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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Was an alarm company's building prewiring taxable when performed as part of installing a permanent burglar-alarm system?
Yes. The total alarm-system charge, including prewiring, was taxable as a security service, and future system-maintenance charges were also taxable. The specific security-service tax controlled over t…
How did Texas tax elevator and escalator installation, modernization, maintenance contracts, and repair orders in new or existing buildings?
New-building installation labor was nontaxable. Installation or modernization in existing nonresidential buildings and repair orders were taxable on the total charge. Maintenance of real property was …
How did Texas tax plant leasing and maintenance, proprietary consulting for television commercials, and wardrobe clothing rentals?
Plant rental and maintenance were taxable, while client-specific proprietary consulting was nontaxable. Wardrobe clothing leases were taxable; items known to be exclusively for lease could be bought f…
Did a newcomer welcome service collect Texas sales tax from sponsors for coupon distribution, gifts, and monthly reports?
Yes. The service collected tax from sponsors. A church or newspaper could give a reason-specific exemption certificate, the service could buy printing and gifts for resale, and separately billed coupo…
Did soluble oil, hydraulic oil, and Cyclean filter paper used to manufacture aluminum cans qualify for Texas's manufacturing exemption?
The soluble oil used in cup-forming and can-stretching and the hydraulic oil used in the bodymaker press qualified under Rule 3.300(d)(3). Cyclean filter paper used to refurbish and reuse washed-off o…
Did a tax clause in rental, lease, and service agreements destroy the prior-contract exemption from Texas's October 1, 1987 rate increase?
No, the submitted clause did not. Rule 3.319(c)(4) instead disqualified contracts that specifically shifted tax-rate changes to the customer. The exemption ended when the original agreement ended or J…
Were county publications listing properties posted for foreclosure or already sold taxable information services?
Yes. Texas treated the foreclosure-posting, completed-sale, and referenced trustee and mortgagee listing publications as taxable information services.
Did Texas exclude capital improvements from the new sales-tax treatment of real-property remodeling?
No. The Tax Policy Committee concluded that remodeling included capital improvements, and the Chief Deputy Comptroller approved that decision.
Was a yearly scheduled turnaround on a cat-cracker unit taxable repair or nontaxable real-property maintenance?
It was nontaxable maintenance because the turnaround was scheduled, recurring, preventive work performed before the unit failed.
Was a service that converted insurance applications into computer printouts of rates and premiums taxable in Texas?
Yes. Texas treated the described rating service as a taxable insurance service and required the provider to obtain a Texas sales-tax permit.
Was researching whether property taxes were paid and issuing a certificate to a title company a taxable information service?
Yes. The research-and-certificate charge was taxable as an information service. Separately stated courthouse copy and similar charges incurred during the research were nontaxable.
Were chimney sweeping and residential chimney-top, brick, and mortar replacement labor taxable in Texas?
Chimney sweeping was taxable. Labor to replace chimney tops, brick, and mortar on residential real property was nontaxable, and the contractor could pay tax to suppliers and quote the customer a tax-i…
Is the flat monthly End-User Common Line (EUCL) charge on a phone bill subject to New York sales tax, or is it an exempt interstate charge?
Yes. New York Telephone Company asked whether the flat-rate End-User Common Line ('EUCL') charge it bills every subscriber — an FCC-mandated way to recover part of its cost of providing interstate acc…
Were natural gas and electricity used to prepare refrigerated or frozen catered food exempt from Texas sales tax?
No. Because the same entity prepared and sold the food through its restaurant or catering business, the natural gas and electricity did not qualify for exemption as of October 1, 1987.
Could a direct-payment permit holder claim credit for tax-paid inventory later removed for exclusive offshore mineral exploration or production?
Yes, if the items had no prior use and were used exclusively offshore outside Texas's territorial limits. Credit used the same rate originally accrued and paid, required purchase, removal, and tax rec…
Could a vending-machine operator include sales tax in the item price and back it out of total gross receipts?
Yes. Candy, gum, mints, soft drinks, and cigarettes were taxed on total gross receipts, but the operator could include tax in the sales price and back the tax out of gross receipts.
