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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Can the state file a tax lien while I'm paying under an installment plan, and can I still challenge the original assessments years later?
The protest was denied. Raymond Gabaldon, who owns Movie Land Video, fell behind on gross receipts taxes after a manager he hired during his National Guard active duty failed to file and pay. He…
Would California release its later tax lien so sale proceeds could pay a spouse under a purported deed of trust on the couple's community property?
No. Legal staff concluded the deed of trust was invalid and recommended denying the partial release because the trust was not the borrower or record owner and an owner could not hold a lien on the…
When a customer pays for an equipment maintenance contract in monthly or quarterly installments instead of all at once, does the seller collect sales tax on each installment or on the full contract price up front?
The full sales tax is due on the entire contract price at the time the maintenance agreement is signed, regardless of whether the customer is allowed to pay in installments over the contract term,…
When did a graphic artist's computer-created artwork become a taxable transfer of tangible property?
Leaving a disk with the client was taxable. Saving directly to the client's hard drive was not, and temporary media avoided tax only if the client never controlled it.
Who bore the tax and reimbursement risk when an export customer gave an invalid resale document?
Past sales remained presumed taxable. The buyer had to document resale without use or owe contractual reimbursement; a late certificate alone could not cure the sales.
Were charges to lawyers for a telephone-conferencing service taxable, and did the provider owe tax on free courtroom equipment?
The call charges were not taxable because no tangible personal property was sold. But the provider could owe California use tax as the consumer of equipment it placed in California courtrooms…
Did a $150 vehicle coupon issued in a class-action settlement reduce the taxable selling price in California?
No. The settlement coupon was third-party consideration rather than a dealer's voluntary discount, so its face value remained in taxable receipts; taxable repair parts also stayed taxable at full…
Were Pedialyte and the listed oral-electrolyte and diarrhea products taxable?
No. California classified the five listed products as nontaxable food because their water-and-sugar or sugar-substitute formulations were comparable to nontaxable sports drinks.
Could a federal S corporation opt out of S-corporation treatment for the former Texas franchise tax?
No. Texas had no separate state election to accept or reject S-corporation status for franchise-tax purposes. Most treatment matched other corporations, but an S corporation could elect the federal…
Are services to run temporary electrical drops and power temporary trailers at a new construction job site taxable in Texas?
No. Services to run temporary electrical drops (so subcontractors can plug in power tools) and to connect electrical power to temporary trailers at a new construction job site are not taxable. The…
When was the initial former Texas franchise-tax report due after a company with nexus obtained a certificate of authority?
The Comptroller restated a prior determination that the company had Texas nexus and was subject to franchise tax, but this letter did not repeat the underlying nexus facts. After receiving authority…
Does a coffee manufacturer's own grinding machine, placed in a grocery store for the store's customers to use on already-shipped coffee beans, qualify for the Texas manufacturing exemption?
No -- this letter corrects an earlier (January 10, 1997) ruling from the same office. A coffee storage/grinding machine that a coffee manufacturer places inside grocery stores, for the stores' own…
Which shipping-document title clause passed title before delivery by both a third-party carrier and the seller's own truck?
Use 'Title: to buyer prior to shipment' or 'Title: passes prior to shipment.' F.o.b.-warehouse clauses worked for third-party carriage but not the seller's own vehicles.
Was a graphic artist's charge taxable when the artist personally loaded digital artwork into the client's computer and kept the transfer disk?
No. The artist transferred no tangible property when personally loading the file into the client's computer and removing the artist-owned disk afterward.
Where were royalty receipts from trademarks, franchises, and licenses sourced under the former Texas franchise tax?
Texas sourced the intellectual-property owner's royalty revenue to the payor's location for both former franchise-tax components. Rule 3.549 expressly used that rule for taxable capital. Although…
When used refinery equipment bought in Texas is dismantled, inspected, refurbished, and shipped out of the country over several months, does the export exemption still apply, and are the dismantling/inspection/refurbishing services themselves taxable?
The purchase of used refinery equipment for export is exempt from Texas sales tax, and local tax on the sale is refundable to the buyer once proof of export is provided under Rule 3.323. Rule…
Did a revocable trust move its intangible-tax situs outside Florida when one doctor said its Florida grantor was totally and permanently disabled and a non-Florida successor trustee was named?
