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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As sole shareholder of the company that owns and operates my newspaper, I plan to contribute the newspaper's real estate (still subject to a $25 million mortgage) into the company for no additional consideration, to help stabilize the business -- and separately, we're planning to set up an employee stock ownership plan that will eventually hold 20% of the company's stock. Does either step trigger New York's Real Property Transfer Gains Tax?
Neither step triggers the gains tax -- the real estate contribution is an exempt mere change of identity, and the 20% ESOP stock issuance never reaches the 50% controlling-interest threshold in the fi…
Is Utah's new petroleum environmental surcharge included in the taxable purchase price when calculating Utah sales tax on petroleum products?
No. The environmental surcharge is treated as an excise tax, not part of the taxable purchase price, so it is not subject to Utah sales tax -- the Commission reasoned by analogy to the Waste Tire Recy…
When out-of-state vendors sell merchandise through airport video-terminal kiosks that ship goods to New York customers, do the vendors have to collect New York sales tax, is the kiosk operator liable as a co-vendor, and do the vendors owe New York income or corporate franchise tax?
Mixed answer across three taxes. Mitchell Sorkin's client planned computerized advertising video terminals at airports (within and outside New York) letting travelers direct-dial out-of-state vendors'…
For gas producers, are meter-maintenance and meter-installation fees taxable, and are chart-integration services (personalized well analyses) taxable?
The meters qualify for the production exemption, and the well reports are a nontaxable personal information service. The Independent Oil & Gas Association of New York asked about three charges its mem…
Were an accounting firm's economic and financial litigation-support services taxable as business analysis or management consulting in Connecticut?
No under this historical ruling. The accounting firm reviewed case materials, researched financial and business data, formed expert opinions, prepared exhibits and testimony, and assisted attorneys wi…
Could a debt collector accept a Texas sales-tax exemption certificate from a bank holding notes formerly connected to the FDIC or FSLIC?
No. The bank, not the FDIC, was the debt-collection client, and the letter found the bank was not a tax-exempt governmental entity.
When a company buys taxable information reports delivered to offices both inside and outside New York, how much sales tax applies?
Only the New York-delivered portion is taxed, allocated by where delivery occurs. Pfizer, Inc. buys taxable information-service reports (professional research and marketing advice) delivered to its of…
When a company buys taxable information reports delivered to offices both inside and outside New York, how much sales tax applies?
Only the New York-delivered portion is taxed, allocated by where delivery occurs. Bristol-Myers Squibb Company buys taxable information-service reports (professional research and marketing advice) del…
When a company buys taxable information reports delivered to offices both inside and outside New York, how much sales tax applies?
Only the New York-delivered portion is taxed, allocated by where delivery occurs. Kraft General Foods, Inc. buys taxable information-service reports (professional research and marketing advice) delive…
When did SC Revenue Ruling 91-2 allow free bingo, and could licensed promoters or nonprofit organizations give players free cards?
Licensed bingo promoters and licensed nonprofit organizations could not give away cards or pay any part of a player's card cost. Unlicensed persons could conduct bingo without charging only if players…
When is a Nebraska financial institution tax return due when the bank has a short tax year?
By the 15th day of the third month after the short year ends. Under Revenue Ruling 24-90-1, when a financial institution has a short tax year, its Nebraska financial institution tax return must be fil…
Is application software that a vendor analyzes and adapts to a customer's system taxable in New York, and are the software maintenance charges taxable?
No — neither the software nor the maintenance is taxable. Answer Systems, Inc., an application-software maker, analyzes each customer's requirements and modifies its software to fit the customer's env…
When a company rents out cranes and other self-propelled construction machinery, can it use the reduced motor-vehicle rental tax computation?
Only partly, and only if you separate the charges. Clark Rigging & Rental Corp. rents self-propelled construction machinery — truck cranes, boom trucks, tractor-trailers, trailers, and pick-ups — and …
Could a vending-machine operator obtain a refund of Texas sales tax remitted on newly exempt 25-cent bulk-vending sales?
