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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Did land placed in the federal Conservation Reserve Program still qualify as agricultural real property for South Carolina's reduced property-tax assessment?
Yes. RR 87-9 held that farmland taken out of production under the federal Conservation Reserve Program (16 U.S.C. §§ 3831–3832) should still be designated agricultural real property for the reduced as…
Did Anderson County's new half-percent sales tax apply to electricity used by commercial and residential customers?
The county tax followed the state sales-tax treatment: commercial electricity was taxable unless the account qualified for and claimed a state exemption, while residential electricity use was not taxa…
How did Texas tax pagers or beepers rented with telecommunications service compared with equipment sold or rented without service?
A pager rented with telecommunications service used the same tax rate as the service. A beeper or pager sold outright or rented without service was treated as an ordinary sale or rental of tangible pe…
Could a Texas hospital-waste disposal service lease its incinerator tax-free for resale, and was its collection and disposal charge taxable?
No. The service provider used the incinerator and could not give its New Jersey lessor a resale certificate; it paid tax on leased equipment and supplies. Hospital waste collection and disposal was ta…
How did Texas sales tax apply to snapshots supplied while performing services for insurance companies, including the film and developing charges?
The provider's total charge to the insurance-company client for snapshots and services was taxable. The provider paid tax when buying film but could issue a resale certificate instead of paying tax on…
Were an attorney's judgment-collection and other debt-collection charges taxable while Texas awaited an Attorney General opinion on attorney services?
Collecting a judgment was not debt collection when the attorney represented the client in the suit that produced it. The letter gave no final rule for other attorney charges and said the Comptroller w…
Which municipal and commercial garbage-collection contracts qualified for Texas's prior-contract exemption, and did renewals or on-request pickups qualify?
The two fixed-term city contracts qualified only through their stated end dates, and renewals did not. A commercial contract needed a pre-July 21, 1987 date, fixed price, specific service level, and f…
For Nebraska's LB 775 personal property tax exemption, do 'agricultural products' include partially-processed farm goods that a company buys and processes further before they reach the consumer?
Yes. Under Revenue Ruling 29-87-9, 'agricultural products' for purposes of the LB 775 personal property tax exemption include products grown or raised on the farm or ranch and the intermediate product…
Could stamped invoices from a private bridge security service prove that duty-free merchandise was exported for the Texas sales-tax export exemption?
No. Section 151.307(b) allowed proof only through specified carrier bills of lading, licensed U.S. customs-broker documentation, destination-country import documents, or qualifying freight-forwarder d…
When did Texas exempt a subscription to a quarterly poetry journal from sales tax, and who collected tax when the exemption did not apply?
A magazine subscription was exempt only if sold for a semiannual or longer period and entered as second-class mail. The letter does not say whether the poetry journal met both conditions. When a magaz…
Was a flat monthly charge for testing residential pool water, adding chemicals, and cleaning taxable, and how were chemicals and service equipment purchased?
Yes. The entire charge for materials, labor, transportation, and incidentals was taxable whether lump-sum or separated. Chemicals transferred to customers could be bought for resale, while cylinders, …
How did Texas allocate the forfeited value of unused credit reports between taxable Texas reports and nontaxable out-of-state reports?
The Comptroller approved multiplying the unused or forfeited contract amount by the ratio of Texas reports actually ordered to total reports actually ordered. That percentage determined the taxable sh…
Was job-site electricity exempt when used directly to power tools and welding equipment on wastewater-treatment projects for exempt customers?
Yes. Electricity used directly in construction for the listed exempt customers was exempt when the contractor gave the utility a certificate identifying the entity and project.
Were services helping employers install and administer qualified retirement plans subject to Texas sales tax?
No. Based on the stated facts, including that the firm did not provide specialized news or current-information bulletins, Texas found the service nontaxable.
Was tax due on pre-October 1987 advance payments for later trash service, and when did a small quarterly filer report and pay the tax?
