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 an elevator company owe use tax on materials it uses in taxable maintenance and repair jobs, and can it recover that tax?
Elevator maintenance and repair is taxable on the full invoice price (unless it's a capital improvement). The company can claim a refund or credit for tax paid on materials that become part of the ser…
My clients, a married couple both now in bankruptcy and heading toward divorce, jointly own a 37-acre residential property. My client moved out several months ago due to marital discord, but her husband still lives there. If their bankruptcy trustees sell the property (including to a tax-exempt buyer) for $1.5 million, does the personal residence exemption from New York's Real Property Transfer Gains Tax still apply, given my client's recent absence?
The residence exemption still applies -- a spouse's few-month absence due to marital discord, with the other spouse continuing to live there, doesn't break the exemption, and neither does the property…
I want to transfer my three New York properties -- including my personal residence -- into a revocable living trust to avoid probate, keeping full control and the right to revoke at any time. Will funding the trust trigger Real Estate Transfer Tax or Real Property Transfer Gains Tax? And will my residence be exempt from gains tax when the trustee eventually sells it after I die?
Both exempt. Hilles Timpson planned to transfer her Southampton personal residence, a New York City residence used by relatives rent-free, and a New York City rental property (each worth over $1 milli…
How should a Kansas county treasurer calculate delinquent property-tax interest after BOTA or another competent authority reduces the property's valuation?
Recalculate the tax first, then apply the statutory delinquent-interest rate or rates to the adjusted tax due. When BOTA or another competent jurisdiction reduces the valuation, the treasurer should n…
Could a Kansas county appraiser, county clerk, or county commission waive a statutory property-tax listing penalty for a late filer?
No. The directive says county appraisers must impose the prescribed penalties and that appraisers, clerks, and county commissioners may not abate them. For a penalty under K.S.A. 79-1422, only the Boa…
Are Kansas property tax directives issued before November 1992 still good authority?
No -- they were wiped out in 1992. This directive states that 'effective immediately, all prior directives, memoranda, and written or oral instructions issued by any Director of Property Valuation on …
Does placing print advertisements in Texas newspapers (including national inserts and free-standing inserts) create nexus requiring a mail order company to collect Texas sales tax?
No. The Comptroller ruled that placing one-page ads in Texas newspapers, in national publications distributed via Texas newspapers, in shared advertising booklets inserted in Texas newspapers, or as f…
Texas Letter Ruling 9211L1203A01: Thirteen Period Accounting Calendar Year
Yes. The Comptroller granted permission for a group of affiliated corporations to keep filing Texas sales tax returns based on their 13-period fiscal accounting calendar instead of standard calendar m…
Texas Letter Ruling 9211L1202G12: Layaway Sales — Tax Increase Or Tax Rate Change Before Customer Obtains Possession Of Tpp
The tax rate in effect when the layaway contract was executed applies to the whole layaway sale, even if a local tax rate increase takes effect before the customer pays off the balance and takes posse…
Texas Letter Ruling 9211L1202G11: Does a carpet installer collect sales tax on materials under a separated contract?
Yes. Under a separated contract for selling and installing carpet in a residence, the dealer is the seller of the incorporated materials, must give a resale certificate to its supplier, and must colle…
Does a Texas carpet dealer collect sales tax on materials only, or on the whole job, when installing carpet in a residence?
It depends on how the invoice is written. Under a separated contract (materials and labor billed separately), the dealer collects tax only on the stated materials charge and gives suppliers a resale c…
Texas Letter Ruling 9211563L: Does a company owe sales tax on temporary security guards hired to supplement its existing security force?
It depends on whether the guards are licensed security personnel or true temporary help. If the guards are licensed by the Board of Private Investigators and Private Security Agencies, the charge is a…
Does an aircraft-rental company pay sales tax on fuel it pumps into planes for 'wet' rentals, and can it recover that tax?
