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 cleaning, inspecting, and applying a protective monel coating to oilfield equipment like submersible pumps and tank batteries a taxable repair or remodeling service in Texas?
Yes. Coating and re-coating oilfield equipment such as submersible pumps and tank batteries counts as taxable maintenance, remodeling, or repair of tangible personal property under Rule 3.292, so…
Were an out-of-state manufacturer's receivables from Florida customers subject to Florida intangible tax when its salesperson regularly visited the state?
Yes. Florida ruled that receivables from Florida customers had Florida business situs because the manufacturer's salesperson regularly entered the state to call on customers and solicit orders, and…
Is a package of disposable products sold to hospitals for use in a heart-lung pump during open heart surgery exempt from Texas sales tax?
Yes. The package of disposable products sold to hospitals for use in a heart-lung pump during open heart surgery is exempt from Texas sales tax, because a heart-lung pump and its accessories and…
Are the annual membership fees, supplier commissions, and consulting charges earned by an operator of computer-equipment buying groups subject to New York sales tax?
Mixed result -- a computer buying group operator's annual membership fees (not club dues) and supplier commissions (agency fees) are not subject to New York sales tax, and its software training or…
Is a personal matchmaking and dating service subject to New York sales tax?
No -- a dating service that matches clients based on interviews and profiles, or lets clients browse an album of prospective dates, is not subject to New York sales tax, because bringing people…
Were charges for producing and transferring a principal television-commercial tape taxable, and how were duplicate television and radio copies treated?
The principal TV commercial was nontaxable and the producer consumed its tape; extra TV copies and radio duplicates were taxable, regardless of job-number accounting.
When is a staffing or subcontractor arrangement exempt as a 'temporary employee' under Texas law, versus a taxable temporary help service?
It depends on meeting all four requirements of Tex. Tax Code § 151.057: the work must normally be done by the client's own employees, the client must supply the equipment, the client must directly…
How should an apartment complex handle sales tax refunds for electricity used in vacant apartment units that were taxed as commercial accounts, and can it still use exemption certificates for residential accounts billed at commercial rates?
When several tenants' electricity accounts are billed in the apartment complex's name, the complex itself is the buyer and can receive the tax refund directly rather than needing a separate request…
When a multi-level marketing company sells vouchers to its distributors that are redeemed for printed goods like trading cards, who owes sales tax on the sales to the final customer?
The company itself, not just its independent distributors, is a 'direct sales organization' responsible for sales tax on the full selling price of the vouchers and related items sold through its…
Is the electricity a paper mill uses to run dedicated air conditioning for rooms housing its production equipment's electrical controls exempt from New York sales tax?
Yes -- a paper mill's electricity used exclusively to run dedicated air conditioning systems that keep separate, restricted-access control rooms cool enough to prevent the electrical components…
Does a school owe Utah sales tax when it sells discount cards that let students buy discounted goods and services from outside vendors?
No. When a school sells discount cards that are honored by a number of outside vendors — rather than selling the cards itself as the vendor of the underlying goods or services — the sale of the card…
Does a company that operates a can-crushing prize machine owe sales tax on the advertising fees it charges, or on the machine and prizes it buys?
No, the advertising fee charged to companies for placing their logos on the machine is not taxable. But the machine's operator must pay sales tax on the taxable items it buys to run the promotion,…
Do casualty insurance agencies owe Texas sales tax on fees they charge clients for services like claims administration, risk inspections, and rate-setting when those fees are paid instead of a sales commission?
Yes. When a casualty insurance agency charges a client a fee -- instead of earning a sales commission -- for services such as claims administration, risk inspections, rate-setting, or claims/loss…
Can a caterer, hotel, or restaurant use a resale certificate to buy or rent tables, chairs, decorations, or audio-visual equipment used in providing food service, instead of paying tax on those items?
No. A caterer, hotel, or restaurant that buys or rents equipment (such as tables, chairs, utensils, decorations, or audio-visual equipment) to use while providing food service must pay tax on that…
Can a corporation and its affiliates file one combined Texas sales tax return instead of separate returns for each entity?
