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 towable dollies, jeeps, stingers, auxiliary axles, and converter gears beginning September 1, 1991?
Texas moved them into the trailer and semitrailer definitions, subjecting in-state purchases and rentals to motor vehicle tax and interstate-carrier units to IMC tax instead of limited sales tax.
Could a Texas purchaser use wholly electronic purchase orders to claim resale, exemption, or direct-payment treatment?
Not by themselves. A traditional signed resale or exemption certificate had to remain on file with the seller; later written or electronic purchase orders could claim the exemption by referring to tha…
What documents could a Texas purchaser use to prove that multiple items were exported to its Mexican maquiladora?
Texas required specific export proof. The letter identified U.S. Customs certifications, a Mexican Pedimento de Importaciones with detailed supporting manifests or invoices, and a properly completed M…
Were medical case-management and rehabilitation-consulting services supplied to insurance companies taxable in Texas?
Yes. The provider's calls, meetings, medical and vocational assessments, appointment coordination, reports, and recommendations qualified as insurance investigation and claims adjustment or processing…
When did a crude-oil operator have to report and remit severance tax as oil moved from a lease into a pipeline or storage facility?
The operator had to remit tax on oil removed from the lease and report itself as purchaser. Oil piped only to on-lease storage was not reported until it left the lease, but commingled oil from multipl…
When a home-party hostess redeems earned credits for a direct-sales company's merchandise, is that a taxable sale even though no cash changes hands?
Yes, it is a taxable sale. Petra Fashions ran home merchandise parties and, as an incentive to host, gave hostesses credits redeemable only for its own line of merchandise. The Department held that tr…
Can a New York vendor keep computer-readable tapes instead of paper cash-register tapes to satisfy its sales tax recordkeeping duties?
Yes. A vendor may keep computer-readable tapes as an alternative to paper cash-register tapes to satisfy its sales tax recordkeeping duties under Tax Law § 1135(a)(1) and 20 NYCRR § 533.2(f)(1), provi…
Did Texas-based independent salespeople require an out-of-state seller to collect tax, and what resale or exemption documents could the seller accept?
Yes. Commissioned independent salespeople created Texas business activity, requiring a permit and tax collection or valid certificates. A permit copy was not a certificate; Texas required separate res…
Could a taxable security-service provider buy customer-controlled equipment for resale when the customer could keep it free or buy it for $1 after the contract?
Yes. Under the 1991 letter, equipment transferred to the customer's care, custody, and control as an integral part of taxable security service could be bought with a resale certificate under either pl…
How did Texas sales tax apply when a contractor filed a damaged-freight claim and transferred the damaged item to the carrier?
Treatment depended on whether the contractor was a seller or consumer. A seller generally excluded tax from the claim if the carrier resold the item. A consumer included previously paid tax in the cla…
Could a property manager make tax-free purchases for assets held in FDIC receivership without registering as an FDIC agent?
Yes, registration with the Comptroller was unnecessary, but the manager needed a written FDIC agency agreement and proof that FDIC held title to the property. With those records, the manager could iss…
What documentation could a service provider accept before stopping sales-tax collection from a manager acting for the RTC?
A completed, signed exemption certificate was enough to protect the service provider if accepted in good faith. The manager could sign as RTC's agent and assert the agency relationship; the manager, n…
Did a customer still owe sales tax on catalog jewelry that was returned but lost in transit before the retailer received it?
Yes. A sale occurred between the customer and the retailer, and the lost return shipment did not erase the tax debt. Under Texas Tax Code § 151.052(a)(1), sales tax was part of the sales price and rem…
Were a sports league's team entry fees and $10 player passes taxable as amusement services or sales of tangible personal property?
No. The $400 team charge was a nontaxable entry fee under Rule 3.298(c), and the $10 pass bought association membership and participation rights—not property or admission to an amusement. The operator…
Was sales tax due up front on all payments under a financing lease even if the lease was later terminated and the equipment sold?
