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 an out-of-state pension fund invests in Alabama only as a limited partner — and registers as a foreign corporation just to make its contracts enforceable — is it 'doing business' so as to owe Alabama franchise and income tax?
No to both taxes. Entity A, an out-of-state public-school retirement fund (a trust with 'corporate powers,' investing ~$64.35 million as a limited partner in a tiered partnership that owns an Alabama …
Is Texas sales tax due on broadcast-quality television transmission and video conferencing services provided to networks and television stations?
Yes, if the transmission originates in Texas. The Comptroller ruled that broadcast-quality television transmission and video conferencing services are 'telecommunications services' under Tex. Tax Code…
Who owed Florida's historical intangible tax on QTIP and residuary trusts when the wife had income rights and Florida trustees served?
The wife had only a current income right and therefore no taxable beneficial interest or beneficiary filing duty. But the Florida individual and corporate trustees had to file and pay for the trusts. …
How did documentary stamp tax apply to primary notes and Florida or out-of-state mortgage collateral in a wholesale warehouse arrangement?
A Florida primary obligation was exempt only up to already-taxed Florida collateral; any excess was taxable. Out-of-state obligations executed outside Florida and brought in only for servicing were ex…
Is a hot air balloon company's charge for flight instruction, sightseeing rides, or demonstration flights subject to Texas sales tax?
It depends on the type of flight. Pleasure/sightseeing balloon rides and demonstration flights (shown to a potential balloon buyer) are taxable amusement services. But a charge to a student for actual…
Is a cable TV company's hourly service call charge (for problems that aren't the operator's responsibility) subject to Texas sales tax?
Yes — service charges billed in connection with providing cable television service are subject to Texas sales tax. This includes the hourly-rate charge a cable operator bills for a service call that t…
Were business assets transferred to new subsidiaries in a corporate restructuring exempt as an occasional sale or sale for resale?
Factory and office equipment qualified as an occasional or isolated sale under the represented business and frequency facts, except registered or titled vehicles. Inventory and salvage or surplus held…
Were a lender-required lease and sublease of the same real property taxable even though the borrower called them a financing arrangement?
Yes. Florida found enforceable leases because occupancy rights moved to the lessee and back to the sublessee for stated consideration. The intermediary could give a resale certificate on the prime lea…
When did PLR 94-2 treat a federal security contractor's purchases as exempt federal-government purchases?
The purchases were exempt when ABC bought on the federal government's behalf, did not risk its own credit, disclosed the government agency on purchase orders, vested title in the government, and paid …
Is renting equipment, set dressings, and picture cars for a television or movie production exempt from Texas sales tax?
Yes — effective October 1, 1993, a producer may claim an exemption from Texas tax on qualifying machinery or equipment rented or leased for the production of a motion picture, or a video or audio reco…
Does Texas sales tax apply to materials, equipment, and electricity used to build a product prototype?
Yes, tax applies — materials used to fabricate a prototype do NOT qualify for the Texas resale exemption. The resale exemption only covers property purchased exclusively for resale and not for use, bu…
Is sales tax owed on installing, repairing, or remodeling an underground sprinkler/irrigation system in Texas?
It depends on the work and the type of property. New installation and residential repairs are treated as improving real property — tax applies to materials, not labor, and how it's collected depends o…
If I bring goods into Texas only temporarily before shipping them out of state for use elsewhere, do I owe Texas use tax?
No use tax is owed on out-of-state purchases that are brought into Texas only temporarily for the purpose of transporting them outside the state for use solely outside the state — Tax Code Section 151…
Did beneficiaries or trustees owe Florida's historical intangible tax when appointment powers were limited and every trustee was outside Florida?
No. The beneficiaries could not revoke the trusts, invade corpus, or appoint assets for themselves, their estates, or estate creditors, so they lacked taxable beneficial interests. The individual and …
Can a Texas insurance company claim a multistate benefit exemption on sales tax paid for actuarial services, when the resulting policies are later sold in other states?
No. Under Comptroller Rule 3.355(j), a purchaser can only claim the multistate benefit exemption on services like actuarial studies if it actually has a business location in another state and issues a…
If I buy equipment tax-free for rental/lease and later sell it as an 'occasional sale' when reorganizing my company, do I owe Texas sales tax?
