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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What Tennessee tax obligations applied to a retail store whose building crossed the state line, even though its main entrances and checkout lanes were in the neighboring state?
The retailer had to register for Tennessee sales and use, business, and franchise and excise taxes because it would maintain property and conduct business in Tennessee. Sales made in the Tennessee…
How did Tennessee allocate industrial-machinery excise tax credits when one corporation transferred machinery to a new corporation for stock in a divisive reorganization?
The transferor kept credits and carryovers for machinery it retained but had to recapture the remaining-life portion of credit on machinery transferred during its useful life. The transferee…
How did a parent LLC account for an investment in a subsidiary LLC under the former Texas franchise tax?
Texas treated an LLC as a corporation for the former franchise tax. A parent LLC used the cost method for its subsidiary investment under the taxable-capital component. For earned surplus, it…
Was a custom disassembled building kit one single article for Tennessee's local-option sales tax cap, or did the cap apply separately to each component used by the contractor?
The kit was not one single article. The contractor used the individual components to create a building that became real property upon assembly, so the building never existed as a single article of…
Does a commissioned salesperson owe New Mexico gross receipts tax on their commissions, even though the company already pays gross receipts tax on the product sold?
The protest was denied. An independent-contractor salesman who sold adjustable beds for Craft-Matic Pacific owed gross receipts tax on the commissions he earned — even though the company itself…
Did the statutory concept of exempt 'related supplies' extend beyond ostomy devices to drainage catheters?
No. California's long-standing interpretation limited 'related supplies' to ostomy devices; changing that interpretation would require a regulation amendment.
Were charges to convert customer VHS, Hi8, and Betacam recordings into digital files on computer disks taxable?
Yes. The customers sought disks containing converted digital files, so the transaction was a taxable sale of property and the partnership needed a seller's permit.
Is an independent insurance/risk-management consultant -- who reviews clients' insurance policies for coverage adequacy and risk retention -- required to hold a sales tax permit and charge sales tax, even though the consultant doesn't think this work fits within the tax code?
Yes -- services provided by risk managers are taxable, and risk managers must apply for a sales tax permit and collect sales tax on their service charges. The taxpayer, newly self-employed reviewing…
How did Florida treat an electric utility's planned lease assignment, head lease, intermediate lease, and sublease of plant equipment?
The assignment was untaxed; the head and intermediate leases could be for resale with certificates; and the final utility sublease was exempt only for equipment meeting the electricity-production criteria.
Did a nonprofit religious group's sales and lump-sum spiritual-retreat fees qualify for Florida sales-tax exemptions?
Yes. The group qualified as a church, its tangible-property sales and qualifying admissions were exempt, and a single retreat fee was not lodging rent when the price stayed the same without accommodations.
What rights do taxpayers have during a Kansas tax audit under the 1997 Tax Equity and Fairness Act?
Effective July 1, 1997, this directive from the Secretary of Revenue tells all Department auditors to give taxpayers three protections required by the Kansas Tax Equity and Fairness Act of 1997…
If you keep using old resale certificates and can't prove you paid another state's tax on out-of-state equipment, will New Mexico deny the deductions and charge use tax plus a penalty?
The protest was mostly denied. A Deming tortilla and tamale maker lost its gross receipts tax deductions on wholesale sales because it kept honoring outdated resale certificates instead of getting…
What does the available official PDF for South Carolina's June 1997 policy-document index contain?
The PDF says the index covered five Department document types concerning taxation from 1987 through June 30, 1997 and alcoholic-beverage licensing and regulation from July 1, 1993 through June 30,…
What does the available official PDF for South Carolina's June 1997 policy-document citator explain?
The PDF explains that the citator was intended to cover Revenue Rulings, Revenue Procedures, Private Letter Rulings, Technical Advice Memoranda, and Information Letters from 1987 through June 30,…
Did holding a kit-built aircraft for resale too long itself trigger use tax?
No. There was no time limit while it was genuinely held for resale; use tax arose from nonqualifying intervening use, not merely the passage of time.
Did federal nonprofit status and fundraising for youth programs qualify this organization for a Florida sales-tax exemption certificate?
