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 filling and plugging an abandoned underground storage tank (UST) in place, including removing residual product and disposing of it, a taxable service in Texas?
No. The Comptroller ruled that filling and plugging underground storage tanks in place, including removing and disposing of leftover product, is the functional equivalent of demolition, which is not a…
Does a business owe Texas sales tax on candy sold through an honor-system box, where customers take a piece and leave payment on their own?
Yes. The Comptroller ruled that honor-system candy sales are subject to Texas sales tax on the total gross receipts, the seller must get a sales tax permit and file quarterly, and because the candy su…
Does a Texas company have to charge sales tax on monitoring fees and installation fees for a personal emergency response (medical alert) system?
No. The Comptroller ruled that the monitoring fee and the one-time installation fee charged to subscribers of an emergency response system are not taxable, because the company was found not required t…
Do sales/use tax and the oil well service tax apply to well tagging, inter-well tracing, and naturally occurring radioactive material (NORM) testing services performed on oil field equipment?
The well tagging and inter-well tracing services themselves are not subject to limited sales or use tax, but the taxpayer must pay sales tax on the materials and equipment (including radioactive isoto…
When must I file the Nebraska Personal Property Return (Form 775P) to keep my LB 775 property tax exemption?
By May 1. Under Revenue Ruling 29-93-2, the Nebraska Personal Property Return (Form 775P), with its accompanying schedules, must be filed with the Department of Revenue on or before May 1 of each year…
Do engineering and architectural design firms have to charge Texas sales tax on their professional design services?
Generally no. Texas does not tax engineering and architectural services on their own. A consulting engineer or architect designing the layout of a laboratory or office building does not owe tax on tha…
How did Florida apply documentary stamp and intangible taxes to mobile-home cooperative leases, stock, and purchase notes?
Occupancy documents were generally taxed on consideration, with minimum tax for qualifying original subscribers. Stock was taxed on par value; note parties owed stamp tax, and note and stock holders o…
How much documentary stamp tax applied when a cooperative issued proprietary leases to original mobile-home-park subscribers?
Only the minimum 70-cent tax applied to leases for subscribers who committed funds before the cooperative bought the park, if proper tax was paid on the cooperative's acquisition.
Did four equipment bills of sale count as two exempt occasional-sale series under Florida's 1993 rule?
Yes, if they were the seller's only two sale series in 12 months. Three bills dated October 27 counted as one series and the November 13 bill as a second, but the official source notes the rule change…
Was natural gas used exclusively to toast bread crumbs at a fixed manufacturing site exempt from Florida sales tax?
Yes, if the manufacturer gave its vendor a corrected certificate claiming the manufacturing boiler-fuel exemption. A refund of tax paid in error had to be requested first from the vendor.
Did a 1993 Florida ruling treat related-party office rent used for jointly guaranteed mortgage debt as nontaxable?
Yes, for the debt-amortization portion under the former rule, but the official source marks the ruling obsolete and superseded. Any excess payment remained taxable rent even in the original analysis.
Were meals sold by a continuing-care retirement community taxable to residents, nonresidents, and guests?
Resident meals were exempt under every described plan because the facility primarily cared for aged people dependent on special attention. Meals and rooms sold to nonresidents or guests were taxable.
Which of a medical distributor's dressings, IV components, diagnostic products, and other supplies were exempt from Florida sales tax?
Florida exempted specified dressings, tape, jelly, IV components, a catheter, arm sling, urine strips, and SureCell tests, but taxed several other products. Its treatment of the 60-cc syringe is inter…
Did a city's direct purchases of building materials become sales-tax exempt after it assumed risk of loss under a public-works contract?
Yes. On reconsideration, Florida exempted the materials after the city bought builder's-risk coverage, retained title, and relieved the design-builder of loss risk through a contract amendment.
If a Texas manufacturing plant is sold to a new owner, can the new owner keep using the seller's predominant use utility study to claim a sales tax exemption on utilities?
No. Even if the manufacturing operations at the plant don't change, a change of ownership means the buyer must get its own predominant use engineering study done and secure its own utility exemption c…
If I buy only generic office assets (furniture, computers, office equipment) from a business that has an IRS tax lien against it, paying by a check made out to the IRS, do I become liable for the seller's unpaid Texas sales tax as a 'successor'?