Yes, partially — under Tex. Tax Code § 151.055(a), a company that buys equipment tax-free under a resale certificate to rent or lease it, then later sells that equipment in an occasional sale, still o…
When worn grinding wheels are stripped and re-coated, is that exempt manufacturing, an exempt material purchase, or taxable repair in Connecticut?
It splits into three parts. Replating a worn grinding wheel is NOT the 'manufacture of a tool' under Conn. Gen. Stat. §§ 12-412(18) and (34) — a grinding wheel goes in and a grinding wheel comes out (…
Is a matchmaking/dating service, where a customer pays for an interview and is then mailed a match's name and phone number based on comparison with other interviewees' records, subject to New York sales tax?
Yes -- collecting and analyzing interviewees' information and furnishing customers with a match's name and phone number is a taxable 'information service,' so the fee charged for this dating service i…
Is the software a manufacturer uses to run its computerized milling machines exempt from Connecticut sales tax as manufacturing machinery?
It depends on how the software is bought. A manufacturer's CAD/CAM software that drives its computerized milling machines can qualify for a manufacturing exemption, but with a key catch: (1) if the so…
If a Nebraska-domiciled executive takes a fixed 4-year New York work assignment, using a company apartment and spending more than 183 days a year in New York, is he a New York resident or a nonresident for personal income tax purposes?
He remains a nonresident. Because Petitioner Charles M. Harper's New York assignment is for a fixed and limited four-year term (or less, if performance goals are met sooner), after which he will retir…
Are insurance services performed for a self-insured or self-funded plan taxable in Texas?
No — under Rule 3.355(b), insurance services performed pursuant to a self-insured plan or for a third-party administrator (TPA) handling funds under a self-insured plan are not taxable, including serv…
Is a city's 20% construction-cost charge for installing new electric power lines taxable, when the line will serve both residential and commercial use?
Yes, it can be taxable. The Comptroller ruled that a city's charge to a customer or developer for installing power transmission lines — even though no property changes hands and the fee just offsets t…
Does a company that fabricates and installs gas distribution pipelines qualify as a 'fabricator' for the Texas manufacturing exemption?
No. The Comptroller ruled that a company that fabricates and then installs gas distribution pipelines as an improvement to real property is a contractor, not a fabricator/manufacturer — so it does not…
Is a dragline service that clears silt from a farm or ranch tail water pit subject to Texas sales tax?
Yes — a dragline service rented with an operator to remove silt from a farm or ranch tail water pit is taxable. The Comptroller treated the tail water pit as real property and the farm or ranch as com…
Did a nonresident estate owe Florida estate tax on unencumbered Florida property passing to a spouse by survivorship and marital deduction?
Yes. Because the Florida property was included in the federal gross estate, its value entered both the Florida-property numerator and total-gross-estate denominator of the nonresident formula despite …
Is sales tax owed on the flyers and promotional items (pens, magnets, calendars) stuffed into free door-to-door advertising bags?
Yes, partially. Sales tax is due on all supplies, materials, equipment, and services used to produce the advertising flyers stuffed into the bags. The advertisers themselves owe tax on pens, magnets, …
Does a home business owe Texas sales tax on computerized calling services, like automated appointment reminders, wellness check-in calls, or community information lines?
It depends on the specific service. The Comptroller found automated wellness check-in calls (for homebound individuals) and automated calls to children not taxable, but ruled that automated patient ap…
Is a baggage protection wrapping service offered to airline passengers at the airport subject to Texas sales tax?
No — the Comptroller ruled this baggage protection service (wrapping a passenger's luggage in a specially designed plastic bag at the airport) is a non-taxable service. However, the company still owes…
Does sales tax or hotel occupancy tax apply to a timeshare condominium association's maintenance fees, bonus-time program, and repair/maintenance purchases?
The timeshare association's annual maintenance fee itself is not taxed (the association is the purchaser of the goods/services, and owners are just reimbursing it), and the "bonus time" program isn't …
How many one-day tax-free sales can a 501(c)(3), (4), (8), (10), or (19) nonprofit and its chapters hold each year in Texas?
A nonprofit organization exempt as religious, charitable, or educational (and, as of August 30, 1993, one classified by the IRS as 501(c)(3), (4), (8), (10), or (19)) may hold one one-day tax-free sal…
Which South Carolina bodies counted as legislative agencies for the temporary document-copy sales-tax exemption in RR 94-1?
