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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What was the January 1996 internal memo about a special postcard mailing to Texas taxpayers who had a local sales tax rate change in 1995?
This is NOT a taxpayer-specific letter ruling — it's an internal Comptroller staff memo (with the attached postcard text) explaining that 610 sales-tax yearly filers in specific jurisdictions (the…
When are missing-person investigative services subject to Florida sales tax, and is a separate monthly administration fee taxable?
Investigative charges were not taxable when the purchaser's primary benefit was outside Florida, but charges to Florida customers were taxable even if the investigation occurred elsewhere. A…
Were South Carolina property taxes paid by January 17, 1996 subject to a late-payment penalty?
No. Because January 15, 1996 was the Martin Luther King holiday, the Comptroller General extended collection through the end of business January 17. The Department said property taxes paid from…
A wholesale floor covering distributor asks: is sales/use tax due when it buys carpet samples for its own showrooms, when it later resells those used samples to dealer customers at a discount, when its salespeople swap out a dealer's sample display for free, and can it get a tax refund when it has to discard samples that go out of style?
Tax is due when the distributor first buys the carpet samples, because it uses them in its own showrooms. When those used samples are later resold to a dealer, a resale certificate can be taken…
Can a cellular telephone company buy 'positive validation' (fraud-prevention/roamer-validation) services tax-free with a resale certificate, on the theory that the cost is passed through to customers on their cellular bill?
No. The Comptroller ruled that positive validation service is not an integral part of the cellular service sold to customers, so the cellular company cannot purchase it tax-free for resale —…
Under Florida's 1996 intangible tax, what happened when Florida companies transferred receivables to an out-of-state partnership before January 1?
The Florida companies owed intangible tax on the receivables only until they transferred them. The out-of-state partnership had no Florida taxable situs, and the companies had no tax liability on…
Does Florida tax a seller's out-of-state purchase of coupon-certificate books or the later sale of those books to consumers?
The seller owed Florida use tax on certificate books bought from an out-of-state printer because it was the ultimate consumer. Its sale of the books to customers was not taxable because they…
Must a Florida sign company collect sales tax on both materials and labor when its contract treats installed signs as tangible personal property?
Yes. Because the binding contract kept each sign severable and treated it as tangible personal property until the buyer paid in full, the company had to collect tax on the total sales price,…
Should a fire-alarm contractor charge Florida sales tax on an itemized life-safety system upgrade and its installation?
Yes, but only on the itemized materials. The contractor had to collect tax because the invoices separately itemized the materials and title passed before installation; separately stated installation…
Did RR 96-3 impose South Carolina sales or use tax when software was delivered entirely by modem and telephone line with no physical media?
No. Software delivered entirely by modem and telephone line, with no diskette, tape, or other physical copy, was intangible software rather than taxable tangible personal property. The transmission…
How did South Carolina's 1996 county rankings affect the new jobs tax credit?
For qualifying tax years beginning after December 31, 1995, the credit was $1,000 per new full-time job with at least 10 new jobs in a less-developed county, $600 with at least 18 jobs in a…
Could a business charge customers for handling refunds after California found its process was a nontaxable service?
Not for returning excess sales-tax reimbursement, which had to be refunded in full. It could charge for voluntarily representing customers on use-tax refund claims.
Is the sale of electronic tokens/credits used to play phone-based casino-style games taxable in Texas, when winning tokens also enter callers into a weekly raffle drawing?
Yes. The Comptroller determined that selling the tokens/credits is taxable as an amusement, regardless of the raffle mechanic layered on top. The letter also flags that raffles are generally not…
Was a pre-made Kunzli ankle-support shoe exempt because its stabilizers were custom molded?
No. The appeals recommendation treated it as an orthopedic shoe that was pre-made and merely modified, not a custom foot orthosis made on a positive model or part of a leg brace.
Did another agency's refusal to reimburse sales tax make incontinence creams and washes exempt?
No, under the proposed staff response. Counsel said the reimbursement position did not override the Board's interpretation of section 6369 or let the Board disregard the statute. The memorandum does…
Did a surviving corporation's Chapter 11 stay also protect the liabilities of a corporation that had merged into it?
Yes. Staff said the surviving corporation inherited the merged corporation's liabilities, so determinations issued after the bankruptcy filing violated the automatic stay.
Is a nutritional drink taxable in Texas, or exempt like a food product or meal replacement?
