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 corporate group stop filing Florida consolidated income-tax returns after a merger distorted its contractual allocation of tax?
Yes. Florida found good cause in the merger-related contractual change and resulting distortion and granted permission for separate returns for the specified tax year and later years.
Could a Florida bank claim the international-banking-facility income deduction when eligible accounts were not separately booked?
Yes, if the bank and activities met the cited definitions and the eligible asset and liability accounts were segregated or capable of being segregated. Actual separate booking was not required by the …
Does a company that rebuilds customers' ink rollers for the printing industry owe Texas sales tax on materials and equipment, or can it claim a manufacturing exemption?
The company may buy rebuilding materials tax-free with a resale certificate, but must charge its customers tax on the full charge to rebuild each roller. Equipment used solely to rebuild customers' ro…
Should a manufacturer give its supplier a resale certificate or an exemption certificate when buying component parts or ingredients that will become part of an item manufactured for sale?
Either one. The Comptroller confirmed that a supplier may accept either a resale certificate or an exemption certificate in lieu of tax when a manufacturer purchases component parts or ingredients of …
If a nonresident's former-New-York-employer pension is paid out on a declining-balance schedule, a mortgage-style amortization schedule, or with interest that varies with the Consumer Price Index, does it still qualify as a non-taxable 'annuity' rather than taxable New York-source compensation?
Yes, in all four scenarios examined. New York taxes a nonresident's former-New-York-employment pension only if it fails to meet the regulatory definition of an 'annuity' under 20 NYCRR § 132.4(d)(2) -…
Did PLR 94-11 apply South Carolina's historical $300 maximum tax to a research electron microscope?
Yes. Each item of the electron-microscope system qualified because it was used directly and exclusively to develop or improve membrane-filter applications and was located in a separate facility devote…
Are a limited partnership, a trust, and the holders of the trust's interests subject to Texas franchise tax?
None of them were subject. Under the pre-2008 franchise tax, a limited partnership and a trust were not subject because neither is a corporation, and the holders of the trust interests were not subjec…
Does a nursing home operator owe sales tax on the disposable diapers it buys for use on its resident patients, or does the medical-supplies exemption cover them?
The nursing home operator owes sales tax on the diapers -- because it's buying them at retail to use while performing medical/nursing services for compensation, which is a specific exception to the me…
Is the sales tax on club initiation fees due when a golf club sells founding memberships before the golf course and clubhouse are even built?
Yes. A membership payment counts as a taxable initiation fee as soon as it's required as a condition of joining the club, regardless of whether the club's facilities physically exist yet.
If a residential community requires every homebuyer to join a separately-run country club as a social member -- even though the same club also sells memberships to the general public on a first-come, first-served basis without any restrictions -- are the required social-membership dues and fees taxable as social/athletic club dues?
Yes. The mandatory requirement that every homeowner join is itself an exclusivity restriction that makes the club a taxable social or athletic club, even though the club sells other memberships to the…
I'm planning a three-step real estate deal: (1) sell a small 5% stake in my two buildings to an outside investor for under $1 million, (2) contribute my and the investor's interests into a new limited partnership, and (3) later sell a 44% limited partnership stake for over $1 million. Does New York's Real Property Transfer Gains Tax apply to any of these three steps?
None of the three steps triggered the tax. A real estate developer owned two commercial buildings individually and planned a three-step restructuring: first, sell a 5% undivided interest in each build…
My family's 71-acre estate has multiple houses on it -- my house, my brother's house, my sister's occasional-use cottage, and a caretaker's house -- plus outbuildings including a horse barn some neighbors use. If we sell the whole estate for over $1 million, is any of it exempt from New York's Real Property Transfer Gains Tax as our residence?
Yes -- the entire 71-acre transfer was exempt. The McIntyre family's estate in Dix Hills, New York -- a 71-acre parcel with four residences and nine outbuildings, including a horse barn -- had been in…
Must a company that provides barricades, lights, and arrow boards to Nebraska contractors collect sales tax on the charge?
Providing this traffic-control equipment to contractors is a taxable lease, and tax applies to the whole charge. Under Revenue Ruling 1-94-2 (sales and use tax), persons providing barricades, high int…
How did PLR 94-10 tax an out-of-state fabricated ornamental railing installed at a South Carolina dealership?
The ruling classified the railing as a unique product. Materials used to fabricate it out of state were not taxed because they were not sold and delivered to the contractor in South Carolina, but inst…
Is a Delaware business trust that is classified as a partnership for federal income tax purposes treated as a partnership, and not as a corporation, for New York Article 9-A franchise tax?
