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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What does the Kansas Taxpayer Protection Act require of paid income tax return preparers?
Kansas Notice 21-21 explains the Kansas Taxpayer Protection Act, created by 2021 Senate Bill 47 (New Sections 1-6) and effective on and after January 1, 2022. It applies to 'paid tax return preparers'…
What privilege tax deduction did Kansas add for interest on agricultural and single-family residence loans?
Kansas Notice 21-18 explains that 2021 Senate Bill 15 (Section 10) amended K.S.A. 79-1109 to add a new deduction from net income for privilege tax purposes, available for all tax years commencing afte…
Does a Colorado crane rental company charge sales tax on cranes and hoists, and does it owe tax when it buys or moves the equipment into the state?
It depends on whether an operator is included. A crane or hoist rented with the company's own operator is a nontaxable service, so no sales tax is collected; instead the company owes sales or use tax …
Is a sale exempt from Illinois sales tax as a sale in foreign commerce when the goods are delivered in Illinois to a freight forwarder for export, rather than directly to the purchaser?
Yes, if the freight forwarder — not the purchaser — takes physical possession in Illinois and ships the goods to a foreign country for good, the sale is exempt as a sale in foreign commerce under 86 I…
Is a supplier's sale of equipment to a contractor exempt from Illinois sales tax when the contractor resells it to a government agency under a construction contract, even without a CRT-61 at the time of shipment?
It depends, and the Department could not say for sure on the facts given. Sales of building materials to a construction contractor are exempt from Illinois Retailers' Occupation Tax and Use Tax only i…
Does Texas use tax apply to mobile lodging camp buildings brought in from Canada and set up on leased land to house oil and gas workers?
Yes, use tax applies. Mobile lodging, dining, and recreational modular buildings brought from Canada and set up on leased Texas land to house oil and gas workers remain taxable tangible personal prope…
Our timeshare condominium's owner's association owns and furnishes every unit -- can the association claim the household goods exemption from business tangible personal property tax since individual owners actually use the furniture as their vacation home?
No -- Virginia's household goods exemption from business tangible personal property (BTPP) tax requires the property to be OWNED (not just used) by an individual or family incident to maintaining an a…
The Department assessed us for failing to withhold tax on workers we treat as independent contractors, using VEC data -- can we still make our case that they're properly independent contractors?
Yes -- the case was sent back to the Department's audit staff because the auditor relied on Virginia Employment Commission (VEC) worker-classification data without independently applying the legal tes…
We run a water park and paid business tangible personal property tax on our rides, theming, and lockers -- can we get a refund by showing these items are fixtures to the real estate, not taxable personal property?
Yes -- under Virginia's three-part fixture test (annexation, adaptation to use, and intent to permanently improve the realty), a water park's ride structures, ride equipment, theming, and even its loc…
How should three service businesses source their receipts for Florida's corporate income-tax sales factor?
The companies had to use market sourcing. All service receipts went in the sales-factor denominator, and receipts went in the Florida numerator to the extent the service deliverables were forwarded, s…
Can Kansas financial institutions subtract FDIC premiums disallowed on their federal return for privilege tax?
Kansas Notice 21-16 explains that 2021 Senate Bill 50 (Section 11) amended subsection (c) of K.S.A. 79-32,138 to add a new subtraction modification for the privilege tax. For all taxable years commenc…
Are manufacturer cash rebates on a new motor vehicle exempt from Kansas sales tax, and how long does the exclusion last?
Kansas Notice 21-15 explains that 2021 House Bill 2143 amended the definition of 'sales or selling price' in K.S.A. 79-3602(ll)(3)(E) to extend the sunset of the exclusion for certain manufacturer cas…
Is there a Kansas tax credit for contributions to the Friends of Cedar Crest Association?
Kansas Notice 21-11 explains that 2021 Senate Bill 47 (New Section 8) created an income or privilege tax credit for contributions to the Friends of Cedar Crest Association, for tax years 2021 through …
Is there a Kansas tax credit for contributions to the Eisenhower Foundation?
Kansas Notice 21-10 explains that 2021 Senate Bill 47 (New Section 7) created an income or privilege tax credit for contributions to the Eisenhower Foundation, for tax years 2021 through 2025. The cre…
When are Kansas non-corporate income tax returns due, and do I need a separate Kansas extension?
Kansas Notice 21-09 explains that 2021 Senate Bill 47 (Section 13) amended K.S.A. 79-3221 to restate the filing deadline for income tax returns of taxpayers who do not file corporate income tax return…
What business-income tax changes did Kansas make in 2021 Senate Bill 50?