Tax applied to later service unless a written customer contract predated July 21, 1987. Quarterly returns were due the following month's 20th day.
Were premium-audit services taxable when an independent firm reviewed policyholder records so an insurer could calculate final property or casualty premiums?
Yes. Reviewing policyholder financial records and reporting the premium basis was taxable insurance service because Rule 3.355 covered insurance inspections and analysis connected with calculating pre…
When were Texas real-estate appraisals taxable for loans, property sales, tax purposes, insurance coverage, or insurance claims?
Loan, sale, and tax appraisals were not taxable. Insurance appraisals were taxable, except lender-required appraisals primarily obtained for financing.
When a customer pays partly with food stamps and partly with cash, how should the food stamps be applied for Texas sales-tax purposes?
Apply the food stamps first to taxable eligible items. Collect sales tax on taxable items remaining in the portion paid with cash.
Were appraisals of art, antiques, furnishings, and personal property taxable when done for general value or for insurance purposes?
General value appraisals were not taxable, but appraisals for insurance loss, damage, or coverage valuation were taxable insurance services.
Are the monthly assessments a homeowners association charges to maintain common areas — including a tennis court — taxable as social or athletic club dues?
Yes. Stratford RP, Inc. created the Stratford Green Homeowners Association (a Not-for-Profit corporation) to own and operate a housing development's common property; membership and one vote are automa…
New York Advisory Opinion TSB-A-87 (6)I: For the 1987 taxable year, how should a married E-1 treaty trader who is a dual-status alien for federal purposes handle New York filing status, the standard deduction, proration of deductions/exemptions between resident and nonresident periods, and claiming a nonworking spouse as a dependent?
The Department answered all four questions for the 1987 tax year: (1) a married treaty trader forced to use the federal 'married filing separately' table must use the same New York table; (2) the trad…
Were off-duty security services performed by full-time peace officers taxable, and did the answer change when a security company employed them?
Direct services by full-time peace officers were not taxable, but their time was taxable when included in a security company's charges.
Did a city have to collect Texas sales tax on garbage collection and a separate alley-maintenance fee when it contracted with a private collector?
Yes. The city had to tax garbage services beginning October 1, 1987 and also tax the alley-maintenance fee; it could give the collector a resale certificate.
When did Texas begin taxing real-property surveying, and did written contracts signed before July 21, 1987 qualify for a prior-contract exemption?
Real-property surveying became taxable October 1, 1987. Written contracts made before July 21, 1987 qualified for the prior-contract exemption.
Could a credit-reporting provider buy monthly microfiche credit information for resale, and were its credit-reporting charges taxable?
Yes. The provider could issue a resale certificate for information transferred as part of its credit reports, and its credit-reporting charges were taxable.
Were charges for administering a polygraph examination subject to Texas sales tax?
A stand-alone polygraph examination was not taxable. If it was billed as part of a taxable investigation service, the entire investigation charge was taxable.
Could a seller accept a hotel's resale certificate for linens when the permit number was invalid and hotels ordinarily used rather than re-rented linens?
No. The certificate lacked a valid Texas permit number, and the seller had to consider whether the hotel's ordinary business supported a good-faith claim that the linens were for resale.
How did Texas apply the new insurance-services tax to independent adjusters working in Texas for in-state and out-of-state insurance companies?
Texas confirmed the adjusters' six-point collection plan, including tax on total service charges, but clarified that work for an out-of-state company had to be performed in Texas.
Were charges for collecting and transporting salt water from well sites to disposal wells or disposal areas subject to Texas sales tax?
No. The letter said collecting or transporting salt water from a well site was not a taxable service under Rule 3.356(a)(3)(B).
Did repossessing improved equipment create a taxable sale, and how would Texas measure use tax on the improvements?
Repossession itself was not a sale. The seller owed use tax on the improvements based on the consideration it gave, but the letter lacked enough facts to determine that amount.
