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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I'm an artist who painted a custom mural on canvas panels that were installed into a train station -- is my entire charge for the artwork and installation subject to Virginia sales tax?
Yes -- because the customer's whole purpose was to end up with the physical painted canvasses installed in the building, not just to purchase the artist's creative services in the abstract, the entire…
How could a consolidated Florida corporate group calculate income and tax liability generated by its Capital Investment Tax Credit project?
Florida approved a pro forma consolidated-return method. The group would start with reported consolidated federal taxable income, make the described Florida and extraordinary-item adjustments, and app…
Could a corporate taxpayer exclude a redacted income item from Florida's sales factor through alternative apportionment?
No. The taxpayer did not present clear and cogent evidence that the standard formula taxed extraterritorial values or produced a grossly distorted result out of proportion to its Florida business. A d…
If an out-of-state company sells prefabricated (modular) home packages to Utah buyers who install them on Utah foundations, does it have to collect Utah sales tax, and which sales count as Utah sales?
Yes — even from out of state. A company that makes prefabricated/modular home packages and sells more than $100,000 (or 200+ transactions) into Utah has economic nexus and must collect Utah sales tax.…
Can a New Mexico resident claim a 2019 credit for Pennsylvania wage taxes paid years earlier when withdrawing money from a traditional IRA?
No. Harvie and Mary Beavers claimed a $902 New Mexico credit for tax paid to Pennsylvania when Harvie took a 2019 traditional IRA distribution as a New Mexico resident. Harvie had paid Pennsylvania ta…
How long did South Carolina extend its COVID-19 remote-work nexus and withholding relief in December 2021?
SC Information Letter #21-31 extended through March 31, 2022 the temporary COVID-19 relief originally stated in SC Information Letter #20-11. Under that relief, a business did not establish South Caro…
Can a quarry that mines raw material and ships it to a separate manufacturing plant get its own Tennessee industrial-machinery sales-tax exemption?
Yes — with its own registration and application. The Department concluded (in an advisory Revenue Ruling) that a quarry can qualify for the Tennessee industrial-machinery sales-tax exemption on the eq…
Did New Mexico's COVID-19 relief or force majeure excuse a hotel from penalty when furloughed staff filed its gross receipts tax return 84 days late?
No. Inn of the Anasazi closed temporarily and furloughed staff during the COVID-19 emergency, then filed its March 2020 CRS-1 gross receipts tax return and paid on July 20, 2020—about 84 days after th…
Can a corporation avoid a $62,917.63 severance-tax penalty when it paid on time but filed the return one day late during an employee's COVID-19 family emergency?
No. XTO Energy timely paid its April 2020 New Mexico oil and gas severance tax on June 25, 2020, but filed the accompanying return the next morning. The employee assigned to the filing had endured COV…
Can a New York resident recover New Mexico wage withholding for 2013 when the refund claim was filed about six months after New Mexico's three-year deadline?
No. Roy Charletta's employer mistakenly withheld both New Mexico and New York income tax beginning in 2013. New Mexico granted refunds for 2014–2016, but his June 2018 claim for 2013 was about six mon…
What South Carolina tax interest rate applied from January 1 through March 31, 2022?
The listed South Carolina tax interest rate was 3% for January 1 through March 31, 2022. It applied to tax underpayments and overpayments and was compounded daily, except simple interest applied to un…
My company mostly markets and services loans for an out-of-state bank, but a city reclassified my whole business as 'financial services' and denied my out-of-state deduction because the loan-related tax I pay is a Utah franchise tax, not technically an income tax -- is that right?
No to both of the city's moves -- the company won on appeal. A company ran an online financial wellness program from its only Virginia office, marketing and servicing loans issued by a Utah bank (abou…
I was only a minority shareholder when my corporation fell behind on its taxes, then later became the sole owner -- can Virginia hold me personally liable for taxes from before I owned the whole company?
It depends on when you actually became a 'responsible officer' under Virginia's four-part legal test -- and the answer can split by time period for the same person. A Virginia corporation was assessed…
I took a temporary federal job requiring me to live near Virginia for years and even registered a vehicle there -- does that mean I became domiciled in Virginia for tax purposes?
Not automatically -- living somewhere for work, even for years, isn't domicile unless you actually abandon your old home state with no intent to return. A federal employee took a temporary position re…
My cold storage business freezes and chills customers' food products before shipping them out -- does my refrigeration equipment qualify for Virginia's industrial manufacturing and processing sales tax exemption?
