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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We're the fee owner of an office building. To help a corporate tenant get economic-development tax benefits through the NYC Industrial Development Agency (IDA), we're converting our building to a condominium and conveying legal title to the tenant's units to the IDA for a nominal price, then leasing those units back from the IDA for nominal rent under an 'Overlease.' We (not the IDA) will keep all the rent, insurance and condemnation proceeds, income-tax ownership treatment, and the right to sell, mortgage, or alter the units; title reverts to us automatically when the IDA benefits end (no later than 2016). The tenant separately subleases from us and its rent obligations flow through additional financing leases to fund the IDA bonds. Are the conveyance to the IDA, the eventual reversion back to us, and the various leases and lease amendments subject to New York's Real Estate Transfer Tax or the (now-repealed) Real Property Transfer Gains Tax?
Exempt at every step -- Metropolitan Life Insurance Company kept all the real economic benefits and burdens of ownership throughout. Metropolitan Life, the fee owner of 11 Madison Avenue in…
Did the Flint Trust owe Florida intangible tax when its trustees had to remain outside Florida and its beneficiary held only a limited power of appointment?
No. No trustee had Florida situs because individuals could not reside in Florida and corporate trustees could not qualify or do business there. The beneficiary had only a limited appointment power…
Did the Flint Trust owe Florida intangible tax when its trustees had to remain outside Florida and its beneficiary held only a limited power of appointment?
No. No trustee had Florida situs because individuals could not reside in Florida and corporate trustees could not qualify or do business there. The beneficiary had only a limited appointment power…
Did the Flint Trust owe Florida intangible tax when its trustees had to remain outside Florida and its beneficiary held only a limited power of appointment?
No. No trustee had Florida situs because individuals could not reside in Florida and corporate trustees could not qualify or do business there. The beneficiary had only a limited appointment power…
Did the Flint Trust owe Florida intangible tax when its trustees had to remain outside Florida and its beneficiary held only a limited power of appointment?
No. No trustee had Florida situs because individuals could not reside in Florida and corporate trustees could not qualify or do business there. The beneficiary had only a limited appointment power…
Did the Flint Trust owe Florida intangible tax when its trustees had to remain outside Florida and its beneficiary held only a limited power of appointment?
No. No trustee had Florida situs because individuals could not reside in Florida and corporate trustees could not qualify or do business there. The beneficiary had only a limited appointment power…
Did the Flint Trust owe Florida intangible tax when its trustees had to remain outside Florida and its beneficiary held only a limited power of appointment?
No. No trustee had Florida situs because individuals could not reside in Florida and corporate trustees could not qualify or do business there. The beneficiary had only a limited appointment power…
Did the Flint Trust owe Florida intangible tax when its trustees had to remain outside Florida and its beneficiary held only a limited power of appointment?
No. No trustee had Florida situs because individuals could not reside in Florida and corporate trustees could not qualify or do business there. The beneficiary had only a limited appointment power…
Did the Flint Trust owe Florida intangible tax when its trustees had to remain outside Florida and its beneficiary held only a limited power of appointment?
No. No trustee had Florida situs because individuals could not reside in Florida and corporate trustees could not qualify or do business there. The beneficiary had only a limited appointment power…
Did the Flint Trust owe Florida intangible tax when its trustees had to remain outside Florida and its beneficiary held only a limited power of appointment?
No. No trustee had Florida situs because individuals could not reside in Florida and corporate trustees could not qualify or do business there. The beneficiary had only a limited appointment power…
Did the Flint Trust owe Florida intangible tax when its trustees had to remain outside Florida and its beneficiary held only a limited power of appointment?
No. No trustee had Florida situs because individuals could not reside in Florida and corporate trustees could not qualify or do business there. The beneficiary had only a limited appointment power…
Did the Flint Trust owe Florida intangible tax when its trustees had to remain outside Florida and its beneficiary held only a limited power of appointment?
No. No trustee had Florida situs because individuals could not reside in Florida and corporate trustees could not qualify or do business there. The beneficiary had only a limited appointment power…
Did the Flint Trust owe Florida intangible tax when its trustees had to remain outside Florida and its beneficiary held only a limited power of appointment?
