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 made each video-game room a separate 'single place or premises' under South Carolina RR 95-7?
Under the regulation explained in RR 95-7, each video-game room in a shared structure needed qualifying exterior walls or firewalls, a separate electric meter, its own employee during business…
Does the Texas Comptroller agree that the industry-published 'Sales Tax Guide for Texas Printers' (June 1995 edition) — covering when printers charge sales tax, what equipment/energy purchases qualify for the manufacturing exemption, and how to claim refunds — reflects current Comptroller policy?
Yes, with the corrections shown in this letter. The Comptroller's Tax Administration Division (Gilbert Zamora) reviewed the trade associations' 'Sales Tax Guide for Texas Printers' line-by-line,…
Was documentary tax due when church trustees deeded church realty to the same church after nonprofit incorporation under RR 95-8?
No. RR 95-8 concluded that a church's transfer of realty from its trustees to the newly incorporated church was only a change in legal form, not a sale for consideration. Documentary tax was not…
Is a technical-manual developer's computer equipment, software, and supplies exempt production machinery under Tax Law Section 1115(a)(12)?
Yes, to the extent the equipment is used more than 50% of the time to produce camera-ready mechanicals or print-ready computer disks that are delivered to the customer as tangible personal property…
Which restaurant purchases were taxable or exempt from South Carolina sales and use tax under RR 95-6?
RR 95-6 treated food and beverage ingredients and qualifying containers or packaging used to sell and deliver the meal as nontaxable wholesale or exempt purchases. It treated supplies consumed by…
Which entities were subject to South Carolina's corporate license fee under Revenue Ruling 95-5?
RR 95-5 applied the corporate license fee to South Carolina corporations, foreign corporations qualified or doing business or earning income in the state, and LLCs, professional associations, and…
What dry cleaning environmental surcharge and solvent fee did Kansas start charging on July 1, 1995?
Beginning July 1, 1995, the Kansas Dry Cleaner Environmental Response Act required dry cleaning and laundry retailers to collect an environmental surcharge of 2% of gross receipts from dry cleaning…
Were proceeds from Company B's and Company C's sales of telecommunications-operation assets subject to Rhode Island business corporation tax or gross earnings tax?
No. Company B and Company C were public-service taxpayers under chapter 44-13 and therefore outside chapter 44-11's business corporation tax. Their sale proceeds also were excluded from chapter…
Does a contractor owe Texas sales tax on renting portable toilets for a construction job site when the job is a contract to improve real property for a tax-exempt entity like a public school?
Yes, generally. A contractor owes sales tax on the rental of portable toilets used at a job site improving real property for an exempt entity, even if the contract requires the toilets to be there.…
If a retailer of x-ray equipment loans machines free of charge to tax-exempt hospitals and depreciates the equipment on its books, does that count as tax-free demonstration/display use, or does the retailer owe sales tax?
The retailer owes tax. The Comptroller ruled that loaning x-ray machines to hospitals for their free use is not demonstration or display under Rule 3.285(e)(1), because the hospitals have no…
When Company A sells a mold to Company B under a written agreement, is the sale of the mold taxable, and does it matter whether Company B itself manufactures the end product?
It depends on whether Company B is manufacturing tangible personal property for sale and on whether a written agreement transfers title to the mold. If B uses the mold (directly or through a…
If a company leases drilling tools that are delivered to and picked up in Texas, but then actually used at drilling sites in another state (New Mexico), does the lessee owe Texas sales tax on the lease charges?
Yes, generally. Because the lessee took possession/delivery of the leased tools in Texas (the common carrier's bill of lading showed delivery to Odessa, Texas), the operating lease was executed in…
Can 14 related commercial property owners consolidate their on-site maintenance and janitorial staff's payroll processing into a single payroll corporation without triggering New York sales tax on the wages funneled through it?
Yes. As long as each property owner keeps the real controls that make the maintenance staff its own employees -- hiring/firing authority, setting salary and benefits, and reimbursing the payroll…
How old did employees have to be to bartend, serve alcohol, or work in a South Carolina liquor business under RR 95-4?
Under RR 95-4, bartenders serving open beer, wine, or distilled spirits had to be at least 21. Servers, waiters, and waitresses could serve open alcoholic beverages at 18. Anyone working in any…
Were the video game machine regulations attached to SC Information Letter #95-10 already effective?