It depended. Tax paid from the operator's own gross receipts could be refunded, but tax collected from customers had to be returned to them first.
Which charges for developing Texas video training seminars, manuals, master tapes, and copies were taxable?
Seminar and manual development was not taxable, but the developer owed tax on its materials and had to tax copies of master tapes, manuals, and other training materials.
Did Texas county sales tax apply to residential use of gas and electricity?
No. The Comptroller said county tax followed the same guidelines as state tax, so county and state tax should not be collected on residential electricity use.
How did Texas sales tax apply to a contractor expanding an underground sprinkler system at an apartment complex?
Labor to improve the residential property was not taxable; material-tax treatment depended on whether the contractor used a lump-sum or separated contract.
How did Texas tax rental of a semitrailer with a permanently attached CAT scanner and related services?
A contract over 180 days was a lease, so no tax was due on monthly charges if vehicle tax had already been paid on the trailer and all attached equipment. A shorter contract was a taxable rental requi…
How did Texas apply sales and use tax to demolition, site preparation, equipment, freight, and contracts for a new manufacturing project?
The treatment varied: complete demolition and new-construction labor were generally nontaxable, while debris removal, taxable materials, equipment, and some installation charges were taxable.
Which purchases could a property manager make tax-free in Fannie Mae's name under the reviewed Texas management contract?
Items bought in Fannie Mae's name and incorporated into or used on the managed property could qualify; the manager's own phone, office supplies, and equipment did not.
Did transferring accounts receivable under a federal bankruptcy-court order accelerate unpaid Texas sales tax?
No. The Comptroller declined to accelerate the remaining tax under Rule 3.302(c), and the court-authorized collector could continue cash-basis reporting.
Was an optional, nonrefundable damage-waiver fee on a Texas tuxedo rental taxable?
Yes. The Comptroller treated the waiver fee as a prepayment toward taxable restoration or repair services, so the rental business had to tax it.
Was feed for a rancher's cow dog exempt from Texas sales tax when the dog was not used exclusively on the farm or ranch?
No. Feed for a working cattle dog was exempt only if the dog was used exclusively on the farm or ranch; this dog's off-farm use made its food taxable.
How did Texas tax shared title-plant costs, management services, and information sold to shareholders and nonshareholders?
A jointly owned title plant paid tax on taxable inputs but did not tax shareholder cost reimbursements; taxable information sold to nonshareholders remained taxable.
Were separately stated insurance charges for goods shipped to customers taxable in Texas?
Yes. Insurance charges on shipped goods were taxable even when separately stated because the Comptroller treated them as part of the sales price.
What qualified as a written contract of sale under SC Revenue Ruling 91-1's historical 1987 long-term-capital-gain transition rule?
A qualifying contract had to become legally binding between January 1 and June 22, 1987, identify the parties, describe the property, state the consideration, and require the seller to convey title. O…
Could a Texas direct-payment-permit holder use its certificate and seek an Enterprise Zone Project tax refund on construction purchases?
Yes for a separated contract, but not a lump-sum contract. The permit holder could accrue tax on materials and seek a refund for qualifying purchases and new jobs.
When a company covered by Nebraska's Employment Expansion and Investment Incentive Act opens a new location partway through the year, whose taxable year does it use to figure employment and investment?
The company's taxable year as a whole. Under Revenue Ruling 29-90-2, for the Employment Expansion and Investment Incentive Act the calculation of employment and investment must be determined based on …
Do I owe Nebraska income tax on unemployment or sickness benefits I got from the Railroad Retirement Board?
No — they're subtracted out. Under Revenue Ruling 22-90-3, unemployment or sickness insurance benefits paid by the Railroad Retirement Board are proper Nebraska adjustments decreasing federal adjusted…
When a company buys taxable information reports delivered to offices both inside and outside New York, how much sales tax applies?
Only the New York-delivered portion is taxed, allocated by where delivery occurs. American Home Products Corporation buys taxable information-service reports (professional research and marketing advic…
When a company buys taxable information reports delivered to offices both inside and outside New York, how much sales tax applies?
