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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How did Texas tax equipment-and-operator charges for laying, burying, delivering, and removing sold or rented polyethylene pipe?
For rented pipe, laying, installation, trenching, and equipment-with-operator charges were taxable; separately stated later removal was not. For sold pipe, laying was taxable, but separately stated pe…
How did Texas tax moving, storage, packing, crating, repair, packaging-material sales, and export-packing services?
Moving, storage, transit preparation, and customer packing were nontaxable, but the provider generally owed tax on materials. Repairs and retail packaging sales were taxable. Manufacturer crates could…
Are a stock-footage library's charges to customers taxable when it grants the right to reproduce movie footage and delivers workprints and master copies?
It splits. Sherman Grinberg Film Libraries catalogues and licenses studio-owned 'stock' footage. Its arrangements with the studios are not taxable: it only takes temporary possession of the original n…
Mae LaBue, a longtime New Jersey resident and homeowner, was admitted to a nursing home in the Bronx, New York on her physician's advice due to a stroke, severe paralysis, and hypertension, and is expected to remain there for the rest of her life. Does this involuntary, medically-necessitated placement make her a New York resident for 1991 or any future tax year?
No. The Department ruled that LaBue remains a New Jersey domiciliary and a New York nonresident for as long as she stays in the nursing home. Because her presence in New York resulted from physical an…
How did Texas tax underground-tank demolition, tank and contaminated-soil removal, backfilling, surface restoration, repairs, replacement construction, and soil testing?
Tank excavation and backfilling were nontaxable; tank hauling and disposal were taxable. Qualifying contaminated-soil removal was exempt with a certificate. Surface repair and tank repair were taxable…
Which local recording agent fees were taxable under Texas sales-tax rules after Senate Bill 324?
The authorized service fees and a new-client setup fee were not taxable. A property-picture fee was taxable tangible property, and a motor-vehicle-record fee was a taxable information service above th…
Did the builder exemption for a commercial dry dock survive a sale to a related corporation and leaseback to the builder?
No. The builder's first sale of the over-eight-ton dry dock was exempt, but the related buyer's leaseback was taxable because that corporation was not the builder. Operating-lease tax followed reporte…
Does a microwave carrier collect New York sales tax on local vs. interstate telecom service, and is its transmission equipment exempt?
Local yes, interstate no, and the equipment can be exempt. Local Area Telecommunications, a microwave common carrier, must collect New York sales tax on charges to customers for local (intrastate) tel…
Can an interior design and space-planning service qualify for the capital-improvement exclusion from New York sales tax?
No. Hafner Associates' interior design and space-planning services — layouts, lighting design, millwork elevations, finishes and furnishings specifications, and project management presented on bluepri…
Could a homeowners association use Texas's historical prior-contract exemption for garbage service, and how was its separately stated garbage charge treated?
The letter said qualifying fixed-rate homeowner contracts entered before July 22, 1987 could support the historical exemption, while quoting a statutory note that the exemption had no effect after Jan…
Which stuck-pipe recovery, gamma-ray, cement-bond, and casing-inspection services were subject to sales tax or Texas's 2.42% well-service tax?
The described gamma-ray/cement-bond and casing-inspection logs were not subject to sales tax or the 2.42% tax. Locating and cutting stuck tubing was subject to sales tax but not the 2.42% tax. The sam…
Were intraocular lenses sold in Texas exempt from sales and use tax as prosthetic devices?
Yes. The Comptroller classified an intraocular lens as a prosthetic device and said it was exempt from Texas sales and use tax.
Which radio-dispatch, signal-boosting, and elevator-phone services were taxable telecommunications or telephone-answering services?
Radio signal amplification and retransmission was taxable telecommunications. Dispatching that answered radio calls and routed them to land lines, plus elevator-phone answering, was taxable telephone …
Were liquid eggs, frozen eggs, egg substitutes, and unheated hard-boiled eggs exempt from Texas sales and use tax?
Yes. Liquid and frozen eggs and egg substitutes were exempt food. Hard-boiled eggs were also exempt when sold unheated and without eating utensils. A seller with no taxable Texas sales did not have to…
Which member and guest charges at a nonprofit Texas golf and country club became taxable on October 1, 1991?
