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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Can New Mexico tax a retirement distribution received while a taxpayer is temporarily in Nevada if the taxpayer spent more than 185 days of that year in New Mexico?
Yes. Michael Miller lived in New Mexico for 247 days in 2016, so the Administrative Hearings Office held he was a statutory New Mexico resident under the 185-day rule even though he lived in Nevada fr…
Are fees earned by a New Mexico consultant taxable when some work is done from an Albuquerque home office and separate speaking engagements occur out of state?
Partly. David Baldridge reported $15,750 of 2017 Schedule C income but filed no New Mexico gross receipts tax returns. The Administrative Hearings Office held that $13,050 paid by a Maryland nonprofit…
Which city's local sales tax rate should an oil well servicing company charge when it takes orders at its equipment yard but performs repairs at customers' well sites elsewhere?
It depends on the type of work. For equipment rentals and repairing/remodeling tangible personal property (like tubing, rods, or pumps), the company must charge the LOCAL tax rate where its equipment …
Were durable-goods financing contracts conditional sales or operating leases, and was the retailer or finance company the Florida sales-tax dealer?
The reviewed contracts were conditional-sale type leases because they transferred substantially all ownership benefits and risks and transferred title at term end or for a nominal option. The retailer…
Does selling corn oil as an off-road-use-only performance fuel for tractor pulls require a Motor Fuel Tax license, and is it subject to motor fuel tax?
It depends on whether the corn oil is blended with diesel or another fuel. Plain corn oil resold as-is is not "motor fuel" and isn't subject to the Motor Fuel Tax Law. But if it is blended with diesel…
I'm a Virginia resident who commutes to a job in Maryland and had Maryland tax withheld from my paycheck -- can I claim a Virginia credit for that Maryland tax, or do I need to get it back from Maryland directly? And can Virginia at least waive the interest on my assessment?
No to both. Virginia has a reciprocal tax agreement with Maryland (also West Virginia and Pennsylvania) that exempts Virginia residents who commute into Maryland from Maryland tax on their wages in th…
My spouse took a fixed two-year federal government posting abroad, and we moved our bank accounts, phones, and health insurance there -- but we'd always planned to move to a different U.S. state once the assignment ended. Did we successfully abandon our Virginia domicile?
No -- a temporary, fixed-term overseas work assignment generally doesn't establish a new domicile, especially when the taxpayers' own plan was to move somewhere else entirely once the assignment ended…
My business's sales tax audit found a compliance ratio just under Virginia's 85% threshold, and we've generally filed and paid on time for years -- can we get the compliance and amnesty penalties waived?
No -- Virginia's compliance penalty is mandatory once your audit compliance ratio falls short of the regulatory threshold, and being a generally diligent filer in other years isn't the kind of 'provid…
I sold my business years ago, but the county still assessed ME for tangible personal property tax on it for years after the sale -- can I appeal that dispute to the state Department of Taxation?
No -- not through the Department. The Department's jurisdiction over local business tangible personal property tax appeals is limited to reviewing whether an ASSESSMENT itself (the tax rate, the taxab…
I paid long-term care insurance premiums and listed them on my federal Schedule A, but my total medical expenses were under the deduction floor so I never actually got a federal tax benefit for them -- can I still claim Virginia's deduction? And can I subtract retirement income from an IRA I funded with military pay while filing returns in Pennsylvania?
Split result. Yes on the long-term care premium deduction: Virginia bars it only if you actually CLAIMED a federal deduction for the same premiums, and because this couple's total medical expenses fel…
I moved to another state for a new job, got a driver's license and voted there, but kept my unexpired Virginia driver's license and a car titled with my dad -- did I successfully change my domicile away from Virginia?
Yes -- this taxpayer successfully established a new domicile outside Virginia, a useful contrast to cases where a similar move failed. She took a new job in another state in late 2016 intending to sta…
How could a Florida corporate group revise its Capital Investment Tax Credit project-income calculation after unrelated operations moved into the project company?
