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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When did customized software for computerized telephone switching systems qualify as nontaxable custom software?
Separately stated modifications were nontaxable; bundled software required customization above 50 percent. This May opinion was superseded on August 7, 1995.
As a customs broker, what date should I use as the 'date of export' when a proof of export covers multiple invoices grouped together, and how far back can those invoices go?
Under the Comptroller's rules, a single proof of export may cover multiple purchases from multiple vendors, but only if those purchases were made within the 30 days before the goods are certified as…
Was a Florida commercial landlord liable when it failed to collect sales tax from a tenant that refused to pay rent tax?
Yes. The landlord had the duty to collect the stated 6% sales tax plus applicable local surtax in addition to rent. Because it failed to collect, section 212.07(3) made the landlord liable for the…
Is a hospital's charge for an outside company's inspection and certification of hospital electrical and biomedical equipment (to meet federal or state safety regulations required for licensing) subject to Texas sales or use tax?
No. The Comptroller ruled that this inspection and certification service is a nontaxable service. It is not the repair or maintenance of tangible personal property, not the repair of nonresidential…
Do cotton gins in Texas need to have a utility study performed before they can buy gas and electricity tax-exempt for processing?
No. The Comptroller reviewed utility studies of large and small cotton gins showing that gas usage was 98 percent exempt (processing) and electricity usage was over 91 percent exempt, even counting…
If a direct pay permit holder buys equipment or software, stores it in Texas, and then ships it out of state before using it for anything other than storage, does Texas use tax apply?
No. The Comptroller confirmed that a direct pay permit holder does not owe Texas use tax on tangible personal property that is purchased (whether from a Texas or an out-of-state seller), stored in…
Who bore aviation-fuel tax penalties and interest when a Florida refiner failed to collect tax from a licensed importer?
The refiner had to collect and remit the aviation-fuel tax and was subject to applicable penalties and interest on the unpaid tax. The importer still had monthly filing duties, and the ruling…
Were sales of a bottled meat-and-poultry marinade and a dry herb-and-spice blend subject to Florida sales tax?
No. The Department treated the bottled marinade as an exempt grocery sauce used to flavor or tenderize meat and poultry, and the dry onion, herb, garlic, and pepper blend as exempt spices. Sales to…
Did a glossy monthly publication distributed mostly free, but also sold by annual subscription, qualify for Florida's shopper or community-newspaper exemption?
No. Although the publication carried substantial advertising and community content, it was monthly, offered annual subscriptions, called itself a magazine, and used glossy paper. Florida taxed…
Did fabric sample books mailed free to users qualify as printed sales messages because they included labels and incidental printing?
No. The fabric was the primary marketing tool and the printing was ancillary, so the books consisted substantially of samples rather than printed promotional messages.
Does a bone growth stimulator device, prescribed by a physician but applied and owned by the physician in the physician's own office rather than by the patient at home, qualify for Utah's home medical equipment sales tax exemption?
No. Utah's home medical equipment exemption requires (among other things) that the device be purchased or leased by or on behalf of a home patient for that patient's own personal and exclusive use.…
Was a later fee for a code unlocking additional software already stored on a purchased CD-ROM taxable?
Yes. The unlock fee paid for further use of tangible property already delivered on the disk, so it was part of the disk's taxable selling price.
Was a later fee for an unlock code taxable when the additional software was already stored on the customer's CD-ROM?
Yes. The unlock fee paid for further use of software already embodied on tangible media and was part of the CD-ROM's taxable selling price.
Was a lump-sum charge for prepackaged software customized after analyzing each customer's systems subject to Florida sales tax?
No. The seller analyzed each customer's environment, modified the software's format and features, identified the customer in the program, and sold the package only to that customer for one lump sum.…
Would an FDA decision to classify a biofeedback device as medicine make it exempt medicine for California sales tax?
No. The letter said FDA terminology did not control California's sales-tax definition of medicine, so even a favorable FDA response would not change the Board's earlier biofeedback-system conclusion.
Were bundled software-maintenance charges taxable when updates were delivered by modem or installed from a disk the employee retained?
No on these facts. Remote updates transferred no property, and rare employee-operated disk installs were treated as reprogramming services rather than fabrication.