No. The organization did not qualify as a charitable fundraiser because only about 18% of its operational expenditures went to the recipient, below the more-than-50% test. It also did not qualify…
Could an auto dealer buy accommodation-loan cars for resale, and when did customer repair loans create fair-rental-value use tax?
Yes for documented loans that continued a qualifying vehicle lease. Loans to owners, non-continuing-sale lessees, or unrelated-lessor customers triggered use tax on fair rental value.
Does a mold or die used to make wax patterns (which are then used to cast metal parts for resale) qualify for Texas's manufacturing exemption if it has a useful life longer than six months?
Yes, exempt -- and useful life is no longer the deciding factor for items purchased after January 1, 1995. Molds, dies, and patterns used by a manufacturer qualify for the manufacturing exemption…
Does Section 151.353's court reporting services exemption cover the transcription of depositions even when performed by someone other than the licensed court reporter who took the deposition, and is medical dictation transcription taxable?
The transcription is exempt ONLY if performed by a licensed court reporter as part of court reporting services under § 151.353(b) -- the exemption doesn't extend more broadly to transcription work…
How are affiliated companies providing telephone answering services, paging airtime, and equipment rentals taxed under the franchise, telecommunications excise, and sales taxes?
A telephone answering service company is a general business taxed under Article 9-A, not as a telephone business. A paging common carrier is principally engaged in a telephone business taxed under…
Can the distortion requirement for filing a New York combined report be met when one of the corporations is a Subchapter T cooperative that generally reports no federal taxable income?
It is not precluded. The distortion requirement for a New York combined report (20 NYCRR 6-2.3) is presumed when there are substantial intercorporate transactions, and the fact that one member is a…
Is an out-of-state wine wholesaler exempt from the New York Article 9-A franchise tax under Public Law 86-272 when its only New York presence is a home-based sales manager who solicits orders?
Yes. Public Law 86-272 (and 20 NYCRR 1-3.4(b)(9)) exempts an out-of-state seller of tangible personal property from the Article 9-A franchise tax if its New York activities are limited to soliciting…
When a corporation sells products to an LLC it owns that is taxed as a partnership, how are those sales treated in the receipts factor of the corporate member?
The corporate member must exclude, from both the numerator and denominator of its receipts factor, the portion of its sales to the LLC that is in effect also reflected in its distributive share of…
Did a Georgia company's receivables from Florida customers have taxable Florida situs when an employee serviced displays in Florida?
Yes. The Department concluded that receivables arising from the company's Florida business were subject to Florida intangible tax because they benefited from Florida law, arose from Florida…
Was a financed lighting retrofit with a mandatory $1 purchase option taxed as leased equipment or as a real-property improvement?
Florida treated the retrofit as a real-property improvement with the characteristics of a purchase, not a taxable equipment lease. The contractor owed tax on materials incorporated into the…
If a mail-order company with no Utah presence opens retail stores in Utah, does that create nexus for its separate, out-of-state mail-order division too?
Yes. Once a company opens retail stores in Utah, it has nexus for ALL of its sales into Utah -- including mail order sales handled entirely by a separate division that keeps its own employees,…
How did California tax Teflon coating applied to new versus used customer equipment, including out-of-state shipments?
Coating new equipment was fully taxable fabrication. Coating used equipment was repair with material-tax rules; qualifying retailer-shipped out-of-state property was exempt.
How did California tax Teflon coating applied to customer-owned new equipment versus used equipment?
Coating new equipment was taxable fabrication. Coating used equipment was repair work, with tax treatment depending on material value and separate charges.
Does a tax-exempt historical society have to collect sales tax on items it sells through a local store, a card table, and word-of-mouth from members' homes?
It splits by sales channel -- a tax-exempt organization's regular, ongoing sales of merchandise through a fixed "candy store" and thrift shop display are taxable because those count as a "shop or…
Is an early Internet "presence provider"'s web page development service subject to New York sales tax?
No -- receipts from an Internet "presence provider"'s Web page development services, including passed-through hosting fees, aren't subject to New York sales tax, both because web page development…
Does a New Jersey company owe New York compensating use tax on free advertising cash-register tapes it manufactures in New Jersey and gives away to New York supermarkets?
