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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What former Texas franchise-tax reports and additional tax applied when a corporation planned to dissolve in 1996?
The corporation properly filed its 1996 annual report and a 1996 final report paying additional tax because dissolution would end its earned-surplus liability. If it did not dissolve by December 31,…
Is a video production business's charge for taping and editing a wedding or event video subject to Utah sales tax, and how does the resale exemption work when buying blank tapes?
Yes, fully taxable when you sell a finished video. Like other photographic services, video production mixes professional services (taping, editing) with tangible personal property (the tape), but…
Was exchanging half the stock of an S corporation for a direct 50% interest in its sole asset, an aircraft, subject to use tax?
Yes. The stock was consideration for the aircraft interest, so use tax was measured by the stock's value—presumed to equal 50% of the aircraft's value absent contrary facts.
Did filing for apportioned registration with DMV satisfy the purchaser's use-tax return duty or start the three-year limitation period?
No. The application lacked the information needed for a use-tax return, so the purchaser still had to file and the three-year limitation period did not begin.
Which reporting period carried sales tax when invoices, progress payments, title passage, and delivery occurred at different times?
The period when the sale occurred. Cash and invoices did not control unless they triggered title passage; possession set the latest possible sale date.
Could an unlicensed delivery business using independent contractors to hang advertising on doors be a common carrier for the printed-sales-message exemption?
Potentially. Licensing was unnecessary if the business transported property for hire and offered service indiscriminately to the public or a segment, but more facts were required.
Did California use tax apply to a Florida-bought yacht shipped here for reassembly before four to five months of use in Mexico?
Not under the assumptions. Florida use would occur first, and at least four of the six months after California entry would be spent using the yacht in Mexico.
Was an off-reservation retailer's sale exempt when title passed to an Indian purchaser on a reservation but the purchaser did not reside on a reservation?
No. Reservation delivery and title passage avoided sales tax, but a purchaser who did not reside on a reservation still owed use tax.
Is a separately priced training package sold with a taxable low-vision device also subject to California sales tax?
Yes if the training is mandatory for buying or functionally using the device. Optional significant training billed lump sum can be nontaxable, while separately sold materials remain taxable.
Were weekly charges at a Chapter 509 motel for migrant, seasonal, or temporary workers exempt from Florida sales and tourist development tax?
No. The proposed Chapter 509 motel or transient apartment had no demonstrated migrant-labor-camp permit, and its license agreement expressly disclaimed a lease. Although the agreement stated a…
Did an independent-contractor photographer owe sales tax on amounts retained for supplying directory photographs to a dating service?
Yes. On only the stated facts, the memorandum treated the photographer as an independent contractor selling directory photographs to the dating service, making the retained customer-payment portion…
Was mandatory start-up assistance included in taxable receipts from wastewater equipment, and could lump-sum freight be excluded?
The start-up service was taxable because it appeared required for the equipment's purchase or functional use. The published PDF conflicts internally on unitemized freight, so that point is unresolved here.
Are Jobst burn-treatment garments (pressure vests, gloves, garments with leg zippers, and vest-with-gloves-and-face-mask combinations) exempt from Texas sales tax as braces?
Yes, but only as braces, not as orthopedic devices. The Comptroller reversed part of an earlier opinion and ruled that the Jobst pressure gradient vest, Jobst pressure vest, Jobst pressure gradient…
Is a separately stated charge for air quality monitoring during an asbestos abatement project taxable in Texas?
Not taxable. A separately stated charge for air quality monitoring performed during an asbestos abatement project is not taxable, though the monitoring and other equipment used is taxable to the…
Is the labor to set up a computer -- connecting the monitor, mouse, keyboard, and printer to the CPU -- taxable in Texas?
Yes. The Comptroller ruled that the initial set up of a computer -- connecting the monitor, mouse, keyboard, and printer to the CPU -- is considered assembly of tangible personal property and is…
What does the available official PDF for South Carolina's September 1996 policy-document index contain?
