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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Is capping a hazardous landfill a taxable service under Texas sales tax?
No — capping a hazardous landfill isn't a taxable real-property or landscaping service. But watch the materials: unprocessed dirt/sand/gravel and its transport are tax-free, while PROCESSED quarry…
Which of the lender's nine open-end loan forms triggered Florida documentary stamp tax?
Only the LoanLiner Subsequent Action Form was taxable, and only when its Extension Agreement was exercised. Tax was based on the unpaid balance entered on that form. The other eight submitted forms…
Did California's drop-shipment rule apply when a manufacturer delivered product to a California processor working for an out-of-state buyer?
No, if the manufacturer documented that the processor performed further work for the buyer and received the product for processing rather than end use.
Was a tenant's direct payment of the landlord's property taxes taxable as rent?
Yes. The lease required the tenant to pay the property taxes as a condition of occupancy, and nonpayment was a default. Florida treated the direct payment to the tax collector on the landlord's…
If I demolish part of a building down to the floor joists (or foundation) and rebuild it into one larger non-residential structure combining old and new areas, is the work taxed as new construction or as remodeling?
It depends on how far down each area is demolished. Razing a structure all the way to its foundation (the piers of a pier-and-beam building count as the foundation) and building a new facility on…
Is the charge for 'notching' sample pipe to calibrate quality-control equipment taxable under Texas sales and use tax?
Yes. The Comptroller ruled that 'notching' sample pipe to calibrate a lab's quality-control equipment is taxable as remodeling. The manufacturing exemption does not apply because the notching is not…
How did Florida value mutual-fund shares for the 1994 annual intangible tax?
The Department confirmed that valuation used the fund's January 1 holdings and that shareholder exemption was proportional to qualifying exempt government obligations held that day. Private-entity…
Was full documentary stamp tax due when the company deeded encumbered property to its trust?
No. Florida required only the minimum documentary stamp tax when the company transferred the encumbered property to a real estate trust of which it remained the sole beneficiary under the…
If I sell petroleum products to out-of-state customers with title transferring inside a Texas pipeline, do I owe Texas sales tax, and what proof do I need that the product left the state?
Crude oil is not subject to Texas limited sales, excise, and use tax at all. Processed oil, natural gas, and other petroleum products are taxable unless the customer resells them (resale…
Is 'third-party installation' a valid reason to claim a Texas sales tax exemption?
No. "Third-party installation" by itself is not a valid exemption certificate reason. True third-party installation labor (by an entity that did not sell the item) is not taxable, but some…
Are parts and labor used to repair or refurbish railroad cars and locomotives exempt from Texas sales tax?
Yes. Locomotives and railcars (complete with the truck) are exempt from Texas sales tax when purchased or sold, and the labor and parts used to repair them are also exempt, with no exemption…
If I supply mobile vendors, do I have to remit tax on sales to vendors who now operate independently of my company instead of exclusively under me?
It depends on whether the mobile vendor is still connected to the supplier. Under Comptroller Rule 3.293, a supplier must remit tax on sales to mobile vendors who still operate under it (e.g.,…
Can the Department substitute a credit toward a taxpayer's future sales tax bill instead of issuing a cash refund, when the taxpayer specifically requested a refund on Form AU-11 for overpaid sales tax on manufacturing electricity?
No. Once a taxpayer checks the 'Refund Claimed' box on Form AU-11 and is found entitled to it, the Department cannot substitute a credit toward future tax payments instead, without the taxpayer's consent.
When a trucking company temporarily stores goods 'in transit' while waiting for delivery instructions, does that storage make its transportation charges taxable, and when does the storage itself become taxable?
Transportation charges stay untaxed either way, but in-transit storage over 30 days becomes taxable on its own -- and if that taxable storage charge isn't separately stated from the untaxed…
When a business-forms company acts as a single 'facilitator' ordering supplies from third-party vendors and drop-shipping them to its own customers, who collects sales tax -- and is the fee for its ordering software and invoicing service itself taxable?
