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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Does a beauty salon or aesthetician owe Texas sales tax on shampoo, tonics, and conditioners it buys and uses on customers?
Yes, in part. A beauty salon or aesthetician owes Texas use tax on supplies (like shampoo, tonics, and conditioners) it uses to perform nontaxable services such as facials, and must also collect and r…
Does a property management company owe sales tax on an 'overtime air conditioning' fee it charges tenants?
No. The Comptroller ruled the overtime air conditioning charge is not taxable, because the property management company already paid sales tax to the electric or gas utility and is using the utility se…
Does Texas sales tax apply to food purchased for a guard dog?
No. Texas sales tax does not apply to food for guard dogs, as long as the dog has been professionally trained for guard duty by someone in the business of training guard dogs and is not kept as a pet.
Is electricity used to show a vacant model home or house exempt from Texas sales tax as residential utility use?
No. Electricity a real estate agency buys for a vacant home used to show or demonstrate the property to prospective buyers is taxable as commercial use, not exempt residential use — the same is true f…
Was the United States Postal Service exempt from Texas motor vehicle tax, and did its vehicles need exempt license plates?
Yes, the United States Postal Service was exempt as an instrumentality of the federal government. Vehicles owned by the United States or its instrumentalities were not required to display exempt licen…
Are Kool-Aid Kool-Pumps, popsicles, snow cones, and individually sold ice cream novelties subject to Texas sales tax?
Yes. The Comptroller ruled that Kool-Aid Kool-Pumps are not a food product and are taxable whether sold individually or in a box of six, and that popsicles, snow cones, and individually sold ice cream…
Could a South Carolina fee-in-lieu project under the historical Section 4-29-67 consist only of manufacturing machinery and equipment?
Yes. The project could consist solely of machinery and equipment; land and buildings were not required, provided all other statutory fee-in-lieu requirements were met.
Under South Carolina Revenue Ruling 93-6, when were charges for extended warranties subject to sales or use tax?
A warranty sold with tangible personal property was taxable in full, even if optional and separately stated. A separate warranty bought after the property sale was not subject to sales or use tax.
Do admission charges for amusement events at a venue listed in the National Register of Historic Places owe Texas sales tax, and can collected tax on those tickets be refunded?
No sales tax is due on admission to amusement services held exclusively at a place listed in the National Register of Historic Places, but any tax already collected from patrons on ambiguously-worded …
Is an Ottawa yard tractor (a yard-spotting tractor used to move trailers around a yard) a taxable motor vehicle or is it subject to Texas limited sales and use tax?
An Ottawa yard tractor is subject to Texas limited sales and use tax, not motor vehicle sales tax, because it is not a motor vehicle and not rolling stock. The Comptroller confirmed that yard tractors…
Are a telephone company's receipts from private line circuits taxable as intrastate telephone service, or excluded from sales tax as interstate telephone service?
It depends on geography. Private line circuits that begin and end within New York are taxable intrastate telephone service; circuits that cross the state line are exempt interstate service. Where a Ne…
Are Japanese specialty sweets made from beans, flour, rice powder, and sweeteners exempt 'food' in New York, or taxable candy and confectionery?
Exempt. The Department ruled these traditional Japanese sweets — cakes, pastries, powders, and gelatins made from azuki beans, flour, rice powder, and sweeteners — are exempt food and food products un…
Which fees in a computerized securities-trading information network — directory listings, oral transmissions, delivery-instruction processing, broker referral premiums, and corporate-release fees — are subject to New York sales tax?
It splits by function. Fees to receive compiled trading information (including bundled directory listings and oral or Alert transmissions) are taxable information services; pure advertising listings a…
Are multi-part 'bill of lading' shipping forms, sold to a manufacturer's client, exempt from Texas sales/use tax as packaging supplies?
Corrected answer (April 12, 1993): a manufacturer-client may issue an exemption certificate for the bill-of-lading forms, but must then self-assess use tax on the cost of any part(s) of the form that …
How did Texas handle vehicle tax when a lemon-law vehicle was refunded, upgraded, downgraded, replaced, or leased?
