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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Did Texas tax software delivered to an affiliated company outside Texas or data-processing access sold to its Texas affiliate?
Out-of-state software delivery and related out-of-state services were not taxable; intercompany data processing was exempt only if the affiliates qualified under § 151.346.
Was a Texas periodical-subscription agency the taxable seller of magazines it ordered for libraries and corporate customers?
No. The agency provided a nontaxable service and never owned or possessed the periodicals; the publisher sold the subscription to the customer.
Were consulting and public-relations services provided to a political candidate exempt from Connecticut sales and use tax?
No under this historical ruling. Conn. Gen. Stat. § 12-407(2)(i)(J) taxed consulting and public-relations services, and the law provided no exemption merely because the customer was a political campai…
Did Comptroller's Decision No. 22,974 concern cylinder charges imposed on industrial-gas customers?
No. It concerned the taxpayer's own lease payments for cylinders it acquired, and the Comptroller said a published CCH summary incorrectly described those payments as customer charges.
Were sales and rentals of graduation gowns under $75 exempt from Connecticut sales and use tax, and was an exemption certificate required?
Yes under this historical ruling. Graduation-gown sales and rentals qualified as clothing costing under $75 under Conn. Gen. Stat. § 12-412(47), so the retailer did not need an exemption certificate. …
Was the federal luxury tax included in the amount subject to Texas sales or use tax on jewelry and furs?
No, when separately stated and identified on the invoice. Texas sales tax still applied to the full retail sales price before the federal luxury tax.
Could a Texas seller's clearing-house agent file sales-tax returns and remit tax under the agent's permit number?
No. An agent could bill customers and collect funds, but the seller remained responsible for filing returns, remitting tax, and keeping sales records.
Was removing a cement plug from existing well casing to reenter a plugged and abandoned Texas well subject to sales tax?
No. Texas treated drilling cement out of existing casing to reenter a plugged well as a nontaxable well service.
Did an aircraft used in a Texas aerial-photography business qualify as manufacturing equipment?
No. Although necessary and essential to producing aerial photographs, the aircraft was not used directly in manufacturing them.
Were 12-month subscriptions to monthly or biweekly comic books taxable in Texas?
Yes. The comic books did not qualify as magazines because they lacked stories, articles, and essays by various writers as required by Rule 3.299.
Which cookbook, book, and museum-meal sales by a qualifying Texas nonprofit organization were taxable?
Its own published cookbook was exempt, but books it did not publish—including exclusive reprints—and meals sold at its museum were taxable.
When were charges for slicing and disposing of used tires taxable as garbage collection in Texas?
They were nontaxable when customers brought tires to the same place where they were sliced and buried, but taxable when the company picked them up or hauled them to another disposal site.
Did assigning the remainder of a 50-year ground lease and tenant-owned improvements trigger Connecticut real estate conveyance tax?
No under this historical ruling. The ground lease had one fixed 50-year term and no renewal options, so neither the lease nor its remaining term met the regulation's definition of realty for a lease l…
How could publishers return and recover Texas sales tax on qualifying pre-August 28, 1989 publication sales after Texas Monthly?
Publishers could refund customers and claim a credit or amend returns, or assign the refund right to customers with the required invoices and schedules.
Do audio- and video-tape duplication subsidiaries of a broadcasting company qualify as 'manufacturers' for Utah's sales tax exemption on new manufacturing equipment?
No, according to the Utah State Tax Commission's Advisory Opinion of December 3, 1990. Two subsidiaries of a Utah broadcasting company that mass-duplicated audio cassettes and video tapes for sale to …
How does New York tax a utility's IRC section 468A nuclear decommissioning trust -- as a corporation itself, as a grantor trust attributed to the utility, and what happens to the utility's own franchise and gross-receipts taxes when the trust's accumulated earnings are finally distributed decades later?
The Master Trust itself owes neither Article 9-A corporate franchise tax nor Article 22/30 personal income tax, but Con Edison will owe gross-receipts tax on the eventual profit when it's distributed.…
Robert Spielman was the sole shareholder of a New York S corporation that did business and paid tax in two other states. One of those states called its corporate levy a 'franchise' or 'privilege' tax rather than an 'income' tax, even though the tax was actually computed based on net income. Can Spielman still claim New York's resident tax credit under Tax Law § 620(a) for the tax his S corporation paid to that state, despite the 'franchise' label?
Yes. What matters for the New York resident tax credit under Tax Law § 620(a) is how a state's corporate tax is actually computed - on a net income base - not what the state chooses to call it. Follow…
How did Texas tax fixed-price residential and commercial repair contracts and insurance reimbursements for cost overruns?
Residential lump-sum customers were not charged tax and the contractor paid tax on materials; commercial billings were taxable, with no extra tax on documented insurance reimbursements.
When were lump-sum HVAC filter and preventive-maintenance contracts taxable in Texas?
Maintenance-only plans were nontaxable; a plan including repairs stayed nontaxable only while repair charges were 5% or less of the total, with parts treated separately.
Were separately stated telephone-directory listing charges taxable in Texas?
No. Directory listings were not taxable items when separately stated, but a lump-sum charge combining a listing with taxable basic local exchange service was fully taxable.