No. The Comptroller's office concluded that buying only miscellaneous, generic office items -- not the whole business or an identifiable segment of it -- does not trigger successor liability under Tax…
Does a certified fraud examiner who is licensed under Texas's Private Security Act owe sales tax on special investigations, fraud auditing, insurance claims work, and expert witness testimony?
Mostly yes. Because the examiner is licensed under the Private Investigators and Private Security Agencies Act, the special investigation, fraud auditing, and insurance claims activities described are…
Does a Texas corporation owe sales or use tax when it distributes its equipment to shareholders as part of dissolving and liquidating the company?
No. The Comptroller ruled that when a corporation distributes its equipment to its shareholders as a liquidating distribution when the company dissolves, no sales or use tax is due, because the shareh…
Does a Colorado-based securities broker-dealer and investment adviser owe Texas sales tax on its securities sales, commissions, and investment advice to Texas clients?
No, not on the securities trades or commissions — those are not taxable transactions at all. Investment advice given for a fee is also generally not taxable, unless the 'advice' is really packaged, co…
Does a printing company owe Texas sales tax on repairs to the paper roll cores used on its printing equipment?
Yes. The Comptroller ruled that repairs to a printing company's paper roll cores are taxable. The cores qualify for the packaging-material exemption only when held by the manufacturer that ships produ…
Does a business that sells computer-generated Lotto number picks based on statistical analysis of past winning numbers have to collect Texas sales tax?
Yes. The Comptroller told this taxpayer that selling computer-generated Lotto number selections, based on analyzing past winning numbers and other statistical factors, is a taxable information service…
Does a Texas seller owe sales tax on 'Passport Books' that give the holder free and discounted rounds of golf at participating courses?
No sales tax applies when the golf Passport Book is sold directly to the golfer who will use it, because the Comptroller treated the sale as a sale of an intangible right, not tangible personal proper…
Can an independent contractor working for a Texas customs broker sign export certifications, and can an export certification just reference an attached invoice instead of listing item descriptions?
No, not yet. Under Rule 3.360 as it stood in 1993, only the licensed customs broker or the broker's own employee (someone under the broker's direct supervision, paid regular wages, with taxes withheld…
When a company ships everything into Alabama from out of state and makes few Alabama sales, does the corporate income tax 'throwback rule' overstate its Alabama sales factor — and can it apportion on a destination basis instead? And how is it classified for franchise tax?
The Department granted relief. Company A (an out-of-state corporation with a new Alabama distribution facility) showed that Alabama's income-tax 'throwback rule' — which attributes a sale to Alabama w…
Is Texas sales tax refundable when an auction buyer takes possession of the item in Texas before the seller ships it out of state?
No. Once the buyer takes possession of a taxable item in Texas, sales tax is due and is not refundable, even if the seller later ships the item out of state. The interstate-shipment exemption under Ta…
Can a company just start paying the county the property taxes on property that's exempt under Nebraska's LB 775 incentive agreement?
No — not voluntarily. Under Revenue Ruling 29-93-1, property tax on personal property that is exempt under the Employment and Investment Growth Act may not be paid to the county until either the taxpa…
Can the sole shareholder of a dissolved corporation claim a sales tax refund for bad debts on accounts receivable that were assigned to the shareholder as part of the dissolution?
No. The Comptroller denied the refund because the shareholder, not the original dissolved corporation, was trying to claim the bad-debt credit, and Texas law does not treat a corporate dissolution fol…
Which charges on a repossession/debt-collection company's invoice are taxable, and can the company or its creditor-clients use resale certificates for repossession-related expenses?
Most of a repossession company's miscellaneous invoice items (storage fees, long-distance calls, informant fees, key-making) are taxable as part of the taxable debt collection service, except separate…
Does transferring a division's assets to a subsidiary in a Section 351/368 reorganization trigger investment tax credit recapture or forfeit the credit carryover?
No recapture, and the carryover survives. Transferring all of a division's assets to a wholly owned subsidiary in a tax-free transaction under IRC sections 351, 368, and 381(a) -- where the property s…
Were a city utility's internal electricity transfers to city departments subject to Florida gross receipts tax?
Generally no, because they were internal transfers rather than sales. But purchased utility service acquired tax-free for resale was taxable on transfer, while service bearing upstream tax avoided add…
Does an out-of-state company distributing satellite television programming to Utah bars, hotels, and nightclubs have Utah corporate franchise tax nexus, and are its receipts included in Utah's sales apportionment factor?
