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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Our partnership owns seven Manhattan properties. We're proposing to exchange them for land under a building owned by a related corporate subsidiary, 1133 Building Corp. Both entities are ultimately owned (through different family trusts) by the same thirteen family members ('the Second Generation Children'), but the ownership chains aren't perfectly identical -- our partnership is 99.9% owned by them equally through one set of trusts plus a 0.1% sliver owned by a corporation that only four of the thirteen family members own, while 1133 Corp. is 100% owned by them equally through a different set of trusts. Since the same family effectively owns both sides before and after this exchange, is it exempt from the Real Estate Transfer Tax and Real Property Transfer Gains Tax as a 'mere change of form,' or does the slight difference in cross-ownership percentages make part of it taxable?
Mostly exempt, with a tiny taxable sliver -- the mirror image of a companion ruling covering the other side of the same exchange. Eastern Pork Products Company ('Petitioner'), a New York general…
Our company owns land under a Manhattan building. We're proposing to exchange it for seven other Manhattan properties owned by a related partnership, Eastern Pork Products Co. Both our company and Eastern Pork are ultimately owned (through different family trusts) by the same thirteen family members ('the Second Generation Children'), but the trusts and ownership percentages aren't identical -- our company is 100% owned by them equally through one set of trusts, while Eastern Pork is 99.9% owned by them equally through a different set of trusts, plus a small sliver owned by a corporation that only four of the thirteen family members own. Since the same family effectively owns both sides before and after this exchange, is it exempt from the Real Estate Transfer Tax and Real Property Transfer Gains Tax as a 'mere change of form,' or does the slight difference in cross-ownership percentages make part of it taxable?
Mostly exempt, with a tiny taxable sliver -- New York taxes only the fraction of beneficial ownership that actually changed hands. 1133 Building Corporation, a wholly-owned subsidiary of The Durst…
Under Florida's 1995 rules, how were monthly dial-up Internet access, setup charges, residential use, business use, and homepage advertising taxed?
Monthly access was subject to gross receipts tax for all Florida subscribers and to sales tax and county surtax for business users. Nonbusiness residential access was sales-tax exempt if documented.…
Is the portion of a Utah employee's gross wages that the employee contributes to an employer's 401(k) plan subject to Utah income tax at the time of contribution, or is it deferred like it is for federal income tax purposes?
Deferred, not taxed at contribution. Because employee contributions to a 401(k) plan are tax-deferred for federal income tax purposes, those same contributions are also deferred for Utah income tax…
If a cellular phone retailer sells a phone cheap (or gives it away) to get a customer to sign up for a carrier's service contract, is sales tax owed on the full contract price, and can the retailer buy the phone tax-free for resale?
A retailer can buy cellular phones tax-free for resale, but not if it keeps a phone for its own use (then it owes tax on its cost). If the retailer sells the phone alone, tax applies to whatever…
Who owed California use tax when an MTE sublessee's trailer use failed the interstate-commerce exemption?
The prime lessor. California attributed the lessee's and sublessee's use to the MTE lessor-consumer, so the lessee-sublessor did not owe the equipment use tax.
Was a refrigerated truck exempt after a power-of-attorney holder took California delivery and then transported it nonstop to Costa Rica?
No. Written authority made the recipient a purchaser representative, so California delivery preceded irrevocable export commitment despite later transport.
Does a mail-order company that has no property or payroll in Texas, but uses an independent contractor in Texas to handle customer calls and sometimes take orders, have nexus for Texas sales and franchise tax?
Yes. The Comptroller ruled the company has nexus for Texas sales tax under Tex. Tax Code § 151.107(a)(1), (2) and (7) because it uses the Texas-based independent contractor to carry out its everyday…
Does the official PDF for South Carolina's September 1995 policy index contain the promised document entries?
No. The notice says a policy-document index was 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 September 1995 policy-document citator contain actual status entries?
Yes. The 27-page source lists affected Revenue Rulings, Revenue Procedures, Private Letter Rulings, Technical Advice Memoranda, and Information Letters, with cumulative-reference and nonresident…
Were a wholesaler's separately stated product, storage, handling, delivery, and retail-support charges all exempt when the retailer bought products for resale?
Utah exempted tangible products bought by retailers for resale when the wholesaler obtained an exemption certificate. Items the retailer consumed—such as merchandise used in advertising, displays,…
Did a corporate officer's 1989 bankruptcy discharge California tax liabilities for periods with no filed returns?