Kansas Notice 21-08 summarizes several business-income changes made by 2021 Senate Bill 50, effective beginning tax year 2021. It adds a subtraction for 100% of global intangible low-taxed income (GIL…
When are Kansas corporate income tax returns due after 2021 Senate Bill 50?
Kansas Notice 21-07 explains that 2021 Senate Bill 50 (Section 6) amended K.S.A. 79-3221 to change the corporate income tax filing deadline. Effective immediately, for tax year 2020 and all later year…
Which Kansas counties are rural opportunity zones now, and how long does the ROZ credit last?
Kansas Notice 21-05 explains that 2021 Senate Bill 47 (Sections 11, 12, and 15) expanded and extended the Rural Opportunity Zone (ROZ) program. Section 11 amends K.S.A. 74-50,222 to define a 'rural op…
What is the Kansas disabled access credit for home accessibility renovations after 2021?
Kansas Notice 21-04 explains that 2021 Senate Bill 66 (Section 4) amended K.S.A. 79-32,176a, the income tax credit for home renovations made for a disabled family member's access. Effective for tax ye…
Would closing a Florida sales-tax dealer account prevent a former business from later claiming a refund of tax collected and remitted in error?
No. Closing the dealer account did not itself bar a later refund application. The business still had to refund the erroneously collected tax to customers, satisfy all statutory and regulatory requirem…
Where was the Department's index of South Carolina advisory opinions issued through June 30, 2021?
SC Information Letter #21-21 attaches the Department's index of South Carolina advisory opinions issued from 1987 through June 30, 2021 and supersedes SC Information Letter #21-10. The index catalogs …
How could taxpayers check the status of South Carolina advisory opinions through June 30, 2021?
SC Information Letter #21-20 attaches the Department's citator for advisory opinions issued from 1987 through June 30, 2021 and supersedes SC Information Letter #21-9. It identifies opinions known to …
Does a food-delivery driver in New Mexico owe gross receipts tax on delivery fees and tips, and does the state's delay in scheduling a hearing wipe out the bill?
Partly. Ronald Duncan, an independent contractor delivering restaurant food for Delivered Dish (later Grubhub), was assessed $3,114.85 in New Mexico gross receipts tax, penalty, and interest for 2014-…
What South Carolina tax interest rate applied from July 1 through September 30, 2021?
The listed South Carolina tax interest rate was 3% for July 1 through September 30, 2021. It applied to tax underpayments and overpayments and was compounded daily, except simple interest applied to u…
Does an out-of-state seller with no Colorado location have to collect Colorado sales tax on prefabricated homes, and how much of the price is taxable?
It depends, with two answers. First, Colorado exempts 48% of the purchase price of prefabricated housing from state sales tax, and any later resale is fully exempt from state use tax; these exemptions…
Does paying gross receipts tax through New Mexico's online 'make a payment' option excuse penalties when the taxpayer does not file the required CRS-1 returns?
No. Slapfish Restaurant timely paid gross receipts tax online for two quarters but used TAP's 'make a payment' option and did not file the corresponding CRS-1 returns until July 5, 2019. The payments …
What conditions had to be met for an affiliated group to make a Florida consolidated corporate income-tax filing election?
The parent had to have Florida nexus when the election was made; the Florida group had to match the federal consolidated group; every member had to consent; and the consolidated return had to be filed…
Could a South Carolina retail beer-and-wine permit holder continue curbside sales to a customer who stayed in a vehicle after the COVID state of emergency ended?
No. After the COVID-19 state of emergency ended on June 6, 2021, South Carolina reinstated Regulation 7-702.5. The regulation prohibited a retail beer or wine permit holder, employee, or agent from se…
Could a Florida consolidated group switch to separate returns after substantial expansion through new products, markets, locations, and acquisitions?
Yes. Florida found that the group's expanded operations, products, markets, sales, and acquisitions were a sufficient change in business circumstances. Permission was subject to four redacted conditio…
How does South Carolina's Catastrophe Savings Account work — who can open one, how much is deductible, and when are withdrawals taxed?
A Catastrophe Savings Account (CSA) lets a South Carolina homeowner set aside money — with a state income tax deduction — to cover a homeowner's-insurance deductible and uninsured storm losses to thei…
Does a revenue-sharing agreement between a hospital district and its radiologists create a separate entity subject to Texas franchise (margin) tax?
