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 adhesive used to seal boxes be sold tax free in Texas as manufacturing or packaging material?
Sometimes. Adhesive was tax free when sold to manufacturers packaging their own products or box manufacturers completing boxes, with an exemption certificate; other buyers owed tax.
Could a Texas waste-removal company issue a resale certificate for taxable transfer-station services that it resold to customers?
Yes. Because the waste-removal company resold the transfer station's services to customers from whom it collected sales tax, the station could accept a resale certificate instead of tax.
Were live and automated telephone-answering services subject to Texas sales tax beginning October 1, 1991?
Yes. Charges for all answering services became taxable on October 1, 1991. The letter noted that automated answering services had already been taxable since 1985.
Could Texas cotton ginners buy the bagging, metal ties, and identification tags used to bale processed cotton without sales tax?
Yes. The Comptroller treated cotton ginning as processing cotton for sale, so ginners could buy bagging, ties, and bale-identification tags tax free with an exemption certificate.
Must a Texas manufacturer obtain a new engineering study to keep a predominant-use exemption for natural gas or electricity?
No, not while the business operation and utility use remain unchanged. The Comptroller said the original engineering study remains valid under those facts.
Were a nonprofit private dining club's initiation fees, dues, privileges, and amusement services exempt because the club occupied a historic landmark?
Yes. The historic-place amusement exemption covered the club's initiation fees, dues, special privileges, and amusement services, but meals and nonalcoholic beverages remained taxable.
Could an aircraft-parts dealer buy required preservation and packaging supplies tax free because it held U.S. military contracts?
No. Military-contract packaging requirements did not control. Because a separate entity manufactured the parts, the company was a distributor or dealer and owed tax on packaging for those parts and su…
Was transferring property to a newly uncapitalized corporation for 100% of its stock a taxable Texas sale?
No. The Comptroller concluded that an initial property contribution for all stock of an uncapitalized corporation was not a taxable sale, but later stock-for-asset trades were taxable.
Did dealer-assisted sale of an old vehicle to a third party create a Texas trade-in reduction for the replacement vehicle?
No. Under the historical rule, the old vehicle had to be physically traded to the seller. Having the dealer sell it for the buyer and apply the proceeds to the down payment did not reduce the replacem…
Could commercial nurseries buy pots, bowls, flats, hangers, boxes, and other plant packaging tax free?
Yes, when the nursery grew or fostered the plants and supplied exemption documentation. A reseller that merely bought and held potted plants for sale had to pay tax on its packaging supplies.
Could a Texas meat processor buy containers, liners, bags, strapping, vacuum packaging, and tape tax free for frozen meat it processed for sale?
Yes. The processor could buy the listed packaging tax free for meat products it processed for sale by giving its supplier an exemption certificate.
Did Texas's new boat and boat-motor tax apply to canoes, kayaks, rowboats, rafts, paddle craft, and electric motors?
No. The new 6.25% boat tax excluded vessels designed for paddles, oars, or poles, including canoes, kayaks, rowboats, and rafts, and it excluded electric motors.
Under historical SC Revenue Ruling 91-17, which county's one-percent local option sales or use tax applied to a delivery?
The historical one-percent sales tax followed delivery within the imposing county where the retailer was located. When property was delivered into another local-option county, the purchaser owed that …
When did Texas sales or use tax apply to flexible food packaging bought from Texas or out-of-state suppliers?
Manufacturers and processors could buy qualifying packaging with an exemption certificate. Other Texas buyers owed sales tax or, for out-of-state purchases, use tax; seller-shipped out-of-state orders…
When could a Texas seller sell paper or plastic bags tax free to distributors, manufacturers, processors, repackagers, and prepared-food businesses?
Resellers could use resale certificates, and manufacturers or processors could use exemption certificates for packaging their own products. Repackagers of others' goods owed tax; food preparers qualif…
Were Texas seminar fees taxable, and who owed tax on books, audiotapes, and course materials distributed to participants?
