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 building-cleaning company also runs payroll for a building owner's own maintenance engineers and mechanics, does the building owner owe sales tax on the payroll costs it funds through that company?
No -- the building owner doesn't owe sales tax on the payroll costs, because the maintenance engineers and mechanics remain employees of the building owner, not of the payroll-processing company;…
Can an event planner buy tents, chairs, tables, and catering with a resale certificate and pay no tax on its own purchases, or must it pay tax on what it buys and only charge tax on its overall bill to the client?
No -- an event planner cannot buy equipment rentals like tents, tables, and chairs tax-free with a resale certificate, because it's using those items to provide its own event-planning service rather…
Is software licensing, plus separately stated charges for customization, testing, training, and maintenance, subject to New York sales and use tax?
Yes, the software license itself is taxable -- the modules are prewritten software even though later customized to each customer. But separately stated, reasonable charges for customization,…
Are labels and tags sold to manufacturers and retailers, which they attach to products or to packaging, exempt from New York sales tax as either a resale or as packaging material?
It depends on what the label or tag actually does. Labels and tags that describe the product, identify its maker, or provide information the end customer needs (a "critical element" of the product)…
Who owed South Carolina sales or use tax when a retailer had a manufacturer or distributor drop-ship goods to its customer?
The retailer owed sales tax if engaged in business in South Carolina. A voluntarily licensed remote retailer collected use tax. If the retailer had neither South Carolina business activity nor a…
Could South Carolina withhold bingo-tax distributions from an organization it determined was a fictitious charity?
Yes. After properly notifying the organization and explaining its determination, the Department could withhold bingo-tax distributions during the dispute and appeal, seek repayment for periods when…
A client plans to build a two-story office area inside an existing warehouse without raising the roof — installing a new second floor where none existed before, alongside remodeling the existing first floor. Does it matter whether the first and second floors are built under one contract or two, or at different times, for purposes of Texas's new-construction sales tax exemption?
No, not for the second floor's exemption. Installing a new second floor where one didn't previously exist qualifies as exempt new construction, regardless of whether it's done under the same…
Do employer-paid long-term disability payments count as an 'annuity' that qualifies for New York's pension and annuity income subtraction once the recipient turns 59 1/2?
Yes. Because the petitioner's long-term disability payments arose from her permanent, disability-driven cessation of active employment and formed one cohesive retirement-benefit scheme together with…
Are cardboard compactors that a waste-removal company places at shopping centers to collect and crush cardboard for recycling exempt from sales tax as production equipment?
No -- the compactors are subject to sales and use tax. New York's production-equipment exemption only covers machinery used directly and predominantly in actually manufacturing or processing a…
A telecommunications carrier wants to combine its new FCC Universal Service Fund (USF) pass-through charge with its existing state Telecommunications Infrastructure Fund (TIF) charge on one billing line, to keep bills simpler. The carrier also asked: (1) if it collects more TIF reimbursement from customers than it actually owes the state, must it remit that excess to Texas, and (2) are voice mail box revenues (with no paging component) subject to the Texas Telecommunications Assessment?
Combining the USF and TIF charges into one billing line is allowed — both assessments are made against the carrier, not directly against ratepayers, and there's no prohibition on collecting a single…
Artificial Insemination (A.I.) Certificates are documents breed associations require to register animals resulting from artificial insemination, authenticating that the producer purchased the semen used. They're increasingly sold separately from the semen itself (for customer convenience) rather than always bundled together. Are these certificates subject to Texas sales tax?
No. Charges for A.I. certificates sold to purchasers of the semen, authenticating their purchase, are exempt from sales tax in the same manner as the semen itself — even when the certificate is…
Did an out-of-state sign manufacturer create Texas franchise-tax nexus by arranging local installation for customers?
Yes. Although signs arrived by common carrier and the manufacturer had no other Texas representatives, Texas installers acted as its agents when it arranged installation for purchasers. That…
Is glauconite (a naturally occurring mineral) exempt from Texas sales tax like other unprocessed natural materials such as sand, dirt, and gravel?
Yes, when sold unprocessed. Glauconite is treated the same as sand, dirt, and gravel: it's considered unprocessed — and therefore not taxable — if it has been merely sorted, sized, screened, washed,…
Did Florida documentary stamp tax apply when church corporations gifted unencumbered real estate to affiliated nonprofits?
No. The deeds conveyed unencumbered Florida real estate as charitable gifts, with no money, debt assumption, discharged obligation, stock, or other consideration. Because the transfers were donative…
When could a Florida county buy elevator and escalator materials tax-free for a civic-arena project?