The PDF says the index covered five Department document types concerning taxation from 1987 through September 30, 1996 and alcoholic-beverage licensing and regulation from July 1, 1993 through…
Was a foundation's purchase of a sailplane sculpture exempt because it was displayed free to the public at an airport?
No. Free public display was insufficient. The foundation kept title, did not buy the sculpture for direct donation to a listed government or nonprofit, did not operate a public museum under…
Could the described religious nonprofit's donated-goods thrift store qualify under section 6375?
Yes, on the stated welfare-exemption, poverty-relief, distressed-purchaser, and assembly facts—but the organization still needed a seller's permit.
Did installment-sale gain belong in a dissolving S corporation's former Texas franchise-tax final report?
Only to the extent the gain was reported on the S corporation return through dissolution. That portion entered receipts and taxable earned surplus on the final report. Installment income reported…
Is ISDN internet equipment and connectivity used to transfer prepress printing files exempt from Texas sales tax as manufacturing equipment?
Mostly no. The Comptroller ruled that computers or equipment that directly drive digital printing presses qualify for the manufacturing exemption, but the ISDN line, routers, and other equipment…
When were shares of out-of-state investment funds holding Florida municipal and U.S. government obligations exempt from Florida intangible tax?
Shares were wholly exempt when the fund's prior-year-end portfolio contained only exempt Florida municipal interests and U.S. government obligations. Taxable securities held earlier in the year did…
Did a rabbi trust acquire Florida intangible-tax situs because one of its three or more trustees was a Florida trust company?
No. The trust required at least three trustees, at least two of them nonresidents, and management and control rested with a majority. Because the nonresident trustees controlled the assets and the…
Which LoanLiner forms were taxable written obligations or renewals, and which forms were not taxable by themselves?
The signed BFL215 credit agreement and VFL065 advance request were taxable when read together because they supplied a promise, approved sum certain, and borrower signature. A signed MST053 extension…
As a Federal Firearms Licensed Dealer handling interstate gun transfers, when do I collect Utah sales tax on the gun price, on my transfer fee, and on the federal NFA tax stamp — and does an individual owe tax on an NFA firearm even if it's for law enforcement training use?
It depends on the roles and billing details. Whether Utah sales/use tax applies to the gun's purchase price turns on nexus: if the out-of-state seller has sufficient contact with Utah, the seller…
How did California distinguish a taxable splint from an exempt orthotic device?
California said a splint primarily immobilized broken-bone pieces and provided no support or only incidental support, while an orthotic device was designed to support the body structure and permit…
Were sales of sequential gradient pumps exempt as sales of orthotic devices?
Generally no. California said the pumps usually rested on a table beside the patient rather than being worn, so they generally did not qualify as orthotic devices and their sales were taxable.
Were cold-compression therapy devices exempt as prescription medicines?
No, on the hypothetical description. California counsel said cold-compression units applied compression and cold, not a substance or preparation within the medicine definition, so their sales were…
Does a promotional-advertising company owe Texas sales tax on searchlights, inflatables, banners, balloon giveaways, and clowns it provides for grand openings and sales events?
It depends on the item. Imprinting balloons for giveaway and selling balloons is taxable, but searchlights, inflatables, banners, flyovers, decorating, and clowns/entertainment are nontaxable…
Did a trust owe Florida intangible tax when its trustees had to remain outside Florida and its beneficiary held only a limited appointment power?
No. The trust barred individual trustees from Florida residence and corporate trustees from qualifying or doing business in Florida, so no trustee had Florida situs. The beneficiary's limited…
Was interest from qualifying loans to a South Carolina business development corporation exempt from state income tax under RR 96-10?
Yes. Interest on loans made to a South Carolina business development corporation in accordance with Sections 33-37-250 and 33-37-460 was exempt from South Carolina income tax because Section…
Is carpet bought for a minister's parsonage exempt from Texas sales tax, and does it matter who pays for it?
It depends on who pays. A church can buy carpet to refurbish a parsonage tax-free by giving the supplier an exemption certificate, but only if the materials are billed to and paid for by the church…
Does a sale-and-leaseback of office equipment escape New York sales tax if it's really a disguised financing arrangement rather than a true sale?