Were property-tax certificates prepared for title companies taxable information services, and could government-copy costs be excluded?
Yes. Gathering the taxes due or paid on a specific property for a title company was a taxable information service. The cost of copies obtained from a government agency could be excluded from the tax b…
Was a title-search report based on courthouse records taxable, and could separately stated government copy charges be excluded?
Yes. The December 31 letter superseded an October 20 nontaxable answer and treated the title-search report as a taxable information service. Separately stated governmental copy charges could be exclud…
Were Oklahoma data-processing services supplied to Texas financial institutions subject to Texas use tax beginning January 1, 1988?
Yes. After reviewing the servicing agreement and marketing brochure, Texas said the financial-institution data-processing services became taxable January 1, 1988. Because performance occurred in Oklah…
Were janitorial services taxable when a corporation provided them to a partnership in which the corporation was a principal or member?
Yes. Texas treated the corporation and partnership as separate and distinct entities and found no exemption for the taxable janitorial transaction between them.
Did an aircraft lessor's sale qualify as an occasional sale, and was additional tax due after rental taxes already exceeded purchase tax?
Yes, on the stated facts. The aircraft sale qualified as an occasional sale, and no additional tax was due because tax collected and paid on rental or lease charges exceeded the tax that would have ap…
How did Texas distinguish taxable software sales and modifications from nontaxable programming, training, and computer consulting?
The letter taxed completed-program sales and seller-performed modifications, installation, and maintenance, while separately stated training and consultation were generally nontaxable. Modifying softw…
Could subcontracts and material orders signed after July 21, 1987 qualify for Texas's prior-contract exemption when based on earlier bids?
Yes, if the bids were intended for a general contract entered before July 21, 1987 and that contract's final terms were substantially similar to the original bids. On those facts, later-signed subcont…
Were services performed under an industrial-discharge permit issued under Texas Water Code Chapter 26 taxable?
No. Based on the injection-well facts, the Comptroller confirmed that services performed under a permit issued under Texas Water Code Chapter 26 were not subject to sales tax under historical Rule 3.3…
A contractor working on a federal Department of Energy project rents equipment and claims it is the government's agent. Is the equipment rental exempt from New York sales tax?
No. Butler Mechanical, Inc. performs services at the federal West Valley Demonstration Project (run by West Valley Nuclear Services for the U.S. Department of Energy) and argued it was acting as the g…
New York Advisory Opinion TSB-A-87 (11)I: Does the $20,000 pension and annuity exclusion under section 612(c)(3-a) of the Tax Law apply to payments from TIAA-CREF retirement annuity contracts that the retiree funded entirely with his own money?
No. The Department ruled that Robert Stolberg's payments from his T.I.A.A.-C.R.E.F. retirement annuity contracts do not qualify for the $20,000 pension and annuity exclusion under Tax Law § 612(c)(3-a…
How did Texas tax sales and moves of used houses, new foundations, customer-owned house moves, repairs, and subcontractor work before attachment to realty?
When the business owned and sold a used house, the house and moving charges were taxable, while foundation treatment depended on lump-sum or separated billing. Customer-owned house moving was nontaxab…
Does someone selling a mail-order 'kit' that helps property owners challenge their tax assessments have to collect New York sales tax on it?
Yes. Linda and Ralph Spaulding sell a mail-order 'Taxbuster kit' to help property owners in the City of Troy challenge their tax-assessment increases; it contains an article and charts they wrote, a g…
Must a corporation add back 90% of the interest it pays on a loan from a 'nephew' corporation -- a second-tier subsidiary of its ultimate parent, not a direct shareholder or a shareholder's own subsidiary -- when computing New York entire net income?
No -- section 208.9(b)(5)'s 90% interest addback only reaches interest paid to a shareholder owning more than 5% of the taxpayer's stock, or to a subsidiary of such a shareholder; a 'nephew' corporati…
Did Texas's manufacturing-utility sales-tax exemption apply to propane, and what remedy was available for sales tax paid on propane purchases?