The county's direct material purchases were exempt when it issued the purchase orders, gave vendors its exemption certificate, was invoiced and paid vendors directly, held title, and bore the risk…
Does setting up a temporary trade show booth in Utah for under two weeks create sales tax or income tax nexus for an out-of-state mail-order company?
Mostly no, with one catch. A temporary trade show booth in Utah for under two weeks doesn't create sales/use tax or income tax nexus by itself, but giving away catalogs at the booth is still a…
When a car is leased with an extended warranty or service contract bundled in, is the sales tax on the warranty due up front or spread out with each monthly lease payment?
It depends on how the lease agreement structures payment for the warranty. If the extended warranty's cost is folded into the monthly lease payments with no down payment, sales tax is due monthly as…
Did a California nonprofit owe tax when it rented donated beds and medical equipment to people with HIV/AIDS?
Generally yes on rent despite exempt acquisition; specified personal-use mobility devices could qualify when directed by a licensed physician.
Which florist event charges were taxable fabrication or services, and which were nontaxable installation?
Creating or adding to decorations and related planning were taxable, while the final physical affixation or placement was nontaxable installation; removal was not installation.
A business stores liquid in tanks and, before selling it to final consumers, filters out impurities using a pump-and-filter system — without this filtration, the product isn't marketable. Does that filtration equipment qualify for the manufacturing exemption?
It depends on facts the letter says weren't fully provided. If the client receives the liquid already in a MARKETABLE state and is merely filtering out impurities that accumulated from its OWN…
A refined sugar producer built three large 'conditioning silos' that dehumidify sugar as a final processing step before packaging. Sugar cycles through silo #1 for 24-36 hours, then may go on to silo #2 or #3 for additional, variable-length dehumidification. Do all three silos qualify for Texas's manufacturing equipment exemption?
Silo #1 qualifies for exemption (as a piece of manufacturing equipment, not counting its foundation, assuming it isn't installed under a lump-sum realty-improvement contract) because it's used for a…
How did Florida's $5,000 discretionary-surtax limit apply to furniture sets, itemized pieces, and split deliveries?
An advertised, sold, and invoiced furniture suite with one unitemized price was one item, so discretionary surtax applied only to its first $5,000. If the pieces were separately itemized, each piece…
When did RP 98-2 say a South Carolina resale certificate shifted sales-tax liability to the purchaser?
A signed resale certificate generally shifted sales-tax liability from the seller to the purchaser only when the seller accepted it in good faith. The seller had to examine whether the goods fit the…
Are laboratory and analytical testing services (chemical, metallurgical, calibration) subject to Kansas sales tax?
No. The Department ruled that the testing services described — chemical analysis, analysis of mechanical properties, metallurgical testing, pressure/load/hardness/conductivity testing, and accuracy…
If an electronic tax payment fails through no human error and arrives late, does the taxpayer owe interest and a negligence penalty?
The taxpayer owed the interest but not the penalty. When NMSU's electronic (ACH) tax payment silently failed in transmission and arrived two days late, interest still applied — it's mandatory and…
Which computer consulting and programming services did Tennessee treat as taxable, where did local tax apply, and did the single-article cap limit the charges?
Custom programming and software installation were taxable. The listed consulting services were generally nontaxable when separately sold, but design tied to the taxpayer's own programming sale was…
A seller wants to sell one-time-use, USDA-approved polyester straps to meat packers, replacing the reusable stainless steel hooks currently used to suspend carcass beef in refrigerated rail trailers for shipping (the straps are also lighter and skip the hook-sanitizing requirement). Do these straps qualify for a sales tax exemption as packaging supplies?
Yes — the straps qualify for exemption as packaging under Rule 3.314 when sold to a meat packer that processes the meat for sale, since they function as a container/packaging supply used to ship and…
When were foreign-source dividends excluded from former Texas taxable earned surplus and its receipts factors?
Foreign-source dividends were excluded from taxable earned surplus when included in federal taxable income under I.R.C. Section 78 or Sections 951-964, or when they met Rule 3.555(b)(3). An excluded…
How did South Carolina treat a federal qualified subchapter S subsidiary election under RP 98-1?
A valid federal QSSS election automatically applied for South Carolina income tax, so the parent and subsidiary were treated as one entity for income, deductions, credits, apportionment, and…
Did a related company's full-year depreciation deduction prove that an intercompany equipment sale occurred before the year-end journal entry?
No. Depreciation showed ownership or non-resale use but did not date the sale; the sale occurred when title or possession transferred for consideration and delivery duties were complete.