No -- a business whose predominant activity is refrigerated storage, not manufacturing, doesn't qualify, even if it also does some freezing. A Virginia cold storage company asked whether an industrial…
My cold storage business freezes and chills customers' food products before shipping them out -- does my refrigeration equipment qualify for Virginia's industrial manufacturing and processing sales tax exemption?
No -- a business whose predominant activity is refrigerated storage, not manufacturing, doesn't qualify, even if it also does some freezing. This ruling is Virginia's word-for-word duplicate publicati…
My use tax compliance ratio came out to 0% on a second sales tax audit because of heavy employee turnover during the audit period -- does that turnover excuse the penalty?
No -- employee turnover doesn't excuse a mandatory compliance penalty, though the underlying tax bill itself could still be reduced with the right paperwork. A utility inspection services company was …
Could a newly created, disregarded single-member LLC be included in its corporate owner's Florida Capital Investment Tax Credit project?
Yes. Because the taxpayer was the LLC's sole member and the LLC was disregarded for federal and Florida corporate income-tax purposes, Florida treated it as a branch or division of the taxpayer and in…
What were South Carolina's 2022 job-credit county tiers, moratorium counties, and reduced fee counties?
SC Information Letter #21-28 publishes South Carolina's 2022 county designations for the job tax credit, tax moratorium, and reduced fee-in-lieu investment. The Tier IV counties were Allendale, Bamber…
What state and county per capita income figures did South Carolina publish in December 2021?
SC Information Letter #21-27 reports South Carolina state per capita personal income of $48,021 and lists a figure for each county. The Department publishes these figures because several income, sales…
Can a corporation use alternative apportionment just because its foreign royalty income is excluded from the Illinois sales factor under the 50% test?
No. The Department denied the petition because royalties that fail IITA Section 304(a)(3)(B-2)'s 50%-of-gross-receipts test are properly excluded from the sales factor, and that exclusion alone -- wit…
Does a company that dehydrates, powders, and encapsulates a customer's own product into vitamin capsules owe Service Occupation Tax, and if so, how is the tax base calculated?
Yes. The Department concluded the company is acting as a "serviceman" under the Service Occupation Tax Act and owes tax on the tangible personal property (the capsules and packaging) transferred incid…
If my South Carolina plant is contractually obligated to deliver the goods to my customer at a point outside the state, do I owe South Carolina sales tax on that sale?
No. Under S.C. Code § 12-36-2120(36), a sale of tangible personal property is exempt from South Carolina sales tax when the seller, by the contract of sale, is obligated to deliver the goods to the bu…
A federal Civil Service Retirement System (CSRS) retiree sued Virginia a second time over its tax treatment of his pension -- what happened, and does it help anyone else make the same argument?
It was dismissed at trial before the court ever reached the merits. This is the bare Circuit Court of the City of Richmond Order in a federal Civil Service Retirement System (CSRS) retiree's second la…
Was leased airport apron space taxed as commercial real property or as paid aircraft parking and tiedown space?
The apron area used for free military-aircraft parking was subject to commercial real-property rental tax under Fla. Stat. Sec. 212.031 because the operator charged no aircraft-parking rent there. The…
Is software that guides an entire steel-building fabrication process from design through production — replacing printed blueprints — exempt from Illinois sales and use tax as 'software used to operate exempt manufacturing machinery and equipment'?
The Department did not decide whether this particular fabrication-guidance software qualifies, because a GIL cannot make a taxability determination on specific facts. Instead, it laid out the framewor…
Does an out-of-state digital advertising company owe Illinois Use Tax or Service Occupation Tax on payments it receives from Illinois-based customers for serving mobile ads that lead to app installs?
It depends on whether tangible personal property (including taxable computer software) actually changes hands. The Department explained that Illinois does not treat viewing, downloading, or streaming …
Does New York's $5 million Rehabilitation of Historic Properties Credit cap apply per structure or per application when several related historic buildings are filed on one application?
Per structure. The $5 million cap on the Rehabilitation of Historic Properties Credit applies on a per-certified-historic-structure basis, not per application. Because Tax Law § 606(oo)(1)(A) sets the…
Does an Illinois school lose its sales-tax exemption on cafeteria meals if it outsources cafeteria operations to an outside food service company instead of using its own employees?
No. The Department confirmed that a school's cafeteria sales remain exempt from Retailers' Occupation Tax under 86 Ill. Adm. Code 130.2005(b)(4)(A) even when an outside food service company operates t…
When a company installs cell-tower/telecom transmission equipment (wiring, cabling, and related materials) onto real property under time-and-materials or lump-sum contracts, is the company treated as a construction contractor subject to Use Tax, or as a retailer that must charge sales tax, and does using or acting as a subcontractor change the answer?