No. No trustee had Florida situs because individuals could not reside in Florida and corporate trustees could not qualify or do business there. The beneficiary had only a limited appointment power…
Did the Flint Trust owe Florida intangible tax when its trustees had to remain outside Florida and its beneficiary held only a limited power of appointment?
No. No trustee had Florida situs because individuals could not reside in Florida and corporate trustees could not qualify or do business there. The beneficiary had only a limited appointment power…
Did the Flint Trust owe Florida intangible tax when its trustees had to remain outside Florida and its beneficiary held only a limited power of appointment?
No. No trustee had Florida situs because individuals could not reside in Florida and corporate trustees could not qualify or do business there. The beneficiary had only a limited appointment power…
Did the Flint Trust owe Florida intangible tax when its trustees had to remain outside Florida and its beneficiary held only a limited power of appointment?
No. No trustee had Florida situs because individuals could not reside in Florida and corporate trustees could not qualify or do business there. The beneficiary had only a limited appointment power…
Did the Flint 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 the Flint 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 the Flint 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 the Flint 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 the Flint 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…
Can a custom flexible packaging manufacturer bill for artwork and printing plates without charging sales tax if the customer provides a manufacturer's exemption certificate?
Yes. The Comptroller confirmed that when a company bills customers for artwork and plates used in manufacturing custom flexible packaging, no state or local sales tax needs to be charged, as long as…
Does a California company that runs an internet 'mall' website for Texas retailers create Texas sales tax nexus for itself or for the retailer's out-of-state clients, and who is responsible for collecting and remitting the sales tax?
The Comptroller ruled that COMPANY A, a California business that built and ran e-commerce websites for retailers (including some in Texas) and collected payment on their behalf, was responsible for…
Which fishing baits are exempt from Texas sales tax as perishable bait, and which baits are still taxable?
Exempt. Sales tax is no longer due on perishable fishing bait such as worms, minnows, water dogs, crawfish, live or frozen shrimp, frozen shad, frozen squid, blood baits, and crickets. Fishing…
Did a Texas-organized LLC owe former franchise tax and have to file an initial report even if taxed federally as a partnership?
Yes. Organization under Texas law made the LLC subject to former franchise tax despite federal partnership treatment. Its initial report used Rule 3.562 for taxable capital and earned surplus,…
Is installing or removing window tinting/sunshield film on a commercial building taxable, and does it matter whether the building is residential or nonresidential?
Taxable, if the building is nonresidential. The Comptroller ruled that adding or removing window film or tinting on an existing commercial building (like a store front or office building) is taxable…
When an event planner bills a client for a mix of food, rentals, decorations, and entertainers, which of those charges are subject to Texas sales tax?
It depends on the item. The Comptroller ruled that food, rentals (tables, chairs, decorations, tents), and most goods transferred to the customer are taxable, while charges purely for live…
How long does the statute of limitations run on the manufacturing phase-in exemption, and does it differ if the exemption was claimed at the time of purchase versus refunded later?
A four-year statute of limitations applies to purchases made during the last quarter of 1993, 1994, and later periods when the manufacturing phase-in exemption is claimed at the time of purchase…
What former Texas franchise-tax penalties applied when a report was more than 60 days late and a tax determination remained unpaid?
A report more than 60 days late incurred a 10% penalty on unpaid tax. If the taxpayer had also received a deficiency or jeopardy determination and failed to pay it on time, the letter said an…
Were disposable blood oxygenators, reservoirs, cardioplegia delivery systems, and custom tubing packs exempt medicines?
No. California treated all four product categories as taxable devices, instruments, or appliances used during heart-lung bypass surgery.
What counts as exempt 'machinery and equipment' for a Texas enterprise project, and how do the related sales tax refunds work?
The Comptroller ruled that 'machinery and equipment' for a Texas enterprise project under Section 151.429(a) covers essentially all depreciable property purchased for use in the zone -- production…
Does the Texas fishing bait exemption put fishermen on the same footing as hunters, and are ice and small containers of honey taxable?
The Comptroller confirmed the perishable bait exemption puts fishermen on an equal footing with the exemptions available for hunters. Separately, ice is taxable even though it is for consumption,…
What South Carolina tax relief was available under IL 96-21 to taxpayers affected by Hurricane Fran?