Taxable, as of this 1996 letter. The Comptroller advised that products marketed as a replacement or substitute for a meal (such as Slim Fast and Ultra Slim Fast) are treated as food products and are…
Were separately stated promotional fees for restaurant trademark and trade-name rights taxable as commercial rent in Florida?
No. The separately stated promotional fees paid for trademark, trade-name, and logo rights rather than the use of real property, and the leases reasonably allocated those nontaxable fees from taxable rent.
As of the mid-1990s, did Utah use tax apply to mail-order and early online purchases, and how did Utah tax software, newspapers, and other products delivered electronically?
As of this January 1996 opinion: Utah use tax is owed by a Utah purchaser whenever tangible personal property is bought for use in Utah and sales tax wasn't charged, but the out-of-state vendor only…
Were advertising coupons nontaxable when the printer sent them to a binder for physical attachment to a newspaper publication and the advertiser never received them?
Yes. The attached coupons became component parts of the newspaper, so the advertiser could give the printer a timely Regulation 1590 certificate for nontaxable treatment.
After a confirmed Chapter 11 plan discharged all nonexcepted debts and paid California's allowed priority claim, should the Board continue a tax petition?
No. Staff treated the remaining petitioned liability as discharged under the confirmed amended plan and recommended taking no further action on the redetermination petition.
Does producing an animated television commercial using computer graphics qualify for Texas's motion picture exemption, and does the computer/software used to make the master tape qualify for the manufacturing exemption?
Yes to both, with limits. Using computer graphics to produce a master video tape that will be sold, broadcast, or distributed qualifies for the motion picture exemption (Rule 3.350). The computer…
Can an apartment complex give a utility company a residential-use exemption certificate for gas/electricity without first getting a formal utility (predominant use) study done?
Yes, for apartment complexes matching the studied pattern (meters that mix small commercial use, like the manager's office, with residential common-area use, like club rooms, laundry rooms, pool…
Does the section 189.6 exemption from the gas-importer tax apply where the same entity both owns/operates the qualifying co-generation facility and is itself the thermal energy host?
Yes. Buffalo Paperboard owns and operates a co-generation 'qualifying facility' (under section 201 of the federal Public Utility Regulatory Policies Act of 1978) at its Lockport plant and uses the…
New York Advisory Opinion TSB-A-96(1)S: Is a therapeutic powered air mattress system for bedsore-prone patients exempt from New York sales tax as medical equipment, when sold or leased to individual patients versus to hospitals and nursing homes?
Exempt medical equipment -- but with an important carve-out for sales to medical-service providers. Pegasus Airwave Inc. makes a powered air mattress system, fitted into a standard hospital bed or a…
How did superseded RR 96-2 classify amusement machines, video games, free-play devices, and game tables for South Carolina license tax?
RR 96-2 assigned historical Type I, II, or III licenses based on the device's function, payment slot, video display, and free-play feature, while specified for-profit physical game tables followed…
Did RR 96-1 continue the full disability-retirement income exclusion after benefits converted to a regular retirement plan?
No. Once benefits changed from a disability retirement plan to a regular retirement plan—whether the change was mandatory or optional—the full disability-retirement exclusion no longer applied. The…
Could a South Carolina retailer pay an alcoholic-beverage wholesaler by electronic funds transfer under the Department's 1996 policy?
Yes. The Department treated electronic funds transfer as satisfying the cash-sale and no-credit rules if retailer and wholesaler agreed, the retailer initiated an irrevocable payment order on or…
Who qualified for a prorated South Carolina video-game owner/operator license refund under the Department's 1996 policy?
A prorated owner/operator license-fee refund was available only if the applicant had operated video gaming machines solely in one or more of the 12 counties that voted to end cash payouts. Anyone…
Does an out-of-state company owe Utah sales tax on discount memberships it sells, on catalog/drop-shipped products, and does using independent contractors in Utah create nexus?
It depends on the structure. Selling a bare discount membership — where the member later buys goods or services at a discount from a separate, unrelated retailer who collects its own sales tax — is…
Could a multistate retailer buy supplies from Tennessee vendors without Tennessee sales tax when it received them at a Tennessee warehouse for later use outside the state?
No. Supplies bought from Tennessee vendors and delivered to the retailer's Tennessee warehouse were taxable Tennessee sales even when the retailer later shipped them to stores outside the state. The…
Does an air compressor used exclusively to power an abrasive blasting system that prepares steel surfaces for coating qualify for the Texas manufacturing sales tax exemption?