Were armored payroll delivery, vault storage, helicopter delivery, and security-guard services for commercial vessels taxable in Texas?
Yes, except security services performed exclusively offshore and outside Texas territorial waters were not taxable under the letter.
Could a restaurant obtain a refund of sales tax paid on electricity bought before October 1, 1987, when food-preparation electricity became taxable?
Yes, if the prior electricity use was predominantly exempt based on the preceding 12 months and Rule 3.295's requirements were met.
For Nebraska's LB 775 incentives, how are leases between members of the same unitary group treated -- do they create qualifying investment or disqualify rented-out property?
They are disregarded, because the unitary group is a single taxpayer. Under Revenue Ruling 29-87-7, for the Employment and Investment Growth Act a unitary group of corporations is only one taxpayer, s…
After a shell corporation acquires a target company's assets by merger and inherits its investment tax credit, can it claim the follow-on employment incentive tax credit using its own pre-merger employment level (zero employees) as the statutory baseline?
Yes -- the successor corporation qualifies for the employment incentive tax credit for the two years after the merger, because its own employment level in those years exceeded 101% of its own (pre-mer…
Were accident reinvestigation, consulting, and information-compilation charges to insurers and attorneys taxable as claims services?
Yes. The described services were taxable as insurance-claims adjustment or claims processing, including charges to insurers and attorneys.
Which janitorial supplies could be bought tax-free, and could a janitorial company issue resale certificates to taxable-service subcontractors?
Transferred supplies such as trash containers and floor wax could be bought tax-free; consumed cleaners could not. Taxable subcontracted services could be bought for resale.
Were pager-service fees taxable when the provider supplied equipment or the customer used its own, and how was the equipment purchase treated?
Pager-service fees were taxable either way. Equipment transferred with the service could be bought for resale; retained equipment could not.
Did a Texas motor-vehicle repairer charge customers tax on lump-sum bodywork, painting, rustproofing, or undercoating, and how were decorative painting charges treated?
No tax was billed on lump-sum repairs; the repairer paid tax on materials. Murals, pinstriping, and signs were taxable on the total charge.
I own two of four contiguous parcels individually, and my wholly-owned corporation owns the other two. All four are being sold together to one buyer under a single contract for $1.2 million, with consideration allocated separately to each parcel so that neither I nor my corporation would individually receive $1 million or more. Are my corporation and I treated as separate transferors for New York's Real Property Transfer Gains Tax, so our considerations aren't aggregated?
No -- because John Malasky owned 100% of John Malasky, Inc., he and the corporation are treated as a SINGLE transferor under the gains tax's 'look-through' principle, so their combined consideration m…
When were plant maintenance, plant leasing with maintenance, and landscaping taxable, and could an older written contract delay tax?
The services were taxable on the dates stated in the letter, but a qualifying contract signed by July 21, 1987 temporarily delayed tax.
If a nonprofit social club exempt under IRC § 501(c)(7) has unrelated business income of less than $1,000 after deductions, does it still have to file Form CT-13 and pay New York's $250 minimum unrelated business income tax?
Yes -- unlike federal law, New York has no minimum dollar threshold before its unrelated business income tax applies, so any § 501(c)(7) organization carrying on unrelated business in New York must fi…
Was the total charge for installing leased electrical capacitors on existing commercial systems subject to Texas sales tax?
Yes. The capacitors remained tangible personal property under the lease, so their sale and installation were taxable; the financing lease was treated as a sale with tax due at the time of sale.
What interim Texas sales-tax methods could credit reporting companies use, and when were screening reports taxable?
Texas accepted two interim reporting methods. Screening reports delivered to a Texas customer were taxable, while reports delivered outside Texas were not.
New York Advisory Opinion TSB-A-87 (5)I: May an S corporation qualify as a 'new business' so an investor can use the Tax Law § 612(o) capital-gain exclusion or the § 612(p) reinvestment deferral for money invested in it?
