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 an electric cooperative's security-light charges taxable when the cooperative owned and controlled the light?
No if the cooperative retained ownership and control and the customer did not operate or maintain the light. Customer control made the total charge taxable.
Which utilities used to stone-wash, press, bag, package, and move garments counted as exempt processing use?
Utilities directly used to wash, press, and bag garments were exempt uses; shipping-package equipment, conveyors, general areas, and tenant utilities were taxable uses.
Was a separately stated optional road-hazard warranty sold with a tire subject to Texas sales tax?
No. Once installed, the tire was part of a motor vehicle, so the separately stated repair warranty was nontaxable; the warrantor owed tax on repair inputs.
Which veterinary drugs, devices, and animal feeds could be purchased tax-free under the Texas letter?
Prescribed animal drugs, hypodermic needles and syringes, prescribed dog and cat diet feed, and normal farm, ranch, or wildlife feed were exempt; other items were taxable unless bought for resale.
How does New York sales tax and the passenger-car-rental tax apply to a rental company's rental charges, incidental fees, insurance, fuel, promotions, and fleet purchases?
In a 25-question opinion for Alamo Rent A Car, the Department confirmed that renting a car is a taxable sale of tangible personal property (Tax Law §§ 1101(b)(5), 1105) and also carries the special 5%…
Are janitorial services by resident apartment superintendents taxable when they are the complex's employees but are paid through a related company's central payroll?
Not taxable — the superintendents are the complexes' employees. Max Farash owns apartment complexes, each with a resident on-site superintendent who does light janitorial and related work. Each superi…
Was telephone software support taxable when the support was delivered to an out-of-state location for use outside Texas?
No. Software telephone support was taxable maintenance generally, but support delivered to an out-of-state location for use outside Texas was exempt under Texas Tax Code § 151.330(e).
Were charges for computer equipment repaired in Texas taxable when the repairer shipped the equipment back out of state?
No when the repairer shipped the equipment out of Texas and kept records proving shipment. If it shipped to a Texas location, the total charge was taxable.
Is a service that retrieves motor vehicle records for customers -- using computers to match and transmit the data -- a taxable computer and data processing service in Connecticut?
Not a taxable computer service. A company retrieved motor vehicle driving records for its customers: it routed each request through a service bureau to the Connecticut DMV and returned the DMV's repor…
Could a direct-payment permit holder choose which purchases and suppliers its certificate covered, and how were uncovered taxes handled?
Yes. The holder could use blanket, item-specific, or supplier-specific certificates, but had to pay or accrue all state and applicable local tax on other purchases.
Were purchases of oil-and-gas working interests with production equipment and an entire gas-processing plant subject to Texas sales tax?
No. The working interests and in-use basic production equipment were real property, and the entire gas-processing plant sale qualified as an occasional sale.
Could a seller refund tax collected on geologic studies after Texas expanded its exemption for scientifically observed geologic information?
Yes, subject to the letter's historical categories and four-year limit. Texas said post-October 1987 tax on qualifying geologic information services could be refunded.
Is retipping a manufacturer's worn carbide saw blades a taxable repair service, or an exempt purchase of manufacturing tools?
Repair is taxable; a new blade is exempt -- but note this ruling is marked not current (obsoleted in part by AN 2000(8), clarified by Ruling 94-4), so confirm today's law. A kitchen-cabinet manufactur…
If a company buys a business's assets tax-free as an exempt bulk/isolated sale, but separately leases equipment from the same seller with an option to buy, is the later lease buyout also exempt?
No. Utah sales tax applies to each transaction separately, so exercising an option to buy leased equipment is a distinct, taxable transaction from the earlier exempt bulk-asset purchase -- once the se…
Did transferring an entire software-licensing business and its inventory to a new subsidiary qualify for Texas sales-tax exemptions?
Yes. The licensing business was an identifiable segment transferred in one transaction, so its operating assets qualified; inventory was separately exempt as a sale for resale.
