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 teacher buy classroom supplies with personal funds without paying Texas sales tax if the school reimbursed the purchase?
No. The teacher had to pay sales tax even if reimbursed and even if the items were used only in class; the public school could instead make the purchase directly under its exemption.
When a company buys taxable information reports delivered to offices both inside and outside New York, how much of the charge is subject to New York sales tax?
Only the reports delivered in New York are taxed, and the taxable share is allocated by where delivery happens. Clairol buys professional research/marketing reports that are assumed to be taxable info…
Can a rental company buy storage containers and trailers tax-free for resale when it only rents them out and delivers/picks them up?
Yes. Gibney Leasing rents storage containers and trailers, delivering them to customers in New York and picking them up at the end of the rental for a separate delivery/pickup charge. Under New York l…
Are accident reconstruction investigation services for attorneys and insurers subject to New York sales tax?
Yes. Robert Burns runs an accident reconstruction business for attorneys and insurance companies — visiting accident scenes after the police, taking photographs and measurements, interviewing drivers …
How should an HVAC contractor handle sales tax when customers give it exemption certificates or direct-pay permits instead of capital-improvement certificates, and can it buy repairs to rented equipment for resale?
The Department answered four questions for X, an HVAC seller-contractor. Under Tax Law § 1132(c) and 20 NYCRR § 532.4, all receipts are presumed taxable and the customer bears the burden of proving an…
Are a tax preparer's charges subject to Connecticut sales tax when it electronically files a client's return at no extra charge, even if the invoice does not separately state an e-filing charge?
Not taxable, on these facts. Electronic filing of a tax return is a taxable computer and data processing (CDP) service in Connecticut (Conn. Gen. Stat. § 12-407(2)(i)(A); TSSN-41), and when a preparer…
Is a company's survey research sampling service subject to Connecticut sales and use tax?
No -- not taxable. A company sold survey research sampling services: it drew random statistical samples from the demographic groups and geographic regions its clients specified (built from telephone l…
Did a Texas hotel owe tax when it gave guests complimentary coffee, champagne, candy, or flowers?
Unprepared coffee carried no use tax when given free, but the hotel owed tax on the cost of taxable champagne, candy, and unbilled flowers; separately billed flowers were taxed to the guest.
How did Texas tax commercial air-conditioning contracts combining scheduled maintenance, parts, and repairs?
A maintenance-only lump sum was nontaxable, but separately billed repairs were taxable. A mixed lump sum was taxable unless repairs were 5% or less or a documented repair allocation was used.
When could Kansas schools file their second-quarter 1991 sales-tax return?
A public or private primary or secondary school could file its second-quarter 1991 state and local sales-tax return when the school year closed or any time before July 25, 1991. The Department sent an…
Which parts of a new narrow-gauge railroad project qualified for Texas's rolling-stock and train-supplies sales-tax exemption?
The engine, tender, passenger cars, and materials incorporated into the operating track were exempt, but station and maintenance-facility materials and other nonessential construction were taxable.
Did a Texas seller need a separate exemption certificate when a government agency supplied an official purchase order or state voucher?
No separate certificate was required when the official purchase order or state voucher supplied the necessary exemption information, but the seller still had to keep supporting documentation.
Was Texas sales tax due when a mover disassembled, transported, and reassembled an existing portable hot tub?
No. Because the company only moved the existing tub and did not sell, remodel, repair, or permanently install it, its disassembly, transportation, and reassembly charges were nontaxable.
If three doctors incorporated only to satisfy a bank's mortgage requirement, believed the corporation was dissolved and the property reconveyed to them personally years earlier, but the corporation was actually dissolved by proclamation years later than believed, for which years does it owe Article 9-A tax?
Highmount Medical Building, Inc. was incorporated in 1978 solely because a construction lender required the mortgagor to be a corporation (with the lender's advance consent to later reconvey the prope…
Did a registered self-employed massage therapist have to collect Texas sales tax after February 1, 1991?
