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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Were capital assessments charged to proprietary members of a nonprofit Texas country club subject to sales tax?
Yes. The assessments were part of the taxable sales price of private-club membership because Section 151.007(e) included dues, fees, initiation fees, and other assessments required for membership or a…
How should a seller document tax-free class-ring sales to a university bookstore, and when could it accept the bookstore's claimed university exemption?
A bookstore buying rings for resale had to provide a resale certificate, not a government exemption certificate. A properly completed university exemption certificate could protect a good-faith seller…
Could a church buy telephone service for its pastors' parsonages tax-free when the phones had some personal use?
Yes. The Comptroller said churches could purchase telephone service for parsonages tax-free by giving the telecommunications provider an exemption certificate.
How did Texas tax cathodic corrosion-protection systems installed on existing pipelines, well casings, tangible equipment, or new construction?
Installation on an existing nonresidential pipeline or well casing was taxable real-property repair or remodeling on the total charge. Installation on equipment remaining tangible personal property wa…
Were utilities at fee-simple timeshare condominiums exempt residential use when units were occupied only by owners and never rented to nonowners?
Yes. The October 29 follow-up treated owner-only occupancy as exempt residential use. The attached earlier letter applied a 30-day and per-meter predominant-use test to mixed residential and short-ter…
Are the management fee and cost reimbursements paid to a food-service contractor to run a subsidized cafeteria subject to New York sales tax?
Yes. ARA Services would run a for-profit cafeteria open to the general public in a building whose landlord pays it a management fee plus cost reimbursements. Pure management of a for-profit cafeteria …
Were Texas insurance claims adjusting or processing services taxable when performed for a surplus-lines or non-admitted insurer covering a Texas risk?
Generally yes. The provider had to presume the service was taxable when the insured person or property was in Texas. It could avoid collection when the insurer was not conducting insurance business in…
Could a change order executed during construction retroactively convert a lump-sum real-property contract into a separated contract?
Yes. A retroactive amendment changed compensation to reimbursable actual costs plus a fixed fee and required amended and future invoices itemizing incorporated materials and other expenses. That cost-…
Was artwork sold by a graphic artist to an advertising agency taxable when the agency used it only in conceptual ad-campaign development?
Yes. The artist delivered a finished product to the agency, so the sale was taxable. The agency's later use of that artwork as preliminary or conceptual material did not change the finished-art classi…
How did Texas tax underground-tank excavation, tank disposal, contaminated-soil removal, replacement installation, repair, inspection, and mixed charges?
Tank excavation was nontaxable demolition, but tank hauling and disposal were taxable. Qualifying contaminated-soil removal was exempt with a certificate. New installation followed construction rules;…
How did Texas tax underground fuel-storage-tank removal, tank disposal, contaminated-soil disposal, repair or upgrading, and installation of a new tank?
Tank excavation and removal were nontaxable demolition, but hauling and disposing of the tank were taxable waste removal. Qualifying contaminated-soil disposal was nontaxable, repair or remodeling was…
Did a company have to collect Texas sales tax for pumping, hauling away, and disposing of gasoline-contaminated water from underground fuel storage tanks?
No, if the liquid was an industrial discharge regulated by the Texas Water Commission and the provider held the required permit. The provider had to obtain and retain a completed exemption certificate…
Could a software developer buy boxes, wrapping paper, envelopes, tape, and similar supplies tax free when they were used to package computer programs?
Yes. If the corporation produced computer programs as defined by Rule 3.308, it could buy the listed wrapping and packaging supplies tax free by giving its suppliers an exemption certificate instead o…
Were bags supplied to third parties tax-exempt packaging when used for cement the company made versus cement it bought from other manufacturers?
Bags used to package the company's own manufactured cement were exempt even when an unrelated packager did the work. Bags supplied to other manufacturers for cement the company later bought and resold…
If an out-of-state trade-show promoter's only New York activity is renting a convention center for a single three-day franchise expo, does that one event make it subject to New York corporate franchise tax?
Yes. Blenheim Franchise Shows, Inc., a Florida-based producer of small franchise expos with its only office in Winter Park, Florida, produced 43 shows nationwide in 1990 -- only one of them in New Yor…
Did ABC's South Carolina quality-control and customer-complaint visits exceed Public Law 86-272 solicitation protection?