Are sales of surgical instruments and wound-closure supplies to doctors and veterinarians subject to Connecticut sales and use tax?
Taxable to doctors and vets; exempt only to nonprofit hospitals. A company sold surgical instruments and wound-closure supplies (staplers, clips, staples, suture materials, laparoscopic instruments). …
Could a lease operator receive 100% of a natural-gas-tax refund when an interest owner separately sold 25% of production taken in kind?
Yes, if the in-kind owner assigned its refund claim to the operator and the refund on that owner's gas was otherwise proper, subject to verification of the operator's records.
How did Texas tax jewelry trade-ins, including a customer trading a higher-value ring for a lower-value watch and receiving cash back?
Tax generally applied to the balance after a qualifying like-kind trade-in. When a $9,000 ring was traded for a $7,000 watch with $2,000 returned, no tax resulted.
Were marketing leads sold to insurance agents, home remodelers, and similar customers taxable information services?
Yes. Texas treated the marketing leads as taxable information services because the same information could be sold to multiple customers and therefore was not proprietary to one client.
Were a corporation's lease payments taxable when it leased parking lots to provide free parking for employees or customers?
Yes. Texas said lease payments for parking lots used to provide free employee or customer parking were taxable under Rule 3.315 on motor-vehicle parking and storage.
How did Texas tax financing leases of motor vehicles and a wheeled compressor?
For the two vehicles, lease payments were not separately taxed, but the lessee owed historical vehicle tax on all lease payments plus the buyout when title passed, less tax paid by the lessor at purch…
Could a business donate uniforms, equipment, prepared food, and disposable serving items to tax-exempt organizations without owing sales tax?
Generally yes, with proper exemption treatment and records. Uniforms and equipment bought under a valid exemption certificate could be donated to qualifying exempt organizations, while donated taxable…
What happened when a customer refused to pay sales tax, or the seller initially omitted tax from the invoice?
The seller still had to collect and remit the tax. Tax became part of the sales price and could be recovered like the original price; an omitted tax charge could be back-billed.
How did Texas classify nitrogen and coil-tubing well services between limited sales tax, the 2.42% well-servicing tax, and neither tax?
The job's purpose controlled. A service could fall under limited sales tax, the 2.42% well-servicing tax, or neither—but not both taxes on the same job—and documentation was essential.
Did a seller still owe Texas sales tax when customers paid for taxable asset-location services but refused to reimburse the tax?
Yes. Customer refusal did not relieve the seller of remitting tax. Asset-location investigations required a license and were taxable services under the letter.
Can an extended-warranty administrator give repair shops a resale certificate for warranty repair work it pays for, or must its retail clients do that?
It can issue the resale certificate itself. Warrantech develops and administers extended warranty programs: retail vendors sell the extended warranties (collecting tax on the merchandise and the warra…
If a mutual savings and loan converts to stock form and is simultaneously acquired by a new holding company in a transaction the IRS treats as tax-free, is the whole conversion and acquisition also tax-free for New York's Article 32 banking franchise tax?
Yes. The Homestead Savings (FA), a federally chartered mutual savings and loan association with no capital stock, plans to convert to stock form ('Stock Homestead') while simultaneously becoming a who…
Was a scientific golf-swing measurement service taxable, and how were optional slow-motion videotapes treated?
The measurement service was nontaxable. Optional videotape sales were taxable, while the provider paid tax on inputs and could credit supplier tax on tapes later sold.
Was a per-gallon charge for pumping, treating, and permit-discharging residual liquid from removed underground fuel tanks taxable?
No. Texas said the per-gallon charge was not taxable because the permitted industrial discharge was excluded from the rule's definition of garbage or other solid waste.
Was surgical autotransfusion taxable, and could the provider buy disposable supplies tax-free when serving an exempt hospital?
