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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Does a radioactive-waste disposal company owe use tax on out-of-state-purchased containers it gives customers, and is its entire disposal charge taxable even though the waste and containers are ultimately buried or processed outside New York?
No use tax applies to the containers themselves, since they're actually transferred to the customer as part of a taxable disposal service rather than purchased at retail by the company. But the…
How did Tennessee sales and use tax apply to automotive core charges, returned cores, equal exchanges, and full or prorated warranty replacements?
Tax applied to the net price after a returned-core trade-in, or to the full price including the core charge when no core was returned. Equal exchanges and free warranty replacements produced no…
Was specialized liquid heat-transfer fluid exempt industrial machinery when an integrated manufacturing system could not operate without it?
Yes. The specialized fluid was an integral and necessary part of the closed-loop production system, so it qualified with the system as exempt industrial machinery.
A taxpayer was audited, paid the resulting deficiency determination in full, then submitted additional documentation within 60 days that got some items amended. There are still other items the taxpayer believes are exempt but hasn't yet documented to the auditor. How much time does the taxpayer have to present that additional documentation without losing the ability to claim a refund — is it six months from the audit's final date under Tax Code Section 111.104, or does the normal four-year statute apply?
It depends on whether the specific item was already part of the audit. Tax Code Section 111.104(b) lets a taxpayer file a written refund claim within SIX MONTHS from the date the deficiency…
Is a hazardous-waste broker's fee for arranging removal, transportation, and treatment/disposal of waste taxable when the waste is actually treated or disposed of outside New York State?
It depends on whether the waste is actually treated or disposed of inside or outside New York, and on whether the broker is acting as its customer's agent or as the actual service provider. Removing…
Which telephone-company assets qualified for South Carolina's economic-impact-zone investment credit under PLR 98-2?
Qualifying communications assets included switching and terminal equipment, satellite towers, cable, and repair trucks and tools when they met the federal property, depreciation, original-use, and…
A company operates parking facilities in a large medical complex and sells monthly parking services to nearby tax-exempt organizations (like hospitals), which in turn let designated employees, physicians, nurses, volunteers, and directors use that parking for free while carrying out their work at the exempt organizations' facilities. The parking operator doesn't currently collect sales tax on these sales but does get exemption certificates from the exempt organizations. Is that correct?
Yes. Sales of parking services to an organization exempted under Tax Code Section 151.310(a) and Rule 3.322(f)(1) are exempt from tax when that exempt organization (or its authorized agent) pays for…
By how much could South Carolina rollback millage increase in a 1998 countywide reassessment year?
Rollback millage could be increased by 2.3% for a countywide reassessment implemented in 1998. The Department used the average 1997 increase in the CPI-U. The underlying rollback millage was…
Did reusable pallet caps qualify for Tennessee's industrial-machinery sales-tax exemption when they protected products in transport and temporary storage?
No. The pallet caps were primarily storage and containment devices used during transport and temporary storage, so they did not qualify as exempt industrial machinery.
A web developer whose services expanded into more on-line artwork asked how Texas sales tax applies to illustrations/graphics for a website, HTML/JAVA programming, multimedia programming, and professional consultation — and whether it matters if these are provided to companies outside Texas.
Creating graphics/logos with a drawing program for a client's homepage is taxable graphic art (Rule 3.312). Scanning data into a site and creating HTML documents is taxable data processing (Rule…
How do section 186, section 186-a, and the real estate transfer tax apply to LILCO's restructuring -- under threat of condemnation by LIPA -- including asset exchanges, redemption distributions, and transfers to disregarded LLCs?
Because LILCO is restructuring under threat of condemnation by the Long Island Power Authority (LIPA), the gas-and-generation asset exchange is not 'receipts from the employment of capital' and is…
Is a competitive local phone carrier's purchase of fiber optic network access from an in-state network owner taxable, or is it exempt as a purchase for resale?
No -- the network access fees aren't subject to sales tax, because the local exchange carrier is buying the fiber optic capacity as a component of the telephone service it resells to its own…
Is a driving school's road test vehicle usage fee taxable, and must it collect sales tax when it occasionally sells one of its cars to an individual?
The charge for supplying the vehicle itself for the road test is taxable as a rental, along with the special passenger car rental tax -- but if the driving school separately states and bills its…
Who owed Florida sales or use tax on carpet under government and private flooring contracts?
