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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Are duty-free 'in bond' sales and 'tax paid' sales at the Salt Lake City airport's duty-free store exempt from Utah sales tax as interstate commerce?
It depends on delivery, not on the duty-free label. "In bond" duty-free sales -- where federal customs law requires the merchandise to be delivered directly to the departing passenger or aircraft at…
Could a Utah customer refuse to pay use tax to a licensed out-of-state seller and instead self-accrue and remit the tax directly to Utah?
Generally no. Utah said it had no direct-pay option allowing the customer to self-accrue the use tax, so a seller holding a Utah sales-tax license had to collect, report, and remit tax on taxable…
My elderly mother's house is held in an irrevocable trust, with her as trustee's grantor keeping a life estate. She wants a HUD-approved reverse mortgage. Is recording that mortgage exempt from New York's mortgage recording tax, even though the borrower is technically the trust rather than my mother individually?
Exempt, as long as the reverse mortgage genuinely conforms to the HUD/HECM federal program. A 77-year-old grantor had conveyed her Greenburgh home to an irrevocable trust in 1988, reserving a life…
New York Advisory Opinion TSB-A-96(34)S: When a nonprofit cooperative housing corporation generates its own electricity and submeters it to residential and commercial tenants at cost, are those electric charges taxable utility sales, do residential tenants get a reduced rate, and can the co-op get a refund on the sales tax it paid for the fuel oil used to generate that electricity?
Yes, all three questions get detailed yes answers. Mutual Redevelopment Houses, Inc., a nonprofit cooperative, generates its own electricity and bills residential and commercial tenants separately…
New York Advisory Opinion TSB-A-96(31)S: When an interior design firm buys furnishings for a client at its own discretion and bills the client a marked-up price (cost plus a design fee percentage), is the entire charge taxed as a sale of goods, or can the design fee be taxed at a lower rate as a separate service?
The entire marked-up charge is taxable as a sale of goods, at New York City's full combined rate, unless the design fee is separately contracted for and separately billed. J.P. Molyneux Studio Ltd.,…
Could Florida investment funds net short sales against identical long stock positions when calculating intangible personal property tax?
No. Although an initiated short sale was not taxed because the fund did not own the shorted stock, each long stock or securities position the Florida funds owned on January 1 remained taxable at…
Was an interest-bearing cash account held with a broker subject to Florida intangible personal property tax?
No. Florida treated the described interest-bearing brokerage cash account like cash deposited with a bank because it was not organized as a mutual fund or money-market fund. The ruling warned that…
Did trusts with Florida settlors owe intangible tax when an out-of-state trustee controlled revocation and the settlors lacked broad access powers?
No. The trusts had an out-of-state trustee, the Florida settlors could revoke or amend only with that trustee's written approval, they could not invade principal, and their limited appointment power…
When and where did the Cherokee County School District One 1% sales and use tax take effect?
The 1% local sales and use tax was to begin July 1, 1996 and apply throughout Cherokee County, not only within the area of School District One. Its revenue was dedicated to debt service on bonds for…
Which of my internet service company's fees -- monthly service, set-up, domain registration, custom web design, extra disk space, audio/video, and secure server -- are subject to Texas sales tax?
Most of the fees an internet service provider charges are taxable, but not all. The Monthly Service Fee, Set-Up Fee, Additional Disk Space Fee, Audio/Video Fee, and Secure Server Fee are all taxed…
As an advertising agency, which of our 'nonbillable' expenses (items and services we buy but can't fully bill back to clients) owe Texas sales/use tax, and which don't?
It depends on whether the item was resold to the client or just consumed by the agency. If an agency buys a taxable item or service for a client but ends up not billing (reselling) it -- for…
How did South Carolina revise its 1996 county rankings for the new jobs tax credit?
The revised notice moved Horry County from the moderately developed tier to the developed tier because the unemployment figures used for the January ranking had been revised. Horry therefore carried…
Did Utah charge sales tax on internet access in 1996, and what about the phone-line equipment an internet provider installed for customers?
In this 1996 ruling, the Utah State Tax Commission said charges for internet access itself were not subject to sales tax, but the provider's charges for DS1/DS3 equipment and Access Transport Lines…
Could an office-equipment dealer charge tax on an estimated portion of optional maintenance fees instead of paying use tax on parts and supplies it consumed?
