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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How much could South Carolina rollback millage increase for a 1997 reassessment year under this notice?
Rollback millage could be increased by 2.9% for a 1997 reassessment year. The Department used the average 1996 increase in the Consumer Price Index for All Urban Consumers published by the U.S.…
When is an oil drilling workover rig exempt from Kansas vehicle registration, and how do you claim it?
Only single-purpose rigs that meet specific design tests, and only from registration -- not from property tax. This 1997 Division of Vehicles memo says an oil drilling workover rig is exempt from…
Did an out-of-state software company owe Tennessee franchise and excise tax merely because a corporate officer moved to Tennessee for personal reasons and worked from his own home?
No, under the unusually limited facts. The officer moved for personal reasons, paid for and maintained the home workspace himself, had no Tennessee business contacts, and performed strategic work…
Could a buyer reduce a new vehicle's Texas tax base when the old vehicle went to someone other than the seller?
No. The old vehicle's value was excluded from total consideration only when the seller of the new vehicle took it as consideration. If someone else received the old vehicle, the letter said there…
Did a minority beneficial interest in a trust doing business in Texas create franchise-tax nexus for a foreign corporation?
No. The foreign corporation held less than a majority beneficial interest, did not effectively control the trust or trustee, and had no other Texas activity. On those facts, Texas said the…
Was the ultimate parent limited to a U.S. corporation for the former earned-surplus officer-compensation add-back?
No. Neither Section 171.110(c) nor Rule 3.558(h) limited the parent to a U.S. corporation. Texas interpreted the ultimate parent as any corporation exercising ultimate control over the subsidiary,…
Is a monthly standby retainer fee paid to a security firm (to be available if needed, billed separately for hours actually worked) subject to Texas sales tax?
Generally no. A monthly retainer fee paid to a security firm just to be on standby -- separate from hourly billing for services actually performed -- is treated as the sale of an intangible and is…
Do compressors used in oil and gas processing qualify for Texas's manufacturing exemption, and how does a company refund sales tax collected in error on exempt equipment?
It depends on what the compressor does. Effective January 1, 1995, a manufacturer or processor can claim exemption on machinery and equipment necessary and essential to manufacturing, processing, or…
What verification deadline applied to South Carolina employers claiming the former-AFDC-recipient hiring credit in early 1997?
For employees hired from January 1, 1996 through March 26, 1997, the Department waived the normal five-day request rule and allowed the employer through March 31, 1997 to request AFDC-eligibility…
Must an estate file South Carolina waiver forms or a safe-deposit-box inventory before transferring a decedent's assets?
No. The ruling says the listed waiver forms and safe-deposit-box inventory are no longer required, but preserves separate real-estate and safe-deposit-law duties.
Under the superseded RR 97-1, when did firefighting equipment share a fire truck's $300 maximum sales or use tax?
Equipment shared the truck's $300 cap only when necessary for it to be a fire truck, sold by the same vendor, and mounted or stowed before the buyer took title or possession. Otherwise the equipment…
How did RP 97-2 guide penalties for South Carolina video-game-machine and coin-operated-device violations?
It recommended progressive monetary penalties and license consequences for most listed violations while allowing Department staff to impose more or less severe sanctions within statutory authority…
If I start a new company and take over a tax-delinquent business's location, staff, and customers without any formal sale, can the state make me pay its back taxes?
The protest was denied. Salvo Beachwear, Inc. (doing business as New Mexico Carpets) owed the Department about $1.1 million in taxes and was being forced to close. Its president formed a new…
Was a Florida simple-interest automobile retail installment contract subject to documentary stamp tax, and did its tax base include a loan processing fee?
Yes. The contract had a promise to pay, a sum certain, and the borrower's signature. Tax applied to the amount financed over the loan term; a processing fee was excluded only if actually paid in…
Accidents and computer failures made me pay my gross receipts tax late — can New Mexico's negligence penalty be waived for hardship?
The protest was denied. Rio Rancho Pharmacy fell behind on the gross receipts and other CRS-1 taxes for December 1992 through February 1993 after a run of misfortunes — its owner and its bookkeeper…
Were refrigerators exempt when sold through different delivery chains but installed in galleys as part of completing new common-carrier aircraft?
