Exempt, but with a genuinely fact-dependent condition on the Improvements question that this opinion couldn't resolve outright. CS First Boston Corporation ("CS First Boston") proposed a roughly 20-ye…
Under Florida's 1995 intangible tax, what happened when affiliated companies sold receivables to an out-of-state subsidiary before January 1?
The receivables were not subject to Florida intangible tax when the out-of-state subsidiary owned, managed, and controlled them on January 1 and did no Florida business. Later transfer back did not ch…
Can a towing company or mechanic access a vehicle's protected registration record based on their possessory lien, and does a protected registration stay protected after the vehicle is sold?
No, not directly. A towing company's or mechanic's possessory lien (created by statute) does not qualify as a 'bona fide security interest' under Utah Code Ann. § 41-1a-116(4), because that term requi…
Is a drilling contractor's charge for oil/gas well drilling services a taxable equipment rental or a tax-exempt service, and does it matter who physically operates the equipment?
It's an exempt service contract if the drilling contractor -- the one who supplies the equipment -- also retains CONTROL and supervision over the drilling operation, even if the customer's own employe…
In a sale-leaseback of manufacturing equipment, is the sale to the leasing company exempt, and are the lease payments back exempt?
The initial sale is exempt, but the lease payments are not. The manufacturer's sale of its own equipment to a leasing company is exempt as a purchase for resale. But because the leaseback was structur…
For deciding whether more than 95 percent of an insurance company's 'premiums' under section 1505(b) are for annuity contracts, do 'premiums' include reinsurance premiums (including from licensed or affiliated insurers) and all direct premiums on both New York and out-of-state risks?
Yes. For the section 1505(b) test of whether more than 95 percent of an insurer's premiums are for annuity contracts, 'premiums' means premiums as in the first sentence of section 1510(c)(1) modified …
Our state agency's subsidiary is redeveloping a 94-acre Queens waterfront site. A private developer will build the first residential parcel, financed by outside lenders, with our subsidiary named as the initial mortgagee even though it has no beneficial interest in the loan. Is recording that mortgage -- and its later assignment to the real lender -- exempt from mortgage recording tax?
Exempt, while UDC or its subsidiary QWDC remains the named mortgagee. This is the origin advisory opinion for the Hunters Point (Queens West) Waterfront Development project -- a 94-acre East River red…
How did Florida tax a multistate refinancing involving assigned mortgages, an out-of-state $125 million note, a $100 Florida recovery cap, and consolidated renewal documents?
Most steps were exempt. The note-and-mortgage assignment, out-of-state notes, consolidation agreement, and consolidated renewal mortgage produced no additional tax. The recorded second mortgage owed o…
Who owed Texas minimum rental tax after fleet refinancing, and could one entity use another entity's retired vehicles as deductions?
Refinancing the existing fleet did not itself trigger minimum rental tax. But for newly titled vehicles, only the title owner could use retired vehicles titled to that same entity as deductions, and t…
Does a clean room used to make the protective garments worn in semiconductor fabrication qualify for Texas's semiconductor fabrication clean room sales tax exemption?
No. The Comptroller held that the 'semiconductor fabrication clean room' exemption (created by Senate Bill 640) only covers clean rooms used to manufacture an actual semiconductor product — a clean ro…
Did storing and ministerially servicing Georgia loan notes in Florida create annual intangible tax or documentary stamp tax?
No. Notes owned, managed, and controlled in Georgia were not subject to annual intangible tax merely because a Florida affiliate stored them and performed limited servicing. Their later presence in Fl…
Did a Florida grantor owe intangible tax on an irrevocable trust when he could withdraw corpus only during a stated eight-month period each year?
Yes. The Department treated the grantor's right to withdraw any or all trust corpus from March 1 through October 31 as a continuing power of revocation, even when it could not be exercised during the …
Which of eight LoanLiner open-end credit forms was subject to Florida documentary stamp tax?
Only the LoanLiner Subsequent Action Form was taxable when its Extension Agreement was exercised, with tax based on the unpaid balance entered on the form. The other seven forms did not contain or inc…
Did Florida documentary stamp tax apply when an out-of-state statutory merger transferred Florida real property to the surviving nonprofit by operation of law without a deed?
No. Florida documentary stamp tax did not apply when the real property passed to the surviving corporation by operation of merger statutes and no deed was given. If a deed were given, consideration wa…
If my business charges landfill, garbage, or pallet companies a fee just to accept pallets and scrap materials at my facility (which I then use as raw material), do I owe sales tax on that fee?
No. The Comptroller ruled that a fee charged simply to accept pallets and related materials delivered by landfill, garbage, and pallet companies — without collecting the waste from the customer — is n…
Will Texas accept the Multistate Tax Commission's Uniform Sales & Use Tax Multi-Jurisdiction Certificate as a valid Texas resale certificate?