No. The Department said the four regulations had legislative approval but were not official until the Governor approved the legislation and the rules were published in the State Register. Until…
Were separately stated delivery charges taxable when a cabinet maker's signed contract passed title at shop completion before its own truck delivered?
No. The signed contract passed title when the custom cabinets were completed at the shop, so qualifying separately stated later delivery charges were excluded.
When could a sheriff sell property seized for California tax debt under the minimum-bid rules discussed in 1995?
Only when the highest bid exceeded protected labor claims, specified deposits, and applicable debtor exemptions; otherwise the sheriff had to release the property.
Are meal-replacement and nutritional supplement products like Extreme Measures and Preferred Whey taxable or exempt under Texas sales tax?
Exempt, in this case. The Comptroller found that Extreme Measures may be used as a meal replacement and is therefore treated as a food product, exempt from tax. Whey itself is classified as a food…
How did House Bill 2077 re-enact and change Kansas instant bingo rules in 1995?
After the Kansas Supreme Court declared the 1993 instant bingo laws unconstitutional and Kansas voters approved a constitutional amendment permitting instant bingo in April 1995, House Bill 2077…
Did an auctioneer's trust account protect a taxpayer's abandoned-property sale proceeds from California's levy?
No. Staff said the trust-account exemption protected the auctioneer from its own creditors, not the taxpayer from California, so the auctioneer had to honor the levy after allowed costs.
How does Texas sales and use tax apply to a company that installs, repairs, and remodels exterior lighting permanently placed in the landscaping and hardscaping of residential and commercial property?
It depends on the type of work and the type of property. The company acts as a contractor (not a taxable-service provider) when it makes original exterior lighting improvements to residential or…
Did temporary receivable entries from an investment fund's securities and share sales make its otherwise exempt portfolio subject to Florida intangible tax?
No. The settlement entries for investments sold and fund shares sold were accounting control accounts, not enforceable obligations for payment, because the fund had no recourse if the purchaser…
Was a financial institution's sale of hotel furniture and equipment acquired through foreclosure exempt as an occasional sale?
No. The institution already held a seller's permit for selling and leasing equipment, and it sold the foreclosed furniture, furnishings, and equipment to a customer as it would other equipment. The…
Were charges for scheduled aerobics instruction subject to Utah sales tax when customers received no general right to use a fitness facility or equipment?
No. The Commission treated the described 'pure' aerobics classes as lessons rather than taxable admission or user fees. Customers paid only for scheduled professional instruction and had no…
Is electricity used to recool ferns after they arrive in Texas from Mexico, and again after further processing, exempt from Texas sales tax as an exempt use in processing?
Yes, in this case. The Comptroller held that because a processing step (removing bacteria and deepening the ferns' color) occurred before each recooling, the recooling was itself part of processing,…
Did federal nonprofit status exempt a youth organization's California conference activities from sales and use tax?
No blanket exemption applied. Retail property sales remained taxable, but charges for educational services were not sales when training materials were merely incidental.
For a Dallas-based mobile radio repeater service whose customers are located throughout the Dallas area and suburbs, should local sales tax be charged at the Dallas rate or at the various suburban rates based on each customer's location?
The Dallas rate. Local sales tax on mobile radio repeater services is based on where the telecommunications device (the repeater) that originates the amplified signal is located, not on the…
When a cigarette manufacturer packages a free promotional item -- like a lighter or playing cards -- together with a pack of cigarettes as a marketing premium, is buying that item a tax-free purchase for resale?
No. Promotional items given away for free with a product (rather than genuinely sold to the end customer) don't qualify for the resale exclusion -- the manufacturer's purchase of the premiums is a…
Was the cash-collateral asset recorded by a securities-lending intermediary subject to Florida intangible personal property tax?
No. The intermediary's recorded asset was a collateral cash deposit securing return of borrowed securities, and the cited statutes treated money as exempt. The ruling addressed only the middleman's…
Were monthly burglary and fire security-monitoring fees subject to South Carolina sales or use tax when the provider or customer owned the equipment?
No. The monitoring fee was a nontaxable service charge whether the provider retained the equipment or the customer owned it. Equipment sales and the provider's own equipment use remained taxable.
