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 department-store sale-leaseback parties make attached materials and fixtures taxable personal property merely by agreeing to treat them that way?
No. Physical attachment controlled. Counsel removed attached materials and fixtures from taxable rent, retained freestanding property and denied the rest.
Is a computer-generated wake-up call service sold to private duty nurses subject to Texas sales tax as a telecommunications service?
Yes. The Comptroller ruled that a service placing computer-generated, recorded wake-up calls to private duty nurses (who confirm receipt by pressing a key) is a taxable telecommunications service.…
Can a cable television company claim the manufacturing exemption on the electricity it uses to produce and deliver its cable signal?
No. The Comptroller ruled that CATV providers cannot claim the Tax Code § 151.317 manufacturing exemption on electricity used to produce their signal, because cable television service is…
Does a private dining and athletic club have to collect sales tax on dues and food charged to the federal or a state government?
No. The Comptroller ruled that a company providing private dining and athletic club services is not required to collect sales tax on membership dues, food, or services when a federal,…
Does building a completely new parking lot or street, or enlarging an existing one, count as tax-favorable new construction rather than taxable repair?
It depends on what you actually do, not on the paving process used. Building a completely new street/parking lot, adding length or width to enlarge an existing one, or fully removing and replacing…
Does selling an airplane back to the original leasing company and leasing it back under a financing lease or operating lease trigger Texas sales tax?
It depends on the type of lease and the facts. For a financing lease, if the corporation originally paid tax on the plane, the new lease is also a financing lease, and there is evidence the…
Did use tax apply when buyers took possession of a motorhome but never formally took title or assumed its loan?
Yes. Possession and payment conduct established a purchase; the taxable measure was $41,100, and the later return did not earn a full-price refund deduction.
Are drafting charges from a third party taxable when building or remodeling a natural gas pipeline in Texas?
It depends on who creates the design. If a third party is simply handed schematic drawings and specifications and produces drafting work (drawings/blueprints) from them, that firm is a taxable…
Does the manufacturing phase-in exemption cover a power shear and the mobile power unit that runs it at a metal recycling yard?
Yes, the shear itself qualifies for the manufacturing phase-in exemption, and the mobile power unit that powers it qualifies too, but only if the power unit is used predominantly to power the shear…
How does a Texas roll-off box / solid waste collection company source local sales tax — where the box is placed, or where the office takes orders?
Local tax on a roll-off box/waste collection service is based on where the box is placed, not where the company takes the order. The Comptroller told this taxpayer to collect tax at the rate in…
My brother and I are partners in a family realty partnership that, on paper, owns two unrelated New York properties -- but our partnership agreement has always allocated Property A entirely to me and Property B entirely to him (separate income, separate capital accounts, separate distribution on dissolution), even though title to both properties has always been recorded in our individual names as tenants-in-common (not the partnership's name), for accounting/administrative reasons. We're proposing to liquidate the partnership and simultaneously correct the recorded title so each of us becomes sole owner of 'our' respective property. Does liquidating the partnership and correcting title this way trigger New York's Real Estate Transfer Tax or Real Property Transfer Gains Tax?
Exempt -- each partner already beneficially owned 'his' property under the partnership agreement, so liquidation didn't change anything real. Heinrich Realty Company was a two-partner realty…
When were shares of a municipal-securities fund exempt from Florida's annual intangible tax?
Fund shares were fully exempt when the portfolio held only exempt assets. In a mixed portfolio, direct U.S. government and territorial obligations were removed as exempt; if any taxable asset…
Was removable telephone cable laid through federal buildings machinery and equipment, or a taxable fixture used by a United States construction contractor?
Most building cable was a fixture because it was adapted and intended to remain, so the contractor consumed it; separate jack cable was excluded on reaudit.
Were optional lump-sum maintenance contracts nontaxable services because the seller gave error-correction disks to all software customers?
No. The recommendation treated the whole contract as taxable because update and correction disks were bundled with consultation that customers could not buy separately.
Did California sales tax apply when a corporation merged into a limited partnership under the statutory merger provisions?