Not as submitted. The Comptroller's office reviewed a proposed Multi-Jurisdiction Sales & Use Tax Exemption Certificate and identified four problems that would need to be fixed before Texas could acce…
Does a law firm that performs background investigations for its clients have to charge sales tax like a licensed private investigator would?
No, not merely by doing background investigations for clients. Legal services are not on the list of taxable services, so attorneys don't collect sales tax on their legal fees — they're instead treate…
Is a New York investment-advisory subsidiary of a foreign 'bank' that is principally engaged in investment management (not deposits/lending) taxable under Article 32 as a banking corporation, or under Article 9-A?
Article 9-A. A corporation is a banking corporation under section 1452(a)(9) only if its foreign parent is itself a banking corporation -- and a corporation is 'doing a banking business' only if it is…
If a company hires contractors to clean up PCB contamination at its facility, does it owe sales tax on the site inspection, soil removal, decontamination cleaning, and waste-hauling charges?
It depends on the specific service. Site inspection and removal/replacement of contaminated soil are nontaxable services. Decontamination cleaning of the real property itself (like the compressor stat…
Are water trucks used to control lime dust at a limestone processing facility, as mandated by the State of Texas, exempt from tax because they're used for pollution control?
No exemption. The Comptroller ruled that if the water trucks are designed to transport persons or property on the highway, they are motor vehicles subject to motor vehicle tax (not sales tax), so sale…
Does a manufacturer owe sales tax when it sells hydrogen embrittlement test bars to plating companies, who use the bars to certify the quality of their plating tanks?
No exemption. The Comptroller ruled that hydrogen embrittlement test bars sold to plating companies for use in certifying the quality of their plating tanks do not qualify for the Rule 3.300 manufactu…
If my litigation support business produces trial exhibits like scale models, graphs, photographs, or videotapes for an attorney, do I have to charge Texas sales tax?
Yes, for the exhibits. The Comptroller ruled that separately stated consulting services are not taxable, but producing exhibits such as scale models, graphs, photographs, videotapes, maps, and charts …
Is a pre-employment background screening service (criminal, education, driving, and credit checks) taxable in Texas?
Yes. The Comptroller ruled that a company using on-line databases to run pre-employment screenings — pulling credit reports, criminal and civil records, education verification, and driver's license in…
Is equipment used in mining or quarrying (like screening equipment, shaker screens, front end loaders, sand screws, and gravel water pumps) exempt from Texas sales tax under the manufacturing exemption?
It depends on when the equipment is used relative to when processing (crushing/grinding) begins. Screening equipment, shaker screens, and sand screws are taxable if used before crushing or grinding st…
Was a fee paid directly to a licensed vehicle lease facilitator subject to Texas motor vehicle sales tax?
No, under the described structure. The dealer sold the vehicle directly to the banking-institution lessor, and the facilitator acted only as the lessor's agent. Tax applied to the total consideration …
Do refrigerated sandwich/pizza prep units and refrigerated worktop/undercounter units used in a restaurant qualify for Texas's manufacturing machinery and equipment sales tax exemption?
No. The Comptroller ruled that refrigerated sandwich/pizza preparation units and refrigerated worktop/undercounter units do not qualify as exempt manufacturing machinery and equipment. These units are…
Can an outside accountant who prepares a client's sales tax reports for a fee be held personally liable for the client's unpaid sales tax under Texas's responsible-person rule?
No. The Comptroller's office explained that personal liability under Section 111.016 of the Texas Tax Code for "control or supervision" of the accounting, collection, or payment of tax generally exten…
Did a lessee's residual-value obligation or purchase option turn the vehicle leases into conditional sales?
No. Requiring the lessee to act as sales agent or cover a minimum resale amount was not the same as requiring the lessee to buy the vehicle. One lease also gave an option to purchase, but the letter s…
Does an indoor golf-simulator business have to charge Utah sales tax on time or per-round charges to use the machines?
Yes. Charges for using golf simulation equipment — whether billed by the quarter-hour or by the round — are taxable as admission/user fees for a recreation or amusement activity. The billing method (t…
Are fees that bowling leagues pay for use of bowling lanes subject to Utah sales tax, or are they exempt like country club membership dues or facility rental?
Yes, fees bowling leagues pay for the use of bowling lanes remain subject to Utah sales tax as taxable admission or user fees — whether paid by an individual bowler or collected by a league on behalf …
Is electricity used at a restaurant chain's central commissary/kitchen exempt from sales tax if the food leaving the commissary isn't yet ready to eat?
No. The Comptroller ruled that the electricity used at the commissary is taxable. Even though the commissary only partially prepares the food before sending it to the restaurants to finish, the restau…
Do I have to charge Texas sales tax when I sell to an out-of-state government agency, college, university, or school district?
