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 Walk In Medical Care, Inc. classifies a part-time physician as an independent contractor for federal income tax purposes under the Section 530 safe harbor, does New York State recognize that safe harbor, and what are Petitioner's New York reporting and withholding obligations if the worker would otherwise be an employee for New York personal income tax purposes?
It depends on whether Petitioner actually qualifies for the federal Section 530 safe harbor, a factual question the Department did not decide in this opinion. But as a legal matter, New York does not …
Is sales tax due on tickets to a college football game when a for-profit promoter helps run the event and shares in the revenue?
No — the Comptroller ruled the ticket sales were not subject to sales tax. Because the universities' own students played in the game, the contract disclaimed any partnership or joint venture, and the …
If a pay-phone servicer charges one flat monthly fee that covers both coin collection and minor incidental repairs, is any part of that fee subject to Texas sales tax?
Yes, the repair portion is taxable. Cleaning, replacing parts, and clearing coin jams are taxable repair/maintenance services under Tex. Tax Code § 151.0101(a)(5). Separately stated charges for coin c…
Is a finance/interest charge excluded from Texas sales tax if it isn't broken out separately on the contract or invoice?
No — the tax was correctly assessed. Tex. Tax Code § 151.007(c)(4) excludes finance, carrying, and service charges (and interest) from the taxable sales price only if they are separately identified to…
Does machinery and equipment used to remediate groundwater already contaminated by decades-old waste disposal qualify for the manufacturing waste-treatment exemption from sales and use tax?
No -- the waste-treatment exemption only covers equipment that treats waste materials AS PART OF an ongoing manufacturing process to prevent pollution in the first place; equipment built to pump and p…
Can a 501(c)(3) organization that runs a regular retail store still hold two tax-free sale days a year, and how must it document them?
Yes — a qualified 501(c)(3) organization may designate any two days a year as tax-free sale or auction days, even if it also holds a Texas sales tax permit and sells taxable items regularly through a …
Is 'moss rock' or rip-rap rock sold in its natural state for landscaping subject to Texas sales tax?
No — moss rock and rip-rap sold in the natural, unprocessed condition they are found in are not subject to Texas sales tax. The Comptroller has treated unprocessed sand, dirt, gravel, and rock as exem…
Does Texas sales tax apply to motor vehicle repairs or replacement vehicles paid for with insurance claim settlement money?
Yes for parts and for a replacement vehicle, no for labor. There is no special sales tax exemption for motor vehicle repairs or replacements paid via an insurance claim settlement or salvage title pro…
Is a warehouse discount-club membership fee (like Sam's Club) subject to sales tax, and if so, at which county's tax rate, and to which county should the tax be remitted -- the county where the membership was purchased, or the county where the club warehouse is located?
Yes, the membership fee is taxable as a prepayment for merchandise -- and the applicable rate and destination county are determined by where the discount club's own warehouse is located (or the specif…
Is a coronary atherectomy catheter, used to excise and retrieve plaque from diseased arteries, taxable in Texas?
Yes — the coronary atherectomy system, a disposable catheter device used to excise and retrieve plaque from diseased coronary arteries, is taxable. The Comptroller pointed to Rule 3.284 (Drugs, Medici…
What does 'industrial solid waste' mean under Texas Rule 3.356?
Industrial solid waste, as used in Rule 3.356, means waste products resulting from the actual manufacturing process, such as sawdust from lumber mills or slag from a steel manufacturing process. It do…
Can a company that monitors house arrest units buy its telephone lines tax-free for resale, since the phone service is resold as part of its monitoring service?
No. Electronic monitoring of a person as a condition of probation, parole, mandatory supervision, or bail is a nontaxable service, so the company cannot issue a resale certificate for the telephone li…
Is labor to repair storm/water damage to a parking lot taxed as new construction or as taxable repair, and is contract labor for real property repair taxable?
Repairs made to this taxpayer's damaged parking lot before October 1, 1993 qualified as nontaxable 'new construction' labor. But that casualty-damage exemption was replaced by Tax Code Section 151.350…
Did a nonprofit corporation operating indigent-care clinics qualify for a Florida Consumer's Certificate of Exemption as a charitable institution?
Yes. Florida found that the corporation and its clinics were one legal entity, its primary purpose was delivering medical services, and a reasonable percentage of care was free or substantially reduce…
Does a doctor's prescription to clean air ducts for allergy relief make the cleaning service exempt from Texas sales tax?