Yes. The contract was a financing lease, so tax applied to the full sales price—including all lease payments—when possession began or the first payment came due, whichever was earlier. Termination, re…
Did a nonprofit trade association have to collect Texas sales tax on correspondence-course tuition or the course binder, test, and certificate?
Tuition or enrollment was not taxable. A separately stated materials charge—including shipping and handling—was taxable, and the association could buy participant materials for resale. If materials we…
Was the Dallas/Fort Worth International Airport Facility Improvement Corporation exempt from Texas sales tax as a political subdivision?
No. After reviewing its articles of incorporation, the Comptroller concluded that FIC was not a political subdivision and denied the sales-tax exemption. The corporation could reapply if it later obta…
Did SC Revenue Ruling 91-11 allow bingo players to cover every even or odd number, or every number sharing a drawn ball's final digit?
No. A single randomly selected ball could not authorize players to cover every number with the same ending digit, and a random selection could not authorize covering every even or odd number. The hist…
Was a Texas seller still responsible for sales tax when its customer refused both to pay $288.83 in tax and to provide a resale certificate?
Yes. The seller had to collect and remit the tax. Under § 151.052, tax became part of the sales price and a legally recoverable debt owed by the purchaser. The seller could also correct an invoice and…
My corporation and two related partnerships (with overlapping but not identical family ownership) plan to swap parcels of undeveloped land, with cash making up any difference in value. Does this land swap trigger New York's Real Property Transfer Gains Tax, and does the mere-change-of-identity exemption help since the same family owns pieces of all three entities?
The exchange is a taxable transfer on both sides (each party is a transferor of what it gives up), but each side gets a PARTIAL mere-change-of-identity exemption to the extent the exchange doesn't act…
Did a vehicle brought into Texas owe motor vehicle use tax or the historical new-resident tax?
It depended on whether the owner qualified as a new resident. The 1991 letter said an out-of-state purchase generally incurred 6% use tax, with credit for another state's vehicle tax, but a vehicle al…
Could a nonprofit corporation sell its own books, magazines, newsletters, and other writings without Texas sales tax?
Only if it qualified under the nonprofit-writings exemption and was not an educational organization. Rule 3.299 specifically excluded schools, colleges, universities, and similar institutions systemat…
Did a railroad's electronic load-cell scale qualify for the Texas exemption for supplies essential to operating trains?
The Comptroller could not decide from the submitted facts. The railroad had to show how the load cells were attached to the bridge and identify the federal or state rule requiring railcars to be weigh…
Was a lessor's reimbursement charge for personal property tax on leased equipment subject to Texas sales tax?
Not when the property-tax reimbursement was separately stated from the equipment lease price. If it was included in the lease price, sales tax applied to the entire charge. The Comptroller pointed to …
Who had to collect and report Texas state and local sales tax on retail sales made by a Utah network-marketing company's independent distributors?
The direct-sales organization, CORP A, was responsible under Rule 3.286(a)(3). Tax reporting depended on whether distributors took customer orders before buying from CORP A or stocked products first, …
Were electricity and natural gas exempt when used to manufacture equipment the company retained and used to provide services to hotels and motels?
No. Utilities used to make equipment for the company's own service activity were taxable commercial use. Direct manufacturing utilities could qualify only for equipment sold, leased, or rented as tang…
Could change orders separate equipment sales from partially completed lump-sum real-property construction contracts for Texas sales-tax purposes?
Yes, if both parties agreed, the addendum separated every equipment purchase, delivery, and installation component, and the equipment invoices became part of the contract by reference. Contractors cou…
Did an auto dealer have to collect Texas sales tax when recovering, filtering, returning, or adding refrigerant during an air-conditioner repair?
Only if the dealer charged for the refrigerant. With no refrigerant charge, the procedure was treated as nontaxable motor-vehicle repair. A charge for refrigerant was taxable whether the gas was new o…
Are an art advisor's consulting and support services taxable in New York, and when do they become taxable interior decorating and designing services?