No. The Department concluded that the trust still had taxable situs in Florida because the evidence did not establish incapacity under the trust's two-doctor procedure or Florida law, and the…
Is a company's charge for driving a client's employee crews around Utah in vans subject to Utah sales tax, and has the law on transportation taxation changed recently?
Yes, taxable for the period in question, but the law changed several times in just a few years and became permanently favorable after July 1, 1997. Intrastate (within-Utah) passenger transportation…
Could California record its nonmaritime sales-tax lien against a federally documented vessel with the U.S. Coast Guard?
Yes, according to the memorandum. Because federal law preempted state title-and-lien registration for documented vessels, the Board said its tax-lien notice had to be recorded with the U.S. Coast Guard.
When a city agrees with a municipal utility/management district to impose city sales tax and hotel occupancy tax in its extraterritorial jurisdiction (ETJ), when does the new city sales tax actually take effect?
Even though the City of Galveston and Galveston County Municipal District Number One had already held public hearings and signed an agreement to impose both the Galveston municipal hotel occupancy…
Is a subscription publication made up mostly of attorney-written trial reports exempt from Texas sales tax as a magazine, even though it looks and is delivered like one?
No. Even though the publication has every physical characteristic of a magazine -- paperback, illustrated, published at regular intervals, containing stories/articles/essays and ads, sold by…
Must a qualified retirement plan or an IRA file a New York return or pay New York tax under Article 13 on unrelated business taxable income?
As originally issued: a qualified section 401(a) retirement plan covered by ERISA owed no New York Article 13 tax on unrelated business taxable income because the tax was preempted by ERISA under…
Were the accounts labeled receivables in an investment fund's portfolio subject to Florida intangible personal property tax?
No. The Department concluded that the accounts titled receivables in the fund's portfolio were not subject to Florida intangible personal property tax. It reasoned that the entries created for…
An electrical contractor's customer used a sales tax recovery firm to seek a refund of tax paid on several jobs, claiming a manufacturing exemption -- which of the contractor's charges (moving equipment, repairing manufacturing equipment, upgrading a building's electrical system, partial demolition) actually qualify?
It depends on the specific work, and the Comptroller broke it down by job type. (1) Simply moving equipment between plants, setting it in place, and hooking it up to the existing electrical system…
Did a publicly traded company have to send its Public Information Report to a director paid for board service?
No. The Comptroller said the publicly traded company did not need to send a copy to a director who was paid for board services. Section 171.203 targeted people who might be listed after their…
Did assigning and renewing an existing Florida mortgage loan, then transferring the property without assuming the payment obligation, trigger additional documentary stamp or nonrecurring intangible tax?
No. The assignment and renewal were not additionally taxed because the original obligor renewed only the unpaid balance, without enlarging the obligation, and the original taxes had been paid. The…
Did an out-of-state husband and his Florida-domiciled wife each have to file Florida intangible personal property tax returns for their separately held portfolios?
The wife had to file; the husband generally did not. Because the wife was domiciled in Florida, she had to report all intangible property she owned, managed, or controlled, including any of her…
Was a $10,000 refundable security deposit under a Florida real-property lease subject to sales tax as rent?
Not when deposited or returned unused. The Department concluded that the refundable security deposit was not taxable rent. Any amount later applied to unpaid rent was taxable, while an amount…
Were fees for swimming or snorkeling in structured and unstructured dolphin programs subject to Florida sales tax when spectators paid a separate taxable admission?
No. The Department concluded that fees for participants in both dolphin programs were not subject to sales tax because the operator charged spectators a taxable admission to enter the controlled…
Does a farmer-owned cooperative building a new feed mill get a sales tax exemption on the construction materials and manufacturing equipment it buys?
Mostly no on the agricultural exemption, but yes on parts of the manufacturing exemption. The agricultural exemption under § 59-12-104 only covers property used directly in farming production itself…
Does an out-of-state manufacturer with no offices, warehouses, or sales staff in Utah have to collect Utah sales/use tax on sales shipped to Utah dealers, and are its shipping charges taxable?