No for a merger actually completed under the cited statutory provisions. Counsel compared the corporate and limited-partnership succession language and found it identical for this purpose: the…
Did bulk takeout sales of croissants and sandwich fillings count the same way under California's 80/80 food rule?
No. Bags of individual croissants were already taxable facility-suitable food, while bulk sandwich fillings were not; taxable food still exceeded 80%, taxing takeout sales.
Could a California telemarketer treat use tax as included in a quoted price when its invoices mentioned only unspecified shipping and handling?
No. California required collected use tax to be separately stated, and the invoices contained no written tax notice. Verbal assurances did not establish tax-included sales.
Were circulars asking for charitable donations printed sales messages because the organization would use donations to provide goods and services?
No. They were fundraising materials whose principal purpose was requesting donations, not advertising or promoting goods or services.
Was a disposable coronary atherectomy system used during surgery exempt medicine in California?
No. California treated the one-use system as a taxable surgical appliance or device because it temporarily removed and collected obstructing tissue for treatment and analysis.
When did a hospital's central-supply item become a taxable sale to the patient rather than a hospital-consumed supply?
Only when the hospital separately charged for the item and passed title or possession to the patient. Without itemized billing or patient control, the hospital was the consumer and its supplier's…
Which catheter uses could qualify, and were the listed dilation and contrast-injection catheters taxable?
Permanent and qualifying postoperative drainage catheters could be exempt, but the listed dilation and retrograde-pyelogram catheters were taxable devices.
Would tax apply when a sole proprietor transferred all tax-paid rental equipment to a wholly owned corporation and the corporation continued the leases?
No on the stated assumptions. If the proprietor truly needed no seller's permit, the transfer was an exempt occasional sale. The corporation's later leases were excluded because all leasing-activity…
Is on-site computer network administration (backups, file cleanup, running reports, data manipulation) taxable as a data processing service in Texas?
Partly yes. The Comptroller held that backing up files, cleaning up old files/messages, and using existing tools to produce reports or manipulate data are taxable data processing services under Tax…
Is the rental of a mobile office/office trailer subject to Texas sales tax, and is a separately stated property tax charge taxable?
Yes. Effective October 1, 1993, mobile offices are no longer classified as motor vehicles but as tangible personal property, so their sale, lease, or rental is subject to state and local sales/use…
Does a maid/housekeeping business have to collect Texas sales tax on residential cleaning services?
It depends on the working arrangement. The Comptroller explained that Texas exempts cleaning services performed by an individual employee who cleans the same home for wages, but if the business…
Could a cumulative public-records database issued on compact disc qualify as a periodical when each new disc repeated earlier data and added recent information?
Yes. California construed section 6362.7 to permit computer-readable media and treated the discs as periodicals when issued at stated intervals averaging no more than three months.
Was a nonprofit's member-periodical subscription exempt when its price was included in dues and the publication was mailed to members?
Yes, if the publication met section 6362.7(c)'s periodical definition and the organization delivered it by mail or common carrier.
Could a Florida corporate group stop filing consolidated returns after inadvertently electing consolidated treatment without adequate professional advice?
Prospectively, yes. Florida found good cause and permitted separate filing for fiscal 1994 and later if an extension made the request timely. It refused retroactive deconsolidation or amendment of…
Did Florida county discretionary surtax apply to long-term vehicle leases when only the out-of-state lessor's address appeared on title and registration?
No. Florida treated the title and registration address as controlling, so leases were outside a surtax county when those documents showed only the lessor's out-of-state address. If the Florida…
Did a 1994 California letter exempt disposable catheters used for diagnosis, vascular access, monitoring, administration, and pain management?
No, assuming they were not permanently implanted. The letter treated those functions as taxable device uses and recognized only narrow exceptions for permanent implants and qualifying post-surgical…
Is a new computer/drafting consulting company's revenue — drafting, technical graphics, consulting, hardware/software sales, and sub-contracted work — subject to Texas sales tax?
