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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We're a nonprofit local development corporation that makes business loans secured by mortgages, and we record those mortgages ourselves. Is that exempt from New York's mortgage recording tax, whether we're the one giving the mortgage or the one receiving it?
Exempt, both directions -- mortgages given TO the corporation and mortgages given BY it. This is a foundational, general-purpose ruling establishing that Not-For-Profit Local Development Corporations …
Is a charge to inspect used oil-well casing pipe (checking threads and drift) taxable if it isn't tied to a sale of the pipe?
No, it's not taxable. **A charge for inspecting tangible personal property — like used casing pipe for a new oil well — is not taxable as long as the inspection is not related to the sale of that prop…
Is the labor to cut and bevel the production casing on a newly completed oil well taxable under Texas sales and use tax?
No. Cutting off the extra casing and later beveling it while completing a new oil well is treated as new construction, so the welder's labor is not taxable. Because the welder billed a single lump-sum…
Did Kansas bingo licensees collect sales tax or bingo enforcement tax on instant bingo tickets?
Kansas bingo licensees selling instant bingo tickets, or pull tabs, had to collect Kansas state and local retailers' sales tax on those sales. The instant tickets were not subject to the separate 3% b…
Does a 'Material Reimbursement Charge' (also called a 'Texas Price Adjustment' charge) that a well-services provider adds to its invoices to recover sales tax it paid on materials used in a nontaxable service violate Rule 3.324(b)(3)(4)?
No. The Comptroller confirmed that the taxpayer's 'Material Reimbursement Charge' — a separate line-item charge used to recover additional product costs incurred because the taxpayer paid sales tax on…
When a sign company designs, manufactures, and installs signs, when is the job treated as an improvement to realty versus a sale of tangible personal property, and how does that affect sales tax?
It depends on the type of sign and how it is attached. Most signs (since May 1988) are treated as real property, so if the sign company acts as a lump-sum contractor it pays tax on materials and does …
We're modifying a mortgage so that accrued-but-unpaid interest gets deferred and paid as a fixed lump sum at maturity, without bearing its own interest and without being added to the principal balance. Does that modification trigger additional mortgage recording tax?
No additional tax -- but the details of HOW interest is deferred matter enormously, and this ruling draws a precise line. Ticor Title Guarantee Company asked whether modifying a mortgage to defer accr…
Did Florida require a stock transfer agent to file the customer position statements required from registered securities broker-dealers?
No. Section 199.062(3) required registered securities broker-dealers holding customer securities to file position statements. A transfer agent acted only as the recordkeeper rather than the seller of …
Were a surgical hemostat, a blood-analysis stain, and medicated pre-surgery scrubbrushes exempt from Florida sales tax?
The hemostat was exempt because a licensed practitioner incorporated it into the patient, and the B-R-I blood stain was an exempt diagnostic chemical compound. The medicated scrubbrushes were taxable …
If a contractor performs lead-paint abatement (a taxable repair to real property) and also does air monitoring for the same job, is the air monitoring taxable too, and what about the disposal of contaminated materials?
The repair/remodeling work (paint removal, repainting, and related repairs) is a taxable service, but air monitoring is not taxable when it is a stand-alone service involving direct scientific observa…
Did South Carolina PLR 93-4 exempt a commercial fisherman's retail oyster sales as farm products?
Yes, but only for oysters the fisherman cultivated and harvested in his own shellfish-culture permit area and sold in their original state of production or preparation. Oysters harvested from state-ma…
If a motor vehicle repair shop separately states a charge for shop supplies on a customer's bill, is the shop the 'seller' of those supplies and required to collect sales tax on them?
Yes. This internal Comptroller memo confirms that, effective October 1, 1991, a motor vehicle repair person who separately states a charge for shop supplies (tangible personal property) is a seller of…
If I provide nontaxable mailing/packaging services (boxing, padding, and shipping items for customers) and pay tax on my own packaging supplies, do I have to charge my customers sales tax on the box, packing materials, labor, and shipping charges?