Without an office, warehouse, sales agents, or service/repair presence in Utah (directly or through a third party acting on its behalf), the manufacturer generally lacks Utah nexus and doesn't have…
If I couldn't use a capital loss in the year I had it and want to carry it back to cut an earlier year's New Mexico tax, how long do I have to file the refund claim — and does an earlier amended return on a different issue keep that year open?
The protest was denied. Amoco carried a 1992 capital loss back to its 1989 New Mexico corporate income tax year to claim a $64,588 refund, but filed the amended 1989 return in January 1995 — more…
Was fungicide bought for resale when planing removed it from lumber and the contaminated shavings were sold?
No. Its primary use protected lumber during manufacturing; resale of the incidental shavings did not convert the fungicide purchase into a resale purchase.
Was fungicide bought for resale when it protected lumber during manufacturing, was planed off, and remained only in shavings that the sawmill sold?
No for the surfaced-lumber scenario. The fungicide was used as a manufacturing aid, and selling the incidental shavings containing it did not convert the original purchase into a resale purchase.
Is a waste management company's flat monthly fee for supplying and servicing portable toilets (port-a-potties) at a manufacturing plant taxable, and if so, which local tax applies?
Yes, taxable. A waste management company's flat monthly fee to supply portable toilets at a manufacturing plant and clean them out twice a week is taxable as the rental of tangible personal property…
Did a lessor owe use tax when property first leased outside California later entered for the lessor's own operations?
Under the historical tests, not after the stated 90-day or six-month periods. A 1997 source correction expressly excluded mobile transportation equipment.
Could an MTE lessor issue a resale certificate to avoid sales tax and claim the section 6009.1 exclusion?
No. The certificate was allowed only for a timely FRV election. Otherwise the lessor owed tax on cost, and the certificate could not create a section 6009.1 exclusion.
Could California issue a sales-tax determination personally against a business trust's successor trustee despite a trust clause disclaiming personal liability?
Yes. Staff said the trustee remained personally liable because the Board had not expressly or implicitly agreed to look only to trust assets.
Were Texas rental receipts exempt when a vehicle was modified for a renter with an orthopedic disability?
No. The purchase exemption for a specially modified vehicle bought by an eligible individual did not extend to gross rental receipts. The rental business had to collect and remit rental tax,…
Did a sheet-metal job shop's $319,000 laser qualify for Florida's industrial-machinery exemption as equipment used in a new business?
Yes. After examining the old and new products, the Department found that thick steel-plate parts cut by the laser were not physically comparable to the thin sheet-metal electronics parts made on the…
Did the original TAA treat a utility's monthly charge for utility-owned voltage-reduction equipment as a taxable equipment lease?
The original ruling said no. Because the utility selected, installed, operated, maintained, repaired, replaced, and removed the equipment while the customer had no operational control, the charge…
If a business charges customers to play a no-stakes black jack table (chips have no monetary value, dealt by a live dealer), does it owe Texas sales tax on the charge?
Yes. Charging customers to play black jack -- even a for-fun table where the chips have no monetary value and a live dealer runs the game -- is taxable as an amusement service. The business must get…
Did Florida use tax apply when permitted pharmaceutical manufacturers gave free prescription-drug samples to practitioners and hospitals for patient treatment?
No. The Department concluded that use tax did not apply when authorized pharmaceutical manufacturers and sellers gave free prescription-drug samples to practitioners and hospitals for use in medical…
Did a Tennessee manufacturer have to charge sales tax on separately stated freight paid to an independent contract hauler when title and risk of loss passed to the customer at the manufacturer's plant?
No. When the contract made title and risk of loss pass at the manufacturer's Tennessee plant and an independent contract hauler delivered the goods, the separately stated transportation charge was…
A firm charges insurance adjusters for accident-scene photos, travel time, mileage, diagrams, measurements, traffic-signal timing, witness canvassing, and obtaining police reports -- which of these itemized charges are subject to Texas sales tax?
All of it is taxable -- confirming that the firm was "correctly charging tax on the total amount charged," though under three different legal categories. (1) Photo charges are taxable as the sale of…
Was a mandatory $125 initiation fee for access to a computerized real-estate multiple-listing database subject to Florida sales tax?