Were admission charges to a section 501(c)(3) urban marine museum exempt from Florida sales tax as charges by a nonprofit sponsoring organization?
Yes. The organization qualified under section 501(c)(3), planned and operated the museum, bore operational costs and losses, carried liability insurance, faced negligence liability, and was entitled…
When a business buys copywriting and graphic design for employee newsletters, sales brochures, and community economic-impact statements, is that a taxable service in Connecticut — and can the fee for the design's reproduction/ownership rights be carved out?
Yes, they're taxable — the only question is which category and where. Copywriting and graphic-design services a business buys to influence a group are taxable Connecticut services: work for…
What tax applied when manufactured equipment was transferred for first-issue stock, leased by the new corporation, and later used by that corporation?
Manufacturer owed use tax on ex-tax inputs; new corporation had to collect rent-based tax, but its own post-lease use was nontaxable.
Are the poles that an electric utility uses to support step-down transformers (and the transmission lines running along them) exempt from Texas sales and use tax as equipment necessary to the manufacturing of electricity?
No. The Comptroller concluded the poles are not exempt. Even though step-down transformers themselves are treated as part of the manufacturing process, the poles supporting them also carry…
Did transferring seller-financed vehicle receivables through a corporate reorganization and then to a limited partnership accelerate unpaid Texas tax?
The first transfer from the dealer corporation to a newly formed corporation did not trigger § 152.047(g). The later transfer of seller-financed receivables from that corporation to a limited…
Is a company that operates school buses under contract with a school district providing a taxable rental of the buses, or an exempt transportation service?
An exempt transportation service. Even though the school district's contract dictates the bus routes, stops, timing, equipment specs, and even the pool of drivers to hire from, the bus company…
Are in-room hotel pay-per-view movie charges taxed in Connecticut as sales tax, as room occupancy tax, or both — and who owes what?
Both taxes apply, at two different links in the chain. The pay-per-view movie service a company provides to a hotel is a taxable 'community antenna television service' under Conn. Gen. Stat. §…
Did California trade-show employees and itinerant dealers require an out-of-state gun-safe manufacturer to collect use tax on all California retail sales?
Yes under the historical facts. Employees and authorized dealers took California orders, creating nexus for trade-show, dealer, telephone, and mail-order sales.
Were the seller's prefilled saline and Heparin flush syringes exempt from California sales tax?
Potentially, but California gave no final answer. A syringe was taxable as a device unless it was disposable, for one use, and sold prefilled with exempt medicine; the seller had not supplied enough facts.
Was a contractor-group membership exempt when its primary benefit was a mailed weekly construction-bid publication and its only other benefit was bidding-room access?
Likely yes if the publication met every periodical test. The membership was treated as its sale, and bidding-room access was incidental to that exempt subscription.
I sold two parcels of land on the same road to the same buyer on the same day, but they're separated by a third parcel owned by a completely unrelated party. Do I have to add the two sale prices together to test New York's $1 million Real Property Transfer Gains Tax threshold, since they're roughly in the same area?
No aggregation required. Gick Road Development Corp. owned two parcels on the same side of Old Gick Road in Suffolk County: a narrow 1.24-acre former railroad-bed strip used for a mobile home park,…
Is the fee a firm pays a third-party mainframe host to store and let it access its own previously-purchased databases -- with no hardware transferred -- a taxable information service or a taxable computer-timeshare rental?
Neither -- the flat monthly fee is untaxed. There's no transfer of possession of the host's computer (so it's not a taxable rental), and since the host is just storing and serving back the…
Does a factory-manufactured home dealer owe sales tax on homes it buys and resells already-installed, and is the installation work of a related but separately-owned installation company subject to sales tax?
Homes sold and installed as permanent capital improvements (not mobile homes, not display models) escape sales tax on both the dealer's purchase and its resale, with the manufacturer owing the use…
How did Florida divide research-and-development and taxable costs for custom special property designed and built for a destination resort?
Historically, the ruling treated 40% of comparable design, fabrication, delivery, and installation cost as exempt research and development and the remaining 60%, including materials, as taxable when…
Was a closely held winery's barrel sale-leaseback merely a bookkeeping or financing transaction exempt from tax?