Yes. ABC's technicians and plant managers inspected rejected yarn, decided whether it was defective, proposed remedies, and advised customers how to adjust machinery or processes. The ruling held that…
Was the S.B. 324 fee charged by a local recording insurance agent for services outside the insurer-paid commission subject to Texas sales or use tax?
No. The authorized fee itself was not subject to sales or use tax. But the agent still had to pay vendors' tax on any taxable property or services acquired for the client, and that tax became part of …
Did the taxpayer's publication qualify as a magazine, and what objective criteria did Texas use to distinguish a magazine from a newsletter?
Yes. The publication qualified because it had paid subscribers, appeared monthly, contained articles by various writers, and used a second-class postal permit. Texas also considered whether a publicat…
If an out-of-state manufacturer's only New York presence is a handful of employee-days per year repairing products it sold, is that enough activity to make it subject to New York's corporate franchise tax?
Yes. The American Crane Corporation, a North Carolina crane manufacturer with all operations based in Wilmington, sent a small service department into New York for a maximum of about two weeks a year …
Could a taxpayer file monthly Texas sales-and-use-tax returns using a 13-period accounting calendar, and how were period-end dates assigned to returns?
Yes. Periods ending on days 1-10 were reported on the prior month's return due on the 20th of that month; periods ending on days 11 through month-end were reported on that month's return due the next …
Was a monthly fee for access to a computer database of found animals taxable when people reporting found pets supplied information for free?
Yes. The monthly fee paid by owners of lost pets for access to the found-animal database was taxable as an information service under Rule 3.342.
Were automobile hand controls and a vehicle modified for an orthopedically handicapped person exempt from Texas tax?
Yes under the stated conditions. Hand brakes were exempt orthopedic devices when they enabled a person with missing, damaged, or nonfunctioning organs or appendages to drive, and § 152.086 exempted a …
If a company has no office in New York but its employees occasionally spend a small amount of time there, does any of their compensation count in the numerator of the Article 9-A payroll factor?
No -- the payroll factor numerator is zero. Himont USA, Inc., a Delaware company with no office or place of business in New York and no New York-resident employees, had a small property factor (about …
Was a confidential, client-tailored medical literature search a nontaxable proprietary-information service when its source material came from public-access databases?
No. The search was a taxable information service because the client had no enforceable proprietary rights in the public-access source material. Tailoring the search, keeping results confidential, or s…
When were a property manager's repair and maintenance services exempt for permanently assigned employees, related corporations, rental property, and dollar-for-dollar reimbursements?
The employee exclusion required rental property, permanent assignment to one owner's property or properties, and dollar-for-dollar reimbursement. Common ownership alone did not merge separate corporat…
Were a nonprofit club's charges for horse-stall space and feeding taxable when stable access was a membership privilege versus being offered to members and nonmembers alike?
The charge was taxable effective October 1, 1991 if the right to stable a horse was a privilege of club membership. It was not taxable if the stable facilities were available to members and nonmembers…
Did the 1991 removal of the Section 501(c)(7) club exemption make dues and membership fees taxable for fraternities, sororities, scouts, and similar service organizations?
No. The Comptroller's clarification said dues and membership fees paid to fraternities, sororities, scouts, and similar service organizations were not subject to the newly enacted amusement-services t…
Could an amusement provider be designated as solely responsible for sales tax when a ticket agent sold admissions and a successor disputed who had to collect and remit?
No sole designation was given. The parties' contract could assign collection and remittance duties, but it did not bind the Comptroller. If the ticket tax was not reported and paid, Texas would hold b…
Were a nonprofit country club's membership dues exempt when members prepaid them before the October 1, 1991 repeal of the club exemption?
Yes. Dues actually received before October 1, 1991 were exempt with no limit on how far ahead a member could prepay. Later income recognition did not make them taxable, but the club had to keep record…
Was a charge for drug-screening urinalysis taxable, and what happened if the consultation also included licensed background or character investigations?
