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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Was a restraint vest that strapped around a wheelchair an exempt wheelchair replacement part?
No on the described facts. California treated the vest as a restraint appliance worn by the patient, not a wheelchair part, so its sale was taxable absent further information.
Was a post-operative heat-and-cold therapy wrap an exempt orthotic device?
No. California treated the wrap as a device that applied heat or cold treatment rather than supported a body structure, so it was excluded from the medicine definition.
Did strapping a femoral-traction pillow to the patient make it an exempt orthotic device?
No. California treated the pillow as a traction device that was not fully worn on the body because the patient used it while lying in bed, so it remained taxable equipment.
Could a federal contractor performing qualified production services buy overhead materials for resale because its contract passed title to the United States?
No. The contract lacked the progress-payment clause that accelerated title to overhead materials, so the contractor consumed the property used in its services.
Was an intercompany development and management fee taxable as commercial rent because it was calculated from the cost of real property facilities?
No. The fee paid for acquisition, design, construction, financing, leasing administration, and facility management services. The agreement gave the parent no right to use, occupy, or control the…
Could a separated or divorced spouse ask South Carolina for notice of activity involving a joint tax return or liability?
Yes. A spouse or former spouse could submit a written request asking the Department to provide notice about an examination of a joint return or collection activity when the Department had contacted…
On a combined bank franchise tax return, how are a banking group's allocation factors and loan receipts sourced, and does an intercorporate transfer of a loan change its location?
On a combined Article 32 return the banking group is treated as one corporation. The combined activities of all members are used to compute the entire-net-income, alternative-entire-net-income, and…
Did a Florida investment adviser create Florida intangible-tax situs for a Texas partnership when the adviser could recommend but not implement investments?
No. The Florida adviser could keep asset records and recommend investments, but had no authority to decide or implement transactions for the Texas corporation or partnership. Actual investment…
When a vehicle leasing company restructures using a titling trust to hold legal title to leased vehicles, are the vehicle transfers into and within that structure subject to Utah sales tax?
No, not the vehicle/lease transfers themselves. A leasing company can acquire a vehicle tax-free under Utah's resale exemption (§ 59-12-104(26)), and transferring that vehicle and lease into a…
Does a contractor owe Texas sales tax on the profit and overhead portion of a cost-plus construction contract, with or without a guaranteed maximum price?
Cost-plus contracts (with or without a guaranteed maximum price) are treated as separated contracts under Tax Code § 151.056, so the contractor collects sales tax on materials charged to the job…
Is a single-member New York LLC subject to New York tax, and does owning it make a foreign corporate sole member taxable in New York?
New York follows the LLC's federal classification. A single-member LLC that is disregarded for federal income tax (the default under the check-the-box rules) is treated as a branch or division of…
Are industrial development agency bonds investment capital, is their interest investment income, and are they governmental securities for the investment allocation percentage?
Yes. Bonds issued by the New York City Industrial Development Agency -- a governmental instrumentality (public benefit corporation) under Article 18-A of the General Municipal Law -- are investment…
Does a foreign corporation that enters New York only to meet with a prospective accountant, banker, lawyer, or underwriter become subject to the Article 9-A franchise tax?
No. A foreign corporation (XYZ) that enters New York for the limited purpose of meeting with an accountant, banker, lawyer, or securities underwriter it might engage -- and does nothing else in the…
Is a cane-like device designed to help Parkinson's disease patients overcome motion block exempt from Texas sales tax?
Yes. The STEPP-ALERT, a cane-like device with a multi-colored flap that helps Parkinson's disease patients experiencing motion block phenomenon, qualifies as a therapeutic device and may be…
When an exempt organization owns part of a joint venture that buys taxable items for a joint venture facility, how much of the purchase price can be bought tax-free with an exemption certificate?
An exemption certificate can only cover the percentage of a taxable item's purchase price equal to the exempt organization's percentage ownership interest in the joint venture that owns the facility…
Does a multi-level marketing/direct sales company have to collect and remit Texas sales and use tax on sales made through its independent distributors?