Seminar and training fees were not taxable, but book and audiotape sales were. The provider owed tax on free materials and had to collect Texas tax because its representatives created Texas business p…
Our limited partnership and a sister partnership are contributing all our real estate joint-venture assets to a newly formed REIT in exchange for 98% of its stock, then liquidating and distributing that stock directly to our limited partners. Does the initial contribution to the REIT, or the follow-on liquidating distribution of REIT stock to our partners, trigger New York Real Estate Transfer Tax?
Partially taxable on the contribution; the liquidation is exempt. Krupp Cash Plus IV Limited Partnership held a 50.10% interest in a joint venture that owned a New York shopping center. It exchanged t…
What did a Texas interior decorator report each quarter, retain for audit, and tax when billing for furniture, design, or installation?
The decorator reported total sales, taxable sales, and taxable purchases and kept supporting records four years. Design was nontaxable; marked-up furniture and installation of items sold were taxable.
How did Texas tax engineering and real-property surveying services sold to municipalities, and the supplies used to provide them?
Engineering plans were nontaxable, while real-property surveying was taxable. An exempt municipality could give a certificate for taxable surveying, but the provider still owed tax on nontransferred s…
Is installing energy-saving reflectors in existing fluorescent light fixtures a nontaxable capital improvement or a taxable installation?
Taxable. N.R.G. Savers installs custom-designed reflectors in existing fluorescent fixtures — repositioning the sockets and cutting a four-lamp fixture to two lamps (or two to one) to save energy. Tha…
Is the Savings Bank Life Insurance Fund a New York State agency or instrumentality exempt from sales and use tax?
Yes. The Savings Bank Life Insurance Fund was created by an Act of the New York Legislature (L.1940, ch. 449; Banking Law § 270) as a body corporate within the banking department, and it grew directly…
Is New York sales tax charged on the federal luxury tax when a car is bought or leased, and how does it work on a lease?
No sales tax on the separately stated federal luxury tax. The federal retail excise tax on luxury items (26 U.S.C. ch. 31) is imposed on the consumer, so under regulation § 526.5(b)(2) it is excluded …
If an out-of-state broker-dealer trades securities in New York only through independent brokers, but also acts as an AMEX options specialist requiring a leased exchange seat, is it doing business in New York for franchise tax purposes?
Yes. Taxpayer, a Delaware S corporation whose sole office is in Houston, Texas, trades stocks, bonds, and options on exchanges nationwide, executing all trades -- both proprietary and client -- throug…
What special 1991 reporting periods did Texas announce for rental and interstate-carrier taxes, and what battery fee rules accompanied them?
The notice created one-time 1991 reporting periods for monthly and quarterly vehicle-rental filers and for interstate carriers after September 1 rate changes. It also distributed battery-fee guidance,…
Are dues and other fees for amusement services exempt when the services are provided in a historic building?
Yes, if the fees covered only amusement services provided exclusively in a place on the National Register of Historic Places or designated as a Recorded Texas Historic Landmark.
What documents let a property manager make tax-free purchases as an agent for the FDIC or RTC when receivership records do not include a new deed?
A written FDIC or RTC purchasing-agency agreement, the failed institution's deed, and proof of the receivership and its effective date were sufficient because title passed to the receiver by operation…
Are environmental testing and reporting services on a landfill's own ground taxable in New York?
It's not a taxable information service, but it can be taxable as a real-property service. A landfill hires outside vendors to analyze and report the levels of motor oil, groundwater, leachate, condens…
Since 1990, can a long-distance reseller still deduct the cost of local exchange carrier access service it buys and resells, and does it owe New York's section 186-a excise tax on international calls it merely routes through a New York gateway?
The resale mechanics changed, and the international-traffic question turned on facts not yet in the record. Since a July 1990 law change, local exchange carriers can no longer exclude receipts from se…
Are frozen or partly frozen foods sold through vending machines exempt because they are not ready for immediate consumption?
No. Food sold through vending machines was taxable under Rule 3.293(g)(1) even while frozen or partly frozen, and providing customer heating facilities did not change that result.
Is a fee for converting a customer's real-estate database into a format compatible with licensed software taxable in Texas?
Yes. Converting and manipulating the customer's data was a taxable data-processing service under Rule 3.330(a), and any charge to modify the sold software was also taxable under Rule 3.308(b)(1).