No. The Rule 3.317 change ended tax collection on registered massage services as of February 1, 1991; a therapist with no other taxable sales also did not need a sales-tax permit.
How did Texas tax sales of recyclable cardboard and a hauler's fee for taking the cardboard to a dealer when the hauler and customer shared sale proceeds?
The cardboard sale was taxable unless supported by a resale or manufacturing exemption certificate, but the $75 hauling fee was nontaxable transportation tied to the property sale.
How did Texas separate new construction from remodeling when a project added four floors and expanded an existing building?
Work in the added footage was new construction, while changes to the existing structure were remodeling. A mixed lump sum was fully taxable if remodeling exceeded 5% unless separately stated.
Could a licensed customs broker use a power of attorney to obtain merchant refunds and pay Texas sales tax directly to Mexican customers at export?
No. The broker could document the export, but the purchaser had to present that documentation to the seller for the refund, and a cash refund required the seller to obtain the purchaser's signed recei…
How did Texas tax motor-vehicle service contracts, repairs performed under them, and customer deductibles?
The vehicle service contract itself was not taxed. Lump-sum covered repairs were nontaxable, while separately stated parts were taxable; a deductible reduced the balance paid by the underwriter.
Was an equipment lessor's reimbursement for property tax subject to Texas sales tax when billed to the lessee?
Not when separately stated from the equipment lease price. If the property-tax amount was included in the lease price, sales tax applied to the total charge.
Could a Mexican farmer use Texas's agricultural exemption certificate to buy qualifying veterinary supplies tax-free?
Yes. The letter applied the same qualifying agricultural-item exemption to Mexican and Texas farmers; taxable purchases could instead use the export-and-refund procedure.
Were Texas oilfield vacuum, fluid, pumping, and well-maintenance services always subject to the same sales-tax treatment?
No. The primary purpose of each job controlled. Vacuum removal for transport or disposal was listed as exempt from limited sales tax, while many equipment-cleaning and repair jobs were taxable.
Was Texas use tax due on out-of-state stone processing and freight when the processed stone entered Texas for construction?
Yes. The raw stone purchase was exempt, but the New Mexico processing charge and billed freight were taxable when the stone entered Texas for a lump-sum construction job.
Who owed Texas use tax when an out-of-state leased vehicle was brought into Texas?
The lessee bringing the vehicle into Texas was responsible. The 1991 letter computed 6% use tax on the out-of-state lessor's original purchase price, allowed credit for tax legally due and paid to ano…
Was satellite-based positioning equipment exempt when bolted or welded onto commercial oil-and-gas vessels?
Yes. The equipment became an exempt component part when bolted or welded to a vessel used in a commercial enterprise.
John Panos rebuilds old, non-working starters and alternators using a mix of original and new parts, and separately assembles brand-new starters and alternators from new parts, selling the finished units to retailers and trucking companies. Does the building, equipment, and tools he uses in this business qualify for New York's investment tax credit under Tax Law § 606(a), which requires the property to be principally used in "manufacturing" rather than mere repair?
Yes. The Department ruled that both of Panos's processes - rebuilding old starters and alternators and assembling new ones from new parts - constitute "manufacturing" under Tax Law § 606(a)(2), becaus…
Are combined shipping-and-handling charges on a mail-order purchase subject to New York sales tax?
Yes — because the charges are combined. Neil Harrison buys compact discs by mail from Columbia House, which bills each disc's cost plus a single combined 'shipping and handling' charge and computes sa…
When a leased car is stolen or totaled, does the lessor collect sales tax on the insurance buyout, and can the lessee get back tax already paid on the lease?
Two answers. First, when a leased car is stolen, lost, or totaled, the lessor does not collect sales tax on the insurance company's buyout or on any shortfall the lessee must pay: sales tax is not imp…
At a social or athletic club, is buying stock in a related land company — required for membership or bought voluntarily to cut annual dues — subject to sales tax as dues?
