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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Could a supply-house vendor buy construction materials for resale and sell them tax-free directly to a Florida school board?
Yes, under the proposed structure. The vendor could buy the materials tax-free for resale and sell them directly to the school board without sales tax because the board paid the vendor directly, took …
Could a supply-house vendor buy construction materials for resale and sell them tax-free directly to a qualifying church?
Yes, under the proposed structure. The vendor could buy the materials tax-free for resale and sell them directly to the church without sales tax because the church paid the vendor directly, took title…
Is producing a master film, audio, or video recording treated as manufacturing for Texas sales tax purposes, and is duplicating (dubbing) that master taxable?
Yes — producing a motion picture or audio/video recording for sale, license, distribution, broadcast, or exhibition is manufacturing, so producers, production companies, and post-production companies …
Is installing theater chairs in a new theater taxed the same as removing and replacing chairs in an existing theater?
No. Installing theater chairs for the first time in a newly constructed theater is a nontaxable improvement to realty, but removing old chairs and installing new ones in an existing theater is taxable…
Were shares of a business trust exempt from Florida intangible tax when its valuation-date portfolio held only exempt securities?
Yes. Fund shares were exempt when the portfolio held only assets exempt from Florida intangible tax on the valuation date. Earlier holdings during the prior year did not matter. If the portfolio inclu…
Were Florida commercial-loan notes taxable when borrowers signed them and delivered them to the lender or its agent outside Florida?
No, under this ruling's facts. The notes were signed and accepted outside Florida, so their later return to Florida for safekeeping did not trigger documentary stamp tax. Filing a Florida UCC-1 alone …
Did a Florida corporation owe documentary stamp tax on unsecured debentures issued entirely outside Florida?
No. The corporation's directors authorized the transaction in Florida, but the manual signature work, printing, sale, and delivery of the unsecured debentures occurred outside the state, and no Florid…
Do ostriches, emus, and rheas (ratites) raised for slaughter qualify for the same Alabama tax breaks as 'poultry' — the sales/use tax exemptions, the reduced machinery rate, and the ad valorem exemption?
Yes. The Department ruled that ostriches, emus, and rheas — flightless birds called ratites, raised for slaughter for meat and by-products — are included within 'poultry' for Alabama tax purposes and …
Is labor to repair a parking lot damaged by an underground explosion taxable if the repair work was done after October 1, 1993?
Yes. The Comptroller told the taxpayer that because the parking lot repair labor was performed in November 1993 — after the October 1, 1993 effective date of new Tax Code Sec. 151.350 — that repair la…
Can a corporation deduct dividends from a mutual fund under Connecticut's dividends-received deduction when the fund's payouts are exempt-interest or capital-gain dividends?
It depends on the type of distribution. Under Connecticut's dividends-received deduction, Conn. Gen. Stat. § 12-217(a)(D), a corporation may deduct 'dividends as defined in the federal income tax law.…
Is faxing coupon advertisements to a list of recipients a nontaxable advertising service or a taxable telecommunications service in Texas?
It depends on what the customer is paying for. Assembling and distributing a collection of coupons is a nontaxable advertising service, but the fax transmission itself is a taxable telecommunications …
If I buy something from an out-of-state company that delivers it into Texas, who has to pay or collect the use tax — me or the company?
It depends on whether the seller is permitted in Texas. The Comptroller told this individual purchaser that because COMPANY A (the vendor they bought from) is permitted in Texas, COMPANY A is required…
Is sales tax owed on wireline services performed on oil/gas wells to obtain seismic or geological data in Texas?
No. The Comptroller ruled these wireline services are not subject to sales & use tax. Instead, the receipts are subject to the 2.42% well servicing tax under Texas Tax Code 191.081. Sales tax is still…
I'm structuring a turnkey deal where I sell my client a vacant lot, buy it back at the same price, build a building on it as construction financing, then sell (or lease) the finished building back to the client. Will New York's Real Property Transfer Gains Tax apply when I transfer the finished building back?
The Department wouldn't give a yes-or-no answer -- it depends on facts an Advisory Opinion can't resolve. Deegan Development Group, Inc. owned a parcel of land and proposed a turnkey arrangement for i…
For a Texas motor vehicle repair, can the repairman charge the customer sales tax on parts at a price lower than what the repairman paid for those parts?
No. In a separated repair contract (materials and labor billed separately), the agreed sales price of parts and consumable supplies that the repairman charges the customer sales tax on cannot be less …
Did an out-of-state association and publisher with only mailed publications and Florida members have to collect Florida tax under the 1993 physical-presence rule?
