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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Which steps in a Florida aircraft purchase, resale, dry lease, and crewed charter structure were subject to sales tax?
The registered dealer's purchase and resale to an exclusively leasing subsidiary were exempt with valid resale certificates. The subsidiary's dry lease to the charter operator was taxable, but the…
Did title to packing materials pass before use when a moving customer signed an express early-title clause?
Yes. A signed clause stating that title passed before any use controlled regardless of billing method; a separately stated charge by itself did not establish early title passage.
Are camera-ready mechanical drawings sold to garment and textile manufacturers -- used to make the silkscreens that print designs onto fabric -- exempt production equipment, or taxable tangible personal property?
Exempt production equipment, as long as the customer buying them uses the mechanical drawings directly and predominantly (over 50% of the time) to produce printed fabric or other tangible goods for…
What did Florida's original 1995 ruling say about dial-up Internet access, setup charges, residential use, business use, and homepage advertising before it was amended?
This original ruling was amended and replaced by TAA 95A-025R. It imposed gross receipts tax on recurring Florida access charges, sales tax and surtax on business use, exempted documented…
How did South Carolina RR 95-10 count player stations and licenses on multiplayer video-gaming devices?
RR 95-10 counted each player station on a multiplayer video-gaming device as a separate machine. A location could not allow more than five people to play the device at once under the five-machine…
What South Carolina income, sales, and deed-tax consequences did RR 95-9 assign to a partnership's conversion into an LLC?
For a conversion with the same owners, ownership shares, and business, RR 95-9 treated the LLC as a continuation of the partnership. The partnership did not terminate or close its tax year, no new…
Were blood glucose meters exempt from South Carolina sales and use tax under PLR 95-6?
Yes, for the addressed taxpayer when a blood glucose meter was sold to a diabetic under a physician's authorization and direction. The Department treated the meter as a technological development…
Was Met-Rx powdered drink mix exempt as a meal substitute when its package also directed consumers to use it only as a food supplement?
No. The powder's supplement label triggered the exclusion, and its nutrients did not meet the complete-dietary-food exception, so sales were taxable.
Was the Met-Rx bar exempt as food even though it was nutrient-loaded and marketed for health, fitness, and vitality?
Yes. A bar was not one of Regulation 1602(a)(5)'s excluded supplement forms, and this label made no supplement or nutritional claims.
Can a corporation with multiple internal divisions get separate direct payment (direct pay) permits for each division, so each division reports and pays its own Texas sales and use tax?
No. The Comptroller's Tax Administration division denied the request. Only one direct payment permit may be held by the legal entity (the corporation as a whole, referred to in the letter as "CORP…
When a shop changes a customer's oil and oil filter, does it charge sales tax on a lump-sum price or does it need to separately state and tax the materials?
Either method is allowed, and the tax treatment differs. If you charge one lump-sum price for the oil change (parts and labor not separated), you do not collect sales tax from the customer, but you…
I'm the fee owner and ground tenant of an office building. To help a tenant (Donaldson, Lufkin & Jenrette) get NYC Industrial Development Agency economic-development benefits, I'm converting the building to condominium units and conveying title to the IDA-benefited units to the IDA for nominal consideration, then leasing them back from the IDA under a 22-year 'Overlease.' I'll keep all the rent, insurance and condemnation proceeds, income-tax ownership treatment, and the right to sell, mortgage, or transfer the units; title reverts to me automatically in 2016 or whenever the tenant's IDA benefits end. Are the conveyance to the IDA, the eventual reversion, and the various leases subject to New York's Real Estate Transfer Tax or Real Property Transfer Gains Tax?
Exempt at every step -- Stanley Stahl, doing business as Stahl Park Avenue Co., kept all the real economic benefits and burdens of ownership throughout. Stahl, the fee owner and ground tenant of 277…
Were separately quoted post-installation testing, adjustment, and operator-training charges part of a contractor's taxable sale of an electrical control panel?
No, when a vendor or separate company performed those services after installation. Pre-installation assembly or other fabrication remained part of the taxable fixture measure.
When a Texas customer calls an 800 number to order flowers for delivery through an FTD-type wire-order florist network, is the sale subject to Texas sales tax?