Did steam generators and distribution lines used for tertiary oil recovery become improvements to Texas real property?
No. The generators and lines remained tangible personal property because they retained their identity and could be removed without extensive damage; attached support arms might differ.
Did a Texas electronic tax-return filing service have to collect tax from out-of-state customers?
No for the described non-Texas customers. Electronic filing was treated as telecommunications, and long-distance service was exempt unless both originated from and was billed to Texas.
How did a Texas electronic tax-filing provider tax customers and buy the underlying data transmission?
It could buy transmission for resale, charged no Texas tax to non-Texas customers, and charged state and local tax to Texas customers, with local tax based on its sales office.
Did an after-the-fact statement that tax was included in a lump-sum repair invoice protect the customer from Texas tax liability?
Not by itself. The customer needed specific proof of the taxable price, state and local tax amounts and rates, and the reporting period in which the vendor remitted the tax.
Was electricity used to turn customers' grease wool into customer-specific wool top exempt as electricity used to manufacture tangible personal property for sale?
Yes for production power. Turning grease wool into customer-specific wool top was manufacturing tangible personal property for sale even though ABC worked on customer-owned wool. Electricity used in o…
Was monthly microbial treatment that prevented paraffin buildup in oil-well equipment taxable in Texas?
Yes. Texas classified the treatment as taxable maintenance of tangible personal property because it limited deterioration of tubing, rods, and flow lines.
How did South Carolina's original 1% county local-option sales and use tax apply to retailer sourcing, exemptions, contracts, utilities, and credits?
The 1990 guide generally sourced in-state retail sales to the order-receiving business location and use-tax transactions to the customer's first storage, use, or consumption. It also carried state exe…
Were labor and materials for restoring Texas historic buildings exempt from sales tax?
Labor was exempt only for property in the National Register of Historic Places; a Recorded Texas Historic Landmark alone did not qualify, and materials remained taxable unless another exemption applie…
Was destructive testing of computer chips for manufacturers a taxable Texas service?
No. The chip-testing service was not taxable, and destroying sample chips during testing did not make the work processing or part of manufacturing.
Were nitrogen and carbon dioxide taxable when injected into a formation to maintain pressure during natural-gas production?
Yes. The gases served no identified exempt function and were not resold, so Texas treated both nitrogen and carbon dioxide as taxable in the described use.
Was a nine-year machinery sale-leaseback with a 10%-of-cost purchase option a financing lease for Texas tax?
Yes. The option price was only one-sixth of expected fair market value, making it nominal; Texas taxed the financing lease as a sale rather than an operating lease.
Were food, drinks, gratuities, and ceremony charges for a church-sponsored wedding taxable in Texas?
Church-prepared food and cake were exempt, but a caterer's food, cake, alcohol, and gratuity charges were taxable; separately stated ceremony charges were not taxable.
Two partners bought real estate through their partnership, later sold a one-third interest to a third partner, and now want to buy that interest back at a higher price before selling everything (or their whole partnership interest) to a new buyer. Depending on WHEN each of these steps happens relative to a mid-transaction regulatory change, what 'original purchase price' can the original two partners use to calculate their gain for New York's Real Property Transfer Gains Tax?
The answer turns entirely on precise timing relative to a November 7, 1990 regulatory amendment -- but under every timing scenario the Department analyzed, A and B's original purchase price on a sale …
Which scrap-metal processing operations qualified as manufacturing for Connecticut sales and use tax exemptions?
Under this historical ruling, basic sorting, cutting, and baling -- including junk yards, auto wreckers, peddlers, collectors, and transfer stations -- did not qualify because they did not substantial…
Did Texas utilities need exemption certificates for electricity accounts coded as agricultural irrigation?
Yes. Power used to irrigate farm or ranch products for sale was exempt, but the utility still needed a certificate showing exclusive or predominant qualifying use.
Was licensed collection and hauling of special or infectious medical waste for the Texas prison system taxable?
No. The collection service was nontaxable, but the hauler owed tax on containers, air-conditioning units, and all other items used to store, collect, and transport the waste.
When were Texas computer hardware and software service contracts taxable?
Hardware contracts were taxable regardless of who sold the equipment; software contracts were taxable only for software the service provider originally sold, with contract-programming services exempt.
Were cemetery grounds-maintenance labor and the materials used in that work taxable in Texas?
Maintenance labor was excluded from tax under a cemetery-specific policy retroactive to October 1, 1987, but weed killer, mower parts, marble, and other materials remained taxable.
Is the finance charge a country club adds for a member's overdue account balance subject to sales tax?
Yes — the late-payment finance charge is taxable as club dues. St. George's Golf & Country Club, a 501(c)(7) social and athletic club, bills members a 1½%-per-month finance charge on account balances …
Does a domestic bank need to make a special adjustment to its federal taxable income to account for its International Banking Facility (IBF) interbranch income and expenses, the way an alien (foreign) bank does?
No. A domestic bank that uses the IBF modification already properly and accurately reflects its New York entire net income through the standard statutory computation, so — unlike an alien bank — it do…
How could a Texas elevator contract combining maintenance and repairs avoid tax on its full price?