Affected taxpayers could be eligible for extensions to file returns and pay taxes, suspension of enforced collection, waiver of penalties caused by granted extensions or collection suspensions, and…
What job-tax-credit amounts applied to South Carolina's four county tiers under the 1996 Rural Development Act?
The annual credit for each new job was $4,500 in a least-developed county, $3,500 in an under-developed county, $2,500 in a moderately developed county, and $1,500 in a developed county. The notice…
Can a Texas manufacturer buy external packaging supplies like corrugated void-filler and air bags tax free?
Yes. The Comptroller ruled that a manufacturer may give a vendor a properly completed exemption certificate to buy external packaging supplies -- including corrugated void-filler and air bags used…
Is a service that posts a client's website link and information to other websites' free submission forms taxable in Texas?
Not taxable. The Comptroller ruled that a business which posts a client's website link and information to free listing/submission sites around the internet is providing a service that is not taxable.
Is a foreign corporation that is the general partner of a Texas-active limited partnership subject to Texas franchise tax, and what about its shareholders and out-of-state limited partners?
The foreign corporation is subject to Texas franchise tax as the general partner of a Texas-active partnership; its individual shareholders and any out-of-state limited partners are not. A Florida S…
Is an environmental consulting firm's installation of a petroleum-leak remediation system, its water/soil sampling, and its reports subject to New York sales tax?
It depends entirely on the capital-improvement test -- if an environmental consulting firm's installation of a petroleum-leak remediation system (and any related tank removal/replacement) satisfies…
Is a group self-insurance workers' compensation trust taxed as an insurance company under Article 33, or under another article of the Tax Law?
Under Article 9-A, not Article 33 or the personal income tax. Because the trust is not licensed by the Superintendent of Insurance and is not regulated under the Insurance Law, it is not 'doing an…
Are funds a bank receives from a subsidiary's issuance of commercial paper 'deposits' includible in the bank's deposits allocation factor?
No. The deposits factor of a bank's Article 32 allocation percentage uses 'deposits' as defined in 20 NYCRR 19-7.2, which is modeled on the federal FDIC definition (12 USC 1813). Money a wholly…
We're buying a 127-acre parcel for commercial redevelopment. The land has one large structure that used to be a house but has been converted to office space (leased to an architecture firm and a law firm), plus five smaller ancillary structures (a couple of small houses, a vacant house, a stable/loft, and a caretaker's apartment over a garage). The main building will be demolished before or shortly after closing; some ancillary structures will also be demolished, and the rest converted to a day care center. Total consideration is over $1 million, but no single structure is worth anywhere near that. Does New York's 'mansion tax' -- the additional 1% Real Estate Transfer Tax on residential property sales of $1 million or more -- apply to this purchase?
No -- the additional ("mansion") transfer tax doesn't apply. Swiss Re America Holding Corporation was considering buying, for commercial development, a 127-acre New York parcel containing a large…
Were a printer's sales of blank municipal-bond forms to California banks exempt as resales or transfers of official documents?
No. The banks consumed the forms in registration services, and the blank forms were not official documents when the printer sold them, so the printer's sales were taxable.
Were fees for codes unlocking additional information already stored on a customer's CD-ROM taxable?
Yes. The fee removed a contractual use restriction on property the customer already owned; separate online database access with no property transfer was nontaxable.
Could a closely held corporation use a minority-interest discount when valuing its stock for Florida intangible tax paid for shareholders?
Yes. Florida ruled that a minority interest is a factor normally considered in valuing closely held stock, so the corporation could account for that discount when paying intangible tax for its…
Does a federally chartered production credit association (a farm-credit lending institution) have to pay Utah sales and use tax on its own purchases?
No. A production credit association (PCA) is a federally chartered instrumentality of the United States under the Farm Credit Act, and federal instrumentalities are constitutionally immune from…
Two charitable lead annuity trusts, created under the same family trust instrument with identical remainder beneficiaries, are being combined into one 'Surviving Trust' by court order because their income no longer covers their required annual charitable payments. The trusts jointly own New York real property as tenants-in-common. To protect the separate remainder beneficiaries' interests despite the combination, we're setting up a bookkeeping 'Pro Forma Account' that tracks what each set of beneficiaries would have received had the trusts stayed separate, plus a 'Loan-Back Agreement' so that if a 2003 distribution from that account requires deeding out New York real property, the recipient beneficiaries can immediately loan the property interests back to the Surviving Trust instead of the trust having to sell real estate to raise cash. Does combining the trusts -- or the later Pro-Forma-driven deed-and-loan-back mechanism -- trigger New York's Real Estate Transfer Tax or Real Property Transfer Gains Tax?
