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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New York Advisory Opinion TSB-A-86 (8)I: Do support payments a divorced woman receives from her ex-husband - calculated as a portion of his pension under their separation agreement - qualify for the $20,000 pension and annuity exclusion under Tax Law § 612(c)(3-a)?
No. The Department ruled that Dorothea Petersen's support payments from her ex-husband, though calculated as a specified portion of his pension under their 1971 separation agreement, are characterized…
How did Texas sales tax apply to replacing a vinyl roof that was a manufactured component of a motor vehicle?
A separately billed repair was taxed on parts only. For a lump-sum parts-and-labor charge, the repairer paid tax on the parts and did not charge the customer tax on the repair.
Could farriers buy horseshoes, supplies, and equipment tax-free under the agricultural exemption?
No. The Comptroller said farriers, who normally charged one lump-sum fee for materials and labor, did not qualify for the agricultural exemption and had to pay tax on those purchases.
Could a chiropractor prescribe vitamins tax-free for Texas sales-tax purposes?
Yes. The Comptroller said chiropractors were treated like doctors for sales-tax purposes and could prescribe vitamins tax-free.
How did the Comptroller's internal timeline assign annual franchise-tax report due dates, penalties, and interest when an extension was late, adequately paid, or only partially paid?
The guidance used March 15 when no timely qualifying extension existed and June 15 for additional tax after a timely, adequately paid extension. It also included a split calculation for a partial-paym…
How did Texas sales tax apply to tanning-bed leases and sales, tanning-clinic membership or session fees, and true customer rentals?
Bed leases and sales to clinics for their own use were taxable. Clinic memberships and on-premises sessions were not taxable, but a true rental giving the customer control and possession of equipment …
Could a supplier accept an exemption certificate on products sold to chiropractors, and could chiropractors dispense vitamins, minerals, and food supplements without collecting sales tax?
Yes. The supplier could accept the certificate; food supplements were exempt as food, and chiropractors could dispense vitamins and minerals tax-free as drugs and medicines.
When were artists' sketches, layouts, consulting design, creative time, and supplies taxable as finished art rather than nontaxable preliminary work?
Work not delivered as the final product could be nontaxable preliminary art, but completed layouts and consulting designs were taxable finished art. Separately stated thinking time unrelated to the fi…
Who paid and collected sales tax when prime contractors or subcontractors used separated versus lump-sum real-property contracts?
Separated contractors acted as retailers, bought incorporated materials for resale, and taxed the material sales price. Lump-sum contractors were final consumers and paid tax to their suppliers.
Are charges for hot air balloon rides subject to New York sales tax, and can a balloon operator get back tax it mistakenly remitted?
The rides aren't taxable if the operator keeps control of the balloon, but a refund depends on the operator's records. 1000 Island Balloon Co. asked whether its $75 hot air balloon rides are taxable a…
Is a modular home a 'mobile home' for New York sales tax, and who collects or pays the tax when it's sold and installed?
A modular home is not a 'mobile home,' and who owes the tax depends on who installs it. Affordable Homes, a mobile-home dealer starting to sell modular homes, asked three things. First, the home doesn…
Are building materials and installation labor for a project financed by an Industrial Development Agency exempt from New York sales and use tax?
Exempt. Casabonne Bros., a contractor, asked how far the sales and use tax exemption reaches on a structure partly funded by an Industrial Development Agency (IDA). Because General Municipal Law § 874…
New York Advisory Opinion TSB-A-86 (7)I: Are fees an investment syndicator receives for raising money for real estate partnerships, and renewal commissions he still receives from his former career as an independent insurance agent, subject to the New York Unincorporated Business Tax?
Yes to both. The Department ruled that fees Mark Schachter received as an investment syndicator - who set up temporary offices in various states to raise investor money for real estate partnerships, t…
Which bras, breast forms, covers, and adaptive garments qualified as exempt prosthetic devices after mastectomy?
Specially made prosthesis bras, temporary or partial-removal breast forms, and replacement covers were exempt. Ordinary bras merely adaptable to a form were taxable; nightgowns and swimwear were left …
Were stock-trailer repair parts and labor exempt when a rancher used the trailer between tracts of land or to haul livestock to market?
They were exempt when the trailer was used only to move livestock between tracts, but the exemption was lost when it hauled livestock to or from market. STAR flags a later registration-number requirem…
Was a separately stated fee for reserving a photographer on a specific day taxable?
It depended on the outcome. The retainer was taxable when a photograph was sold and nontaxable when no photograph was sold.
New York Advisory Opinion TSB-A-86 (6)I: Can a nonresident sales manager, whose compensation is based on the sales volume of the salespeople he supervises (not his own personal sales), choose to allocate his New York income based on sales volume rather than days worked in New York?
