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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Is on-site labor to relocate and install production machinery at a Connecticut customer's plant subject to sales tax?
No, if the installation labor is separately stated on the customer's bill. The trucking, hauling, crane, and rigging company removed and relocated floor lags, installed production machines on them, an…
Could Kansas sales of all-terrain vehicles or dirt bikes qualify for the farm-machinery exemption?
No. Kansas specifically excluded all-terrain vehicles from farm machinery and equipment, and the Department applied the same result to dirt bikes. A purchaser could not issue, and a retailer could not…
Did a doctor's prescription make a computer exempt from Texas sales tax as medical equipment?
No. The computer did not qualify as exempt medical equipment even with a doctor's prescription; the Comptroller did not decide the software issue.
Did paving machines qualify for Texas's 25% sales-tax refund for manufacturing equipment when customers used them on roads and parking lots?
No. The machines were contractor equipment used to improve or repair real property, not qualifying manufacturing equipment, so the 25% refund was unavailable.
How did Texas tax a prison construction contract for the Federal Bureau of Prisons on city-owned land leased to the federal government?
Texas treated it as a federal contract: no tax was charged on materials incorporated into the realty, but the contractor owed tax on equipment used to build it.
Were payments taxable when an equipment-financing arrangement was labeled a lease for accounting purposes but operated as a loan?
No. Because the financing party never received or conveyed title or possession, the Comptroller treated the arrangement as a loan, not a taxable lease.
Were charges for an interstate private-line data system subject to Texas state and local sales tax when no channel terminated in Texas?
State sales tax applied, but local city, county, and transit taxes did not apply because the circuit qualified as interstate long-distance service.
When did tenant finish-out work count as new construction rather than taxable remodeling of Texas real property?
Initial finish-out of a true shell was new construction, but changing space after flooring, walls, or a ceiling had been installed was taxable remodeling.
How did Texas sales tax apply to long-distance service, separately stated 911 surcharges, federal excise tax, and municipal franchise fees?
Tax applied to specified long-distance service and municipal franchise fees, but not to separately stated 911 surcharges or federal excise tax.
Was a Texas fee for providing managers who trained and directed a facility's own housekeeping and laundry employees taxable?
No. The management fee was not taxable, but the management company owed sales or use tax on taxable items it used to provide the service.
Were accelerated monitoring-service charges taxable when a burglar-alarm customer terminated the contract early?
Yes. The customer had agreed to pay for the taxable monitoring term even after ending service, and tax timing followed the provider's accounting method.
Were monthly subscriptions and per-lead charges for faxed trade-lead information subject to Texas state and local sales tax?
Yes for Texas customers: both charges were taxable. No Texas tax was collected when the information was faxed to customers outside Texas.
Does an out-of-state corporation that holds a passive limited-partnership interest in a New York cogeneration project owe New York franchise tax, and if so, is it taxed under the general Article 9-A rate or the utility-specific Article 9/section 186 rate?
Yes to nexus, and it may be Article 9 instead of Article 9-A. PEC Fort Drum, Inc., a Florida corporation with no independent New York presence, held an indirect 10% foreign-corporate-limited-partner i…
Which of a printer-mailer's services — personalized mailings, label printing, electronic data processing, and packaged or custom software — are subject to New York sales tax?
Mostly taxable, with specific exemptions. Computerized Transactions Inc. asked about five printing/mailing and software services. (1) Personalizing letterheads/envelopes and giving the client the data…
Were guided educational river trips in Texas taxable even when they taught customers about river geology and botany?
Yes. Guided river trips were taxable amusement services; the rule's specific guide-service exemption covered hunting and fishing, not river trips.
Which charges at an indoor fitness and play center were taxable amusement services, and was a tumbling-style class exempt?
Passes, club cards, group trips, parties, games, food, and merchandise were taxable; the creative-movement class was exempt sport instruction.