Yes -- it is treated as a partnership. Diversified Futures Trust I is a Delaware business trust that trades commodity futures, with a managing owner and public limited interestholders, and it qualifie…
Were prepaid software-license fees and monthly license-and-support charges subject to Florida sales tax?
Generally yes for the company's standard software and for software bundled with its hardware. The stated exception was company-customized software licensed without a hardware purchase; its license and…
Does the Texas manufacturing exemption apply to equipment, materials, and services purchased by a television broadcaster?
Partially. Because broadcasters produce programs for consideration, they qualify for the Section 151.318 manufacturing exemption on materials and equipment used directly in production (with a phase-in…
Are subscription sales of scientific/technical trade magazines exempt from Connecticut sales tax under the magazine-by-subscription exemption?
Yes. Subscription sales of the publisher's scientific and technological periodicals are exempt from Connecticut sales tax under Conn. Gen. Stat. § 12-412(6) as 'sales of magazines by subscription.' Be…
Is Texas sales tax due on motorized braces and orthotics sold or rented to patients on a doctor's prescription?
No. The motorized braces and orthotics described qualify as orthopedic appliances under Rule 3.284, and the sale, lease, or rental of a corrective lens, hearing aid, orthopedic appliance, prosthetic d…
Is a Texas sale exempt from sales tax when an out-of-state customer hires a common carrier to pick up the items at the seller's place of business, rather than the seller arranging the shipment itself?
Yes, the sale is still exempt. Under Tex. Tax Code § 151.330(a)(2), a sale is exempt from Texas sales tax if the seller delivers the goods to a common carrier for shipment to an out-of-state consignee…
Does a tire dealer owe sales tax on the sales price and does a warranty credit for a returned defective tire reduce the tax due, when tires are sold on open account and later adjusted under a manufacturer's warranty?
Selling and installing tires is treated as repairing a motor vehicle, and no tax is due on parts or labor furnished by the manufacturer under a manufacturer's warranty. When a customer returns a defec…
Did PLR 94-9 require an entertainment facility to withhold tax from payments to nonresident performers?
Yes, when a temporary nonresident licensee's payment exceeded or was expected to exceed $10,000 in a calendar year. The facility controlled ticket receipts and paid the settlement balance, so the ruli…
Is the electricity used by a florist to power coolers or cooling rooms that keep cut flowers from opening too quickly exempt from Texas sales tax as used in processing?
No. The Comptroller ruled that refrigeration used to slow the natural opening (deterioration) of flowers is storage, not processing, so the electricity used to power florist coolers and cooling rooms …
Is Texas sales tax due on the finder's fee a licensed private investigator charges for locating owners of unclaimed property held by a state agency?
Yes. The Comptroller ruled that a licensed private investigator's fee for locating claimants of unclaimed property is taxable as a security service, so sales tax must be added on top of the investigat…
Does a maid or housekeeper have to charge Texas sales tax on cleaning services performed in a private home?
It depends on who is really in control. If you hold yourself out as a maid service (like "Happy Maids") and clean a home with only minimal direction on which rooms to clean, you are performing a taxab…
Does a company that only delivers, assembles, and installs greenhouses (bought separately from the manufacturer) have to collect Texas sales tax on its charges?
It depends on whether the greenhouse becomes part of the real property once installed. If the greenhouse becomes an improvement to realty, the installer's delivery/assembly/installation charges are tr…
Are knives used by meat processors exempt from Texas sales and use tax as manufacturing equipment?
No. Hand-operated knives used by meat processing members are "hand tools," and hand tools are specifically excluded from the Texas manufacturing exemption by Tex. Tax Code Sec. 151.318(c), so they rem…
Is Texas sales tax due on high-pressure washing services for motor vehicles, sidewalks, parking lots, and graffiti removal?
No tax on washing motor vehicles — power washing a motor vehicle is not taxable. But graffiti removal, sidewalk washing, and parking lot washing are taxable, either as restoration/maintenance of tangi…
Is Texas sales tax due on the various oilfield lease-site services a contractor performs for farmers, ranchers, or oil companies — mowing, oil spill clean-up, site clean-off, saltwater disposal land work, dikes, road patching, new well locations, pit digging/filling, flow line repair, and truck pulling?
It depends on the specific job. Mowing/cutting at lease sites is not taxed (it's not a residential or commercial yard/lawn), but mowing a farmer's or rancher's own yard is taxed. Cleaning up oil spill…
Is Texas sales tax due on charges for faxing advertising materials, like coupons and flyers, to a list of recipients?