No. The letter said propane was subject to fuels tax rather than limited sales tax, while the manufacturing-utility exemption was limited to natural gas and electricity. Any sales tax paid on propane …
Did Texas base the October 1, 1987 transition for taxing insurance services on when the service was performed or when it was billed?
The service date controlled. Services performed before October 1, 1987 were not taxable even if billed on or after that date, while services performed on or after October 1 were taxable.
When did Texas treat an accountant's computer work as taxable data processing rather than nontaxable professional accounting?
Computer word processing, accounts-receivable billing, and payroll-check printing were taxable data processing. Financial reports, printed tax returns, and other work requiring accounting or tax exper…
Were transportation, delivery, and handling charges connected with taxable tangible personal property taxable when separately stated?
Yes. Transportation and delivery charges for tangible personal property sold, leased, or rented were taxable even when occurring after the transaction and separately stated. Handling charges tied to a…
Are receipts from licensing prepackaged (canned) computer software, and from the support contracts that go with it, subject to New York sales tax?
No, on these facts. Cognos Corporation licenses prepackaged (canned) software — a fourth-generation language called Powerhouse for the HP3000 — on magnetic tape, along with software support (telephone…
Did Texas's tax policy committee view painting as maintenance under the proposed 1987 real-property repair and remodeling rule?
The committee's provisional view was that painting was not maintenance unless it was a regularly scheduled activity. The agency also said it would reexamine the entire proposed rule before adoption, s…
Were labor to assemble or reconfigure modular office furniture and charges for refurbishment, disassembly, repair, handling, and transportation taxable?
Yes. Assembly into a finished usable product and reassembly into a new configuration were taxable, whether the furniture was sold by the provider or customer-owned. Refurbishment charges, including di…
When were freight-collect charges taxable, and what historical state and local taxes did the Texas retailer have to collect?
Freight collect was nontaxable unless the retailer accounted for the transportation charge. The retailer otherwise had to collect applicable state and local taxes unless the customer supplied a resale…
How much of a vending machine's receipts was taxable when the operator could not determine the number of candy products sold from a machine containing candy and food?
Texas required tax on candy and soft-drink receipts. If the operator could not determine the number of candy products sold from a machine containing candy, tax was due on 100% of that machine's total …
Which manual and computer-based tax, payroll, accounting, reporting, and consulting services did Texas treat as taxable?
Manual tax returns, financial reports, manual consulting, and manual miscellaneous reports were nontaxable. Computer payroll became taxable January 1, 1988, and computer-prepared accounting records we…
Is a radio paging company subject to New York's gross receipts utility tax when customers reach subscribers by dialing a phone number that automatically links into the radio paging system?
Yes -- the company is a radio common carrier and therefore a taxable utility under section 186-a regardless of whether the telephone link-up is only incidental to its main paging business, but the tax…
New York Advisory Opinion TSB-A-87 (10)I: For purposes of the section 603-A maximum tax on personal service income, is a shareholder-employee's personal service income from an S corporation limited to the amount the corporation designated as salary on his W-2?
Not necessarily. The Department ruled that a shareholder-employee's 'New York personal service income' under the now-repealed section 603-A maximum tax is not automatically limited to the amount his S…
Could an estate make a QTIP marital-deduction election where the surviving spouse had a life estate plus broad power to sell, convey, or dispose of the property?
No. The surviving spouse's broad right to use, sell, convey, and dispose of the property allowed appointment to someone other than herself during her lifetime. That power failed a QTIP requirement, so…
Did a specially designed 60-by-100-foot building for processing, packing, and marketing an owner's vegetables qualify as exempt agricultural equipment?
No. Texas said the building did not qualify as agricultural equipment. The historical exemption required exclusive qualifying use and a design so mechanically specialized that the structure functioned…
Were hourly charges for landmen and lawyers to inspect private tract books taxable when customers read and copied the information themselves?
Yes. Texas treated the hourly access charge as a taxable information service even though the provider did not transmit, explain, or write down the information and the tract books were not public recor…
Did a lease stating a fixed rental payment 'plus sales and use tax' lose its Texas prior-contract exemption?
