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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Were charges for printing, stuffing, sorting, and mailing payroll and accounts-payable checks taxable sales of printed property in Tennessee?
No. The combined check-printing and mailing charge was primarily for a nontaxable payroll or financial service, not a sale of checks as tangible personal property. Separate U.S. postage was also not…
How was a $15,500 online-database license taxed when it also included mailed periodicals and two standardized reports?
Database access was nontaxable, qualifying mailed periodicals were exempt, and $750 allocated to two standardized off-the-shelf reports was taxable.
Does a home builder's 'tax included' contract language shift sales-tax liability to the contractor, and who is liable if a service later turns out not to qualify for the new-residential-construction exemption?
The submitted 'tax included' contract language does NOT meet the requirements of Rule 3.286(d)(4) because it isn't unconditionally explicit — it refers only to 'applicable taxes' on 'material, labor…
Could a tax-exempt museum association buy construction materials tax-free for a new center while using a construction manager and subcontractors?
Yes, for materials the association directly ordered, owned, insured, and paid vendors for using its exemption certificate. Contractor purchases and contractor-fabricated items were not covered.
Could a county buy materials tax-free for a jail expansion while a design-builder and subcontractors coordinated selection, delivery, and installation?
Yes, when the county was the true purchaser: it issued exempt purchase orders, took title and risk at delivery, received invoices, paid vendors directly, and insured the materials.
Could the Board release a defunct corporate taxpayer's records to its bankruptcy trustee without a power of attorney or court order?
Yes. Because the trustee represented the bankruptcy estate, the Board could release relevant taxpayer records without either document and allow access to the defunct corporation's file.
Can a motor vehicle paint and body shop switch from separately billing parts (with tax collected from the customer) to a lump-sum price (paying tax itself on parts, collecting none from the customer)?
Yes, this is an acceptable way to handle the tax. Labor to repair motor vehicles is not taxable under Rule 3.290(g)(1)-(2). A shop billing a lump-sum price for motor vehicle repair is not a retailer…
Does a Texas computer retailer need to collect Texas sales tax on computers and parts it ships to customers outside Texas, and can it buy those components tax-free?
No Texas tax collection is required. A retailer is not required to collect Texas sales tax on computers or parts it ships to customers outside Texas, but must keep documentation — like postal…
Can an Internet service provider buy its facility 'environment' and T1 connectivity charges tax-free if it charges its own customers sales tax on those services?
The ISP's own supplier should not charge it tax on the monthly $150 environment-and-connectivity charge. Instead, the supplier itself must pay tax on the taxable items included in that charge —…
When a gift basket bundles nontaxable food with taxable items (like candy or gift items), how is Texas sales tax applied to the package's price?
Not all food in a gift package is nontaxable — of the food items listed, only candy, chocolates, soda pops, chocolate powder drinks, and chewing gum are taxable; the rest are nontaxable food.…
Is a fee charged to businesses for posting their printable coupons on a website subject to Texas sales tax as data processing?
Yes. Charging businesses a fee to place their coupons on your website — where visitors can print and redeem them — is taxable as data processing, because the service involves entering, scanning,…
Could a Florida corporate group stop filing consolidated returns after the subsidiary that made the election merged into the ultimate parent?
Yes. The electing subsidiary ceased to exist as a group member, a Parent-and-Sub-B subgroup could not file alone, and no income distortion was shown. Permission was granted for 1995 and later years.
Was a mandatory city or county tax included in the amount subject to South Carolina admissions tax under RR 97-13?
Yes. RR 97-13 said a mandatory local tax paid as part of entering or using a place of amusement was included in 'paid admissions' and subject to state admissions tax, whether the city or county…
Do New Mexico residents owe compensating (use) tax when they buy a mobile home out of state and bring it home to live in?
Yes — the refund was denied. When New Mexico residents bought a mobile home in El Paso and brought it home, they owed New Mexico compensating (use) tax, which applies to using out-of-state purchases…
How did California distinguish custom pharmaceutical research from taxable database products, software, extra copies, and standardized reports?
A single tape of substantially analyzed custom research was incidental to service, but extra or reused reports, tangible canned software, and standardized hard copies were generally taxable.
