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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Which of four one-time-use cardiac-catheterization devices were exempt from Florida sales tax?
Response E.P. Catheters and Pacel Bipolar Pacing Catheters were exempt as listed prosthetic or orthopedic appliances. Peel-Away Introducers and Fast-Cath Introducers were taxable medical equipment…
When did delivering multiple servings of cold food on returnable trays make the sale taxable under Regulation 1603(f)?
A large returnable tray did not make bulk food, pre-portioned cake, or individual sandwiches taxable. Tax applied when each serving came in its own returnable container intended for eating from it.
How was tax measured when a manufacturer paid $8,705 toward replacing a defective trailer and the dealer allowed a $9,400 trade-in?
Tax was measured by the new trailer's price plus document fee, less the $8,705 defect credit. The $9,400 trade-in remained taxable.
How much of a $15 pallet charge was a nontaxable deposit when only $13 was refunded after return?
Only the refundable $13 was a deposit. The retained $2 was part of the sales price and entered the tax measure when the retail sale was taxable.
Should a vehicle rebate be subtracted before reporting the sales price on line 21(a) of Texas Form 130-U?
Yes. The Tax Administration Division said the rebate could be subtracted before entering the sales-price amount on line 21(a). Its example reported $19,000 when the initial price was $20,000 and the…
Does a tax-exempt public benefit corporation's blanket sales-tax exemption extend to purchases made by the private contractor it hires to operate and maintain its facility?
No -- the agency's own broad tax exemption applies only when the agency itself is the actual purchaser and payor of record, not to purchases its private operating contractor makes in its own name;…
If a company owns Industrial Development Board bonds that financed its own leased facility, can it still deduct that bond investment from its franchise-tax capital, and exclude the bond interest from income tax — even after paying big dividends to its parent and even though it borrowed the money to buy the bonds?
Yes to all. In a large Industrial Development Board (IDB) bond-financed manufacturing deal, the Taxpayer owned the IDB's bonds (bought with capital contributed — and partly borrowed — by its parent)…
Did California testing make computer equipment taxable before resale to out-of-state affiliates?
No. Units tested in California and then resold and shipped to out-of-state affiliates for sole use there were not subject to California use tax.
Did a customer's good-faith exemption certificate protect a printing broker when printed materials were delivered to the customer or its agent?
No. A certificate protected the seller only when the actual delivery met the regulation; delivery to the purchaser or its agent remained taxable without contrary records.
Were royalties for artwork reproduction taxable, and were photographs or transparencies shipped directly to out-of-state publishers exempt?
Royalties formed part of taxable receipts from the tangible copy sale. Contract-required direct shipment of the copy outside California qualified for exemption.
How did California tax computer equipment bought by a parent for resale after configuration and testing at a California service center?
The parent could buy for resale and owed no use tax on property sent to out-of-state subsidiaries. Its California subsidiary owed use tax, which the parent had to collect.
Does a Texas city owe sales tax on its sewage/wastewater charges, and how should a city handle sales tax on amusement services and related packages like 'Party Buddies'?
No — a city's charge for sewage service is not taxable, even if it is billed as 'waste water service,' because the taxable definition of garbage collection (a real property service) does not include…
Did additional documentary stamp or nonrecurring intangible tax apply when already-taxed timeshare notes and mortgages secured percentage-based warehouse advances?
This ruling was superseded by TAA 94M-004R on March 30, 1994. The revision retained the no-additional-tax result and expressly applied it to the 75% and 80% receivable-loan advances and borrower's…
Did additional documentary stamp or nonrecurring intangible tax apply when already-taxed timeshare notes and mortgages secured an 85% warehouse advance?
This ruling was superseded by TAA 94M-003R on March 30, 1994. The revision retained the core no-additional-tax result and expressly applied it to the receivable-loan advances and borrower's note,…
Can a NAFTA Certificate of Origin be used as proof that goods were exported, for Texas sales tax purposes?