Who owed South Carolina sales and use tax under PLR 95-4 when a food-service company managed hospital or private-company cafeterias?
For the addressed contracts, the food-service company made a nontaxable wholesale sale when it supplied food to a hospital and provided a nontaxable service when the hospital bought the food itself;…
I paid the coal severance surtax while finalizing a contract, then registered the contract — can I still get the surtax exemption for coal I sold before registration?
Yes — the producer won. New Mexico's coal severance surtax exemption (Section 7-26-6.2) requires a producer to register the qualifying sales contract 'prior to taking the exemption.' Hearing Officer…
Were railroad switches, rails, joints, and other trackwork sold to a California regional rail authority exempt from sales tax?
No. The buyer was a California joint-powers authority, the goods were trackwork rather than exempt freight cars, and the generally applicable sales tax did not discriminate against rail carriers.
Was a fee charged to cellular and paging companies for the right to install antennas on communication towers subject to California sales or use tax?
No. The letter found no tangible-property sale or lease; the live annotation characterizes the tower-site right as real property.
Could a California city give one taxpayer a copy of another taxpayer's sales and use tax return while pursuing local-tax allocation?
No. A city could use Board records only for authorized governmental purposes and had to stop disclosing taxpayer returns to other taxpayers.
On a utility's sale-leaseback of business equipment, is only the gain (not the entire proceeds) taxed under section 186, and how is the gain/profit computed for sections 186 and 186-a?
Only the gain, and it is computed from original cost. On a sale-leaseback of equipment used in (not held for sale in) its business, only the gain -- not the entire proceeds -- is a 'receipt from the…
Did temporary receivable entries from an investment trust's securities and beneficial-interest sales count as taxable assets in its Florida portfolio?
No. The receivables for investments sold and beneficial interests sold were settlement-period accounting controls, not enforceable obligations for payment, because the trust had no recourse if the…
When did withdrawing ex-tax inventory for gifts create California use tax?
When title passed in California. Shipping a gift from California by common carrier completed taxable use here, while a properly purchased item withdrawn and given away outside California did not.
Is a scrap metal processing service — cutting, chopping, and separating aluminum and copper conductors for electric utilities and co-ops — taxable, and does the machinery used qualify for the Texas manufacturing exemption?
The processing service itself is taxable, but the utility company can give the processor a resale or exemption certificate stating the service is purchased to further processing of property that…
When a country club charges members a separate capital assessment to pay for remodeling the club, and the club itself already pays sales tax to the contractors doing the remodeling, is the members' assessment also taxable, or does that create impermissible double taxation?
Both charges are taxable — this isn't double taxation on the same transaction. The remodeling contractors must collect tax from the country club on the total charge for remodeling the nonresidential…
Is a vehicle's DMV registration by the lessee proof that sales tax was paid on a pre-June-1990 lease, and separately, does a lessor keep its exemption-certificate protection when it accepts a farmer's exemption certificate for leasing an ultrasound machine to a veterinarian for use on farm livestock?
No, DMV registration alone doesn't prove sales tax was paid -- for leases before June 1, 1990, the lessor owed sales tax on each lease payment separately (not all at once as under the current law),…
Was a separately stated $3 governmental-compliance fee charged by a welding-supply seller taxable?
Yes. The fee reimbursed the retailer's regulatory compliance costs, so it was a business expense included in taxable gross receipts even when separately itemized.
How were Florida documentary stamp and nonrecurring intangible taxes calculated on limited-recovery mortgages securing a new subsidiary's guaranties?
No intangible tax was due because the mortgages secured contingent guaranty obligations. The guaranties themselves drew no documentary stamp tax, but recording the mortgages did. Stamp tax was…
Were a credit union's signed open-end loan application, plan, addendum, and advance request subject to Florida documentary stamp tax?
No. None of the submitted forms combined a borrower's signature, a written promise to pay, and a determinable amount. The advance request stated an amount but did not promise payment or incorporate…
I own a one-third tenant-in-common interest in a commercial building (subject to a tenant's purchase option worth over $3 million for the whole property). I want to transfer my one-third interest, for no payment, into my own revocable trust -- I'm the grantor and sole trustee, I'll keep receiving all the income during my life, and I can amend or revoke the trust at any time. Does moving my interest into my own revocable trust trigger New York's Real Estate Transfer Tax or Real Property Transfer Gains Tax?
