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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Could preliminary art remain nontaxable if the client was allowed to dispose of the roughs after review instead of returning them to the agency?
No. The agency had to retrieve preliminary art after client review; allowing the client to dispose of it meant the agency sold it and tax applied.
Are non-dairy milk-substitute drinks (soy and rice beverages) taxable or exempt under Texas sales tax?
They are nontaxable. The Comptroller reviewed labels for nine specific non-dairy soy and rice beverage products marketed as milk substitutes and found all nine nontaxable, because they qualify as,…
Could a corporate group stop filing consolidated Florida income-tax returns after the parent disposed of its Florida investment and withdrew from the state?
Yes. Although the group did not show a substantial adverse tax effect or a relevant change in law, the parent's loss of Florida nexus and withdrawal from the state were a sufficient change in…
How did California tax parts used in medical-equipment repairs performed out of state and shipped back to California hospitals?
Retailer treatment depended on separately stated charges or the parts' share of the repair price. The repairer had California nexus and had to collect applicable use tax.
Did taking custom-knife orders at one California show create use-tax collection responsibility even when every knife shipped later from Montana?
Yes under the historical rule applied. Entering California once to solicit or take orders was enough, even if no property changed hands at the show and every knife shipped later.
During a scheduled refinery turnaround, is replacing machinery and equipment that was still working taxable 'restoration,' or nontaxable 'maintenance'?
It counts as nontaxable maintenance. The Comptroller ruled that, during a scheduled and periodic refinery turnaround only, replacing functioning and operable machinery or equipment that is attached…
Is a real-estate document-archiving firm's fee for retrieving, scanning, cataloging, storing, and reproducing building-permit and related documents subject to sales tax, and are its computers exempt production equipment?
Reproduced documents (scanning, maintenance fees, and reproductions delivered back to the subscriber) are taxable as a sale of tangible personal property -- it's data CONVERSION (paper to digital),…
Did a District of Columbia exemption certificate exempt California marine-fuel sales to the Argentine Navy?
No. The California sales were taxable because no qualifying U.S. Department of State Tax Exemption Card or other California exemption proof was provided.
Is proof coil chain used to lower and dip raw materials into cleansing and galvanizing vats exempt from Texas sales/use tax as manufacturing equipment, or is it taxable intraplant transportation equipment?
It is taxable. The Comptroller ruled that proof coil chain used to lower and dip raw material into chemical cleansing and galvanizing vats is excluded from the manufacturing exemption as intraplant…
Did Florida beneficiaries or out-of-state trustees owe Florida intangible personal property tax on discretionary irrevocable trusts without Florida situs?
No. The out-of-state trustees had full discretion over income and principal distributions, maintained no Florida office, and the trust assets had no Florida situs. The trusts were not subject to…
Did a beneficiary with only a limited power of appointment, or the non-Florida trustee, owe Florida intangible personal property tax on the trust?
No. The beneficiary had only a limited power of appointment and could neither revoke the trust nor invade its corpus, so the beneficiary lacked a taxable beneficial interest. The trustee was not a…
Was a membership that merely licensed the taxpayer to enjoy a privilege in a specific area subject to Florida intangible personal property tax?
No. The membership was merely a license allowing the taxpayer to enjoy a privilege in a specific area, so it was not subject to Florida intangible personal property tax. The ruling contrasted it…
Did receivables bought by a Tennessee parent from its Florida subsidiary acquire Florida taxable situs when the subsidiary performed directed processing and collection work?
No. The Tennessee parent owned, managed, and controlled the receivables outside Florida, did no business with Florida customers, and used the Florida subsidiary only for directed ministerial and…
Would receivables transferred to an out-of-state subsidiary before January 1 remain subject to Florida intangible personal property tax?
No, on the stated facts. Receivables owned on January 1 by the out-of-state subsidiary were not taxable whether received by sale or capital contribution because the subsidiary had neither Florida…
Did an annual association directory qualify as a periodical or printed sales message, and how were member copies, reliance on a prior audit, and interest treated?
It was not a periodical, but most copies qualified as printed sales messages; 275 member copies were taxable, written-advice relief failed, and interest remained due.
Is electricity used to power a telephone on a farm or ranch exempt from Texas sales tax under the farm/ranch exemption?