Are charges for moving telephones and activating, connecting, or adding office cabling and jacks taxable in Texas?
Yes, when the work included activating or connecting building wiring, Texas treated it as taxable real-property remodeling. If taxable remodeling was part of the job, the entire charge was taxable eve…
Are employee travel and living expenses billed to Texas software customers subject to sales or use tax?
Yes. The software seller's separately billed employee travel and living expenses were part of the total amount charged for the taxable software transaction and were subject to Texas sales or use tax.
Does a creditor owe Texas sales tax when it takes furniture from an insolvent customer in exchange for reducing the customer's debt?
Yes. Taking furniture in exchange for reducing an insolvent customer's debt was a taxable sale. The tax base was the debt forgiven, or the furniture's book value if that amount could not be determined…
When is a packaged bus tour taxable as an amusement service rather than nontaxable transportation, and how are meals and admission fees treated?
A primarily guided scenic tour was taxable as amusement, while a trip mainly transporting passengers to attractions was not. Meals and taxable admissions still had to bear tax, either from the organiz…
Which South Carolina activities did historical SC Revenue Ruling 91-16 treat as protected solicitation under Public Law 86-272?
The ruling protected an out-of-state seller only when its South Carolina activity stayed within solicitation of orders for tangible personal property, with approval and fulfillment from outside the st…
Which interest did SC Revenue Ruling 91-15 treat as exempt from South Carolina income tax, including through a mutual fund?
The ruling exempted qualifying interest on South Carolina obligations, federally designated tax-exempt agency or instrumentality obligations, and direct U.S. obligations meeting the four-part Smith v.…
Can an entire operating segment qualify as an occasional sale, and is a no-consideration asset distribution on joint-venture dissolution taxable?
The operating-asset sale was nontaxable if every Rule 3.316(d) occasional-sale condition was met. A legitimate joint venture's no-consideration distribution to partners on dissolution was not a sale.
Did Texas PTA groups have to collect sales tax on concession-stand food and drink sales at school football games?
No, for the PTA concession sales described. They qualified under Section 151.314(e) because the school-associated groups conducted fundraisers and all net proceeds went to the groups for their exclusi…
We're a federal government-chartered corporation that buys and resells mortgages nationwide. When mortgagors on our New York mortgages default and we foreclose or take a deed in lieu of foreclosure, are we exempt from New York's Real Property Transfer Gains Tax and Real Estate Transfer Tax as the transferee, and later as the transferor when we resell the foreclosed property? And do we still have to file the tax return paperwork even if we're exempt?
Exempt as a federal instrumentality, but filing obligations still apply. The Federal Home Loan Mortgage Corporation (Freddie Mac), a federally chartered corporate instrumentality of the United States,…
Did Texas personal income, inheritance, estate, or gift taxes increase the tax burden on military survivor-plan annuity payments in 1991?
No. The Comptroller said Texas had no personal income tax and taxed only to the extent of the federal credit for state death taxes, so the annuity owner or recipient faced no added Texas burden.
Could multistate credit-report customers get refunds of Texas tax already collected because they later elected to pay tax directly?
No. The service correctly collected the tax, and Rule 3.325 allowed a refund only when the transaction was exempt—not when a purchaser could have elected to pay the Comptroller directly.
Can I file my Nebraska tax returns on reproduced or substitute forms instead of the official printed ones?
Yes. Nebraska accepts reproduced and substitute versions of its official tax returns and schedules for every Nebraska tax program, as long as the forms follow the Department's 'Guidelines for Reproduc…
How did Texas tax underground-irrigation installation, repair, remodeling, and complete replacement for residential and nonresidential property?
Nonresidential repair charges included taxable labor and materials; residential repair labor was exempt but materials taxable. For new construction or complete replacement, labor was exempt and materi…
Was a customized demographic report exempt as proprietary information when the provider could reuse the underlying data for other clients?
No. Although the finished report could not be resold, the provider could reuse the same underlying information for other customers, so the information was not proprietary and the service was taxable.
Was a student scholarship-matching service taxable, and when could its printed personal reports be bought for resale?