Is a company that leases furnished New York City apartments to tenants for a month or more a taxable 'hotel,' and which of its extra charges are taxable?
Not a hotel — the rent is exempt, but several add-on charges are taxable. KPMG Peat Marwick asked whether 'XYZ,' which leases furnished New York City apartments to residents for terms of one month to …
Does the 5% special tax on passenger-car rentals apply when a taxi company leases cabs to drivers by the shift?
Yes. BEJ Taxi Corp. leases cabs to drivers in Albany County on a shift basis (6-12 hours) and pays the registration, insurance and other nontaxable charges. The Department held the 5% special tax on p…
How did SC Revenue Ruling 91-3 tax hotel-guest valet laundry charges, the cleaner's charge to the hotel, and cleaning of hotel-owned linens?
The independent cleaner's charge to a hotel for cleaning a guest's clothing was a nontaxable wholesale sale for resale. The hotel's valet-service charge to the guest was a taxable additional guest cha…
Did using personal computers and diskettes change whether an advertising agency's preliminary and finished artwork was taxable?
No. The work and client approval controlled: preliminary art was nontaxable, finished art was taxable, and the transfer medium did not decide the result.
Did renting a licensed trailer with an empty water tank trigger Texas motor vehicle rental tax?
Yes, if the contract lasted 180 days or less. The owner had to collect the historical 6% motor vehicle rental tax and obtain a rental tax account. A single contract lasting more than 180 days was trea…
Is rent for leasing an entire parking garage taxable, and can a building owner who leases the garage to serve tenants treat that rent as a nontaxable purchase for resale?
Taxable, with only a partial resale credit. A building owner wanted to lease an entire adjoining parking garage — with the garage owner continuing to operate and maintain it — to provide parking for i…
Was hazardous-waste cleanup performed under a state environmental mandate considered 'voluntary' and excluded from Connecticut sales tax?
No under this historical ruling. The exclusion in Conn. Gen. Stat. § 12-407(2)(i)(I) applied only when a company acted solely on its own initiative. Cleanup following a federal or state agency mandate…
How could a computer lessor recover Texas sales tax paid to the prior owner of a supplier business on computers bought for leasing?
The purchaser could seek a refund or an assignment of the seller's refund right, or claim a return credit; local-tax credits required matching jurisdictions.
Did the 1991 federal luxury tax enter the taxable sales price for Texas motor vehicle tax?
No, when the federal luxury tax was separately stated and identified on the invoice. In that circumstance, the 1991 letter said it did not become part of the vehicle's taxable sales price and was not …
Was an extended service contract sold with a motor vehicle taxable in Texas?
The contract itself was not subject to motor vehicle tax or limited sales and use tax. Repair and replacement parts used under it remained taxable: separately billed parts were taxed to the customer, …
Were refrigeration units bought separately and attached to trailers after the vehicle sale subject to motor-vehicle tax or limited sales and use tax?
They were subject to limited sales and use tax, not motor-vehicle tax, because the accessories were separately purchased and attached after the trailer sale.
Were installation, software, and communication charges taxable when sold with a Texas information service?
Yes. The Comptroller treated all three charges as part of the taxable information service whether billed separately or as one lump sum.
Were literary-agent fees taxable Connecticut sales-agent services when agents helped authors place manuscripts with publishers?
No. Literary agents represented authors in approaching publishers and were paid through retainers or commissions, but the manuscript was the author's intellectual product and was not tangible personal…
Were charges for guided tours of a choose-and-cut Christmas tree farm subject to Texas sales tax?
Yes. The Comptroller treated the guided tours as taxable because they were not primarily educational, although an exempt organization could buy admission for its members with an exemption certificate.
Could an association obtain a Texas sales-tax refund for monthly publications prepared and mailed to members by an outside publisher?
No. The Comptroller treated the association as the publisher rather than a purchaser of publications, so the referenced court case did not produce a refund.
Did an aircraft modified and used for aerial photography qualify for Texas's manufacturing-equipment exemption?