The lessor must pay sales tax on fuel at the pump even though it's bought for resale, but can then claim a credit (on the FF schedule, Form ST-100.10) against the tax it collects on the wet rental. Fu…
Are a country club's membership fees and dues taxable when membership is by invitation only and restricted to a defined group?
Yes. Because the club restricts membership by invitation only — an attempt at exclusivity beyond mere facility size — it's a taxable 'social or athletic club,' so its fees and dues are subject to sale…
For a multi-tier chain of controlled foreign corporations, does a company's share of a lower-tier CFC's Subpart F income keep the character (subsidiary capital vs. investment income) of the company's OWNERSHIP IN THAT LOWER-TIER CFC, or does it instead take on the character of the company's ownership in the FIRST-TIER CFC through which the income is deemed distributed?
The company's pro-rata share of Subpart F income from ANY tier of controlled foreign corporation -- first-tier or lower -- is deemed a dividend paid up the chain and takes on the character of the taxp…
Texas Letter Ruling 9211L1199G12: Hotel — Trunk Lines Purchased For Own Use And For Resale To Guests — Resale Certificate Guidelines
No. A hotel that buys a trunk line for telecommunication service and resells part of that service to guests cannot give its telecom provider a resale certificate for the basic local exchange service. …
Does a Texas pallet manufacturer have to collect sales tax when transportation companies buy replacement pallets, even though the old pallets are returned to distributors?
Yes. The Texas Comptroller ruled that the pallet manufacturer must collect sales tax from the transportation companies buying the replacement pallets. The fact that the removed pallets may later be re…
Do carry-out pizza and wholesale-bakery retailers that prepare food for consumption elsewhere qualify for the noncommercial-use sales tax exemption on the fuel and electricity they use, the same way manufacturers do?
No. Even though a carry-out pizza shop or a bakery preparing food for later consumption uses gas and electricity to "produce or compound" a resold product -- similar to a manufacturer -- Utah Code sec…
Does Utah sales tax apply to the federal excise tax portion of cigarette prices sold from vending machines?
No — separately stated federal excise tax is not subject to Utah sales tax, as long as accounting records consistently reflect the sale price separately from the federal excise tax. A physical sign on…
Does a computer-integrated manufacturing (CIM) system that also handles some administrative functions qualify for Utah's new-and-expanding manufacturing equipment exemption?
This record shows a dispute, not a clean final answer. An initial Auditing Division response denied the exemption under § 59-12-104(15), reasoning that a computer-integrated manufacturing (CIM) system…
Texas Letter Ruling 9210L1200F09: Caterer — Definition — Treated As Restaurant
Yes. The Comptroller ruled that a caterer is treated the same as a restaurant for Texas sales tax purposes, so it owes tax on tangible personal property it rents to put on catered events (tables, chai…
Texas Letter Ruling 9210L1200F03: Recycling Plant — Manufacturing Process Begins With Shredding — Also Machinery/Equipment Used
Yes. The Texas Comptroller ruled that a company shredding old tires into three-inch squares for eventual processing into rubber crumb (to be resold in products like mats and mud-flaps) is engaged in m…
Under South Carolina Revenue Ruling 92-12, how did the historical 5% tax and $300 maximum apply when boats, motors, and boat trailers were sold alone or together?
The historical $300 maximum applied to a boat sold alone and to a boat sold with a permanently attached motor; otherwise the ordinary 5% rate applied. A motor sold alone and an ordinary boat trailer s…
Is renting out pedal boats, bumper boats, and aqua cycles on a waterway taxable as a rental of tangible personal property in Texas?
