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 RR 95-16 direct admissions-tax revenue from major South Carolina tourism or recreation facilities?
RR 95-16 applied to qualifying tourism or recreation facilities with at least $20 million invested within five years. One-fourth of admissions tax went to the county or municipality and one-fourth…
What did “school” mean for South Carolina's 1995 homestead exemption from school operating millage?
The Department interpreted “school” to mean grades K-12. It concluded that the term did not include colleges, junior colleges, or public libraries.
Does a Texas Internet service provider owe sales tax on domain name registration fees or on a handling fee charged for helping a customer obtain a domain name?
No. The Comptroller told this Internet services provider that the domain name registration fee itself is imposed on the customer (not the provider), so a separately stated fee for that licensing is…
Could a securities dealer use the federal section 475 mark-to-market method for California before California required conformity?
Yes. Although California had not conformed to section 475, mark-to-market was already a permissible California method. A dealer's federal change automatically carried over to California unless the…
How were prewritten mortgage software, remote delivery, updates, manuals, and bundled support taxed?
Media-delivered software and maintenance were taxable, including bundled support. Remote-only transfers were not, while separately charged manuals were taxable.
Was a business purchase of trailer-mounted mobile water-purification units exempt as an occasional sale?
No. The seller had used the units in a permit-requiring leasing activity, and units integral to trailers were treated as vehicles subject to use tax for the buyer.
Were corporate sales, marketing, and training videos qualified motion pictures, and how were the master, duplicates, raw stock, props, and costumes treated?
The videos qualified and the producer consumed raw stock for the initial version; duplicate copies and separately transferred props or costumes were taxable sales.
Could an interstate sale remain exempt when the out-of-state purchaser chose and hired the common carrier picking up goods in California?
Yes. Either party could hire the carrier, but the contract had to require out-of-state shipment and the buyer or its agent could not take California possession.
Did an independent California sales representative create use-tax collection responsibility for an out-of-state retailer?
Yes under the historical rule applied. Delegating any sales-solicitation power to the California representative made the retailer engaged in business and required collection on all California sales.
Is Resolut Regenerative Material, a product used to treat periodontal disease and bone defects in the oral cavity, exempt from Texas sales tax?
Yes. The Comptroller's office ruled that Resolut Regenerative Material — a product placed in the oral cavity to help regenerate the supporting structures of teeth lost to periodontal disease, which…
Who was the taxable retailer when one cabinet contractor obtained the job and plans but a subcontractor manufactured and installed the prefabricated cabinets?
The subcontractor. It was the last party truly responsible to furnish and install the fixtures, so tax applied to its regulatory cost price.
After the U.S. Supreme Court barred a state fuel tax that legally fell on tribal retailers, does Utah's motor fuel tax exemption apply the same way?
The Chickasaw Nation decision has little impact in Utah because Utah's motor fuel tax is legally imposed on the distributor, not the retailer -- the U.S. Supreme Court's ruling struck down a tax…
How did California divide a museum exhibit contract between exempt mixed-media artworks and taxable construction improvements?
The life-size scenes were exempt assemblages, including artistic backdrops and scene furniture. The museum shell and merely supportive wiring, lighting, ducting, ramps, railings, and cabinets were…
Are kidney dialysis machines and the accessory equipment used alongside them (recliner, scale, blood pressure device, calibration equipment, water treatment system, reuse machine) exempt from Texas sales tax?
Only some of it. The Comptroller said kidney dialysis machines and related supplies are exempt from Texas sales tax when specifically designed and used during dialysis treatment, and that a water…
New York Advisory Opinion TSB-A-95(41)S: Is the monthly fee a video-playback facility charges a new cable channel for accepting, playing back, and feeding its programming to a satellite uplink -- to distribute the channel nationwide -- subject to New York sales and use tax?
Not taxable. MRG Production Associates is exploring an agreement to provide videotape playback facilities and support staff for a new cable television channel's ("Corporation A") 24-hour on-air…
Can a sport-fishing boat that holds a license to catch and sell some of its fish get a refund of New York's motor fuel, petroleum business, and sales taxes on its fuel as a commercial fishing vessel?
It depends on the facts — and the Department says that factual question can't be answered in an Advisory Opinion. Relief from the Article 12-A motor fuel tax, the Article 13-A petroleum business…
My real estate broker has agreed to pay New York's Real Property Transfer Gains Tax out of its own pocket (not passed on to the buyer) so a contingent multi-parcel closing can go through. Does the broker's payment of my tax count as additional taxable consideration for the sale?