No. The Texas Comptroller ruled that a North American Free Trade Agreement (NAFTA) Certificate of Origin is not helpful in proving that items have been exported for Texas sales tax purposes. The law…
How did Florida's historical intangible tax treat shares of a business-trust fund holding exempt and taxable portfolio assets?
Shares were fully exempt for a year if the January 1 portfolio contained only exempt assets. Otherwise, prior-year-end net asset value was proportionately reduced for U.S. government debt. Florida…
Was a taxpayer's investment with a life insurance company subject to Florida's historical intangible personal property tax?
No. The ruling cited the definition of money, which included the cash equivalent of annuities and life insurance policies, and the statutory exemption for money. Based on those provisions and the…
Could a proposed Florida facility producing customized forms claim the new-business machinery and equipment exemption?
No under the statute then in effect. Even if the operation manufactured tangible products, section 212.08(5)(b)5. specifically excluded printing and publishing firms. The ruling noted a pending 1994…
Were Florida commercial-loan notes taxable when borrowers signed them and delivered them to the lender or its agent in Georgia?
No. The revised ruling found no documentary stamp tax because the notes were signed and accepted in Georgia, not Florida, even though they later returned to Florida for safekeeping and funds and…
Is a foreign corporate limited partner in a Texas real-estate partnership subject to franchise tax, and what are the registration, penalty, and interest rules?
A foreign corporation that is only a limited partner in a Texas real-estate limited partnership is not doing business in Texas and has no franchise-tax nexus, but a general partner in the same…
Were laboratory batch controls used to validate patient-test runs exempt from Florida sales tax as diagnostic chemical compounds?
Yes. Florida found that all described control groups were chemical compounds and that required use of control samples to validate patient results made them part of the procedure for diagnosing or…
Is an agricultural cooperative that breeds cattle and sells semen, whose earnings benefit its members, subject to New York's unrelated business income tax?
No. Select Sires is an agricultural cooperative that artificially breeds members' cattle and sells semen and supplies. New York's unrelated business income tax (Article 13, section 290) applies only…
Are a fleet-management company's personal-mileage and vehicle-expense reports, prepared for individual corporate clients from their own data, subject to New York sales tax as an information service?
No -- because each report is built entirely from a single client's own vehicle/mileage data and covers only that client's own fleet, it counts as personal and individual information excluded from…
Is a toxic-waste cleanup company's cleanup service taxable, and are the supplies (absorbents, drums, protective gear) it uses during a cleanup subject to sales tax?
Yes, the cleanup service itself is taxable as processing/real-property-maintenance work -- and the company's own equipment (booms, vacuums, earth movers) and protective gear (uniforms, protective…
Is routine office cleaning that a commercial landlord bundles into a tenant's lease payment subject to New York sales tax as a maintenance/repair service?
No -- routine cleaning baked into the negotiated lease rate is incidental to the rental of the space, not a separate taxable cleaning service, so those payments aren't subject to sales tax; but any…
Could a Florida limited liability company deduct guaranteed salary payments to owner-partners for corporate income tax purposes?
Yes, when preparing the required pro forma federal corporate return, amounts treated as salaries were deductible if they were reasonable compensation under I.R.C. section 162(a)(1). Discretionary…
Did a face painter at children's fairs and parties make taxable sales or need a California seller's permit?
No. California treated face painting as a personal service, like painting fingernails, rather than a sale of tangible personal property.
Did custom advertising layouts mailed to an advertiser qualify for California's printed-sales-message exemption?
No. Advertising layouts were not catalogs, letters, circulars, brochures, or pamphlets, so their sale remained taxable even though they were created for advertising.
Who owed tax on replacement parts when an independent repair shop performed work for manufacturers under optional warranties?
The repair shop made taxable retail sales of the parts to the manufacturer, measured by fair retail value, when parts were separately charged or exceeded ten percent.
Was the federal excise tax under Internal Revenue Code section 4051 included in the California sales- or use-tax measure?
No. Because section 4051 imposed a retail tax on covered truck, trailer, and tractor property, California excluded it from gross receipts and sales price.