A firm that permanently affixes tangible personal property (such as telecom transmission equipment, wiring, and cabling) to real property is a construction contractor, not a retailer, and owes Use Tax…
Does a SaaS company owe Illinois sales, use, or service occupation tax on a free connector applet and on subscription fees for its cloud-based service?
No. The Department ruled the company owes no Illinois Use Tax on the free applet it lets customers download from out-of-state servers, and no Retailers' Occupation Tax, Use Tax, or Service Occupation …
The county estimated my business tangible property and merchant's capital tax using a PRIOR owner's sales and inventory numbers, and its final determination didn't clearly explain how it calculated my bill -- do I have to accept that?
No -- not when the locality's own explanation doesn't clearly show how it reached its numbers. A business failed to file complete business tangible personal property (BTPP) and merchant's capital tax …
I bought used business equipment from another company -- can the city value it based on what I actually paid, or does it have to use the ORIGINAL owner's purchase price when the equipment was new?
The city has to use the original purchase price paid by the FIRST owner when the property was new -- not what you paid to acquire it used. A business bought used tangible personal property from anothe…
If a former employee moved out of Illinois before receiving a back-pay settlement for wages earned while she worked in Illinois, does the employer still have to withhold Illinois income tax from that payment?
Yes. Because the back wages were earned while the employee was working in Illinois, they are allocable to Illinois and subject to Illinois withholding, regardless of where she lived when the settlemen…
Can a German government pension be subtracted from Illinois taxable income the same way a Canadian pension can?
It depends on the type of German pension. The Illinois Department of Revenue could not give a definitive answer without knowing the specific kind of 'government pension,' but explained that a German p…
Are retroactive 'catch-up' retiree healthcare subsidy payments from a City's Illinois Pension Code annuity and benefit funds exempt from Illinois income tax?
Yes, if included in federal adjusted gross income. Distributions from Illinois Pension Code annuity and benefit funds -- including retroactive 'bring current' healthcare subsidy payments -- qualify fo…
Does a non-resident Illinois taxpayer have to prorate (reduce) their standard exemption when some of their income comes from outside Illinois?
Yes. Under IITA Section 204(a), if a taxpayer's total base income is greater than their Illinois income, the taxpayer must prorate their standard exemption to account for income from sources outside o…
Are shredded tires and railroad ties that a cement plant burns as an alternative fuel exempt from Colorado sales tax under the manufacturing-energy exemption?
No, they're taxable. Shredded tires and railroad ties that a cement plant burns as an alternative fuel to reduce its coal use are NOT exempt from Colorado sales tax. The manufacturing-energy exemption…
Are airplane repair services and replacement parts exempt from Tennessee sales tax when the aircraft is based out of state and leaves Tennessee soon after the repairs?
It depends on the aircraft's size and the facts. The Department drew three lines. (1) Repair and refurbishment services performed in Tennessee on an aircraft based out of state are exempt if the aircr…
After a corporate merger, could vendors use the surviving entity's Florida direct-pay permit for contracts and purchase orders still in the merged entity's name?
Yes. The surviving corporation assumed the merged entity's contracts, debts, and tax obligations by operation of Florida merger law. Vendors could accept the survivor's valid direct-pay permit for inh…
What Illinois sales tax rate applies to a whole-food-based powdered shake mix?
It appears to qualify for the lower 1% state tax rate on food (plus applicable local taxes) rather than the higher 6.25% rate for candy or soft drinks, because the product is a powder intended to be m…
Does a software vendor's perpetual and term software license agreements qualify for Illinois' exemption from Retailers' Occupation Tax and Use Tax as a non-taxable software license rather than a taxable retail sale?
The Department did not rule on the specific licenses because it no longer issues private letter rulings on whether a particular canned-software license meets the exemption test — it considers 86 Ill. …
When are eyeglasses and eye-care charges taxable in South Carolina?
An optician's retail sale of prescription eyeglasses is taxable on total gross proceeds, including insurance payments. An ophthalmologist's or optometrist's professional charges to a patient—including…
I already claimed Virginia's historic rehabilitation tax credit on my building -- can I still claim the separate land preservation tax credit within five years if my conservation easement includes façade restrictions, as long as an appraisal shows those restrictions don't add any value to the easement?
Yes -- if a qualified appraisal actually shows the building-façade portion of the easement adds no value, the building doesn't count as part of the land preservation credit's basis, so the five-year e…
I think a circuit court improperly assessed fines and costs against me for a traffic conviction -- can I appeal that to the Virginia Department of Taxation?