No. The Comptroller's office will not accept a combined sales tax return or report from a corporation and its affiliates -- Texas requires each entity to file its own separate report, and the agency…
Are low-vision aids and devices sold to blind or visually impaired individuals exempt from Utah sales tax?
No, there is no special sales tax exemption for sales to blind or visually impaired individuals. Utah taxes tangible personal property regardless of the purchaser's physical limitations, and items…
Is providing equipment with an operator for oilfield lease-site work -- like restoring a wellsite, cutting a pipeline right-of-way, building or maintaining a road, or setting frac tanks -- taxable under Texas sales tax?
It depends on the specific service. Reclaiming an oil and gas lease site back to its pre-drilling condition is not taxable, but restoring other nonresidential real property improvements is taxed.…
Is non-executable source code that a seller licenses to manufacturers, who must substantially re-engineer it before use, a 'completed computer program' subject to Texas sales tax?
Yes. The Comptroller ruled that the seller's non-executable source code -- even though customers must substantially re-engineer it before using it -- meets the dictionary definition of 'source code'…
Did California's interstate rail-freight-car exemption cover repair or replacement parts installed before the cars entered the state?
Yes, when installed outside California before entry. Parts brought into California before installation remained taxable.
Is a biotechnology company's purchase of cell, organ, or tissue taken from a cadaver exempt from Texas sales and use tax?
Yes. The Comptroller reversed an earlier determination and ruled that cell, organ, and tissue purchased or sold by a biotechnology company are exempt from Texas sales tax to the extent they are…
Were Florida residents' interests in a non-SEC-registered limited partnership exempt, and did the partnership itself have Florida intangible-tax situs?
The Florida residents' limited-partnership interests were exempt because the partnership was not registered with the SEC. The partnership itself also was not subject to Florida intangible tax…
How does New Mexico set the market value of my land for property tax, and can I challenge the state's number?
The cooperative won a substantial reduction, though not everything it asked for. Central Valley Electric Cooperative protested the Property Tax Division's $396,400 valuation ($11,325 per acre) of…
Was a medical laboratory's final business-asset sale occasional when it disclosed three earlier transactions?
Yes, except for vehicles, vessels, or aircraft, but only on the assumption that the laboratory made no other tangible-property sales anywhere.
Did tax-paid status carry to a buyer of water coolers already subject to nontaxable leases?
No. Existing leases stayed nontaxable after the seller paid sales tax on the asset sale, but the buyer's future leases were generally taxable on rent.
Who owed tax when a subcontractor fabricated a prime contractor's fixture before installing it on real property?
The subcontractor owed tax on its separate fabrication sale and could not accept a resale certificate, while the prime remained retailer of the finished fixture.
Does a process server who files court documents and pulls certified copies of court records owe sales tax on those services?
Filing or serving legal documents like citations, subpoenas, and writs is not a taxable service, and researching court records or requesting certified copies is not taxable by itself. But sales tax…
Does a company that locates and negotiates preferred provider network contracts for health plans owe Texas administrative services tax or sales tax on the contingent commissions it earns?
No. A company that locates and negotiates contracts with preferred provider networks on behalf of health care and occupational injury plans, earning a contingent commission based on savings, owes…
After confirmation of a Chapter 11 plan, could California resume a pending tax petition and refund claim, and had the nonfinal liability been discharged?
Yes, California could resume the matters, and no, the liability was not discharged. Staff said confirmation lifted the stay while the nonfinal petitioned tax survived.
When a tax-exempt nonprofit organization hires a for-profit carnival operator to run an event, who owes sales tax on the amusement -- the carnival operator or the exempt entity?
It depends on two things: whether the contract between the exempt entity and the carnival operator is a joint venture (sharing both profits and losses, which makes ticket sales taxable), and if not,…
Does a front-end loader used to blend materials and support cooling during processing qualify for Texas's manufacturing equipment sales tax exemption?
