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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If a customer paid tax on parking space rent before getting a Texas sales tax permit, and later gets a permit, can the tax already paid be refunded?
Generally no. A customer cannot issue a resale certificate for purchases made before the effective date of its sales tax permit, so tax collected before that date should not be refunded. The only way …
Is an interior decorator's design fee, purchasing fee, administrative charge, freight/move-in charge, or consultation fee taxable under Texas sales and use tax?
It depends on how the charge is billed. A separately stated interior design fee or a stand-alone consultation fee is not taxable. But a design fee folded into a lump-sum charge for taxable property be…
Are vibrating shaker screens used at a sand, gravel, and aggregate processing plant exempt from Texas sales tax as manufacturing equipment?
It depends on where in the process the shaker screens are used. Shaker screens used before the aggregate material undergoes any physical or chemical change (such as crushing) are not part of manufactu…
Is cleaning out debris from an existing farm irrigation canal a taxable service in Texas, and does the agricultural exemption cover it?
Yes, it's taxable. Cleaning debris out of an existing irrigation canal to restore it to near its original working order is nonresidential repair and restoration of real property, which is taxable unde…
When a repair company fixes real-property equipment (like a restaurant refrigeration system) under a manufacturer's warranty, or provides a free 'goodwill' repair afterward, who owes Texas sales/use tax on the labor and parts?
It depends on who is footing the bill and why. When an out-of-state manufacturer's warranty covers the repair and the repair company bills the manufacturer (not the property owner) for labor and parts…
What did the original Florida ruling say about Georgia notes stored in Florida, and why must the revised TAA 95M-007R be reviewed?
The original ruling said Florida safekeeping did not create documentary stamp tax if the Georgia notes were executed and delivered outside the state and supported by an accepted bank-officer affidavit…
Are labor charges to install exempt manufacturing equipment also exempt from Utah sales tax, whether bundled into the equipment price or billed separately?
Yes, generally. A tax research consultant asked the Utah State Tax Commission to confirm that labor charges to install manufacturing machinery or equipment that already qualifies for the manufacturing…
I made an honest mistake on my return that the Department could have caught but didn't for years — do I still owe interest on the tax I underpaid?
Yes. Interest is owed on any underpayment of tax, even an honest error the Department could have caught from the face of your return but didn't. Emiel Bosman, a New Mexico resident who worked as a tra…
Can a business report sales tax on a modified accounting basis that lets it collect tax from customers but delay remitting that tax to the Comptroller past the statutory due date?
No. The Comptroller denied a company's proposed modified-accrual reporting method (treating invoices dated in one month as the following month's return data) because it would let the company collect t…
Does it matter, for Texas sales tax purposes, whether an insurance agency's risk-management fee is paid out of commissions on premiums or billed directly to the client?
No. The Comptroller ruled that whether a fee is paid from commissions on premiums or billed directly to the client does not change the sales tax result. What matters is whether the specific activity i…
New York Advisory Opinion TSB-A-95(33)S: Is a company's charge for creating and running Internet advertisements -- "Virtual Storefronts" displaying a client's products -- subject to New York sales tax?
Not taxable, as long as Petitioner isn't also selling tangible personal property. Mike Levy's company, Cyberactive, sets up "Virtual Storefronts" for client companies on the Internet, creating and run…
How did PLR 95-9 apportion trademark royalties earned by a South Carolina licensing subsidiary?
The addressed subsidiary used the historical gross-receipts formula. Its numerator included royalties from the licensee's sales delivered to customers in South Carolina, and its denominator included r…
Were ABC's purchases of parts and materials for temporary dual-vacuum extraction systems exempt when the systems cleaned soil and groundwater pollution caused by manufacturing machines?
Yes, for ABC's stated facts and only if every requirement of Regulation 117-173 was met. The systems removed water, vapor, and contaminants caused by machines manufacturing tangible personal property …
When a company sells blueprints made from customer-supplied drawings, does it owe sales tax on the sale, even if the blueprints end up being used to build a real estate improvement for a tax-exempt entity?
Yes, in most cases. The Comptroller told the seller (Company X) that it must charge sales tax when it sells blueprints to an architectural/engineering firm or to a general contractor, regardless of wh…
Is telephone or on-site technical support for software taxable in Texas, and can a contractor providing that support staff to a company accept a resale certificate instead of charging tax?
Yes, charges for telephone technical support of tangible personal property (including software) are subject to Texas sales and use tax if provided to a recipient in Texas, though the service can be pu…
Is a caregiver referral agency's fee taxable, and are the pre-employment screening services it performs (criminal history, driving records, reference checks) subject to Texas sales tax?