No, under the historical Quill physical-presence rule applied in 1993. With no Florida representatives, offices, property, inventory, or other presence, the association and publisher did not have to r…
Did distributing a magazine to dues-paying association members make part of their dues taxable as a subscription charge?
No. No stated or implied part of the membership dues paid for the magazine, and neither members nor nonmembers could buy it separately, so the association did not collect tax on dues. Because the dist…
Is a 'lane closure' (barricade) service provided to a highway contractor a taxable service, or is it treated as equipment rental for Texas sales tax purposes?
It is not a taxable service. The Comptroller ruled that the total charge for 'lane closure' (barricade) services is treated as a rental of equipment to the contractor, and is taxable as a rental — jus…
Is thin capitalization tested on a book or fair market value basis, and is interest on a loan used to fund a distribution exceeding shareholder equity deductible for Article 9-A?
Thin capitalization is tested on a fair market value basis, not a book basis. Indopco borrowed $700 million from a brother/sister corporation to pay a dividend to its parent when its book capital was …
If a 501(c)(3) nonprofit and a for-profit company form a 50/50 joint venture to build affordable housing, can the joint venture buy construction materials free of Texas sales tax?
Only partly. The Comptroller ruled the joint venture may issue an exemption certificate for 50% of the cost of the incorporated building materials and consumable supplies — matching the nonprofit part…
Is installing a patented lawn-fertilization control device as part of a new or existing underground sprinkler system a tax-exempt capital improvement, and does that change if it's just replacing an existing pump?
Yes -- installing the device as part of a new underground sprinkler system, or adding it to an existing one, is a capital improvement and not subject to sales tax, because it permanently increases the…
How did South Carolina Revenue Ruling 93-12 calculate the historical retirement-income deduction for a surviving spouse?
A surviving spouse could claim one deduction for the survivor's own retirement income and a separate deduction for income attributable to the deceased spouse. For the inherited stream, the survivor ge…
Are the entry fees participants pay to enter a tournament subject to Alabama sales (amusement) tax when the organizer collects the fees and pays them all back out to participants as prize money?
No. A 501(c)(3) sponsor ran a national tournament hosted in one Alabama city in 1994 and another in 1997, drawing more than 50,000 entrants who each paid an entry fee. Alabama's § 40-23-2(2) imposes a…
When a manufacturer expands by adding a new product line that shares some processes and equipment with an existing line, does the manufacturing sales tax exemption cover equipment used by both lines?
It depends on whether the equipment is used exclusively by the new line or shared with the existing line. Equipment used exclusively for the new product line qualifies for Utah's manufacturing exempti…
Do X-ray dyes and contrast materials used in hospital diagnostic imaging, and surgical appliances like pacemakers, sutures, and bone cement, qualify for Utah's sales tax exemption for 'medicine'?
No to both. The Tax Commission ruled that X-ray dyes and contrast materials, and surgical appliances/substances such as pacemakers, sutures, and bone cement, do not qualify for Utah's sales tax exempt…
Did the Comptroller change the manufacturing exemption policy for equipment (dies, photoengravings, presses) used by printers and publishers?
No. The Comptroller reviewed the proposed policy change and decided not to change the existing manufacturing exemption policy that had applied to printers and publishers for several years. Because the…
If a 501(c)(3) organization bundles hotel lodging, meals, and tuition into one lump-sum price for an educational seminar, does it owe sales tax on the meals and hotel tax on the lodging?
The meals charge is exempt from sales tax (the organization can issue an exemption certificate for meals whether eaten at the lodge or off-site), but the organization still owes hotel occupancy tax on…
Is a hyperbaric oxygen chamber exempt from Texas sales tax when it is rented to a for-profit hospital?
No. A hyperbaric oxygen chamber is a therapeutic device that is exempt when rented directly to an individual patient under a doctor's prescription, but it is taxable when sold, leased, or rented to a …
Is a real-time financial-data terminal service (stock tickers, quotes, market news) delivered over leased telephone lines to desk-top display units subject to the additional 5% telephone/telegraph tax on top of the regular information-service tax?
No -- the service is a taxable information service under Tax Law Section 1105(c)(1) because it isn't personal or individual to any one subscriber, but it escapes the additional 5% tax under Section 11…
If a city installs speed bumps in a neighborhood and bills the private citizens or businesses who requested them, does the city have to collect sales tax on that charge?
No. The Comptroller ruled that installing speed bumps is remodeling of nonresidential realty (a taxable service), but the city does not have to collect sales tax on the charges billed to the citizens,…
Is a tree/plant examination and disease-treatment consultation service (arborist services) taxable under Texas sales tax, and can a referral fee paid to another business reduce the tax base?