It depends on where the telemarketer who takes the order — the "selling florist" — is located, not on where the flowers are delivered. If the telemarketer-florist is in Texas, the sale is taxable in…
Did Florida's daily rental-car surcharge restart every 30 days when a customer signed one addendum for a specific rental longer than 30 days?
No. When the customer signed the addendum at the start and it set the full term for the same vehicle, the surcharge applied only to the first 30 days. Later rental agreements completing that stated…
Was Florida estate tax due when the federal credit for tax on a prior transfer eliminated all federal estate tax, including the state death-tax-credit amount?
No. Because the unified credit and the federal credit for tax on the prior transfer consumed all federal estate tax, the ruling concluded that no Florida estate tax was due from the resident's estate.
How did return duties, retained media, maintenance updates, and federal-contract use affect four canned-software license arrangements?
The word license did not control. Return of the original media supported lease treatment; permanent possession supported a sale, and government use did not exempt a lease.
How did California classify canned-software licenses, sublicenses, update fees, and software used by a federal contractor?
Classification depended on return rights and the actual media. True subleases were taxed on subrents unless prime-rent tax was elected; outright sales and update fees were taxable retail sales.
Could a software sublicense be taxed as a sublease, and could the intermediary elect to pay tax on the prime lease instead?
Yes if the same original media had to be returned. Subrentals were taxable unless the intermediary timely elected use tax measured by prime-lease rentals.
Was a three-year canned-software license and sublicense a lease when the user could keep the program after that period?
No. It was an outright sale because return was not ultimately required. The customer's $32,000 purchase and $7,000 update contract were taxable.
Is a certified sonographer's fee for a veterinary ultrasound exam -- including the written report, video tape, and thermal prints she gives the client -- subject to New York sales tax?
No, as long as she's selling a personal written report (impression) that isn't and can't be reused in reports to other clients -- that's an exempt 'personal or individual' information sale. But if…
Does a free bi-weekly arts-and-entertainment magazine qualify as an exempt 'periodical,' and are the typesetting/layout charges for its pre-press camera-ready mechanicals taxable?
The publication itself qualifies as an exempt periodical. But because it's given away free rather than sold, its purchases of typesetting and camera-ready mechanicals -- which would otherwise be…
Which affiliated-group sales belonged in the Florida processor sales-factor percentage furnished to growers and grower cooperatives?
The reported factor had to include the processor's sales, the affiliated sales company's sales, and any other affiliated-group sales that could be considered sales of the Florida processor.…
Were payments to a property owner for dropping objections to an adjacent power plant and covering anticipated rental losses subject to Florida rent tax?
No. The agreement gave the adjacent developer no possession, occupancy, or right to use the owner's property. The fixed and monthly payments were compensation for forbearance and prospective…
In a nightly-rental resort property, is the property owner or the property manager legally responsible for collecting and remitting sales tax, transient room tax, and resort communities tax?
It depends on the property manager's contractual role. If the property manager contracts to receive payment for room rentals on the owner's behalf, the manager is a "vendor" who must obtain a sales…
Will a new Utah resident owe Utah income tax on retirement income (pensions, deferred compensation, Social Security) already taxed by California, and what are Utah's general sales and property tax rates?
Yes, a Utah resident must report all of their income, including retirement income earned or received from another state -- but they get a credit that prevents double taxation. A prospective retiree…
When a construction contract commingles taxable renovation/remodeling labor with nontaxable new-construction labor and the contract doesn't separately state the two, can a taxpayer's own engineer certify how much labor was new construction in order to claim a tax refund?
Yes. The Comptroller's Tax Policy Division said the customer's construction engineer may certify the split between new-construction labor and renovation/remodeling labor on a commingled job, citing…
How did PLR 95-7 apportion trademark royalties and the corporate license fee for a South Carolina licensing subsidiary?
The addressed licensing subsidiary used a gross-receipts ratio: its South Carolina numerator included royalties from licensees' sales delivered to customers in South Carolina, while the denominator…
Does Utah sales tax apply to a multi-day river rafting trip that starts in Colorado, spends most of its time there, and ends in Utah?
A river rafting trip conducted entirely within Utah is subject to Utah sales tax. A multi-day trip that crosses into Colorado is subject to Utah sales tax only if more than half (a 'preponderance,'…
Were interactive corporate presentations delivered on disks or CD-ROMs taxable as motion pictures or computer programs?
