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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Could a taxpayer amend a 1994-1997 South Carolina return when software inserted a zero that appeared to elect retirement-deduction deferral?
Yes. A taxpayer whose software automatically placed zero on every unused line, or who otherwise placed zero on all unused lines, could amend if nothing else on the original return showed an intent…
What determined whether a service member bringing an overseas-purchased vehicle to Texas received ordinary use tax or new-resident treatment?
A service member with Texas as the home of record owed the ordinary use tax described in the letter. To receive the new-resident alternative, the title applicant had to be a new Texas resident and…
How did a QSSS and parent S corporation report separately for the former Texas franchise tax, including parent investment and dividends?
The QSSS and parent were separate Texas taxpayers. The QSSS filed using its own income, deductions, assets, and liabilities, while Rule 3.556 computed earned surplus as if separate federal…
Did South Carolina enforce its 1998 beer-and-wine gambling prohibition while court injunctions were pending?
No. Two preliminary injunctions stopped the Department and SLED from enforcing § 61-4-580(3) as described in Information Letter 98-10 while the cases were unresolved. The Department would issue or…
Which parts of an agricultural irrigation system are exempt from Kansas sales tax as farm machinery, and which are taxable as real property?
It depends on the item. Movable irrigation equipment — the pivot system, pumps, motors, valves, column pipe, flowmeter, and similar parts — is exempt farm machinery and equipment under K.S.A.…
Are labor services on land improvements around a residence — driveways, fences, patios, pools — exempt from Kansas sales tax?
Yes, for land improvements that immediately surround and principally serve a residence. Under the residential remodeling exemption (K.S.A. 79-3603(p)(4), effective July 1, 1998), install/apply labor…
Is Kansas sales tax due on tickets to performances held in Kansas, even if the tickets are sold elsewhere?
Yes, tax is due. Under K.S.A. 79-3603(e), Kansas imposes sales tax on the gross receipts from the sale of admissions to any place providing amusement, entertainment, or recreation services. Because…
Are materials used to repair and repave private streets owned by a homeowners association (built to city specs but never dedicated to the city) subject to Texas sales tax?
Materials are taxable; labor is not. A contractor repairs streets in a gated residential community that were built to city specifications and inspected/approved by the city, but were never actually…
Are litigation-support services -- process serving, obtaining records via deposition on written questions, courthouse research, filing motions, taking witness statements, and appearing in court on an attorney's behalf -- subject to Texas sales tax?
Not taxable. A litigation-support company described seven categories of services it provides to attorneys and others: (1) obtaining and serving subpoenas/deposition subpoenas; (2) preparing and…
Could a South Carolina taxpayer credit sales or use tax paid to another state against South Carolina use tax in 1998?
Yes, if the tax was due and paid on tangible personal property and the other state allowed a substantially similar credit for South Carolina purchases. The taxpayer needed proof of payment. If the…
How did South Carolina tax a 1998 sale of a vehicle or trailer to a nonresident who would license it at home?
Charge the lesser of the tax imposed by the purchaser's home state or the South Carolina tax, provided the vehicle or trailer will be registered and licensed in the home state. No South Carolina tax…
How did Utah tax veterinary medical services, grooming, supplies, agricultural and resale purchases, animal boarding, and separately charged food?
Utah said veterinary medical services and animal boarding were not taxable, while animal grooming and retail sales of food, medicine, leashes, collars, and supplies were taxable. A veterinarian…
Are direct-marketing mailing services and promotional-kit assembly taxable in Utah, and does it matter whether the customer or the vendor supplies the printed pieces or promotional items?
It depends on who supplies the tangible items being processed. When a customer supplies its own printed advertising pieces and the vendor only processes/sorts/inserts/mails them, the service is NOT…
Is a church's direct purchase exempt from Kansas sales tax, and how does it claim the religious-organization exemption?
Yes. The Department determined that the church is a 'religious organization' under K.S.A. 79-3606(aaa), so its direct purchases used exclusively for religious purposes are exempt from Kansas…
Does a Kansas manufacturer charge sales tax on separately invoiced customized dies and artwork that stay in Kansas?
It depends on who the customer is. When a Kansas manufacturer sells to a bona fide reseller and bills the reseller for both the manufactured item and the customized items (dies, artwork, silk…
Can a taxpayer recover interest when New Mexico stops sending bills or applies a payment to the wrong tax year?