No — a doctor's written prescription recommending air duct cleaning to relieve allergic reactions does not exempt the service from Texas sales tax. The Comptroller ruled that air duct cleaning is a ta…
Is Texas sales tax due on printed book covers that a business buys and then donates to public schools?
No — buying taxable items (like printed book covers) that will be donated to a public school, with no use by the buyer, is exempt from Texas sales tax under Tex. Tax Code § 151.155(b), as long as an e…
Are annual membership fees for a public pistol range, and separate fees for its firearm safety course, subject to New York sales and use tax?
No -- because membership is open to the public, members have no ownership stake or management control, and the range hosts no social activities, it isn't a taxable 'social or athletic club,' and a fir…
If a utility company accepts a predominant-use energy study in good faith and issues an exemption, can the Comptroller still challenge that study on audit?
Yes. Under Rule 3.295(e)(3), neither the Comptroller's review nor the utility company's good-faith acceptance of an exemption certificate confirms that the underlying utility study is accurate. The st…
If a commercial landlord separately bills tenants for chilled and heated water (air conditioning and heating), does the landlord owe Texas sales tax as if selling utilities?
No — the Comptroller ruled that separately stated chilled/heated water (AC and heating) charges billed by a commercial landlord to its office tenants are not taxable. Because the landlord rents the re…
Is the charge a recycling business collects to receive asphalt shingles hauled in by others subject to Texas sales tax?
No — the charge a recycling business collects from a hauler to receive asphalt shingles for processing into usable products is not subject to Texas sales tax. However, the hauler who pays that receivi…
For Article 9-A, can a corporation's loan to a partnership be classified as investment capital, with the interest treated as investment income?
No. Friendly Home Parties, a New York S corporation, made a $3.5 million demand loan to a partnership (owned by individuals who hold 70% of the corporation) and receives 7% interest, taking back an in…
Are a mandatory condominium association's dues, which fund both a swimming pool/tennis courts and ordinary building maintenance, fully subject to sales tax as social/athletic club dues?
Yes, as originally issued -- because membership is mandatory, sold as a single non-optional unit, and the association provides a swimming pool and tennis courts, the ENTIRE assessment paid by unit own…
Is the sale and installation of a residential direct-broadcast satellite receiving system a tax-exempt capital improvement, or is it a taxable sale of tangible personal property?
It's split -- the underground wiring and the concrete-based support pole ARE tax-exempt capital improvements, but the microwave antenna/dish itself keeps its identity as tangible personal property (it…
Is a service that finds a judgment debtor's attachable assets for a creditor a taxable credit-reporting or private-investigation service in Connecticut?
No, on both counts. A company that searches by phone and computer to locate a judgment debtor's attachable assets for a judgment creditor — and just delivers a written asset report — is NOT providing …
Does the electricity used in a newspaper's prepress-operations building qualify for Connecticut's manufacturing/fabrication utility exemption?
No. The electricity used in the building that houses a newspaper's PREPRESS operations (advertising, composing, art, camera, editorial, darkroom, classifieds) does NOT qualify for the utility exemptio…
Is teleconferencing/audio conferencing a taxable telecommunications service in Texas, and can a provider buy long-distance calls or equipment tax free?
Teleconferencing is a taxable Texas telecommunications service, but interstate (out-of-Texas) long-distance charges are exempt from Texas sales tax. A call is only taxable if it both originates from a…
When a contractor or repair/remodeling firm uses consumable supplies on a job, who owes Texas sales tax on those supplies — and does it matter if the job is for a tax-exempt organization?
It depends on the customer. If the contract is for an improvement to realty for an organization exempt under Tax Code Section 151.309 or 151.310, the contractor can buy consumable supplies tax-free (v…
Can a retailer take a credit or refund for sales tax already remitted on a financing lease that later becomes a bad debt?
Yes — a retailer may take a credit or obtain a refund of the portion of accrued sales tax already remitted to the state that later becomes a bad debt, even when the bad debt arises from a financing le…
Did an out-of-state membership association have to collect Florida tax on publications mailed to Florida members when it had no physical presence in the state?
Under the 1994 Quill physical-presence analysis, no. Florida could not compel the association to register and collect. But Florida recipients remained liable for use tax and county surtax if an expres…
Is labor to repair or remodel a dormitory manager's office or cafeteria taxable, and how does that compare to the residential-use rule for apartment complex utilities?