No -- a proposed sale of office and computer equipment by a securities firm to an unrelated commercial lender, followed by a 'leaseback' with renewal/purchase/return options structured so the firm…
What was the Florida intangible-tax result when a Florida parent transferred receivables to an out-of-state subsidiary over January 1 and received an intercompany note?
The Florida parent was not taxed on receivables it did not own, manage, or control on January 1. Its note from the subsidiary was taxable in principle, but a timely consolidated intangible-tax…
Did a Florida beneficiary or non-Florida trustee owe intangible tax on an irrevocable foreign-situs trust when the beneficiary lacked current income and control rights?
No. The Florida beneficiary had no current right to income, power to revoke, power to invade corpus, or general power of appointment, so she held no taxable beneficial interest. The individual…
How does Utah tax sale-leaseback lease payments, conditional-sale 'leases,' and secured loans on equipment, and how can a leasing company avoid taxing the same equipment twice?
It depends on how the transaction is structured. A true sale-leaseback avoids double taxation on the lease payments only if three conditions are all met: the lessee already paid sales tax on its own…
Was web-site design taxable when a customer supplied its computer and existing software, the designer modified the software, and no tangible copy or manual was delivered?
No. Under the stated assumptions, modifying customer-supplied software to create a web site without delivering disks, tapes, manuals, or other tangible property was nontaxable reprogramming.
Were a library joint powers agency's charges for remote computer access, record capacity, and a share of vendor maintenance taxable, and did it need a seller's permit?
No. Providing remote access and hard-drive space without transferring hardware, software, or records was not a sale or lease, and the agency needed no seller's permit absent other taxable sales.
Did a corporation independently tax two short federal periods after its stock changed owners, or combine them on its former Texas report?
It combined them. Because the stock sale changed ownership but not the corporation's legal status, the 1996 annual report used the full 1995 calendar year. The corporation added both short-return…
How did Texas tax a leasing company's purchase of another lessor's vehicles, loans, and lease contracts?
A financing takeover was only a lienholder change and was not taxable. Apportioned carrier units could transfer under the carrier's IMC permit. Other vehicles could be acquired for resale tax-free…
When did California treat information pulled from a preexisting database as a taxable product rather than nontaxable research?
Physical database extracts were generally taxable, including custom-selected lists, but individualized profiles and narrow lookups could be nontaxable research; purely electronic transfers were not…
Did an irrevocable trust owe Florida intangible tax when its trustees had to remain outside Florida and its beneficiary held only a limited power of appointment?
No. The trust barred an individual trustee from residing in Florida and a corporate trustee from qualifying or doing business there, so no trustee had Florida situs. The beneficiary's limited power…
Did an irrevocable trust owe Florida intangible tax when its trustees had to remain outside Florida and its beneficiary held only a limited power of appointment?
No. The trust barred an individual trustee from residing in Florida and a corporate trustee from qualifying or doing business there, so no trustee had Florida situs. The beneficiary's limited power…
Who owed Tennessee sales tax when a business custom-fabricated shutters and permanently installed every shutter in customers' buildings?
The shutter business owed tax on its raw materials as a contractor and could not use a resale certificate. Because the permanently installed custom shutters became real-property fixtures, it did not…
Were monthly license fees for standardized commercial real estate data delivered temporarily on disks and CD-ROMs taxable even though customers had to return the media?
Yes. Customers leased disks and CD-ROMs containing noncustom data from a preexisting database, and tax applied to the rentals because the company created the recorded media itself.
Were monthly license fees for standardized commercial real-estate data delivered on disks and CD-ROMs taxable?
Yes. Customers received noncustom information from a preexisting database on tangible media, so California treated the transaction as a taxable lease of the disks.
Is a fee-based Internet dating service that maintains a database of interested persons taxable as an information service in Texas?
Yes, taxable. The Comptroller ruled that charging a fee for individuals to access a database of interested persons built for an Internet dating service constitutes an information service, and…
Are elevator consulting firms' inspection, evaluation, design, and expert-witness services subject to New York sales tax?
