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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Is Texas sales tax due on fees for recovering or removing freon/refrigerant gas from air conditioners, refrigerators, and vehicles?
No, in the situations described. **The Comptroller ruled that a $5 fee for removing refrigerant gas from a dropped-off appliance is not taxable, and none of the described refrigerant recovery labor ch…
Was a Florida collector's contribution of a lien-encumbered art collection to a controlled family limited partnership subject to sales tax?
Yes. The collector admitted art sales could occur three or more times in 12 months, including through out-of-state brokers, so the occasional-sale exemption failed. The partnership was a separate pers…
Were monthly telephone wellness-check and reminder services subject to Florida sales tax?
No. Automated or mechanical calls asked subscribers to confirm they were well, alerted designated contacts after no answer or a request for help, and delivered verbal reminders. The company installed …
Does a company's new regional distribution center — one that wholesales motor vehicle parts and supplies to the company's own retail stores — qualify as 'private use industrial property' so it can get an Alabama tax abatement under the 1992 Tax Incentive Reform Act?
Yes. Company A, a Virginia corporation, planned an ~$8,000,000 regional distribution center in Gadsden — owned by a public authority and leased to the company — to wholesale motor vehicle supplies, ac…
Is a charge for the use of a transportable miniature golf course taxable as an amusement service, or as a rental of equipment?
It's taxable, but as a rental, not as an amusement service. **The total charge for a transportable miniature golf course is subject to sales tax under Rule 3.294(b) as the lease or rental of tangible …
In a bond-financed sale-leaseback structure with a city industrial development agency (IDA), are a corporate tenant's affiliate's purchases, leases, and maintenance contracts -- made as the IDA's disclosed agent -- exempt from state and local sales and use tax?
Yes, generally -- purchases, leases, and maintenance/repair/service contracts entered as the IDA's disclosed agent are exempt from sales and use tax as long as the IDA is the true owner/lessor/lessee …
Would Florida impose additional stamp or intangible tax when property was conveyed to a partnership already liable on the note and the partnership later renewed it?
No additional documentary stamp tax was due on the partnership's later renewal if the individual and partnership were both original obligors and every requirement of the renewal exemption was met. No …
Did an out-of-state municipal fund with no Florida office, people, or property owe Florida corporate or intangible taxes?
The separate fund itself owed neither tax on the stated facts. Its shares were fully exempt from the historical intangible tax only when the valuation-date portfolio was entirely exempt; otherwise onl…
Which LoanLiner open-end loan forms were subject to Florida documentary stamp tax?
The signed Advance Request Voucher and Security Agreement was taxable on the amount labeled total payment for all accounts. The Subsequent Action Form was taxable only when its extension agreement was…
Were an open-end credit agreement, advance request, or lender-issued funds voucher subject to Florida documentary stamp tax?
No. No submitted form contained the complete combination of a written promise to pay, a sum certain, and the borrower's signature. The agreement had the promise and signature but no stated sum; the re…
Which county's discretionary surtax applied when a furniture wholesaler delivered a retailer's sales directly to Florida customers?
Under the pre-1994 rules, the answer depended on the retailer, wholesaler, and customer counties, but the retailer always collected. A non-surtax wholesaler triggered surtax only when retailer and cus…
What motor vehicle tax changes did Texas announce in 1993 for seller-financed sales, EMS vehicles, and mobile offices?
The notice required self-financing dealers to obtain permits and collect tax as payments arrived beginning October 1, 1993; expanded the EMS-vehicle exemption beginning September 1; and moved office, …
Under South Carolina PLR 93-5, were sales of Lupron exempt when dispensed by a pharmacist or sold by the manufacturer to a physician for administration?
A licensed pharmacist's sale of Lupron under a medical professional's prescription was exempt. LOP's sale to a physician who would administer the drug was taxable because the doctor was the consumer a…
Can a business that charges sales tax on gift-wrapping issue a resale certificate to buy its gift-wrap paper, ribbons, and boxes tax-free?
No. **Sales tax is due on the purchase price of gift-wrapping supplies (paper, ribbons, boxes) bought by a business that provides gift-wrapping services, even though that business separately collects …
Is a company's on-line and archival data storage service a taxable computer and data processing service in Connecticut?
Partly. A division of a large out-of-state corporation stored Connecticut customers' data at out-of-state facilities, both on-line (customers access it from their own computers) and archival (data cop…
Could a parent corporation succeed to a Florida LLC's approximately $3 million net operating loss when the LLC merged into the parent?