No. The Texas Comptroller ruled that while Tax Code Section 151.316 exempts a variety of items used on a farm or ranch from sales tax, telecommunications services do not qualify for that exemption,…
Did Florida reverse its conclusion that steam purchased for a citrus-processing operation was taxable tangible personal property?
No. On reconsideration, Florida upheld TAA 94A-055. It treated steam as tangible personal property because section 212.06(1)(b) expressly exempted certain self-produced steam energy, showing…
Is renting a large locked wire-mesh storage cage in a condo basement a taxable 'locker rental,' or a nontaxable rental of space, in Connecticut?
It's a nontaxable rental of space, not a taxable locker rental. Connecticut taxes 'locker rental' (except cold storage) as a miscellaneous personal service under Conn. Gen. Stat. § 12-407(2)(i)(FF).…
How did California tax an optional road-hazard warranty that repaired tires free or replaced them for a prorated customer charge?
The warranty fee was nontaxable, but the retailer consumed the warranty-covered part of a replacement tire and made a taxable sale of the prorated part charged to the customer.
Could a service provider offset tax charged to customers against use tax on property it bought for resale but consumed while providing the service?
Yes, transaction by transaction, for reimbursement collected before it knew the service was nontaxable. Later collections could not offset its use-tax liability.
Were charges for vehicle safety and emissions inspections, including the inspection sticker, subject to California sales tax?
No. The inspection was nontaxable labor, and the sticker was a record of the inspection rather than a sale of tangible personal property.
How does a mortgage lender apportion the proceeds from selling mortgage loans, and where are its loan-servicing receipts sourced, for Texas franchise tax?
If the mortgage loans are the corporation's inventory, the gross proceeds from selling them are gross receipts (not just the net gain), and because loan sales are sales of intangibles they are…
Is Texas sales tax due on satellite telecommunications services — including rental of outbound/inbound frequencies, hub monitoring services, and hardware/software maintenance — and if so, how is local sales tax apportioned across remote locations?
Yes, but the rules differ by component. Texas sales tax applies to the 5 outbound satellite frequencies, with local tax apportioned by time (or, if unavailable, by count) of Texas remote locations…
Is a fee for copying and providing a government agency's audio or video tape recording under the Texas Open Records Act subject to sales tax?
No. The Comptroller ruled that charges for audio or video tapes provided by a government agency under the Open Records Act, where the fee just covers the cost of duplicating the tape, are sales of…
For Utah's manufacturing equipment exemption, does it matter whether the electrician or plumber installing equipment connections identifies as a 'real property contractor,' or does it matter how they actually treat the transaction?
It's not the contractor's general self-identification (real property contractor vs. personal property contractor) that matters — it's how the contractor actually treats a specific job. If the…
Is a Texas company's computer trading system for natural gas subscribers — including the software license, monthly access fee, advertising-space charge, and sales commissions — taxable under Texas sales and use tax?
It depends on the charge. The software license is taxable when sold and delivered to Texas subscribers (but not to out-of-state subscribers); the monthly access fee and the advertising-space charge…
Does a cottonseed delinting operation qualify for the Texas manufacturing exemption, and can it accept resale/exemption certificates for the bags, fungicide, and insecticide it charges producers for?
Yes. The Comptroller ruled that machinery and equipment used directly in processing (delinting) the cottonseed qualifies for the Texas manufacturing exemption, and the delinter may accept a resale…
When exporting goods to Mexico, can a customer combine multiple purchases onto one Licensed Customs Broker's Export Certification ('shipper'), and when can a customs broker issue that certification?
Multiple invoices can go on a single export certification ('shipper') only if all the listed items were exported at the same place, date, and time; purchases made on different dates each need their…
Are charges for title searches, title plant information, and related wiring/fax fees taxable under Texas sales tax?
Yes, generally. The Comptroller told the firm that charges for title information sold to attorneys and others are taxable information services, whether the information comes from the firm's own…
If a 'sale and leaseback' is really a secured loan — the customer keeps title and possession and the lender just holds a security interest — are the 'lease' payments subject to Connecticut sales tax?