An actual trade-in toward an upgraded replacement was taxed on the price difference; otherwise the new vehicle was taxed in full and a refund claim filed for the returned vehicle. A trade-down created…
Which flight-school charges were exempt instruction and which were taxable aircraft rentals under Florida's 1993 rules?
Classroom training, ground school, briefings, critiques, and supervised solo flights within the course were exempt instruction. Separately rented aircraft and solo flights after course completion were…
Does a trucking company owe Texas sales tax on satellite-tracking data fees, fuel-card billing fees, or a work-injury medical services retainer, and how should it apportion its Interstate Motor Carrier (IMC) tax?
It depends on the charge. A California company's satellite-tracking/messaging fees are not subject to Texas sales tax if the transmissions don't originate in Texas (they are taxable if the transmittin…
Were asphalt pump-kettle units subject to Texas motor vehicle tax or limited sales tax?
Limited sales tax applied. Although local officials viewed the units as trailers, the Tax Administration Division found they were not designed and built to transport people or property on highways, so…
At the end of a Nebraska incentive project, can a company sign a new agreement for the same activities and keep using its old credits?
Yes. Under Revenue Ruling 29-93-3, when a project's entitlement period ends, a taxpayer may enter a subsequent Employment and Investment Growth Act agreement covering the same activities as the previo…
Were post-July 1991 installments taxable when non-equity country-club initiation fees had been sold before July 1, 1991?
No. The transaction occurred when the membership was sold, so later installments on pre-July 1991 initiation fees remained exempt. The club had to refund tax collected in error before seeking a state …
Do I have to charge Texas sales tax on drafting or CAD design services, like drawings and blueprints made from a client's specs?
Yes. Texas sales tax is due on drafting delineations and blueprints, including CAD drafting, when the draftsman works from specifications the customer supplies, and on any additional copies of the fin…
If I rent my Texas condo out short-term part of the year and use it as my residence the rest of the year, is repair and remodeling work on it taxable?
Yes. The Comptroller told this condo owner that because the unit was rented on a daily or weekly basis part of the year (taxable under the Hotel Occupancy Tax) and used residentially the rest of the y…
Is a scale used to weigh cattle at a farm or ranch exempt from Texas sales tax as agricultural equipment?
It depends on installation: a free-standing scale used exclusively on a farm or ranch to weigh livestock can qualify for the Texas agricultural exemption as farm equipment, but a scale that becomes pa…
Does a repairman owe Texas sales/use tax on warranty forms and cards bought from an out-of-state retailer, or can the repairman use an exemption certificate instead?
Yes, tax is owed. A repairman must pay sales or use tax on warranty forms and cards because they are consumable supplies used to perform the repair, not parts transferred to the customer, and a repair…
Is a jewelry appraisal taxable in Texas?
It depends on why the appraisal is done. Under Rule 3.355(a)(2), an appraisal is a taxable 'insurance inspection' if it's done to get an insurance floater for replacement value or to support payment o…
How did Florida sales tax apply to one disclosed agent simultaneously representing multiple sellers of taxable goods and exempt services?
The agent's own service compensation was exempt. Each principal's sale was classified separately, so one principal's exempt service was not tainted by another's taxable goods. A principal selling good…
When was Florida sales tax due on burial merchandise promised under a cemetery company's cancelable preneed plan?
Not when the plan was signed. The agreement was executory because no actual or constructive delivery or title transfer occurred until it became at-need. Tax was due upon delivery at the rate then in e…
Were dining-club dues and refundable initiation deposits taxable when membership included reciprocal access to a country club's golf course?
The monthly dues were taxable while the reciprocal agreement gave dining-club members country-club recreation access. The refundable deposits were not taxable because repayment was required, they rema…
Did South Carolina PLR 93-2 impose the historical accommodations tax on reserved recreational-vehicle parking at a raceway?
No. The separately sold RV spaces, which had electrical hookups but no water or sewer hookups, were not taxable accommodations because the raceway was not a campground.
Did South Carolina PLR 93-1 exempt printing inputs used to produce a free advertising shopper that was not a newspaper?
Mostly no. Because the shopper was distributed free and was not a newspaper, newsprint, ink, composing supplies, press plates, photo negatives, production electricity, and local telephone service were…
Are an out-of-state software company's analysis, adaptation, training, and license fees taxable in Connecticut?