The referral fee itself is not taxable. But the pre-employment screening components — criminal conviction histories, driving records, and reference confirmations — may be taxable if the customer (not …
What did the original Florida TAA 95A-040 say about a religious broadcaster's merchandise sales, and why must revised TAA 95A-040R control?
The original ruling required sales tax because the organization was shown to be a religious institution but not a church, and its own corporate purposes focused on broadcasting. The source directs rea…
Which shopping-mall operating-cost pass-throughs and parking charges were taxable as Florida rent or parking, and how did the mall have to state tax?
Actual separately billed electricity cost was not taxable rent when the landlord had already paid sales tax, but any markup or admin fee was taxable. Other mandatory operating-cost pass-throughs were …
Does Connecticut sales tax apply when a store sells a prepaid long-distance phone card, and does it apply when a customer later uses the card to make calls?
Two separate answers. Selling the prepaid long-distance phone card is NOT taxable — a phone card is a 'cash equivalent' (like a gift certificate or voucher), so its sale is the sale of an intangible f…
Can Booster Clubs buy tax-free as exempt organizations or hold tax-free sale days, can a school issue an exemption certificate for cheerleader uniforms bought through the school, and can a teacher buy classroom supplies tax-free if reimbursed later?
This is an internal Comptroller staff memo (Bettie Peterson to Ron Watkins), titled 'Taxability School Related Organizations,' answering three questions: (1) a Booster Club can only make tax-free purc…
Did a vessel charter remain a taxable bareboat lease when the charterer chose the voyage but the separately hired captain controlled navigation and safety?
Yes. The charterer received possession and control over the vessel's destination, while the captain's navigation and safety authority was only a limitation on use. A vessel bought exclusively for thes…
Did the Texas Comptroller waive the electronic fund transfer (EFT) filing requirements under Sec. 151.401 of the Sales Tax Law for affected taxpayers?
Yes. In this August 9, 1995 letter, the Comptroller confirmed that it had waived the requirements stipulated in Section 151.401(a)(1) and (2) of the Sales Tax Law for all affected taxpayers. The lette…
New York Advisory Opinion TSB-A-95(32)S: Are a horse spa's fees for pool use, a walk-around exercise service, horse transportation, and boarding subject to sales tax, and does it matter whether the horse owner or the facility's licensed trainer handles the horse?
It depends on who handles the horse: pool rental alone is untaxed as real property rental, but the exercise, transport, and boarding fees are exempt only when performed by a licensed trainer training …
When a customer trades in their old vehicle as part of leasing a new one, does the trade-in reduce the amount subject to New York sales tax -- even when the lease is actually financed and owned by a separate leasing company rather than the dealer?
It depends on whether the dealer taking the trade-in has actually been appointed as the leasing company's agent for accepting trade-ins (not merely for paperwork). If the dealer only has authority to …
Was a Florida sale exempt when the customer picked up the goods in Florida but held an export sales-tax number and supplied a blanket resale certificate?
Yes. The Department treated the customer as a licensed exporter because it held a valid Florida export sales-tax number, and the customer supplied a blanket resale certificate claiming the sale for ex…
Does Texas local sales and use tax apply to conference calling charges when the conference call center or 800 number is located outside Texas but some participants call in from Texas?
It depends on where each leg of the call originates, not on where the conference call center is located. For a 'Dial Out' call, the client owes state (but not local) sales tax on its own call to the o…
What was Florida's intangible-tax treatment when a Florida corporation transferred its trust interest before January 1 to a Delaware subsidiary and received an intercompany note?
The Florida seller was not taxed on a trust interest it no longer owned on January 1, and the Delaware buyer was not taxed because the trust and buyer lacked Florida taxable situs. The buyer's note wa…
How did an insurer apply Florida's intangible-tax exemption when its annuity reserves were bookkeeping entries rather than designated assets?
The insurer could reduce the taxable value of its intangible property generally by the amount of assets held as its Florida statutory annuity reserve. It did not have to identify particular reserve as…
Are charges to install and adapt canned computer software to a company's needs exempt from Utah sales tax if separately stated on the invoice?
Not automatically. Rule R865-19S-92 D exempts separately-stated charges to modify or adapt prewritten ('canned') software, but the Commission held that the adaptation must actually CHANGE THE SOFTWARE…
Are a product warranty, a separately-sold travel-expense contract, and an extended service contract each taxable when sold with a scientific instrument, and do repair parts later brought into Utah trigger use tax?
All three are taxable at the time of sale -- the built-in one-year warranty (bundled into the instrument's price), the separately-billed Travel Extension Agreement covering post-90-day travel expenses…
For a Texas advertising agency, are charges to write copy and produce, edit, or create a master (audio, video, or film) for a commercial taxable, and how does that differ from charges for copies (dubs)?