It depends on the service. The Comptroller ruled that drafting and CAD services (billed by customer specifications), technical graphics/charts/posters, and hardware/software sales are all taxable.…
Does renewing or extending a fixed-term operating lease lock in the original tax rate, or does a new rate apply?
A new rate applies. The Comptroller ruled that while a fixed-term operating lease is taxed at the rate in effect when it was executed for its initial term, each renewal or extension is treated as a…
Does a Texas company owe use tax when it transfers goods between its own divisions, including goods shipped from a Mexico City headquarters or from an out-of-state office?
Yes, generally. The Comptroller ruled that a Houston division owes Texas use tax, based on the original purchase price, when it receives goods (no money changing hands) from a company division in…
Is cutting or closing an opening in a fence to let trucks through a taxable real property service in Texas?
Yes, for a nonresidential fence. The Comptroller ruled that cutting an opening in a fence is taxable remodeling of an improvement to realty, and closing that opening back up is taxable repair,…
Can a customs broker with the purchaser's power of attorney collect a sales tax export refund on the purchaser's behalf?
Yes. The Comptroller ruled that a licensed customs broker may bring export documentation to a retailer and obtain a sales tax refund on the purchaser's behalf, as long as the broker holds the…
Does a personal shopper have to collect Texas sales tax on commission and consulting fees charged to clients?
Yes, when the fees relate to a sale of clothes. The Comptroller ruled that a personal shopper who buys clothes for clients is a seller of that clothing, so commissions and consulting fees added to…
Is prepared coffee sold by a non-restaurant for on-premises consumption taxable in Texas?
Yes. The Comptroller ruled that a charge for prepared coffee sold by a non-restaurant business for consumption on the seller's premises is taxable. This coffee answer is one item in a longer…
Did PLR 94-3 tax gravel, crushed rock, and asphalt that a road contractor produced for its own projects?
Not on the stated facts. Removing gravel and rock from ABC's own land was not a retail sale, and its rare asphalt sales did not make it an asphalt manufacturer. If regular sales later made ABC a…
Was a contractor's sale of fixtures and equipment an exempt occasional sale because its earlier auto-parts sales to the U.S. government were exempt?
No. Exempt government sales still required the contractor to hold a seller's permit, so its later business-asset sale was not occasional. The recommendation nevertheless allowed a refund of tax,…
Did a corporate reorganization excuse two years of tax overpayments for purposes of credit interest?
Only for six months. Staff recommended credit interest for the first two quarters disrupted by the reorganization, but treated the next six quarters as careless errors.
Did nontaxable preliminary art require a separate finished-art contract, and what proof could show client approval occurred before finished-art production?
No separate contract was required. Client statements, memos, conference reports, invoices, and internal records could prove approval preceded finished-art production.
Does a Sequential Compression Device (SCD) qualify for exemption from Texas sales or use tax?
Yes. The Comptroller ruled that Sequential Compression Devices (SCD) qualify for exemption from sales or use tax, and that this exemption covers both the SCD sleeves and the machines themselves. The…
Did deleting a boat buyer's failure-to-file penalty also eliminate the accrued use-tax interest?
No. The filing failure arose from a mistaken belief about Coast Guard paperwork, not a qualifying disaster, and the boat sale was not exempt as an occasional sale.
Is the Berman Airway, a mouthpiece that keeps the mouth open and tongue down, exempt from Texas sales tax?
Yes. The Comptroller ruled that the Berman Airway, a mouthpiece that keeps the mouth open and the tongue down, is exempt from Texas sales tax when used to keep the airway open or to keep the mouth…
Is a New York resident trust exempt from New York State and New York City personal income tax when its sole trustee, its corpus, and all of its income are all located outside New York?
Yes. Even though the Charles B. Moss Trust is a New York 'resident trust' under Tax Law § 605(b)(3)(C) because its grantor was domiciled in New York when the trust became irrevocable, Reg. §…
How did Utah tax pharmacy-computer data services, reports, training, installation, freight, insurance, labels, software and hardware maintenance, rentals, and management services?