Yes. The Texas Comptroller ruled that renting bumper boats, pedal boats, and aqua cycles on public or private waterways is a taxable rental of tangible personal property, both before and after October…
Texas Letter Ruling 9210L1198D01: Caricature Artists/Cartoonists Charges For Drawings At Party/Parties
Yes. Caricature drawing is a sale of taxable tangible personal property (graphic art), so the artist must collect sales tax on the total charge. But if the artist is hired by an amusement-service prov…
Texas Letter Ruling 9210L1205A08: Storage Tank — Above Ground With 500 Barrels Less Or More Capacity — Tpp Vs. Improvement To Realty
Yes, taxable. Each tank in the battery held only 400 barrels, under the 500-barrel line that keeps a tank classified as tangible personal property in Texas. Because it stayed TPP rather than becoming …
Texas Letter Ruling 9210L1200G07: Navigation District — Loading Dock Facility Construction — Lump — Sum And Separated Contract Guidelines
It depends on the contract type. Building a loading dock for a navigation district (a political subdivision) is an improvement to realty. Under a lump-sum contract, the contractor pays tax on all inco…
Can a trash-removal company buy portable compactors tax-free for resale when it supplies them to customers as part of its trash-removal service?
No. Because the hauler and its customer both use the compactors as part of one bundled trash-removal service, the compactors aren't purchased for resale — so the hauler owes sales tax on buying them, …
Are golf country club membership dues and initiation fees taxable when members have no control, no proprietary interest, and membership is limited only by the size of the facility?
No. Because members won't control the club, won't hold a proprietary interest, and membership is limited only by the physical size of the facility (not exclusivity), the club isn't a taxable 'social o…
A nonresident who was a longtime key employee of a family-owned New York publishing business received a $1.2 million payment for agreeing not to compete, made as part of the family's sale of the business to an outside buyer. Is that non-compete payment New York-source income subject to New York State personal income tax, and if so, how much of it is taxable?
Yes, at least in part. The Department ruled that a payment for an agreement not to compete, made in connection with the sale of a business, is New York-source income to the extent it derives its value…
Is a subcontractor's charge to erect tubular scaffolding or pipe framing for a building renovation subject to New York sales tax?
Yes. A subcontractor's charge to erect tubular scaffolding or pipe framing is subject to New York State and local sales tax. Scaffolding is not a tax-exempt 'temporary facility' — and it's taxable whe…
Are a company's labor and material charges to close its portion of a town-owned landfill subject to New York sales and use tax?
No. Closing the landfill is a capital improvement, so the labor charges aren't taxable; and because the materials become an integral part of the exempt Town of Wilna's land, the materials aren't taxab…
Texas Letter Ruling 9210L1198A13: Jail/Prison — Inmates Staying In Facility In Excess Of 30 Days Do Not Meet Definition Of Tenants — Gas And Electricity Is Not Residential Use
No. The Texas Comptroller ruled that a prison is not a building 'occupied as a home or residence,' so natural gas and electricity purchased for use in a prison do not qualify for the residential-use s…
Texas Letter Ruling 9210L1197E07: Walls — New Exterior Wall Built Around Remodeled Building — No Usable Space Created — Is Remodeling
It depends on whether the new wall creates usable space. Following an ALJ hearings decision, the Comptroller revised its earlier guidance: pouring a new footer and adding a brick wall outside an exist…
Texas Letter Ruling 9210504L: Satellite Dish — Home/Residential Or Commercial Use — Sale And Installation Vs. Improvement To Realty
Generally no. The Comptroller ruled that satellite systems are tangible personal property, not permanent improvements to realty, so the full charge for both labor and materials to sell and install the…
Texas Letter Ruling 9210L1200G11: Medical Air Services — Membership/Initiation Fee For Emergency Medical Flights, Organ Delivery, Mortal Remains Return
No. The Texas Comptroller ruled that annual dues and a one-time initiation fee paid to a medical emergency association are not taxable, because membership in a medical emergency association is not an …
Texas Letter Ruling 9210L1197G12: Fair Exhibitors — Parking Passes Provided Together With Admission Fee
No, not automatically. If an exhibitor's admission pass includes complimentary parking with no separately identifiable parking charge, none of the admission price is taxable as motor vehicle parking. …
Does Salt Lake County's 1% restaurant tax apply to banquet extras like flowers, equipment rental, music, bartender labor, ice carvings, corkage, and gratuities -- or only to the food and beverages themselves?