Florida approved a revised project-income method for tax years beginning after December 28, 2020. The project company could use separate GAAP records and pro forma federal and Florida income computati…
Does moving to an employer-provided trailer in Texas end New Mexico domicile when licenses, registrations, banking, and tax addresses stay in New Mexico?
No, not on these facts. Michael Hughes transferred from Hobbs to his employer's Odessa, Texas location and lived in a trailer parked at the business, but the Administrative Hearings Office held he rem…
Were housekeeping workers supplied to a resort hotel under a revised staffing contract taxable nonresidential cleaning services?
No. The revised contract provided nontaxable temporary staffing rather than taxable cleaning services because the hotel directed and supervised the workers, supplied their tools and materials, and pai…
Where can taxpayers find South Carolina Department of Revenue advisory opinions by tax topic through December 31, 2021?
Use the subject index attached to SC Information Letter #22-2. It organizes South Carolina Department of Revenue advisory opinions issued from 1987 through December 31, 2021 under administrative, alco…
How can taxpayers check whether a South Carolina Department of Revenue advisory opinion had been modified, superseded, or made obsolete through December 31, 2021?
Use the citator attached to SC Information Letter #22-1. It lists South Carolina Department of Revenue advisory opinions from 1987 through December 31, 2021 that the Department identifies as modified,…
Does a company whose revenue mostly comes from selling renewable-fuel credits (RINs and LCFS credits) still count as a manufacturer eligible for Tennessee's franchise and excise tax industrial-machinery credit?
Yes. The Department ruled that an LLC running a Tennessee industrial-gas plant qualifies for the franchise and excise (F&E) tax industrial-machinery credit on its equipment, even though most of its re…
When a peer-to-peer car-sharing platform lets private "Hosts" rent out their own vehicles to "Guests," who owes Illinois's Automobile Renting Tax -- the platform or the Host -- and does that change once the platform's rental volume crosses certain thresholds?
The platform (the "Car Rental Facilitation Company") is treated as a marketplace facilitator under the Automobile Renting Occupation and Use Tax Act, the same way an online marketplace is a marketplac…
Is Nebraska Revenue Ruling 01-08-1 on the sales and use tax exemption for Community-Based Energy Development project materials still in effect?
No -- it has been withdrawn. Revenue Ruling 01-22-1 (issued January 31, 2022) formally rescinds Revenue Ruling 01-08-1, 'Sales and Use Tax Exemption for Qualified Materials for Use in a Community-Base…
Did a governmental entity's direct purchases of materials for a training center and parking garage qualify for Florida's public-works exemption?
Yes. The governmental entity's purchases qualified because it issued purchase orders and exemption documents directly to vendors, received invoices, paid vendors from public funds, took title, and ass…
What does Missouri LR 8181 conclude about Wine Club Digital Memberships are Subject to Sales Tax?
Yes. Missouri ruled that a wine retailer's monthly Digital Club membership fee is subject to state and local sales tax, because the single charge bundles taxable retail items (wine, discounts, event a…
What does Missouri LR 8180 conclude about Taxability of Machinery & Equipment for Solar Electric Facility?
Missouri's manufacturing exemption covers a solar facility's photovoltaic modules (including spares) and their support structures, but not the foundations for those structures, the DC/AC combining equ…
Could Broward County use an owner direct-purchase program to buy construction materials tax-free for a convention-center expansion and county-owned hotel?
Yes. Florida treated the county-owned convention-center expansion and headquarters hotel as public works and approved Broward County's owner direct-purchase program. The County could claim exemption w…
The IRS increased our federal income and Virginia adjusted our return to match -- so why did our Virginia taxable income go up by MORE than our federal income did?
Because Virginia's age-65 deduction phases out dollar-for-dollar once your adjusted federal adjusted gross income (FAGI) passes $50,000 (single) or $75,000 (married), a federal income increase near or…
I missed Virginia's 90-day appeal deadline for a sales tax audit because the audit notice was mailed to an old business address -- can I still get the assessment corrected?