Yes. Because a company's independent distributors act as its agents under Texas Tax Code § 151.024 and Rule 3.286(a)(3), the company (not the individual distributors) must collect and remit Texas…
Is a matchmaking service that arranges social lunch meetings between clients subject to New York sales tax?
No -- a service that interviews clients, matches them with other clients by phone, and arranges a luncheon meeting between them is not subject to New York sales tax, because the primary function of…
Does an aircraft leased to a commuter air-charter operator qualify as an exempt "commercial aircraft" under New York sales tax law, even though the lessor also uses it for its own company business?
Yes -- an aircraft the owner leases to a commuter air-charter operator qualifies as an exempt "commercial aircraft" under Tax Law § 1115(a)(21), exempting the lease payments and related…
Were securities owned by a Nevada partnership taxable in Florida when all three general partners were Florida residents but decisions and implementation occurred elsewhere?
No. The securities were owned by the Nevada partnership, whose meetings, investment decisions, records, business location, and transaction implementation were outside Florida. They were not owned,…
How could a South Carolina economic-development project request an alternative income allocation or apportionment method under RP 96-3?
A taxpayer planning a new or expanded South Carolina facility first sought the economic-development council's certification that regional public benefits exceeded costs, then the Department decided…
Does a Texas mobile home dealer owe sales tax on the tools, equipment, and materials it uses to repair or refurbish manufactured homes held for resale?
Yes, in most cases. A Texas mobile home/manufactured housing dealer that repairs or refurbishes homes held for resale owes sales tax on the vehicles, jacks, nail guns, hand tools, and most other…
Does a tax-exempt religious organization owe Texas sales tax on books it publishes and sells, mostly at religious services and meetings?
No. The Comptroller ruled that a nonprofit religious organization exempt under IRC 501(c)(3) does not owe Texas sales tax on the sale or distribution of books it publishes, where the books were…
Was a London-branch market-linked deposit exempt from Florida intangible tax even though its interest depended on financial-index performance?
Yes. Florida treated the product as an exempt bank deposit, and therefore exempt money, even though interest depended on market measures and could be zero. The Department relied on authorities…
Did RR 97-8 require a taxpayer to qualify as an 'economic impact zone business' before claiming the zone investment tax credit?
No. RR 97-8 said the separate 'economic impact zone business' definition did not limit the investment credit. Eligibility turned on qualifying property being placed in service in an economic impact…
Does a grower who hybridizes and sells lily bulbs grown from seed on their own land qualify for Utah's agricultural sales tax exemptions?
Yes, with conditions. A grower who produces lily bulbs from seed on their own land as a seasonal crop qualifies as an agricultural producer, and can sell the bulbs tax-free during harvest season…
My tax return and check probably got lost in the mail years ago — do I still owe the penalty and interest on the missing payment?
The protest was granted in part and denied in part. Zia Printing, a one-person Albuquerque print shop, had a good filing record but the Department had no record of its November 1989 return or…
Was computer artwork taxable when the artist copied it from retained media directly into the customer's computer?
No, if the artist retained title and possession of the disk, CD-ROM, or sketch at all times and transferred no other property; yielding possession could create a taxable lease.
Was an artist's charge taxable when the artist loaded artwork into a client's computer but kept the source disk?
No, if the artist continuously retained the source medium and transferred nothing else tangible. The artist should keep a purchase order and invoice documenting the work.
Was artwork taxable when an artist copied it from artist-owned media into a client's computer while continuously keeping possession of the media?
No. Copying the artwork into the client's permanent computer storage was not a sale if the artist continuously retained the source media and transferred nothing else.
Does a county owe sales tax on debt-collection legal services performed by a law firm, and is the law firm's reimbursed expenses treated as taxable debt collection or sales tax?
No. Legal services performed by an attorney to recover debts for a client are not taxable as debt collection services, and a county, as an exempt governmental entity, does not owe sales tax on those…
Could a chemical-toilet lessor pay tax on purchase price instead of rental receipts, and recover tax paid on units bought solely for lease?