No, it's not additional consideration -- as long as the broker's payment isn't really the buyer's obligation in disguise. Robert Schwagerl was selling vacant land in Suffolk County for $1,250,000 as…
Was a film-testing company's charge for a Methaline Blue Test taxable when it returned only a text report?
Probably not. If the company transferred only a text report analyzing the customer's film, the report was incidental to a nontaxable testing service; other property could change the result.
Under Texas Tax Code Section 151.0048, can a contractor or homebuilder buy landscaping and other real property services tax free when building a new home, and does that exemption also cover model homes or subdivision common areas?
Yes for new residential construction, but no for model homes or subdivision common areas. A contractor building a new residential structure can buy landscaping (and other real property services…
Did a licensed California dealer owe sales tax when it received a gun from an out-of-state retailer and delivered it to the California buyer?
Yes, presumptively, when the out-of-state seller was not registered or shown to be engaged in California. The dealer owed tax on the gun price plus required service and passed-through DROS fees.
When a catering/event company provides entertainment (mariachis, armadillo races, hay rides) at a party, does it owe Texas sales tax on the entertainment charges?
It depends on whether the company is acting as a provider of a taxable 'amusement service.' A straight performance fee paid to musicians (like the mariachis in this letter) isn't a taxable…
Under this internal Texas Comptroller staff memo, is buying, installing, repairing, or renting Christmas decorations for a customer taxable?
Mostly yes, with one key distinction: when the seller buys the Christmas decorations and sells/installs them for the customer (whether billed as one price, itemized, or with a separate…
Did regularly selling at California trade shows require an out-of-state retailer to collect use tax on its California mail-order sales?
Yes. The appeals recommendation found that attending five to nine California shows annually to sell goods supplied sufficient physical presence.
Was Ferris PolyMem exempt as a dressing impregnated with medicine?
No on the available record. California found that the glycerin and surfactant appeared to improve absorption and nonadherence rather than medicate the wound, and the surfactant was unidentified.
When did a deed in lieu of foreclosure avoid successor liability, and did the reviewed hotel transfer qualify?
Only a seller-mortgagee reacquiring purchase-money collateral for cancellation of the unpaid balance avoided purchase treatment. A nonseller lender or third-party transferee made a purchase. The…
Did California have to turn a sales-tax security deposit over to a debtor's Chapter 11 trustee?
No. Staff said state law held the deposit in trust for use only under sections 6701 and 6815, and that transfer restriction remained effective in bankruptcy.
Did university libraries owe California sales or use tax on bibliographic and full-text online database subscriptions?
No. The database operators supplied electronic signals without tangible property; tax collected on those transactions was excess reimbursement to refund or remit.
If an apartment resident operates a store or business out of their unit, is the electricity or gas used there still exempt as a residential utility in Texas?
Not automatically. The Comptroller told the requester that a Texas Apartment Association publication was wrong to say residential utilities are simply exempt. If a unit has a separate meter and the…
Is sales tax due on food, meals, soft drinks, and candy sold to inmates in federal prisons in Texas?
Yes, as of October 1, 1995. The Comptroller told this requester that House Bill 462 added Subsection (g) to Tax Code Section 151.314, making sales of food products, meals, soft drinks, and candy to…
Were a landfill recycler's charges for chipping county green waste into daily cover taxable, and could subcontracted delivery charges be excluded?
Chipping was taxable fabrication of county-furnished material. Separately stated third-party delivery could be excluded only up to the recycler's transportation cost, not under the excavation-site rule.
Could a South Carolina taxpayer amend a return to change the historical retirement-income deduction election under RR 95-15?
Sometimes. RR 95-15 treated the election to defer deductions until the applicable retirement age for a later $10,000 annual deduction as irrevocable. A taxpayer who chose the $3,000 annual deduction…
How did RP 95-6 require a taxpayer to protest a South Carolina proposed assessment and continue an internal appeal?
A taxpayer generally filed a written protest within 30 days of the proposed assessment. The responsible division and appeals staff reviewed the dispute, offered a conference, and forwarded…
Under RP 95-5, when could South Carolina correct an error or allow relief after the normal refund period had closed?