Partly — Joseph R. Ruiz recovered $84.78 of interest caused by the Department's misapplication of his $249.54 payment, but he could not recover the rest of the interest that accrued while billing…
Is a 'Fastbreak Bar' meal-replacement snack bar exempt from Texas sales tax as a food product?
Exempt. A company's product (referred to as a Fastbreak Bar) is marketed and labeled as a meal replacement. Because of that marketing and labeling, the Comptroller confirmed the product is a…
After an out-of-state retailer closed all Utah stores, did catalog sales, an out-of-state website, or retained store leases create Utah sales-tax or income-tax nexus?
Under the pre-Wayfair law and strict assumptions in the ruling, Utah said catalog mail-order sales and an out-of-state website did not create sales/use-tax or corporate-income-tax nexus after the…
Could a corporation deduct a federal net operating loss in Texas earned surplus, and how did the separate Texas business-loss carryforward work?
A federal net operating loss was not deductible because earned surplus began with federal taxable income before NOL deductions. Texas instead allowed a business loss—any negative amount after…
Did Texas apply motor vehicle tax or limited sales tax to highway motorcycles, dirt bikes, and all-terrain vehicles?
A motorcycle designed for highway use was taxed under Chapter 152, with a qualifying motor vehicle trade-in reducing taxable value and dealer resale acquisition allowed tax-free. Dirt bikes and…
After a midyear corporate buyout produced two federal short-period returns, did the acquired corporation file separate Texas franchise-tax reports?
No additional Texas reports were required. Assuming the acquired C corporation remained a separate legal entity doing business in Texas and continued its calendar year, both former tax components…
If a taxpayer claims to have changed their domicile from New York to Florida, will the Department confirm that change in an Advisory Opinion, and who has to prove it happened?
The Department would not decide whether, or when, the Coopers' domicile changed from New York to Florida — that is a factual question that depends on individualized circumstances and cannot be…
When a landlord buys electricity and its transportation separately and resells both to submetered tenants, is the entire charge taxable even if the components are separately stated?
Yes. A landlord who purchases electricity from one supplier and arranges transportation from the utility, then resells both to submetered tenants as electric service, must charge sales tax on the…
Are data-processing, remote-access, and information-storage billing services subject to New York sales tax when the resulting data isn't shared with other customers?
No. Billing and customer-care data processing, remote access, management reports, and information storage aren't taxable information services when the processed data belongs to and is reported back…
Can an aviation-services company avoid charging sales tax on airport flowage fees and its own fuel surcharge that it passes through to customers?
No, generally. Airport-imposed flowage and concession fees, and the company's own 'into plane' fuel surcharge, are business expenses that become part of taxable receipts when passed on to…
Do specialized trade and legal newsletters qualify for New York's periodical sales tax exemption, including in electronic formats?
Yes. Twenty-three specialized print newsletters covering law, business, and industry news qualify as exempt periodicals under Tax Law § 1115(a)(5) even though they aren't general-interest…
Does transferring a vehicle's DMV registration to a commonly owned company, without transferring title, trigger New York sales tax?
It can. Transferring a vehicle's registration to another company, even one commonly owned by the same person and even without transferring legal title, is a transfer of possession that counts as a…
Are dialysis machines, artificial kidneys, and their disposable blood-line tubing exempt from sales tax when a manufacturer sells them to New York hospitals and clinics?
Yes. Dialysis machines, artificial kidneys, and the connected disposable tubing/connectors used in hemodialysis all qualify as exempt prosthetic devices under Tax Law § 1115(a)(4), because together…
Does mailing a New Mexico gross receipts tax return and check count as timely payment when the Department never receives either one?
No — a mailed return and check that the Department never receives do not count as timely payment, so interest was mandatory and the protest was DENIED. Attorney James C. Ellis followed his normal…
When a company provides compressors to customers along with transportation, installation, and maintenance, is that a taxable rental of equipment or a nontaxable service?
A taxable equipment RENTAL, not a nontaxable service -- based on who bears care, custody, and control. A taxpayer asked the Comptroller to review two vendors' contracts (COMPANY A and COMPANY B) to…
Is labor to install, upgrade, repair, or maintain computer hardware taxable in Texas -- and where can a computer repair business point skeptical customers for proof?