Yes. The Comptroller ruled that the air compressor qualifies for the manufacturing exemption because it is used exclusively to propel the blast media that prepares steel surfaces for coating —…
Does Utah sales tax apply to a heli-skiing operator's helicopter transportation, backcountry ski-guide services, and included meals?
Yes to both main components. Intrastate helicopter passenger transportation is taxable, because federal law only limits state taxation of interstate passenger transportation (not intrastate air…
Does a maid who cleans houses need to collect Texas sales tax on her charges, and does the new small-business exemption for lawn care/landscaping apply to housecleaning?
No to both, with a distinction: the July 1, 1995 small-business exemption for self-employed lawn care/landscaping workers earning $5,000 or less does NOT extend to housecleaning services, because…
Is a company that isn't a joint venturer with a theater/performance operator still liable for sales tax on admissions as a "provider" of taxable amusement services?
The Comptroller found that, based on the one contract reviewed, Operating Company is not a joint venturer with Company A — but that doesn't settle the matter, because Operating Company may still be…
The Department sat on my protest for two years while interest piled up — can I at least get that interest reduced?
No. LEICA, Inc. was assessed New Mexico tax after a 1992 Multistate Tax Commission sales-tax audit: Assessment No. 1651584, for $13,793.38 in tax, $5,312.09 in interest, and $1,381.95 penalty. The…
I paid my gross receipts taxes just one day late — why am I charged a whole month of interest and a penalty?
Because New Mexico interest is charged by the month 'or any fraction thereof,' so even a single day past due triggers a full month — and no law lets it be abated. Davis and Associates, Inc., a New…
Were charges for distributing radio commercials taxable when delivery was electronic or by physical audio tape?
Electronic modem delivery was not a tangible-property transfer, but tapes sent to California stations were taxable, measured by the blank recording medium.
Were separately charged drill-align panels taxable manufacturing tools, or circuit boards sold for resale with the rest of a customer's order?
They were circuit boards sold for resale, not tools used to make other boards. Appeals recommended canceling the determination because the panels were sold under resale evidence and had no prior use.
Were charges for delivering radio commercials taxable when the distributor transmitted them electronically or instead sent physical audio tapes?
Electronic transmission transferred no taxable property; paid tape delivery to California was taxable on blank-media sales price.
Is a Texas manufacturer's sale of etchant — a chemical used to etch unwanted copper off printed circuit boards — subject to sales tax, given that none of the etchant ends up in the finished circuit board and the spent etchant is bought back by the seller for recycling?
The sale of the etchant is a taxable sale of tangible personal property, but the purchaser (a circuit-board manufacturer) can buy it tax-free with a resale/exemption certificate, because the etchant…
Is the construction of a special, secured room inside an existing building — built to protect a customer's inventory and equipment during manufacturing — exempt from Texas sales tax as either a manufacturing exemption or new construction?
No. The Comptroller ruled that building a special security room within an existing building — even though it was a specific contract condition needed to protect a customer's manufacturing inventory…
Were prototype and final units under a fiber-optic test-instrument design contract nontaxable research-and-development transfers or taxable custom-item sales?
The first evaluation prototypes were nontaxable under the administratively applied proposed rule. Final units required more facts: testing use could qualify, but post-development functional use was…
Did California use tax apply to rents for equipment used on offshore jobs when the equipment might pass through or be stored in California?
No while property stayed outside or was held only for shipment to exclusive outside use; rent tax applied for periods of other California use.
When a vehicle lessee defaulted, did California sales-tax law require the lessor to apply the security deposit to particular debts first?
No sales-tax rule set the order; absent other law or a contract term, the lessor could allocate it, but taxable uses stayed taxable.
Did California tax a yacht purchase when ownership transferred offshore to an out-of-state corporation before a short California refit?
The 1996 letter said no sales or use tax applied if yacht ownership transferred outside California and advised written proof of sale location. The amended annotation later added first-use and…
Could an automobile distributor use the 1/40 fair-rental-value formula for cars loaned to a promotional driving school?
Yes within the limited-period rule. Distributor registration created the demonstration-and-display presumption, and the school promoted vehicle sales; the source conflicts on exactly 12 months.