No. The barrel lessor had a real separate corporate existence and the transaction failed the financing tests, so use tax applied to the winery's rental payments.
When an out-of-state gas marketer sells gas delivered through a utility's pipeline to a New York consumer, who owes sections 186, 186-a and 189 -- the utility or the marketer -- and how is the situs of the sale determined?
Split by role. The utility (Niagara Mohawk) never owns the gas; it only transports it, so its contract-carriage delivery fee is its section 186 gross earnings and section 186-a gross income (as a…
Does a retailer that imports petroleum products from out of state and sells them in its Connecticut stores owe Connecticut's petroleum products gross earnings tax — and is it measured on its sales or on what it paid?
Yes, and it's measured on the sale, not the purchase. A company that brings petroleum products into Connecticut and sells them here makes the 'first sale within this state,' so it owes the petroleum…
Did California's drop-shipment rule make a seller the retailer when it delivered components to a California fabricator working for an out-of-state reseller?
No. The fabricator accepted the components for the out-of-state reseller, assembled them, and shipped them to the reseller's out-of-state customer; delivery was not to an end user or its agent.
Is a custom-fitted canvas awning, installed at a homeowner's residence to block sun from entering the living and dining rooms, an exempt capital improvement, or taxable?
Taxable. Canvas awnings are categorically NOT treated as a capital improvement under the Department's own published guidance and prior precedent, regardless of how custom-fitted or substantial the…
Were two aircraft transfers in a corporate liquidation and merger exempt, and were later crewed charter services taxable?
Both aircraft transfers were exempt: one was a ratable liquidating distribution and the other passed to the surviving corporation in a merger. The described crewed time-sharing service was exempt…
Is a newspaper's charge for a caller voice mailbox — where people can call in and respond to a classified/advertisement — subject to Texas sales tax?
Yes. The Comptroller held that the charge for the caller mail box is taxable as a telecommunications service under 34 Tex. Admin. Code Rule 3.344. Because the newspaper charges advertisers a single…
After further review, does a mandatory condominium association's entire assessment count as taxable club dues, or only the portion actually funding the pool and tennis courts?
Only a reasonable portion is taxable -- this modified opinion corrects the Department's own earlier answer (TSB-A-94(6)S) on the identical facts: rather than taxing the association's ENTIRE…
Were customer-brewed beer operations legal, permitted, and taxable in South Carolina under RR 95-3?
Yes, the described brew-on-premises business was legal, but the operator had to obtain and maintain a brewery permit. The customer who rented the equipment and bought ingredients was liable for beer…
Was a startup's stock-purchase warrant part of taxable equipment rent when it was granted alongside periodic lease payments?
Yes if the warrant had determinable commencement value; that value joined periodic rent. A sufficiently speculative warrant was excluded, and a later stock sale was not rent.
Which phases of a medical-center signage project were taxable when the designer provided concepts, preliminary art, finished drawings, and installation review?
Phases I–II were nontaxable preliminary art, Phase III was taxable finished art, and Phase IV had to split nontaxable installation review from taxable production revisions.
Was natural gas used to control humidity and heat circuit-board cleaning water exempt as industrial manufacturing fuel?
Yes. The gas-powered dehumidifier maintained humidity required for circuit-board production rather than employee comfort, and gas heated cleaning water needed to remove flux. Florida treated both…
I sell towable rock-crushing and screening plants for road work — do those sales qualify for New Mexico's 50% gross receipts deduction for unregistered vehicles?
Yes — the seller won. Builder's Equipment Co. of Albuquerque sells large portable rock-crushing ('spokane') plants and gravel-screening plants used in road construction. They are not self-propelled…
Did a party organizer owe tax on the part of its client fee tied to catered meals and other tangible items?
Yes. The tangible-property portion of the organizer's fee was taxable even though subcontractors collected tax; the organizer received credit for tax already paid.
Could South Carolina coin-operated-device and owner/operator licenses be transferred to a machine's buyer under RR 95-2?
No. RR 95-2 concluded that neither a license attached to a coin-operated device nor the seller's owner/operator license could be sold or transferred. When a licensed machine changed hands, the old…
Did a recorded California tax lien remain on real property after the taxpayer quitclaimed it to another person?