Yes, both are taxable as dues. St. George Operating and Improvement Co. is a title-holding company that owns a golf course leased to the St. George Country Club; its shareholders are almost all club m…
For an out-of-state natural gas wholesaler that briefly holds title to gas passing through New York, does New York tax turn on where its customers are located, or on where the gas actually changes hands (the point of sale)?
The point of sale controls, not customer location. A foreign corporation that buys and resells natural gas in bulk -- taking brief title only to facilitate the transfer from supplier to end-user, with…
Was electricity used to make metal frames exempt when the business both sold frames over the counter and installed frames into real property?
Only partly. Electricity used for frames sold as tangible property was exempt; use for frames incorporated into real property was taxable and had to be allocated by equipment hours.
Did a homeowners association owe Texas sales tax on swimming-pool maintenance, and could it avoid tax with a federal ID number?
Pool maintenance was taxable, and a federal ID number alone gave no exemption. The association needed Texas approval before giving the pool company an exemption certificate.
Was on-site biological remediation taxable garbage collection when microbes treated contaminated soil or water and the waste stayed at the site?
No. Treating the material with microbes and leaving it on site was not garbage collection or disposal, though the provider owed tax on equipment and supplies used.
Was a Cunningham clamp used to control incontinence exempt from Texas sales tax?
An implanted clamp was exempt. An externally used clamp qualified only when sold to an individual under a licensed healing practitioner's prescription.
Was a corporation's software-license transfer to a joint venture tax-free when the venture acquired it solely to relicense it to customers?
Yes. The transfer was a sale for resale, so the venture could issue a resale certificate, but it needed a sales-tax permit and owed tax on software bought for its own use.
Which leased-facility, design, job, and property-tax costs did SC PLR 91-2 allow for ABC's historical headquarters incentives?
The credit used ABC's actual first-five-year lease payments, not straight-line book expense. Qualifying leased personal property and outside design or development services could count under the stated…
Was an automobile-detailing service taxable when the business sold no products?
No. Texas said auto detailing was not taxable, but the detailing business had to pay sales tax when buying the supplies, materials, and equipment used to perform the service.
Was the reviewed vehicle rental-purchase contract an operating lease or a conditional sale?
It was an operating lease. The title owner bore the historical minimum tax liability and had to obtain a motor vehicle retailer permit. The right to return the vehicle or buy it at market value preven…
Was a one-time fee for setting up a new digital-pager rental account subject to Texas sales tax?
Yes. The activation fee was part of the consideration paid for renting the pager and was taxable.
Was a basket of cookies taxable when the package contained both exempt food and a taxable basket?
It depended on value. No tax was due if the basket was not the package's primary component, but the whole package was taxable if the basket was worth more than the cookies.
Does a nonresident company owe New York sales or use tax on an aircraft delivered out of state but then hangared and maintained in New York?
No New York sales or use tax is due. Arepo Corporation, a Delaware holding company with no New York office, employees, or business, took title and possession of two Gulfstream jets in Delaware, then h…
Were city-licensed horse-drawn carriage rides operated on public streets subject to Texas sales tax?
No. The carriages were treated as nontaxable transportation services rather than taxable amusement services when operated on public streets and licensed by the city.
Were indoor plant leasing, maintenance, sales, and short-term rentals taxable, and which inputs could the provider buy for resale?
They were taxable under the letter. The provider could buy plants and qualifying transferred inputs for resale, but STAR now directs readers to amended Rule 3.285 for current guidance.
Were stand-alone polygraph examinations used to investigate internal embezzlement subject to Texas sales tax?
No when billed by themselves under the stated facts. They became taxable when rebilled as part of an investigation requiring a licensed investigator.
Were medical-item purchases exempt from Texas sales tax merely because Medicare or Medicaid funded or reimbursed them?