No. The dealer was the consumer of the repair property and owed tax on its actual cost; tax charged to customers on the optional contract was excess reimbursement.
If I trade gift baskets to a radio station in exchange for a free radio ad (a tradeout), do I owe Texas sales tax on the baskets?
It depends on what's mostly in the basket, not on the fact that it's a barter. This corrected 1996 Comptroller letter says that if the taxable items (the basket itself and any miscellaneous,…
If I generate a federal net operating loss while I'm a New York nonresident, can I carry that loss back to reduce my New York tax from an earlier year when I was a New York resident?
Yes, potentially. New York has no independent NOL carryback rule of its own - the deduction rides entirely on Tax Law § 612, which starts New York taxable income from federal adjusted gross income.…
Did Rhode Island's EDC exemption cover a tenant's building materials, equipment, software, and replacements for a service center?
Yes, conditionally. Qualifying improvements and purchased materials held by the EDC tenant were exempt as if EDC held title, if EDC adopted the required resolution and the stated statutory…
How did California tax fresh, recovered, rented, and exchanged platinum catalyst when refiners returned spent catalyst or maintained platinum accounts?
Tax depended on title and timing. New platinum was taxed at full value; customer-owned recovered platinum excluded its metal value, while fabrication, salvage, rental, and added metal remained taxable.
How was platinum value taxed when recovered catalyst and other platinum were commingled before new catalyst was shipped to a California refinery?
No tax applied to platinum value covered by sufficient tax-paid recovered inventory; processing was taxable. Added or ex-tax platinum was taxable, with inventory rules controlling commingled withdrawals.
Could a lessor reverse its decision to pay tax when vehicles were acquired and instead report tax on the rental receipts?
No. Acquisition tax on same-form leased vehicles irrevocably chose cost treatment; later rental tax and a resale deduction could not switch it.
Were mandatory bank documentation fees part of taxable automobile lease receipts?
Conditionally yes. If the dealer remitted or netted the required $400 fee to the bank lessor, it was taxable lease gross receipts.
Was tax on separately stated repair parts hand-delivered by an out-of-state vendor's California field employees sales tax or use tax?
Delivery occurred in California, but the letter could not choose sales or use tax without local-participation facts. The live annotation adds an unsupported California vendor location and selects…
Was a vehicle manufacturer's reimbursement to dealers for filling new-car fuel tanks part of the dealers' taxable gross receipts?
No. The reimbursement under the generally required full-tank program reduced the dealer's vehicle purchase cost rather than adding retail-sale receipts.
Did one fixed-price construction contract grandfather fixtures, materials, and supplies from three historical California tax-rate increases?
Not uniformly. Each increase had its own clause; district-tax protection for materials and supplies generally required a pre-increase fixed-price supplier contract.
Could a local-government tax consultant disclose confidential sales-and-use-tax records to an outside attorney retained as an independent contractor?
No. Staff said disclosure was limited to an authorized local-government officer or employee, not an independently contracted attorney.
Did money in a bank account become part of a Chapter 13 estate when California served its levy two days before bankruptcy?
No. The reviewed memorandum said title passed when the levy was served, so the levied money was not part of the later Chapter 13 bankruptcy estate.
Is nitrogen used to nitrify drilling mud, and the cementing of a well's casing seat, subject to Texas sales/use tax and the oil and gas well servicing occupation tax?
Yes to both. The Comptroller held that sales of nitrogen and drilling mud are subject to Texas sales or use tax, and that a product made by combining the two (nitrified drilling mud) is also…
Which mutual-fund self-mailers, reports, prospectuses, brochures, envelopes, and forms were exempt as printed sales messages, periodicals, or interstate shipments?
Promotional self-mailers, prospectuses, and brochures qualified; reports qualified as free periodicals; envelopes and forms depended on packaging or attachment, and out-of-state copies could qualify…
If I start a computer-aided design (CAD) drafting business, do I have to charge sales tax on the blueprints I produce, and does it matter whether I'm a licensed architect or engineer?
Yes -- a draftsman (whether drawing by hand or using CAD software) owes sales tax on the delineations and blueprints produced from a customer's specifications, and on additional copies, because…
Is a real estate inspection service -- checking a building's structural components like plumbing, wiring, and roof and issuing a condition report -- subject to Texas sales tax?