It splits. An out-of-state company sold a tool for developing custom software -- analyzing each customer's needs, adapting the program, licensing it, and offering maintenance and training. DRS held th…
Is the gas a rental-equipment company uses for heating its repair area and for steam-cleaning returned machinery exempt from Texas sales tax as a processing/manufacturing use?
Partly. Gas used to heat the specific area where repairs on rental equipment are performed can be exempt as processing, but only for the time that area is actually used for repairs, and it must be all…
Does a technician who installs, services, or repairs gas station pumps, tanks, and related equipment have to charge sales tax on the job?
It depends on whether the equipment is going into a brand-new station or an existing one. New construction: tax the materials/equipment only, not the labor. Work on existing stations (installation, re…
Does Texas sales tax apply to the sale of a prescription drug discount card?
No. The Comptroller ruled that selling a 20% prescription discount card is the sale of an intangible and is not taxable in Texas. The seller instead owes Texas sales or use tax on its own cost of the …
A nonresident alien partner in a New York law firm works entirely from the firm's London office and receives fixed annual 'guaranteed payments' under IRC section 707(c), on top of his distributive share of partnership income. Are those guaranteed payments taxable as New York source income, even though he performs no services in the United States?
It depends on federal tax treatment, and the Department did not decide that federal question. The Department held that if a guaranteed payment to a nonresident alien partner is not includible in the p…
Did selling shares and investing in Florida bonds create Florida tax nexus for an out-of-state business-trust fund?
Not by themselves. The fund's stated activities did not create corporate-income-tax nexus, and Florida bonds alone did not do so, but nexus of the trust or another fund could create filing duties for …
When were shares of an out-of-state business trust holding government obligations exempt from Florida intangible tax?
The shares were exempt to the extent determined by the fund's January 1 portfolio under Florida's stated allocation rules. The fund itself owed no tax because it had no Florida taxable situs.
Could employees discount publicly traded shares bought through a restricted stock-purchase plan for Florida intangible tax?
Yes. For the plan described, Florida allowed a total 40% discount from year-end closing price: 25% for lack of marketability and 15% for the shares' restricted availability.
How did Florida allocate intangible tax on a mortgage loan secured by both real and personal property?
Florida allocated 11.9% of the loan to real-property collateral subject to the 2-mill nonrecurring tax. The other 88.1% was exempt from annual tax because the lender lacked Florida domicile or busines…
Were rents taxable when related partnerships leased mortgaged real estate to commonly owned automobile-dealership corporations?
Yes. The mortgage-debt rule applied only between related corporations, so leases from partnerships to tenant corporations remained taxable even where parties shared liability on secured notes.
Was rent taxable when individual owners leased mortgaged Florida real estate to a corporation solely owned by one lessor?
Yes. The related-corporation mortgage-debt rule did not apply because the lease was between individuals and a corporation, not two related corporations. Rent equal to the mortgage payments remained ta…
Did Florida's solid-mineral severance tax apply to a company's mined and processed clay sold for further processing?
No. On the described operation, Florida found no severance tax due because the processed clay was sold for further processing under the sales-and-use-tax provisions of Chapter 212.
Was a deed taxable when a partnership transferred pre-July 1986 land, free of debt, to current partners who had not contributed it?
No. Because the partnership acquired the land before July 1, 1986 and it was unencumbered, the deed was not taxable. Any mortgage balance, recorded or not, would have been taxable consideration.
Did extending a revolving promissory note's maturity date through an amended loan agreement trigger more Florida documentary stamp tax?
No, if the original obligor signed the amendment and it only extended maturity without increasing principal. The amendment was a renewal, but no additional documentary stamp tax was due.
Which of ten open-end loan forms did Florida treat as subject to documentary stamp tax?
The guarantor agreement and termination-of-joint-borrower form were taxable. The security agreement also became taxable if filed or recorded; the other submitted forms did not meet the stated requirem…
Were five open-end loan forms taxable written obligations under Florida's documentary stamp tax?
No. Although all but the unsigned addendum bore the borrower's signature, none contained a written promise to pay a sum certain, so none of the submitted forms was taxable.