RR 94-1 limited the temporary exemption to agencies under the South Carolina Legislature's direct control, such as the Senate, House, joint committees, Legislative Audit Council, Legislative Council, …
Is a service that signs homeowners up for accelerated mortgage payment drafting subject to Texas sales tax?
No — the Comptroller ruled that this mortgage payment service is not a taxable service, based on the facts presented. The taxpayer was an independent agent who signed homeowners up for a Florida compa…
Is a consultant's fee for helping clients choose electrical equipment and find suppliers subject to Texas sales tax?
It depends on what the fee covers. Selling information gathered for a client about the availability of parts, pricing, and shipping is a taxable information service under Rule 3.342, even though it wa…
Are SEC insider-trading disgorgement funds -- like the Boesky, Siegal, and Kidder Peabody funds -- subject to New York corporate franchise tax under Article 9-A or personal income tax under Article 22, and are the individual claimants or original defendants separately taxed on the funds' earnings?
No entity-level New York tax applies to the Disgorgement Funds themselves. Because the receiver merely holds court-restricted investments and distributes them under an SEC-approved plan with no discre…
Is a 'For Sale By Owners' list compiled and faxed weekly to real estate companies for a fee subject to Texas sales tax?
Yes — compiling a weekly list of 'For Sale by Owners' homes and faxing it to real estate companies for a $14.99 weekly fee is a taxable information service under Texas sales tax law. Information that …
Does a company that fetches and delivers police accident reports to insurance companies owe Texas sales tax on those charges?
It depends on the charge. No sales tax is due on the amount a company passes through to an insurance company to cover what it paid the police department for an accident report (no markup). But sales t…
Are repair and replacement parts for farm trucks and trailers exempt from Texas sales tax if the vehicles have farm license plates?
It depends on whether the vehicle is licensed for highway use. Repair and replacement parts for unlicensed vehicles used exclusively on farms or ranches are exempt from Texas sales tax. Repair and rep…
Can a farm or ranch buyer use an agricultural exemption certificate to buy an ATV in Texas without paying sales tax upfront?
Yes, starting February 1, 1994 — the Comptroller told motorcycle/ATV dealers they may accept an agricultural exemption certificate for a farm-use ATV purchase instead of collecting tax and sending the…
In 1984, a state energy authority issued pollution-control bonds for our nuclear plant, backed by our first mortgage bonds. Now we want to refinance those bonds at today's lower interest rates, which requires amending and restating our mortgage bonds and recording a new supplemental mortgage indenture. Is that refinancing exempt from mortgage recording tax, and does restating the bonds count as new debt?
Exempt, and restating the bonds isn't treated as new debt for MRT purposes. This is the origin ruling establishing mortgage recording tax exemption for Niagara Mohawk Power Corporation's financing arr…
Do a school organization's two allowed one-day tax-free sales reset each school year, or are they limited to one calendar year?
The two one-day tax-free sale exemption applies per calendar year (January 1 through December 31), not per school year. If a PTO already held a tax-free sale earlier in the same calendar year (even if…
Does a self-employed house cleaner with no employees need a Texas sales tax permit?
No — a self-employed individual with no employees who cleans only residential homes is treated as an employee of the homeowner under Texas Tax Code Sec. 151.057, so no sales tax permit is needed and n…
Did Florida's withdrawn 1994 ruling include self-insured health claims and administrative charges in insurance premium tax?
This ruling was withdrawn by TAA 94B8-002 on August 18, 1994. Before withdrawal, it had treated the city's administrative fee, risk-assumption charge, stop-loss premium components, and incurred claims…
Does a nonprofit hospital's school of nursing owe sales tax on textbooks and uniforms sold to students who pay with financial-aid loan funds?
Yes — the textbooks and uniforms a nonprofit hospital's nursing school sells to its students are taxable, even though students pay for them using "financial aid" that is actually a loan under a Financ…
Is producing a sonogram video tape for expectant mothers subject to Texas sales tax?
Yes — the total charge for producing a sonogram video tape of expectant mothers is taxable. The business may, however, purchase the blank video cassettes tax free by issuing a resale certificate to it…
After a Texas sales tax audit becomes final, how long do I have to claim a credit for resale or exemption certificates, and does the 60-day letter cut that off?
A special six-month period to claim credits or refunds begins on the date the audit determination becomes final (Sec. 111.104(c)(3)), even for transactions where the standard four-year limitations per…
If I pick up a government record (like an accident report) for a client and bill them for the record's cost plus my own labor fee, is my labor fee taxable?