No. Staff concluded that none of the liability was discharged because required returns were not filed and the record did not show timely scheduling or notice to California.
Was a California tax guaranty invalid because the signed form omitted its date and place of execution?
No. Staff said the written, signed guaranty remained enforceable, though future undated or location-blank forms should be returned to the signer for completion.
Did California violate the bankruptcy stay by assessing tax periods that began after a Chapter 13 filing and continued through later conversions?
No. Staff said the liabilities remained post-petition through conversion to Chapters 11 and 7, so the assessments were valid; refunds still required timely claims.
Does the Texas Comptroller issue sales tax exemption certificates or letters directly to foreign diplomats stationed in Texas?
No. The Comptroller's office does not issue exemption certificates or letters of exemption to foreign diplomats. Instead, diplomats are told to get a Tax Exemption Card from the U.S. Department of…
For the new manufacturing-equipment lease exemption starting October 1, 1995, what makes an operating lease qualify, and can an existing lease be renegotiated to qualify?
To qualify for Texas's manufacturing-equipment lease exemption, a lease must be a single operating lease contract with a term of at least one year (365 days) that starts on or after October 1, 1995,…
How did California tax parts and labor used to repair and recondition a hydroelectric turbine that remained attached or had to be reaffixed?
The work was a fixture-repair construction contract. Separately billed parts were retail sales; under a lump-sum contract, the responsible contractor consumed the parts.
Does a building used to sort, repack and cold-store imported flower bulbs for resale qualify for the Article 9-A investment tax credit as property principally used in the production of goods by processing?
No. The investment tax credit under section 210.12 requires the property to be principally used in the production of goods by manufacturing, processing, assembling, refining, horticulture, etc. K.…
Did a response card with less than 50 percent promotional content and a logo-bearing reply envelope qualify as printed sales messages?
No. The card's principal purpose was collecting customer information, and the loose reply envelope remained taxable unless physically affixed as an integral component.
Were preloaded, nonreusable Visistat skin staplers exempt from sales tax?
Yes. After the seller clarified that the stapler was prefilled and not reusable, California treated it as a container sold with exempt medicinal contents.
Were carpet swatch books resale samples or marketing aids, and how did the transfer price affect the manufacturer's tax role?
Swatch books were marketing aids, not carpet samples. A transfer below 50% of purchase price made the transferor the consumer; a transfer at 50% or more was a retail sale unless the recipient resold…
How does California distinguish resale carpet samples from swatch-book marketing aids, and when does transferring a marketing aid trigger tax?
Area rugs or carpets held for demonstration and later sold are samples. Carpet remnants bound into swatch books are marketing aids: a transfer below 50% of purchase price generally makes the…
Were preloaded, nonreusable Visistat skin staplers exempt from California sales and use tax?
Yes. Once the company confirmed the staplers were sold prefilled and could not be reused, California treated them as exempt containers sold with exempt medicine.
Did aircraft qualify for the common-carrier exemption when the owner leased them to an air-taxi operator but personally used or rented them back?
No on the documented facts. The Cessna had extensive personal use, and the Beechcraft's owner flights were recorded as nonrevenue with separate pilot charges, leaving common-carrier use below 50%.
Is feed purchased for dogs held for breeding purposes (whose puppies are sold in the regular course of business) exempt from Texas sales tax?
Yes. Feed purchased for dogs held for breeding purposes, when the offspring are held for sale in the regular course of business, may be bought tax free by giving the seller an exemption certificate,…
Starting October 1, 1995, does Texas sales tax apply to food, meals, soft drinks, and candy sold to inmates confined in a jail, prison, or other correctional facility?
Yes. Effective October 1, 1995, House Bill 462 added subsection (g) to Texas Tax Code Section 151.314, which removes food, meals, soft drinks, and candy sold to a person confined in a correctional…
For a new-home landscaping contract that spans the October 1, 1995 law change, is labor taxed based on when the work was actually performed or based on the billing/acceptance date?
Based on when the labor was actually performed, not the billing or acceptance date. Effective October 1, 1995, Senate Bill 640 amended Section 151.0048 so that landscaping purchased by a contractor…
Under Florida's 1995 rules, how were tiered Internet access, startup charges, residential and business users, county reporting, and separately stated gross receipts tax treated?
Monthly Internet access was subject to gross receipts tax for all Florida subscribers and to sales tax and surtax for business users. Nonbusiness residential access and one-time startup charges were…
Could a photographer exclude a $2 Little League donation from the taxable price of a mandatory $17 photograph package?
