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 a lawn care company buy the mixer drums, pumps, pulleys, chains and engine parts it uses to blend its own fertilizer tax-free as production machinery and equipment?
No -- a lawn care company's mixer drums, pumps, pulleys, chains and vehicle engine parts used to blend fertilizer are subject to sales and use tax (and so are repairs to them), because the…
How does New York sales tax apply to a company that thermally treats and recycles contaminated soil -- on the processing charge, on transportation, on the treatment equipment and fuel, and on any reclaimed soil it later sells?
A company that thermally treats and recycles contaminated soil is performing a taxable processing service under Tax Law § 1105(c)(2) (not exempt waste removal), taxed on the full contract price…
Is the concrete foundation for a ski lift's towers and terminals covered by Utah's passenger-tramway sales tax exemption?
The tramway sale itself (chair lift, J-bar, T-bar, platter pull, rope tow, or aerial tramway) is exempt from Utah sales tax, and the Commission confirmed the concrete foundations securing the towers…
Did using a California toll-free answering service to take orders make an out-of-state retailer collect use tax?
Yes under the historical rule applied. The California service was the retailer's order-taking representative; a 1997 source note extended collection to all taxable California sales, not just…
Did a commonly owned California marketing subsidiary make a separate out-of-state catalog company collect use tax?
The 1978 letter said no on facts showing separate people, products, budgets, and operations. Later 1989 and 1997 notes changed—and then withdrew—the section 6203(f) qualification.
Did a Texas-resident servicemember owe Texas vehicle tax when registering an out-of-state purchase in Texas?
Yes. A Texas-resident servicemember registering the vehicle in Texas owed motor vehicle tax, with credit for sales tax paid to another state. The letter's separate $15 new-resident amount is…
How did California tax a single-price post-warranty agreement covering hardware service, software updates, and technical support?
The charge had to be allocated: actual hardware maintenance was nontaxable, while prewritten software updates on tangible media and mandatory support tied to them were taxable.
Did ordinary IV sets and laboratory reagents qualify as exempt prescription medicines, and could the refund claims proceed as a class?
No on the presented record. IV sets were taxable devices, reagents were applied to removed specimens rather than the body, and the proposed class and individual claims failed.
When did RP 97-5 treat delivery through a private carrier as timely filing or payment for South Carolina taxes?
A return, document, or payment qualified when the taxpayer timely gave it to a specific delivery service designated by the IRS under the federal rule. The protection did not cover an undesignated…
Does a health club need to charge sales tax on membership fees, aerobics classes, punch cards, massage, physical therapy, personal training, and tanning?
It depends on what's actually being charged for. Membership fees and any charge for use of the facility/equipment are taxable, calculated on each payment as it's made (including monthly installment…
Did a Tennessee orthodontist owe sales or use tax when purchasing corrective appliances and devices that would be attached to patients' teeth?
No. Although dentists generally are treated as the users and consumers of property used in their practices, these corrective appliances qualified for a separate exemption. The Department treated…
Is a line drawing sold to a t-shirt manufacturer, for use in its manufacturing process, taxable as graphic artwork, or can the seller accept an exemption certificate instead?
Graphic artwork -- including a line drawing -- is generally taxable under Rule 3.312. But because this line drawing is being sold to a shirt manufacturer that will use it in its manufacturing…
We're the state agency redeveloping Times Square/West 42nd Street. Private developers are leasing sites from us and financing construction through commercial lenders, with us named as mortgagee or co-mortgagee even though we have no beneficial interest in the loan. Is recording those mortgages -- and later assignments or modifications of them -- exempt from mortgage recording tax?
Exempt, while UDC remains the named mortgagee or co-mortgagee. The New York State Urban Development Corporation (UDC, doing business as Empire State Development Corporation) has been redeveloping…
Did a Tennessee computer company have to collect Tennessee sales tax on hardware repair and maintenance contracts sold to customers outside Tennessee?
Yes. The ruling treated warranty and service contracts for repairing tangible personal property as taxable services. Because the company entered into the obligations in Tennessee and performed the…
If my business only serves the federal government on a military base and I never knew I owed New Mexico gross receipts tax, can I be excused from the tax, penalty, and interest — especially when the state never gave me a straight answer?