Taxable -- and the letter points to the exact rule text a business can show disputing customers. A computer repair business asked for documentation proving that labor/service charges for warranty…
For the section 1505(b) test of whether more than 95% of an insurer's premiums are annuity consideration, does 'premiums' include reinsurance premiums and all direct premiums (in and out of New York)?
Yes to both. For purposes of the section 1505(b) test -- whether more than 95% of an insurance corporation's premiums are received as consideration for annuity contracts (or for the section…
Is cattle-management computer software and hardware bought by a farmer exempt as farm machinery and equipment?
Taxable -- it is not exempt farm machinery. Under K.S.A. 79-3606(t), the farm machinery and equipment exemption covers farm and aquaculture machinery and equipment, repair and replacement parts, and…
Which repair items for a farmer's combine and tractor qualify for the Kansas farm machinery exemption?
It depends on the item. Under K.S.A. 79-3606(t), the Department's opinion is that bolts, nuts, washers, cotter keys, and hydraulic and motor oil used in the repair and maintenance of a combine and…
Could a Texas maquiladora exemption certificate be used to rent motor vehicles or trailers without motor vehicle rental tax?
No. The maquiladora exemption belonged to Chapter 151 limited sales tax, which generally covered tangible personal property other than motor vehicles. Chapter 152 governed motor vehicles and…
Is a motor vehicle rental tax-exempt when rented directly to a Texas agency or to a state employee on official business?
Direct rentals to a Texas state agency were exempt. STAR later superseded the letter's blanket denial for employee rentals: an employee on official business may issue an exemption certificate when…
Is the admission fee to a children's indoor play center with climbing equipment subject to New York sales tax?
Yes. A single admission fee that lets children enter and use non-moving recreational equipment like climbing apparatus at an indoor play center is a taxable admission charge to a 'place of…
Are dialysis machines and a dialyzer reprocessing system purchased by a dialysis clinic exempt from New York sales tax?
Dialysis machines are exempt as prosthetic devices under Tax Law § 1115(a)(4), regardless of who buys them or why -- but a dialyzer reprocessing system, which only cleans and readies the artificial…
Were a vendor's sales of disposable intrauterine monitoring catheters to Florida hospitals exempt from sales tax?
Yes. Florida's medical-device rule specifically listed catheters as exempt prosthetic and orthopedic appliances and did not limit the exemption to particular catheter types. Because the products…
For an independent distributor of prepaid 'Discount Redemption Vouchers,' does the distributor need a sales tax permit, what's the tax base on non-fundraiser sales, and are fundraiser sales through booster clubs/churches/civic groups tax-exempt?
Three-part answer covering permits, tax base, and fundraiser exemption limits. An independent distributor purchases prepaid 'Discount Redemption Vouchers' from a direct-sales parent company (COMPANY…
Was a lump-sum charge for a mobile medical laser unit, technician, setup, monitoring, and consumables taxable in Florida?
No. The lump-sum charge was for a medical service and involved no transfer of taxable property, so the customer charge was not taxed. The provider was the ultimate consumer of the supplies used…
What major South Carolina tax-law changes did the Department summarize from the 1998 legislative session?
The update summarized most significant 1998 changes in laws administered by the Department across income and corporate license taxes, property tax and fee-in-lieu arrangements, sales and use tax,…
Is installing a new solid epoxy floor over an existing concrete floor a taxable service or an exempt capital improvement?
It's an exempt capital improvement, not a taxable service. A new solid epoxy floor built up in place over an existing concrete floor is 'flooring,' not 'floor covering,' so it isn't subject to New…
Are the printing services and production equipment a stamp retailer buys to create 'first day cover' envelopes for resale exempt from sales tax?
Yes, mostly. Printing services a retailer buys to produce envelopes it resells to customers are exempt as purchases for resale (with a resale certificate), and the film negatives, color separations,…
Does a licensed architect and engineer's litigation-support research, reports, and expert-witness testimony for attorneys get taxed as a service or as a sale of the drawings and reports it produces?
No, generally. Professional architectural and engineering services -- research, analysis, written reports, presentation drawings, and expert-witness testimony -- aren't among New York's enumerated…
Does a manufacturer of CV-joint grinding machines have to collect sales tax when it sells them to auto parts remanufacturers and repair shops?