Did fortifying noncarbonated Simply Nutritious Mega C fruit juice with a high dose of Vitamin C make its grocery-store sales taxable?
No. The product remained an exempt noncarbonated fruit juice because adding Vitamin C to a traditional food did not make it a taxable supplement or adjunct.
Were bank ATMs tangible personal property or construction fixtures for California sales-and-use-tax purposes?
Free-standing and countertop ATMs were tangible personal property; ATMs built into a wall or structure were fixtures governed by construction-contract rules.
Was mandrill wire used to shape catheters exempt as a manufacturing material in Florida?
No. The manufacturer's mandrill wire was taxable because it supported and shaped the catheter during fabrication but was removed and discarded before the catheter's use. The component-material…
A refinery is relocating a large storage tank (exceeding 500 barrels, treated as real property) — tearing it down at its current location and rebuilding it, using the same materials in the same configuration, either elsewhere within the same facility or at a different facility. Is this relocation taxable?
The teardown, relocation, and rebuild are treated as nontaxable SERVICES, with the rebuild at the new location qualifying as new construction. In a new-construction contract, materials (but not…
What registration and interstate-use conditions did Texas require for the motor vehicle tax exemption for interstate trucks, trailers, and buses?
Apportioned interstate trucks and tractors, and qualifying trailers pulled by them, could receive the § 152.089 exemption, subject to continued interstate use. STAR warns that cited rates are stale…
An oil and gas well operator places its own compressors at well sites to boost gas pressure for working interest owners, billing them monthly under line items historically called 'compressor rental' (recently relabeled 'compressor services'). The operator's compressors were later sold to a commonly-owned affiliate, which now leases them back to the operator. Are the operator's compression services to working interest owners taxable rentals of tangible personal property, or nontaxable services — and does the billing label, or the separate affiliate lease-back arrangement, change that answer?
The compression services the operator provides to working interest owners are NONTAXABLE services, not taxable rentals — because the working interest owners never get physical possession, control,…
A notary public asked the Comptroller to confirm whether the document/record preparation services she performs for lawsuit participants are exempt from Texas sales tax, and whether she's now exempt from collecting sales tax altogether.
Her document/record preparation services for civil or criminal lawsuit participants ARE exempt from sales tax, under Tax Code Section 151.353's court reporting services exemption — covering…
A company bought a used forklift at a Texas auction intending to export it abroad, but the forklift needed major repairs first and sat at a Texas repair facility for several months before shipping. The company sought a refund of the sales tax it paid, arguing it never stored or actually used the forklift — only had it repaired. Does the export exemption apply?
No — refurbishing the forklift after the company took title to it counts as a USE of the forklift in Texas, and that use causes the loss of the export exemption on the original purchase, even though…
Were separately stated, at-cost travel and living reimbursements taxable when incurred in providing custom programming or taxable computer consulting?
Yes when the underlying sale was taxable. Travel and living reimbursements tied to custom programming—and to consulting that was part of a software or programming sale—entered the taxable sales…
How did Tennessee's local single-article sales-tax cap apply to notebook, prepackaged, and custom-built computer systems, and did the assembler qualify as a manufacturer?
A notebook itself could be one article, but bundled software, accessories, warranties, and separate computer components required their own allocated prices. Without allocations, the cap did not…
If you didn't know your service work owed gross receipts tax and your tax preparer never mentioned it, can you avoid the penalty and interest?
No — the protest was denied. Interest is mandatory whenever tax is paid late, no matter the reason. And not knowing your service receipts owe gross receipts tax is still negligence in New Mexico's…
If you underpay New Mexico income tax by mistake and the state doesn't catch it for years, can you avoid the interest and penalty because the notice was late?
No — the protest was denied. Interest on unpaid tax is mandatory by statute, so the reason for a late payment (and the state's delay in catching it) doesn't matter. And failing to amend a New Mexico…
A monthly publication is distributed free of charge at over 250 locations, funded by advertisers who pay for ad space. The publisher currently pays tax on its own printing materials. Does the publisher instead qualify as a 'controlled-circulation' publication — letting it buy printing materials tax-free with a resale certificate and instead collect tax from advertisers — and do the advertisers owe tax on their ad space purchases?
No, not on the facts described — this publication does not appear to meet the controlled-circulation test. Per Sharp v. Cox Texas Publications, a controlled-circulation magazine must show all five…
Can a chiropractor sell or dispense vitamins to patients tax-free in Texas?