Not through a normal appeal -- Virginia's 90-day appeal deadline runs from when an assessment is mailed to the address the Department has on file, even if that address is no longer current, because it…
My tax preparer submitted our Virginia Research and Development Expenses Tax Credit application 8 days after the September 1 deadline -- can we still get the credit since the delay wasn't our fault?
No -- Virginia's Research and Development Expenses Tax Credit application deadline (September 1 of the year following the tax year) is enforced with zero discretion, and reliance on a tax preparer's m…
A foreign country withheld tax from my pension but I wasn't required to file a tax return there -- can I still claim Virginia's credit for tax paid to a foreign country without filing that foreign return?
Yes -- this taxpayer won. Virginia's credit for tax paid to a foreign country on pension or retirement income only requires proof that the foreign tax was actually paid, not proof that a foreign tax r…
I moved out of Virginia years ago, but I renewed my Virginia driver's license after the move and didn't switch my voter registration until much later -- does that mean I never actually gave up Virginia domicile for tax purposes?
Yes, on these facts -- renewing (not just holding onto) a Virginia driver's license years after your claimed move date is treated as very strong evidence you never actually abandoned Virginia domicile…
The Department is trying to collect my former employer's unpaid sales and withholding taxes from me personally because I was a shift manager there -- can they do that if I never had access to the bank account or authority over which bills got paid?
No -- this taxpayer won. Virginia can only convert a corporation's unpaid tax debt to an individual 'responsible officer' if all four parts of a strict statutory test are met: the person willfully fai…
The IRS never questioned my Schedule C vehicle expense deduction -- can Virginia still audit and disallow it if I can't produce documentation when asked?
Yes -- Virginia generally relies on the accuracy of your federal return, but it keeps independent authority to demand supporting documentation for any deduction and to disallow it if you don't provide…
I lived and worked in Virginia all year but funded my IRA years earlier in a state with no income tax, and I treated half of it as my spouse's community property -- can I subtract any of my Virginia IRA distribution, and can I get interest waived because a Department employee gave my preparer wrong advice over the phone?
No to all three arguments. Virginia's retirement-income subtraction only covers IRA distributions to the extent the original contributions were actually taxed by another state -- since this taxpayer's…
When Connecticut combined-group members that were allocated net operating losses merge into another member, do those NOLs survive so the surviving group can still use them?
Yes. Net operating losses allocated to combined unitary group members that merged into another member survive the merger and may be used by the surviving member -- or shared with any other member that…
I filed my Virginia return more than three years late because of personal issues, and I thought I automatically had until November to file -- can I still get my overpayment refunded?
No -- because these taxpayers never actually filed their return within Virginia's automatic six-month extension period either, the extension was negated entirely and the three-year refund clock ran fr…
The IRS accepted our Schedule C and Form 2106 deductions across three tax years with no questions -- can Virginia still audit and disallow them for all three years if we can't produce documentation when asked?
Yes -- Virginia's independent authority to demand documentation for a federal-form deduction applies year after year, and this ruling shows it enforced across three full tax years at once. These taxpa…
I was converted a responsible officer for my restaurant company's unpaid sales tax, and I have records that would lower the assessment -- but I haven't been able to get them together yet. Can I still get the assessment corrected?
No -- promising to gather supporting documentation isn't the same as actually providing it, and this taxpayer's assessment was upheld because he never followed through. He was the president and minori…
I moved out of Virginia and set up a home, license, and voter registration in another state, but I never gave up my Virginia driver's license or voter registration -- have I actually changed my domicile for tax purposes?
No -- changing your domicile requires both abandoning your old home state AND establishing a new one, and here the husband only showed the second half. He had real ties to his new state (State A) -- p…
The IRS adjusted my 2013 return back in 2016, but I never reported it to Virginia because I believe (and am still contesting with the IRS) that their adjustment itself was made after their own deadline had passed -- can Virginia still assess me years later?