No. The Comptroller ruled that a front-end loader used to blend seed and product and to support the deaeration and cooling process is treated as intraplant transportation equipment or equipment used…
Are replacement or repair parts for exempt ski resort equipment (snowmaking equipment, grooming equipment, tramways) also exempt from Utah sales tax?
Yes, ultimately. After first advising the taxpayer to treat replacement parts as taxable pending a related manufacturing-exemption decision, the Utah State Tax Commission concluded on December 6,…
How did the former Texas throwback rule source receipts from medical products shipped from Texas, including exports?
Delivery to a Texas buyer produced Texas receipts. Delivery to another state produced non-Texas receipts unless the seller was not subject to tax there, in which case the receipts threw back to…
Did a year-end sale of receivables between out-of-state affiliates avoid Florida intangible tax, and was the resulting note eliminated on their consolidated return?
Yes to all three requested conclusions. The selling affiliate did not own, manage, or control the receivables on January 1. The purchasing affiliate lacked Florida nexus and the receivables did not…
Was a precomputed 15% gratuity voluntary when the customer check included it in the total but said the customer could ask the server to change it?
No. Because the presented total already included the 15% amount, counsel treated the full total as taxable despite the printed option to change or remove it.
Was a printer-maintenance company the consumer of repair parts but the retailer of toner and ink cartridges included in a bundled contract?
Yes. It consumed parts and materials used to maintain printers, but sold the disposable cartridges and had to segregate their fair retail selling price.
How should a fixed-price printer-maintenance contract that also supplied toner or ink cartridges be divided for California tax?
The maintenance portion was nontaxable, while the cartridge portion was a taxable retail sale that had to be allocated at fair retail selling price.
Could every parcel inside the outer boundary of a checkerboard area automatically be treated as Indian country for sales-tax administration?
No. The claimant had to prove reservation, trust, restricted, or dependent-community status; parcels never included in the reservation did not qualify by outer boundary alone.
Does an engineer hired by an insurance company to investigate a homeowner's damage claim have to charge the insurance company sales tax on the investigation?
Yes. The Comptroller ruled that an engineer's investigation of an insured's claim -- inspecting a dwelling and reporting on damage and its cause -- is a taxable 'insurance service,' so the engineer…
Is a machinery moving company's charge to relocate equipment within or between facilities subject to Texas sales and use tax?
No, not by itself. A machinery moving company's charge for simply relocating a machine or piece of equipment within a plant or between facilities is not taxable, but the entire charge becomes…
Is selling stock in a corporation that operates a country club subject to Texas sales tax when stock ownership is required for membership?
Yes, generally -- if owning stock is required to get a special privilege, status, or membership classification in a private club that provides amusement services, the sale of that stock is taxable.…
When a direct-sales or multi-level-marketing company gives away free prizes or awards at a home party, who owes the tax -- the company or the person who receives the prize?
The company giving away the prize owes the tax, not the recipient. Pulling an item out of tax-free resale inventory to give away as a prize is a taxable divergent use, so the company (or the…
Does metal-leveling equipment qualify for the Texas manufacturing sales tax exemption when the leveling process changes the metal's tensile and yield strength?
Yes. Because leveling increases the metal's tensile and yield strength to meet the customer's specifications, the Comptroller found the process causes a physical change and qualifies as…
Does an out-of-state captive equipment-finance company that leases/finances equipment used in Utah, with no Utah office or employees, have Utah income/franchise, property, and sales/use tax nexus?
It depends on the facts of each lease/finance arrangement — this ruling explains the tests rather than giving one flat answer, because whether a transaction is a true lease or a secured loan changes…
When ranchers upgrade a privately owned power line and then transfer it to a city, is sales tax owed on the upgrade materials -- either because the operation is agricultural or because the line ends up city-owned?
Yes, sales tax applies. A group of ranchers/farmers owned a power line serving their farms and agreed to upgrade it "to code" so a city could take over ownership and maintenance. Even though the…
Does a tobacco distributor owe Utah cigarette and tobacco tax when it sells cigarettes and cigars to the duty-free store at the Salt Lake City airport, even though the duty-free store resells them to travelers leaving the country?