Autotransfusion was a nontaxable medical service, but the provider had to pay tax on disposable and other taxable supplies—even when its customer was an exempt hospital.
Were a nonprofit hospital's human-relations and organizational consulting services subject to Connecticut sales and use tax?
No under this historical ruling. A nonprofit charitable hospital's division advised public, private, and nonprofit organizations on workplace stress, wellness, morale, motivation, collaboration, commu…
May a Connecticut manufacturer buy air compressors tax-free when they eject parts from dies, sandblast finished products, and also power production machinery?
Yes, assuming the company qualified as a manufacturer. A compressor used to blow a part from a die and two compressors used primarily to sandblast parts in the final finishing stage qualified as machi…
Which separately stated health-spa charges were taxable: massages, facials, pedicures, manicures, or hydrotherapy baths?
Only the hydrotherapy-bath charge was taxable. Texas said separately stated charges for massages, facials, pedicures, and manicures were not subject to sales tax.
How did Texas sales tax apply to a nonprofit benefit auction's unique experiences, artwork, and any separately imposed federal luxury tax?
A dinner-with-the-governor experience was not taxable, artwork was taxable like other tangible property, and any federal luxury tax could be excluded when calculating Texas tax.
Which handling of sand, dirt, and gravel counted as processing, and when was delivery nontaxable?
Mixing or crushing was processing; sizing, screening, sorting, washing, or drying was not. Delivery of unprocessed material was nontaxable, while processed material was taxable.
Could a security company exclude a separately stated, dollar-for-dollar employee health-insurance reimbursement from its taxable service charge?
No. The reimbursement was taxable overhead within the security-service price, whether separately stated or marked up; it was not a distinct unrelated service.
Did the offshore-drilling exemption apply when the platform and wellhead were outside Texas waters but the wellbore entered Texas territory?
No. The exemption required exploration or production exclusively outside Texas; equipment used for a well operating inside and outside Texas territory was taxable.
Could a vehicle dealer receive a tax refund when a sale failed after the dealer paid the tax?
Yes, as a historical exception to the usual purchaser-only refund practice. The dealer had to show a dishonored check or draft, provide the original or a copy of the tax receipt, and establish that it…
When was a delivered and installed portable building taxable as personal property rather than treated as an improvement to realty?
The total sale, delivery, and installation charge was taxable unless the building was permanently foundation-affixed with plumbing and electricity appropriate to its use.
How could a purchaser prove goods were exported to Mexico and obtain a refund of Texas sales tax paid to the seller?
The purchaser needed proof of export, such as a Mexican customs pedimento, and had to seek the refund from the seller. A passport and driver's license did not prove export.
When did a direct-payment-permit holder owe use tax on taxable items bought tax-free and stored or used in Texas?
If Texas use was known, tax was due when the items were first stored, used, or consumed. If destination was unknown, the holder could consistently elect storage or withdrawal.
Did Connecticut's former capital gains tax apply when an older retirement-plan participant elected federal transitional capital-gain treatment for a lump-sum distribution?
Yes under this historical ruling. A Connecticut resident who had reached age 50 before January 1, 1986 and elected Pub. L. No. 99-514 § 1122(h)(3) treatment for a qualified-plan lump-sum distribution …
Was a Connecticut S corporation shareholder's share of interest income subject to the former dividend and interest income tax when federally reported as nonseparately computed income?
No under this historical ruling. When the S corporation's interest income was properly reported for federal purposes as a nonseparately computed item, the resident shareholder's pro rata share was not…
Could a pay-telephone provider give its local-exchange supplier a resale certificate instead of paying tax on the purchased access service?
Yes. Texas said the provider could issue a resale certificate to the supplier for basic local-exchange service purchased to facilitate public pay-telephone service.
Could a private Texas engineering contractor buy equipment and materials tax-free merely because it used them on federal-government contracts?
No. The contractor was the taxable consumer of items used to provide nontaxable engineering services; only items sold directly to the federal government qualified for resale treatment.