How does Texas tax hotel amenities, upgraded-package charges, and bundled room-and-meal (American Plan) pricing — hotel occupancy tax, sales tax, or both?
This letter corrects an earlier March 1997 ruling's citation (the Alcoholic Beverage Code section for mixed beverage gross receipts tax is § 183.021, not the repealed § 202.02) and restates five…
How did Texas calculate former franchise-tax penalty and interest when an annual report was extended, underpaid, or filed without an extension?
An extended report still showed its original due date. The 90% payment test used total tax on line 36, less the payment made by the original due date. The unpaid difference drew 5% penalty, another…
Could a multistate air-freight carrier use a special four-factor formula for the former Texas franchise tax?
No. Texas denied the carrier's proposed formula based on miles, arrivals and departures, shipping weight, and sales. Section 171.106 required a single gross-receipts factor for both former…
Was providing a concrete pump truck with a skilled operator a Texas motor vehicle rental or a service?
It was a service, not a rental. The operator transported and controlled the complex pump truck, the customer's staff never operated it, and the customer merely directed where concrete should be…
Is the fee charged to program a patient's medical history and insurance information onto a smart card subject to Texas sales tax?
Yes. A programming fee — charged to load a patient's health and insurance information onto a credit-card-sized smart card with an embedded memory chip, readable by ambulances, hospital emergency…
Which aircraft-fuel tax receipts did RR 97-12 treat as the tax on aviation gasoline credited to South Carolina's Aviation Fund?
RR 97-12 said the relevant tax was South Carolina sales and use tax and credited it to the State Aviation Fund only for gasoline meeting the cited aviation-gasoline specifications. Tax on jet fuel…
How was Florida's nonrecurring intangible tax apportioned when a note was secured by both Florida real property and tangible personal property?
The nonrecurring tax applied only to the share secured by Florida real property. If the electric facilities were personal property, only land and buildings entered that ratio, and annual tax applied…
Was documentary stamp tax due when grantors transferred unencumbered Florida land to a court-appointed trustee without changing beneficial ownership?
No. The trustee gave no consideration, no mortgage encumbered the land, and each grantor retained the same proportional beneficial interest after legal title moved to the trustee.
Could a retailer rely automatically on a late section 6247 statement to avoid liability for uncollected California use tax?
No. The statement had to be timely and accepted in good faith for automatic protection. A late statement was only evidence that the property was actually bought for out-of-state use.
What bingo-paper controls did South Carolina Revenue Ruling 97-11 require beginning October 1, 1997?
RR 97-11 required approved bingo paper with a printed face value or approved color-code equivalent, controlled serial numbers, complete-set sales, and a South Carolina emblem distributed only…
Are fuel filters, nozzles, hoses, and lubricants used on farm/ranch equipment and vehicles exempt from Texas sales tax?
Yes, with an exemption certificate. Fuel filters, nozzles, and hoses used on large fuel tanks (250-1,000 gallons) that supply fuel exclusively to farm or ranch equipment, or to motor vehicles not…
Do substation equipment items (breakers, switches, transformers, capacitor banks, regulators, relays) used to step down high-voltage electricity for distribution qualify for the manufacturing exemption?
Yes. Breakers, switches, transformers, capacitor banks, regulators, and relays located in an electric utility's substation and used to step down high-voltage electricity (69kv/138kv/230kv) to…
Could California accept an IRS check payable jointly to two corporate owners when only one named payee had endorsed it?
No. A check payable to both payees, rather than either one in the alternative, required both endorsements or authority for one to endorse for the other.
When a financial institution only holds a security interest in equipment (never taking title or possession), are its 'financing lease' interest charges subject to Texas sales tax?
No sales tax is due on the separately stated finance/interest charges. A lease or rental under Rule 3.294(a)(2) requires transferring POSSESSION (even if not title) of tangible personal property —…
Were S corporations subject to the former Texas franchise tax?
Yes. Texas imposed the former franchise tax on each corporation doing business in Texas or chartered or authorized to do business there, including an S corporation. A 1993 bill that would have…
How did Texas address possible double taxation of related S corporations and LLCs under the former earned-surplus tax?
Texas did not resolve the stated S-corporation parent-and-subsidiary issue because it was still considering Qualified Subchapter S Subsidiary treatment. It did explain that an LLC investor should…
When a taxpayer makes a payment on a past-due Kansas tax account, is it applied to tax, interest, or penalty first?