Yes -- the distributor still owes the tax, unlike the sales tax treatment of the same duty-free sales. Utah's cigarette and tobacco taxes are levied on the FIRST sale, purchase, use, or storage of…
When did a road contractor processing crushed stone and hot-mix asphalt qualify as a manufacturer for Tennessee machinery, materials, and utility tax benefits?
The contractor qualified as a manufacturer at a location when at least 51% of its products and revenue came from third-party product sales, qualifying tax-funded highway or road projects, or a…
When did leased rail freight cars qualify for California's interstate-commerce exemption?
When the lessee's principal use during the first six months after purchase was interstate commerce. Occasional intrastate use did not defeat that principal-use test.
Does a private insurance carrier owe Texas sales and use tax on crop loss adjusting services it buys, even though the underlying crop insurance is federally reinsured?
Yes. Texas sales and use tax applies to crop loss adjusting (claims appraisal) services that a private crop insurance carrier buys from an outside adjusting company, even though the underlying crop…
If an industrial supply company runs a customer's on-site tool crib and charges a management fee plus product costs, is that management fee taxable?
Yes, in most cases. The Comptroller ruled that if the industrial supply company is a retailer of all the sales made through the tool crib (not acting as the customer's purchasing agent), then its…
Could California use notices of withhold on off-reservation bank accounts to collect use tax from a tribe or a tribally owned section 17 corporation?
No. Staff recommended against the withholds because attaching tribal property would violate sovereign immunity, even though the order was not technically a lawsuit.
Who owned the interest earned while a Texas county held collected motor vehicle sales tax?
The state. Based on an enclosed Attorney General opinion and related case law, Tax Policy said interest earned while the county held motor vehicle sales tax belonged to Texas and had to be remitted…
Who owed Texas use tax on a vehicle bought outside Texas and leased for use in Texas, and what happened at buyout?
The operator owed Texas use tax when the out-of-state-purchased vehicle was brought into Texas for use. Tax was based on the owner's purchase price, with credit for similar tax legally paid to…
Were sperm-bank sales for physician-assisted or self-insemination taxable?
No. California treated human semen held by a sperm bank for insemination as exempt human tissue or body parts held for medical purposes, including direct sales for self-insemination.
Is sales tax due on assets transferred into a new corporation or partnership as part of a statutory merger or a tax-free IRC 351 reorganization?
No. Assets transferred as part of a statutory merger, or transferred to a newly formed corporation or partnership for its initial capitalization, are not subject to Texas sales tax, as long as…
Does a company owe Texas sales or use tax on loose product samples and sample binders or books that it produces or buys to help its sales representatives solicit customers?
Yes. The Comptroller ruled that loose samples and sample binders or books distributed in Texas are taxable, because their only use is to demonstrate the products they represent, not to be sold…
Is a temporary staffing agency's key-entry data-entry work, performed at a client's own facility using the client's own computer system, subject to New York sales tax?
No -- charges from a temporary staffing agency for its temps' key-entry of manual records (time cards, C.O.D. stubs, package pick-up records) into a client's own computer system, at the client's own…
What major South Carolina tax-law changes did the Department summarize in its 1996 legislative update?
The 77-page update covers dozens of 1996 enactments across income and corporate license fees, sales and accommodations taxes, property tax and fee-in-lieu arrangements, procedure, admissions,…
How did California group business activities for the historical eligible-small-business and new-business net operating loss rules?
FTB generally treated activities in different SIC Manual divisions as separate businesses, but aggregated the taxpayer's and related persons' activities within the same division. Same-division…
Was restitution requiring a corporate president to pay the corporation's sales tax proper after the corporation filed Chapter 7 bankruptcy?
Yes. Tax counsel said a corporation could not receive a Chapter 7 discharge, so its tax debt remained and the officer's restitution condition was proper.
Did California need separate dual determinations before collecting a partnership aircraft-use-tax liability from its documented general partners?
No. Staff concluded that a notice clearly identifying the partnership and its account created liability against the partnership and its general partners, even if every partner was not individually listed.
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