Utah has jurisdiction to tax the company (it has nexus), but that doesn't mean any revenue actually gets counted toward Utah's tax. Because the company is providing a SERVICE (delivering a satellite T…
One month after getting a ruling on our IDA condo conveyance-leaseback structure for our tenant's financing benefits, we realized the initial condominium units will actually be conveyed to the IDA in phases over time as construction is completed, and we want the ruling to also cover our affiliates, nominees, successors, and assigns. Does this refined, phased structure change the tax-exempt conclusions?
Still exempt -- the phasing doesn't change the answer. This opinion refines TSB-A-93(1)R (issued a month earlier on the same petition) to reflect that the condominium units at One New York Plaza occup…
Does a company owe Texas sales tax when it swaps in identical replacement computer equipment to relocate a customer's data center, then rents back the old equipment during the transition?
Yes. Shipping identical replacement equipment to a customer's new location under a computer 'swap' program is a taxable sale of equipment. If the customer's old equipment is taken as a trade-in, tax i…
If I permanently move out of New York but keep my old New York home and still spend 45 to 90 days a year there, has my domicile changed to my new state?
The Department did not decide. Whether Kenneth Springer changed his domicile from New York to Florida is a question of fact, and an Advisory Opinion can only apply the law to given facts, not resolve …
Can a broker operate an export certification satellite office inside Mexico instead of within the United States?
No. The Comptroller's office denied the request, explaining that an export certification business must be conducted from a location inside the United States because state regulators cannot freely perf…
If a cellular phone retailer charges a customer a 'deactivation' or 'lost commission' fee for canceling service early, is that fee taxable as part of the phone's sales price?
Yes. The Comptroller ruled that the deactivation/lost-commission fee is part of the phone's selling price, so the retailer must collect sales tax on it, just as it does on the initial discounted phone…
Does a machine used to rebuild torque converters qualify for the sales tax production exemption and the Article 9-A investment tax credit?
Yes, both. Rebuilding worn torque converters -- cutting open the old unit, replacing worn parts, and reassembling and testing a finished converter -- is the production of goods by manufacturing or pro…
If a contractor completely demolishes a sidewalk and rebuilds a new one on the same site, is that new construction or repair for Texas sales tax purposes?
New construction. The Comptroller ruled that completely demolishing an existing sidewalk and rebuilding a new one on the same site is treated as new construction labor. Only demolishing and rebuilding…
When a cable TV company hires a third party to collect past-due bills and to pick up converter boxes from delinquent accounts, are those third-party services taxable 'debt collection services'?
Yes to both. This internal Comptroller memo concludes that a third party hired by a cable TV company to collect past-due accounts is providing a taxable 'debt collection service' under Tax Code Sectio…
Can an out-of-state seller who leases equipment in Texas get credit against Texas sales/use tax for sales tax it paid to another state on that same equipment?
No. This is an internal Comptroller memo explaining that an out-of-state seller cannot apply for a refund or credit against Texas tax collected on leased equipment for tax it separately paid to anothe…
If I default on a layaway purchase and the store resells the item, do I get taxed twice when I finally pay it off?
No. Texas sales tax applies only when title or possession of the item actually transfers, so a layaway sale that falls through before pickup was never a taxable sale in the first place. When the buyer…
As an independent distributor selling tablets for a direct sales/multi-level marketing company in Texas, do I owe tax on the products I buy from the company to resell?
Yes. The Comptroller ruled that the tablets sold through this direct sales organization are taxable in Texas, and as an independent distributor you must pay tax on your purchase of the product from th…
How did RR 93-3 apply South Carolina's historical bingo-license domicile and separate-organization requirements?
A reinstated corporation's temporary dissolution did not interrupt its three-year South Carolina domicile, but an organization not yet reinstated could not qualify. Related churches or auxiliaries had…
How did RR 93-2 tax racing gasoline and other racing fuels in South Carolina?
High-octane racing gasoline was taxable under Chapter 27. Other racing fuel was taxable under Chapter 29 when used in a vehicle that could be licensed for highway use, but not when used in a racing ve…
Could Texas use tax on an out-of-state leased vehicle entering Texas be calculated on depreciated value?