Yes, in all three scenarios, if installation was part of manufacturing or completing a new aircraft whose purchase otherwise qualified under section 6366. Installation after common-carrier use began…
Do the foundations and support structures for rock-crushing-plant equipment (a crusher, screens, a logwasher) qualify for Texas's manufacturing exemption?
No. Support foundations for manufacturing equipment -- reinforced concrete slabs, sometimes with concrete piers and anchor bolts to fasten equipment in place -- are considered real property, not…
What happened when a Texas corporation failed to file its initial franchise-tax and public-information reports?
The corporation's Texas privileges had already been forfeited under Section 171.251. If it did not file its overdue initial franchise-tax report and Public Information Report, its charter would be…
Is the labor to build a new mezzanine floor inside an existing building taxable real property repair/remodeling, or non-taxable new construction, under Texas law?
It's non-taxable new construction. Building a new mezzanine floor -- adding usable floor space where only non-usable empty space existed before -- inside an existing building qualifies as "new…
Is admission to a sports card and memorabilia show, the vendor table fees, and autograph sales all subject to New York sales tax?
Admission to a sports card and memorabilia show and the fee charged to vendors for table space are not subject to New York sales tax, but a promoter must collect sales tax on autographed products it…
Is artwork a fabric manufacturer buys and scans to design a computer-generated weaving blueprint for upholstery fabric exempt from New York sales tax as production equipment?
Yes -- artwork a textile manufacturer purchases and scans into a computer to design a weaving blueprint for upholstery fabric qualifies for New York's Statewide production machinery and equipment…
Is an integrated CAD/CAM/CAE computer system used both to develop generic product designs and to configure specific customer orders exempt from New York sales tax as research and development or production equipment?
A fully integrated CAD/CAM/CAE hardware, software and maintenance system qualifies for the research and development exemption when used to create documented, generic marketable product designs, and…
How is a New York corporation and its shareholders taxed when the shareholders of a federal S corporation make a section 338(h)(10) election on a sale of the company's stock?
The target corporation (X) is subject to Article 9-A whether or not it is a New York S corporation, and the section 338(h)(10) deemed asset sale is reflected in its franchise tax. X files two…
Could a Florida county buy construction materials tax-free for its county-owned civic arena while a private developer and contractor built the project?
Yes. Materials bought under the agreement were exempt because the county issued purchase orders, paid suppliers directly, held title, assumed the risk of loss, and provided its exemption…
When did section 6353 exempt propane placed in a tank at the customer's location and later delivered to the premises as vapor?
Only when the seller controlled the tank and expressly retained title and possession until the propane reached the customer's premises in vapor form through mains or pipes. Customer control…
When was hay sold for horse feed taxable, exempt as feed, or nontaxable as a resale?
Hay for pet or work horses was taxable. Hay for horses held solely for sale was feed-exempt, and hay bought solely for resale was nontaxable, with timely certificates advised.
Which periods did a December 11, 1996 corporation use on its initial former Texas franchise-tax report?
The initial report was due March 10, 1998 and covered the privilege period from December 11, 1996 through December 31, 1998. Because December 31, 1997 met both timing tests, taxable capital, earned…
Did a Texas certificate of authority create franchise-tax liability when a corporation had no physical presence and took only customer-initiated phone orders?
Yes for taxable capital. The certificate of authority made the corporation subject to the former franchise tax even though it reported no Texas property, payroll, employees, or physical presence and…
Did Florida transient rentals tax apply when DOT charged former occupants rent for two or three months after acquiring their homes through eminent domain?
No. DOT acquired the homes for a public road project, not to enter the rental business, and used two- or three-month leases only to give displaced occupants time to relocate. Section 212.03…
Did a used-car dealer owe Texas motor vehicle tax after operating a new vehicle on a metal dealer tag?