Yes. The Comptroller ruled that arborist services — consultation, diagnosis, and treatment of landscape plants — are taxable, and tax must be collected on the entire charge to the customer, including …
Do a surviving corporation's pre-merger Connecticut net operating loss carryovers survive an ownership-change merger, free of the federal Section 382 limit?
Yes. Where a corporation is the SURVIVING corporation in a merger (here a reverse triangular merger in which the purchaser's new subsidiary merged into the holding company, and the holding company sur…
Can a mail-order company use an average industry shipping rate to calculate its exempt, separately stated shipping charges for periods before September 1, 1991, and does the shipping exemption still apply after that date?
No -- an Advisory Opinion can't resolve a factual question like whether $1.04 per package matches an industry-prevailing shipping rate, and there was never any rule letting an average rate substitute …
How is Texas sales tax applied to selling, renting, installing, or servicing water softeners and reverse osmosis units — and does it matter whether the units are plumbed into a building or whether the customer just pays for a water-conditioning service?
It depends on three variables: whether title to the equipment passes to the customer (sale vs. rental vs. service), whether the unit is plumbed into the building (making it an improvement to realty) o…
Is transferring property to a brand-new, not-yet-capitalized corporation in exchange for 100% of its common and preferred stock a taxable sale under Texas sales tax?
No. The Comptroller confirmed that transferring property to a non-capitalized corporation in exchange for 100% of that corporation's stock — even if the stock is split between common and redeemable pr…
Did an out-of-state municipal-bond fund with no Florida office, employees, property, or secured loans have Florida corporate or intangible-tax obligations?
No corporate return was required if the fund remained a separate entity with no direct Florida nexus, and the fund itself was exempt from the historical intangible tax. Its shares were fully exempt on…
Does producing a motion picture, video, or audio recording for sale, license, distribution, broadcast, or exhibition count as manufacturing for Texas sales tax purposes, and can a producer buy or rent production materials, equipment, and services (like film processing, dubbing, and editing) tax-free?
Yes. The Comptroller ruled that producing a motion picture, video, or audio recording that will be sold, licensed, distributed, broadcast, or exhibited is treated as manufacturing. A producer can use …
If a parent company spins off an equipment subsidiary and that subsidiary then leases the equipment back to the parent or a sister company, is tax due on the lease payments?
Yes. The Comptroller ruled the lease payments Equipment Company A receives from the parent (ABC) or from sister company Company B are taxable, because these are operating leases between related corpor…
Would correcting a deed that conveyed only mineral rights instead of the intended fee title trigger Florida documentary stamp tax?
A new quitclaim deed conveying the omitted fee title would be taxable on the property's fair market value because the original deed's face transferred only oil, gas, and mineral rights. A court judgme…
Is manufactured brine water (made by pumping fresh water into an underground salt formation) exempt from Texas sales tax the same way plain water and table salt are exempt, and is non-food salt like rock salt or ice cream salt taxable?
No — the Comptroller ruled that brine water made by pumping fresh water into a salt formation to dissolve the salt is 'processed' water, not naturally occurring brine, so the charges for the brine wat…
If an information provider subcontracts the gathering of proprietary information to a third party, does the information stop being 'proprietary' for Texas sales tax purposes?
No. The Comptroller overruled an earlier letter that had taxed these charges, holding that information gathered by a subcontractor for a provider who then sells it to a client still keeps its propriet…
Were real-property transfers, debt assumptions, substitute notes, and mortgages under a confirmed Chapter 11 plan subject to Florida stamp or intangible taxes?
No. The Department treated the transfers, assumptions, substitute promissory notes, and joint-venture mortgage contemplated by the court-approved settlement and confirmed reorganization plan as exempt…
Did a Florida income beneficiary owe intangible tax on two out-of-state trusts when the beneficiary held only a limited power of appointment?
No. The Florida grantor-beneficiary had a current right to income but only a limited power of appointment that could not benefit the grantor, the grantor's estate, or their creditors. That was not eno…
Which of five credit-union line-of-credit forms were subject to Florida documentary stamp tax?
Only the signed Line of Credit Advance Request Voucher was taxable because it contained the borrower's promise to pay. The other four reviewed forms were not taxable because they did not contain a pro…
Which supplies could Kansas auto body and repair shops buy tax-free, and which remained taxable?
Kansas auto dealers and body or repair shops could buy qualifying items tax-free when the items were consumed in providing a taxable repair service or became a component of the repaired vehicle, and t…
Can a flooring/cabinet manufacturer buy display systems and promotional materials tax-free with a resale certificate when it sells them to its distributors along with its products?
Yes, if the manufacturer is genuinely reselling the displays and promotional materials to distributors (who in turn resell them to retailers), it can issue a resale certificate to its own vendors for …
When a rental company rents out a package that mixes exempt film-production equipment with taxable items, how should sales tax be charged on the package?