For the government installation documents reviewed, the flooring provider was the materials' taxable ultimate consumer because the public owner did not satisfy the direct-purchase conditions. For…
When can a rock quarry sell rock exempt from Kansas sales tax — to a trucker, a contractor, or a concrete plant?
It depends on the buyer. Kansas sales tax applies only to retail sales (sales to final users). A quarry may sell rock exempt to a trucker who gives a valid resale exemption certificate (the trucker…
Is Kansas sales tax charged on a discount when the manufacturer offering it is not reimbursed?
No — not on that discount. Kansas taxes the gross receipts from retail sales (K.S.A. 79-3603(a)), and the taxable 'selling price' is the total cost to the consumer exclusive of discounts (K.S.A.…
Does an insurance company owe Kansas sales tax when a vehicle is totaled and the owner keeps it minus a salvage deduction?
No. Kansas sales tax applies to gross receipts from the sale of tangible personal property (K.S.A. 79-3603(a)). The Department ruled that when an automobile is determined a total loss and the owner…
Who owed California tax on out-of-state materials used to furnish and install a nonschool modular building?
The installer did. The furnish-and-install contract was construction work, so the contractor consumed the materials, owed use tax on cost, and could claim a qualifying other-state tax credit.
How did California tax installed modular buildings compared with factory-built school buildings sold or leased by an out-of-state contractor?
Nonschool modular buildings were construction contracts taxed on material cost; factory-built school buildings used 40 percent of the contractor's purchase price.
An outsourced digital pre-press/asset management company runs a Texas photography studio plus several product lines (digital photography, 2D/3D digital illustration 'Liquid Graphix,' resold data-communication solutions called 'ViNET,' and custom/modified software) delivered to customers via mail, contract carrier, or the Internet. The company asked a long list of Texas sales/use tax questions covering nearly every one of its product lines and business practices.
Yes across the board — having a Texas studio requires the company to be permitted and to collect/report Texas sales/use tax on its taxable Texas sales. Software sales are taxable tangible personal…
Is installing custom shutters and blinds as original equipment in a new home, before construction is finished, a tax-exempt capital improvement?
It depends on the item. Custom shutters installed as part of the original finish carpentry before construction was complete -- enclosing the window and door casings -- are excluded from tax as part…
Does a new nonprofit LLC formed to manage a national laboratory meet the organizational test for New York's sales-tax exemption as a scientific/educational organization?
Yes -- based on the operating agreement submitted, Brookhaven Science Associates, LLC's purposes are limited to scientific research, education, and related exempt purposes, its earnings and…
Could an out-of-state direct seller collect Florida sales tax for distributors who were not registered dealers?
Yes. The seller could collect and remit tax for unregistered distributors, avoiding their need to register or file Florida returns. A distributor choosing to collect tax had to register and could…
Were chemicals used to sanitize dairy-processing equipment exempt from Florida sales and use tax?
No. The sanitizing and sterilizing agents were taxable tangible personal property because they cleaned dairy-processing equipment rather than becoming part of the finished milk products. Their…
Would a publisher owe Tennessee sales or use tax when a Tennessee printer mailed its free magazines directly to recipients inside and outside Tennessee?
Tax applied to the copies addressed to Tennessee recipients, but not to copies the printer mailed directly to recipients outside Tennessee. Neither printed-material exemption covered the in-state copies.
A manufacturer uses a third-party service company to handle its warranty repair claims (both original manufacturer's warranty and separate extended warranty). Is that third-party service provider required to charge the manufacturer Texas sales tax on its parts-and-labor claims — and does the answer differ for a regular manufacturer's warranty versus an extended warranty?
For the manufacturer's ORIGINAL warranty: the manufacturer may give the third-party service company an EXEMPTION certificate for the labor and material charges used to fulfill the manufacturer's…
Are a public broadcasting station's charges for producing and broadcasting a corporate client's private television program subject to New York sales tax?
No -- the broadcasting station's separately stated charges for producing and broadcasting the program (studio time, set-up and breakdown, employee time, and satellite transmission) are not subject…
Are charges for leasing a private luxury suite at an arena, and separate charges for suite-related advertising, subject to New York's admissions tax?
It depends on the type of suite agreement. Under agreements granting permanent exclusive use of a suite, the rental is taxable admissions -- but only measured against the events for which the suite…
Does a high-volume Xerox Docutech system that Kinko's uses to integrate, edit, and print customer materials qualify for New York's personal income tax investment tax credit?