Utah treated electronic pricing data, claim processing, and aging reports as nontaxable services, but taxed canned software, hardware maintenance, equipment rentals, start-up fees, taxable-equipment…
How did Utah tax full-service photocopying contracts, vendor equipment and supplies, alternative equipment leases, and separately stated labor and material charges?
The total customer charge for copies, printing, binding, folding, and connected services was taxable. Vendor-owned production equipment was taxable to the vendor, while paper, toner, and other items…
If a Utah company fabricates massive equipment (400-ton autoclave vessels) that gets shipped out of state and permanently bolted to a foundation there, does Utah sales or use tax apply to the fabrication and installation?
No tax was owed, but not for the reason the taxpayer argued. The Commission held that 400-ton autoclave vessels fabricated in Utah and permanently bolted to a Nevada foundation remained tangible…
Did water-treatment programs sell chemicals or provide services when the provider also performed testing, studies, training, and chemical handling?
The provider-administered program was a nontaxable service, but the self-administered program sold taxable chemicals at list price; a separate $500 test-kit charge was taxable.
How was an on-site copy, fax, and mail-center contract taxed when the customer could operate leased equipment itself or hire the lessor's staff?
The optional operator preserved the tax-paid lease, but supplies and copy fabrication were taxable because the sample failed the loaned-employee test.
Can an aircraft previously purchased under the certificated carrier exemption be used as a tax-free trade-in toward a new aircraft that will not be used as a licensed carrier?
Yes. The Comptroller ruled that an aircraft purchased more than five years earlier under the certificated carrier exemption could still be used as a valid trade-in to reduce the sales tax owed on a…
Are purchases made by federal employees using a Government Visa (I.M.P.A.C.) credit card exempt from Texas sales tax?
Yes. The Comptroller ruled that purchases made with the Government Visa I.M.P.A.C. credit card are exempt from Texas sales tax when cardholders are authorized only to make purchases for official…
Are storage fees paid at a public warehouse, charged per carton per day with no formal lease, gross rents that must be capitalized at eight times and included in the Article 9-A property factor?
Yes. Corporation A stores inventory in public warehouses, paying on a per-carton, per-day basis with no formal lease. Under 20 NYCRR 4-3.2, real property rented to a taxpayer is included in the…
Could a cable company retroactively terminate taxable converter-box leases, sell the boxes to a related company, and restart tax-paid leases without tax on rents?
No retroactively. Existing rental-tax treatment continued through each lease, but a real arm's-length sale between ended and new leases could support a tax-on-cost election.
Were Vitalite Snacks labeled as dried seasonal fruits and vegetables exempt from California sales tax?
Yes. Dehydrated foods were treated like their ordinary fruit or vegetable form, and Regulation 1602 listed dehydrated vegetables as food products.
Did the 1994 opinion tax Sunny Days mouthdrops as medicine because they were marketed to freshen breath, and is that medicinal-claim test still current?
The 1994 letter taxed the mouthdrops under its halitosis-medicine theory, but the official source later says medicinal label claims no longer distinguish food from medicine.
Were individually wrapped granola-type Sun Bars exempt after Proposition 163 repealed California's temporary snack-food exclusion?
Yes. Food bars were not one of the supplement forms in Regulation 1602(a)(5), and beginning December 1, 1992 their sales were again nontaxable.
Did Fortune Delight herbal packets qualify as exempt food when the box listed ingredients but did not otherwise describe the product?
They qualified if the individual packets did not label the product as a food supplement. The source later says medicinal label claims are no longer the medicine test.
Were sales of Dr. Chen's Secret Sauce exempt when the product was described as an all-natural barbecue sauce?
Yes. California treated the product as an exempt food because Regulation 1602 expressly listed sauces as food products.
Is renting carbon absorption units used to treat recovered ground water taxable, or is it a nontaxable remediation service?
It's a nontaxable service, not a taxable rental. The Comptroller ruled that although carbon absorption units are left on customers' premises to treat recovered ground water, the customers are not…
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