Urinalysis by itself was not taxable. If the same consultation included background checks, character investigations, or similar work requiring a license under the Private Investigators and Private Sec…
How did the October 1, 1991 effective date apply to a private club's initiation fees, equity component, installment payments, and operations assessment?
The member's joining date controlled. Fees assessed to members joining before October 1 were nontaxable even if paid later; fees for members joining on or after that date were taxable, including the $…
Can a customer give a contractor a capital-improvement certificate after the contract is signed and the first tax invoice is paid, and who then owes tax?
Yes, the customer can furnish the certificate later, with limits. Once Action Scale receives a properly completed Certificate of Capital Improvement, it must stop collecting sales tax on future invoic…
Which dental-lab charges did SC Revenue Ruling 91-19 treat as exempt prosthetic production, taxable products, or services?
Charges for listed stages used to manufacture exempt dentures or crowns were part of the exempt prosthetic-device sale, even when several labs billed separate stages. Surgical trays and night guards w…
Were natural gas and electricity exempt when a plant manufactured restaurant equipment partly for sale to franchisees and partly for use in company-owned restaurants?
Only the utility used to manufacture equipment sold to franchisees was exempt. Utility used to make equipment for the company's own restaurants was taxable. Because the submitted study did not separat…
Were truck-time and per-gallon charges for disposing of oil and water from a groundwater test well taxable as waste removal?
No, if the waste was an industrial discharge regulated under a Texas Water Commission permit. The provider needed a properly completed exemption certificate; without one, the service was presumed taxa…
Is a contract to care for and maintain live plants (like office interior plants) subject to Nebraska sales tax?
Yes. Under Revenue Ruling 01-91-2, when the owner of live plants that are not incorporated into real property buys an agreement providing for the continuing care or upkeep of those plants, the sale of…
Were fees for storing fire- and water-damaged property and the premium for bailee's insurance subject to Texas sales tax?
No. The Comptroller said both the storage fees for fire- and water-damaged items and the bailee's-insurance premium were nontaxable, and allowed continued reliance on the June 1989 Sales Tax Review.
Is the sale of advertising space in a free discount-shopper directory subject to New York sales tax?
No. A client that publishes a discount shoppers directory and earns income only from selling advertising space in it is providing an exempt advertising service, not a taxable information service. Tax …
Were recurring club assessments billed in late September for October taxable, and were September amusement services taxable if payment arrived after October 1, 1991?
October assessments billed in advance at the end of September were taxable. By contrast, billings for amusement services actually provided in September were nontaxable even when the club received paym…
Were concession-stand food sales exempt when a school-associated group sold them as a fundraiser and kept all net proceeds for its exclusive use?
Yes. Under the stated facts, the sales were exempt because the group was associated with a public or private elementary or secondary school, the sales were part of its sponsored fundraising drive, and…
Was regularly scheduled cleaning of kitchen vent hoods and exhaust systems nontaxable preventive maintenance or taxable building cleaning?
It was taxable building and grounds cleaning under Rule 3.356. Although the work helped prevent fires and had maintenance features, Texas found it closer to chimney or duct cleaning than to the repair…
Which for-profit country-club membership dues did historical SC Revenue Ruling 91-18 subject to admissions tax?
The ruling taxed social dues that included discounts or privileges for other club facilities for all open periods. Beginning April 1, 1992, it also taxed true social dues and the full amount of golf, …
How did Texas tax HVAC maintenance and repair contracts for tangible equipment, commercial real-property systems, and residential real-property systems?
Tangible-equipment service was taxable. Scheduled preventive maintenance on commercial realty was nontaxable, but repair charges were taxable and an unallocated lump sum became taxable when repairs ex…
Which supermarket bags and food-packaging supplies were taxable at checkout, produce, bakery, and meat departments?
Checkout and produce bags were taxable. Bakery packaging was exempt only when the store baked its own goods and supplied an exemption certificate. Meat trays, film, pads, and paper were exempt because…
Could a pharmacy buy prescription labels, patient-use information, and bags tax free when pharmacists compounded chemicals and mixed medicinal solutions?
Yes. Texas treated compounding raw chemicals and mixing liquids and solids into medicines as processing, so the prescription labels, patient-use information, and bags used to convey those medicines qu…
Who had to collect Texas tax on sales made through a direct-sales company's local distributors, and how did churches and schools document exemption?