Generally, a timely written refund claim was required. Limited relief could arise from a written extension, a qualifying sales-tax offset, a timely federal-adjustment claim, an increased amount…
Could a corporation that moved from New York to Florida during one fiscal year use separate accounting instead of Florida's three-factor apportionment formula?
No. The Type F reorganization continued the same corporation and tax year, the company had not kept separate records for the pre-move and post-move periods, and the business was one operation in two…
Were fees for sightseeing tours by carriage, bus, helicopter, airplane, trolley, boat, and similar transportation subject to admissions tax?
No. Fees paid solely for sightseeing tours by carriage, bus, helicopter, airplane, trolley, boat, and similar modes were not subject to admissions tax. Entertainment-oriented vehicle admissions were…
Were grocery coupon-certificate books taxable tangible property when they represented rights fulfilled by an out-of-state company?
No under the assumed facts. The books recorded intangible rights to receive selected grocery coupons, so neither their sale nor use in California was taxable as tangible personal property.
Did California apply one categorical tax rule to all catheters and urinary specimen bags?
No. The complete opinion said taxability depended on each item's actual use and reaffirmed earlier item-specific conclusions, but did not reproduce enough facts for a broader catheter rule.
Could a direct-selling company replace its suggested-retail-price tax agreement with one calculating tax on independent agents' product cost?
Utah rejected the proposed agreement because it calculated tax on the independent agents' cost even when they resold products above cost. The Commission required tax on the resale amount under the…
If a seller accepts a customer's exemption certificate in good faith and it later turns out the customer isn't actually exempt, is the seller liable for the uncollected sales tax?
No -- a seller who accepts an exemption certificate in good faith is not liable to collect the sales tax, even if the buyer's exempt status is later called into question. A Park City-area vendor had…
Does selling an entire hospital campus to a related parent company, and that parent's later resale of the same hospital to an unrelated third party, both qualify for Utah's isolated-or-occasional-sale sales tax exemption?
Yes to both transactions. A Utah hospital company agreed to sell its acute-care hospital campus (land, buildings, and personal property) to its parent corporation, which in turn planned to resell…
When a retailer sells a $200-500 cellular phone for a penny or a dollar in exchange for the buyer activating cellular service (earning the retailer an activation commission), does Utah sales/use tax apply to the phone's nominal sale price, its cost, or something else?
Sales/use tax applies, but not on the nominal one-cent-to-one-dollar sale price. A cellular phone retailer bought phones costing $200-500 and resold them to the public for as little as one cent,…
Could an eyewear dealer issue one resale certificate for indistinguishable items later divided between resale and consumption?
Yes, if it could not identify which items would be consumed at purchase; it then owed use tax on consumed items, but consumer-only buyers could not use that approach.
Do Air Force personnel and other authorized purchasers who buy amusement or entertainment park tickets through a Department of Defense Nonappropriated Fund Instrumentality's 'Ticket and Tour' operation owe Texas sales tax on those tickets?
No. The Comptroller's office confirmed that sellers of amusement and entertainment park tickets are not required to collect tax on sales to Department of Defense Nonappropriated Funds…
Are court reporting services — transcripts, videotapes, or audiotapes of depositions and testimony — taxable when sold to participants in a lawsuit in Texas?
No. The Comptroller's office told this court reporter that selling a court reporting service (transcripts, computer-readable formats, audio tapes, video tapes, or films of a deposition, testimony,…
Did California's historical double-weighted sales formula change the test for water's-edge group membership or the former water's-edge election fee?
No. The water's-edge membership test still used a simple average of the U.S. property, payroll, and sales factors, while the former election fee used the California sales-factor numerator. Double…
Did a no-admissions court settlement prevent a vehicle manufacturer from receiving California's Lemon Law sales-tax reimbursement?
No. Other facts showed the payment was Lemon Law restitution, and section 1793.25 did not require separate proof of every repair, disclosure, and warranty duty.
How did the 1995 federal restraining order affect Kansas motor fuel tax on sales to certain tribes?
On October 5, 1995, Federal District Judge Dale Saffels issued an order temporarily restraining the Kansas Department of Revenue from collecting tax from distributors who sell motor fuel to the…
New York Advisory Opinion TSB-A-95(39)S: Is a food service contractor's charges to a substance-abuse treatment facility -- for meals, on-site labor, supplies, nutritional analysis, and management services -- exempt as a sale for resale, or at least partly exempt as a professional fee?