Tax liability first, then interest, then penalty last. On August 27, 1997, the Kansas Department of Revenue's Policy Council decided that, effective with the implementation of the Department's new…
In Houston, how are telecommunications service charges, rented telecom equipment, PBX maintenance, and related software upgrade/training charges taxed, and at what combined state-plus-local rate?
Telecommunications services (trunking/SMR, air time, local phone service, dispatch service, and tower access billed as part of the service) are taxable at the combined Houston rate of 7.25% (6.25%…
How did an acquired company report the former Texas franchise tax after changing from a December 31 to March 31 year-end?
The company did not need Texas permission to change its accounting period and should not file a short-period franchise-tax report. Its 1998 annual report used the 12 months ending March 31, 1997 for…
Do out-of-state consultants who work in Utah during the week but fly home on weekends have to register their vehicles in Utah?
Yes, they must register in Utah. A consultant who works at a Utah job site during the regular work week -- renting or otherwise establishing a place to stay in Utah, and commuting locally from that…
Was pipe installed by a contractor to move municipal drinking water to storage tanks and customers exempt as industrial machinery or municipal water-system property?
The new water pipeline was taxable contractor property. It was not repair or maintenance, water distribution was not pollution control, and pipe was not a qualifying machine. Pumps and other actual…
Does replacing an old golf course sprinkler/irrigation system with a completely new one, laid in new trenches, count as nontaxable new construction?
Yes. A golf course, per TR 1263, is not as a whole an improvement to realty — rather, it's made up of a number of separate improvements to realty, each analyzed on its own. Installing a brand-new…
When is a staff leasing arrangement exempt from Texas sales tax, and what happens if the leased employees perform otherwise-taxable services like data processing, security, or collections?
A staff leasing arrangement is exempt from sales tax only if it meets ALL of Rule 3.364(b)'s conditions: at least 75% of the assigned employees were previously the client's own employees for at…
How may seal card and coin board games be built, approved, and sold under Nebraska's Pickle Card Lottery Act?
Seal card and coin board games are a legal form of pickle-card lottery, subject to detailed manufacturer standards. Under Revenue Ruling 35-97-2 (which supersedes 35-96-4), the Nebraska Pickle Card…
Is a hotel's separately billed 'booking agent' fee part of the taxable hotel room rent, even when a foreign travel agent pays the room charge and fee separately?
Yes -- the 20-25% fee a hotel's own booking-agent entity charges a foreign travel agent for negotiating discounted room rates is part of the taxable rent for hotel occupancy, because the traveler…
Were typesetting charges for business forms exempt professional services when customers received a camera-ready board or computer file for approval?
No. The board or computer file was not an inconsequential part of the transaction, so the provider had to collect tax on the full typesetting charge.
Could a city agency buy materials tax-free for parkway landscaping, lighting, utilities, and road work while a general contractor managed the project?
Yes, after the contract adopted direct-purchase procedures making the city the real purchaser. Earlier purchases under the unamended contractor-purchase terms were not exempt.
Is a rental car company's separately billed 'booking agent' fee part of the taxable rental charge (and subject to the 5% special tax), even when a foreign travel agent pays the fee separately?
Yes -- the roughly 20-25% fee a rental car company's own booking-agent entity charges a foreign travel agent for negotiating discounted weekly rates is part of the taxable passenger car rental…
Is an internet lead-generation company's sale of custom prospect reports to its clients subject to New York sales tax?
No -- "X"'s custom monthly reports of website-generated sales leads, delivered electronically or by mail to each client and billed per lead, aren't subject to sales tax, because each report is…
Are the initiation fees, dues, listing fees, and office assessments that local real estate boards charge for operating a multiple listing service subject to New York sales tax?
No, for most of it -- the one-time initiation fees, periodic dues/participation fees, listing fees, and office assessments that a multiple listing service charges participating brokers all escape…
Does a foreign life insurer with no New York certificate of authority owe New York tax if it makes mortgage loans on New York commercial real property?
It is doing business under Article 33 but, in practice, owes no tax. A life insurer that makes mortgage loans on New York commercial real property (sending employees in to find borrowers, do due…
If a Utah telecom company bundles internet access, paging, and calling minutes into one monthly price, does the whole bundle owe sales tax?