Yes. The dealer did not hold the new vehicle exclusively for resale and was not eligible to operate it on a metal dealer tag, so taxable use occurred. The dealer had to pay tax when applying for…
Which of a health-care management company's many services -- managed care advice, credentialing, quality assurance, claims processing, member services, contract, pre-certification, and utilization review -- are taxable in Connecticut, and under which service category?
It's service-by-service. DRS classified each service a health-care management company sells against Conn. Gen. Stat. § 12-407(2)(i)(J). Because the customers' core business is providing health care,…
Does a rubber-tired, electrically-powered 'people mover' passenger transportation system, guided by a steel guidebeam rather than running on rails, qualify for Texas's rolling stock sales tax exemption?
No. A rubber-tired, electrically-powered "people mover" passenger transportation system -- guided and powered by a steel guidebeam/rail system rather than running on rails -- does not qualify as…
Were flat-fee mobile disc jockey services for private parties, weddings, and receptions subject to Tennessee sales tax or amusement tax when no admission was charged?
No. The mobile DJ service was not one of Tennessee's enumerated taxable services, and the flat fee was not admission, membership, recreation, or equipment-use revenue subject to amusement tax. The…
Could a Florida school district buy equipment and materials tax-free for a K-12 construction project managed by a private construction manager?
Yes. Purchases made under the submitted contracts were exempt because the school district issued purchase orders, paid vendors directly, held title, and bore the risk of loss. Each vendor also…
I reported my pay as business income on my federal Schedule C, but I think I was really an employee — do I owe New Mexico gross receipts tax on it?
The protest was denied. Ruth Dilts worked as a live-in nurse-companion and, after 1982, was paid on a Form 1099 as 'nonemployee compensation' — about $100,849 in 1988. She reported that money as…
When did a retailer overpay tax after mistakenly charging reimbursement on a resale and later refunding the customer?
In the quarter when the retailer reported and remitted the erroneous sales tax, not the later quarter when it refunded the customer.
Was a doctor-recommended hot tub exempt as prescription medicine?
No. California held that a hot tub was neither a listed exempt item nor a qualifying orthotic or prosthetic device, so the sale remained taxable despite the doctor's recommendation.
Is a drugstore's free monthly newsletter for senior customers exempt from sales tax as a periodical or shopping paper, or is its cost a taxable purchase by the store?
No -- a drugstore's free monthly newsletter for senior customers is not exempt from sales tax, because giving a publication away free for promotional purposes is a taxable retail purchase by the…
Are dues paid to a private beach club association that's limited to residents of a specific housing development exempt from sales tax as a homeowners association?
Yes -- dues and initiation fees paid to a private beach club association whose membership is limited to residents of a defined housing development, and which operates recreational facilities (a…
What cash-payout and credit-redemption limits did South Carolina report for video game machines in 1997?
The reported decision interpreted § 12-21-2791 to prohibit cash payouts above five cents per free-game credit and to prohibit redemption of more than 2,500 credits per player in a 24-hour period.…
Is electricity used in the common areas of a residential condominium complex (sprinkler systems, pools, clubhouses, exterior lighting) exempt from Texas sales tax as residential use?
Yes, if the complex is genuinely residential. Electricity used in common areas (sprinkler systems, swimming pools, clubhouses, exterior lighting) of a residential condominium complex -- one where…
Could California use the eight-year limitations period against an unregistered co-owner after the registered joint venturer filed a vehicle registration return?
No, absent a fraud finding. The unregistered co-owner received the benefit of the joint venture's filed return, so the same expired three-year period applied.
Could a business still use the nondealer vessel-sale exemption after evolving from boat repair into building and selling racing boats?
No. Its business had become selling racing boats, so it was required to remit sales tax and could not rely on purchasers paying use tax at DMV.
Could a vehicle lessor avoid filing its own California return because a retail partner collected and reported the rental tax?
No. Assuming the client was lessor, it needed a separate return; the retailer could prepare/sign that return only as authorized agent.
Could a vehicle lessor report its rentals and use tax on another retailer's return instead of filing its own return?
No. The lessor had to file a separate return reporting its rentals and tax, although the retailer could prepare and sign that return as the lessor's authorized agent.
