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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Could a tax-exempt governmental project owner buy construction materials tax free when subcontractors coordinated the orders?
Yes. The governmental owner could buy project materials tax free when purchases used its purchase orders and credit, vendors billed it directly, it paid vendors directly, title vested at delivery to…
When a 1995 rate increase to Utah's utility gross receipts tax has a January 1, 1995 effective date, how does that apply to a taxpayer whose fiscal tax year doesn't start on January 1?
The increased rate applies starting with the taxpayer's first taxable year BEGINNING on or after January 1, 1995 — not to any taxable year merely ending after that date, and not by splitting a…
How was tax measured when qualified PTAs sold gift wrap and gifts on their own account?
The supplier owed tax measured by the amount each statutory-consumer PTA paid it, not the ultimate customer's payment, and could not accept the PTA's resale certificate.
If my company moves, disassembles, and reassembles office furniture, and also sells, delivers, or repairs furniture, which of these charges are taxable in Texas?
A pure moving service -- relocating a customer's modular furniture, even if you must disassemble and reassemble it to do so -- is not taxable in Texas. But if you are selling, renting, repairing, or…
If I store business forms I sold to a customer in my warehouse and later ship them out one box at a time, do I owe sales tax on the freight and handling charges billed separately later?
Yes. Because the seller stored the pre-purchased business forms in its own Texas warehouse rather than shipping them directly to the customer under the sales contract, the sale was already taxable…
Can I use taxes I overpaid in earlier years to offset a later assessment if my refund claim for those years is now too late?
No. A refund of overpaid tax can only offset a later bill if the refund claim was filed within the three-year deadline — and here it wasn't. Wilson and Frances Lundy, New Mexico residents, had paid…
Were dialysis-clinic protective wear and sterile gauze exempt dialysis-related supplies?
No. California taxed technician gloves, masks, gowns and covers because they were not integral patient supplies, and taxed gauze dressings because dressings were excluded from medicine.
New York Advisory Opinion TSB-A-96(23)S: When an out-of-state industrial auctioneer sells equipment at a New York auction site "as is, where is" to a buyer who arranges common-carrier shipment to an out-of-state destination, is the sale taxable in New York, and what records must the auctioneer keep to prove it isn't?
Not taxable in New York -- as long as the buyer never takes physical possession within the state. Norman Levy Associates, a Michigan-based industrial auctioneer and appraiser, conducts public…
Did an equipment seller's support and consulting agreement create a taxable Florida service warranty?
No. The support agreement did not indemnify the customer for maintenance, repair, or replacement costs, so it was not a taxable service warranty. The customer used its own mechanics and bore those…
I paid gross receipts tax and only later got the nontaxable transaction certificate — can I still get a refund by claiming the deduction now?
No. A nontaxable transaction certificate (NTTC) must be in the seller's possession at the time the gross receipts tax return is due — not merely by the time the deduction is later claimed. Basin…
Did a senior security interest and absence of cash protect an inventory buyer from the seller's unpaid sales tax?
No. California imposed personal successor liability because the buyer purchased inventory without providing for the seller's tax debt. The senior lien did not matter, and no-cash consideration did…
New York Advisory Opinion TSB-A-96(22)S: Are a merchant-services company's charges for its "check guarantee" service -- where it agrees, for a fee, to buy a dishonored check from a subscribing merchant at face value -- subject to New York sales tax?
No, not taxable. TeleCheck Services offers retail merchants a check "guarantee" service: before accepting a customer's check, a subscribing merchant contacts TeleCheck electronically (via a…
Did an out-of-state holding company or its machinery-manufacturing subsidiary owe Tennessee franchise, excise, sales, or use taxes when they had no Tennessee property or personnel and shipped remote sales by common carrier?
No under the stated 1996 facts. The holding company had no Tennessee activity, and the manufacturer had no Tennessee property, personnel, or in-state solicitation; it accepted orders outside the…
How did California treat fitting charges, insurance billing, and Medicare payments for custom orthotic and prosthetic devices?
The provider was a retailer and fitting charges were part of gross receipts. Insurance did not change taxability; Medicare A was a federal sale, while Medicare B remained a sale to the patient.