Yes, your labor/pickup fee is taxable, but the government agency's own charge for the record itself is not — as long as you separately state the two amounts on your bill. The Comptroller ruled that a …
If a customer buys an aircraft under an exemption certificate for use outside Texas, does having it refurbished in Texas before removal make the aircraft taxable?
No. The Comptroller confirmed that an aircraft purchased under an exemption certificate for use exclusively outside Texas does not become taxable just because the customer has it refurbished or proces…
Who owed tax on color separations, filmwork, and printing plates retained by a printer for customer jobs?
A taxable customer sale occurred only if a preexisting agreement explicitly transferred title in Florida and the printer separately billed at least cost; then the printer collected tax and could buy f…
How did Florida tax multistate campground memberships sold by a Florida preserve?
They were taxable transient rentals because the contracts granted overnight accommodations. The Florida preserve had to tax the full initial fee and later dues without multistate proration, regardless…
Which station-purchase documents under a confirmed Chapter 11 plan escaped Florida documentary stamp and intangible taxes?
The mortgage, security agreement, financing statement, and rent assignment were exempt because they were plan transfer documents and a debtor was a party. Section 1146(c) generally did not cover the w…
How did Florida value fund shares invested through underlying tax-free portfolios for historical intangible-tax purposes?
The funds and portfolios themselves lacked Florida commercial domicile. Shareholders were fully exempt when the fund held only an interest in a portfolio containing solely exempt government obligation…
How did Florida's historical intangible tax treat an out-of-state business trust, its exempt-asset fund shares, and municipal lease obligations?
Florida confirmed that the fund assets lacked Florida taxable situs, shares were fully exempt when the prior year-end portfolio held only Florida, federal, and cash-equivalent exempt assets, and gover…
Were 25-cent gum and candy sales exempt when a commercial vendor's machines displayed a qualified charity's sponsorship message?
Yes. As of the amended vendor agreement, the machines were sponsored by an organization qualified under section 501(c)(3), so gum and candy sales for 25 cents or less qualified for the vending exempti…
New York Advisory Opinion TSB-A-94(1)I: Are distributions from the federal Thrift Savings Plan (TSP) that petitioner Joseph T. DiGianni receives exempt from New York State income tax; if not, is the first $20,000 tax-free whether taken as a monthly annuity or a lump sum; and if the distributions are taxable, is the portion of earnings from the TSP's 'G Fund' (invested in U.S. government bonds) tax-free as tax-exempt interest?
It depends on which federal retirement system covers the employee. For a FERS employee, TSP distributions are treated as part of the employee's pension itself, so they qualify for New York's full pens…
Are financial-information publications about bond ratings exempt from Texas sales tax as 'magazines'?
No. The Comptroller ruled that four publications providing current financial information on bond ratings did not qualify for the magazine exemption. Under Sec. 151.320(b), a 'magazine' does not includ…
How does a cooperative housing corporation value the real property it owns for purposes of the Article 9-A capital base?
At fair market value -- but the actual value is a factual question. For the Article 9-A capital base, a cooperative housing corporation (defined in IRC section 216) is taxed under section 210.1(b) at …
How does a cooperative housing corporation determine the fair market value of its real property for the Article 9-A capital base when only the assessed valuation is known?
By fair market value -- which is a factual determination, not simply the assessed value. For the Article 9-A capital base, a cooperative housing corporation (IRC section 216) is taxed under section 21…
Is the New York net operating loss deduction limited to the amount of the federal net operating loss deduction, and does that limitation require adjustments when assets are later disposed of?
Yes -- the New York net operating loss deduction is capped at the federal amount. Under section 208.9(f), the New York NOL for a loss year is computed under section 208.9(f)(1), but the deduction actu…
Can a security services contractor buy tax-free parts and materials to repair vehicles it uses solely to guard a tax-exempt nonprofit's property?
No. The Comptroller ruled that even though the nonprofit is tax-exempt and the vehicles are used exclusively for its security contract, the security services contractor — not the nonprofit — is the pu…
Is building additional rows of sky boxes, a media box, and extra stadium seating treated as new construction or as remodeling for Texas tax purposes?
New construction. The Comptroller ruled that all four stadium improvements described — a second row of sky boxes, a new media box, additional seating above the entry ramps, and an additional row of se…
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