Yes, but only conditionally. New York's Department of Taxation and Finance ruled that Kinko's Docutech Publishing System qualifies for the 4% investment tax credit under Tax Law § 606(a) if it is…
Is furniture manufactured in New York and delivered directly to an out-of-state buyer in Nevada subject to New York sales or use tax?
No -- since the furniture is delivered directly to the buyer in Las Vegas and possession transfers there, not in New York, the New York manufacturer doesn't have to collect or remit New York sales…
Are specialized roll-off containers a waste hauler buys to collect hot ash for a manufacturer's landfill-capping-material production exempt from sales tax as production equipment?
No -- the roll-off containers are subject to sales and use tax. Even though they're custom designed for hot ash and the ash is later used as raw material in another company's manufacturing process,…
Could a builder and separate landowner transfer a completed Florida home with one deed and one documentary stamp tax payment?
Yes. The builder and the entity holding title to the lot could sign one deed to the homebuyer. Documentary stamp tax was paid once on that deed, based on the total consideration for both the land…
Did temporarily bringing an aircraft to Texas for repair while completing outside-signed sales, leases, and a novation create franchise-tax nexus for the parties?
No. The aircraft entered Texas temporarily for repair and renovation while Companies A through D completed a purchase, lease, later sale, and novation. Each company otherwise had no Texas business…
Can a student training for a pilot certificate or the next level of flight rating (instrument, commercial, multi-engine, airline transport, etc.) claim a Texas sales tax exemption on aircraft rentals used for training, including solo flights?
Yes. A student enrolled in an FAA-approved program may claim exemption on aircraft rentals used for flight training, including instructor-approved solo flights (evidenced by a logbook endorsement,…
Were South Carolina timeshare and membership-resort accommodation exchanges subject to accommodations sales tax?
Yes. When South Carolina accommodations were furnished through a membership or timeshare exchange, the provider owed accommodations sales tax on the reasonable rental value of the exchanged stay…
Did South Carolina conform its income-tax law to the federal Taxpayer Relief Act of 1997?
Yes. House Bill 4466 amended § 12-6-40 so South Carolina conformed to the Internal Revenue Code of 1986 as amended through December 31, 1997, including the federal effective-date provisions. The…
Are a company's services helping nursing homes with the Medicaid resident-admissions process taxable in Connecticut as business management or business management consulting services?
Not taxable. A company's services helping nursing homes handle the Medicaid resident-admissions process are not taxable business management or business management consulting services under Conn.…
Is a permit holder's sale of an unusual item automatically an exempt occasional sale because the business does not normally sell that kind of property?
No. The 1998 correction says unusual property may still be acquired and resold as part of the permit holder's business. It treated individual capacity and separation from sales activity as…
How did Texas treat use tax and later title transfer when a vehicle bought and taxed in another state was brought into Texas?
Historically, Texas use tax arose when the vehicle entered Texas, with credit for Michigan tax already paid. The letter's later $10 gift-tax result is superseded because 2009 law restricted which…
Which purchases by a nonprofit domestic-violence shelter are exempt from Kansas sales tax — food, educational materials, or repair materials?
It depends on the item. Kansas has no exemption for the food a domestic-violence/rape shelter buys to provide meals, so those purchases are taxable. Free educational materials the shelter…
Was use tax due when advertising invoices shipped directly out of state were never used there and later returned to California?
Yes. Direct out-of-state shipment was nontaxable, but unused invoices first used in California after return were taxable; waiting 90 days did not change that.
Were charges solely for internet access subject to California sales or use tax when the provider supplied no equipment, software, manuals, or other property?
No. On that assumption, the provider sold no tangible personal property and made no taxable lease, so its internet-access charges were outside sales and use tax.
Are annual membership dues charged by a newly formed private-club restaurant subject to Utah sales tax, when members vote for a board that sets the dues?
No, the dues are not taxable. Utah excludes annual membership dues to private organizations from its definition of taxable "admission or user fees," but only if the membership dues are paid by…
Did an out-of-state company create Texas franchise-tax nexus by providing capital-lease financing without representation or financial activity in Texas?
No, on the stated facts. The company had no Texas representation and provided only capital-lease financing. The Comptroller said it was not subject to franchise tax. But Texas credit checks,…
Does a public warehouse that stores and ships customers' inventory provide 'fulfillment services,' and do its out-of-state customers get New York franchise tax or sales tax nexus by using it?