If the taxable and exempt items are rented together for one bundled price, the whole charge is taxable. If the rental company separately states the charge for equipment used directly in production (wh…
Were two named Texas Medical Center cooperative associations exempt from motor vehicle sales tax on their purchases?
Yes. The approved verbal response accepted that Texas Health and Safety Code §§ 301.013(a) and 301.042(a) exempted the named hospital laundry and heating-and-cooling cooperatives from tax or assessmen…
Our hotel financing, structured through an industrial development agency, needs a workout: we're restoring previously-waived loan proceeds (increasing the secured debt back up), adding a brand-new loan the IDA won't be a party to, and then consolidating everything into one lien after the IDA exits the deal entirely. Which of these steps trigger new mortgage recording tax, and which don't?
It depends on which step and whether the IDA remains a party -- a genuinely mixed outcome. Coliseum Hotel Associates financed and built a Marriott hotel at Mitchel Field, Nassau County through the Tow…
Does a tax-exempt nonprofit's sheltered workshop, where disabled clients perform auto detailing for paying customers, have to collect sales tax on those charges?
No -- the nonprofit's auto detailing (washing, window cleaning, vacuuming, waxing) is a sale of a SERVICE, not tangible personal property, and it doesn't fall into any of the specific carve-outs (reta…
Is an airline's purchase of on-line computer systems -- flight control, crew management, reservations, baggage tracing, and similar tools -- exempt from sales tax as personal or individual information when each system is built around the airline's own confidential operating data?
Mostly yes -- the Flight Control, Crew Management, AFTN, Flight Plan, ACTS, Baggage Claims Central File, and Sub-Host Reservations systems are all exempt, because each is based only on the airline's o…
Is a self-operated condominium rental pool treated as a taxable property management company, and are repairs to the condo units and common areas taxable as commercial real property?
Yes to both. The Comptroller ruled that a self-operated rental pool serving 72% of a condominium regime's owners is treated as a property management company for sales tax purposes, so the exemption fo…
Does a plant and equipment used to convert liquid cryogens into compressed gas qualify for the Article 9-A investment tax credit?
Yes, if the other tests are met. A company that buys liquid cryogens, converts them into vapor with pumps, vaporizers, and compressors, and bottles the gas in high-pressure cylinders for sale is engag…
Price Waterhouse asked New York, on behalf of a Nebraska-domiciled employee called Mr. A, whether Mr. A remains a nonresident of New York for personal income tax purposes when a fixed 4-year employment contract requires him to work in New York City and use a company apartment there for more than 183 days a year.
Yes, Mr. A remains a New York nonresident throughout the four-year contract. Because his New York City company apartment is kept only for a fixed and limited assignment - not indefinitely - it is not …
Can a contractor that improves a government facility under an informal but binding agreement buy the incorporated materials free of Connecticut sales tax?
Yes. A limited partnership that operates a Connecticut political subdivision's facility and makes agency-funded improvements to it may purchase, free of sales and use tax, the materials and supplies t…
Is the separate, optional amount a racetrack charges for reserved seating at tables/counters taxable, given that general admission is charged separately?
Yes. The Comptroller's Tax Policy Division concluded the separate optional charge for seating at tables/counters is taxable, comparing it to paying extra for a box seat at an amusement event. Charging…
Is vacuuming up industrial waste (including EPA-hazardous flue dust) from a steel manufacturing plant a taxable 'building or grounds cleaning' service, or nontaxable waste 'collection'?
Nontaxable. The Comptroller reversed its earlier position and ruled that vacuum-truck removal of mill scale, flue dust (EPA-hazardous), lime dust, and sludge from a steel manufacturer's plant is 'coll…
Is providing and servicing air freshener/deodorizer dispensers installed in a customer's building a taxable service in Texas, and can the dispenser, batteries, and liquid be bought tax-free for resale?
Yes. The Comptroller ruled that Company A's air freshener/deodorizer service — installing a dispenser it owns in a customer's restrooms and servicing it by replacing the battery and refilling the liqu…
Are limited partnerships, a trust, and the holders of the trust interests subject to Texas franchise tax?
None of them owed the tax. The Comptroller advised that two limited partnerships (ABC and EFG) and a Trust were not subject to the pre-2008 Texas franchise tax because they were not corporations, and …
If casualty-loss repair labor was performed and finished before October 1, 1993, but most of the payment isn't collected until October 1993, is that labor taxed under the new law that took effect October 1, 1993?
No. The Comptroller ruled that for casualty-loss repairs, the taxability of the labor depends only on the date the labor was performed — not the date of the casualty/disaster and not the date payment …
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