Yes -- Cadett Register Tapes owes New York compensating use tax on the free, advertising-printed cash register tapes it distributes to New York supermarkets, because giving away promotional…
Was a grocery store's separately stated $3.50 delivery charge taxable when employees delivered orders in the store's vehicle?
Yes for taxable goods because title passed at customer delivery without an earlier written agreement. Exempt-food delivery was exempt, and mixed orders required proration.
Did California sales or use tax apply to fees for creating internet job-listing pages when the company delivered no equipment, software, or printed database information?
No. Assuming the company sold or leased no equipment or software and delivered no database information in tangible form, its fee for creating an online job-listing page was not taxable.
Were a circuit-board manufacturer's separately stated testing charges taxable when testing was part of producing boards for sale or lease?
Yes. Testing was part of the manufacturing process, and gross receipts included passed-through service and expense amounts; separately stating the testing charge did not exclude it.
How were circuit-board design files and nonrecurring-engineering charges taxed when designs went by modem, on physical media, or remained manufacturer-owned tooling?
Modem-only design transfers without tangible property were not taxable. A functional tangible copy made the entire design charge taxable, and NRE tooling costs were taxable whether title transferred…
How were remote circuit-board designs, tangible copies, tooling, and testing charges taxed?
Remote-only design transfer was nontaxable; a functional tangible copy made the whole design charge taxable, and tooling and board-testing charges were taxable.
Did a charity donate paper plates and napkins when donees used them for meals?
For on-site meals, the charity consumed the paper goods and owed tax on its purchase; items packed into a takeout meal were donated and could qualify.
When did a charity's kits and supplies count as donated property rather than property the organization consumed?
Items assembled into a kit and given to a donee could qualify as donations, while communal or service-use supplies were consumed by the charity and taxable.
Which interstate trucks and trailers qualified for Texas motor vehicle tax exemption beginning September 1, 1997?
Beginning September 1, 1997, qualifying interstate trucks and trailers of the size and weight eligible for International Registration Plan plates were exempt. A Texas-plated tractor or truck needed…
A joint venture bills an insurance company a single charge covering many different accounting/administrative functions -- some classified as taxable insurance services, others as taxable data processing, and some seemingly nontaxable -- does the 5% threshold for taxing an entire bundled charge apply function-by-function, or to the whole contract?
The 5% guideline applies to the AGGREGATE of all taxable services performed under the contract, not separately to each type of taxable service. Citing Hearing 30,261, the Comptroller classified…
Does a Utah motel owe sales tax on soap, shampoo, and continental-breakfast items it gives free to guests?
Yes. The motel — not the guest — is the taxable consumer of soap, shampoo, coffee, toilet paper, and complimentary breakfast items it buys and gives away with the room, because there's no separate…
Who could claim the exemption for vehicles modified before lease or sale to a corporation transporting disabled passengers?
The leasing company that performed the modifications could exempt its modification materials. The corporate transport buyer was not a qualifying disabled person for the later transfer exemption.
Was a petitioned California gross-receipts tax liability discharged in a no-asset Chapter 7 case when the taxpayer's entity type was uncertain?
No under either alternative in the memorandum: a corporation could not receive Chapter 7 discharge, and an individual's nonfinal petitioned tax had not yet been assessed for bankruptcy timing.
If a company guts a previously-occupied shopping center down to a shell and does finish-out work to prepare it for new tenants, is that finish-out taxed as nontaxable new construction (like a brand-new building's initial finish-out), or as taxable remodeling?
It's taxable remodeling, not exempt new construction. Rule 3.357(a)(5)'s definition of "new construction" includes the INITIAL finish-out work of a structure -- but that exemption applies only to a…
Which South Carolina tax benefits did PLR 97-2 approve for an integrated expansion of a certified qualified recycling facility?
The Department approved the integrated, recertified addition for the 30% recycling-property investment credit, conditional fee-in-lieu treatment, the taxpayer's existing separate-accounting method,…
What records should a boat dealer keep to support offshore delivery and the buyer's claimed out-of-state use of a sailboat?
Keep a signed bill of sale recording delivery terms, date, and place; ship logs; the buyer's sworn use statement; and records showing where the boat stayed and was used.