Rental receipts remained taxable, but a lessor that bought units solely for lease could recover erroneous acquisition tax through a timely deduction or proper refund route.
Could a chemical-toilet lessor recover acquisition tax even though California required tax on every rental payment?
Yes, through the tax-paid-purchases-resold rules when the unit was bought solely for lease, but the deduction had to be claimed on the first rental return or through the proper refund route.
Did collateral assignments of already-taxed purchase-money loan documents and mortgage modifications adding land trigger more Florida documentary stamp tax?
No additional documentary stamp tax was due. Tax had already been paid on the original notes, and the purchase-money loan documents were assigned only as added collateral for existing loans, not to…
Can the Utah Tax Commission give a product-by-product ruling on whether a manufacturer's line of electrotherapy medical devices (TENS-type pain units, muscle stimulators, biofeedback systems, and similar equipment) qualifies for the home medical equipment sales tax exemption?
The Commission declined to give a yes/no answer for each product. It explained that eligibility for Utah's home medical equipment exemption isn't determined by what kind of item it is, but by three…
Are batteries for a blood pressure monitoring device exempt from Texas sales tax?
Batteries for a blood pressure monitoring device can be purchased tax exempt in Texas, but only if the device itself was purchased exempt under a doctor's prescription, and the batteries are bought…
Was a contract covering towing and limited emergency roadside labor taxable as a Florida service warranty?
No. Florida's insurance staff determined that the contract fell under section 624.124, which allows specified towing and emergency motor-vehicle services without treating the provider as an insurer.…
Were subscription fees for standardized foreclosure reports taxable when customers received them by mail, and how did electronic or custom listings differ?
Standardized foreclosure reports mailed to subscribers were taxable tangible property; electronic delivery was not taxable, and specifically researched custom specialty listings were treated as services.
Does electricity used in a vacant apartment unit count as residential use that is exempt from Texas sales tax?
Yes. The Comptroller determined that Section 151.317 of the Tax Code, as amended, defines residential use of electricity to include electricity used in vacant apartments -- except electricity used…
When a manufacturer outsources its entire computer division, are the outsourced services and the equipment the provider buys exempt -- and what about equipment the provider buys as the manufacturer's agent?
Mostly exempt, with one taxable piece. When a manufacturer outsources its whole computer division to an unrelated provider, the outsourced computer and data processing services are exempt under…
Does Utah sales tax apply to charges for leasing space on remote Internet servers to customers?
Not taxable under 1996 Utah law. Charges for access to online services like the Internet, including reselling leased space on remote Internet servers, were not subject to Utah sales tax at the time…
Was a guaranteed vehicle buyback-price agreement subject to Texas motor vehicle sales tax?
It depended on the seller. A guaranteed buyback agreement purchased directly from the vehicle dealer was included in taxable value and subject to motor vehicle sales tax. An agreement purchased from…
Is steam exempt from Texas sales tax the same way ice is exempt?
No. The Comptroller ruled that steam does not qualify for a sales tax exemption. Although steam, like ice, is water in an altered state, the Tax Code only grants specific exemptions to ice (Tax Code…
If a fuel distributor blends cheap marine diesel or off-spec No. 2 heating oil with enhanced diesel motor fuel to make standard No. 2 heating oil, is the result taxable 'enhanced' diesel motor fuel?
No — the resulting product is unenhanced diesel motor fuel, so previously-untaxed inter-distributor sales of it stay free of the Article 12-A excise tax, the Article 13-A petroleum business tax, and…
Were separate monthly charges for monitoring a personal emergency response unit taxable along with the unit's rental fee?
No. The equipment rental remained taxable, but the separately charged monitoring—calling one of the customer's designated emergency contacts when the unit signaled—was a nontaxable service.
Should a bundled optional hardware-and-software maintenance agreement be taxed in full or allocated between its components?
It should be allocated. Hardware maintenance was nontaxable, while software updates on tangible media and mandatory consultation tied to them were taxable.
Was the monthly monitoring fee for an in-home emergency-alert unit taxable along with the equipment rent?