Yes, if the merger would have qualified under IRC section 381 had the LLC been a corporation and Florida applied the same federal-style limitations to the loss carryovers and other tax attributes. The…
Which association charges for trade shows, tournaments, meetings, auctions, seminars, dinners, and publications were subject to Florida sales tax?
The results varied by transaction. Trade-show and auction admissions, free-facility tournament participation, taxable entertainment admissions, and publication sales were taxable. Qualifying trade-sho…
Were an airport advertising company's concession payments and the amounts advertisers paid to use its display units subject to Florida sales tax?
Yes. The company's concession fee was taxable consideration for a license to use airport real property, and advertisers' payments were taxable consideration for renting or licensing tangible personal …
We're a securities broker-dealer buying two office buildings for our headquarters. To avoid putting $500 million of real estate and debt on our own balance sheet -- which would reduce our regulatory net capital under broker-dealer rules -- the seller will transfer title directly to a financing trust instead of to us. The trust will fund the purchase with senior notes, junior notes, and investor certificates, then lease the buildings back to us with a purchase option we can exercise anytime. We'll pay all taxes, insurance, and maintenance, keep all appreciation, bear all depreciation risk, and be treated as the owner for income tax purposes (though not on our own books). None of the financing mortgages will be recorded unless our parent company's credit rating drops. Does this financing structure trigger New York's Real Estate Transfer Tax, Real Property Transfer Gains Tax, or Mortgage Recording Tax at any step?
Exempt at every step described -- Smith Barney, Harris Upham & Co. structured an off-balance-sheet financing purchase of two Manhattan office buildings (388 and 390 Greenwich Street) so that beneficia…
Is removing or replacing an underground storage tank (UST) taxable in Texas, and how are the related excavation, hauling, disposal, and installation charges taxed?
It depends on which service is being performed. Excavating and removing a UST (to dispose of it or replace it) is nontaxable demolition of an improvement to real property, but hauling away and disposi…
Was a Medicare Part B contractor's purchase of scanning equipment, software, and a maintenance agreement exempt as a federal-government purchase?
Mostly no. The contractor was an independent taxable entity, not a federal instrumentality, so its equipment, noncustom software, and maintenance agreement were taxable even though federal funds reimb…
When are Texas motor vehicle rentals to public agencies or government employees exempt, and what state-employee rule was later clarified?
Direct rentals to a public agency were exempt. STAR later replaced the letter's blanket denial for state employees: an employee on official business may use an exemption certificate for a rental under…
How does the change to Sec. 151.311, Tex. Tax Code, affect materials and supplies purchased under construction contracts entered into before and after October 1, 1993?
It depends on when the contract was signed and when the item was purchased. **The Comptroller approved the taxpayer's revised contract language referencing Sec. 151.311, Tex. Tax Code, for contracts e…
Does a bill of lading alone count as proof that goods were exported for a Texas sales tax export exemption?
No, not by itself. **A bill of lading that lacks sufficient detail does not prove the goods were exported, and the Comptroller will not accept a sworn statement made after the fact as a substitute.** …
Were sales and rentals of therapeutic specialty hospital beds to hospitals or individual patients subject to Florida sales tax?
Sales and rentals to hospitals were taxable unless the hospital presented a valid Florida Consumer's Certificate of Exemption at the transaction. A direct sale or rental to an individual patient for u…
Was an individual's transfer of a lien-free recreational vehicle to the individual's revocable trust subject to Florida sales tax?
No. Florida treated the trust as a separate person and the title change as a transfer, but it was not a taxable sale because the trust paid no consideration and assumed no lien. The transfer qualified…
Did a motel avoid Florida sales and tourist development taxes by having guests sign agreements lasting slightly longer than six months?
No. Read together, the guest registration, 185-day transient agreement, and motel rules created a taxable transient stay, not a bona fide longer-than-six-month lease. The documents rejected a landlord…
Were charges for carrying passengers and vehicles between two ports on an owner-operated, crewed ferry subject to Florida sales tax?
No. The ferry charges were consideration for the nontaxable service of transporting people or property from one port to another while the owner controlled the vessel and crew. Separate sales of taxabl…
How did Florida's former intangible tax apply to out-of-state investment funds, hub trusts, and shareholder units backed by exempt government obligations?
The out-of-state funds and hub trusts owed no entity-level intangible tax because they lacked Florida taxable situs and commercial domicile. Shareholder units were fully exempt when the underlying por…
Did an out-of-state manufacturer lose Public Law 86-272 protection when its Florida employee regularly worked from a desk in a customer's office?