How did California treat fitting charges, insurance billing, and Medicare sales for custom orthotics?
The provider was a retailer and fitting charges were part of gross receipts. Insurance payment did not change taxability; Medicare Part A was treated as a federal sale, while Part B was a patient sale.
Could a provider exclude custom fitting from taxable orthotic and prosthetic device charges, and did Medicare billing make sales exempt?
No fitting deduction applied when the device sale was taxable because fitting was part of the sale. Medicare Part A sales were treated as federal sales; Part B reimbursement did not itself create an…
Could a new software-maintenance agreement for electronically delivered updates be nontaxable after a tangible-media agreement ended?
Yes, if the parties actually ended the old agreement, formed a valid remote-delivery-only agreement, and supplied no tangible software media.
Were Internet access and subscription fees for searching and viewing a résumé database taxable?
No on the stated assumptions. Customers used their own computers, while the provider transferred no equipment, software, or database information in tangible form.
If a Texas remodeling contractor isn't registered to collect sales tax and doesn't collect it on a lump-sum job, can the customer be assessed the tax instead?
Yes. Once Texas began taxing remodeling services directly, the old rule that only the contractor owed tax on a lump-sum job (based on its material costs) no longer applied. Remodeling services are…
Is labor to replace a failed electrical ballast in a light fixture taxable in Texas, and does it matter whether the building is a residence or a commercial building?
Labor to replace a failed or failing electrical ballast in a commercial building is taxable as real property repair, because ballast replacement normally requires a licensed electrician. The same…
Could a condominium association treat cable television included in a transient room charge as a service bought for resale?
No. Because the guest invoice showed one charge for transient accommodations and did not separately state a cable-service sale, the association was the consumer of the cable service. It had to pay…
My company does most of the work for its service out of state — are my receipts from New Mexico customers still subject to gross receipts tax?
Yes — the receipts are taxable, because the service is performed where the customer receives its benefit, not where the company does its back-office work. Entertainment Publications, a Michigan…
Did a 1990 Chapter 7 discharge eliminate California's later-billed priority tax claims against two corporate officers?
No, in staff's view. The cited Bankruptcy Code provisions excepted priority tax claims from discharge whether or not California filed a claim in the personal case.
Were charges for computer-generated illustrations delivered solely by modem subject to California sales tax?
No. Tax did not apply when the business transferred the illustrations only by modem and supplied no disk, storage medium, or other tangible property.
My form-work company buys plywood that's used up on jobsites for exempt organizations -- can I buy those materials tax free or get a refund of the tax I paid?
No. The Comptroller ruled that a company doing form work (erecting and removing concrete forms and centering materials without incorporating any tangible personal property into the realty) is a…
Under Florida's 1996 intangible tax, did receivables sold to an out-of-state subsidiary retain Florida taxable situs when the seller performed only ministerial servicing?
No. Receivables sold before January 1 to the non-Florida subsidiary lacked Florida taxable situs when the Florida seller retained only ministerial servicing and the subsidiary made discretionary…
Under Florida's 1996 intangible tax, who had to report assets in foreign-situs trusts and foreign entities controlled by Florida residents?
The foreign trustee did not have to file, but the Florida grantor-beneficiaries did because their power to remove and replace the trustee gave them control of the trust assets. Their corporation and…
Under Florida's 1996 intangible tax, did investment assets retain Florida taxable situs after an 11% Florida-company owner transferred them to a Texas partnership?
No. On the stated facts, the Texas partnership, its investment assets, and the resident's non-SEC-registered limited-partnership interest were not subject to Florida intangible tax because…
How did Utah tax electronic health-claim processing fees, bundled software and hardware, archive CDs, and the processor's Utah income-tax nexus and sales factor?
Utah taxed the processor's bundled charges because taxable noncustom software and computer equipment were included with other fees and not separately stated. Archive CDs were taxable tangible…
Do I owe Texas sales tax on sports cards sold through vending machines, including the chance cards redeemable for an autograph?
Yes -- receipts from sports card vending machines are subject to Texas sales tax because the cards are tangible personal property, not an amusement activity. These machines are not treated as…
Does Texas sales tax apply to charges for computer consulting, hardware setup, software installation, training, and computer repair/maintenance?