No. The mandatory $125 per-terminal fee was a condition of accessing the multiple-listing database. Because the database supplied information as electronic images on a subscriber's screen, the…
Could a corporate group stop filing Florida consolidated returns because the parent withdrew from Florida, the subsidiary became inactive, and separate filing would reduce administration?
No, not on the information submitted. The group remained federally consolidated, loss of the parent's Florida nexus did not end the Florida election, and the parent showed none of the adverse legal…
Did a 50% LLC ownership transfer that caused a federal partnership technical termination also create a Florida liquidation, and how many Florida returns were required?
It did not create a Florida liquidation or gain or loss, but it did require two Florida short-year returns. Florida treated the LLC as a corporation, so the federal partnership technical-termination…
Was the full lump-sum price for installing or repairing permanent commercial refrigeration systems subject to Florida sales tax?
No. The Department treated permanently installed refrigeration systems as improvements to real property, so the full lump-sum installation or repair price was not subject to sales tax. The…
Did a Tennessee telemarketer owe Tennessee sales tax on magazines, books, and periodicals mailed from outside the state to Tennessee customers, and on publications delivered entirely outside Tennessee?
It had to collect Tennessee tax on most publications delivered to Tennessee customers, even when mailed from outside the state. The limited exemption for sellers whose Tennessee activity was only…
I drive my own truck for one company that pays me on a 1099 with no taxes withheld — am I an independent contractor who owes gross receipts tax, or an employee whose pay is exempt?
The protest was granted. Stan Wheeler drove his own dump truck hauling asphalt for Western Mobile, was paid on a Form 1099 as 'nonemployee compensation' with no taxes withheld, and the Department…
Were automobile-lease due-date change, assumption, and optional GAP-waiver charges included in taxable rental receipts?
Due-date change and assumption fees were taxable lease payments, but the later, optional, separately stated GAP-waiver charge was not taxable rent.
Is a ranch's two-way radio repeater system and handheld radios, used to keep in contact with employees working the ranch, exempt from Texas sales tax as farm/ranch equipment?
No. A ranch's two-way radio repeater tower system and handheld radios -- used to keep in contact with employees working various areas of the ranch -- are not exempt from Texas sales tax. Although…
Did California use tax apply to an Oregon-bought motorhome and tow trailer briefly brought home before five months of out-of-state travel?
It depended on first use. Empty delivery for packing meant California first use and tax; actual out-of-state towing plus five months away could avoid tax.
What guidance did this Texas Comptroller letter give about dissolving a limited partnership?
The letter did not decide a franchise-tax issue or explain a dissolution procedure. It directed the requester to Title 105 of Vernon's Texas Civil Statutes and specifically to Section 2.03 of former…
How did Florida require a single-owner LLC treated federally as its corporate owner's branch to report within a consolidated group?
The LLC was not a separate member of the Florida consolidated group. Its income remained inside the corporate owner's federal taxable income and therefore the Florida consolidated return, but the…
Under RR 97-5, how much South Carolina sales tax did a nonresident owe when buying a travel trailer?
With the required notarized form, tax was the lesser of the buyer's home-state tax or South Carolina's then-applicable amount: 5% of price after trade-in or $300. No South Carolina tax was due if…
Why were sales of Crystal Geyser Sparkling Mineral Water taxable while noncarbonated Kern's Nectar qualified as an exempt food product?
Crystal Geyser was taxable because it was carbonated. Noncarbonated Kern's Nectar qualified as a food product because it contained fruit juice.
Are anti-theft sensor labels sold to manufacturers and retailers exempt from New York sales tax as sales for resale or as packaging material?
It depends who buys them -- loss-prevention labels sold to manufacturers, who place them inside a product's packaging and resell the labeled product, qualify for the resale exemption with a resale…
Is a kitchen and bathroom renovation company that controls the whole job but has its customers separately sign contracts with the installing tradespeople a retailer of the cabinets it sells, or a contractor performing a capital improvement?
The renovation firm is a contractor, not a retailer -- because it controls every aspect of the renovation (design, pricing, and which tradespeople the customer must use), it must pay sales tax…
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