The facilitator buys tax-free for resale from third-party suppliers (using a resale certificate) but must itself separately state and collect the actual sales tax from its customer -- a bundled…
Are building and environmental inspection services (including Phase I Environmental Inspections) taxable in Texas?
No. The Texas Comptroller ruled that the taxpayer's inspection services -- including building inspections for repair and maintenance needs, report writing, material sample testing, specification…
Is scanning paper documents onto CDs a taxable service in Texas?
Yes — electronic document scanning/imaging is taxable as a data processing service under Rule 3.330; you must collect sales tax on your total charge to the customer.
Is a light-bulb-replacement maintenance service taxable in Texas if I only provide labor, not bulbs?
Yes — lighting maintenance (including bulb replacement) is a taxable real property service under Rule 3.356(a)(7), even if you provide only labor and no materials.
Is selling coupon books or passbooks taxable under Texas sales tax?
No — the Texas Comptroller ruled that selling a book of discount coupons (a 'passbook') is considered the sale of an intangible, not tangible personal property, so Texas sales tax does not apply to…
Could an unlicensed carrier recover tax on fuel later used by refrigerated trailer units?
No. Because the carrier was not licensed as a special-fuel dealer and bought tax-paid fuel into bulk storage, it could not claim a refund or credit for reefer use, obtain a retroactive dealer…
How was a separately stated handling charge taxed on invoices containing taxable items, resale items, or both?
The handling charge followed what it related to: fully taxable for retail goods, nontaxable for resale goods, and prorated when it covered both portions of a mixed sale.
How should a seller tax a handling charge on an invoice containing taxable, resale, or mixed items?
Tax the charge when it relates to a taxable retail sale, exclude it when it relates to a resale transaction, and prorate it when it covers both.
Texas Letter Ruling 9409L1316G12: Racetracks — Leased By Exempt Organization To Hold Event — Taxability Of Ticket Sales And Rental Fee/Proceeds Received By Nonexempt Lessor
The rental fee a racetrack owner receives from a nonprofit that leases the track (a percentage of net sales) is not subject to sales tax, and the nonprofit's ticket sales to the event are also…
Is a yacht club condominium a taxable social/athletic club, is the sale of a boat-slip condo unit itself taxable, and can the condo buy maintenance services tax-free for resale when it bills unit owners for maintenance?
The condo IS a social/athletic club, so its Common Expense assessments to unit owners are taxable dues -- but a slip unit's sale is an untaxed real property sale. Maintenance work billed for one…
Was the monthly bacterial grease-control and wastewater-maintenance service taxable?
No. Florida treated the monthly work as a nontaxable personal service and lump-sum maintenance of real property, not a pump rental. The company remained responsible for sales tax on equipment,…
Our company runs a state agency's electronic benefits transfer (EBT) system under contract — is that a taxable data processing service, do we owe sales tax on our fee to the exempt state agency, and can we buy supplies, cards, and outside services tax-free using resale certificates?
Yes — running a state agency's electronic benefits transfer (EBT) system is a taxable 'data processing service' under Texas law, but because the purchasing agency (TDHS) is tax-exempt, the…
When a county raises its local sales tax rate, do equipment lease payments made AFTER the rate increase get taxed at the new higher rate, even though the lease agreement itself was signed before the increase took effect?
Yes. Each rental payment is taxed at the rate in effect when that specific payment is made, not the rate in effect when the lease was originally signed -- so payments made after a local rate…
Were lending notes and other receivables taxable after sale to a foreign affiliate before January 1?
No. The foreign affiliate's purchased receivables had no Florida tax situs, and the Florida seller no longer owned them on January 1. The affiliate's promissory note was taxable but was eliminated…
Did Florida's 1994 intangible tax apply after receivables were sold to a new out-of-state affiliate?
No. Receivables sold before January 1 to the planned out-of-state affiliate with no Florida business situs were not taxed to either corporation. The seller's note was taxable by itself but excluded…
Did Florida's 1994 intangible tax apply after receivables were sold out of state before January 1?