This original ruling said yes: the employee's regular use of a desk in the purchaser's Florida office amounted to maintaining an in-state office, so the manufacturer had to file a Florida corporate re…
Which document in a lender's open-end LOANLINER package was subject to Florida documentary stamp tax?
Only the signed Advance Request Voucher No. VST004 6826LL was taxable because it contained the required written promise to pay a sum certain. Tax was based on the voucher's stated new balance; the oth…
Were rental-income insurance proceeds paid to shopping-center landlords after Hurricane Andrew subject to Florida tax on commercial rent?
No. Insurance proceeds paid to the landlords while the damaged property was unfit for occupancy were not taxable rental income because the insurer, not a tenant, paid them and they were not considerat…
Is cleaning acoustical tile ceilings a taxable service in Texas, and does the cleaning company owe tax on the cleaner it buys?
Yes to both. **Cleaning acoustical tile ceilings is a taxable building cleaning service, and the company is correct to charge its customers sales tax on the service.** The letter also confirms the com…
Is electricity used to dig a flood-drainage tunnel and haul the dirt and rock to the surface exempt from Texas sales/use tax under the gas-and-electricity extraction exemption?
No. The Comptroller's Taxability Response Committee ruled that a contractor building a flood-drainage tunnel is not entitled to the Sec. 151.317(c)(2)(A)(ii) gas-and-electricity exemption on the elect…
Which assets in the sale of a phosphate business qualified for Florida's resale or occasional-sale exemptions?
Inventory and salvage property held for resale were exempt if the buyer timely gave the seller a proper resale certificate. Mining, processing, and distribution equipment qualified as an occasional or…
Alvin Nathel, a shareholder of an S corporation that never made New York's separate S-corporation election, failed for years to claim the offsetting subtraction that would have kept his corporation's income from being taxed twice - once at the corporate level and again on his personal return. By the time he discovered the error, the ordinary refund deadline had passed for the earlier years. Can the Department use its discretionary special refund authority under Tax Law § 697(d) to refund those time-barred years anyway?
No. The Department ruled that Nathel's error was a mistake of law, not a mistake of fact, because he understood all the relevant facts (that Wishnatzki was a federal S corporation, that its income pas…
Can Robert J. and Barbara Hanrahan get a 1988 New York income tax refund for tax they mistakenly paid on pension income that should have been excluded, when they only asked for it in 1993, after the ordinary refund deadline had passed?
No. New York denied the refund for two independent reasons: (1) the ordinary three-year refund deadline under Tax Law § 687(a) for the 1988 tax year had already expired by the time the Hanrahans reque…
Could short condominium rentals qualify for Florida's longer-than-six-month transient-rental exemption based only on an oral lease?
No. Even if an oral lease was otherwise valid, Florida's tax exemption expressly required a bona fide written lease longer than six months. Condominium rentals lasting less than six months and lacking…
Did natural gas used to control the drying rate of paint qualify for Florida's manufacturing boiler-fuel exemption?
No. The Department said the boiler-fuel exemption required the burned fuel to produce a change in the composition of tangible personal property made for sale. Using natural gas only to make paint dry …
How did Florida's former intangible tax apply to an out-of-state business trust, its fund, and shares backed by government obligations?
The trust and fund owed no entity-level tax because they had no Florida presence. Fund shares were fully exempt with an all-exempt portfolio; a mixed portfolio left the nonexempt portion taxable. The …
Were shares of a Massachusetts investment trust exempt from Florida's former intangible tax when its portfolio held government obligations and cash?
The shares were fully exempt when the trust's entire portfolio consisted of exempt Florida, U.S.-government, agency, territorial, and cash-equivalent assets. If the trust held nonexempt securities on …
How does the October 1, 1993 change to Tax Code Section 151.311 affect sales tax on contracts for construction of public roads and highways?
Effective October 1, 1993, contractors on public road and highway construction contracts go back to being taxed the way they were before October 1, 1991, regardless of whether the contract separately …
Are transportation or mileage charges billed in connection with repairing a motor vehicle, its components, or accessories subject to Texas sales tax?
It depends on what's being repaired or sold. **Transportation charges tied to repairing a motor vehicle (including its components or accessories) are not taxable, and towing is not taxable, regardless…
Can a monthly 'recurring credit' on a taxable service contract be subtracted from the amount subject to sales tax?