The direct-sales company had to collect and report tax on its distributors' Texas sales. Churches and schools generally needed exemption documentation; a public-school purchase order was sufficient.
Were charges to place and remove Realtor-owned for-sale signs at residential properties taxable when the service provider did not sell, assemble, or erect the signs?
No. Labor to place or remove the Realtor-owned signs was nontaxable installation under the stated facts. The result would change if the provider sold the signs or performed taxable assembly or erectio…
Could a prime contractor act as a direct-payment permit holder's agent and issue direct-payment exemption certificates for construction materials?
Yes, if the agency agreement authorized it. The contractor could buy materials incorporated into the permit holder's realty on its behalf, but not consumable supplies or other taxable contractor items…
When were wrapping and packaging supplies exempt for a business handling self-manufactured goods, purchased inventory, bundled components, assembled products, or third-party packaging?
Packaging for the taxpayer's own manufactured product was exempt. Packaging purchased for acquired inventory, mere bundling, or labeling and instructions was taxable; packaging a newly assembled produ…
Did the carrier exemption cover consumable aircraft-repair supplies, and could a shop servicing both private and licensed-carrier aircraft claim exemption for qualifying tools and equipment?
Consumable repair supplies were not exempt under § 151.328(d). A mixed-use shop was not automatically disqualified, but it needed records separating exempt and taxable uses and could claim exemption f…
Was pulling removable or cappable data and telecommunications cable through ceilings and walls of an existing building taxable?
Yes. Texas treated the work as taxable remodeling because it replaced or upgraded part of an existing structure. The company had to collect sales tax on the total charge even though no walls were demo…
Is an optional 'loss protection' charge on leased pagers taxable, and does it need to be separately stated?
Not taxable, if it's broken out in the contract. Pro Net leases pagers and offers optional 'loss protection' (about $1-$1.50 per pager monthly) that spares a customer from paying the full value of a l…
Were drums and liners used to package a manufacturer's products exempt after October 1, 1991, and did returnability change the treatment?
Nonreturnable drums and the liners qualified for exemption. Returnable drums were taxable to the manufacturer when purchased. The 1991 packaging-law change did not eliminate the manufacturing-process …
Did rebuilding and sometimes enhancing used telecommunications equipment qualify the business as a remanufacturer entitled to exempt packaging supplies?
Yes. Texas treated the business as a remanufacturer, so it could buy wrapping and packaging supplies for the rebuilt equipment tax free by giving suppliers an exemption certificate.
Could a Texas box seller sell corrugated shipping boxes tax free to recyclers that sent processed material back to manufacturers?
Yes. Texas treated recycling as processing, so boxes used to ship recycled material to a manufacturer could be sold tax free when the recycler supplied a completed exemption certificate.
Were annual and individual sales of a monthly newsletter taxable even though it contained professional articles and was delivered by second-class mail?
Yes. Texas classified both subscription and non-subscription sales as taxable information services because the publication was not a magazine under § 151.320(b) and Rule 3.299(b)(1). The publisher nee…
How did Texas tax a contract that removed an old microwave tower and repaired the roof, then designed and installed a new pole and antenna?
Old-tower demolition was nontaxable, but roof repair and waste removal were taxable; the whole Project A charge became taxable if those taxable parts exceeded 5% unless demolition was separately state…
Was the subscription price exempt when the publications qualified as magazines but were mailed at Library Rate rather than entered as second-class mail?
No. The publications qualified as magazines, but their subscription price was taxable because they used Library Rate fourth-class postage. The exemption required a semiannual-or-longer subscription an…
Could Texas waive the 90-day purchase window for an enterprise-project sales-tax refund because unusual circumstances delayed project designation?
No. The Comptroller said it lacked authority to create an exception to the statutory 90-day window, despite the business's condemnation pressure and delayed enterprise-project designation.
Could a Texas business imprinting blank caps, shirts, pens, or calendars for sale buy the packaging for those finished goods tax free?
Yes. Texas treated buying blank merchandise and imprinting it for sale as manufacturing or processing, so packaging for the imprinted goods could be bought with an exemption certificate.
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