No. Because mailing services are a nontaxable service, the provider (not the customer) owes sales tax on packaging supplies purchased from suppliers under Rule 3.314(c). In both examples given -- one …
A partnership owes $30 million on a nonrecourse mortgage loan, secured by real property worth $10 million plus a $50,000 cash account the bank also has a security interest in. The partners personally guaranteed part of the debt. If the partnership transfers everything to the bank in lieu of foreclosure -- or the bank forecloses and is the winning bidder -- in exchange for cancelling the debt and the guarantees, what's the 'consideration' for New York's Real Property Transfer Gains Tax, and does it matter whether the loan was recourse or nonrecourse?
For a transfer occurring before April 15, 1993, the consideration was the amount of debt cancelled, apportioned to reflect only the real property's share of value -- and the answer was the same whethe…
Which costs entered the Florida use-tax base when a road contractor excavated its own fill dirt from owned or leased borrow pits?
The base included land acquisition and costs attributable to clearing, site access, excavation, inbound mobilization, mining, and loading labor, fuel, and repairs. Loader equipment itself and reclamat…
Is beaver trapping and dam removal on timberland taxable as a structural pest control service?
No. The Comptroller ruled that beaver trapping and removal services performed to stop beaver dams from flooding East Texas timberland are not taxable as structural pest control services. Structural pe…
Is a glamour photography studio's session fee (covering wardrobe, makeover, and a private photo session) taxable, even if the customer receives no tangible personal property at the session and only orders photographs — if ever — at a later date?
Yes, the session fee is taxable. The Comptroller ruled that the session-fee services (wardrobe, makeover, private photo session) are part of the sale of any photographs, image copies, negatives, or pr…
Are massage services by a New York State licensed massage therapist subject to New York City and New York State sales tax?
They are taxable for New York City but not for New York State. New York City taxes massage services under Tax Law section 1212-A(a)(2) and NYC Administrative Code section 11-2002(h). Those laws exclud…
Is a power lift recliner exempt from sales tax as medical equipment?
No. A power lift recliner sold by a retail furniture store does not qualify as exempt medical equipment under Tax Law section 1115(a)(3). To be exempt, equipment must be primarily and customarily used…
Are chocolate-covered cookie bars like PB Max and Twix taxed as candy or exempt as food?
It depends on how they are packaged, marketed, and sold. PB Max and Twix are chocolate-coated wafer cookie bars. When sold in family packs and advertised, marketed, and sold as packaged cookies or sna…
Does an orthotist owe sales tax on braces, canes, crutches, and walkers it buys, and is fitting a brace a taxable medical service?
No, the purchases are exempt, because the orthotist is not performing a medical service. Braces (with component parts), canes, crutches, and walkers are exempt medical equipment under Tax Law section …
When a cable TV company adds new cable lines to utility poles, is that remodeling or new construction — and does it matter whose poles the lines are being attached to?
It depends on whose poles are involved. This internal Comptroller memo concludes that when a cable company adds new lines to poles it already owns, that is remodeling, consistent with prior guidance (…
Is dredging dirt, mud, silt, and sand out of a boat slip or waterway taxable as real property repair/remodeling, or exempt as new construction, and is the fee charged for disposing of the dredged material at a spoils facility taxable?
It depends on what is being dredged. Dredging to create a brand-new slip or dock (as part of new construction) is new construction labor and is NOT subject to sales tax. But dredging an existing man-m…
Is a Section 468B escrow settlement fund subject to New York franchise or personal income tax, and will New York waive penalties as the IRS did?
No tax is due, and the penalty question is moot. The SEC v. Vaskevitch escrow fund, treated as a qualified settlement fund under Section 468B, is not subject to New York franchise tax or New York Stat…
Which systems for a new cogeneration plant qualified for Florida's machinery exemption for producing electrical or steam energy?