The protest was denied. M & R Janitorial Services cleaned base housing exclusively for the federal government at Kirtland Air Force Base and, from 1986 on, simply didn't know it owed New Mexico…
If my supplier passes gross receipts tax on to me in the price of materials, can I subtract those material costs from my own gross receipts — and isn't taxing both 'double taxation'?
The protest was denied. Novick's Painting, a house-painting contractor, was assessed gross receipts tax for 1993 after it stopped being able to buy paint tax-free and started deducting the cost of…
Are membership dues taxable as club dues when a golf and country club sells memberships to the general public on a first-come, first-served basis with no proprietary rights or membership control?
No -- dues paid by members of a golf and country club are not subject to New York sales tax as club dues, because nonequity members hold no proprietary interest in the club, have no vote or control…
Is a company's telephone verification of a mortgage applicant's job, income and landlord references a taxable investigation service under New York sales tax?
No -- a company's mortgage loan verification service, which consists of telephone interviews confirming a specific applicant's employment, income and other facts at the time of the loan application,…
Was a linen company's recurring rental of reusable cloth napkins to restaurants subject to Florida sales tax?
Yes. The linen company rented tangible personal property to the restaurants, so the per-napkin rental charge was subject to the 6% tax applied in the ruling. Reusable cloth napkins were not one-time…
When did a South Carolina video-game room need its own employee under Regulation 117-190?
Each room that customers could enter and use operable machines needed a separate employee inside, even if no customer was present at that moment. A closed room or a room with inoperable machines did…
Did a sale of all LLC assets to a related new subsidiary qualify as an occasional sale when ultimate ownership matched through multiple entity levels?
Yes for the proposed transaction under counsel's assumptions. Parent-child tracing left A, B, and C with one-third ultimate interests before and after Newco's all-assets purchase, so counsel…
Could a rental agency lease replacement cars to a dealer for resale when the dealer supplied loaners during warranty repairs?
Sometimes. Required taxed-warranty and continuing-lease loaners were resale; accommodation or tax-paid-lease loaners were dealer use.
When do statutory mergers, partnership contributions, debt assumptions, and lease transfers trigger Texas motor vehicle tax?
Statutory mergers of previously Texas-titled vehicles and genuine no-consideration capital contributions generally caused no motor vehicle sales tax, while debt assumed or forgiven in exchange for a…
After a $1-title-transfer freezer contract defaulted, could the seller reverse the original tax and tax only the replacement contract?
No automatic reversal. The first and replacement $1-transfer contracts were separate sales; refund/credit or bad-debt relief required proof.
How was a freezer 'lease' with a $1 ownership transfer taxed after default, repossession, and resale?
Each $1-option contract was a sale at inception taxed on its full contract price; repossession could support bad-debt relief but not an automatic refund.
Which accounting periods applied to taxable capital and earned surplus on an initial former Texas franchise-tax report?
The corporation's normal December 31 year-end did not satisfy the taxable-capital timing test, so taxable capital used the month-end nearest the first anniversary of doing business in Texas. Earned…
Does Utah's manufacturing sales tax exemption cover a walk-in freezer bought by a frozen cookie dough manufacturer, and does it matter whether the freezer replaced an old one or expanded capacity?
It depends on whether the freezer replaced old equipment or expanded capacity -- the Commission changed its answer once the taxpayer clarified the facts. If the freezer is a normal operating…
Does a nonprofit business league that is tax-exempt under IRC section 501(c)(6) owe Utah corporate income or franchise tax?
Generally no. Organizations exempt under IRC section 501 -- including a 501(c)(6) business league -- are generally exempt from Utah corporate income and franchise tax under § 59-7-102. The one…
How did Texas tax a vehicle bought for export and accessories installed before or after the vehicle purchase?
The vehicle qualified for the export exemption only if its use was limited to removal from Texas and the buyer signed an out-of-state use certificate. Accessories added before the vehicle purchase…
Does a weekly investment research subscription that mixes stock ratings data with analytical articles qualify as an exempt periodical under New York sales tax?
Yes -- The Value Line Investment Survey, a weekly subscription publication combining stock ratings data with analytical articles by different authors, qualifies as an exempt periodical under Tax Law…
Which catalogs, conference materials, contest and seminar flyers, informational publications, and fundraising newsletters qualified as printed sales messages?