Yes. Charges for electronically transmitting fax messages are taxable as telecommunications services. Advertising services themselves are not subject to sales tax, but charges for sending advertising …
Is Texas sales tax due on bulldozer and trackhoe work to clear land or dig ponds, and does it matter whether the bulldozer-and-operator charge is billed as one lump sum or broken out into separate labor and equipment charges?
It depends on the job and the billing method. Labor to clear land (including digging a new pond) as part of new construction is not taxable, but clearing underbrush for landscaping is taxable, and dre…
Is Texas sales tax due on billing and collection services that local exchange telephone companies provide to interexchange carriers, including the recording and rating components?
Yes, but only the recording and rating portion. Recording and rating are taxable data processing services because a computer is used to gather information and apply the carrier's rate schedule to each…
Did a federally tax-free savings-bank reorganization create Florida corporate income tax?
No, if the reorganization and section 351 exchange produced zero federal taxable income and no Florida adjustment applied. Florida started from federal taxable income and required no reorganization-sp…
Does the Texas motor fuels tax apply to kerosene bought in bulk for use in space heaters, even when it's delivered into storage marked for heating and cooking use only?
Yes. Kerosene is treated as diesel fuel for Texas motor fuels tax purposes, so bulk purchases (deliveries over five gallons) are taxable unless the buyer holds a diesel fuel tax permit or can give the…
Were the nonprofit ballet organization's performance admissions exempt from Florida sales tax?
Yes. The Department found that the section 501(c)(3) organization met Florida's criteria for a nonprofit sponsoring organization, so admission charges to its performances were exempt.
Did the bank's proposed checkline credit agreement trigger documentary stamp or intangible tax?
No. The submitted agreement lacked a direct written promise to pay a stated sum, so section 201.08 documentary stamp tax did not apply to the document or the contemplated draws. The Department also fo…
Is Texas sales tax due on the food, beverages, and videotaping charges a focus-group coordinator bills to its clients?
Yes. Any separately stated charges for food and beverages and for video tapes (including taping services) are taxable to the customer. If the invoice instead shows only a single lump-sum charge labele…
How did the 1994 ruling tax a city's fiber bandwidth and network services?
Historically, Florida required the city to collect 7% sales tax and pay gross receipts tax on receipts from both bandwidth and network service. The city itself was exempt on network purchases and inte…
Is a fee charged for a home grocery-shopping service -- where the shopper uses their own money to buy the customer's groceries, then delivers them and gets reimbursed plus a service fee -- subject to New York sales tax?
No. Home grocery shopping and delivery isn't one of the specific services New York taxes, so neither the service fee nor the reimbursement is subject to sales or use tax.
Can a social and athletic club buy lockers tax-free as a purchase for resale, since it charges members a fee to use them?
No. Locker-use fees are taxed as club dues (not as a rental or storage charge), and since the club-dues tax has no resale exception, the club must pay sales tax on the lockers it buys, regardless of b…
Is a federal contractor exempt from Utah sales/use tax on parts and materials used to repair and maintain government-owned equipment, and does that exemption extend to its subcontractors?
Yes to both, with conditions. Charges for parts, materials, labor, and related services to repair tangible personal property are normally taxable, but Rule R865-19S-41 exempts sales made directly to t…
Does a company that sorts, processes, and mails customer mail (rather than manufacturing a product) qualify for Texas's manufacturing exemption on its equipment and supplies?
No. The Comptroller ruled that a mailing services company performing mail sorting, metering, and bar-code labeling is providing a nontaxable mail-handling service, not manufacturing, processing, or fa…
Can a taxpayer get a predominant use study and utility tax refund on a previous business location's natural gas/electric account after closing that account and moving to a new location?
No. The Comptroller will not allow a predominant use study on a closed utility account. Even though the taxpayer's engineer believed an accurate study could still be performed on the old location, the…
Is Texas sales tax or motor vehicle tax due on motorcycle accessories, and does it matter whether the accessory is attached to the motorcycle or bought separately?
It depends on whether the accessory is attached at the time of purchase. An accessory attached to a street-legal motorcycle when it's bought (like a luggage rack) is taxed along with the motorcycle un…
Can a landlord who buys gas and electricity, sub-meters it, and bills each tenant claim a manufacturing/processing exemption because most tenants are manufacturers who use the utilities predominantly in processing?