Yes. The Texas Comptroller ruled that a revenue-sharing agreement between a hospital district and a group of radiologists — under which the parties jointly manage imaging centers, share net revenue, a…
Does Colorado charge sales or use tax on an aircraft that was bought out of state but is then based in or flown into Colorado?
No sales tax, but yes use tax. An aircraft bought outside Colorado is not subject to Colorado sales tax, but once it is based in or used in Colorado it owes Colorado use tax, and the expired aircraft …
May a staffing company exclude client payments for employee wages and benefits from gross receipts as disclosed-agent reimbursements?
No, not under ITSQuest's contracts. The staffing company employed and paid workers, while clients reimbursed wages and benefits plus a service fee. ITSQuest reported gross receipts tax only on its mar…
Which purchases and sales by beekeepers are exempt from South Carolina sales and use tax, and what exemption certificates do beekeepers use?
Many of a beekeeper's purchases are exempt as agricultural inputs, but some are not. Because beekeeping is part of the agricultural industry (and beekeepers also 'process' honey), commercial beekeeper…
When is a military servicemember's spouse exempt from South Carolina income tax on wages earned in South Carolina, and how do they claim it?
A military servicemember's spouse is NOT taxed by South Carolina on the personal-service income (wages, salary, self-employment service income) they earn in South Carolina if three things are true: (1…
When someone comes to South Carolina to make a one-time sale of an airplane or boat, does South Carolina sales tax or casual excise tax apply?
It turns on whether the SELLER is in the business of selling. When a seller comes to South Carolina for the sole purpose of a one-time retail sale of an airplane or boat and the buyer takes possession…
How does South Carolina's discount for timely filing and paying sales and use tax work — how much is it, what's the cap, and which returns qualify?
South Carolina rewards on-time filers with a discount off the sales and use tax they remit. Under Code Section 12-36-2610, when a required sales or use tax return is filed AND the tax is paid in full …
When a partnership makes an IRC § 754 election and pushes the basis step-up down to a Tennessee LLC, does it raise the LLC's Tennessee franchise tax and its excise tax?
It splits by tax. The Department ruled that when a partnership makes an IRC § 754 election that steps up the new partners' basis in partnership property, and then 'pushes down' that step-up to a Tenne…
When are optional equipment warranties and repair-part withdrawals taxable in South Carolina?
For the requesting medical-equipment manufacturer, an optional extended warranty sold as part of the equipment sale is taxable as part of gross proceeds or sales price, even if billed later. A separat…
Does an Illinois employer have to withhold Illinois income tax from an employee who is not an Illinois resident and performs no work in Illinois?
No. The Department concluded that if the employee was not an Illinois resident and none of the services were performed in Illinois, the compensation is not 'paid in Illinois' under 35 ILCS 5/304, so t…
Does a charity owe sales or use tax when it pulls resale inventory it bought tax-free and gives the items away to donors, customers, or performers?
It depends. Giving a gift is not a sale, so no sales tax is due on the act of giving — but the giver becomes the user and consumer of the item. When a charity buys goods tax-free for resale and then w…
How did South Carolina increase the statewide Community Development Tax Credit limit for 2021 and later years?
Act No. 83 added $3 million to the aggregate Community Development Tax Credit limit. Up to $1 million of the new amount could support credits earned and certificates issued in tax year 2021, while the…
Can a company that employs nurses and contracts them out to government health clinics take New Mexico's health-practitioner gross receipts tax deduction, or is that only for individual practitioners?
Yes. Robison Medical Resource Group, an LLC that supplies its employed nurses to Indian Health Service and Department of Veterans Affairs clinics in New Mexico, could take the Section 7-9-93 gross rec…
Does an equipment-leasing company owe Illinois Retailers' Occupation Tax when it transfers its leased equipment to an affiliated company as part of a corporate reorganization?
No. Because the leasing company does not habitually sell equipment at retail (its occasional equipment sales were only about 1.5% of revenue) and is not otherwise holding itself out as a retailer, its…
Did South Carolina exclude the first $10,200 of 2020 unemployment compensation from state income tax, and is unemployment taxable after 2020?
Yes, for tax year 2020 only. SC Information Letter #21-14 announces that South Carolina adopted the federal exclusion of the first $10,200 of unemployment compensation per person from taxable income f…
After a club merged into an HOA, were initiation fees, base membership dues, upgraded dues, and capital assessments taxable admissions?
Initiation fees were exempt because members received an equitable ownership interest. Mandatory Social Sports membership fees and assessments were exempt if the merged association became a licensed HO…
Are the explosives, blasting agents, and detonator equipment a quarrying/mining company sells or uses exempt from Illinois sales and use tax as manufacturing machinery and equipment?