No. The tax fell on the patient or health-care provider consuming the items, not directly on the United States, though independently exempt drugs, medicines, and devices remained exempt.
Was mowing vacant lots and acreage for weed and rodent control subject to Texas sales tax?
Yes. The work was taxable lawn maintenance, except when sold to a qualifying exempt organization or government customer with proper exemption documentation.
Did equipment used to rebuild engines or straighten collision-damaged vehicles qualify for Texas manufacturing refund and phase-in benefits?
Usually no for repair work. Engine equipment qualified only when used predominantly to manufacture rebuilt engines for inventory or exchange, while collision-repair equipment did not qualify.
Could a cable-franchise asset sale qualify as an occasional sale when the seller kept land, its office, cash, its name and logo, and some billing computers?
Yes. The listed real property, financial and identity assets were not operating assets, and withholding general-purpose billing computers did not by itself defeat the occasional-sale exemption.
Were multiday Rio Grande rafting trips exempt because they crossed into Mexico and sometimes camped outside Texas?
No. The rafting trips were taxable amusement services unless a trip lasted more than 24 hours with the group remaining entirely outside Texas territory.
Was labor for an annual acid wash of a large vessel treated as nontaxable real-property maintenance?
Yes, if the wash kept the real property in good working order and was performed on a documented scheduled, periodic basis. The provider still owed tax on items used.
Were sales of Vietnamese pot-bellied pigs exempt as animals whose products ordinarily constitute food for human consumption?
No. Texas sales tax applied whether the pigs were sold as pets or for breeding because they were not considered pork-producing animals ordinarily used for human food.
Was destroying an electronic chip layer by layer to diagram its pathways and prepare a client report subject to Texas sales tax?
No. The chip-analysis and reporting work was a nontaxable service, but the provider owed Texas sales or use tax on every item used to perform it.
Which utility bills had to support a predominant-use exemption or refund, and what happened when an invalid exemption was claimed?
Year-round businesses needed the latest 12 months; seasonal businesses needed bills for the operating period. Invalid claims triggered tax, penalty, and interest, generally within four years.
Did random or pre-employment drug testing require a private-investigator license, and how did STAR classify the tax result?
The memo says drug testing alone required no license, while an investigation did. STAR's official subject classifies testing alone as nontaxable and testing combined with licensed services as taxable.
What property counted as inventory under SC Revenue Ruling 91-7's historical business-inventory property-tax exemption?
Inventory meant merchandise purchased and held for resale. The property's purpose when bought and held controlled—not the fact that it might later be sold. Equipment primarily rented to customers and …
When did SC Revenue Ruling 91-6 treat a large, fixed manufacturing structure as machinery or equipment rather than a general real-property improvement?
A structure qualified as manufacturing machinery or equipment when it was used directly in manufacturing, was necessary and integral to the process, was used solely to make the intended products, and …
Must a parent company add back expenses connected to a dividend from its wholly-owned subsidiary when it has already reallocated all of its income and expenses to its subsidiaries?
No add-back on these specific facts -- and note DRS marks this Ruling 'not current,' so it is historical and highly fact-bound. A parent company filed a Connecticut combined corporation business tax (…
Can a newly formed sister corporation buy pool construction materials for resale to an affiliated pool-building contractor, and collect tax on those resales?
Yes — the structure works, and the sales to the affiliate are taxable. Majestic Pools builds in-ground concrete pools (a contractor) and its shareholders want to form a new sister corporation, 'Newco,…
Were automated employee-anniversary tracking and computer-generated award-recipient letters subject to Texas sales tax?
Yes. The tracking was taxable data processing, and sales tax applied to the total charge for producing the computer-generated letters.
Could a long-distance service seller shift its sales-tax filing, remittance, and recordkeeping liability to a billing-and-collection agent?
No. Texas allowed an agent to handle billing and collection, but each long-distance company remained responsible for its own tax collection, reporting, remittance, and sales records.
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