No, he has no choice. The Department ruled that Richard C. Thompson, a nonresident advertising sales manager whose compensation depended on worldwide sales made by the salespeople under his supervisio…
Were prescribed therapeutic devices exempt when sold to individuals but paid for by insurance, and could doctors or hospitals buy the devices tax-free?
The individual sale was exempt with a licensed practitioner's prescription, even when insurance paid, and the seller kept the prescription. Doctors, hospitals, nursing homes, and other providers could…
Was electricity used by beer distributors to cool and preserve beer exempt as electricity used in processing?
No. The distributors bought a finished product from the brewery and used electricity only to preserve it, so they were not processors and the electricity was taxable.
How did title passage, export documentation, and storing goods in Texas affect resale certificates and sales-tax refunds for exported property?
A resale certificate depended on title passing in the United States. Texas storage was a taxable use, and no refund was allowed when property remained in Texas more than one month after purchase.
How did Texas tax a 501(c)(4) flying club's hourly aircraft rentals, membership dues, aircraft supplies, and aircraft purchased for rental?
Hourly aircraft rentals were taxable, but monthly membership dues were not. Rental aircraft and their parts could be bought for resale; other use had to relate to the exempt function or trigger tax on…
Did a TR 200 Fat Cat two-wheel motorcycle qualify for the agricultural machinery and equipment exemption?
No. The Comptroller said transportation was not agricultural use and no exemption was available for a two-wheel vehicle, even under the claimed farm-or-ranch use.
Were metallurgical testing services performed on customer-consumed and customer-manufactured parts subject to Texas sales tax?
No. The testing service was nontaxable, so the provider did not collect tax from customers but owed sales or use tax on taxable items consumed in providing the service.
How was tire-casing repair taxed when performed by the retreader itself versus a separate repair provider?
The retreader's own casing repair was part of the retread process. A separate provider's repair was a taxable service, but the retreader could issue a resale certificate for services on tires it would…
Were royalty receipts taxable when a developer licensed toy and game concepts for others to mass-produce, market, and sell?
No. After reviewing the contracts, the Comptroller treated the business as licensing concepts or ideas rather than selling tangible property. Royalties were not taxed, but the developer paid tax on co…
Was egg-production and processing equipment exempt when used exclusively on a farm or ranch by the original producer?
Yes. The 1986 letter exempted equipment used exclusively on a farm or ranch by the original producer to produce and process agricultural products. STAR flags a later registration-number requirement.
Which of a meat market's prepared foods are taxable, and which are exempt off-premises food-store sales?
Arranged platters are taxable; the other prepared foods are exempt only if sold unheated, in food-store form. Cobbs House of Meats sells baked stuffed potatoes, quiche, TV-style dinners, cold soups, s…
Which 1986 cellular-service charges were taxable, and when did local or MTA tax apply to telecommunications and rented equipment?
Most service, access, feature, intrastate-call, directory, and standalone-equipment charges were taxable. Interstate and international calls and installation were not; equipment bundled with telecom e…
Which admissions, catered-food, volunteer food-and-drink, merchandise, alcohol, parking, and vendor sales were taxable at a nonprofit fundraising event?
Provider admissions were nontaxable and one qualifying annual volunteer food event could be exempt. Catered food, alcohol, merchandise, parking, and unpermitted vendor sales remained taxable.
Did a four-wheel all-terrain vehicle qualify for the therapeutic-device sales-tax exemption when used instead of a motorized wheelchair?
No. The Comptroller said the all-terrain vehicle did not qualify under the stated definition of a therapeutic appliance or device.
Was a separately stated charge for a commercial diver's own equipment taxable when the equipment was provided only with the diver's service?
No. The diver provided a nontaxable service rather than an equipment rental, so the separate equipment charge was not taxed. The diver paid tax when buying the equipment.
Which tractors, harvesters, bins, dollies, trailers, repairs, labor, and freight qualified for Texas agricultural exemptions?
Exclusive-use tractors and harvest equipment qualified; dollies also used to haul produce to a plant did not. Bin treatment depended on purchase date, and trailer treatment depended on farm use and mo…
Could a Catholic hospital use its religious-organization sales-tax exemption to buy liquor for medical staff meetings?
No. Although the hospital itself qualified as a religious organization, the liquor purchase was not related to its exempt purpose and therefore did not qualify.
Are 'suggested donations' a religious organization collects for meals taxable as sales of food and drink?
Yes — the 'donations' were really payment for the meals and are taxable. The SYDA Foundation, a 501(c)(3) religious organization, served meals alongside its daily services and solicited 'voluntary don…
Can a pay-phone operator buy phone service for resale, must it collect tax on per-call charges, and are commissions it pays taxable?
The operator buys phone service for resale, collects tax on the full call charge, and its commissions aren't taxable. Coinven installs pay telephones in restaurants and bars, buys telephone service fr…
New York Advisory Opinion TSB-A-86 (4)I: If a New York resident defers compensation under a New York State employee deferred compensation plan and later becomes a nonresident, is the withdrawal subject to New York personal income tax, and does the $20,000 pension exclusion apply?