Monthly dues, initiation and transfer fees, guest and green fees, range and trail fees, locker and bag storage, cart storage, locker rentals, minimum food charges, and golf or tennis club dues were ta…
How did Texas's October 1, 1991 amusement-tax change affect prepaid country-club dues, cart storage, opening fees, party cover charges, and gratuities?
Charges paid before October 1 stayed untaxed even for later service. Later member-privilege and cart-storage charges were taxable; the club could not buy charging electricity for resale. Alcoholic-bev…
How did Texas treat state contracts for abandoned strip-mine reclamation that permanently incorporated lime into the land?
The December 11 letter replaced a November 25 opinion and treated the reclamation as real-property improvement. After House Bill 11, consumed items were not exempt under Section 151.311; a separated c…
How did Texas tax railroad-track materials and labor for new construction versus repair, remodeling, or renovation?
Rails, ballast, bridges, trestles, ties, and other essential track materials were exempt; depot and nonessential construction materials were taxable. New-construction labor was not taxable, while exis…
Was an aircraft charter used to transport passengers subject to Texas sales tax?
No. The Comptroller said sales tax was not due on an aircraft charter for passenger transportation or on individual tickets for travel on a common carrier.
Did a Mexican pedimento simplificado prove export well enough to support a Texas sales-tax refund?
No. Rule 3.323 required formal destination-country entry documents. For Mexico, the letter required a pedimento de importaciones with a computerized certified customs number, or alternatively a Mexica…
If a Utah refinery processes gold and silver bullion for an out-of-state mining company and the bullion is then sold to a third party who takes delivery outside Utah, does that sale count as a 'Utah sale' in the corporation's apportionment sales factor?
It depends on the throwback rule. If the seller is not taxable in the state or country where the buyer takes delivery, the sale is 'thrown back' and counted as a Utah sale in the sales factor under U.…
Was a jointly funded artificial-intelligence software-development agreement a taxable custom-software sale or nontaxable contract programming?
The developer's retained legal rights controlled: retaining rights made the arrangement a custom-software sale taxable to the extent used in Texas; retaining no title made it nontaxable contract progr…
How did Texas tax labor and materials for removing rust and rechroming a motor vehicle's grille and bumpers without alteration?
Rechroming the grille and bumpers was repair of component parts. Labor was not taxable, but materials were. Under a lump-sum repair the repairer paid materials tax and charged the customer no tax; und…
Were charges for a computerized telephone weather-and-advertising service taxable when customers did not control the equipment?
No. Advertising and franchise fees were nontaxable when the provider retained control and performed all equipment operations, while the provider paid tax on its equipment and supplies. Radio stations …
New York Advisory Opinion TSB-A-91(9)I: May Federal Trust Fund, a regulated investment company, and its shareholders treat the fund's 'Exempt Obligations' - federal government obligations whose interest is subject to federal tax but exempt from New York State tax - as 'obligations of the United States' for purposes of the Tax Law § 612(c)(1) subtraction, and, provided the asset and notice requirements are met, may shareholders subtract the portion of their dividends attributable to interest on those obligations from their New York taxable income?
Yes to both questions. The Department ruled that Federal Trust Fund's 'Exempt Obligations' - obligations of the federal government or its agencies/instrumentalities whose interest is taxable federally…
When did recurring motel repainting qualify as scheduled maintenance instead of taxable restoration or remodeling?
A recurring cycle alone was insufficient. The motel needed fixed, regular schedules or work orders showing repainting was planned before paint declined. Repainting faded, damaged, blistered, or peelin…
Is the fee to cancel a computer-equipment lease subject to New York sales tax, and does a later reimbursement of that fee change the answer?
Yes, it's taxable. Omori & Associates paid a termination fee to end a five-year computer-equipment lease early (to upgrade to new IBM equipment). Because a lease of tangible personal property is a tax…
Did copy machines and supplies used to reproduce customer documents qualify for Texas manufacturing exemptions?
The copying business was treated as a manufacturer. Direct-use copiers with the required useful life qualified for the historical phase-in exemption when purchased in the stated period; financing leas…
Are a contractor's cable-TV installation and testing charges to a cable company taxable, and when do resale, capital-improvement, or exempt-organization rules apply?
Generally taxable, with several carve-outs. A contractor's charges to a cable-TV company for the 13 listed services (testing, splicing, wiring, trenching, drop-cable installs, pole transfers, etc.) ar…
Could a Texas provider of taxable services separately state bond and insurance costs and leave them out of the sales-tax base?