Were customer-specific garment grading, sizing, and marker-making designs transferred on diskettes exempt custom computer programs?
Yes, if prepared to the customer's special order and used to operate those machines. The machine-readable designs then qualified as custom computer programs.
Did a foreign corporation owe Tennessee use tax when its foreign-registered yacht entered Tennessee only for a 30-to-90-day vacation visit under a federal cruising license?
No. The yacht's intended 30-to-90-day vacation visit under a federal foreign-yacht cruising license was temporary; it did not come to rest or become part of Tennessee's mass of property. The ruling…
Did a company owe Tennessee business tax when it supplied both the entire management function and operating staff of a nonprofit health-plan corporation?
No. Because the company supplied both management and the entire operating staff, the industrial-classification rules assigned it the managed entity's activity rather than standalone management…
Are ATM transaction fees, home banking service fees, pay-by-phone charges, and free software given to bank customers taxable in Texas -- for both a bank's own customers and non-customers using its ATMs?
None of these banking fees are taxable to the customer -- because Tax Code § 151.0101 lists only fifteen specific taxable services, and "banking services" is not one of them. This covers: (1) free…
How did Texas treat a Nevada loan-participation subsidiary, its Texas nexus, and dividends paid to a Texas bank?
On the original facts, Texas found the Nevada subsidiary had nexus because the Texas bank and other Texas servicers performed services for it. Dividends formally declared from earnings were…
Does a private trucking company hauling U.S. mail owe New Mexico's petroleum products loading fee on all the fuel it pumps into its trucks in New Mexico, or only the fuel actually burned in-state?
The protest was denied. A private trucking company that hauls mail for the U.S. Postal Service owed New Mexico's petroleum products loading fee on the full amount of special fuel it pumped into its…
Who had to collect California use tax when a no-nexus Internet retailer used out-of-state suppliers to drop ship to California buyers?
The supplier with California nexus was deemed the retailer and collected on the consumer price; the no-nexus supplier did not collect, but the California consumer still owed use tax.
Was a glamour-photography company's retained sitting fee nontaxable when the package included makeup, hairstyling, and one sample photograph?
No, on the facts Staff Counsel assumed after receiving conflicting descriptions. The company's glamour-photography identity, photo-sales revenue, promotional purpose and delivered sample made the…
A contractor building a new manufacturing plant under a lump-sum contract asked a comprehensive set of questions: who can issue manufacturing exemption certificates, how lump-sum vs. separated contracts are taxed differently, what a direct payment permit is, and what Texas's sales tax rate and permit procedures are -- what's the full picture?
This letter is a comprehensive contractor tax primer. (1) Only the MANUFACTURER itself -- never a contractor or subcontractor -- may issue an exemption certificate for qualifying manufacturing…
A GPS vehicle-tracking company runs a test program with an insurance company, paying the cellular carrier directly and then allocating/re-billing the charges to the insurer and individual drivers at cost with no markup -- is this a nontaxable reimbursement, or does it make the tracking company a taxable cellular service reseller subject to security-service tax and the Telecommunications Infrastructure Fund (TIF) assessment?
Neither "reimbursement" nor "resale" was quite the right frame -- the underlying service itself is taxable. The company's core offering (GPS tracking with electronic tracking of a vehicle's…
How did RP 97-7 guide South Carolina Department employees in assessing penalties for bingo-law violations?
It generally recommended escalating monetary penalties and license revocation for repeat bingo violations, while allowing more or less severe sanctions within statutory authority. All offenses…
Did Florida documentary stamp tax apply to employee-plan loan notes made to participants inside and outside Florida?
Florida taxed notes made, executed, or delivered to plan participants in Florida; the ruling found no ERISA exemption. Notes made and delivered to out-of-state participants were not taxable when…
Did a nonprofit community club have to collect Florida admissions tax on voluntary member payments for recreational activities?
The original ruling said yes: the club had to collect sales tax on the admissions charge because member payments supported recreational facilities and were not required as a condition of owning or…
Did a state bank's conversion to a federally chartered association require a new seller's permit and tax the asset transfer?
Tax Counsel said the old California entity had to surrender its permit and the new federal association needed its own, but the property transfer was not a taxable sale because it occurred by…
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