No. The use-tax base was the total consideration paid in the out-of-state sale, defined as the vehicle's cost. The Tax Administration Division said a legislative change would be required to use deprec…
Does machinery used to cut, tie, and close meat casings for meat companies qualify for the Article 9-A investment tax credit?
Yes, if the use tests are met. A company that takes reel stock of cellulose or fibrous casings, cuts it to length, drills holes, and clips, ties, and closes the casings for meat companies is engaged i…
How did Florida value common shares of a business trust holding a mix of exempt and taxable securities?
Common shares were fully exempt when the portfolio held only exempt assets. With taxable securities at year-end, shares were taxable in proportion to taxable assets, while the federal-obligation porti…
Which credit extensions and interbank placements of a foreign bank with Florida offices had Florida intangible-tax situs?
Credit extensions to Florida residents were taxable, while loans to nonresidents were not. Placements of excess funds at non-Florida banks were exempt because they lacked Florida situs and qualified a…
Did a deed moving encumbered land between trustees of the same land trust owe more than minimum documentary stamp tax?
This ruling said no because the trust and beneficiaries stayed the same and no consideration changed hands, but the official source says TAA 93B4-001R superseded it on April 1, 1993.
Did Florida's electrical-generation machinery exemption cover qualifying equipment leased with an entire cogeneration plant?
Yes, but only for separately itemized qualifying machinery and equipment with the required notarized use affidavit. Real estate and water-heating equipment remained taxable; otherwise the whole lease …
What public water supply fee applied to Kansas retail water sales beginning January 1, 1993?
Beginning January 1, 1993, Kansas imposed a public water supply fee of $0.002 per 1,000 gallons of water sold at retail. The new fee was added to the existing $0.03-per-1,000-gallon water protection f…
If we sell oil/gas equipment to overseas customers FOB our Texas plant or FOB an export packer, do we owe Texas sales tax, and when do we have to collect it?
Yes, in most cases. Because title to the equipment passes in Texas under "FOB plant" or "FOB export packer" shipping terms, the sale is a taxable Texas sale, and the seller must collect Texas sales ta…
Can a grocery store chain that prints its own newspaper inserts in its own print shop get a refund of the sales tax it paid on the newsprint and ink?
No. The Comptroller ruled that a grocery store chain printing its own newspaper inserts in its own print shop is not entitled to a refund of sales tax paid on the newsprint and ink. The Sec. 151.319(c…
Can a paging company give its phone company a resale certificate for the phone exchange numbers and trunk lines it leases and then passes on to its paging customers?
Yes. The Comptroller confirmed that a paging service provider that purchases or leases phone exchange numbers and trunk lines from the local telephone company, and then assigns those numbers to its ow…
If my business buys promotional giveaway items like calendars, matchbooks, or rain gauges to hand out for advertising, do I owe Texas sales tax on them?
Yes. The Texas Comptroller confirmed that a business buying tangible items such as rain gauges, imprinted calendars, or matchbooks to give away as promotional items must pay sales tax on those purchas…
If a cable company rebuilds and upgrades its existing cable plant (like boosting channel capacity from 36 to 54 channels), is that taxed as new construction or as remodeling of real property?
It's remodeling, not new construction. This internal Comptroller memo concludes that rebuilding or upgrading an existing cable TV plant -- including replacing wire, poles, and house drops, or increasi…
How did Florida's revised ruling determine the exempt share value of an out-of-state business trust?
The trust itself was exempt. Direct federal and territorial obligations were removed from share value; the remaining value was exempt only if all remaining assets were exempt, and year-end was the sol…
Were insurance-claims investigations performed by a licensed investigative company subject to Florida sales tax?
No when performed as insurance claims-adjustment investigations for insurance companies, agents, brokers, or service companies. Licensable private investigations for other customers were taxable.
Was an equity club's $10,000 member assessment taxable when members received noninterest-bearing bonds?
Yes. The club recorded the assessment as additional paid-in capital rather than a liability, and repayment of the bond's face amount was uncertain, so it was not an exempt refundable deposit.
Did Florida discretionary sales surtax apply to microfilm delivered to a buyer in a surtax county from a dealer in a nonsurtax county?
No under the 1993 law, because the selling dealer was in a county without surtax. The source warns that a January 1, 1994 law change directly affected this issue.
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