It depends on how the space is actually used. Repair/remodel labor on residential property is tax-exempt, and Rule 3.357(a)(9) treats a manager's office as residential only if it doubles as the manage…
If a building owner leases space to a 501(c)(3) organization and pays for remodeling before the exempt tenant moves in, can the contractor's labor and materials be purchased tax-free?
Yes — the Comptroller ruled that where the remodeling is for the primary use and benefit of the exempt tenant (here, because the tenant builds equity through its lease payments and holds an option to …
Does a billboard company have to collect Texas sales tax on charges for repainting existing billboards?
Yes, in most cases. Repainting billboards — whether a straight repaint, a repaint with new colors, or a repaint with a partial copy change — is presumed taxable as repair, restoration, or remodeling o…
Is a ureteral stent exempt from Texas sales tax as a prosthetic device, even though it's only implanted temporarily?
Yes — ureteral stents qualify as exempt prosthetic devices under Rule 3.284, even though they are generally implanted only on a temporary basis. The Comptroller found that neither the statute nor the …
Are shampooing, dry cleaning, and hand-weaving repair services for oriental carpets and other rugs subject to New York sales tax, whether performed at the customer's location or at a plant?
No -- shampooing, dry cleaning, and hand-weaving repair of oriental carpets and other rugs all fall within the tax law's specific dry-cleaning/weaving exclusion, so none of these services are subject …
When did RR 94-3 require paid-admissions receipts to be reported, and were restaurant-package handling fees taxable?
The ruling required reporting when a ticket was issued or promised, unless it had not yet been paid for; gift-certificate receipts were reported when redeemed for a ticket. A separately optional resta…
How did RR 94-2 tax standard and custom-fabricated building products used by their maker in construction contracts?
A true manufacturer regularly selling standard finished products owed tax on fair market value when it used those products at a South Carolina job site. A contractor fabricating unique, job-specific p…
Is labor to relocate, modify, or rebuild railroad track taxable as remodeling, or exempt as new construction, under Texas sales tax rules?
It depends on what work is done. Installing a new switch into existing track, or replacing existing jointed track with welded rail, is taxable remodeling labor. Building brand-new track, road bed, or …
How does the statute of limitations for a sales and use tax refund claim work for reporting periods that were part of a prior audit?
The standard statute of limitations for a Texas sales and use tax refund claim is four years from the date the tax was due. But if the reporting period was part of an audit that went through redetermi…
Which of four one-time-use cardiac-catheterization devices were exempt from Florida sales tax?
Response E.P. Catheters and Pacel Bipolar Pacing Catheters were exempt as listed prosthetic or orthopedic appliances. Peel-Away Introducers and Fast-Cath Introducers were taxable medical equipment unl…
Should a vehicle rebate be subtracted before reporting the sales price on line 21(a) of Texas Form 130-U?
Yes. The Tax Administration Division said the rebate could be subtracted before entering the sales-price amount on line 21(a). Its example reported $19,000 when the initial price was $20,000 and the r…
Does a tax-exempt public benefit corporation's blanket sales-tax exemption extend to purchases made by the private contractor it hires to operate and maintain its facility?
No -- the agency's own broad tax exemption applies only when the agency itself is the actual purchaser and payor of record, not to purchases its private operating contractor makes in its own name; the…
If a company owns Industrial Development Board bonds that financed its own leased facility, can it still deduct that bond investment from its franchise-tax capital, and exclude the bond interest from income tax — even after paying big dividends to its parent and even though it borrowed the money to buy the bonds?
Yes to all. In a large Industrial Development Board (IDB) bond-financed manufacturing deal, the Taxpayer owned the IDB's bonds (bought with capital contributed — and partly borrowed — by its parent) a…
Does a Texas city owe sales tax on its sewage/wastewater charges, and how should a city handle sales tax on amusement services and related packages like 'Party Buddies'?
No — a city's charge for sewage service is not taxable, even if it is billed as 'waste water service,' because the taxable definition of garbage collection (a real property service) does not include d…
Did additional documentary stamp or nonrecurring intangible tax apply when already-taxed timeshare notes and mortgages secured percentage-based warehouse advances?
This ruling was superseded by TAA 94M-004R on March 30, 1994. It had concluded that collateral assignment of timeshare notes and mortgages on which the proper taxes were already paid was exempt from f…
Did additional documentary stamp or nonrecurring intangible tax apply when already-taxed timeshare notes and mortgages secured an 85% warehouse advance?