No — charges to create a master (including the copywriting used to create it) and charges to edit an existing commercial into a new master are not taxable, and studio time and video stock charged by a…
How does a non-bank credit card processor taxed under Article 9-A source its credit card processing revenues for the receipts factor -- by where the services are performed, or by the Article 32 credit-card rules (merchant location, etc.)?
By where the services are performed. Peach Tree is a non-bank credit card processor taxed under Article 9-A, not the Article 32 bank tax. Its processing revenues (discount, authorization, transaction,…
Did a corporation retain Florida corporate-income-tax nexus when a Florida trustee managed its assets as assignee and litigated claims in Florida?
Yes. The Florida-domiciled trustee, acting as assignee, managed and controlled the corporation's assets and litigated in Florida to protect them, creating taxable nexus. If those Florida activities ce…
Was an individual's transfer of an aircraft to a revocable trust taxable when the trust paid nothing and assumed no lien?
No. The aircraft transfer was not taxable because the trust paid no consideration and assumed no outstanding lien. The transferor had to substantiate the gift with a sworn statement. A later transfer …
Did Florida tax required training and software-support contracts, and how could a dealer recover tax collected on telephone-only support?
Required training was taxable as part of the hardware's total sales price. Support contracts were taxable when they maintained, repaired, or replaced software or hardware, but telephone-only support w…
Could a contractor buy construction materials tax-free for a religious owner under a guaranteed-maximum-price contract that did not separately itemize and price every item?
No. Because the guaranteed-maximum-price contract did not separately itemize, describe, and price every item of tangible personal property, it was not a qualifying retail-materials contract. The contr…
Is a charge for disassembling a communications tower — including mileage, travel, per diem, loading, hauling, and unloading of the tower materials — subject to Texas sales tax?
No, not when those charges are separate and apart from any taxable work. The Comptroller told this taxpayer that charges for disassembling a ROHN tower — including mileage, travel, per diem, loading, …
New York Advisory Opinion TSB-A-95(6)I: Issue raised by Petitioner, Heath Shuler, is whether, for purposes of Article 22 of the Tax Law, he can calculate his 1994 New York source income by allocating his pre-season and regular season football wages separately, basing each on the ratio of games played in New York to games played everywhere.
No. New York first confirms that nonresident professional team athletes allocate their income from playing games using a games-played-in-New-York over games-played-everywhere fraction, not the standar…
Is a federal section 468B 'qualified settlement fund' that holds cash and Treasury Bills subject to New York State franchise tax (Article 9-A) or New York State/City personal income tax (Article 22/30)?
Neither. The Steinhardt-Caxton Consolidated Settlement Fund is a federal section 468B qualified settlement fund holding only cash and U.S. Treasury Bills. It is not subject to Article 9-A franchise ta…
Could a county make exempt direct purchases of materials and services used by a private operator to maintain the county's water and wastewater facilities?
Yes, if the operation agreement was amended to incorporate the submitted direct-purchase procedure and all six Department criteria. The county had to order and buy directly, take title and possession,…
When was Florida sales tax due on a cemetery company's preneed merchandise contract, and could merchandise supplied with a complete funeral be exempt?
Tax was not due when the cancelable preneed contract was signed because no actual or constructive delivery occurred until it became at-need. Tax was due at delivery. Merchandise furnished as part of a…
Is a flat monthly fee charged to customers for Internet access service subject to Utah sales tax, given that all transmissions leave the state and usage isn't billed by the hour?
No. Charges for access to on-line services such as the Internet are not subject to Utah sales tax, and charges for interstate telephone communications are also exempt. Based on the contract details pr…
What physical, licensing, and employee requirements made each video-game room a separate place under RR 95-13?
RR 95-13 required each video-game premises in a shared structure to have qualifying walls, a separate electric meter, its own employee present during all business hours, and separate local business an…
Which pieces of an automated material handling system -- racking, forklifts, conveyors, computer controls, dust collection -- qualify for Utah's manufacturing sales tax exemption, and where does the 'continuous production cycle' end?
It depends item-by-item on whether each piece of equipment operates before or after the product reaches its finished, marketable form. Over a series of 1995 letters, a tax consultant helping a Utah vi…
Can a company's electronic 'CPC Sales Tax Reporting' system, generated through a corporate procurement card, replace paper vendor invoices as acceptable documentation for Texas sales and use tax compliance?
Yes, with a major condition. The Comptroller ruled that the described procurement card sales tax reporting system will meet the office's data reporting requirements, but only if the vendor actually en…
Is a natural gas broker that never takes title, possession, control or risk of the gas subject to the section 186/186-a utility taxes, or to the Article 9-A franchise tax?