It depends on the specific service. Business/computer consulting, evaluating a client's computer setup, installing software or peripherals you didn't sell, and training employees are NOT taxable.…
Under Florida's 1996 intangible tax, did receivables sold to an out-of-state subsidiary retain Florida situs when the parent performed routine servicing?
No. Receivables sold before January 1 to an out-of-state subsidiary were not subject to Florida intangible tax when the Florida parent performed only routine, instruction-based servicing. Those…
Under Florida's 1996 intangible tax, did receivables transferred to an out-of-state limited partnership escape the January 1 assessment?
Yes. Approximately $11 million of receivables transferred to a Delaware limited partnership before January 1 were not reportable by the Florida transferor because the partnership and its non-Florida…
Under Florida's 1996 intangible tax, did investment assets retain Florida taxable situs after a Florida resident transferred them to a Texas partnership operated in Texas?
No. On the stated facts, the Texas partnership, its investment assets, and its non-SEC-registered limited-partnership interest were not subject to Florida intangible tax because management and…
Did a Tennessee real-estate limited partnership or its passive foreign corporate limited partner owe Tennessee franchise and excise taxes, and how did the taxable general partner report its share?
No. Under the 1996 law applied, the limited partnership itself was not a taxable entity, and a foreign corporation whose only Tennessee connection was a passive limited-partner interest had no…
Could Tennessee assess closed years, and could a corporation use losses from those years, after it determined that returns reporting no business activity had understated its Tennessee nexus?
Tennessee could not assess the closed pre-1992 years absent a false or fraudulent return filed to evade tax. But the corporation could recompute Tennessee losses from closed years and carry them…
Can a city that has adopted a Municipal Crime Control District sales tax repeal the Section 323.208 exemption for telecommunications services and tax them under that local tax?
A qualified yes. A city that has adopted a Municipal Crime Control District sales tax may repeal the Section 323.208 Tax Code exemption for telecommunications services and tax those services under…
Do we have to charge sales tax on commercial wastewater treatment services, and on the hauling charges when we pick up the water ourselves?
No -- treating a customer's wastewater to remove oil and contaminants before it's discharged to a municipal sewer system is not a taxable service, because water itself is exempt from Texas sales tax…
What did the original, now-obsolete Florida TAA 96A-024 say about a bundled car-dealer promotion?
The original ruling said the full promotional-contract price was taxable because flyers, checks, envelopes, gifts, sale tags, and a licensed mailing list were consequential parts of a retail sale.…
What crude oil severance tax exemption levels applied in Kansas from May 1996 through April 1997?
For the fiscal period May 1, 1996 through April 30, 1997, the Kansas crude oil severance tax exemption levels were set using a determined average oil price of $15.81 per barrel. Because that price…
Which charges under a software support agreement were taxable when some plans included upgrade tapes?
Upgrade plans and mandatory or bundled consultation were taxable; after the first year, separately optional hotline-only plans with no upgrades were nontaxable.
If a Texas seller with Texas nexus sells to an out-of-state buyer who has no Texas nexus, and the buyer resells to a third party, does the Texas seller need to collect Texas tax, and what documentation does it need from the buyer?
A Texas seller does not have to collect Texas tax on a sale to an out-of-state buyer if the buyer gives the seller a valid Texas resale certificate showing the buyer is a bona fide retailer…
How did California tax an industry service organization's membership fees, standard reports, online information, custom reports, newsletters, and credit reports?
Membership and electronic-access fees were nontaxable services; physical noncustom reports and forms were taxable, while custom reports, incidental newsletters, and customer credit reports were services.
Which membership, publication, electronic-information, custom-report, credit-report, and lump-sum charges of an industry information provider were taxable?
Service-oriented membership fees, electronic information, custom reports, and credit-report services were nontaxable; physical noncustom publications and extra copies were taxable.
If I'm a developer building streets, roads, or sewer/water lines in a subdivision that I plan to donate to the county, can my contractor buy materials tax-free?
Yes, but only if the dedication and government acceptance happen before construction starts. A developer donating subdivision infrastructure (streets, roads, sewer/water lines, etc.) to a…
Was a lump-sum direct-mail marketing campaign taxable in Florida, and could the marketer buy campaign inputs with resale certificates?