They were computer programs, not qualified motion pictures. Fully custom presentations were nontaxable; modified prewritten programs depended on pricing and separate charges.
If a beverage distributor buys pre-mix or post-mix carbonated drink machines and loans them to restaurant customers as a marketing incentive (in exchange for the customer agreeing to buy that distributor's soft drink products), can the machines be purchased tax-free as manufacturing equipment?
No. Even though pre-mix and post-mix drink machines otherwise qualify as manufacturing equipment under Rule 3.300, loaning them to customers is itself a taxable "use" of the equipment by the…
Could a dealer claim returned- or defective-merchandise deductions when a manufacturer helped refund a defective automobile?
Only if the dealer itself contracted with the customer and refunded on its own behalf. Acting merely for the manufacturer produced no dealer deduction.
Did Vendor A retain interstate-sale exemption when its component went to Vendor B in California for integration and testing before outside shipment?
Only if possession was temporary and limited to inspection or defect testing. More extensive integration meant customer delivery in California and sales tax.
How did California split ice sales to street-food vendors who resold some ice in drinks and consumed the rest to keep products cold, without resale certificates?
Absent clearer evidence, the Board treated 50 percent as nontaxable resale in soft drinks and 50 percent as taxable ice consumed in the vendors' businesses.
Were aircraft repair parts installed outside California exempt when the aircraft returned for use by a Part 135 air-taxi operator?
Only conditionally. Installed parts entered as part of the aircraft, but each part's use was exempt only if the aircraft had qualifying common-carrier use for more than half of the 12 months after…
What South Carolina tax interest rate applied for the three-month period beginning July 1, 1995?
The rate was 9% for underpayments and overpayments for the three-month period beginning July 1, 1995. The notice said interest was compounded daily, except that simple interest applied to…
Did two leased charter motor coaches qualify for California's interstate-commerce use-tax exemption?
No. Each coach had intrastate California use during the first six months after entry, so the lessor had to continue its irrevocable FRV reporting wherever the buses operated.
Are a television, a VCR, and pre-recorded or blank video cassettes sold for use on a maritime vessel exempt from Texas sales and use tax as component parts of the vessel or as sea stores/ships' stores?
A television and/or VCR can qualify as an exempt component part of a vessel if it is bolted or otherwise firmly attached to the vessel, under Rule 3.297(b)(2)(B). A video cassette cannot be attached…
Were printed biographical profiles and photographs incidental to a matchmaking service, or taxable sales of property?
They were nontaxable only when significant matchmaking skill and assistance were the true object; profile sets, addresses, or other goods sold without that service were taxable.
If a company designs tools, dies, jigs, and fixtures on a computer for manufacturers, is the sale of those designs subject to Texas sales tax?
Yes. The Texas Comptroller ruled that selling a computer-generated design is taxable as the sale of a pattern for use in manufacturing. Selling a design modification for an existing production-line…
Is a business's total charge to etch glass items (such as awards or motor vehicle windows), including labor, subject to Texas sales tax?
Yes. The Comptroller held that etching glass items is taxable processing or fabrication of tangible personal property, so the total charge to the customer — including labor — is taxable as graphic…
Did a ground forwarder need a specific license, and did seller delivery into a customer's leased space at its facility preserve export treatment?
Activities, not a license, established forwarder status. But leased-space delivery might be purchaser possession; counsel lacked facts for a definitive exemption answer.
Could a California base plate with a prorate license satisfy the out-of-state registration proof for the heavy-trailer exemption?
Yes for section 6388.5 interstate-use claims, with a timely signed affidavit accepted in good faith. It did not satisfy section 6388's principal-outside-use rule.
Was extensive work to make a malfunctioning used printing machine operate as originally designed taxable fabrication or nontaxable repair?
It was repair or reconditioning, so repair labor was not taxable. Parts treatment depended on their value and whether they were separately charged.
Does a company's proposed Multi-Jurisdictional Sales Tax Certificate form comply with Texas resale certificate requirements?
Yes, with one fix needed. The Comptroller found the submitted Multi-Jurisdictional Sales Tax Certificate form met Texas's basic requirements, but flagged one gap: Texas resale certificates may only…
How did PLR 95-5 apply South Carolina's historical job credits and job development fee to a new multi-county industrial-park facility?