No. The November correction revised the attached June letter and said bond and insurance costs connected with selling a taxable service remained taxable even when separately stated.
When software is sold as one unit combining a taxable insurance-rating database and nontaxable custom software, is the whole price taxable?
The whole price is taxable when sold as one unit. Insurance Automation Systems sold a two-part insurance-quoting system (June 1988-May 1991): (1) a database of New York insurance companies' rating fac…
Are hemodialysis kidney machines and their single-use disposable supplies exempt from New York sales tax, and as what kind of exempt item?
Exempt as medical equipment — with a carve-out. Althin CD Medical's hemodialysis kidney machines and the single-use disposable supplies (needles, tubing, filters) used with them are medical equipment,…
How did Texas tax unprocessed aggregate and equipment-with-operator charges used in taxable, construction, residential, or nontaxable services?
Unprocessed sand, gravel, dirt, and soil were nontaxable unless included in a taxable service. Equipment-and-operator charges followed the service when combined. For a nontaxable service, separate equ…
Was complimentary valet parking hired by a club, individual, or event group subject to Texas sales tax when guests paid no parking fee?
Yes. The service remained taxable motor-vehicle parking whether the hiring group paid the hourly fee or the vehicle owner paid directly. Operating temporarily on client property, owning no parking lot…
Was a subcontractor that poured tilt-wall panels and other concrete work—but did not physically erect the panels—a manufacturer or a contractor?
It was a contractor. The subcontractor poured the foundation, walls, curbs, sidewalks, plug concrete, patches, and final slab and remained responsible for correct wall placement before payment, even t…
Were one-way or round-trip train tickets taxable admissions when the trip ended in a historic district?
No on the described facts because the trip's primary purpose appeared to be transportation. Admissions to tour trains or buses primarily showing tourist sights along a route were taxable; the Comptrol…
Before a proposed reorganization is even completed, can the Tax Department confirm in advance whether a holding company and its operating subsidiary will be allowed to file a combined New York franchise tax report?
No, not in advance. An S-corporation client (OLDCO) planned to have its sole shareholder contribute OLDCO stock to a new holding company (NEWCO) in a tax-free IRC section 351 exchange, after which NEW…
When did Texas sales tax apply to trained drug-detection dogs sold to law-enforcement or investigation agencies?
No Texas tax was collected when the seller delivered the dog outside Texas and retained delivery proof. A customer taking possession in Texas owed tax unless it was a qualifying exempt entity. Other s…
Did taxable data processing qualify for Texas manufacturing exemptions because it produced printed reports or other physical results?
No. Data processing was a taxable service, not manufacturing or processing tangible personal property for sale. The service provider collected tax on the service price but could not claim manufacturin…
How did Texas allocate tax on remodeling a jointly owned power facility between exempt cities and private utilities holding direct-payment permits?
Each owner was treated as the sole owner of its percentage. Cities bought their shares exempt; private utilities used direct-payment certificates and accrued use tax on their shares. The entire nonres…
Could a company rebuilding purchased used core assemblies buy wrapping and packaging supplies tax-free as a manufacturer?
Yes. The company was a manufacturer because it bought used cores, completely disassembled, cleaned, inspected, remachined, rebuilt, tested, and added the finished assemblies to inventory for sale. It …
Was revenue from renting space on installed utility poles subject to Texas sales tax as tangible-personal-property rental?
No. Utility poles installed as part of a utility line were improvements to real property, so renting space on them was not a rental of tangible personal property and the rental revenue was not taxable…
Could a for-profit club buy membership cards, certificates, newsletters, and other printed materials tax-free for resale with taxable dues?
Yes. When the club collected sales tax on membership dues and gave the printed materials to members as part of membership, it could give the printer a resale certificate. Refunds for past tax had to b…
How does a bank figure its average deposits for the Nebraska financial institution tax when a merger creates a short tax year?
On a partial-year basis. When a merger gives a Nebraska financial institution a short tax year, the acquired institution files a short-period return and computes its average deposits under Neb. Rev. S…
Did cogeneration equipment qualify for Texas's manufacturing-equipment phase-in exemption when the company sold more than half of its electricity?