Yes for Florida clients. The entire lump-sum direct-mail campaign was taxable because the printed materials were essential, not incidental, and mailing-list sales to Florida purchasers were also…
How did California tax a customer-survey program that mailed printed surveys and promotional pens, then delivered a custom research report?
California taxed printed survey materials and pens mailed in-state, exempted qualifying out-of-state shipments, and treated a separately contracted custom survey report as a nontaxable service.
How did California tax a survey program that mailed printed surveys and pens, then delivered a custom research report?
California mailings were taxable; qualifying out-of-state mailings were exempt. A separately contracted custom report could remain a nontaxable service.
If our pharmaceutical company gives free prescription and nonprescription drug samples to physicians and hospitals in Texas, do we owe sales or use tax on them?
It depends on who receives the sample and whether it's prescription or nonprescription. Prescription and nonprescription drug samples given free to physicians (to be dispensed to patients) are…
If my appliance repair customer pays only for an estimate and decides not to go ahead with the repair, do I have to charge sales tax on that estimate/service call fee?
No -- if a customer only pays for a service call or estimating fee and decides not to have the appliance repaired, that fee is not taxable because no repair (a taxable service) actually took place.…
Will the Utah State Tax Commission accept a membership-club retailer's proposed member exemption-certificate and non-taxable sales log system as sufficient for its resale/exempt-purchase tax exemption recordkeeping?
The Commission won't sign a formal contractual agreement (it doesn't normally enter into those), but it approved the substance of the proposed system: keeping each member's signed exemption…
If I transfer my manufacturing equipment to a new LLC to reduce personal liability and lease it back to my business, do the lease payments qualify for Utah's manufacturing sales tax exemption?
No, not on these facts. Transferring already-in-service manufacturing equipment to a new LLC purely for liability protection, then leasing it back to run the same operations it always has, does not…
Does an out-of-state finance company with two Utah-based sales employees, but no Utah office or property, owe Utah corporate franchise/income tax?
Yes. The Utah State Tax Commission ruled that a California-based company purchasing motor vehicle installment contracts from Utah dealers has Utah corporate income tax nexus solely because it has…
Do I have to charge sales tax on sodium bentonite clay that I sell for different uses — animal feed, cat litter, well-plugging, pond/landfill sealant — and on delivery charges for it?
Sodium bentonite clay is taxable when sold to an end user no matter how it's used -- as animal feed additive, cat litter, well-plugging material, or a pond/tank/landfill sealant. The seller only…
Is an air compressor that powers pneumatic tools exempt from Texas sales tax under the manufacturing exemption?
Yes, conditionally: the Comptroller ruled that an air compressor used to power pneumatic tools qualifies for Texas's manufacturing exemption, but only if the pneumatic tools themselves are used for…
Is my company's charge for online continuing-education courses and certification testing subject to Texas sales tax?
No -- charges for providing continuing education courses and testing over the Internet are not subject to Texas sales tax. However, if the company pays its Internet Service Provider separately for…
Does automating an existing manual production line count as tax-exempt 'new or expanding operations' equipment, or is it a taxable 'normal operating replacement'?
Not automatically exempt — it depends on facts the Commission hadn't yet been given. Utah's manufacturing exemption applies to equipment for 'new or expanding operations' but not to 'normal…
Were fees for transferring human cadaveric tissue to surgeons taxable, and did nonprofit status create a general exemption?
The tissue-transfer fees were not taxable because the transactions were not treated as sales of tangible personal property. But nonprofit or charitable income-tax status did not create a general…
Is a service that compiles and reports weekly underground natural gas storage capacity data from multiple subscribers a taxable information service, or does it qualify as a nontaxable proprietary compilation or geophysical survey?
No exemption applies -- the Comptroller ruled that a company's weekly reports on underground natural gas storage capacity, compiled from data submitted by storage operators and sold to industry…
Did a free advertising-supported shopping guide qualify for printed-sales-message exemption when the publisher selected its content and advertisers bought only ad space?
No. Advertisers never acquired title to the guide, so it was not printed to a purchaser's special order; the publisher consumed it and owed tax on production materials.
How these rulings are useful
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