Yes, generally. Illinois' manufacturing machinery and equipment exemption specifically covers blasting agents, high explosives, detonators, lead-in line, and blasting machines used in the extractive p…
I was president and a minority shareholder of a restaurant company that fell behind on sales tax -- can the Department make me personally liable for the company's unpaid tax as a 'responsible officer' even though I didn't handle the company's finances or tax filings?
No -- Virginia's responsible-officer penalty under Va. Code § 58.1-1813 requires the individual to have had the specific corporate duty to pay or report the tax, actual knowledge of the failure, AND t…
We're an electrical contractor who was assessed sales tax on the fire alarm and suppression systems we install -- but we think those systems become part of the building, not taxable personal property -- who's right?
The contractor was right -- fire alarm and suppression systems that are hard-wired into a building's electrical network, required for a certificate of occupancy, and intended to remain permanently ins…
I accepted resale exemption certificates from my distributors even though their listed business type didn't exactly match what they bought -- do I still qualify for the resale exemption?
Mostly yes -- if the resale certificate is complete, signed, and dated, a dealer doesn't need the customer's listed business type to exactly match the products sold; it's enough that a dealer could re…
The Department already ruled our easy-return-label and logo-setup fees are taxable -- can we get that determination reconsidered by arguing the returned goods leave Virginia, and that a logo setup is really an 'alteration'?
No -- the Tax Commissioner denied reconsideration and reaffirmed both prior conclusions: easy-return-label charges are taxable because they're tied to the ORIGINAL Virginia sale, not the eventual out-…
Our national-bank affiliate has no Virginia office of its own, but its employees work out of a sister company's Virginia office doing sales, marketing, and loan-solicitation support -- does that make the bank subject to Virginia's bank franchise tax?
Yes -- a bank doesn't need to accept deposits, make loans, or maintain its own office in Virginia to be subject to the bank franchise tax; simply having employees conduct sales, marketing, and custome…
We're a federally chartered stock savings bank with five Virginia office locations -- are we subject to Virginia's bank franchise tax?
Yes -- a federally chartered bank organized under U.S. law that operates offices in Virginia and provides banking services (accepting deposits, making loans) qualifies as a 'bank' subject to Virginia'…
My land-clearing business uses the same equipment for both taxable brush-clearing services and tax-exempt timber harvesting -- how much of an exemption can I claim, and who has to prove the split?
Only a 20% exempt proration -- because the equipment was used for both exempt timber harvesting-for-sale and taxable general land-clearing/mulching work, and the taxpayer failed to prove a higher exem…
The Department used a single representative month to calculate our use tax assessment, and the audit took a long time to close -- can we get the sample thrown out and the interest waived?
No -- a taxpayer who didn't object to the audit's sample period when it was first proposed, and who provides no documentation showing the sample was unrepresentative or the resulting assessment wrong,…
I moved to another state for a new job and lived there all year, but I kept my Virginia driver's license and car registration -- am I still a Virginia resident for income tax purposes?
No -- physically living and working in another state for a full year doesn't by itself establish that you've abandoned your Virginia domicile; you must prove BOTH an intent to abandon Virginia permane…
We filed our 2016 Virginia return late because of serious medical problems, asking to apply the overpayment to 2017 -- does a severe illness extend the three-year deadline to claim a refund or credit?
No -- Virginia's three-year statute of limitations for claiming a tax refund (or, as here, applying an overpayment as a credit to a later year) is applied strictly with no exception for a taxpayer's s…
The Department disallowed our itemized deductions and Schedule E expenses when we didn't respond to a documentation request in time -- can we still get the medical expense deduction back by showing we already sent proof?
Not automatically -- when the Department has no record of receiving documentation a taxpayer claims to have already submitted, the taxpayer must resubmit it (here, by a firm deadline) or the disallowa…
We harvest timber and later use lime and tractors to reseed the land afterward -- does Virginia's tax exemption for forest-product harvesting equipment cover that reseeding work too?
No -- Virginia's sales and use tax exemption for forest-products harvesting only covers equipment and supplies used DIRECTLY in removing timber from the harvest site (and related pre-transport steps),…
Our audit assessed us for materials markup we billed customers, disputed our resale-exemption purchases, and applied compliance and amnesty penalties -- what can we still get corrected?
Partially -- a contractor who proves specific items were genuinely purchased for resale (not its own use) can get those line items corrected, but tax actually collected from customers must be remitted…
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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