No. Receivables sold before January 1 to an out-of-state affiliate with no Florida business situs were not taxed to either corporation. The seller's note was taxable by itself but excluded as an…
Are 'outplacement services' — counseling laid-off executives to find new jobs, paid for by their former employer — taxable in Connecticut as business management consulting or as employment-agency services?
No — outplacement services are not taxable in Connecticut, under either category considered. Counseling an employer's terminated executives/managers to help them find NEW jobs is NOT taxable…
Does making floral arrangements count as "processing" for Texas utility sales tax exemption purposes?
Yes. The Comptroller's letter states that the activity of making a floral arrangement is considered processing. The taxpayer had asked about the taxability of natural gas and electricity (utilities)…
Does a National Park Service concessioner owe sales tax on materials and services it buys to repair, maintain, and improve government-owned facilities under its concession contract and city license agreement?
Materials that become an integral, permanent part of government-owned property (federal or City) can be bought tax-free, and services genuinely resold to the government are exempt too -- but any…
Does Utah sales tax apply to installed swimming pool cover systems, and does an out-of-state auto-parts locator service with no Utah office or employees owe Utah franchise or income tax?
Two separate advisory opinions are bundled in this record. Installed swimming pool covers become part of the real property, so the installer (not the pool owner) owes sales/use tax on the materials,…
Was cold food delivered in bulk on a large returnable tray taxable when the caterer provided no serving help?
No. Bulk cold food left on a large returnable tray was exempt when employees did nothing more, but dividing it into servings or using individual returnable containers was taxable.
Does vibration-monitoring equipment bought by petroleum processors or electricity generators to protect manufacturing machinery from damage qualify for the Texas manufacturing sales tax exemption?
No. The Comptroller ruled that vibration-monitoring equipment used to detect excessive vibration and trigger safety shutdowns does not qualify for the Texas manufacturing exemption. It is not an…
Is telemarketing taxable in Texas?
It depends on what the telemarketing calls actually do. (1) Using an automated computer system to call people and deliver standardized messages is a taxable telecommunications service. (2) Making…
Is cleaning, painting, and sealing residential air vents/ducts taxable in Texas?
No, not when paint and sealing are involved. The Comptroller reconsidered an earlier ruling that soot-cleaning of vents/ducts was taxable janitorial work, and concluded that when the service also…
How does Texas decide whether a bed-and-breakfast pays residential or commercial (nonresidential) tax on its gas and electricity?
Texas applies a 'predominant use' test. If 50% or more of a bed-and-breakfast's square footage is rented out (or the rooms are offered for rent 50% or more of the year), the property is treated as…
What documentary stamp tax applied to the trustee and title-clearing hotel-property deeds?
Only the minimum tax applied. That result covered the bank trustee's deed to either a successor trustee or the trust's sole corporate beneficiary, and the Tribe's quitclaim deed to either recipient…
Is drafting, marine surveying, marine appraisal, or marine architecture/engineering/consulting work taxable under Texas sales tax?
It depends on who develops the design and why the survey is done. Drafting is taxed as the sale of graphic art only when the customer supplies all the schematics and specifications and the drafter…
Could the jewelry seller collect Florida sales tax for its independent home-show retailers?
Yes. The seller could collect tax from independent retailers at wholesale based on the suggested retail price when that was the actual sales price, avoiding retailer registration. A retailer…
How did California tax free copies, paid California subscriptions, and out-of-state shipments of a monthly cartoon-news publication?
Free qualifying copies needed no 'free' label. Paid subscriptions needed mail or carrier delivery; qualifying interstate sales were exempt.
In a combined Article 9-A report, must the parent still add back interest on debt used to acquire a subsidiary that is itself included in the combined group?
It is handled at two levels. When parent P and subsidiary S file a combined Article 9-A report, each must also file its own separate report. On P's separate report, P must make the section…
Were machines that cleaned dialyzers or purified dialysis water exempt with the hemodialysis machine?