It depends on which provision. The Department ruled that a corporation cannot be an S corporation at the date it adopts its new-business plan and still qualify as a 'new business' for the section 612(…
Was a real-estate multiple-listing information service taxable, and how were the printed listing-book materials treated?
The service was taxable for Texas customers after October 1, 1987 and nontaxable for out-of-state customers. Material treatment depended on when purchased and transfer of the books.
Were the recipient's delivery, courier, or messenger services taxable under the 1987 Texas sales-tax change?
No. The described services were not taxable; only courier services requiring a license under the cited private-security law were taxable.
Is a homeowners association that maintains a private beach for its members subject to New York's corporate franchise tax, even if it elects federal homeowners-association tax treatment under IRC § 528?
Yes -- maintaining the beach for members' benefit is an 'inurement' of net earnings to members, so the association doesn't qualify for the not-for-profit exemption from Article 9-A, regardless of whet…
Did a Texas taxpayer owe tax on the full invoice for Ohio work adding a truck body and accessories to a cab and chassis?
Yes. The work was remodeling or the final stage of manufacturing, a taxable service, so tax accrued on the total invoice price.
Could a buyer's self-assessment letter or combined purchase-order certificate protect a supplier that did not collect Texas sales tax?
No. Without a properly completed resale or exemption certificate, the supplier remained exposed to tax, penalty, and interest; the buyer needed a direct payment permit to self-accrue tax.
Did Texas decide whether attorneys had to collect sales tax on debt-collection services before a pending Attorney General opinion was issued?
No. The Comptroller said the issue was unresolved and would not require attorneys to collect tax until the Attorney General opinion was issued.
Were gun-club membership dues subject to Texas sales tax when members received access to recreational or sports facilities such as a firing range?
Yes. The letter said membership dues were taxable when the club provided recreation or sports facilities, including a firing range.
Who owed Texas sales tax when operating-lease payment rights were assigned without a written debt instrument and resold to investors?
The original lessor owed tax on all remaining lease payments when it assigned the lease paper. The factor and its investors had no tax liability under the described arrangement.
Was a custodial staffing arrangement taxable when the provider remained the workers' employer but the customer trained and supervised them?
Yes. Texas treated that arrangement as a taxable real property service. It did not decide the second arrangement, where the customer employed the workers and the provider processed payroll.
Could an insurance adjuster issue a resale certificate when another adjuster worked a loss, and how should the rebilled service be taxed?
The adjuster could issue a resale certificate to the subcontracted adjuster but had to charge sales tax when rebilling the service to its customer.
Did Texas decide whether bookkeeping services would be taxable as data processing services?
No. The Comptroller declined to answer while a proposed data-processing rule was being written and said the rule was expected to take effect January 1, 1988.
Was a monthly association fee included in taxable credit-reporting charges, and was collecting overdue city water bills taxable?
The monthly fee was taxable as part of the credit-reporting service. Although debt collection was generally taxable, collecting overdue water bills for the city was not.
When did Texas treat installed draperies or curtains as taxable personal property rather than an improvement to realty?
Usually they were taxable personal property. They were treated as improvements to realty when permanently integrated or installed by a contractor as part of construction or remodeling.
Were the sale and leaseback payments for a heavily anchored 80-megawatt cogeneration plant subject to Texas sales tax when the agreements called it personal property?
No. Texas treated the plant as real property based on its construction, so neither the sale to the trustee nor the operator's later lease payments were subject to sales tax.
Was Texas sales tax due on soft drinks, chips, novelty ice cream, or other items bought with food stamps, including mixed-payment purchases?
No tax was due on items bought with food stamps. For mixed purchases, food stamps were applied first to taxable items and then to nontaxable food.
Did a Texas maid-service business have to collect sales tax beginning October 1, 1987?
Yes. The letter required the maid service to charge customers 7.5% tax on the service price beginning October 1, 1987.
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