The Department applied the integrated-plant approach system by system: production machinery, mandated pollution controls, generation controls, fuel, steam, turbine, and many water systems qualified wh…
Is a paper-and-pencil personality profile testing service, used by employers to screen job applicants for honesty and suitability, taxable in Texas as a security service?
Yes, currently — but that changes soon. The Comptroller confirmed that a client's paper-and-pencil personality profile testing service is taxable as a security service under Rule 3.333(a). However, ef…
Were shares of a Massachusetts business trust fund exempt from Florida's former intangible tax when its portfolio held exempt government assets?
The shares were fully exempt when the portfolio consisted solely of exempt Florida municipal, U.S.-government or agency, territorial, and cash-equivalent assets. If the fund held nonexempt securities …
Were equipment master leases and separate schedules or acceptance certificates subject to Florida documentary stamp tax as written obligations?
No. Examined as separate documents, none contained a presently enforceable written obligation to pay money. The master agreements made rent contingent on the lessee's later equipment acceptance, while…
Was documentary stamp tax due when a partnership distributed property to a partner who had not contributed it, even if no mortgage appeared of record?
Yes, to the extent of consideration. For a post-July 1990 conveyance to a partner who had not contributed the property, consideration included any mortgage or other encumbrance on the property whether…
If a manufacturer buys back equipment from a customer under its own satisfaction guarantee (separate from the retailer's original sale), can the retailer refund the sales tax it collected, or can the retailer get that tax refunded from the state?
No. The Comptroller ruled that the doctors were not due a refund of the sales tax paid to the equipment retailer, and if the retailer refunds the tax to the doctors anyway, the Comptroller will not re…
Is a two-hour boat trip to watch dolphins in the wild a taxable amusement service in Texas?
Yes. The Comptroller ruled that a two-hour dolphin-watching boat trip on the Gulf of Mexico (with no food or drinks provided) is a taxable amusement service under Rule 3.298, because the trip does not…
Our company's Employee Stock Ownership Plan (ESOP), an ERISA-covered retirement plan, owns nearly all the stock of our company, which itself holds leasehold interests counting as New York real property. If the ESOP sells all its stock in the company for $100 million allocable to that real estate -- a controlling-interest transfer -- does New York's Real Property Transfer Gains Tax apply?
The gains tax would otherwise apply, but ERISA preempts it as long as the selling entity remains an ERISA-covered employee benefit plan. Avis, Inc.'s Employee Stock Ownership Plan (Avis ESOP), created…
A husband and wife subdivided lakefront land into lots, sold four, and later put the remaining nine lots into a family trust for estate planning, gradually gifting beneficial interests to their children. When the trust liquidates and distributes the lots to all nine beneficiaries proportionally, does New York's Real Property Transfer Gains Tax apply to that distribution, and are the beneficiaries' later individual sales of their lots aggregated with each other for the $1 million threshold?
The trust's liquidation and distribution of lots to its nine beneficiaries counted as a taxable partition, with all the beneficiaries' shares aggregated to test the $1 million threshold -- but each be…
Was a vehicle lessor's transfer of about 15,000 leased vehicles to a new wholly owned subsidiary subject to Florida sales tax?
The transfer was a sale, including the capital-contribution portion, but not a taxable retail sale because the registered subsidiary acquired the vehicles exclusively to continue leasing them. The par…
Did a tenant's early departure make a good-faith written lease longer than six months taxable under Florida's transient-rental rules?
No. A signed written agreement made in good faith for continuous occupancy longer than six months qualified as a bona fide lease. Later default or early departure did not make its rent taxable unless …
Were assembled crab traps and their parts exempt when sold to commercial fishermen in Florida?