Yes -- once a taxpayer fails to file an amended Virginia return reporting a federal change, Virginia can assess the resulting tax at any time, with no statute-of-limitations shield, and the Department…
When a customer's leased equipment is totaled and they pay us a settlement under the lease's total-loss clause, does Virginia sales tax apply to that payment?
Yes, generally -- a payment a lessee makes under an equipment lease's total-loss clause is taxable in its entirety as part of the lease's gross proceeds, with no deduction allowed for the property's c…
An auditor is disallowing exemption certificates from several of my automotive customers because some are undated, some are dated well after the sale, and one is from a volunteer fire department -- which of these actually hold up?
It's a mixed result that turns on the specific certificate and customer, not a blanket rule. Undated exemption certificates and ones dated well after the sale don't get automatic good-faith protection…
My cold storage facility chills and freezes food products for customers -- does that count as industrial processing so I can buy equipment and pallets tax-exempt?
No -- to qualify for Virginia's industrial manufacturing/processing sales tax exemption, a business must be classified as 'industrial in nature' under the SIC/NAICS-based test in Va. Code § 58.1-602, …
The auditor estimated my underreported sales by comparing my federal and state tax returns, and I submitted my bank deposit records to challenge it -- why wasn't that enough to fix the assessment?
Because the bank records this retailer submitted only covered credit card deposits and left out cash sales entirely, they couldn't reliably show the true total of sales -- so they didn't meet the burd…
I moved out of Virginia for work years ago but kept my old house as a rental, a car co-registered with my mother, my Virginia driver's license until recently, and an old inactive voter registration -- did I still manage to change my domicile out of Virginia?
Yes -- this taxpayer successfully changed his domicile away from Virginia, even though he kept several Virginia connections, because the Department found credible, non-domicile-driven explanations for…
Can a company use alternative apportionment to include a huge one-time asset-sale gain in its Illinois sales factor after that gain was excluded under the incidental-or-occasional-sale rule?
No, not on the facts given here. The Department held that alternative apportionment was not appropriate merely because gross receipts from an incidental or occasional sale of business assets were excl…
When must a lodging marketplace facilitator collect Kansas sales and transient guest tax on short-term rentals?
Kansas Notice 21-24 explains how 2021 Senate Bill 50 (New Sections 1-4) applies to marketplace facilitators that provide lodging. A marketplace facilitator is a platform that contracts with sellers to…
Does an out-of-state company that has an Illinois employee and buys personalized debit/prepaid cards from printers owe Illinois Retailers' Occupation, Use, or Service Occupation Tax on those cards, depending on where the printer ships them and whether they are resold, given away, or destroyed unfinished?
It depends on where the printer ships the finished cards. Because the company has an Illinois employee, it is an out-of-state "serviceman maintaining a place of business" in Illinois, and the Departme…
As a federally recognized Indian tribe, are we exempt from Virginia retail sales tax on purchases we make off our reservation for goods we bring back to use on the reservation?
No -- federal recognition and tribal sovereignty protect a tribe's activities within its own reservation boundaries, but once a tribe or its members go beyond the reservation to make a purchase, they'…
Does an outsourced veterinary pharmacy business owe Service Occupation Tax or Retailers' Occupation Tax on the products it supplies through participating veterinary hospitals to pet owners, and who is responsible for remitting that tax?
The Department could not give a definitive answer because the facts were unclear, but it explained the framework: if the pharmacy company sells to veterinary hospitals at wholesale and the hospitals r…
Is a defaulted 401(k) loan taxable by New Mexico when the contributions came from Colorado employment but the deemed distribution occurred after moving to New Mexico?
Yes. Marcos Rayas borrowed $33,084 from a 401(k) earned through Colorado employment, stopped making payments after moving to New Mexico in July 2014, and had a $29,578.90 deemed distribution declared …
I'm a Virginia resident who owns a stake in a partnership or LLC that elected Maryland's entity-level 'PTE SALT cap workaround' tax -- can I claim a Virginia credit for the tax Maryland collected from the entity?