No. The 1994 letter exempted the hemodialysis machine itself but treated the Re-Use cleaning and reverse-osmosis machines as taxable devices, not integral related supplies. Because the lessor was…
How did California tax cabinet refacing, replacement cabinets and windows, and work that altered tables?
Refacing materials and replacement windows were contractor-consumed materials; cabinet status used the 90% test, and table work depended on repair versus fabrication.
If a registered/professional engineer performs forensic investigations of accidents, fires, or structural damage in connection with an insurance claim, does Texas sales tax apply to that service?
Yes. The Comptroller ruled that nothing in the Texas Engineering Practice Act (Article 3271a) or Chapter 151 of the Tax Code exempts a registered/professional engineer from charging and collecting…
How did title, payment, destination, and storage affect tax on business forms shipped from warehouses?
Valid other-state tax could offset California use tax; required out-of-state delivery could exempt a sale, while early title passage without a fixed destination could make it taxable.
How did California tax business forms stored in a vendor warehouse and released later to in-state or out-of-state customer locations?
Tax depended on title passage, payment, and the contract-required destination at sale. Qualifying out-of-state shipments escaped sales tax; most warehouse charges followed a taxable sale.
Were equipment lease payments and exercised purchase options taxable when the customer never received possession and the promised out-of-state delivery never occurred?
No. Without possession, the first arrangement was not a lease; without the contractually required delivery, the later option transactions transferred neither title nor possession and were not sales.
Could California offset a granted sales-tax refund against the same taxpayer's nonfinal sales-or-use-tax assessment?
Yes. Within the same tax law, assessed and self-reported unpaid amounts were due for refund-netting even while collection of a nonfinal assessment was stayed.
Could a retirement home exempt meals for only those residents required to buy room and board for one flat monthly fee?
Yes. The planned bundled meals for 12 residents qualified, while optional meals outside the monthly maintenance fee remained taxable.
Did a pre-nexus standing order exempt later monthly shipments made after a mail-order retailer became engaged in business in California?
No. Staff treated each shipment as a separate sale when title passed at mailing or carrier delivery, so post-nexus shipments required use-tax collection.
Did subscriber-specific names, logos, addresses, and promotions prevent a mailed weekly finance newsletter from qualifying as an exempt periodical?
No. The unchanged finance article remained information of group interest, and the subscriber customization resembled a name-and-address imprint rather than individualized editorial content.
Can a non-Texas retailer use a multi-jurisdictional resale certificate instead of a Texas Resale Certificate when buying from Texas vendors?
Probably not safely. A multi-jurisdictional resale/exemption certificate (even paired with an affidavit) is likely incomplete under Texas law and probably would not protect a Texas vendor from tax…
Does tri-ethylene glycol (TEG) used in natural gas processing qualify for the Texas manufacturing sales tax exemption?
It depends on how the chemical is used. Tri-ethylene glycol (TEG) used like anti-freeze in a pipeline that transports natural gas to an end marketer does NOT qualify for the manufacturing exemption,…
Were separately stated electronic market-data services subject to Florida sales tax?
No. Florida treated the basic and optional financial information transmitted to customer display screens as nontaxable services. Separately charged computer-terminal leases remained taxable, and tax…
Were sales of an auditory-feedback speech device to school districts and a state program exempt as medicine?
No. California treated the speech aid as a taxable device rather than medicine, so it did not need to decide whether the school districts or state program were qualifying agency purchasers.
Did California use tax apply when a company bought tangible personal property from the State of Utah for use rather than resale?
No under the 1994 opinion. Because the State of Utah was not enumerated as a section 6005 person, it could not be a section 6014 seller or section 6015 retailer. The company's nonresale purchase…
Were removable mesh pool fencing, posts, latches, and permanently embedded sleeves all part of one construction contract?
No. Embedded sleeves, curbs, and structural supports were construction work; removable mesh, posts, and latches remained taxable tangible personal property.
How these rulings are useful
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