Yes. Staff said the transferee had constructive notice and took the property subject to the lien, but the lien did not mean the transferee personally owed the tax.
Is a hair-replacement system for male pattern baldness -- a custom mesh grid woven with human hair, fused into the client's existing hairline and serviced every 6-8 weeks -- exempt from sales tax as a prosthetic device?
Only if it's shown to be used for a genuine medical problem, not cosmetic purposes -- and even then, fitting/fusing the hairpiece into the client's own hair is itself a taxable installation service.…
Were preliminary design concepts taxable when a freelance designer transferred them on paper or computer disk?
Yes for the assumed nonengineering graphic designs. Paper or disk delivery was taxable, and preliminary status or later customer modification did not change the result.
Were CD-ROM mastering fees taxable, and when were customer-owned manufacturing films shipped out of state exempt?
Mastering fees were part of taxable CD-ROM receipts regardless of labeling. Film sales could avoid sales tax only with qualifying out-of-state shipment and delivery.
Could California assess corporate officers under section 6829 while the corporation itself remained in bankruptcy?
Yes, if the officers had not filed personal bankruptcies and section 6829's requirements were met. The corporation's automatic stay did not protect separate nondebtor officers.
Is the electricity a company uses to chrome-plate aircraft engine parts exempt as 'processing,' or taxable because it's really 'repair and remodeling' of the engines back to their original specifications?
Taxable, on these facts. Even assuming some of the chrome-plating applications reprocessed the engines (by adding new specification options not originally on the parts), the Comptroller's Assistant…
When a bakery sells some food for immediate consumption (taxable) and some food not for immediate consumption (exempt), how does the Texas Comptroller decide whether a utility (electricity) exemption certificate based on a utility study can be accepted?
An exemption certificate based on a utility study can be accepted if it comes with a statement showing the quantity of goods sold for immediate consumption versus not sold for immediate consumption,…
Did a mortgage modification trigger more Florida documentary stamp or nonrecurring intangible tax when the lender's recovery remained capped at the amount already taxed?
No. The original Florida mortgage limited the lender's recovery to $5 million and tax had been paid on that amount. Because the modification preserved the same cap, no additional documentary stamp…
Were a conditional purchase agreement, memorandum, and vendee's mortgage taxed when recorded even though the seller's repayment duty would arise only after a future default?
No. The documents created no present obligation to pay, and the mortgage secured a contingent repayment duty whose amount would be determined only after default. No tax was due at recording; the…
Were certificates representing interests in church mortgage loans, federal obligations, certificates of deposit, and cash subject to Florida intangible tax?
No. Certificate holders participated only in cash, certificates of deposit, federal obligations, and notes fully secured by Florida church mortgages—all assets the ruling identified as exempt. They…
How did Florida value shares of an out-of-state investment trust holding exempt obligations and temporary taxable assets?
Shares were fully exempt when the year-end portfolio contained only exempt assets. If taxable assets remained, direct federal obligations were removed and the remaining net asset value was taxable.…
Did Florida nonrecurring intangible tax apply to loans, notes, mortgages, after-acquired-property liens, and later amendments made under a confirmed Chapter 11 plan?
No. The Department exempted the described term and revolving loans, notes, mortgages, financing statements, after-acquired-property liens, renewals, and modifications because they were transactions…
Were Florida-generated receivables taxable after a foreign corporation transferred them and their security interests to a no-nexus subsidiary before January 1?
No. The no-nexus subsidiary owned the receivables and assigned security interests on January 1, so neither it nor the seller owed intangible tax on them. The related promissory note was eliminated…
Were receivables taxable when a Florida corporation sold them at face value to a no-nexus subsidiary before January 1 and bought them back after January 2?
No. The no-nexus subsidiary owned the receivables on January 1, so neither it nor the Florida parent owed intangible tax on them. The promissory note given for the receivables was an intercompany…
Who had to collect California use tax when a Texas retailer bought furniture from a Michigan manufacturer with California offices and drop-shipped it to a California customer?
The manufacturer was deemed the retailer and had to collect use tax on the Texas seller's marked-up retail price, unless the Texas seller registered or was otherwise engaged in California.
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