It depends on what the art advisor actually does. Pure consulting — advising a client whether to buy particular works of art for their investment potential, or advising on framing/restoration without …
If a trucking company taxed under Article 9 (not Article 9-A) makes an S corporation distribution to its sole shareholder from the accumulated adjustments account, can the shareholder deduct that distribution on their New York personal income tax return?
No deduction is available. Petitioner is the sole shareholder of a federal S corporation trucking company taxed under Article 9 (sections 183 and 184) rather than Article 9-A. For franchise tax purpos…
Were charges for customer-controlled computer hardware and on-site or off-site computer data storage taxable in Texas?
Yes. Giving customers total operational control of computer hardware was a taxable rental, and both online and offline computer data storage were taxable data-processing services.
Are a city impound lot's charges for towing, storage, notification letters, and DMV searches subject to New York sales tax, even though the operator is a government body?
Yes — the entire charge is taxable. Operating an auto pound is operating a place of business that provides storage of motor vehicles, which Tax Law § 1105(c)(6) taxes. The fact that the City of Roches…
Did Texas require out-of-state circuses and other itinerant vendors operating in the state to register and collect sales tax?
Yes. Texas said itinerant vendors, including out-of-state circuses, had to obtain sales-tax permits and collect tax under Rules 3.374 and 3.424.
Who had to collect Texas tax under a software rent-to-own agreement that let the customer stop paying and return the software?
The software developer did. The agreement was an operating lease, so the developer had to collect sales or use tax on each lease payment as rental income was recognized.
Was a paper-mill capacity project entirely new construction, or did replacing and upgrading existing equipment count as remodeling?
It was both. Adding a new electrical room was new construction, but additions, deletions, and replacements to existing equipment were remodeling under Rule 3.357.
What documentation did a retailer need to sell tax-free to a property manager acting for the FDIC or RTC?
The retailer could accept an exemption certificate alone. The manager had to retain proof of FDIC/RTC title and its written purchasing authority for audit.
Could a retailer accept an FDIC or RTC property manager's exemption certificate without receiving separate ownership and agency documents?
Yes. The manager kept the ownership and agency records for audit, while the retailer could accept the certificate and issue a refund based on it alone.
Could a retailer accept an exemption certificate from a property manager buying for the FDIC or RTC without receiving the title and agency documents?
Yes. The manager or FDIC/RTC could sign the certificate, while the manager kept title-transfer and agency documents for audit instead of giving them to the retailer.
How did Texas distinguish a true vehicle lease with a purchase option from a conditional sale?
A standard lease with an optional purchase was treated as a lease followed by a taxable purchase when the option was exercised. A must-purchase clause or transfer below fair market value made the agre…
Did a cable company have to refund Texas sales tax when a customer canceled before a prepaid service period ended?
No. The company was not required to refund the tax, but if it chose to do so it also had to refund the unused service fee and follow Rule 3.325.
Could an FDIC or RTC property manager issue an exemption certificate without giving the retailer its title and agency records?
Yes. If the manager retained those records for audit, it could issue the certificate; a retailer accepting a proper certificate in good faith was relieved of tax liability.
Can a fireworks company buy pyrotechnic materials tax-free for resale when it uses them to put on a fireworks display for a customer?
No — the materials aren't bought for resale, because the company is selling a service, not the fireworks. Under its standard contract, Bay Fireworks furnishes a 'fireworks exhibition' — providing all …
What tire and short-term vehicle-rental tax changes took effect in Kansas on July 1, 1991?
Effective July 1, 1991, House Bill 2407 broadened the $0.50 tire excise tax to more highway vehicles and to tires mounted on new vehicles at first retail sale. Senate Bill 14 imposed a 3.5% excise tax…
When were sales and delivery of dirt, sand, gravel, equipment, and construction services taxable in Texas?