No. The Texas Comptroller ruled that a landlord who purchases gas and electricity for an industrial park and bills tenants for their sub-metered usage is making its own taxable commercial use of those…
When a temporary worker's staffing contract is renewed until the worker becomes a 'leased employee,' can the agency stop charging Connecticut sales tax on the worker's wages and benefits?
Only going forward, once the worker actually qualifies as a 'leased employee.' A staffing agency's charges for separately stated compensation, fringe benefits, workers' compensation, and payroll taxes…
Is electricity used to cool natural gas, run compressors, and pump water (including salt water) at an underground natural gas storage facility exempt from Texas sales tax?
It depends on what the electricity is used for. Electricity used to run compressors that change gas pressure for transportation is taxable, not exempt as processing. Electricity used to transport natu…
Is tree care service taxable as a landscaping/real property service in Texas, even for trees in a commercial fruit or nut orchard?
Tree care services are generally taxable as landscaping (a real property service), but caring for trees in a commercial fruit or nut orchard operated by a person who raises the fruit or nuts for sale …
Were the Chapter 11 loan assignments, renewals, and mortgage changes subject to Florida stamp or intangible tax?
Mostly no. The assignments, qualifying renewal notes, and related renewal and mortgage documents remained exempt. New future advances were taxable, but after tax was paid on those advances, the stated…
What did the 1994 internal Comptroller memo say about which machinery, tools, and equipment used to repair or maintain a certificated/licensed carrier's aircraft qualify for the Section 151.328(d) sales tax exemption?
This is NOT a taxpayer-specific letter ruling — it's an internal September 22, 1994 audit memo from Lindey Osborne, Tax Administration, resolving a specific audited airline taxpayer's question about w…
When a business relocates, which city's local sales tax rate applies to an existing fixed-term equipment lease — the old location's rate or the new one's?
The old location's rate continues to apply. For a fixed-term (e.g., 12-month or 3-year) operating lease or rental that was consummated from the original place of business, the Comptroller taxes it at …
Is Texas sales tax due on fees charged in the mortgage brokering business, such as loan origination fees, brokerage fees, servicing fees, late charges, title policy charges, attorneys' fees, or real property surveying charges?
Mostly not taxable. The Comptroller advised that loan origination fees, equity origination fees, brokerage fees, late charges, prepayment fees, title policy charges, and attorneys' fees are not taxabl…
Are massage services provided by a New York-licensed massage therapist subject to New York City's local sales tax, and are they also subject to New York State sales tax?
New York City sales tax DOES apply to a licensed massage therapist's services, because massage isn't treated as a 'similar' medical service to the licensed professions the local tax exempts -- but the…
Is installing easily-relocatable, floor-to-ceiling moveable walls a tax-exempt capital improvement, and can the installer accept a Certificate of Capital Improvement on the sale?
No, moveable walls that can be relocated without damaging the building fail two of the three required capital-improvement tests, so their installation is a taxable service, not an exempt capital impro…
Are the services of recruiting temporary employees, drafting training-program manuscripts, and rewriting technical process sheets to a simpler reading level subject to New York sales tax?
No to all three. Recruiting/referral services aren't an enumerated taxable service, and writing manuscripts or editing material for a client -- whether training materials or technical documents -- isn…
Is capping a hazardous landfill a taxable service under Texas sales tax?
No — capping a hazardous landfill isn't a taxable real-property or landscaping service. But watch the materials: unprocessed dirt/sand/gravel and its transport are tax-free, while PROCESSED quarry mat…
Which of the lender's nine open-end loan forms triggered Florida documentary stamp tax?
Only the LoanLiner Subsequent Action Form was taxable, and only when its Extension Agreement was exercised. Tax was based on the unpaid balance entered on that form. The other eight submitted forms la…
Was a tenant's direct payment of the landlord's property taxes taxable as rent?
Yes. The lease required the tenant to pay the property taxes as a condition of occupancy, and nonpayment was a default. Florida treated the direct payment to the tax collector on the landlord's behalf…
If I demolish part of a building down to the floor joists (or foundation) and rebuild it into one larger non-residential structure combining old and new areas, is the work taxed as new construction or as remodeling?
It depends on how far down each area is demolished. Razing a structure all the way to its foundation (the piers of a pier-and-beam building count as the foundation) and building a new facility on that…
Is the charge for 'notching' sample pipe to calibrate quality-control equipment taxable under Texas sales and use tax?
Yes. The Comptroller ruled that 'notching' sample pipe to calibrate a lab's quality-control equipment is taxable as remodeling. The manufacturing exemption does not apply because the notching is not q…
How these rulings are useful
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