No, on the letter's expressly assumed facts. If the package could not be bought for $15 by withholding the added $2, the mandatory selling price was $17 and the full amount was taxable, regardless…
Did an out-of-state seller have to collect California use tax after sending representatives to install pay telephones in California?
Yes. Staff said entering California to install the seller's tangible property made it a retailer engaged in business in the state.
Do clean rooms and equipment used to manufacture mobile telephones qualify for Texas's semiconductor-fabrication cleanroom exemption?
No. The Comptroller told this mobile-telephone manufacturer that the cleanroom exemption added to Section 151.318, effective October 1, 1995, only covers property used to manufacture, process, or…
Is a credit/debt counseling service, where the provider advises clients on repairing credit, building a budget, and negotiating with creditors, taxable in Texas?
No. The Comptroller's office told this credit counseling provider that the service is not taxable. If tax was already collected and remitted on the service, the provider may amend its sales tax…
The state audited how I report oil and gas taxes and the report is full of my proprietary contract data — can a co-owner force the Department to hand it over?
Yes — a co-owner with a legal interest in the audited property can obtain the audit report, even though it contains the producer's proprietary contract data. The Department and State Land Office…
Are aircraft maintenance manuals that contain the procedures and instructions mechanics must follow exempt from Texas sales and use tax?
Yes, at least for the manual described in this letter. The Comptroller told the requester that a manual containing the maintenance procedures and instructions an aircraft mechanic must follow…
Is electricity used in a separately metered manager's office at an apartment complex taxable, or does it count as residential (exempt) use?
Taxable. The Comptroller told the utility and the apartment complex that electricity supplied to a separately metered office not occupied as a residence by an on-site manager is a taxable commercial…
When was a worthless account 'charged off' for California sales-tax bad-debt purposes?
When the taxpayer charged it off in the accounting records—not only later when the income-tax return claiming the bad debt was filed.
Does a Texas Youth Commission facility's canteen have to charge sales tax on food, soft drinks, and candy sold to the children living there, and what about sales to staff or fundraiser sales?
No tax on sales to the children in the facility. The Comptroller ruled that a new law taxing food, soft drinks, and candy sold to inmates of 'correctional facilities' (effective October 1, 1995)…
For Rhode Island's research credit, did 'base period research expense' mean the federal base amount, and could a short first period prorate that base?
The statutory term meant the federal 'base amount' under IRC § 41(c), but the base amount was not prorated. The credit used the amount of qualified Rhode Island excess research expense actually…
Was a California sale to a common carrier exempt under section 6385 if the carrier skipped any Regulation 1621(b)(1) condition?
No. All four Regulation 1621(b)(1) conditions had to be met for that exemption, although a different out-of-state-delivery exemption could apply on different facts.
A seller ships forms into Texas for a customer who will export them to Mexico. The customer's exemption certificate isn't enough to cover the purchase — what are the options for handling the transaction without charging Texas tax?
The certificate the customer sent wasn't sufficient by itself, but the Comptroller described several ways to avoid Texas tax on goods purchased for export to Mexico: the customer can give an…
Does the Texas exemption for services performed on certain exempted tangible personal property (Tex. Tax Code Sec. 151.3111) apply once that property becomes a fixture or improvement to real property, such as a steam boiler installed in an electric generating plant?
No. The Comptroller's office told the taxpayer that the Sec. 151.3111 exemption for services on certain exempted tangible personal property does not extend to property once it becomes a fixture or…
Is a company that provides workplace safety and loss control consulting services to insurance-related and non-insurance clients providing a taxable service in Texas?
Yes, generally. The Comptroller's office told this safety and loss control consulting company that its services are taxable 'insurance services' under Rule 3.355 both when paid for by an insurance…
Is equipment that a company builds and uses to remediate (clean up) contaminated soil at natural gas pipeline metering sites subject to Texas sales/use tax?
The soil remediation service itself is not taxable, but the Comptroller concluded that the equipment purchased or fabricated to perform that service is taxable, because on the facts presented the…
For goods shipped into California F.O.B. destination, did sales tax or use tax apply, and how did a separate title clause affect the result?
The sale occurred in California unless the contract passed title earlier outside the state. A participating California office made sales tax apply; without one, use tax applied.
How did title clauses and F.O.B. destination terms determine whether an incoming California transaction bore sales tax or use tax?