Only the New York-delivered portion is taxed, allocated by where delivery occurs. American Home Food Products, Inc. buys taxable information-service reports (professional research and marketing advice…
When a company buys taxable information reports delivered to offices both inside and outside New York, how much sales tax applies?
Only the New York-delivered portion is taxed, allocated by where delivery occurs. Colgate-Palmolive Company buys taxable information-service reports (professional research and marketing advice) delive…
When a company buys taxable information reports delivered to offices both inside and outside New York, how much sales tax applies?
Only the New York-delivered portion is taxed, allocated by where delivery occurs. Sterling Drug, Inc. buys taxable information-service reports (professional research and marketing advice) delivered to…
When a company buys taxable information reports delivered to offices both inside and outside New York, how much sales tax applies?
Only the New York-delivered portion is taxed, allocated by where delivery occurs. Conopco, Inc. buys taxable information-service reports (professional research and marketing advice) delivered to its o…
When a company buys taxable information reports delivered to offices both inside and outside New York, how much sales tax applies?
Only the New York-delivered portion is taxed, allocated by where delivery occurs. Carter-Wallace, Inc. buys taxable information-service reports (professional research and marketing advice) delivered t…
Did an out-of-state manufacturer become subject to Connecticut corporation business tax by leasing promotional video machines to Connecticut retailers?
Yes. The machines' advertising, order-form, and out-of-state order-solicitation functions were protected solicitation-related activities under Public Law 86-272, and unrelated contractors' repair visi…
Were Texas repair charges for exempt medical equipment and prescribed therapeutic appliances taxable?
No. Repairs to exempt medical equipment were exempt, and therapeutic-device repairs were exempt when the individual used the item under a practitioner's prescription.
How did Connecticut historically tax services provided to condominium associations with both owner-occupied and leased units?
The 1990 ruling used three categories. Some services -- including landscaping, maintenance, janitorial, exterminating, design, locksmith, window cleaning, pool work, and tangible-property repair -- we…
Were other states and their political subdivisions exempt from Texas sales and use tax on purchases made in Texas?
No. The Texas governmental exemption did not cover other states or their political subdivisions, so they owed state and applicable local tax.
Did the Texas Monthly publication-refund decision entitle an online database provider's customers to refunds of tax on search services?
No. The company sold taxable information services, not periodicals or other publications covered by the Texas Monthly refund treatment.
On a short-period Nebraska return under the Employment Expansion and Investment Incentive Act, do I change how I figure the qualified-employee and qualified-investment credits on Form 3800N?
Modify the employee side, not the investment side. Under Revenue Ruling 29-90-1, for the Employment Expansion and Investment Incentive Act the Qualified Employee Calculation on Form 3800N must be modi…
Does machinery a recycler uses to process construction debris into new products qualify for New York's production exemption?
Only the machinery used mostly to make products that are actually sold qualifies. Vigliotti Recycling Corp. accepts mixed construction and demolition debris for a fee and converts it into wood chips, …
If a club makes new members buy stock and bonds in a related land-holding company, must that company register and collect sales tax on the sales?
Yes — the company must register and collect the tax, with no time limit on assessment. St. George Operating and Improvement Co. is a title-holding company that owns a golf course leased to the St. Geo…
For a foreign bank's New York branch, are transactions between its New York international banking facility (IBF) and its own foreign branches counted as 'total assets' when computing the Article 32 asset-based alternative minimum tax?
Excluded, for all years at issue. Bank Hapoalim B.M., an Israeli bank operating New York City branches plus a New York international banking facility (IBF), asked whether interbranch transactions betw…
Were trucking, hauling, packaging, and custom-crating services subject to Connecticut sales tax, and who paid tax on crate materials?
No under this historical ruling. Trucking and hauling were not enumerated taxable services, and packing, crating, and shipping were treated as personal services rather than sales of tangible personal …
Were basic warehouse storage services subject to Connecticut sales and use tax when no watchman or protective services were provided?