Was labor to install a rubber lining in a Texas storage tank taxable as remodeling or exempt as new construction?
It depended on the tank. Labor was nontaxable new construction if installed before the unfinished tank's first use, but taxable remodeling if the tank was finished or used.
When did Texas treat software work as nontaxable programming created from scratch rather than a taxable completed program?
Creating a specific new program for one customer was nontaxable contract programming, but a later sale of that completed program to another customer was taxable.
How did Texas tax window- and door-screen installation on new, residential, and existing nonresidential property?
New and residential installations used contractor rules, while repair or remodeling of existing nonresidential property was taxable on the total charge.
Could a fertilizer company buy replacement tires for free-loan fertilizer applicators under Texas's agricultural exemption?
Yes, only if the applicators were used exclusively on a farm or ranch for the qualifying agricultural production described in the letter.
Does a not-for-profit homeowners association lose its Article 9-A tax exemption once it starts collecting dues and maintaining shared community property for its members?
Yes, once the association becomes active. Lake Shore Hills Homeowners Association was incorporated in 1983 but stayed inactive -- no dues, no maintenance activity -- until 1988, when it began collecti…
Are charges for picking up and shredding confidential documents subject to New York sales tax?
Yes. Confidential Data Management picks up confidential documents at customer sites, transports them to its plant, and shreds and bales them (recycling or disposing of the result); it bills a shreddin…
Could a purchaser obtain a tax refund by getting a seller to separate qualifying repair-part charges after an original lump-sum invoice?
Sometimes. A corrected seller invoice or letter could support a refund when separation did not shift who owed tax; purchaser notes from a phone call were insufficient.
Were Texas-origin audio and video line-feed services sold to commercial broadcast stations taxable telecommunications services?
Yes. Texas treated the line-feed service as taxable, while allowing specified resale-certificate treatment for cable-TV sales and transferred property.
Does selling an entire business still qualify for Utah's isolated-or-occasional-sale sales tax exemption when the deal is structured through an asset purchase agreement plus a 20-year lease-with-purchase-option instead of a simple sale?
Yes, with one carve-out. The Utah State Tax Commission confirmed that selling an entire business qualifies for the isolated-or-occasional-sale sales tax exemption (then § 59-12-104(14), Rule R865-19-3…
Did permanent disability alone qualify a vehicle purchase for Texas's historical disability exemption?
No. The 1991 letter said the vehicle had to be specially modified for operation by, or transportation of, a person meeting the rule's disability standard and had to be primarily driven by or used to t…
Could farmers claim Texas's agricultural exemption for installed underground irrigation pipe, tanks, or water-well casing?
No. Texas treated underground components as taxable permanent real-property improvements, while qualifying portable and above-ground equipment could be exempt.
Was a truck-driver monitoring program taxable when the provider installed its own device and supplied ongoing calls, reports, and performance materials?
No. Texas treated the arrangement as a nontaxable monitoring service rather than a device rental, but the provider owed tax on the device components and other materials.
Were horoscope readings, 12-month biorhythm charts, lucky numbers, and personal astrology or psychic consultations taxable in Texas?
Yes. Texas classified all of those offerings as taxable amusement services under Rule 3.298(a)(1)(F) and sent the provider a sales-tax permit application.
Did the Texas Historical Commission have to collect sales tax on historical-marker plaques posted beside highways or on buildings?
No. Because the sales-tax law did not define 'writings,' the Comptroller treated the Commission's historical-marker plaques as exempt writings under § 151.312.
Does a New Jersey printing company that only solicits orders in New York, ships from out of state, and occasionally delivers finished goods through its salesmen owe New York's Article 9-A corporate franchise tax?
No. ROP Color, Inc., a New Jersey computerized typesetting and color-separation business, had no office, property, or capital in New York -- its only in-state activity was salesmen soliciting orders (…
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