No -- the Department has no jurisdiction over court fines and costs, even though it sometimes collects them. A taxpayer convicted of a traffic infraction in circuit court tried to appeal the resulting…
What wage levels must Nebraska Advantage Rural Development Act and Microenterprise Tax Credit Act applications filed in 2022 meet?
For applications filed on or after January 1, 2022: the Nebraska Advantage Rural Development Act required wage level is $16.03 per hour (up from $14.95 in 2021), and the Nebraska Advantage Microenterp…
Was a gas-station sale-and-leaseback a financing mortgage or a true lease subject to Florida commercial-rent tax?
It was a true lease, not a mortgage. The deed conveyed full title, there was no debt secured by the property, the expired repurchase right was optional and not nominal, title did not return to the tax…
Should a ready-mix concrete company's sales tax be sourced to the local jurisdiction where its plant/office takes the customer's order, or to the jobsite where the concrete is actually delivered and poured?
To where the order is taken, not to the jobsite. A ready-mix concrete producer sued the Virginia Department of Taxation, arguing its concrete sales should be sourced (for local sales tax purposes) to …
After a private club merged into an HOA, which recreational dues, membership contributions, and capital assessments were taxable admissions?
The detailed conclusion taxed recreational dues above the mandatory Social Membership level, while treating qualifying membership contributions and capital assessments paid by unit-owner equity member…
Do confusion, missed communications, and hope for a managed audit excuse gross receipts tax penalty and interest after the taxpayer misses the audit deadlines?
No. Daniel Dawes of Lighthouse Entertainment sought a managed audit after learning that gross receipts tax was overdue for 2012–2016, hoping to avoid penalty and interest. The Department rejected the …
Does Illinois cap the trade-in credit on vehicle sales and use tax, and how does the state tax leased, rental, and out-of-state vehicle purchases?
Illinois charges 6.25% state sales/use tax on vehicles (plus applicable local tax), and as of this 2021 letter capped the trade-in credit at $10,000 per first-division vehicle — but the Department fla…
My corporation's unpaid withholding tax assessment was converted to me personally as a responsible officer years after the company stopped operating -- was that too late under the statute of limitations?
No -- it was timely, because the specific three-year deadline for OMITTED taxes runs from when the return was actually filed (which was late here), not from the general filing due date the taxpayer as…
An erroneous W-2 -- possibly from identity theft -- inflated my Virginia income tax assessment, and correcting it means I actually overpaid; can I get that overpayment refunded even though I never filed a return for that year?
The Department fixed the underlying error and abated the assessment -- but the resulting refund was time-barred because no return was ever filed within the three-year window. Virginia learned from the…
I'm appealing a Virginia tax assessment and claiming I was a resident of another state, but I never actually filled out Virginia's domicile questionnaire -- what happens now?
The taxpayer gets one final chance to actually provide the information -- but simply claiming residency elsewhere, without responding to the Department's request for proof, doesn't work. Virginia lear…
My conference center's all-inclusive room-and-meal package got hit with use tax on food purchases and employee meals, my vendor's custom-table charge got taxed a second time, and the Department extended my audit period past three years -- which of these can I actually fight?
Mixed result across several issues -- the center lost on the substance of most items but won a real procedural fight over how far back (and forward) the audit could reach. A Virginia conference center…
My company sells a bundled smart-home system -- remote video, door locks, lights, controlled through our app and network -- along with our basic monitored alarm service. Is the whole bundled charge taxable as equipment, or exempt as a service?
A nontaxable service -- because customers were really paying for ongoing remote control and monitoring capability, not just to own the hardware. A security company's optional smart-home-style add-on s…
What South Carolina retirement, age-65, and military-income deductions applied under the law addressed by RR 21-13?
Under the pre-2022 law addressed by RR 21-13, an original retirement-account owner could deduct up to $3,000 of qualified retirement income before age 65 or $10,000 at age 65 and older. A South Caroli…
Did Kansas eliminate click-through nexus for out-of-state retailers, and what replaced it?
Kansas Notice 21-23 explains that 2021 Senate Bill 50 (Section 14) amended K.S.A. 79-3702 to eliminate the 'click-through' nexus provisions for affiliated persons in the compensating use tax act. Prev…
When must an out-of-state remote seller collect Kansas sales and use tax?
Kansas Notice 21-17 explains that 2021 Senate Bill 50 (Section 14) amended K.S.A. 79-3702 to expand 'retailer doing business in this state' and create an economic-nexus 'remote seller' category with a…
When must a marketplace facilitator that sells products collect Kansas sales or use tax?
Kansas Notice 21-14 explains how 2021 Senate Bill 50 (New Sections 1-4) applies to marketplace facilitators that sell products -- the first Kansas law to recognize marketplace facilitator platforms. A…
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