Yes, and the customers get no nexus. Distribution Unlimited's public-warehousing activities -- storing manufacturers' and distributors' inventory and shipping it by common carrier on the owner's…
Which advertising-agency services are exempt from Kansas sales tax and which are taxable?
Some are exempt, some are taxable. Under K.S.A. 79-3606(pp), services rendered by an advertising agency are generally exempt from Kansas sales tax. But when the agency produces and sells tangible…
Is a commission-only encyclopedia sales representative an employee (exempt) or an independent contractor who owes New Mexico gross receipts tax on his commissions?
He owed the tax. A commission-only Encyclopaedia Britannica sales representative who set his own schedule, chose his own leads, paid his own expenses, and got a 1099 was an independent contractor,…
For manufacturing equipment installed as real property, are replacement parts taxed differently than ordinary construction materials, and can labor/parts billed together be split by 'reasonable allocation'?
No on both points. Exempt manufacturing equipment and its replacement parts are treated as sales of tangible personal property no matter how they're installed, so parts aren't taxed under the…
Who paid Texas tax on a leased vehicle, what happened at an operating-lease buyout, and who owed local property tax?
The lessor paid motor vehicle sales tax on its purchase, while the lease contract was not taxed. If the lessee bought the vehicle at the end of a true operating lease, that was a second taxable sale…
Does a nonprofit that is a 501(c)(7) social club — not a 501(c)(3) charity — owe New Mexico gross receipts tax on liquor sales to its members, and can it avoid the penalty for following a bookkeeper's wrong advice?
Yes, it owed the tax, and only partly avoided the penalty. New Mexico's gross receipts tax exemption requires an actual IRS grant of 501(c)(3) status; this land-grant heirs' association was a…
Are coin-operated vacuum machines and tire-inflation machines at car washes and gas stations exempt from New York sales tax?
It depends on the machine and the location. Coin-operated vacuum services at a car wash facility (self-service or otherwise, as long as no employee assists) became exempt from sales tax on December…
How were distributions from funds treated as series of one trust sourced for former Texas franchise-tax apportionment?
The trust's principal place of business controlled for both former tax components. Because each fund was described as a series of the trust, the Comptroller presumed the funds were not separate…
When was electricity sold to a for-profit nursing home exempt from Florida sales tax?
Electricity used for residents, their dwelling units, and resident-only common areas was exempt even at a for-profit nursing home. But if one meter also served a commercial activity such as a bank…
Can a New Mexico couple claim full income-tax refunds by arguing wages aren't taxable, the Sixteenth Amendment wasn't ratified, and the graduated income tax violates the state constitution?
No. The refunds were denied. Wages are income — New Mexico builds its income tax on federal adjusted gross income, and 'gross income' means all income from whatever source, including compensation…
If a Utah cabinet maker's materials end up installed as real property in another state, does Utah give credit for use tax paid to that other state, or is Utah tax simply not owed at all?
No Utah tax was due at all, on these facts -- so there was nothing to credit. Utah Code Ann. § 59-12-104(33) exempts property sold in Utah that is later shipped out of state and incorporated into…
Could a former lessee use the previously leased vehicle as a trade-in deduction when buying a different vehicle from a dealer?
Not in the described separate transactions. If the dealer bought the old lease vehicle from the lessor and separately sold the customer another vehicle, the customer's purchase contained no…
When did a Texas resident stationed elsewhere owe use tax on an out-of-state vehicle registered for Texas use?
At Texas titling and registration. The vehicle was registered for use in Texas, and § 152.041 prevented the county from accepting a title application unless tax was paid. The Comptroller therefore…
When a financial institution outsources its whole computer and data processing operation, which of those services are exempt as 'outsourced' -- and what about work it used to do for its clients rather than for itself?
Only the 'own use' work is exempt. When a financial institution outsources its entire computer and data processing operation to an unrelated provider, the services the institution formerly performed…
Did a dealer owe Tennessee use tax when prospective customers and employees used inventory vehicles in a free test-drive program lasting no more than 120 days?
No tax was due if each vehicle's total use by all evaluators and employees stayed within 120 days and the vehicle was sold or returned to inventory. The Department declined to rule on dealer plates…
Were repairs or renovations to heavy nuclear-medicine equipment anchored to specially poured hospital floor pads subject to Utah sales tax?
No, on the stated assumptions. Utah said repair or renovation labor was not taxable because the nuclear-medicine equipment appeared permanently attached and therefore part of the hospital's real…
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