No -- a group of elevator consulting firms' inspections, performance evaluations, code-compliance reviews, modernization studies, traffic-capacity studies, design/specification work, bid analysis,…
How does New York sales and use tax apply to a kitchen cabinet and countertop manufacturer that sells its products both installed and uninstalled?
It depends on whether the sale is installed or uninstalled -- a kitchen cabinet and countertop manufacturer must collect sales tax when selling cabinets uninstalled, but when it installs cabinets or…
Is a rail carrier exempt from Texas sales and use tax on its own purchases, and can Texas make it collect local sales tax on food and beverages sold aboard its trains?
The rail carrier itself is exempt from state and local tax on its own purchases under 49 U.S.C. § 24301(k). But that federal exemption does not let the Comptroller force the carrier to collect local…
Was a warehouse loan exempt from Florida documentary stamp tax when fully supported by pledged mortgage notes on which the required tax had been paid?
Yes. The owner pledged promissory notes secured by Florida real-property mortgages under a wholesale warehouse mortgage agreement, and all documentary stamp tax on those collateral obligations was…
Does Utah's industrial-use sales tax exemption for gas, electricity, and other fuels cover processing activities like washing, crushing, and sizing minerals at a mine site, not just the extraction itself?
Yes. Fuel and electricity used for washing, crushing, and sizing minerals counts as 'mining or extraction of minerals' for Utah's industrial-use sales tax exemption, as long as that processing…
Did an affiliated common carrier qualify for Tennessee's exemption for repair parts shipped on its own trucks for use outside the state when its parent owned 90% of all issued stock but 100% of voting stock?
No. The exemption required the seller and carrier to satisfy a direct 100% capital-stock ownership or control test. The seller owned all voting shares but only 90% of the carrier's total issued…
How did Tennessee sales and business tax apply when a travel-packager bought lodging, meals, and entertainment and resold the combined package to tour operators?
The packager could buy the lodging, food, and entertainment for resale. Its sale to a tour operator was also a resale only with a valid Tennessee resale certificate and a reasonable belief that the…
Were fully worn female urinary-incontinence stimulators exempt prosthetic devices?
Yes under the stated conditions. California treated the fully worn stimulator and vaginal electrode as a prosthetic device assisting the urinary sphincter's natural function.
How does Utah sales and use tax apply to an out-of-state alarm/security company's equipment sales, leases, installation, monitoring, maintenance, and repair services for Utah customers?
It depends on the specific charge, and the outcome hinges heavily on whether the alarm system is 'converted to real property' upon installation (affixed to the building) versus staying tangible…
Is electricity used in vacant apartment, duplex, condominium, or townhouse units exempt from Texas sales tax as residential use?
It depends on the type of unit. Once at least one unit in a multifamily apartment complex is occupied, electricity in the complex's other vacant units and common areas is exempt as residential use…
Was a nonprofit charitable organization that may have done business in Texas during 1995 subject to former Texas franchise tax?
Possibly, but the letter did not decide the organization's liability. It said liability depended on whether the nonprofit was a corporation or other taxable entity, had Texas nexus under Rule 3.546,…
Is a 7-Eleven franchisee personally liable for sales tax on store sales even though the franchisor prepares, signs, and files the sales tax returns?
Yes -- a 7-Eleven franchisee who makes taxable retail sales is a "vendor" personally liable for the sales tax collected at the store, even though the franchise agreement has the franchisor…
Is the cost of soft patterns and prototype materials an apparel manufacturer uses to develop new clothing designs exempt from New York sales and use tax as research and development?
Yes, but only conditionally -- an apparel manufacturer's soft patterns and prototype materials qualify for New York's research-and-development sales/use tax exemption to the extent they are used…
Are orthopedic braces and therapy devices exempt from Utah sales tax as home medical equipment when sold to hospitals and physicians?
Taxability depends on the TRANSACTION, not the product itself, so the Commission couldn't give a blanket answer for each product category. The home medical equipment exemption requires (1) a…
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