No. The Comptroller treated the aircraft as support equipment because it was not used directly to manufacture a photograph.
Could a retailer claim a Texas sales-tax bad-debt credit for an estimated loss when it sold installment receivables without recourse?
No. An estimated bad-debt allowance did not identify the customers who would default; relief required a qualifying actual bad debt, such as a recourse account returned after default.
How did Texas local sales taxes apply to residential and commercial natural-gas and electricity use, and to exemption certificates?
Commercial utility use was taxable and residential use was generally exempt for special-purpose districts, but a city could tax residential use if it retained or reimposed that tax.
Is J.P. Morgan's proposed new New York investment subsidiary -- formed under the federal Bank Holding Company Act's section 4(c)(7) to make leveraged-buyout and venture-capital securities investments -- taxed as an Article 32 banking corporation, or under general Article 9-A?
It depends on year-end facts, not the federal charter. J.P. Morgan & Co. Incorporated ('JPM'), which owns 100% of Morgan Guaranty Trust Company of New York ('MGT') and files combined Article 32 return…
When were an advertising agency's internal-work commissions and radio or television production charges taxable in Texas?
Commissions tied to taxable in-house finished art were taxable, while preliminary art and third-party acquisition commissions were not; commercial production was generally nontaxable.
How did Texas tax advertising-agency work related to finished art, and how should fixed-price billing adjustments affect collected tax?
Work related to finished art was taxable, including post-approval copywriting; billing records and any client tax adjustment had to match the final taxable charge.
How did Texas tax garbage-collection costs when Houston reimbursed a homeowners association and residents paid the difference?
If residents were billed the unreimbursed difference, tax applied only to that amount; if the association absorbed it, the contractor's entire charge was taxable.
Buffalo Brass Company, Inc., a foreign corporation that elected both federal and New York S-corporation status, asks whether its shareholders must add back to their New York adjusted gross income their pro rata share of the deduction Buffalo Brass took on its federal return for the new corporate-level franchise tax and surtax that Chapter 190 of the Laws of 1990 imposed on New York S corporations.
No add-back is required. The Department ruled that the new corporate-level tax and temporary surtax that Chapter 190 of the Laws of 1990 imposed on New York S corporations under Article 9-A are 'franc…
Lionel E. and Maxine Gordon, Florida residents who sold a Long Island telephone-answering business, ask whether payments Lionel Gordon received from the buyer under a noncompetition agreement are New York source income to him as a nonresident, even though he receives them in monthly installments long after the sale.
Yes. Restrictive-covenant payments tied to the sale of a New York business are New York-source income to a nonresident seller, taxable as received even years after the sale. Because the covenant's val…
Were Shaved Ice Flavor Packets exempt food products for Texas sales-tax purposes?
No. The Comptroller treated the flavor packets as taxable because packaged soft drinks and diluted juices were excluded from the rule's food-product definition.
Were separately stated port charges on passenger tickets for an entertainment vessel subject to Texas sales tax?
Yes. The port charges were part of the selling price of the taxable amusement service, so tax applied to the total admission price including those charges.
Must a title-holding company that sells club-membership stock register as a vendor, and does the assessment statute of limitations run if it never filed sales-tax returns?
It must register, and no time limit protects it. St. George Operating and Improvement Co. is a title-holding company whose golf course is leased to the St. George Country Club; new members must buy st…
Does a bookstore have to charge New York sales tax on the sale of bibles?
Yes. Lauriat's, Inc., which operates a chain of retail bookstores in New York, asked whether selling bibles is taxable. The Department held that bibles, like any other books, are tangible personal pro…
Is renting a self-service mini-storage unit taxable as a storage service, or exempt as a rental of real property?
Not taxable. Elbridge Mini Storage rents self-service mini-storage rooms — each a specific, enclosed unit identified by number, dimensions and square footage, rented month-to-month with the tenant put…
Are reduced campground fees for storing unoccupied camping trailers and recreational vehicles subject to Texas sales tax?