Exempt -- moving property into your own revocable trust doesn't change who beneficially owns it. Betty G. Reader owned a one-third interest, as tenant-in-common, in a commercial building at 391-401…
Did filing a Florida UCC-1 create documentary stamp tax when the note, security agreement, and other loan documents were executed and kept out of state?
No. Filing the UCC-1 alone was not taxable unless the note, security agreement, or another obligatory document was also filed or recorded in Florida. The UCC-1 still had to state that proper stamp…
Did time spent refurbishing an aircraft in Florida count as out-of-state use or storage under California's six-month test?
Yes. Refurbishment time counted, and enough combined out-of-state use or storage could avoid aircraft use tax; the separately bought engine had its own 90-day test.
How does Texas sales and use tax apply to the packing supplies, equipment, and moving vans a moving company uses for local, intrastate, interstate, and international moves?
It depends on how the mover bought the supplies and how it bills the move. If the mover pays tax when it buys supplies, no further tax is due on interstate, intrastate, and local moves (the…
Could used equipment be routed back through its original vendor to create a returned-merchandise deduction before a sale and leaseback?
No. The deduction required an actual return and could not be conditioned on the customer producing a replacement buyer at the original above-market price.
Were charges for designing a software opening screen and an Internet home page taxable?
Taxable when the design arrived on tangible media, and not a resale merely because the client recreated it in software. Fax- or modem-only delivery was nontaxable.
Is the Instituto Panamericano De Geografia E Historia (an organ of the Organization of American States) exempt from Texas sales tax on its purchases because of the OAS treaty?
No. The Comptroller ruled that the Instituto Panamericano De Geografia E Historia is not exempt from Texas sales tax because of the OAS Treaty. The 1948 treaty creating the OAS included a…
Did Florida follow federal tax-free treatment for a savings association's reorganization into a stock association under a mutual holding company?
Yes, assuming the transactions qualified under federal sections 368 and 351 and produced no federal taxable income. Florida recognized no reorganization gain, loss, or basis and holding-period…
Is a manufacturer's post-warranty travel-expense charge, travel extension contract, and extended service contract for repairing equipment taxable in Texas, and does bringing replacement parts into Texas under a warranty or service contract create a use tax liability?
Yes, the charges are taxable, but the parts generally are not use-taxed. The Comptroller held that a manufacturer's lump-sum "On-Site Expenses" charge for post-warranty travel (meals, lodging), a…
Could a Florida landlord stop collecting rent tax after a production-company tenant supplied a blanket exemption certificate?
Yes. A landlord receiving a properly executed certificate in good faith could stop collecting tax and was absolved of liability. The tenant was directly responsible for unsupported claims. Only…
Could an exporting auto dealer claim a state refund directly for sales-tax reimbursement paid to a franchised dealer?
No. Only the selling dealer could claim the sales-tax refund, subject to proving resale or qualifying out-of-state shipment and repaying the buyer.
Was a paid transfer of peptide libraries for destructive research taxable despite being called a collaboration and license?
Yes. The physical peptide libraries were tangible property sold for fixed charges because they were consumed rather than returned; later milestone and royalty payments were excluded on the stated facts.
Did a post-surgical catheter have to remain more than 24 hours to qualify as medicine?
No fixed 24-hour rule applied. California focused on whether the catheter was intended to remain for an indefinite recovery period and assist a natural function after surgery.
Is a bank-account verification service -- where subscribers call in or log on to check whether an applicant's prior checking account was closed for cause -- a taxable information service, even though each answer is about one specific applicant?
Yes, taxable. Even though each inquiry is 'tailored' to one specific applicant, the answer is pulled from the same shared database used to answer every subscriber's inquiries -- so it isn't…
How does House Bill 2161 relieve Kansas school buses from motor fuel tax?
House Bill 2161, effective July 1, 1995, helps school districts and nonpublic schools with motor fuel tax on fuel for their buses. A 'school bus' (per K.S.A. 8-1406) is a bus privately owned and…
Was Company B's one-transaction sale of all rights and assets in its five Rhode Island grocery stores to Company A subject to sales or use tax?
No. Because Company B was liquidating every Rhode Island store and would cease being a retailer in the state, its single-transaction transfer of all rights, title, and interests in the five outlets…
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