Did a 1993 Florida ruling tax a quitclaim deed from an individual buyer to a family corporation formed after the purchase?
Yes, the ruling taxed the deed and Dade County surtax on fair market value because the corporation did not exist when the individual bought the property. The Department now marks this ruling obsolete.
When did Florida documentary stamp tax apply to occupancy documents for cooperative mobile-home units?
Tax applied when a document first granted a shareholder the right to occupy a cooperative unit, whether recorded or not. Properly taxed ownership did not incur tax again on later documents showing the…
Can a bakery that sells some food for immediate consumption and some for later consumption still give a gas/utility exemption certificate based on a utility study?
Yes, if the combination of the two uses still shows an overall exempt use. Multiply the percentage of gas used for production by the percentage of goods NOT sold for immediate consumption; if that res…
Does Texas sales tax apply to charges for inspecting and testing a commercial fire alarm system?
No, not if the inspection/testing charge is separately stated. The Comptroller ruled that a commercial fire alarm system is an improvement to realty, so separately stated charges for inspecting and te…
Is an advertising agency's charge for a video tape produced for advertising taxable, or is it an exempt advertising service?
It depends on the structure. Pure advertising concept work is an exempt service, but selling the video tape itself is a taxable sale of tangible personal property. If the client cannot buy the video s…
Is a company's lease of mobile MRI tractor-trailer units exempt from New York sales tax under the heavy tractor-trailer exemption, or taxable because of the MRI machine inside?
Taxable. The tractor and trailer alone would qualify for the heavy-vehicle exemption, but the MRI machine is taxable medical equipment used to perform medical services for compensation — and because t…
Are supervised physical-therapy and fitness services taxable as New York City gymnasium/health-salon services, or exempt because a licensed physiotherapist is involved?
Taxable in NYC unless the service is actually performed by a licensed professional. The facility's supervised training is a taxable New York City gymnasium/health-salon service; only services actually…
Were a medical group's listed diagnostic slides, reagents, test kits, and blood-collection system exempt from Florida sales tax?
Yes. Florida exempted all listed A-1 through A-9 diagnostic slides and reagents as chemical compounds or test kits, and exempted the Vacutainer blood-collection system as needle and syringe components…
An out-of-state retailer ships goods into Texas that the purchaser will later export and use only outside Texas. Is Texas tax due on that shipment?
Use tax (not sales tax) is normally due when an out-of-state retailer ships an item into Texas, but the purchaser can give the retailer an exemption certificate claiming a temporary-storage exclusion …
Can a freight forwarder's bill of lading and receipt serve as proof of export for a Texas sales tax exemption, even if the buyer's name isn't on the bill of lading?
Yes. A copy of the bill of lading together with the freight forwarder's receipt showing the purchaser delivered the items is sufficient proof of export under Rule 3.323(c)(1)(D), and the consignee's n…
ABC CO. imports equipment from out-of-state vendors to its Austin facility, tests or modifies it (sometimes loading software), and then re-exports it within 30 days to a foreign subsidiary — does that testing or modification count as a taxable 'use' in Texas that defeats the export exemption?
Yes. The Comptroller ruled that testing and/or modifying the equipment in Texas before export — even briefly, even within 30 days, and even where title later passes to a resale subsidiary before expor…
COMPANY B bought testing equipment from COMPANY A in Oregon, shipped it to Austin, and tested it for 4-5 days before exporting it to Singapore. Was that Texas testing a taxable 'use' even though the equipment was headed out of state?
Yes. The Comptroller ruled that COMPANY B's purchase from COMPANY A was taxable, because testing the equipment in Austin for 4-5 days to confirm it worked before exporting it to Singapore counted as a…
Was a company's charge to install, maintain, and remove real-estate yard-sign arms a taxable rental of equipment?
No. Florida treated the arrangement as a nontaxable personal service because the realtor never received possession, control, or the right to use, service, alter, or remove the company's yard arms.
Was a wholesaler's sale of prescription-only TENS units and supplies to physicians exempt from Florida sales tax?
Not automatically. Sales to physicians were taxable unless a registered physician bought for resale and gave the wholesaler a proper resale certificate. A patient's prescription purchase was separatel…
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