Yes. The Comptroller applied a more-than-half-for-sale test: equipment qualified when over half of the electricity produced was sold, and the exemption was not lost merely because the same equipment a…
If an out-of-state parent corporation is mistakenly listed as the record owner of New York real property that its subsidiary actually purchased, operates, and pays taxes on, does the parent become subject to New York franchise tax merely because of that clerical title error?
No. Petitioner, a Michigan corporation not authorized to do business in New York, had no involvement with New York operations -- its wholly owned New York-qualified subsidiary (PVS-NY) purchased, oper…
Under SC Revenue Ruling 91-20, when was a tax preparer's electronic-filing charge subject to sales tax?
When the same preparer prepared and electronically filed the return, the filing was incidental to the nontaxable preparation service and the combined charge was not taxable. When the preparer only tra…
Could an amusement provider and its ticket agent decide by contract which party collected and remitted Texas ticket sales tax?
Yes between themselves, but their agreement did not bind the Comptroller. The amusement provider was ordinarily responsible, while a contract could assign collection and remittance to either party. If…
How did Texas tax stand-alone business consulting, training, business evaluations, separately sold books, and books included in training?
Stand-alone consulting, separately stated training, and the described business-viability evaluation were nontaxable. Consulting tied to a taxable item became taxable. Separately sold books were taxabl…
When did Texas begin taxing human-operated telephone answering services, and what amount and local jurisdiction were taxable?
Human message-receiving and relaying became taxable October 1, 1991; electronic answering had been taxable since October 1, 1985. Providers collected 6.25% state tax plus applicable local tax based on…
Which of a telecom carrier's transmission assets qualify for New York's central-office-equipment sales-tax exemption?
Only the equipment that directly and predominantly (more than 50%) switches, initiates, or receives telephone communication at its destination qualifies. For MCI and the related carriers, assets that …
How did Texas tax septic-tank pumping and drain-line unstopping for business and residential customers?
Septic pumping alone was nontaxable for both. Business drain unstopping was taxable, and a combined pumping/unstopping charge was fully taxable unless pumping was separated. Residential labor was nont…
How did Texas tax septic pumping and drain-line unstopping for commercial and residential property?
Septic pumping alone was nontaxable. Commercial drain unstopping was taxable, and combined pumping was taxable unless separately stated. Residential labor and lump-sum materials-and-labor work were no…
Was a one-time $25 administrative fee to transfer residential HVAC repair contracts after a company's bankruptcy subject to Texas sales tax?
No. The Comptroller said the one-time $25 fee charged to transfer each repair contract to the replacement service company was not taxable on the stated facts.
Is a separately priced software maintenance agreement taxable in New York, and how did the 9/1/1991 law change the answer?
It depends on the date, and on itemization. Before September 1, 1991, custom/modified software was intangible personal property, and maintaining or servicing an intangible was not an enumerated servic…
Are honey-roasted peanuts taxable in New York, or are they exempt food?
Yes, they're taxable. Planters Honey Roasted Peanuts are dry-roasted peanuts with a light honey glaze encrusted with sugar (the principal ingredients after peanuts are sugar and honey). Under regulati…
Is an unincorporated, nonprofit residential condominium that earns income from common laundry and garage facilities subject to New York's Article 9-A franchise tax for years before 1989, when the definition of 'corporation' required actually conducting business?
Yes. This unincorporated, nonprofit residential condominium, organized under Real Property Law Article 9-B, derives revenue from common-charge assessments, reserve-fund interest, and common laundry an…
If a corporation voluntarily dissolved decades ago but keeps title to and rents out the same real property, does it still owe New York franchise tax, and can it elect New York S corporation status?
Yes, it remains taxable, and yes, it can elect S status if otherwise eligible. Judsu Realty Corp. voluntarily dissolved in 1965 but has continued ever since to hold fee title to, and operate the renta…
Does a trash compactor bought for an expanded manufacturing facility qualify for Utah's manufacturer's sales tax exemption?
No. The Utah State Tax Commission ruled that a trash compactor purchased for an expanding manufacturing facility does not qualify for the manufacturer's sales tax exemption under Utah Code § 59-12-104…
Does a federal agency keep its sales and transient room tax exemption on employee lodging when a contractor handles the billing?
Yes, but only if the government's own money actually pays the hotel — the check must be made payable to the hotel and traceable to the agency's funds, not simply channeled through a contractor's own a…
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