It depends entirely on what kind of pass-through entity you own. If you're a Virginia resident shareholder of an S-corporation that elects Maryland's entity-level PTE tax, Virginia law specifically tr…
The auditor disallowed my student loan interest adjustment, my employee business expenses, and almost all my itemized deductions -- I sent copies of my tax bills and medical invoices, so why wasn't that enough?
Because invoices and bills only show what you OWED, not that you actually PAID it -- and Virginia requires proof of payment (receipts, cancelled checks, or similar) to substantiate deductions like pro…
I paid DC's Unincorporated Business Franchise Tax on my business income -- can I claim Virginia's credit for taxes paid to another state to avoid being taxed twice on the same income?
No -- the District of Columbia's Unincorporated Business Franchise Tax (UBFT) is specifically excluded from Virginia's credit for taxes paid to another state, and that's true even though denying the c…
We got a refund of the Virginia tax withheld from my wife's wages when we filed our part-year-resident return, but Virginia later assessed us on those same wages -- can we still use that withholding to pay the new bill?
No -- once withholding has already been refunded, it can't be used a second time to offset a later assessment on the same wages. A married couple filed a joint part-year Virginia return for 2018 repor…
My Form W-2 lists 100% of my wages as Virginia state wages because I asked my employer to withhold Virginia tax as a convenience, but I only actually worked a small fraction of my days in Virginia -- can I still allocate my wages based on actual days worked instead?
Yes -- this taxpayer won. A nonresident's Virginia wages should be allocated using the ratio of actual days worked in Virginia to total days worked everywhere, and the state-wages box on a Form W-2 is…
I moved back to Virginia partway through the year and filed a part-year return -- can I exclude the income I earned before my move when computing Virginia's low-income credit?
No -- a part-year resident's income earned before moving to Virginia still counts toward the income threshold for Virginia's low-income credit, even though only the post-move income is actually taxed …
My sales tax appeal was postmarked just 9 days after the 90-day deadline -- can the Department still consider it?
No -- Virginia strictly enforces its 90-day appeal deadline with no exception for a short delay, and this appeal was barred even though it missed the deadline by only 9 days. The taxpayer's sales and …
My timeshare association collects cleaning fees from unit owners and pays them straight through to an outside cleaning company -- can we exclude those fees from our BPOL gross receipts as a pure pass-through?
No -- because the timeshare owners themselves had no direct contractual relationship with the cleaning vendor, the association wasn't acting as their legal agent, so the fees it collected and passed a…
We're a cable company subsidiary that's already lost this exact BPOL situsing argument for earlier tax years in two prior published rulings -- can we get a different result for later years by raising a new federal court case?
No -- with no meaningful change in the company's actual operations, the Department reached the exact same conclusion it had already reached twice before for this same taxpayer's earlier tax years: all…
My timeshare association collects cleaning fees from unit owners and pays them straight through to an outside cleaning company -- can we exclude those fees from our BPOL gross receipts as a pure pass-through?
No -- because the timeshare owners themselves had no direct contractual relationship with the cleaning vendor, the association wasn't acting as their legal agent, so the fees it collected and passed a…
The county hasn't issued a final decision on my manufacturing property tax appeal in over a year -- can I go around the county and appeal directly to the state, and will my manufacturer exemption still hold up?
Yes -- when a locality lets a BTPP tax appeal sit for more than a year without issuing a final determination, the taxpayer can go over its head and appeal directly to the Department, as long as it giv…
I work and live abroad most of the year for my job, but my family has been steadily building up Virginia ties -- a condo, driver's licenses, voter registration, a business -- while I mostly just visit in summers. Am I a Virginia resident for tax purposes?
Based on the specific facts presented, probably not yet a Virginia domiciliary resident -- but this is an unusually cautious ruling in which the Department expressly declined to give a firm, final ans…
How these rulings are useful
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