Generally yes for out-of-state government agencies — Texas doesn't exempt other states' governmental agencies unless a border state (like Louisiana or Oklahoma) has a reciprocal exemption agreement wi…
If I have a contract to improve realty for a tax-exempt entity (like a city), can I buy telecommunications/telephone services for the job site tax-free?
Not automatically. The Comptroller said telecommunications services aren't considered integral to improving realty, but a contractor can still give an exemption certificate for telecom services used a…
Does a trade show exhibit contractor have to charge sales tax on storage, transportation, installation, design/construction, supplies, and refurbishing services for client-owned exhibits and displays?
It depends on the service. Storage, transportation, handling/removal charges, and installation (electrical drop) charges for client-owned exhibits are not taxable unless tied to a sale or lease of the…
Is a contractor's charge for repairing or remodeling a warehouse for a movie production company exempt under Texas's manufacturing exemption?
No. The Comptroller advised that the repair or remodeling of the warehouse is a taxable nonresidential repair and remodeling service. Even though the movie production company that rented the warehouse…
Is Connecticut sales or use tax owed on construction equipment and materials sold or rented for use on a Connecticut tribe's reservation — when sold to the tribe itself, and when sold to the non-Indian contractors building for the tribe?
It depends on WHO buys and WHERE title or delivery passes. Sales and rentals of construction equipment made DIRECTLY to the Connecticut tribe or its enrolled members are exempt (federal preemption, Co…
Is a consultant who uses handwriting analysis, body language, statement analysis, and human behavior analysis to evaluate individuals for jury profiling or employment screening providing a taxable service in Texas?
No, generally not. The Comptroller's office told this consultant that using a computer to prepare analysis reports for clients doesn't make the work taxable "data processing services," and the underly…
If a manufacturer's plant and equipment are destroyed by fire and it rebuilds on the same site, does the new replacement manufacturing equipment qualify for Utah's sales tax exemption for new or expanded operations?
No. The Tax Commission ruled that manufacturing equipment purchased to replace equipment destroyed by fire does NOT qualify for the new-or-expanded-operations sales tax exemption -- it's a normal oper…
Was a lessor-paid lease-facilitator fee taxable when the facilitator was neither the vehicle seller nor the seller's agent?
No. The fee was not part of taxable consideration because the purchaser paid it to a facilitator that was neither the seller nor the seller's agent. The result applied whether the worksheet folded the…
Could a lessee-owned vehicle reduce the taxable value of a lessor's vehicle purchase without the dealer physically possessing the trade-in?
Yes, physical possession by the dealer was not required if the trade-in otherwise formed part of the lessor's purchase consideration and the seller's records showed acceptance, credit, and resale to t…
Are charges for assembling or erecting an above-ground swimming pool taxable in Texas, and does it matter whether a third-party installer does the work?
It depends on what the work actually is. Charges for a true third-party 'installation' — placing tangible personal property in position without changing its form — are not taxable (though separately s…
When a contractor makes an improvement that increases production capacity at a Texas refinery or chemical plant, does sales tax apply to the material, the labor, or both?
It depends on how the contract is written. Under the law effective October 1, 1995, labor to improve production capacity at a refinery or chemical plant is a non-taxable improvement to realty either w…
Is cleaning/washing a trailer tank after hauling liquid chemicals a taxable service in Texas, and can the cleaning chemicals and required safety gear be bought tax free?
No, the cleaning itself isn't taxable — the Comptroller said washing out a trailer tank between loads is nontaxable maintenance to a motor vehicle. But the client still can't buy the cleaning chemical…
Is electricity used in a corporate apartment that a company leases to house out-of-town clients and associates (at no charge, for stays typically under a week) subject to Texas sales tax?
Yes, it's taxable. The Comptroller ruled that electricity used in a corporate apartment maintained to house visiting clients and associates is 'commercial use' under Texas Tax Code § 151.317(a), not e…
When a business reorganizes — transferring assets to a new subsidiary, contributing assets between related corporations, or trading stock between commonly-owned subsidiaries — which of those transfers are subject to Texas sales tax, and how are stock-sale receipts allocated for franchise tax?
It depends on the transaction. A transfer of substantially all the assets of an identifiable business segment can still qualify for the occasional sale exemption even if a shared-use asset (like a com…
Does an apartment complex have to perform its own predominant use study before claiming a sales tax exemption on electricity from a master meter that serves only common-area/residential uses?
Not necessarily. The Comptroller's Tax Policy Division told this association that apartment complexes whose master meters serve only onsite management offices and residential common areas (club rooms,…
The Department says I never paid, but I'm sure I mailed my return and a check — can I win with just my word?
No — uncorroborated testimony that you paid isn't enough to beat an assessment. Peter Grivas, a New Mexico resident, was assessed $2,158.27 in personal income tax plus interest and penalty for 1991 af…
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