Was California's junior tax lien extinguished when real property was sold to a mortgagee at a sheriff's sale?
Yes. Staff said a sheriff's sale to anyone other than the taxpayer extinguished the subordinate state tax lien, so California should issue the requested partial releases.
What tax-collection and title-filing duties did Texas impose on licensed vehicle dealers beginning January 1, 1996?
Licensed dealers had to collect motor vehicle sales tax on all taxable sales, including cash sales, and remit it to a county tax assessor-collector within 20 county working days. They also had to…
A mail order company plans to set up two subsidiary corporations and a limited partnership that will operate in Texas, buying goods for resale to the mail order company, which then ships items to Texas customers; the mail order company will also periodically send a handful of employees into Texas to train and check on the limited partnership's staff. Does any of this create Texas sales/use tax and franchise tax nexus for the mail order company, and does the limited partnership have to collect sales tax on sales to the mail order company or its customers?
Yes, the mail order company has nexus. Sending its own employees into Texas on a recurring basis (initial training plus periodic quarterly/semi-annual site visits) to train and review the limited…
Is a New York corporation subject to Article 9-A franchise tax after it discontinued all active business and was later dissolved by proclamation, when it merely holds record title to real property as nominee for others?
Two periods. For the years it was incorporated -- from 1963 until it was dissolved by proclamation on September 29, 1982 -- the corporation is subject to the Article 9-A franchise tax under section…
Under Florida's 1996 intangible tax, did receivables remain taxable after an out-of-state retailer transferred them to a new out-of-state subsidiary before January 1?
No. The retailer did not own, manage, or control the transferred Florida receivables on January 1, and the new out-of-state subsidiary had no Florida taxable situs. Federal treatment of the brief…
Does South Carolina's year-end 1995 policy index PDF contain the promised document entries?
No. The notice says a policy-document index is attached, but the current official two-page PDF stops after listing the seven major categories and contains no document-by-document entries.
Does South Carolina's year-end 1995 policy citator PDF contain the promised document-by-document entries?
No. The notice says a policy-document citator is attached, but the official three-page PDF ends after its definitions and cumulative-topic explanation. It contains no document-level status entries…
Could a manufacturer treat x-ray equipment as resale inventory while leasing it back from a financing company and using it only for demonstrations?
Yes on the specific facts. Lease or financing, the equipment remained demonstration-only resale inventory; tax waited until resale.
When an employer stays fully liable for its own employees' health claims and just pre-funds an account the insurer draws from to pay them, are those claim payments and the insurer's admin fee taxed as insurance 'gross direct premiums' in Connecticut?
No. When the employer remains solely liable for its employees' health benefit claims below a liability limit and simply pre-funds a claims account that the insurer draws on to pay those claims as…
We're a nonprofit local development corporation. Under the SBA 504 loan program, we plan to take a construction-phase mortgage from a borrower, immediately have it enforced by a private lender who's actually funding the advances, then take it back once permanent SBA financing kicks in. Is that mortgage exempt from mortgage recording tax through both phases?
Exempt throughout, including during the construction phase when a private lender is really funding and enforcing it. This is the origin ruling for Greater Syracuse Business Development Corporation's…
If a broker pays a financial-information company's subscription fee for a customer, and also pays the information company a separate premium/commission based on the customer's brokerage business, is that premium/commission subject to Texas sales tax — and does it matter that the broker is out of state?
The premium/commission a broker pays an information-service provider is NOT subject to sales tax as long as it's separately stated and represents genuine, separate compensation to the provider (not…
A vendor sells equipment to a leasing company, which then leases it to the original customer under a deal labeled a 'financing lease' with declining monthly payments and a buyout/return/renew option at the end of each year — is that a financing lease or an operating lease for Texas sales tax purposes?
It's actually three separate leases, not one financing lease. Because the customer can return the equipment, buy it, or roll into a new lease with a new rental amount at the end of each year, the…
New York Advisory Opinion TSB-A-95(43)S: In a 22-year NYC IDA bond financing to keep CS First Boston headquartered in the city, are the layered purchase, lease, resale-certificate, service-contract, rent, and eventual buyout transactions among Purchasing, Leasing, the Group Agents, and the IDA exempt from New York State and City sales and use tax?
Yes, exempt across all 13 questions raised -- provided every layer of the structure follows the documented agency/resale-certificate paperwork. To keep CS First Boston Corporation ("CSFB")…
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