Were charges for scanning customer engineering drawings taxable when the output was returned on disk, tape, or only by modem?
Disk or tape delivery was taxable because scanning only changed the physical recordation form. Modem-only transmission with no property was not taxable.
Were private-investigation services taxable when performed mainly for insurance companies?
Yes, if the services required a Chapter 493 private-investigator license. The customer's insurance-industry status did not remove the tax. A service not requiring licensure, such as standalone…
Were hourly equipment-use charges taxable rentals when an environmental consultant's employees retained all possession and operating control?
No. Florida treated the contract as an exempt professional service because the consultant's employees transported, operated, and controlled the equipment and clients had no access or control. The…
Is testing underground storage tanks for leaks to comply with environmental law a taxable service to real property or a taxable tank repair in Connecticut?
No, on both counts. Testing underground storage tanks at service stations (and the related monitoring wells and test pits) to comply with state and federal environmental laws is a service rendered…
If an out-of-state pension fund invests in Alabama only as a limited partner — and registers as a foreign corporation just to make its contracts enforceable — is it 'doing business' so as to owe Alabama franchise and income tax?
No to both taxes. Entity A, an out-of-state public-school retirement fund (a trust with 'corporate powers,' investing ~$64.35 million as a limited partner in a tiered partnership that owns an…
Is Texas sales tax due on broadcast-quality television transmission and video conferencing services provided to networks and television stations?
Yes, if the transmission originates in Texas. The Comptroller ruled that broadcast-quality television transmission and video conferencing services are 'telecommunications services' under Tex. Tax…
Who owed Florida's historical intangible tax on QTIP and residuary trusts when the wife had income rights and Florida trustees served?
The wife had only a current income right and therefore no taxable beneficial interest or beneficiary filing duty. But the Florida individual and corporate trustees had to file and pay for the…
How did documentary stamp tax apply to primary notes and Florida or out-of-state mortgage collateral in a wholesale warehouse arrangement?
A Florida primary obligation was exempt only up to already-taxed Florida collateral; any excess was taxable. Out-of-state obligations executed outside Florida and brought in only for servicing were…
Is a hot air balloon company's charge for flight instruction, sightseeing rides, or demonstration flights subject to Texas sales tax?
It depends on the type of flight. Pleasure/sightseeing balloon rides and demonstration flights (shown to a potential balloon buyer) are taxable amusement services. But a charge to a student for…
Is a cable TV company's hourly service call charge (for problems that aren't the operator's responsibility) subject to Texas sales tax?
Yes — service charges billed in connection with providing cable television service are subject to Texas sales tax. This includes the hourly-rate charge a cable operator bills for a service call that…
Were business assets transferred to new subsidiaries in a corporate restructuring exempt as an occasional sale or sale for resale?
Factory and office equipment qualified as an occasional or isolated sale under the represented business and frequency facts, except registered or titled vehicles. Inventory and salvage or surplus…
Were a lender-required lease and sublease of the same real property taxable even though the borrower called them a financing arrangement?
Yes. Florida found enforceable leases because occupancy rights moved to the lessee and back to the sublessee for stated consideration. The intermediary could give a resale certificate on the prime…
When did PLR 94-2 treat a federal security contractor's purchases as exempt federal-government purchases?
The purchases were exempt when ABC bought on the federal government's behalf, did not risk its own credit, disclosed the government agency on purchase orders, vested title in the government, and…
Is renting equipment, set dressings, and picture cars for a television or movie production exempt from Texas sales tax?
Yes — effective October 1, 1993, a producer may claim an exemption from Texas tax on qualifying machinery or equipment rented or leased for the production of a motion picture, or a video or audio…
Does Texas sales tax apply to materials, equipment, and electricity used to build a product prototype?
Yes, tax applies — materials used to fabricate a prototype do NOT qualify for the Texas resale exemption. The resale exemption only covers property purchased exclusively for resale and not for use,…
Is sales tax owed on installing, repairing, or remodeling an underground sprinkler/irrigation system in Texas?