Materials promoting paid lessons or conferences qualified; a free contest, scholarship-supported seminar, mostly informational publication, and fundraising newsletter did not.
(1) Can a wholesaler accept a manufacturing exemption certificate from a grocery store buying packaging supplies it knows are used only to repackage, not manufacture, products? (2) When taxable and nontaxable items ship together for one delivery charge, how much of that transportation charge is taxable?
Two separate answers. (1) A wholesaler CANNOT accept a manufacturing exemption certificate in good faith from a grocery-store customer if the wholesaler actually knows the packaging supplies are…
Does a crane that lifts scrap metal from a metal-cutting shear to a bin for processing -- and can only be used for that one task -- qualify for the manufacturing exemption?
No. A crane (a 1993 Link-Belt Hydraulic Crawler Excavator) that's attached to a metal-cutting shear and uses a magnet to move scrap to a bin for processing does not qualify for the manufacturing…
Is an apartment locating service taxable, where the locator gets paid a referral fee by the apartment complex (not the renter) for each successful referral?
No. Apartment locating services are not taxable in Texas when the locator's fee is paid by the apartment complex for each successful referral.
Does a 5,500-gallon storage tank plumbed directly into a chemical-blending manufacturer's mixing kettles qualify for the Texas manufacturing exemption?
No. A chemical-blending manufacturer's newly acquired 5,500-gallon storage tank -- plumbed directly into its mixing kettles so material can be fed into a batch-in-process by opening a valve -- does…
How did Tennessee sales tax apply when a tax-exempt hospital division provided home I.V. therapy itself, supervised another provider, or sold drugs and equipment wholesale to other home health agencies?
The hospital division's qualifying purchases were exempt, and it did not collect tax on the two packages in which it provided or supervised home health care. In the wholesale-only package,…
Was software installed from the seller's CD directly into a customer's computer nontaxable when the seller removed its media afterward?
Yes for direct installation into permanent computer memory with no seller property left behind; writing the program onto a customer-owned disk, tape, or CD was taxable fabrication.
Does Utah sales tax apply to construction materials a non-Indian contractor buys to build a tribal health facility on reservation trust land, funded through a federal Indian-health grant?
It can be tax-free, but only if the contract was entered under the Indian Self-Determination Act or similarly comprehensive federal regulations governing the financing and construction of Indian…
Were an online classified-advertising company's listing and success fees taxable, and did it have to collect tax on sales completed directly by its users?
No. The online operation was a nontaxable service, and the company did not owe or collect tax on user sales because it never held the goods, accepted bids, transferred title, or acted as auctioneer…
Did converting a partnership and then completing two statutory mergers to move Florida real estate to a sister corporation trigger documentary stamp tax?
No. The Department concluded that the partnership conversion, both statutory mergers, and the transaction as a whole were not subject to Florida documentary stamp tax. The merger transfers had to…
Which parts of a restaurant exhaust-system pressure-cleaning job were subject to Florida sales tax?
Cleaning the exhaust stacks, attached fans, and kitchen hoods was taxable as nonresidential cleaning comparable to chimney cleaning. Exterior building and roof cleaning was exempt. The provider had…
Was electricity for a homeowners association's common areas exempt when the utility coded it as nonresidential and kept the account in the developer's name?
No. The entire electric bill was taxable because the provider coded and billed the service as nonresidential. The specific common-area exemption covered apartments, cooperatives, and condominiums…
Was a provider's lump-sum charge for insecticide applied to Florida golf-course soil subject to sales tax as a product sale?
Yes. The Department treated the transaction as a taxable sale of the insecticide to the golf-course operator, not as the separately enumerated pest-control service for nonresidential buildings. The…
Did an out-of-state lender's unilateral, unsigned, and unrecorded loan-extension notice mailed to a Florida borrower create documentary stamp tax?
No. A lender's extension notice executed outside Florida was not taxable when the Florida borrower did not sign or return it and neither the notice nor a connected document was made, delivered,…
Did a no-asset Chapter 7 discharge eliminate a California sales-tax determination that remained under a timely petition for redetermination?