No on the unique stated facts. Equipment rent was acknowledged taxable, but the separate flat monitoring fee paid for service.
Did California wholesale solicitation by independent contractors make the same company's retail mail-order division collect use tax?
Yes. Staff treated the company as one retailer, so its contractors' California wholesale solicitation created a collection duty for all divisions.
Was the entire price of a bundled optional hardware-and-software maintenance contract taxable?
No. The price had to be allocated between taxable software maintenance supplying tangible updates and nontaxable optional hardware maintenance.
How did Texas tax a trust's acquisition of long-term operating leases, related vehicles, and beneficial interests?
The dealer owed tax when it first leased the vehicles. Assigning the lease contracts to the trust was an untaxed intangible transfer. The trust could take vehicle title for resale without tax only…
What did a Texas seller need on an auto-auction document to support a vehicle's acquisition for resale?
The submitted auction document was acceptable if it included the purchasing dealer's general distinguishing number and signature. The seller had to retain its copy for four years from the sale date.
Were arena construction materials exempt when a governmental owner bought them directly through a developer acting as purchasing agent?
Yes, for materials purchased under the submitted direct-purchase procedure. The governmental entity executed purchase orders, was invoiced, paid vendors directly, took title, bore risk of loss, and…
Are a company's computer-link services -- routing credit-card authorizations between merchants and card issuers, and connecting PC users to Internet service providers -- taxable Connecticut computer and data processing services?
Yes, both are taxable. A company that uses computers to link merchants' card-authorization devices to card-issuing banks, and to link PC users to an Internet/computer service provider, is providing…
I moved from a no-income-tax state and didn't know I owed New Mexico tax — can I avoid the interest?
No — the interest stands, even though the couple acted in good faith. Robert and Marilyn Davidson moved to New Mexico in 1990 after 30 years in Texas, which has no income tax. Mr. Davidson taught…
Can a business renting out mobile office trailers use a resale certificate instead of paying sales tax on repair parts and repair labor for that rental inventory?
Yes. A business may issue a resale certificate instead of paying sales tax on repair or replacement parts bought for mobile office trailers held for rental, and may also issue a resale certificate…
Does a nightclub or bar owe mixed beverage gross receipts tax or limited sales tax on the cover charges it collects from customers?
It depends on why and when the cover charge is collected. Cover charges collected from customers under 21, and all cover charges collected after 11:00 p.m., are subject to limited sales tax. Cover…
New York Advisory Opinion TSB-A-96(45)S: If a three-year car lease is extended by three months (because the lessee's replacement vehicle isn't ready), are the extension's rental payments hit with the extra 5% passenger car rental tax on top of ordinary sales tax -- and does it matter whether the extension is agreed to before or after the original lease expires?
It depends entirely on WHEN the extension is agreed to. If the lessor and lessee agree to extend a long-term (one-year-plus) passenger vehicle lease BEFORE the original lease expires, the extension…
New York Advisory Opinion TSB-A-96(44)S: Is a database data-cleaning/matching service taxable, and are the related software license fees a company charges its clients subject to New York sales tax?
Split ruling: the data service is exempt, but the software license fees are taxable. Company ABC organizes and updates client marketing databases (standardizing names/addresses, matching households,…
New York Advisory Opinion TSB-A-96(43)S: Are a manufacturer's sales of corrugated cardboard and box-forming machinery to companies that turn the material into shipping boxes for their own products exempt from New York sales and use tax?
Yes, both are exempt -- but only if the customer gives a timely exemption certificate. Petitioner's client sells corrugated material (which customers form into their own non-returnable shipping…
Were fees for a twelve-week weight-management seminar taxable when participants also received workbooks and audio tapes?
No. The flat seminar fee paid for a nontaxable service, and the workbooks and audio tapes were incidental because participants primarily sought the classes, counseling, and group support and paid no…
When were a reupholsterer's own-truck pickup and delivery charges excluded from California sales tax?
Optional, separately stated pickup was nontaxable. Return delivery required a pre-delivery written title agreement; merely signing the service contract before pickup was not enough.
How these rulings are useful
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