For the addressed project, 1995 was the first job-credit year because permanent staff began operating the facility then. The company qualified for a historical $1,500 annual credit per new full-time…
What requirements did South Carolina's June 1995 gaming regulation use to recognize separate places within one structure?
Each area had to be enclosed by qualifying exterior walls or firewalls without openings to another gaming area. The Department also required separate electric metering, at least one separate…
Is a heavy truck chassis a tax-exempt 'commercial truck' in Connecticut when a bucket lift is mounted on it — and when it's still bare?
It depends on whether it hauls freight. A heavy truck chassis (GVWR over 26,000 lbs) with an aerial lift mounted on it is NOT an exempt 'commercial truck' under Conn. Gen. Stat. § 12-412(70),…
Is replacing the ground beds/anodes in a cathodic corrosion protection system on an existing pipeline every 7 to 15 years considered nontaxable real property maintenance, or taxable repair and remodeling of real property?
It's taxable repair and remodeling, not maintenance. The Comptroller reaffirmed that adding cathodic protection systems to existing pipelines is taxable repair, restoration, or remodeling of real…
When an independent auto dealer is the actual lessor on a vehicle lease and accepts a trade-in, but then immediately sells (assigns) the lease and vehicle to a finance company, can the trade-in still be excluded from the taxable lease receipts?
Yes. Because the dealer itself -- not the finance company -- is the lessor who negotiates and accepts the trade-in with intent to resell it, the trade-in value can be excluded from the taxable lease…
Is a software-duplication company's disc-copying machinery exempt production equipment, and is the electricity powering it exempt production electricity?
Yes to both, but with different thresholds. The duplicating machinery is exempt if used more than 50% of the time ('predominantly') to copy master discs onto blank discs for resale. The electricity…
Is a Texas insurance underwriter liable for sales and use tax on the risk-inspection services it buys from an outside vendor as part of underwriting a policy, and is the underwriting activity itself taxable?
The underwriting activity itself is not taxable — Tax Code § 151.0039(b) and Rule 3.355(c)(1) exclude insurance coverage for which a premium is paid, or sales commissions paid to insurance agents,…
When a business sells tickets to a taxable amusement service in Texas, how much local sales tax must it collect, and can it report the tax on a mixed cash/accrual basis?
The seller of a ticket to a taxable amusement service must collect tax on the full admission price, including any convenience fee, handling charge, service charge, or other amount charged above the…
Are separately stated charges for original design work performed by a Certified Kitchen and/or Bath Designer subject to Texas sales tax?
No. The Texas Comptroller's Tax Policy Division confirmed that separately stated charges for original design work performed by a Certified Kitchen and/or Bath Designer are not subject to sales tax.
Is a ripper and the bulldozer that powers it exempt from Texas sales and use tax as manufacturing equipment when they are used to break limestone and shale out of the earth as the first step in making cement?
Yes, with a condition. The Comptroller ruled the ripper qualifies as manufacturing equipment and is exempt from sales and use tax because it is the first stage in producing cement, breaking…
Was a crane rental still taxable when the owner supplied the operator but the construction customer exclusively directed and controlled the work?
Yes. Because the lessee had exclusive direction and control over the crane and operator, the arrangement remained a taxable equipment lease. Tax applied to the total charge, including the operator.…
Were aircraft parts sent to California only for repair subject to California tax before shipment to Oregon?
Not under the described use-tax exclusion if the out-of-state sale was followed only by California repair and the parts then stayed outside California for the historical six-month period.
Did section 6009.1 exclude materials stored at a California dock before use on offshore rigs in federal waters?
For out-of-state purchases, yes, if California activity was only storage before shipment and sole use outside the state. The exclusion did not apply to sales completed in California.
Who owed tax on tuxedo rentals handled by franchise and bridal shops, and could the owner make a late election to pay tax on the tuxedo cost?
The tuxedo owner owed tax on all rental receipts because the shops were its agents, and it could not retroactively replace rental tax with tax on purchase cost.
If I sell food, soft drinks, or candy to a jail or prison in Texas, or to inmates there, do I have to charge sales tax?
It depends on who is buying. Sales of food products, meals, soft drinks, and candy to the correctional facility itself (for example, to feed inmates at no charge to them) remain exempt from Texas…
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