No. Staff concluded the petition kept the liability from becoming due, payable, final, or assessed, and the later Chapter 7 discharge did not eliminate it.
Did ramp fire extinguishers and equipment used to load or unload aircraft passengers and cargo qualify as exempt aircraft component parts?
No. They were not attached to the aircraft and served ground loading, unloading, maintenance, or repair functions, so none of the described equipment qualified for the component-part exemption.
When shareware software is downloaded for free but the user later pays a registration fee to unlock it, is that a taxable sale in Texas, and does it matter which server the customer downloaded the software from?
Downloading shareware for free is not a taxable sale, because there's no consideration exchanged at that point. Tax Code § 151.005 defines a "sale" as a transfer of title or possession of tangible…
Did routing foreign custom furniture through an independent warehouse-carrier make the freight taxable before final home delivery?
No. The warehouse was a necessary incident of continuous carriage, not storage for the retailer or buyer, so the separately stated actual common-carrier freight stayed exempt.
Can a textile manufacturer buy the artwork and design mechanicals it uses to silkscreen or weave patterns into its products tax-free under the production exemption?
Yes -- artwork and design mechanicals a textile manufacturer buys and uses directly to silkscreen or weave patterns into products it manufactures for sale qualify for the production machinery and…
Did a licensed wholesale auto auction have to collect Texas motor vehicle tax when selling a government vehicle to an unlicensed public buyer?
Yes. When the licensed wholesale auto auction sold a government-owned vehicle to an unlicensed public buyer, it had to collect the tax, remit it to the tax assessor-collector, and file the documents…
Did off-site building components assembled into finished structures at job sites qualify as factory-built buildings for Florida sales-tax purposes?
No. The components left the factory without complete heating, air, electrical, plumbing, interior, and exterior systems, so they were tangible personal property rather than finished factory-built…
Did Florida's new exemption for mail-delivered magazine subscriptions eliminate the exemption for promotional materials sent out of state to sell those subscriptions?
No. The Department concluded that the later exemption for mail-delivered publication subscriptions did not negate the earlier exemption for promotional materials exported from Florida. The…
Must a Kansas licensed vehicle dealer collect sales tax on a vehicle sold to a Native American who lives on a reservation?
Yes, in almost all cases. This 1997 memo to Kansas vehicle dealers and county treasurers states that a Kansas licensed dealer must collect sales tax at the time of sale on a vehicle sold to a Native…
Did a foreign corporation owe the former Texas franchise tax even without a certificate of authority?
Yes. The corporation lacked authority to transact business in Texas, but it appeared to have begun doing business there in 1988 and was therefore subject to the former franchise tax. The letter…
Is developing original design specifications for a client's custom home project taxable, even though the designer isn't a licensed architect or engineer -- and how does that compare to drafting services or selling stock house plans?
Developing original specifications and producing an original design for a client -- creating, conceiving, originating, and relating the planning and specifications of a project such as a custom home…
Did a Dodge pickup with an attachment in its bed qualify for Texas's farm-machine motor vehicle tax exemption?
No. The pickup only had an attachment in its bed; the vehicle itself was not specially adapted or modified. An electrical hookup was not enough, and a qualifying vehicle also had to be used…
Which electricity customers qualified for Florida's residential-use exemption, including employee housing, RV sites, vacation homes, and hunting lodges?
Employee housing, second or vacation homes, and winter residences qualified when used residentially. A private hunting lodge qualified only if it was not rented. Electricity billed to an RV park was…
What rate and daily-compounding factor applied to DISC-related deferred tax for the period ending September 30, 1996?
For the period ending September 30, 1996, the base-period T-bill rate was 5.51%, and the listed annual rate compounded daily using 365 days was 5.648%. Generally, taxpayers used the 365-day factor;…
Could a parent reduce its former Texas taxable-capital basis after liquidating a subsidiary whose charter remained active?
No for taxable capital. Because the subsidiary's charter remained active, Texas did not recognize the liquidation or adjust the parent's cost-method investment basis on its 1997 report.…
How did RP 97-4 adjust the 1995 school-operating millage for South Carolina property-tax-relief funding in a reassessment year?
The procedure divided the prior year's qualifying residential value, capped at $100,000 per home, by the reassessment year's comparable value excluding new construction, then multiplied that ratio…
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