Yes. Texas treated the charges as taxable storage of an unoccupied trailer or recreational vehicle, even when the vehicle remained at a campsite.
Does Connecticut real estate conveyance tax apply when a general partnership converts to a limited partnership and records a deed while remaining a continuing partnership?
No on these facts. The same partners kept the same profit, loss, and capital percentages; the same business continued; and the real property remained held by a partnership treated as continuing under …
When were printed inserts for Texas newspapers or magazines exempt from sales tax?
Newspaper inserts were exempt when delivered by the printer to the newspaper distributor with supporting documentation; magazine inserts were generally taxable.
Is a monthly minimum charge for credit information taxable even when few or no reports are actually issued, and does it matter if the reports are oral or written?
Yes, the minimum charge is taxable. CCB Management of Texas provides credit-information services and imposes a monthly minimum: if a subscriber orders less than $30 of reports in a month, it bills the…
Were separately listed design, engineering, manufacturing, and performance-testing charges taxable when a manufacturer sold custom equipment?
Yes. Every listed charge was part of producing and selling the custom equipment, so design, engineering, manufacturing, and testing were all taxable.
Must a Texas campground charge sales tax for storing an owner's unoccupied trailer or recreational vehicle?
Yes. The Comptroller said a campground's charge for storing an unoccupied trailer or recreational vehicle was taxable, whether or not water and electricity were connected.
When a second-tier subsidiary's dividend is paid directly to the ultimate parent (skipping the middle-tier parent's books by oversight), can the ultimate parent still exclude it from New York entire net income as income from subsidiary capital?
Yes, once properly recharacterized. Corporation S (wholly owned by D) declared a dividend to D, its shareholder of record, but with D's informal agreement the cash was paid directly to D's parent P --…
Can a corporate merger involving a company that owns Connecticut real property trigger the controlling interest transfer tax even though the real estate passes by operation of law without a deed?
Yes. Shareholders acting in concert transferred more than 50% control of the disappearing corporation and received parent stock, notes, and cash. The Connecticut real property vested in the surviving …
Were a Texas valet-parking company's hourly charges taxable, or did supplying employees qualify as exempt temporary help?
The total charge was taxable motor-vehicle parking service. Supplying valet workers did not qualify as temporary help under the facts described.
Which tax-preparation, electronic-filing, return-review, and refund-anticipation-loan charges were taxable in Texas?
Standalone electronic-filing fees were taxable; return preparation, return review, prepaid interest, and electronic filing provided at no charge were not.
What did the published correction say about whether an acute rehabilitation center's patient facilities were residences for utility-tax purposes?
It corrected the prior letter to say the facilities were not residences, even though patients might be confined for more than 30 days; it did not reproduce the tax conclusion.
If I got founding stock in a corporation I helped create as an employee, does it qualify for Nebraska's capital gains exclusion?
Yes, it can. Under Revenue Ruling 22-90-4, stock received in the creation of a corporation by an employee-investor may qualify for the capital gains income adjustment (exclusion) provided by Neb. Rev.…
Was BARLEYGREEN powder made from barley-leaf juice, brown rice, and kelp exempt from Texas sales and use tax?
Yes. The Comptroller classified BARLEYGREEN as a powdered food product and said Texas sales tax did not need to be collected on its sale.
What publication-refund items did Texas audit guidance allow or disallow after the Texas Monthly case?
The memo allowed qualifying publisher-created tax, reference, and travel publications, but disallowed reproductions, information services, printing, lists, and maps.
Does a Virginia temporary-staffing company with no office or property in New York owe Article 9-A franchise tax simply because it places its own temporary employees to work at New York client sites?
Yes. Quantum Resources Corporation, a Virginia-based provider of temporary clerical and technical personnel, had no offices, capital, or property of its own in New York -- all billing, payroll, and co…
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