No. That wording did not defeat the exemption. Historical Rule 3.319(c)(4) instead disqualified contracts expressly making the customer responsible for tax-rate changes or increases, because the selle…
Was labor to originally install, repair, or service specified improvements to residential real property taxable under this 1987 Texas letter?
No. The letter said original installation labor for underground lawn sprinklers, storm windows and doors, siding, original painting, and roofing was nontaxable. Repair and service labor for those impr…
Did a community association correctly collect tax on residents' share of private garbage collection after a City of Houston reimbursement?
Yes. The association received a monthly city payment, billed residents for the remaining contractor cost, and correctly charged the historical 6% state, 1% city, and 1% MTA taxes on the amount billed …
How did Texas tax swimming-pool cleaning, maintenance, minor equipment work, and separately performed significant repairs under this December 1987 letter?
Pool cleaning and maintenance was taxable on the total bill beginning October 1, 1987, including minor equipment work performed as part of that service. Separately charged labor for significant repair…
How did Texas treat HVAC and ventilation repair labor and maintenance contracts for residential and commercial property, and when was tax reported?
Commercial-property repair labor became taxable January 1, 1988, while repair labor on a personal residence's central HVAC and ventilation system was nontaxable. Qualifying maintenance contracts were …
Were tree trimming and grass mowing along electric-power-line rights-of-way taxable in Texas?
No. The letter said trimming trees and mowing grass along electric-power-line rights-of-way were not taxable. It did not decide cutting, hauling, public-road, residential, or golf-course work despite …
Did an exemption from Texas's January 1, 1987 tax increase automatically cover the separate October 1, 1987 increase?
No. A customer needed a new exemption certificate for the October 1, 1987 increase. That exemption applied to qualifying bids and contracts entered on or before July 21, 1987 and lasted until the orig…
Were engineering inspections, investigations, research, analysis, and failure-cause work taxable when connected to an insurance policy?
Yes. Each listed engineering function was taxable when performed for an insurance carrier, its insured, its policyholders, or others if the work pertained to a policy issued by an insurance company.
Did a Texas installer have to charge sales tax on separately stated labor for installing doors, windows, and skirting on residents' mobile homes?
No. The Comptroller treated the installation as nontaxable residential repair and remodeling labor because it was performed for mobile-home residents and labor was separately stated. The materials cha…
When did Texas treat labor to repair installed wall-to-wall carpet as taxable for commercial and residential buildings?
The letter said on-site repair of carpet in commercial buildings would become taxable January 1, 1988, while on-site repair in residences would remain nontaxable. Repair labor performed at a repair pl…
Could a Texas collection agency buy delinquent accounts and collect them as its own accounts without providing a taxable debt-collection service?
A genuine purchase of a merchant's receivables was not unlawful and let the buyer collect its own accounts, but a merchant buyback obligation for uncollectible accounts would make the arrangement a ta…
Was a membership fee taxable when it included contracted insurance-claims processing for members, and who taxed discount-card purchases?
The monthly fee for Texas members became taxable October 1, 1987 because it included insurance-claims processing. Separate discount-card purchases were taxed by the participating vendors because membe…
Were a property-tax consultant's client-specific research, monitoring, appeal, and appraisal services taxable information services in Texas?
The letter treated information gathered or compiled for a particular client, proprietary to that client, and unavailable for sale to others as nontaxable. Information gathered and offered to the publi…
Were commercial tree relocation, transplanting, post-transplant maintenance, and arboricultural consulting services taxable in Texas?
Yes. The letter treated all four described categories as taxable and made the total service charge subject to tax. It allowed specified materials transferred or incorporated into the work product to b…
Was disposal of salt water and other waste resulting from oil-and-gas exploration, development, or production taxable in Texas?
No. The letter said disposal of waste materials resulting from oil-and-gas exploration, development, or production was exempt from sales tax under historical Rule 3.356(4)(B).
Does a paintball or 'survival game' operator have to charge sales tax on the admission to play, and on the equipment used in the game?
The admission to play is not taxable, but a separate charge for equipment is. Ralph M. Toscano Jr. asked about a 'survival game' — teams shooting CO2-powered non-toxic paint pellets on a playing field…
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