Generally no. The exemption for fishing nets did not extend to assembled crab traps or trap materials. The sale could avoid full tax if it was for resale with a proper certificate or if the fisherman …
Our eight-unit condominium (each unit is a two-family semi-attached house with its own 12.5% interest in the shared common elements/yards) wants to terminate the condominium declaration entirely. Under our plan, all eight owners would first become tenants-in-common in the whole property, then each owner would receive a deed from the other seven conveying their combined 87.5% share of that owner's home-and-yard, so each owner ends up owning 100% of just their own unit and yard outright (no more condo regime). No money changes hands since everyone's share is roughly equal in value. Will this termination-and-partition trigger New York's Real Estate Transfer Tax or Real Property Transfer Gains Tax? And if the gains tax applies, is each owner's 'consideration' measured on the increase in their property's value, and do all eight owners' shares get combined to see if we cross the $1 million threshold?
Mixed result -- the condominium termination itself is fully exempt from both taxes, but the follow-on exchange among the individual owners is a separate, potentially taxable event for gains tax purpos…
How does New York sales tax apply to selling, leasing, and using a medical PAP-smear screening device and a slide-scanning service?
It depends on the transaction and delivery point. Selling or leasing the 'Classifier' device to a New York laboratory that uses it in performing medical services for compensation is taxable, because t…
Could a licensed interstate carrier prorate Florida special-fuel tax when dedicated owner-drivers bought fuel and the carrier reimbursed them separately?
Yes. The carrier qualified on the stated facts because it was a licensed special-fuel dealer and interstate carrier, the trucks operated exclusively under its direction and license, fuel was directly …
For a company that has fixed places of business in some cities but also sells from mobile trucks that travel to customers around the state, is local (city/county) sales tax on the truck sales based on the truck's location when the sale happens, or on the company's place of business that supplies/dispatches the truck?
Local (city and county) sales tax on sales made from the trucks is based on where the truck is when the sale actually happens — that is, the location where the customer looks over the merchandise, sel…
Who owed Florida's former intangible tax on interests and assets in a nonprofit hospital corporation's pooled-income fund?
The donor's life interest was exempt, and the nonprofit corporation had no intangible-tax liability for its remainder interest. The nonexempt trustee was subject to tax while holding the trust corpus …
Did the original ruling impose documentary stamp tax when spouses deeded their own encumbered interests to their separate revocable trusts?
The original ruling said no when each grantor retained control and was the sole lifetime beneficiary, though a deed reciting $10 and other valuable consideration owed the stated $0.70 minimum tax. The…
Were a signed LoanLiner credit agreement and advance-request security form subject to Florida documentary stamp tax?
No. Although both forms were signed by the borrower, neither contained a written promise to pay a sum certain in money. They therefore failed the document requirements for tax under section 201.08(1).
When a Texas repair shop services foreign (Mexican) aircraft — repairing, remodeling, or installing parts and engines — is the labor or the parts subject to Texas sales tax?
Separately stated labor charges to repair, remodel, restore, or maintain aircraft are not subject to Texas sales tax, whether the aircraft is foreign or domestic. Aircraft repair and replacement parts…
Could a Texas vehicle rental company pass county property tax to customers, and was the reimbursement subject to rental tax?
The rental company could recover the cost, but could not tell customers they owed county property tax because only counties collected that tax. Any reimbursement was part of the rental company's taxab…
Is maid/janitorial service provided by a condominium property management company's own employees exempt from sales tax as an employee-wage exclusion, when the cost of that service is bundled into the management company's overall rental commission rather than billed separately?
Generally no. The Comptroller ruled that the maid service employees provide to condominium owners and guests is a taxable real property service, and the wage-exclusion exemption in Rule 3.356(n)(1) do…
Are fenders used by a lightering workboat to protect tankers during a lightering operation exempt from Texas sales tax as a component part of the vessel, even though the fenders are not physically attached to the boat?
Yes. The Comptroller ruled that the fenders (Yokohama Fenders) are an integral part of the lightering workboat and will be considered a component part of the vessel even though not physically attached…
Which products in a diet program were exempt from Florida sales tax, and which reducing product was taxable?