Unprocessed dirt, sand, or gravel and their delivery were not taxable. Processed materials, equipment rentals, and taxable services were taxed with related delivery charges.
Could a business use one store's natural-gas predominant-use study to claim the utility exemption at another store?
Only if the stores and the first study were truly identical and valid. Otherwise each location needed its own study based on actual utility uses and product quantities.
Were monthly water-softener equipment and maintenance services taxable when the provider kept control of the equipment?
No. The managed equipment-and-maintenance service was not taxable, but the provider owed tax on the equipment, salt, and supplies it used. Outright rentals and salt sales were taxable.
Were natural gas and electricity used by restaurants to prepare food for immediate consumption exempt from Texas sales tax?
No. Restaurant utilities used to prepare food for immediate consumption were taxable commercial use, whether customers ate on-site or took the food away.
Was Texas use tax due on a Mexican company's bagged mineral product delivered to Texas customers, and who had to collect it?
Yes. The Mexican seller had to collect and remit use tax; an agent handling billing and collections had to collect it, and customers remained liable if it was not collected.
How is New York sales/use tax applied to an oil- and chemical-spill cleanup company's services, the materials it uses, and its outright sales of cleanup supplies?
The Department treated Marine Pollution Control, an oil- and chemical-spill cleanup company, as a contractor and answered seven questions. Its spill cleanup and disposal is a service of maintaining, s…
Which new tires became subject to Kansas's $0.50 tire excise tax on July 1, 1991?
Effective July 1, 1991, Kansas's $0.50 tire excise tax applied to new tires for any vehicle within the broadened K.S.A. 8-1485 highway-vehicle definition and to tires mounted on a new vehicle at its f…
Were inedible white grease, dried blood, and dry rendered tankage made from livestock offal subject to Texas sales tax?
Yes, as taxable tangible property. A buyer could still claim resale or manufacturing-ingredient treatment by giving the appropriate certificate.
Were Escaid 110, Norpar 13, Paranox 106, and polyacrylic acid A-3 treated as diesel fuel or as sales-taxable materials?
They were subject to sales tax. Although some material might work in a diesel engine, it was not classified and taxed as diesel fuel unless actually used in a motor vehicle.
Could an authorized employee sign a Texas customs-broker certificate showing that goods were exported to Mexico?
Yes. An employee authorized by the customs broker could sign, and omitting 'attorney-in-fact' did not invalidate an otherwise complete certificate accepted in good faith.
Did the exemption for books and periodicals from qualified nonprofit publishers depend on which retailer sold the publication?
No. If the publisher qualified under Rule 3.299, either retailer's sale was exempt; if the publisher did not qualify, either retailer's sale was taxable.
Were fees a cable company paid a utility for permission to attach cable lines to utility poles subject to Texas sales tax?
No. The Comptroller said the described pole-attachment charges were not subject to state or local sales tax, but did not address federal tax.
Were utilities used in a homeowners association's jointly owned, members-only common areas exempt as residential use?
Yes. Utilities for jointly owned common areas intended solely for association members were exempt residential use for billing cycles beginning on or after January 1, 1988.
Was a demurrage charge imposed when a customer returned a gas seller's tank late subject to Texas sales tax?
No. The Comptroller treated the charge as a nontaxable penalty for returning the seller's reusable container after the specified deadline.
Were a contractor's charges to update and correct software developed by someone else subject to Texas sales tax?
No. Rule 3.308(b)(4) made program-modification charges nontaxable when the person performing the modification had not sold the program.
Could a foreign retailer buy auto parts tax-free in Texas for resale in El Salvador using a Texas resale certificate?
No. The buyer could avoid tax if the supplier shipped the parts abroad, or pay tax on Texas pickup and seek a refund after giving the supplier proof of export.
Were pill boxes used for free medicine samples and slides used in laboratory analysis exempt from Texas sales tax?
No. Both were taxable when purchased: the container exemption required the contained product to be sold, and laboratory supplies were not within the health-care exemption.
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