No. When a 'sale and leaseback' is really a disguised financing — the customer's 'Bill of Sale' expressly grants only a security interest, the customer keeps legal title and possession, and the…
When a company sells online access to the Connecticut DMV computer plus the software to use it, which parts are taxable — the online access, the software fee, the support, and the revenue-share payments?
It splits four ways. (1) The online service giving customers direct access to the DMV computer — to file registrations and make inquiries — IS taxable computer and data processing service under…
Could separately stated customization make the entire prewritten-software transaction nontaxable when it exceeded half the total price?
No. The itemized customization was nontaxable, while the remaining monthly charge required its own analysis and could not borrow the separate amount.
Is demolishing part of a building's interior and removing its roof, trusses, and elevator taxable remodeling, and does it matter whether the demolition contractor is the same firm doing the reconstruction or a separate third party?
Yes, it is taxable remodeling either way. The Comptroller held that charges for interior demolition and removal of the roof, trusses, and elevator are taxable real property remodeling under Tax Code…
Were sales by a charitable hospital's gift shop exempt from Utah sales tax when the shop marketed to the public and competed with private retailers?
Unresolved for the specific gift shop. Utah said a charitable institution's sales were exempt only when made in its regular charitable functions and not through an unrelated trade or business.…
Was a nonresident investment partnership's intangible income South Carolina-source income to its nonresident limited partners under PLR 95-2?
No, on the stated facts. The nonresident partnership pooled investments and bought and sold stocks, securities, intangibles, and partnership interests solely for its own account. It gave no…
How should a repair shop tax an overhead or disposal charge connected with taxable parts and nontaxable labor?
Tax the full charge if it relates only to parts, exclude it if it relates only to nontaxable labor, and prorate a general overhead charge using the parts-to-labor ratio.
Were noncarbonated flavored waters, mineral waters, soft drinks, and canned iced teas exempt, and what if a product such as Koala Springs was actually carbonated?
The described noncarbonated, nonalcoholic drinks were exempt food products, but a product shown to be carbonated was taxable under the rule then applied.
After a corporation withdraws from Texas, does it still have franchise-tax nexus?
No. The Comptroller advised that after the date of its withdrawal from Texas, the corporation would no longer have nexus in Texas and therefore would not be subject to either component of the Texas…
Is the $10-a-year membership fee for a private anti-crime organization subject to Texas sales tax, and what about the tangible items it gives out?
No, the membership dues are not taxable. The Comptroller ruled that a private anti-crime organization's $10 annual membership fee is not subject to sales tax, but the organization must still collect…
Is a paper recycler that grades, separates, fluffs, bales, and packs scrap paper for the repulping industry a manufacturer or processor whose equipment qualifies for the Article 9-A investment tax credit?
Yes. Empire Recycling's paper division grades, separates, fluffs, bales, and packs scrap paper into fifteen graded products meeting exacting mill specifications for the repulping industry. That…
Were military goods taxable when a foreign-government purchasing authority staged and repackaged them at a Florida airport before export?
No. The goods were committed from the purchase order onward to a continuous and certain export process. Staging, limited repackaging, and delays of up to two weeks at the Florida airport were…
Did an insurer's payment and resale certificate turn a medical supplier's direct sale to a patient into a tax-free resale?
No. California treated the transaction as a direct retail sale from the medical supplier to the patient; the insurer's payment did not make the insurer the purchaser for resale.
Did church nonprofit or federal income-tax-exempt status create a general California sales-tax exemption?
No. Retail sales by and to a church were generally taxable unless a specific California sales-and-use-tax exemption applied.
Is erosion control work on a creek bank near a pipeline — including bulkheading, concrete mats, and rock or dirt fill — taxed as landscaping, new construction, or repair/remodeling of real property?
It depends on what is added. Simply adding dirt or rock to an eroded creek bank is landscaping, but because it is not done for aesthetic purposes it is not taxable landscaping. However, adding dirt…
Is an optical scanning device called 'An Open Book,' sold exclusively to visually impaired individuals to scan and read aloud printed items like bills and recipes, exempt from sales tax as a prosthetic aid?
Yes -- it's exempt as a prosthetic aid, since it's functionally similar to an already-recognized exempt device (an Optical Tactile Converter) and, per the seller's own supplier contract, is sold…
Was a graphic designer's full charge for camera-ready newsletter art taxable when delivered on paper or computer disk?