The matching service was taxable information service. Personal reports sent to students could be printed for resale, but reports sent to third parties and other business materials remained taxable to …
Was a computer-generated custom diet plan taxable, and were diet cookies sold as meal replacements or supplements taxable?
The custom diet plan was taxable data processing, and the Texas seller could give its out-of-state processor a resale certificate. The diet cookies were not taxable as meal replacements or food supple…
How did Texas tax a parent's formation transfer of vehicles to a subsidiary and a later sale of all subsidiary stock?
The formation-stage vehicle transfer was not taxed when the new subsidiary gave only stock; added consideration, including lien assumption, made it taxable. The letter separately said motor vehicle sa…
Was a photocopier charge based on the number of copies made taxable when it was billed separately from the machine's other rental and service charges?
Yes. The per-copy or meter-click charge was taxable as part of the photocopier rental price because it adjusted the rent according to actual use. Separate billing did not change the result.
Was the sales-tax permit fee due when the permit was issued before October 1, 1991, but the permit holder's first taxable sale occurred on or after that date?
No. The internal memorandum concluded that H.B. 11, Section 14.16(b), did not impose the permit fee when the permit itself was issued before October 1, 1991.
Which electricity used by a mobile-home park's water system was exempt, and how did Texas treat a meter serving both exempt and nonexempt uses?
Electricity used to extract water, move it to holding tanks, and process it was exempt; electricity used to transport processed water was not. A mixed-use meter required the predominant-use analysis i…
Was demographic and marketing information taxable when customers selected regions and databases but the underlying information remained available to other customers?
Yes. The information services were taxable because the information was available to multiple customers and was not proprietary to one client. Customer-selected regions and databases did not make it cl…
Did the Utah State Tax Commission decide whether vehicles bought in Utah and immediately transferred to a bottler's out-of-state subsidiaries qualify for the nonresident-purchaser sales tax exemption?
No. The Commission refused to issue an advisory opinion at all, because the taxpayer's exemption question was already pending on appeal before the Commission itself -- ruling in advance would have pre…
Was a motor-vehicle extended warranty taxable, and how did Texas treat parts, labor, and a customer deductible on repairs performed under the warranty?
The 1991 letter said the extended warranty was not taxable. Parts used for covered repairs were taxable, labor was not, and the deductible reduced the total charge. STAR now flags the cited Rule 3.359…
When was sales tax due on a financing lease entered into by a yearly filer when the transaction created more tax liability than the yearly or quarterly filing limits?
Tax was collected when the lessee took possession or when the first payment became due, whichever came first. Because the liability exceeded the stated yearly and quarterly limits, the transaction req…
Was chemically injecting trees to prevent oak wilt taxable when the provider performed no tree trimming, removal, or other ancillary landscaping?
Yes. Texas treated identifying or treating tree disease as a taxable arborist and real-property service. The entire service price was taxable, while transferred products and supplies could be bought f…
How did Texas tax installing and maintaining reverse-osmosis water equipment when the company might sell, lease, or retain control of the units?
Treatment depended on the agreement. A sale and installation or an equipment rental was taxable, with maintenance treatment varying by property type. If the company retained ownership, operation, and …
Under SC Revenue Ruling 91-14, did a coin-operated batting cage owe admissions tax and an amusement-machine license tax?
The charge to use a coin- or token-operated batting cage was subject to the historical admissions tax because the cage was a place of amusement. But a batting machine on which admissions tax was impos…
When did SC Revenue Ruling 91-13 let a machine shop buy production inputs, machinery, and electricity without sales or use tax?
A machine shop qualified when manufacturing tangible personal property for sale was regular, continuous, and a substantial part of its business. Inputs becoming components or used directly in that pro…
Which purchases by commercial vessels were tax-exempt, and did sales to individual seamen, foreign passengers, or resellers qualify automatically?
Only specified vessel purchases qualified with a complete exemption certificate. Commercial vessels over eight tons could exempt repair and component items, and qualifying interstate or foreign vessel…
Were annual hunting-rights fees and additional fees charged per bird taxable when they granted hunters a right in private real property?
No. The Comptroller treated both the annual hunting-rights charge and the per-bird charge as payment for a personal license or profit a prendre in private real estate, not as taxable sales.
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