The product name redacted in the ruling and Healthi-Snax were exempt dietary foods, and NRG Plus was an exempt vitamin-mineral food supplement. One Day Diet Chews were taxable because the Department c…
Did South Carolina PLR 93-3 require a petroleum-hauling coordinator that leased trucks and used independent drivers to apportion income as a motor carrier?
Yes. Although independent contractors owned and drove the trucks, APC leased them, solicited and coordinated hauling, insured the vehicles, and billed customers, so it was a motor carrier required to …
If a bank writes off a customer's unpaid credit-card balance and recourses (charges back) the uncollectible amount to the vendor, can the vendor claim a sales tax bad debt credit?
Only in one of the two scenarios described. A vendor cannot take a bad debt credit just because a bank identifies and recourses the sales tax portion of a written-off account back to the vendor — tax …
Did Florida trustees, beneficiaries, a ministerial service company, or a Florida investment account give an out-of-state trust taxable Florida situs?
No. The testamentary trust remained outside Florida, the service company had no discretionary authority, the advisor followed strict investment limits, and the beneficiaries lacked the defined current…
Is the compensation a receiving racetrack pays a sending racetrack for simulcasting a horse or dog race, for wagering purposes, subject to Texas sales or use tax?
Yes. The compensation (fees or commission) a receiving racetrack pays a sending racetrack for simulcasting a race — the live audio/video transmission of a race from a sending track to a receiving loca…
If a company places copy machines at retailer locations and charges a monthly fee based on the number of copies sold, is that a lease of the copier, and can the retailer buy paper and toner tax-free with a resale certificate?
Yes, it is a lease. The Comptroller confirmed that a company placing copy machines at various business locations and charging a monthly fee based on the number of copies made (here, 5 cents per copy, …
Is soil aeration (core plugging) performed on golf courses and athletic fields by an independent contractor a taxable service in Texas?
Yes. The Comptroller ruled that punching holes in the soil to aerate turf is "lawn maintenance" as defined in Rule 3.356(a)(5), even if the contractor does not fill the holes afterward. Charges for th…
Is a Section 468B qualified settlement fund subject to tax under Article 9-A or Article 22 of the New York Tax Law?
No. A qualified settlement fund under Section 468B of the Internal Revenue Code is not subject to tax under either Article 9-A or Article 22 of the New York Tax Law -- even where the defendant, the fu…
Is a $100 million Section 468B civil claims settlement fund subject to New York franchise tax or New York State and City personal income tax, and what must it file?
No tax, no return. The Salomon civil claims fund -- a $100 million settlement fund created by federal court order and treated as a qualified settlement fund under Section 468B -- is not subject to New…
Is assigning the unexpired term of a nonrenewable 99-year ground lease subject to Connecticut's real estate conveyance tax?
No. A tenant held a NONRENEWABLE 99-year ground lease of Connecticut land and had built a building on it that would revert, without payment, to the landlord when the lease ended. After the tenant defa…
If an air waybill (bill of lading) covering exported merchandise doesn't itself fully describe the goods, can an attached invoice be used to tie the shipment to the purchase for export tax purposes?
Yes, conditionally. The Comptroller will allow an invoice attached to a bill of lading (air waybill) to identify the goods covered under that bill of lading, but only if the notation tying the invoice…
Can a printer buy its machinery, equipment, and supplies tax-free under the production exemption?
Only when it uses them to produce its own goods for sale. If a printer uses machinery, equipment, and supplies directly and predominantly (more than 50%) to produce printed matter that it will sell --…
Do a software developer's Texas sales, installation, and license fees create franchise-tax nexus, and do a franchisor's initial fee and royalties?
Both out-of-state corporations had Texas franchise-tax nexus. A New Jersey software developer with salespeople soliciting sales in Texas had nexus for both the taxable-capital and earned-surplus compo…
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