It depends on the item. Salt Lake County's 1% restaurant tax applies to charges directly incidental to serving food and beverages -- like a drink setup/corkage fee -- and to required gratuities (unles…
Texas Letter Ruling 9210L1204F12: Lock Or Locking Cylinder Exchange Service For Storage Facilities — Fee Charged
Yes. The Texas Comptroller ruled that a flat fee charged for organizing and coordinating the exchange of locking cylinders between storage facilities is the taxable sales price of the different lockin…
Texas Letter Ruling 9210L1209F06: Right — Of — Way/Other Infrastructure — Installation Or Repairs Of Tpp Or Improvements To Realty Must Be Dedicated And Accepted To Get Exemption
Yes. The Comptroller confirmed that the same rules used for developers donating streets to exempt entities also apply to donations of other types of real property improvements to exempt entities.
When nonresident shareholders liquidate a New York S corporation whose only asset is a partnership interest in New York rental real estate, what are the New York personal income tax consequences under Article 22 of the Tax Law - and can a loss on the deemed sale of their S-corporation stock offset the gain on the deemed sale of the corporation's underlying asset?
No, the loss cannot offset the gain for New York purposes, and the result is asymmetric. Because the New York S corporation allocated 100% of its income to New York for franchise tax purposes, the non…
Are municipal put bonds investment capital, and how does the put date affect their classification under Article 9-A?
A municipal put bond's put date counts as a 'date of maturity' under 20 NYCRR 3-4.2. So the bond is generally classified as investment capital, except that it must be classified as cash (not investmen…
Is a dissolved corporation that merely holds record title to New York real property as nominee for others, while otherwise inactive, subject to Article 9-A franchise tax?
It depends on whether the corporation was still incorporated. Midstate Research was a New York corporation that owned four acres of vacant land but stopped all activity in 1971 and was dissolved by pr…
Texas Letter Ruling 9210L1199F14: Local Tax — City Ordinance — Enacting Tax On Telecommunications/Gas And Electricity — Whether Will Expire If City Changes Providers
No. The Comptroller's Tax Administration division concluded that a city's ordinances taxing telecommunications, gas, and electric services do not expire or stop applying if the city later switches to …
Texas Letter Ruling 9210L1204F03: Stock/Commodity Quotation Service — 'Real Time' Quotes And Bids
The company's real-time stock and commodity quote/bid service is a taxable information service under 34 TAC 3.342, so Texas sales tax applies. But its separate securities order-execution and trade-set…
Texas Letter Ruling 9210L1200F06: Representation/Nexus In Texas — Displaying Products And Providing Order Forms At University Bookstore By Oos Seller
Yes. The Comptroller advised that an out-of-state seller displaying its products and providing order forms at a Texas university bookstore is engaged in business in Texas because that display counts a…
Is plastic media blasting to strip paint before repainting real property taxable in Texas?
Yes, in most cases. The Comptroller treated plastic media blasting done to prepare real property for repainting as a taxable restoration or remodeling service under Rule 3.357. The provider must colle…
Texas Letter Ruling 9210L1201A05: Therabite Mobilizer For Jaw Motion Rehabilitation — Orthopedic Device
Yes. The Comptroller ruled that the Therabite Mobilizer, a device that stretches or moves the jaw joint for rehabilitation, qualifies as a tax-exempt orthopedic device under Rule 3.284(a)(9), based on…
Texas Letter Ruling 9210L1200A01: Exempt/Nonprofit Entity And For — Profit Organization Holding Event — Guidelines
Yes, admission tickets can stay exempt from Texas amusement tax even when a nonprofit hires a for-profit sports marketing firm to run the event, as long as the nonprofit is the one that holds itself o…
Does a Texas restaurant have to charge sales tax on meals it gives employees free or for a fee around their shift?