No. The company charged a stated price for warehouse storage and provided no watchman or protective service. DRS treated the transaction as rental of storage space rather than rental of tangible perso…
Were crane and rigging charges taxable when a company delivered, removed, and set production machinery in place without connecting or repairing it?
No. Setting machinery that did not become a structural building component was not a taxable service to industrial, commercial, or income-producing real property. Transporting, offloading, and reinstal…
Were crane and rigging charges taxable when a company lifted structural building components or modular offices into place but did no connecting, disconnecting, or repair work?
No. The company delivered, unloaded, placed, and removed air-conditioning compressors, trusses, headers, and relocatable modular office units, but did not connect or disconnect them or perform repairs…
Is a crane or trucking contract a taxable equipment rental when the company supplies the operator and controls how and when the equipment is used?
No. Customers hired the company to complete specific transportation or rigging jobs, not to use its equipment. The company always supplied the truck driver or crane operator and retained complete cont…
May a Connecticut lessor exclude insurance charges from taxable gross receipts on a tangible-personal-property lease?
Yes, but only when the insurance charge is separately stated and the lessee may either accept the lessor's insurance or obtain other coverage. Conn. Agencies Regs. § 12-426-25(c) excludes qualifying i…
Do long-term rehabilitation and psychiatric care facilities get New York's reduced 0% energy tax rate, and can they claim a refund?
It depends on whether the facility is 'residential in nature' — and even then only the state portion is zero-rated. Dianne Germany asked whether long-term rehabilitation centers and long-term psychiat…
If a country club makes members buy bonds to fund capital improvements, are those bond payments taxable club dues?
Yes — the mandatory bonds are taxable dues. Nassau Country Club, a not-for-profit social/athletic club, required each member to buy a non-interest-bearing bond (up to $1,000) as a condition of continu…
Could a trade-in titled to someone other than the new-vehicle buyer reduce Texas motor vehicle tax?
Yes. The 1990 letter said the traded vehicle did not have to be titled in the purchaser's name. A vehicle traded to the seller reduced the amount subject to motor vehicle tax even when another person …
Could moving a floor-mounted dimmer switch to hand access satisfy Texas's historical modified-vehicle exemption?
Yes. The 1990 letter said a vehicle modified for operation by, or transportation of, a person meeting the historical disability standard was exempt. Moving a floor-mounted dimmer switch so it could be…
Which electricity used by a Texas ship repairer and machine shop qualified for the manufacturing exemption?
Electricity directly used to manufacture parts and fabricated items for sale was exempt; electricity used to install or repair customer property was taxable commercial use.
Did Texas tax equipment sold for use in refurbishing a West Indies refinery?
The seller had to collect Texas tax unless it delivered the items to a carrier or freight forwarder for export; purchaser possession in Texas made tax due, subject to a documented import refund.
Does an out-of-state bank owe New York Article 32 franchise tax just because it makes mortgage loans secured by New York real estate, when the loan closings, appraisers, or construction-loan inspectors variously touch New York?
It depends on the totality of activity -- no single scenario alone was decisive. Bleakley Platt & Schmidt presented a Connecticut bank with no New York office, employees, or agents, making loans to Ne…
Could printing trade vendors buy film, paper, chemicals, and other production inputs tax-free as resale or manufacturing materials?
Only materials physically incorporated into the product sold could be bought for resale under this historical ruling. DRS did not consider color separators, typesetters, or assemblers of mechanicals, …
How did Texas tax merchant credit-card processing, purchased data processing, setup packages, and card-authorization services?
Merchant processing and authorization were nontaxable, but purchased data processing was taxable unless it benefited the processor's own out-of-state location.
Did arranging engineering and equipment-installation work in Texas require an Illinois seller to collect Texas tax?
Yes. Engineering and installation performed in Texas on the seller's behalf meant it was doing business in Texas and had to obtain a permit and collect applicable state and local tax.
How these rulings are useful
- See how the rule applies: A letter ruling shows how a state revenue department actually applied the tax law to a specific business and set of facts.
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- Binding only on the requester: A ruling is binding on the department only for the taxpayer who asked. It is persuasive, not a substitute for your own ruling or professional advice.
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