Yes. Typed matter combined with artwork was a taxable sale, including typography charges, and delivering the layout as a computer file on disk did not change the result.
Can a retailer pay a sales-tax export refund to a customs broker instead of directly to the purchaser who paid the tax?
Yes, on an interim basis. The Comptroller reviewed a customs broker's proposal in which a purchaser who exports goods assigns their right to a sales-tax refund to the broker, and concluded that —…
Were a skin cleanser and conductive gel used during medical diagnostic procedures exempt from Florida sales tax?
No. The cleanser and conductive gel were taxable even when sold to physicians or hospitals for use in medical treatment because the ruling found no specific exemption for them. A registered…
Did a Florida-domiciled trustee's management and control give a bankruptcy-created trust's intangible assets Florida taxable situs?
Yes. The trustee was domiciled in Florida and managed or controlled the trust assets while acting as assignee for the trust, corporation, and estate. That Florida presence and control created…
Was a two-to-eight-week espresso-machine trial a nontaxable demonstration when the customer paid 40 cents per cup, including 15 cents for beans?
No. The paid trial was a taxable lease, with tax on the 25-cent machine-use portion per cup; the 15-cent bean charge was separately resale or exempt food.
Is the North American Development Bank (NADBank), created under NAFTA, exempt from Texas sales, excise, use, and hotel occupancy tax?
Yes. The Comptroller confirmed that NADBank qualifies for exemption from Texas limited sales, excise, and use tax and from hotel occupancy tax as an entity exempted from tax by federal law. No…
Did firewood sold to a restaurant chain for cooking pizzas qualify for the section 6358.1 waste-by-product fuel exemption?
No. Firewood can be a forest-operation waste by-product when produced incidentally, but a restaurant cooking pizzas was not an industrial facility. That purchaser requirement failed regardless of…
How did California tax copper cladding fabricated for new residential hoods when attachment occurred before or after the hood became real property?
Before real-property attachment, the cladder made a taxable fabricated-property sale. After attachment, the cladding was material consumed under qualifying contractor billing.
Is propane used to heat a homeowner's pool -- prescribed by her doctor as medically necessary water therapy after knee surgery -- exempt from sales tax as a medical supply, and if not, is there any other exemption available?
The medical-supplies exemption doesn't apply, since it only reaches items taxed under a different section of the Tax Law than the one that covers propane gas service. But the propane still escapes…
Were patents, copyrights, trademarks, trade secrets, trade names, and service marks managed by a Florida subsidiary subject to Florida intangible tax?
No. Florida treated the listed intellectual-property rights as government-granted privileges closely related to franchises and concluded that they were not subject to intangible tax. The published…
Would Florida residents owe intangible tax after contributing their publicly traded stock to a New York general partnership with no Florida situs?
No, after the transfer. The Florida residents owed intangible tax while they personally owned the stock. Once they contributed it to a New York general partnership whose offices, records, accounts,…
Which chamber-of-commerce event receipts were taxable, including admissions, sponsorships, space rentals, educational programs, and event purchases?
Treatment depended on the transaction. Entertainment, golf, and casino-night admissions were taxable; educational meetings and leadership programs were not. Cash donations were not sales, while many…
Did a conditional purchase agreement, memorandum, and vendee's mortgage create documentary stamp or nonrecurring intangible tax before any present payment obligation arose?
Not at recording, under this superseded ruling. The documents created no present obligation to pay a sum certain, so documentary stamp and nonrecurring intangible tax were not then due. If the…
Can a Utah holding company exclude a dividend from its premium-tax-exempt insurance subsidiary from its Utah corporate franchise tax income, either by filing a combined return or under the § 59-7-117 double-tax relief provision?
No. A Utah holding company (P) owned about 80% of a Utah insurance subsidiary (S) that was exempt from Utah franchise and income tax because it already paid premium tax under Title 59, Chapter 9.…
Were monthly charges for placing free advertising postcards in restaurant racks taxable, and who owed tax on the cards and racks?
The client charges were nontaxable advertising services if the firm kept ownership of the postcards; the firm owed use tax on out-of-state cards and racks it used in California.
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