Article 9-A. The corporation brokers natural gas between producers and end-users but never takes title to, possession of, control of, or risk of loss on the gas; its agreements identify it as a broker…
Is a computerized communications monitoring service for elderly, shut-in people taxable as a 'security service' in Texas if the provider must be licensed as an Alarm Systems Company under the Private Security Act?
Yes. The Comptroller checked with the State Board of Private Investigators and found that the taxpayer's computerized communications service for elderly people required licensure under the Private Sec…
When a distributor for a direct sales/multi-level marketing company buys items for their own personal or business use (not for resale) and gets overcharged sales tax on the retail price instead of the company's wholesale price, how do they get a refund?
The direct sales organization normally collects tax from distributors based on the retail sales price. But for items a distributor buys for their own use (not resale), tax should instead be based on t…
Does a nonprofit organized under IRC section 501(c)(4) qualify for Utah's religious-or-charitable sales tax exemption, even if a convention bureau told the organization it would be exempt and the organization relied on that in choosing to hold its event in Utah?
No. Utah's sales tax exemption for religious or charitable organizations under Rule R865-19S-43 is limited to organizations recognized by the IRS as exempt under IRC section 501(c)(3). A 501(c)(4) org…
For a marketing company whose execution work is done by subcontractors, are receipts for services performed in New York (including by subcontractors) New York receipts, and how is a lump-sum fee covering work in and out of New York allocated?
Yes, and by relative value or time. Receipts from services performed in New York are 100% New York receipts whether the services are performed by the taxpayer's employees, agents or subcontractors. So…
Does Utah's manufacturing sales tax exemption cover new equipment for a contractor's growing panel-manufacturing and insulation-lamination business, including equipment that also gets used in its construction activities?
Mostly yes, with several qualifications. A longtime drywall/plastering contractor that also manufactures prefabricated exterior panels and, separately, laminates insulation asked the Utah State Tax Co…
Which parts of a Florida mortgage refinancing were subject to documentary stamp tax and nonrecurring intangible tax when the loan was assigned and increased?
Only the additional advance was subject to documentary stamp tax and nonrecurring intangible tax. The lender's assignment was not taxed, the renewal note did not exceed unpaid principal, and the conso…
How did Florida apply its intangible tax to out-of-state investment funds whose portfolio held exempt government obligations or a mix of exempt and taxable assets?
The out-of-state funds and portfolio had no Florida taxable situs. Shareholder units were exempt when the underlying portfolio consisted solely of exempt assets. If taxable assets were present, only t…
Would Florida residents owe intangible tax after contributing their securities portfolio to an out-of-state limited partnership not registered with the SEC?
No, on the stated facts. Once the portfolio was transferred and no longer owned, managed, or controlled by the Florida residents, it was not subject to Florida intangible tax. Their interests in the o…
Did two out-of-state partnerships and their corporate general partner have Florida intangible-tax situs when their Florida-resident owner made investment decisions?
No. The partnerships and corporation had no Florida taxable situs because their actions and operations were carried out at their out-of-state offices. A Florida-resident owner still had to report his …
Are feeding tube systems (gastrostomy, jejunostomy, and related enteral/parenteral supplies) and closed tracheal suction system products (TRACH CARE) exempt from Texas sales and use tax as prosthetic devices?
Yes, generally. The Comptroller ruled that nasal gastric and gastrointestinal (enteral and parenteral) feeding-tube devices and related supplies, as well as closed tracheal suction system products (TR…
Is a mail-based reminder service (reminding clients of special dates or events) subject to Texas sales tax, and what about gift baskets sent to Texas recipients as part of that service?
No, charges for reminder services are not taxable when the reminders are sent through the mail rather than by telephone. However, if the service also involves selling and delivering gift baskets to po…
Is the labor to clean a non-residential septic tank or sewer holding tank taxable in Texas?
It depends on whether the cleaning is scheduled. If a non-residential septic tank or sewer holding tank is cleaned on a scheduled, periodic basis, the labor is nontaxable maintenance labor. If it's cl…
Could an executive-suite operator give its landlord a resale certificate and collect Florida sales tax only from subtenants when it subleased nearly all the office space?
Yes. Because the operator subleased most of the premises, it could give the prime landlord a resale certificate, collect tax from the individual tenants, and pay use tax on its retained office. Option…
Could a Florida tax-exempt educational organization buy building materials tax-free for a contractor's renovation project?
Yes, if the exempt organization itself issued the purchase orders, gave vendors its exemption certificate, bought and paid for the materials directly, took title and possession at delivery, and carrie…
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