This ruling was superseded by TAA 94M-003R on March 30, 1994. It had concluded that collateral assignment of timeshare notes and mortgages on which the proper taxes were already paid was exempt from f…
Can a NAFTA Certificate of Origin be used as proof that goods were exported, for Texas sales tax purposes?
No. The Texas Comptroller ruled that a North American Free Trade Agreement (NAFTA) Certificate of Origin is not helpful in proving that items have been exported for Texas sales tax purposes. The law r…
How did Florida's historical intangible tax treat shares of a business-trust fund holding exempt and taxable portfolio assets?
Shares were fully exempt for a year if the January 1 portfolio contained only exempt assets. Otherwise, prior-year-end net asset value was proportionately reduced for U.S. government debt. Florida als…
Was a taxpayer's investment with a life insurance company subject to Florida's historical intangible personal property tax?
No. The ruling cited the definition of money, which included the cash equivalent of annuities and life insurance policies, and the statutory exemption for money. Based on those provisions and the supp…
Could a proposed Florida facility producing customized forms claim the new-business machinery and equipment exemption?
No under the statute then in effect. Even if the operation manufactured tangible products, section 212.08(5)(b)5. specifically excluded printing and publishing firms. The ruling noted a pending 1994 b…
Were Florida commercial-loan notes taxable when borrowers signed them and delivered them to the lender or its agent in Georgia?
No. The revised ruling found no documentary stamp tax because the notes were signed and accepted in Georgia, not Florida, even though they later returned to Florida for safekeeping and funds and payme…
Is a foreign corporate limited partner in a Texas real-estate partnership subject to franchise tax, and what are the registration, penalty, and interest rules?
A foreign corporation that is only a limited partner in a Texas real-estate limited partnership is not doing business in Texas and has no franchise-tax nexus, but a general partner in the same partner…
Were laboratory batch controls used to validate patient-test runs exempt from Florida sales tax as diagnostic chemical compounds?
Yes. Florida found that all described control groups were chemical compounds and that required use of control samples to validate patient results made them part of the procedure for diagnosing or trea…
Is an agricultural cooperative that breeds cattle and sells semen, whose earnings benefit its members, subject to New York's unrelated business income tax?
No. Select Sires is an agricultural cooperative that artificially breeds members' cattle and sells semen and supplies. New York's unrelated business income tax (Article 13, section 290) applies only t…
Are a fleet-management company's personal-mileage and vehicle-expense reports, prepared for individual corporate clients from their own data, subject to New York sales tax as an information service?
No -- because each report is built entirely from a single client's own vehicle/mileage data and covers only that client's own fleet, it counts as personal and individual information excluded from the …
Is a toxic-waste cleanup company's cleanup service taxable, and are the supplies (absorbents, drums, protective gear) it uses during a cleanup subject to sales tax?
Yes, the cleanup service itself is taxable as processing/real-property-maintenance work -- and the company's own equipment (booms, vacuums, earth movers) and protective gear (uniforms, protective item…
Is routine office cleaning that a commercial landlord bundles into a tenant's lease payment subject to New York sales tax as a maintenance/repair service?
No -- routine cleaning baked into the negotiated lease rate is incidental to the rental of the space, not a separate taxable cleaning service, so those payments aren't subject to sales tax; but any cl…
Could a Florida limited liability company deduct guaranteed salary payments to owner-partners for corporate income tax purposes?
Yes, when preparing the required pro forma federal corporate return, amounts treated as salaries were deductible if they were reasonable compensation under I.R.C. section 162(a)(1). Discretionary dist…
Were private-investigation services taxable when performed mainly for insurance companies?
Yes, if the services required a Chapter 493 private-investigator license. The customer's insurance-industry status did not remove the tax. A service not requiring licensure, such as standalone databas…
Were hourly equipment-use charges taxable rentals when an environmental consultant's employees retained all possession and operating control?
No. Florida treated the contract as an exempt professional service because the consultant's employees transported, operated, and controlled the equipment and clients had no access or control. The cons…
Is testing underground storage tanks for leaks to comply with environmental law a taxable service to real property or a taxable tank repair in Connecticut?
No, on both counts. Testing underground storage tanks at service stations (and the related monitoring wells and test pits) to comply with state and federal environmental laws is a service rendered for…
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