Exempt -- combining the two trusts didn't change who beneficially owned the underlying New York real estate. Lew R. Wasserman, Jean Stein, Gerald H. Oppenheimer, and Andrew Shiva, as trustees of two…
What South Carolina tax interest rate applied for the three-month period beginning October 1, 1996?
The rate was 9% for underpayments and overpayments for the three-month period beginning October 1, 1996. The notice said interest was compounded daily, except that simple interest applied to…
Is a residents' association that was specially chartered by the legislature with municipal powers, and treated by the IRS as a political subdivision, subject to Connecticut's corporation business tax?
No. A residents' association chartered by a 1931 Special Act as a body politic and corporate, exercising municipal-type powers (fire protection, streets, beaches, police, and a real-estate tax) and…
Could a dealer sell a vehicle tax-free for resale to a nondealer lessor?
Yes under the stated assumptions, if the lessor had a valid seller's permit and gave a good-faith resale certificate stating the vehicle was for resale in its regular business.
When restaurant/food-processing equipment like an ice machine is bought tax-free under the manufacturing exemption but later put to a different use, who owes the tax, and how much?
It depends on when the equipment was bought. A vendor who accepts an exemption certificate in good faith isn't liable for the tax -- the purchaser is. For an ice machine bought tax-free between…
Is Texas sales tax owed on direct-to-home satellite TV installation, equipment rental, and programming charges, and does local tax apply?
Yes, the tax charge was correct. Equipment rental and installation for direct broadcast satellite TV are taxable at the full state-plus-local rate (6.75% in this case), but programming charges are…
Is overhauling a compressor used to lift oil and maintain well pressure a taxable service in Texas, or is it exempt as manufacturing equipment repair?
Taxable. The Comptroller ruled that a compressor used to lift oil from wells and maintain pressure for recovering additional oil is production equipment, not exempt manufacturing equipment, so the…
Are hearing aid batteries exempt from Texas sales tax, and does a retailer need an exemption certificate to sell them tax-free?
Exempt. The Comptroller confirmed that hearing aid batteries are exempt from Texas sales tax as a supply or replacement part for hearing aids, which are themselves exempt by statute. The purchaser…
Were receipts from goodwill and other intangibles sold to a Florida corporation included in former Texas receipts?
No. Assuming the asset-sale income was unitary, receipts allocated to goodwill and other intangibles followed the payor's legal domicile. Because the buyer was a Florida corporation and the…
Did holding interests in limited partnerships doing business in Texas create former franchise-tax liability for a corporation?
Not if the corporation's only activity was holding limited-partnership interests. But if it was a general partner in any partnership doing business in Texas, the corporation was subject to former…
Did the former Texas throwback rule cover interstate solicitation and products sold to customers outside the United States?
For interstate sales, independent solicitation created taxable-capital nexus but was protected under Public Law 86-272 for earned surplus, so the same shipments could avoid throwback for one…
Are concession stand food sales taxable when a school district runs the stands at sporting events instead of during the regular school day?
Yes. The Comptroller ruled that food sales from concession stands a school district operates during sporting events are taxable, because the Tax Code 151.314(d)(1) exemption for school food sales…
Can a retailer avoid collecting and later refunding Texas sales tax on items sold for export to Mexico by routing delivery through a customs broker at the border?
Yes. A retailer can avoid collecting and then refunding sales tax on items sold for export to Mexico by shipping the item to a licensed customs broker at the border and having the broker deliver it…
When a landlord bills a commercial tenant separately for electricity measured through the tenant's own sub-meter, is that billing a taxable sale of electricity, and can a predominant-use manufacturing study exempt it?
No. The Comptroller ruled that billing a tenant for electricity through a separate sub-meter is not a sale of electricity by the landlord -- it's just part of the rental/lease price of the real…
Were separately stated delivery and tank-cleaning charges subject to Texas motor vehicle rental tax?
No. The Tax Policy Division said separately stated cleaning and delivery charges were not subject to motor vehicle rental tax. The letter attributed that treatment to a recent motor vehicle…
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