The provider could separately tax a documented repair percentage based on prior work orders, or a reasonable estimate for a new contract; otherwise repairs over 5% taxed the full price.
Could a private lessor buy materials and services tax-free for GSA-required improvements to its leased building?
Yes, by exemption certificate for items incorporated for GSA's primary use and benefit; a resale certificate applied only to goods or services separately resold to GSA.
Did the Department's original 1988 ruling requiring an alien bank to restore interbranch IBF income before applying the IBF modification also rest on the Commissioner's separate discretionary anti-distortion power?
Yes -- this brief modification appends a notation to the original 1988 opinion stating that, for taxable years beginning on or after January 1, 1985, the same conclusion was independently supported by…
Can a petroleum distributor claim a credit or refund of the petroleum business tax, motor fuel excise tax, or prepaid sales tax it already paid on fuel, when the customer who bought that fuel on credit never pays and the debt is written off as uncollectible?
No refund or credit for any of the three taxes. Northeast Petroleum, a Massachusetts-headquartered division of Cargill, Incorporated marketing home heating oil, industrial fuel oil, and gasoline in Ne…
Were fees for taking game animals and receiving guide services on private Texas acreage taxable?
No. Texas treated the animal fee as payment for a private-land right, or profit a prendre, and Rule 3.298 specifically exempted hunting and fishing guide services.
Were catered meals and soft drinks sold to students during the regular Texas school day taxable?
No. Meals, food products, and soft drinks sold at school during the regular school day were exempt, but after-hours sales such as a fundraising supper were taxable.
Was the full $15 Dial 976 charge for merchandise taxable when part was retained as a marketing fee?
Yes. Texas taxed the full $15 selling price without deducting the seller's $5 marketing fee, supplier payment, service fee, or other expenses.
Which Texas taxes applied to residential gas and electricity, and how did a mixed-use meter qualify for exemption?
Residential use was exempt from state and specified local taxes, subject to some city exceptions; a mixed-use meter required an engineer-certified predominant-use study.
Was an independent private cogeneration power producer subject to Connecticut's utility company tax merely because electricity was its principal business?
No, provided it was not a public service company, a public-service holding company or subsidiary, a subsidiary of a holding company controlling a public service company, or a former public service com…
Was electricity used for aquaculture and drip-irrigation research exempt from Texas sales tax in this 1990 ruling?
No. Texas treated the research electricity and gas as commercial use because the taxpayer was neither manufacturing goods for sale nor conducting qualifying farm-or-ranch agriculture.
Was a Texas sightseeing tour exempt if it combined registered historic landmarks with other locations?
No. A multi-location tour was fully taxable if it included any place outside the statutory historic-site categories; tours exclusively of qualifying landmarks were exempt.
Did a publisher owe tax on printing and other services used to make free college telephone directories?
Yes. Because it gave the directories to schools rather than selling them, the publisher owed tax on purchased printing, photography, illustration, and similar services.
Could cash insurance proceeds for a stolen vehicle reduce the taxable price of its replacement?
No. A cash payment from the insurer could not be deducted from the replacement vehicle's purchase price. The letter's example taxed the full $20,000 price of a new vehicle regardless of the amount rec…
Were consumable overhead materials used by a contractor on a federal real-property contract exempt when title passed to the government?
No. Rule 3.291 taxed overhead supplies used on federal contracts unless incorporated into the realty, despite the contract's title-passage clause.
Did this 1990 Texas internal memo conclusively exempt feedlot grain-mixing equipment?
No definitive conclusion appears. One passage calls exclusive feedlot mixing equipment exempt, while later notes record conflicting views on whether bought ingredients made the activity taxable proces…
Were single-use drums and containers used for exempt hazardous-waste disposal exempt from Texas sales tax?
No. The disposal service was exempt, but the provider consumed the drums after manufacturing ended, so the containers remained taxable and did not qualify as pollution-control manufacturing materials.
What Texas tax exemptions applied to the Boy Scouts National Council and individual branches or troops?
The National Council had a 501(c)(3) sales-tax exemption, while all branches and troops had educational-organization exemptions covering sales, hotel, and motor-vehicle taxes.
Our company is buying substantially all the assets of a bankrupt railroad, with the sale authorized by the federal bankruptcy court, and financing part of the purchase with a note secured by a mortgage to the Federal Railroad Administration acting as trustee for the United States. Does the asset conveyance owe Real Estate Transfer Tax, and does the mortgage owe Mortgage Recording Tax?
Both exempt. D & H Corporation, an indirect subsidiary of Canadian Pacific Limited, purchased substantially all the assets of the bankrupt Delaware and Hudson Railway Company pursuant to a sale author…
Was a service that photographed personal property and maintained descriptive records for possible insurance claims taxable in Texas?
Yes. The photography charge was taxable, and storing and maintaining the records was taxable data processing; qualifying production inputs could be exempt or bought for resale.
Were a debt collector's fees and the attorney fees it incurred to collect overdue accounts taxable in Texas?
The debt collector's compensation was taxable, but attorney services were not taxable debt collection when the attorney fees were separately stated from other charges.
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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