An explicit title clause controlled first. Without one, F.O.B. destination placed the sale at delivery; California office participation then determined sales versus use tax.
New York Advisory Opinion TSB-A-95(37)S: When a captive auto-leasing company buys already-executed vehicle leases from unaffiliated dealerships (via automatic assignment after approval), is the leasing company responsible for collecting the sales tax on those leases?
No, not for the original lease -- the dealer, as the original lessor, bears that responsibility. General Electric Capital Auto Lease, Inc. ("GECAL") buys motor vehicle leases from independent,…
Did a one-time purchase of used business and manufacturing assets from a Utah facility qualify for Utah's isolated-or-occasional-sale exemption?
Yes, conditionally. Utah said the described purchase of used business property and manufacturing equipment appeared to qualify as an isolated or occasional sale, as long as the seller was not in the…
My law firm bills clients for out-of-pocket costs like copying at cost with no markup — do I owe gross receipts tax on those reimbursements?
Yes — a law firm's reimbursed photocopying charges are taxable gross receipts, because the firm wasn't acting as its client's agent when it bought the copies. Francis & Starzynski, P.A. didn't own a…
Did a producer owe sales tax on charges for creating client-owned master tapes, window dubs, edited masters, and safety masters before the client duplicated a video series?
No, assuming the series was a qualified motion picture. The producer consumed tape and equipment, while the client's later California release-print sales were taxable.
What keeper fees did California staff calculate under the collection statutes in effect in 1995?
Staff calculated a $300 first-day maximum for installation plus three keeper shifts, and $246 for each later day, rejecting an unsupported increase in the daily custody fee.
How did South Carolina interpret the 1995 credit for hiring a recipient of AFDC assistance?
The Department concluded that the credit could be as much as $5,000 for wages paid to each qualified employee per year. The notice also quotes statutory rates of 20%, 15%, and 10% for the first…
Does a publisher that packages its own books together with purchased videotapes into kits owe sales tax on the wrapping and packaging supplies used?
No. The Comptroller ruled that tax is not due on the packaging supplies used to make the kits, even though the publisher did not produce the videotapes included in the kits, because Rule 3.314(e)…
If a construction contract to expand a chemical or petrochemical plant's capacity was signed before October 1, 1995 (when Senate Bill 640 took effect), is the labor taxed under the old law or the new law?
It depends on when the labor was actually performed, not when the contract was signed or when title/acceptance happens. Labor performed before October 1, 1995 is taxable, even if billed later or…
Was oxygen produced onsite and sold in vapor form through a pipeline to a glass-container manufacturer exempt under section 6353?
Yes. The oxygen was gas delivered to the purchaser through pipes, and title passed at a pipeline junction outside the manufacturer's building, so the sale was exempt under section 6353.
Did seven California sales calls by an out-of-state manufacturer's salesperson create a use-tax collection duty?
Yes. The 1995 opinion said section 6203 imposed no minimum visit count when a representative entered California to make sales calls.
Does a paper machine made of interconnected, bolted-down manufacturing equipment count as real property (an improvement to realty), or does it stay tangible personal property for Texas tax purposes?
It stays tangible personal property. The Comptroller's Tax Policy Division toured a paper manufacturing facility and agreed that the 'paper machine' — actually a series of interconnected machines…
Was a note exempt from Florida documentary stamp tax when the borrower executed and delivered it aboard a vessel outside Florida territorial waters and later returned it to Florida?
Yes. The note was not taxable when executed and delivered aboard a vessel outside Florida territorial waters, even though related documents, funding, payments, safekeeping, and a UCC filing occurred…
Were bindery charges for cutting or punching customer-furnished printed paper taxable, and what related printing transactions were exempt or taxable?
Cutting and punching were taxable fabrication for consumers, but not when performed for resale or qualifying exempt periodicals. The source also gives detailed rules for labels, printing aids,…
Is a computerized psychological-testing and scoring service for psychological professionals a taxable data processing service in Texas?
No. The Comptroller's office told the taxpayer that scoring and interpreting psychological tests and personality inventories for psychological professionals — even though a computer is used to speed…
Do utilities used in apartment complex manager's offices, recreation rooms, laundry rooms, outside lighting, and swimming pools qualify for a Texas sales tax exemption, and are utility studies always required when a meter serves both taxable and exempt uses?
It depends on the meter setup. Since 1979, the Comptroller has treated utilities for recreation rooms, laundry rooms, outside lighting, and swimming pools as part of the exempt residential units. A…
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