It depends on how the bill is written. Intrastate telephone service, paging, and related charges are taxable in Utah, while internet/online access isn't -- but if a company bundles taxable and…
Is a 16-ounce packaged jar of hot sauce subject to Texas sales tax?
No. A 16-ounce jar of hot sauce is presumed to be sold for home consumption rather than immediate consumption because of its packaging and size, so no Texas sales tax is due on the sale.
Did loyalty-card price reductions supported by supplier allowances and scan-buy-down payments reduce the taxable sales price in the Company's Rhode Island supermarkets?
Yes. Off-invoice allowances, bill-backs, net-price adjustments, advertising sponsorships, and scan-buy-down discounts were treated as cash discounts excluded from sales price. Scan-buy-down payments…
Could a company use an intended later restructuring or another entity's apportionment factor to reduce former Texas taxable capital?
No. Texas required the taxpayer's taxable-capital component to reflect its actual financial condition at the relevant period end and its own apportionment activity. The Comptroller rejected using…
Can an employee get a refund of all New Mexico income tax withheld by filing a return that reports zero income on tax-protester theories that wages aren't taxable?
No — the refund was denied. Wages are income under both federal and New Mexico law, so an employee who filed a 'zero income' return to reclaim all the tax withheld from his $49,000 salary was not…
If a subcontractor never gets a resale certificate from the general contractor on a separated construction contract, who owes sales tax on the materials -- even though the ultimate customer holds a direct-pay permit?
The subcontractor (Company B) must bill and collect sales tax on the materials under the separated contract, because it never received a valid resale certificate from the general contractor (Company…
Do heavy trailers used only for on-site storage still qualify for Connecticut's commercial-truck sales-and-use-tax exemption if they weigh over 26,000 pounds?
Yes, they qualify. Trailers with a gross vehicle weight rating over 26,000 pounds can be bought or leased exempt under Connecticut's commercial-truck exemption (Conn. Gen. Stat. § 12-412(70)) even…
We're a nonprofit local development corporation that helps finance small-business construction projects through the SBA 504 loan program, using sale/leaseback, installment sale, or lease/leaseback structures where we briefly hold title or a leasehold interest. Are our purchases (or the contractor's purchases as our agent) exempt from sales tax, and is a mortgage where we're named as mortgagee exempt from mortgage recording tax?
Both exemptions are available, but with conditions. Greater Syracuse Business Development Corporation, a Not-For-Profit Local Development Corporation reincorporated under N-PCL § 1411, helps finance…
Are a medical cost-containment company's case management, utilization review, bill audit, and other services subject to New York sales tax?
Mostly not taxable -- Petitioner's client's field/telephonic case management, first-report filing, utilization management, independent medical exams, peer reviews, hospital bill audits, and Social…
Are a family-run sailboat charter operator's day-cruise fees (including a boxed lunch) subject to New York sales tax?
No -- Petitioner's day-charter sailing excursions on Lake Champlain (including the boxed lunch) are a nontaxable transportation service, not a taxable boat rental, because Petitioner personally…
Are a product-testing lab's testing fees, sales of test-swatches, and lab equipment purchases subject to New York sales tax?
It's split by category -- Petitioner's product-testing fees and confidential result reports aren't subject to sales tax at all, but its sales of dust-sebum swatches, soiled fabric, and testing soils…
Is bottled water subject to Utah sales tax at retail and at wholesale, and what does an out-of-state bottler need to do to register and collect Utah sales tax?
Retail sales of bottled water — still or carbonated — are subject to Utah sales and use tax, because water in bottles, tanks, or other containers is expressly included in the statutory definition of…
Who owed tax when property bought ex-tax was contributed to a new corporation, leased to another company, and later used after the companies merged?
W--- owed use tax on purchase price because its nontaxable contribution used property bought ex tax for resale, and staff said it apparently underreported. IJR's lease to W2 was a taxable continuing…
Was use tax due when a surviving corporation used property received in a nontaxable corporate transfer after a taxable intercompany lease ended?
No. The transferee had not purchased the property, so its post-merger use was tax free; the original transferor still owed tax for buying the property for resale and then using it.
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