No. The Comptroller ruled that real estate inspection services -- checking structural components of a building such as plumbing, electrical wiring, HVAC units, and roofs, and issuing a written…
Is equipment sold to hearing-impaired customers, like FM systems, amplified phones, and alarm devices, exempt from Texas sales tax the same way hearing aids are?
Only two specific products in this ruling -- the Williams Sound Pocket Talker and the SoundMate TW6AA Belt Pack Transmitter and receivers -- are exempt outright as hearing aids. A longer list of…
Does an interstate truck driver who lives in Wyoming but is dispatched from a Utah terminal owe Utah state income tax on wages earned driving through Utah?
No. Under federal law (then 49 U.S.C. § 14053, now recodified as § 14503), an over-the-road truck driver's wages from operating in interstate commerce are taxable only in the driver's state of…
Can married Utah taxpayers who filed a joint state income tax return switch to separate returns by filing an amended return?
No, not usually. Utah follows the federal rule: once married taxpayers file a joint state income tax return, they cannot later amend it to file separately. The only exception is a couple who…
Did registering an out-of-state seed seller with California's agriculture department alone create a use-tax collection duty?
No, under the stated 1996 facts. Registration alone was not sufficient presence, though other California activities could create the duty.
If my restaurant sells 'bulk food' that needs more cooking or heating before it can be eaten, how do I document that it's not taxable, and what records does the Comptroller expect?
Uncooked, refrigerated, or frozen food that still needs cooking or heating is not 'food ready for immediate consumption' under Rule 3.293(a)(9)(A) and is not taxable, regardless of quantity -- 50…
When a business sells equipment it already owns to a bank or lender and then leases it back, does Utah sales tax apply to the sale, and do the lease payments count as taxable rent?
Lease payments in a genuine sale-leaseback financing arrangement are exempt from Utah sales tax only if all three conditions are met: (1) the lessee already paid sales tax when it originally…
Does a private vending-machine company owe sales tax on proceeds it donates to a school PTA fundraiser?
The school fundraising exemption does NOT cover a private vendor's gumball-machine sales just because proceeds are donated to a school PTA — that exemption is reserved for sales made by the school…
How does Utah sales and use tax apply to a video production business's equipment rentals and purchases, and to the charges it bills clients for finished commercials, corporate videos, and film/video productions?
Equipment rentals and purchases used to produce films and videos are taxable purchases for the producer, though items that become part of the final product sold to a customer (or resold) can be…
If I buy natural gas in Texas and ship it out of state by pipeline to generate electricity at my out-of-state plant, do I owe Texas sales tax on the gas?
No. The Comptroller ruled that buying natural gas in Texas and shipping it via interstate pipeline to Pennsylvania, where it is consumed to manufacture electricity, is a noncommercial use of natural…
Can a non-profit water supply corporation use a sales tax exemption certificate on purchases for a project funded by the Texas Water Development Board's Economically Distressed Areas Program (EDAP)?
Yes, but only for purchases tied to Economically Distressed Areas Program (EDAP) projects. Water Code Sec. 17.921(a) specially defines non-profit water supply corporations as "political…
Does a metal roller-leveling process that flattens coiled metal and changes its hardness count as manufacturing or processing, so the wrapping/packaging and equipment used with it are tax-exempt?
The Comptroller's Tax Policy Director did not agree, on the facts presented, that a metal coil leveler qualifies as exempt manufacturing/processing equipment. He explained that if the…
What intangible-tax consequences followed when Florida subsidiaries sold receivables to an out-of-state affiliate before January 1?
The Florida subsidiaries owed no tax on receivables they did not own, manage, or control on January 1. Their notes from the buyer were taxable assets, but qualifying intercompany notes could be…
Did a California acupuncture certificate by itself exempt an acupuncturist's sales of herbs and drugless substances?
No. The 1980 opinion said the acupuncture statute's use of `prescribe` was not the prescription-law authority needed for the exemption. Sales were taxable and required a seller's permit unless the…
Were Nintendo, Sega, software, and audio-tape rentals subject to the special rule that always taxed video-cassette rental receipts?
No. The 1990 letter applied general lease rules: same-form property allowed a timely cost-tax election; otherwise rent was taxable.