It depends on how the buyer uses the machine. Sales to remanufacturers and parts distributors who use the grinder to produce CV joints for sale are exempt if over half the machine's use is in…
Could an expanding affiliated group stop filing Florida consolidated corporate income tax returns after its business changed?
Yes. Florida allowed separate returns effective for the fiscal year ending November 30, 1997, based on the group's substantial evolution and its claim that the original election lacked adequate…
Was Wheeler & Sons Trucking an employee of Western Mobile whose hauling receipts were exempt from New Mexico gross receipts tax?
No — Wheeler & Sons Trucking was an independent contractor, not Western Mobile's employee, so its hauling receipts were not exempt and the protest was DENIED. Western Mobile set haul rates, expected…
How did Texas tax an insurer-declared total-loss vehicle before repair and a later sale after the vehicle was repaired?
Before repair, a vehicle declared a total loss by an insurer was taxed under Chapter 151 limited sales tax rather than Chapter 152. After repair, later sales were again subject to motor vehicle…
When refinery units purchased from another company are dismantled and re-erected at a new location owned by the buyer, does incorporating them into realty count as nontaxable new construction or taxable remodeling?
New construction -- lump-sum labor charges are not taxable. A refinery operator bought refinery processing units from another company, planning to completely dismantle them, move them to a different…
Is a yacht charter company's cruise fee taxable as an equipment rental, and are its liquor and catering charges taxable too?
The bare cruise fee is an exempt transportation service, not a taxable rental, because the company keeps full dominion and control of the yacht -- but once the company sells liquor or arranges…
Does a nonprofit news cooperative owe sales tax on the information services it buys for its members, or on production equipment and utilities it provides at member newspapers?
No, mostly. Because a nonprofit news cooperative's information-service purchases (like stock quotes and weather data) are used by its member newspapers and broadcasters in the collection and…
How do the real estate transfer tax, sections 186 and 186-a, the petroleum business tax, the subsidiary capital tax, and the stock transfer tax apply to a utility's PSC-mandated restructuring into a holding-company structure?
Across five taxes, the PSC-mandated restructuring is largely tax-neutral. Real estate transfer tax: the share exchange, subsidiary spin-offs, and generation-asset transfers within the affiliated…
When a PSC-mandated restructuring forces a utility to transfer its generating assets to a subsidiary and auction them, are the proceeds and distributions taxable under sections 186 and 186-a?
Largely not taxable under section 186. Because the New York Public Service Commission's Competitive Opportunities order forced NYSEG to restructure and auction its generating assets, the asset…
Was an auction buyer's premium or broker commission included in consideration for Florida documentary stamp tax?
Yes. The auction terms added the broker's premium or commission to the winning bid, and the purchase agreement stated one total contract price that included it. Because documentary stamp…
Did Tennessee disregard a Delaware business trust for franchise and excise tax merely because federal check-the-box rules treated it as a division of its sole corporate certificate holder?
No. Tennessee treated each Delaware business trust as a separate legal taxpayer even though federal check-the-box rules disregarded it. Its franchise tax base was the greater of GAAP net worth or…
Could a Tennessee automobile dealer separately charge customers for its business tax, and did that separately stated amount remain taxable for business tax and sales tax?
Yes. The dealer could pass its Tennessee business-tax expense to customers and separately state it on vehicle invoices. But the charge remained part of the vehicle's sales price. It therefore had to…
Could a Tennessee automobile dealer separately charge customers for its business tax, and did that separately stated amount remain taxable for business tax and sales tax?
Yes. The dealer could pass its Tennessee business-tax expense to customers and separately state it on vehicle invoices. But the charge remained part of the vehicle's sales price. It therefore had to…
Did a proposed Tennessee product service center qualify for the $2,000-per-job franchise tax credit because it repaired and reconditioned broken consumer equipment?
No. Although the center planned more than $500,000 of investment and more than 25 new full-time jobs, its primary activity was repairing or reconditioning products that had previously been…
Were a bank's first-tier holding subsidiary and that subsidiary's second-tier investment company both financial institutions included in the Tennessee combined franchise and excise tax return?
No. Corporation Y was a financial institution because it was the bank's direct first-tier subsidiary, so it belonged in the holding company's combined Tennessee return. Corporation Z was only Y's…
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