No. A travel agency's contract for American Airlines' SABRE system gave it a fixed monthly 'recurring credit' of $610 tied to hitting a booking target. The Department found this was not a true discoun…
Is the membership fee for an auto club roadside assistance plan (towing, out of gas, flat tire, lockout, travel expense reimbursement) subject to Texas sales tax?
No. **The Comptroller responded that the membership fees for this auto club's roadside assistance plan are not taxable.** The letter told the auto club that if it had been collecting tax from members …
Does a for-profit art college's photography, film, and computer equipment qualify for the Article 9-A investment tax credit?
No. A for-profit college of visual arts cannot claim the Article 9-A investment tax credit on its photography, film, video, and computer-graphics equipment. The credit under Tax Law section 210.12 is …
Is a crane or hydraulic excavator mounted on a truck chassis exempt from Connecticut sales tax as a 'commercial truck'?
Only if it mainly hauls freight. A company sold and leased cranes and hydraulic excavators mounted on truck chassis, each rated over 26,000 pounds and highway-capable. DRS held such a vehicle is exemp…
If a direct pay permit holder buys items and has them shipped straight through a central receiving point to plants in other cities without storing them, which city's local use tax is due?
City use tax is due to the city where the items are actually used or consumed after transportation, not the city where they passed through a central receiving point. **If items are purchased and recei…
Are purchases made with WIC benefits or food stamps, including for candy or sodas, subject to Texas sales tax — and how does a manufacturer's coupon used alongside them affect the tax?
No tax is due on the WIC- or food-stamp-paid portion of a purchase. Purchases made through the WIC program or with food stamps are not taxable — this includes candy, sodas, or other otherwise-taxable …
Are charges by caricature artists for drawings made at parties or events subject to Texas sales tax?
Yes. **Caricature artists create and sell tangible personal property, the same as other artists or photographers, so their charges are taxable** — even if the charge is figured on an hourly rate or so…
Is the removal and disposal of drilling mud by a vacuum truck company taxable in Texas?
It depends on why the drilling mud was generated. If the drilling mud is a waste product resulting from the exploration, development, or production of oil, gas, or geothermal resources, the vacuum tru…
Does a temporary staffing agency that places lawyers, paralegals, legal secretaries, file clerks, and data processors with law firms need a sales tax permit?
It depends on what the temporary workers do. The letter explains that charges for lawyers and paralegals are not taxable, and legal secretaries and file clerks performing general clerical or secretari…
Which charges by a moving company for relocating household goods (transportation, packing, boxes, storage, disassembly/reassembly) are taxable in Texas, and which are not?
It depends on the specific charge. Interstate transportation charges are exempt, and intrastate transportation charges are nontaxable. Carrier-supplied boxes/containers are taxable tangible personal p…
Are business management services a Connecticut company sells to out-of-state clients taxable when the clients do no business in Connecticut?
No. A Connecticut-headquartered parent corporation's only business was providing 'business analysis, management, management consulting and public relations services' (Conn. Gen. Stat. § 12-407(2)(i)(J…
Did a county's revised direct-purchase procedure exempt construction materials for a public facility from Florida sales tax?
Yes. The county issued its own purchase orders and exemption number, paid vendors directly, took title on delivery, reduced contractor prices by the purchases and tax savings, paid bond and insurance …
Is a marketing/information service that gathers leads from public sources and sells them to a specific client exempt as proprietary information?
No, it is taxable. **Marketing leads or research prepared for and sold to a specific client are a taxable information service, even if the provider agrees to sell only to that one client.** The letter…
When a kit or package combines taxable and exempt medical items, how is sales tax figured on the kit as a whole?
It depends on which items cost more. **When a kit or package of medical items is sold, the composite cost of the kit's items determines the taxability of the whole kit: if the cost of the taxable item…
Is a dockside grain processing terminal project exempt from Texas sales and use tax?
Partly. The Comptroller ruled that materials used to build the dock extension and warehouse are exempt under Sec. 151.311, Tex. Tax Code (once the property becomes the ports' property, after October 1…
Does a Texas restaurant owe sales tax on a one-dollar fee charged to customers who bring in their own food?
No. **A restaurant does not owe Texas sales tax on a flat fee charged to customers who bring their own food, because no sale of tangible personal property occurs with regard to that fee.** The letter …
Must a manufacturer collect sales tax on orthopedic braces and splints that normally qualify as exempt medical equipment?
Sometimes yes. Orthopedic devices such as braces, splints, cervical collars, and supports qualify as exempt medical equipment under Tax Law section 1115(a)(3). But that exemption does not apply to med…
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