No exemption either way -- the entire charge is taxable as a sale of food and drink, with no carve-out for the labor/management/nutritional-analysis portion. Ambassador Food Services Corporation…
New York Advisory Opinion TSB-A-95(38)S: When a prime contractor buys trash removal from a subcontractor and then re-bills the exact cost to a federally tax-exempt customer, is the subcontractor's charge to the prime contractor taxable, and is the prime contractor's pass-through charge to the exempt customer taxable?
The subcontractor's charge to the prime contractor is taxable; the prime contractor's pass-through re-billing to the tax-exempt customer is not. Pasquale & Bowers described a repair project (not a…
Can a company that sells crowd-management/security services to a sporting-event or concert promoter buy those security services tax-free under the sale-for-resale exemption, on the theory that security is an integral part of the promoter's taxable amusement service?
No. The Comptroller ruled that crowd-management/security services for concerts and sporting events are not an 'integral part' of a taxable amusement service, because people can still attend and…
For New York's truck mileage tax (gross weight method), do miles count as "laden" when my truck is only carrying my own tools and equipment, or hauling waste with no economic value, or has equipment permanently bolted on?
It depends on what's being carried. For New York's Highway Use Tax truck mileage tax computed by the gross weight method, miles are "laden" (loaded) unless what's on the truck is part of its…
If a restaurant charges customers a mandatory $1 'donation' to get a discounted meal and then passes that dollar to a charity, does the restaurant owe sales tax on it?
Yes, generally. The Comptroller's office said that when a 'donation' is mandatory and the value of what the customer receives (the meal) is worth more than the donation, the dollar is consideration…
Does an out-of-state 501(c)(3) religious children's ministry that employs one Utah missionary and mail-orders teaching materials to Utah churches owe Utah income tax withholding or sales/use tax on those activities?
It depends on the activity. The Utah-based missionary's wages are subject to Utah income tax withholding just like any other Utah employee. But the mail-order books, uniforms, and game materials the…
The Department took months to finish my audit — can I get the interest that piled up during the delay knocked off?
No — interest keeps running on unpaid tax even while an audit drags on, and there is no provision to abate it for the delay. S & J Enterprises, Inc., a New Mexico commercial-construction…
Could a health plan buy durable medical equipment for resale when it retained title and lent it to members for free?
No on the stated facts. California treated the health plan as the equipment's consumer because it retained title, provided the equipment without charge, and handled repair and replacement.
Does a photographer owe Texas sales tax on a fee charged for licensing the use of a copyrighted photograph, versus on photographs delivered to a Texas advertising agency for an ad?
It depends on what is being sold. A fee charged for licensing or for the right to use a copyrighted photographic image, illustration, or transparency for publication is not subject to Texas sales…
Is selling advertising space on an Internet on-line service (purely electronic media, no tangible property involved) subject to Utah sales tax, and does that change if the seller also provides ad design services?
No, on both counts. Selling advertising space in an on-line Internet service is not a taxable transaction for Utah sales and use tax purposes — neither an initial charge nor ongoing monthly fees for…
Do inmates have to pay Texas sales tax on food, candy, and soft drinks bought at a jail or prison commissary?
Yes, as of October 1, 1995. The Comptroller told this correctional-facility commissary that sales tax became due on food ready for immediate consumption, soft drinks, and candy sold to inmates,…
Our New York property secures both our own $222 million note AND a guaranty of $277 million in sister companies' out-of-state mortgage notes, capped at a combined $335.5 million -- we already paid tax on that cap. As those out-of-state notes get partly prepaid and our whole $500 million multi-state loan gets refinanced and restated, does our New York mortgage modification trigger additional mortgage recording tax?
No additional tax, as long as the properly tracked outstanding balance doesn't exceed what was already taxed. Fifth Win, Inc. owned New York City property securing (1) its own $222,436,500 mortgage…
My ex-spouse and I divorced years ago and split the future sale proceeds of our marital co-op, but only my ex-spouse kept living in it after our divorce. I moved out and never lived there again. When we finally sell, is my share of the gain exempt from New York's Real Property Transfer Gains Tax as a personal residence, the same as my ex-spouse's share?
Split result -- exempt for the spouse who stayed, taxable for the one who left. Robert Liberman bought a co-op apartment in 1976 that he and his wife Katherine Gill lived in as their marital home. A…
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