It depends on the work and the type of property. New installation and residential repairs are treated as improving real property — tax applies to materials, not labor, and how it's collected depends…
If I bring goods into Texas only temporarily before shipping them out of state for use elsewhere, do I owe Texas use tax?
No use tax is owed on out-of-state purchases that are brought into Texas only temporarily for the purpose of transporting them outside the state for use solely outside the state — Tax Code Section…
Did beneficiaries or trustees owe Florida's historical intangible tax when appointment powers were limited and every trustee was outside Florida?
No. The beneficiaries could not revoke the trusts, invade corpus, or appoint assets for themselves, their estates, or estate creditors, so they lacked taxable beneficial interests. The individual…
Could a church obtain a general California sales-tax exemption because it was nonprofit or income-tax exempt?
No. Retail sales by and to the church were generally taxable unless a specific California sales-and-use-tax exemption covered the transaction.
Can a Texas insurance company claim a multistate benefit exemption on sales tax paid for actuarial services, when the resulting policies are later sold in other states?
No. Under Comptroller Rule 3.355(j), a purchaser can only claim the multistate benefit exemption on services like actuarial studies if it actually has a business location in another state and issues…
If I buy equipment tax-free for rental/lease and later sell it as an 'occasional sale' when reorganizing my company, do I owe Texas sales tax?
Yes, partially — under Tex. Tax Code § 151.055(a), a company that buys equipment tax-free under a resale certificate to rent or lease it, then later sells that equipment in an occasional sale, still…
Were wood chips made from small trees and branches removed during forest thinning exempt waste by-products when sold to generate electricity?
Yes, on the assumed facts. The small trees and branches were waste by-products of timber production; the timber producer's sale to the chipper was for resale, and the chipper's sale to a power plant…
When worn grinding wheels are stripped and re-coated, is that exempt manufacturing, an exempt material purchase, or taxable repair in Connecticut?
It splits into three parts. Replating a worn grinding wheel is NOT the 'manufacture of a tool' under Conn. Gen. Stat. §§ 12-412(18) and (34) — a grinding wheel goes in and a grinding wheel comes out…
Were a county hospital's charges for copies of a patient's own medical records subject to sales tax?
No. The county hospital was a public agency legally required to provide requested patient copies, bringing the charges within the public-record copy exception.
Could a newspaper publisher buy strapping for resale when carriers removed it before delivering newspapers to subscribers?
No. The publisher was the newspaper retailer but the strapping consumer because subscribers did not receive the strapping with the papers.
Is a matchmaking/dating service, where a customer pays for an interview and is then mailed a match's name and phone number based on comparison with other interviewees' records, subject to New York sales tax?
Yes -- collecting and analyzing interviewees' information and furnishing customers with a match's name and phone number is a taxable 'information service,' so the fee charged for this dating service…
Is the software a manufacturer uses to run its computerized milling machines exempt from Connecticut sales tax as manufacturing machinery?
It depends on how the software is bought. A manufacturer's CAD/CAM software that drives its computerized milling machines can qualify for a manufacturing exemption, but with a key catch: (1) if the…
If a Nebraska-domiciled executive takes a fixed 4-year New York work assignment, using a company apartment and spending more than 183 days a year in New York, is he a New York resident or a nonresident for personal income tax purposes?
He remains a nonresident. Because Petitioner Charles M. Harper's New York assignment is for a fixed and limited four-year term (or less, if performance goals are met sooner), after which he will…
Are insurance services performed for a self-insured or self-funded plan taxable in Texas?
No — under Rule 3.355(b), insurance services performed pursuant to a self-insured plan or for a third-party administrator (TPA) handling funds under a self-insured plan are not taxable, including…
Is a city's 20% construction-cost charge for installing new electric power lines taxable, when the line will serve both residential and commercial use?
Yes, it can be taxable. The Comptroller ruled that a city's charge to a customer or developer for installing power transmission lines — even though no property changes hands and the fee just offsets…
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