Could California use the eight-year no-return period against an unregistered co-owner when the other joint venturer had registered the vehicle with DMV?
No, absent a fraud finding. Staff treated the DMV registration as the joint venture's return, so both owners received the three-year limitation period, which had expired.
Must a forensic engineering firm charge sales tax on fees for investigating the cause of a fire or explosion for a law firm or insurance company pursuing subrogation, as a taxable insurance service?
Yes, these are taxable insurance services. A forensic engineering firm retained by law firms and/or insurance companies to determine the cause of a fire or explosion -- and to provide expert…
Which city's local sales tax applies when an itinerant janitorial service vendor (no fixed place of business) performs services at a homebuilder's job site?
Local tax is due based on the job site. A janitorial service provider that has no place of business where it receives orders -- and instead receives its orders for services at the job site itself --…
Is electricity used to pump treated municipal effluent to a pond, and then pump that pond water to irrigate a golf course, exempt from Texas sales tax?
No, it's not exempt. A private country club used one electric meter exclusively to pump effluent from a municipality to a pond, and a second meter exclusively to pump water out of that pond to…
What does the available official PDF for South Carolina's year-end 1996 policy-document citator explain?
The PDF explains that the citator was intended to cover Revenue Rulings, Revenue Procedures, Private Letter Rulings, Technical Advice Memoranda, and Information Letters from 1987 through December…
Were a distributor's sales of utility poles, anchors, guy wire, and conduits exempt from Tennessee sales and use tax before the items were installed?
Yes, if the items were sold for use in providing utility services. Tennessee's definition excluded utility poles, anchors, guys, and conduits from tangible personal property and treated them as real…
Were an advertising agency's charges for finished artwork delivered only by modem subject to California sales tax?
No, if no physical form was transferred. The agency still needed evidence of modem delivery, and tax continued to apply to supplies bought by it or its client.
Was finished artwork sent by modem subject to California sales tax, and what evidence should the advertising agency retain?
No, if no physical artwork was transferred. The agency still needed evidence such as a receipt acknowledgment, an invoice notation, and a dated hard copy.
Are purchases made by federal employees using a government I.M.P.A.C. (GSA SmartPay) Visa credit card exempt from Texas sales and use tax?
Yes, if three conditions are met. Purchases made by federal government employees using a Government Visa credit card (I.M.P.A.C.) are exempt from Texas state and local sales and use tax when: (1)…
Did a Texas certificate of authority subject a corporation to both former franchise-tax components despite no Texas activity or employees?
Yes. The corporation reported no Texas business activity, employees, or other nexus for the period, but its certificate of authority meant it was authorized to do business in Texas. Section 171.001…
Is a long-established out-of-state manufacturer a new business eligible for the refundable EDZ investment tax credit when it acquires a New York Article 9-A taxpayer it was not previously affiliated with?
Yes. A corporation is a new business under Tax Law section 210.12(j) -- and so eligible for the refundable economic development zone investment tax credit -- unless it is over-50% owned by an…
New Mexico took over a year to refund my approved manufacturing investment credit — does the state owe me interest for the delay?
The protests were granted. General Mills held an approved $3.5 million manufacturing investment credit and filed claims to have parts of it refunded, measured by gross receipts tax it paid vendors…
What information did a water carrier have to provide for a seller to accept Certificate E on an exempt marine-fuel sale?
The carrier had to complete all material Certificate E information, including fuel-on-board and voyage-use details; an incomplete certificate did not support the exemption.
My insurance brokerage sometimes charges clients a fee instead of taking a sales commission, and we serve both Texas and out-of-state clients -- when is that fee taxable as an 'insurance service,' and what happens with multi-state customers?
Insurance placement and servicing work is not a taxable insurance service when your only compensation is the commission you'd normally earn on the policy (or a fee charged purely in place of that…
Did cumulative preferred securities tied to 49-year debentures qualify as debt under the former Texas surplus rules?
No. Texas concluded that the preferred securities failed at least one of Section 171.109(a)(3)'s three debt criteria. Mandatory redemption when the related 49-year debentures matured or were…
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