No. The Comptroller ruled that meals a food service operator furnishes to employees immediately before, during, or immediately after a shift, provided for the operator's convenience, are not subject t…
Texas Letter Ruling 9210483L: Delivery/Courier/Messenger Service Only
No. Texas ruled that a company's document delivery and filing services (fax, mail, courier, or hand delivery to recipients as instructed by clients) are not subject to Texas sales or use tax, no matte…
Our company owns numerous New York real estate interests, many of which we built ourselves, generating huge volumes of vendor invoices, purchase orders, and accounting records supporting the 'original purchase price' we'd need to prove for the Real Property Transfer Gains Tax. Can we keep those supporting records solely on microfilm or similar media, instead of retaining the original paper documents?
Yes -- microfilm (or similar media) recordkeeping is acceptable for substantiating original purchase price, as long as the taxpayer follows the Department's established recordkeeping procedures for su…
Is a manufacturer's rebate that a car lessee assigns to the dealer as a 'capitalized cost reduction' still part of the taxable receipt on the lease?
Yes. A rebate the car manufacturer pays you and that you sign over to the dealer as a 'capitalized cost reduction' does not shrink what you owe the dealer, so it stays part of the taxable lease receip…
Is the IRC section 847 special deduction for an insurance company's discounted unpaid loss reserves allowed in computing entire net income under Article 33 of the New York Tax Law?
No -- the section 847 deduction is effectively reversed for New York. IRC section 847 lets a property/casualty insurer take an extra deduction for discounting its unpaid loss reserves, but only if it …
Texas Letter Ruling 9210L1197D11: Vessel — Component Parts — Fishing Net/Long — Line Fishing Gear — Component Of Fishing/Shrimp Boat
Long-line fishing gear, fishing nets and repair twine, stored life preservers, and rigging attached to the vessel are exempt as component parts when sold with a proper exemption certificate for a Texa…
We're building a cogeneration plant at JFK Airport under Port Authority agreements, financed by up to $250 million in Port Authority bonds. The Port Authority will assign its lease rents to the bond trustee (exempt, since it's a government instrumentality), and we'll separately grant the trustee a leasehold mortgage on our own leasehold interest as additional security. Is our leasehold mortgage exempt too, or only the Port Authority's assignment?
Exempt too, but ONLY if recorded after the Port Authority's own exempt Assignment of Rents -- and this is the origin ruling establishing that sequencing rule, later applied and reaffirmed on a refundi…
May a new business get a refund of its unused Article 9-A investment tax credit under section 210.12(j), and for which year must the refund claim be filed?
Yes -- a qualifying new business can have its unused investment tax credit refunded, with conditions. NEWCO, a manufacturer incorporated in 1984 that met the section 210.12(j) new-business tests, may …
Under South Carolina Revenue Ruling 92-14, who owed deed documentary tax, and how were master-in-equity deeds and transfers to or from governments, GNMA, FNMA, Freddie Mac, and Farm Credit entities treated?
The purchaser or grantee was primarily liable; the seller or grantor could be assessed only when collection from the grantee was impractical. Master-in-equity foreclosure deeds to private buyers were …
How did South Carolina Revenue Ruling 92-11 tax contractors that fabricated standard finished products or one-project-only unique products for use in real-property construction?
The historical ruling split the result by product type and business activity. A taxpayer regularly selling standard finished products was a manufacturer; when it used those products in its own South C…
The Transit Supervisors Organization, a union representing employees of the Manhattan and Bronx Surface Transit Operating Authority (MABSTOA), asked whether pensions paid to MABSTOA employees are taxable under New York's personal income tax - especially after the MABSTOA pension plan was revamped to more closely resemble the New York City Transit Authority's pension fund.
MABSTOA pensions remain fully taxable - even after the plan's revamp, it still is not exempt as a 'New York State or municipal retirement system' under Tax Law § 612(c)(3), because it remains outside …
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