Yes. A chiropractor is a licensed practitioner of the healing arts and may sell or dispense vitamins tax-free under Rule 3.284(b)(2)'s drugs and medicines exemption. To document the exempt sale, the…
When were Florida documentary stamp and nonrecurring intangible taxes due on mortgages securing a contingent stock-repurchase obligation?
Documentary stamp tax was due once on the maximum obligation secured, even with multiple Florida mortgages or collateral agents, and later added collateral caused no extra tax if the obligation did…
When did a variable corporate hotel-room block qualify for Tennessee's exemption for accommodations supplied to the same person for 90 continuous days?
The hotel collected tax during each room's first 90 continuous days, then could refund or credit tax only for the core number of rooms continuously occupied by the corporate customer. A cancellation…
Is an out-of-state electronic health-claims clearinghouse subject to New York franchise tax when it installs equipment and trains customers here, and which of its fees and equipment are subject to sales or use tax?
On franchise tax: once the company acquires New York customers and sends employees in to install computer hardware/software and train customer staff, it is doing business and has property in New…
Did nontransferable employee stock options have to be reported for Florida intangible tax?
No. Because the awards could not be transferred during the participant's life and could be exercised only by that participant, Florida treated them as having a just value of $0 and said they were…
Did Florida documentary stamp tax apply to card and noncard purchases under a revolving charge agreement?
No tax applied to credit-, charge-, or debit-card transactions. Noncard revolving-credit sales were also untaxed when the sales slip itself lacked a signed, unconditional promise to pay a sum…
Did a nonresident's Florida boat purchase qualify for the sales-and-use-tax removal exemption?
Yes. The nonresident buyer qualified because the vessel was bought through a licensed broker, the buyer signed the removal affidavit, removed the repaired vessel within the statutory period,…
Was an existing Florida manufacturer's new ignition-module line a new business or an expansion for the machinery exemption?
The Department reconsidered its earlier decision and classified ignition-module production as a new business, not an expansion. Additional product samples and facts showed meaningful differences…
If an out-of-state seller makes taxable New Mexico sales but claims it has no in-state presence and doesn't show up to contest the assessment, does it owe gross receipts tax and the 50% willful-evasion penalty?
Yes — the protest was denied in full. A furnishings seller that claimed to be a Colorado company with no New Mexico office didn't appear at its hearing, so the presumption that the assessment is…
Is a service that administers employee business-expense reimbursements subject to Kansas sales tax?
No. A company that administers business-expense reimbursements to Kansas employers' employees — reimbursing employees for equipment they bought and already paid Kansas sales/use tax on — asked…
Did a newly separated fabrication corporation qualify immediately as a Tennessee manufacturer, and were its FOB-destination shipments to out-of-state job sites taxable?
Yes. The separate fabrication corporation qualified as a manufacturer from its formation date under the stated 51% revenue assumption, subject to required authorizations. All five FOB-job-site…
Did attaching bindings substantially change skis, and how did mixed tax-paid and ex-tax acquisition affect rent and deductions?
Attachment did not change form on these facts. Both items tax-paid meant no rental tax; ex-tax bindings made all rent taxable, with a limited ski-cost deduction.
How were receipts from long-haul telecommunications circuits sourced when the provider supplied facilities but did not originate or terminate calls?
The provider was distinguished from the telephone companies covered by the call-originating and terminating rules because it supplied facilities but did not originate or terminate calls. Revenue…
How was Florida sales tax allocated when a self-storage operator leased whole facilities and rerented most of the space?
The operator allocated its master-lease payment by square footage. Tax applied to the share used as its office, while the storage-unit and related customer-use areas were taxed through the rents…
Were a country club's mandatory restaurant and banquet service charges subject to Florida sales tax?
The separately stated 17% restaurant charge was exempt when the club paid all of it to servers within a week or by fiscal year-end, even though club rules made it mandatory. The entire 20% banquet…
Could a Tennessee financial institution apportion its franchise and excise taxes, and how were its factoring, loan, and service receipts sourced?
Yes. The institution used a single gross-receipts factor: all covered receipts entered the denominator, while the numerator depended on Tennessee delivery of receivables-related property, in-state…
A company plans to build a permanent oil-tool testing rig facility — a derrick, mast, substructure, and supporting equipment permanently mounted on a concrete foundation with embedded I-beams forming a tracking system, using TWO separate contractors (one for site planning/foundation, one for installing/hard-wiring the derrick and equipment). Does this qualify as new construction (an improvement to realty) for Texas sales tax purposes, and does splitting the work across two contracts change that?
Yes, the whole project is new construction — there's no existing test rig facility at the site, and the equipment is being permanently, irremovably attached (the derrick can't be detached from the…
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