How did California reduce an out-of-state contractor's taxable material cost for fabrication short ends that never entered California?
Sold short ends reduced cost by their sale price; pieces reused on another job reduced it by prorated cost; unused or unsold scrap produced no reduction.
What Florida deed, documentary stamp, and intangible taxes applied when divorcing spouses divided real property and one gave the other a secured note?
Florida imposed deed tax on 50% of the value of the conveyed Florida real property because the wife received interests beyond her undivided share. Documentary stamp and nonrecurring intangible tax…
Did a Florida resident or an out-of-state partnership owe intangible tax after the resident contributed stock for partnership interests?
No. After the contribution, the Florida resident no longer owned, managed, or controlled the stock, and the out-of-state partnership's stock had no Florida taxable situs. The resident's general- and…
Were receivables taxable on January 1 after a Florida business sold them for cash and assumed liabilities to an out-of-state purchaser?
No. The Florida business did not own or control the receivables on January 1 after selling them for cash and the assumption of liabilities. Its continued duties were only ministerial. The…
Were three deeds issued during a confirmed Chapter 11 reorganization subject to Florida documentary stamp tax?
No. Florida concluded that the three real-property deeds were exempt from documentary stamp tax under the confirmed Chapter 11 plan and the bankruptcy transfer rule. The plan order covered transfers…
Were a nonprofit mortgage bank's warehouse notes and collateral assignments exempt from Florida documentary stamp tax?
Yes. Florida treated the member-funded revolving credit arrangement as a wholesale warehouse mortgage agreement. Because documentary stamp tax had been paid on the developer notes serving as…
Were CPAP machines and their integral humidifiers exempt medical oxygen delivery systems?
Yes. California treated a CPAP machine that delivered pressurized air directly into the patient's airway, and an integral humidifier delivering humidified air, as exempt system components.
Which commercial, educational, promotional, wedding, duplicate-video, production, and postproduction charges qualified for motion-picture treatment?
Initial commercial, educational, and promotional videos and related production services were nontaxable; duplicates and private wedding videos were taxable.
Were separately stated motion-picture lighting-equipment and operator charges a lease, and did operating the lights qualify as production-service fabrication?
Neither. Operating lights did not fabricate an audiovisual work, but the provider retained possession and control by always supplying its operator, so it consumed the equipment.
Did a lighting company lease equipment when it always supplied and controlled the operators along with the equipment?
No. Because customers could not take equipment without the owner's operators, the provider retained control and consumed the equipment.
Could a local-government sales-tax consultant sell tax-analysis software to manufacturers and state agencies without violating California confidentiality rules?
Yes, because the buyers were nonretailer manufacturers and tax agencies, but the consultant could not build a prospect list from confidential consulting work.
Does a real estate agent or firm owe Texas sales tax on market analyses, feasibility studies, and property inspection reports sold to clients?
It depends on what the written report actually contains. Compiling data on sold or listed properties (comparable sales, listings for an area or subdivision) is a taxable 'information service.' But a…
If our medical practice charges patients, insurers, or attorneys for copies of medical records, do we owe Texas sales tax on that charge?
No -- when a medical service provider charges for copies of medical records as part of its professional service (to a patient, an agent, a party in litigation, or an insurance carrier), that charge…
My client makes and installs custom stone/marble tabletops and wood, vinyl, and stone flooring in homes -- when do I charge sales tax on the materials versus the labor, and can I buy materials tax-free for resale?
Installing tile, marble, stone, hardwood, or wall-to-wall vinyl flooring into a home is treated as an improvement to real property, so residential installation labor is not taxable, but the…
Were charges for advertising layouts taxable when the images were sent by modem or posted online?
No for electronic-only delivery. Hard copies or disks were taxable, and even a temporary tangible transfer could be a taxable lease.
New York Advisory Opinion TSB-A-96(30)S: Is applying a slip-resistant chemical treatment to tile, terrazzo, or concrete floors -- often done for ADA compliance -- subject to sales tax, and does it matter whether the floor is brand new or already existing?
It depends on whether the floor is new or existing. FST Services applies a permanent chemical treatment to hard mineral floors (ceramic, quarry tile, concrete, terrazzo) that boosts slip resistance…
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