Partially taxable as wages, and no pension exclusion. The Department ruled that Robert Vincent Smith's withdrawal from a New York State employee section 457 deferred compensation plan - which, followi…
After the Department's first ruling forced a Puerto Rico bank to allocate part of its home-office U.S. bond interest to New York using a special reserve/gross-income formula, did a reexamination change that result -- and can the bank instead use its existing separate-accounting method, which would allocate the interest entirely outside New York?
Yes -- this modified opinion ANNULS the special reserve/gross-income allocation formula set out in the original [TSB-A-86(5)C](/ny/tsb-a-86-5c-issue-raised-is-whether-for-taxable-years-1975-through-19…
Did transferring title to a freight forwarder before export count as a sale supporting a resale certificate?
Not by itself. The freight forwarder had to act as the actual purchaser's agent under a written agreement. Otherwise, foreign resale required title to reach the customer before export or tax followed …
Must a national charity collect New York sales tax on mail-order sales shipped into the state, and does it need to register as exempt first?
It must first establish exempt status; once recognized, its mail-order sales aren't taxable shop/store sales. The National Wildlife Federation, a 501(c)(3) charity, sells a limited range of products (…
Did fixed-term leases signed before October 2, 1984 qualify for the historical prior-contract exemption and protection from later local tax increases?
Yes while continuously in force, but the general exemption expired September 30, 1987. A qualifying contract also received three years of protection from a later local-option rate increase.
Was admission to a restaurant tasting event taxable when the ticket let attendees sample food and drinks from restaurant booths?
Yes as a sale of food and drink, even though the admission was not an amusement-service charge. The mixed-beverage portion already subject to gross-receipts tax was excluded from sales tax.
My late husband's cooperative apartment shares passed under his will into a testamentary trust, of which I'm co-trustee. If the trust now sells the co-op shares, does the personal-residence exemption from New York's Real Property Transfer Gains Tax apply the same way it would if the estate itself were selling?
Not automatically -- it depends on who is living there. Dasha A. Epstein, co-trustee of a testamentary trust holding her late husband Harry D. Epstein's cooperative apartment shares (his former primar…
Was a computer-equipment sale-leaseback a taxable sale and rental or merely a financing arrangement, and was the original sales tax refundable?
The initial purchase remained taxable and not refundable. If the leaseback party was only a secured creditor and the buyer retained the listed ownership burdens and benefits, the leaseback was financi…
Was Texas sales tax due when a contract carrier picked up insulation at the seller's Texas plant and delivered it directly to an out-of-state customer?
No. Direct delivery to the out-of-state customer by the contract carrier kept the insulation sale outside Texas tax, provided the seller retained bills of lading documenting delivery.
Does a New York mutual savings bank's conversion to stock form -- a federal tax-free 'F reorganization' -- also qualify as a tax-free reorganization for New York's bank franchise tax under Article 32?
Yes -- because Article 32 has no modification provision addressing an IRC section 368(a)(1)(F) reorganization, a mutual-to-stock savings bank conversion that qualifies as a tax-free federal reorganiza…
Are labor charges billed under a fleet maintenance agreement taxable service, or exempt employee wages, when the mechanics are on the customer's payroll?
Taxable — the labor is a maintenance service, not exempt employee wages. Coca-Cola Bottling of New York kept auto mechanics on its own payroll but made them available to Soft Drink Leasing Corporation…
Did publicly displaying out-of-state or Mexican goods at a Texas trade show fall within the temporary-storage exclusion from taxable use?
Not unless the goods were being held for sale in the regular course of business. Public trade-show display alone did not fit the exclusion from use.
How is a New York printer/mailer taxed on promotional mailings, and what proof lets it exclude out-of-state pieces?
Printed promotional material is taxed by destination, and the printer can exclude out-of-state pieces only with substantiating records. George Silver, a printer and mailer, produces labels from custom…
How did Texas tax the purchase, five-year bareboat lease, offshore drilling charges, repairs, refitting, component parts, and supplies for a large commercial rig?
The commercial-vessel purchase, qualifying foreign lease, offshore drilling charges, repair labor, and component parts were exempt. Supply items were taxable unless used exclusively in offshore minera…
Did an out-of-state pipe seller become engaged in business in Texas by temporarily storing sales inventory here despite having no Texas salespeople?
Yes. Section 151.107 treated temporary use of a Texas storage place as doing business in the state, so the seller had a collection duty. Customer proof of paid tax could remove sales from the audit.
How did Texas tax cosmetic and medical pet grooming, prescribed veterinary supplies and diets, and items such as foggers and leashes?
Cosmetic grooming was taxable, while clipping required for treatment was not. Prescribed qualifying supplies and diets were exempt, but ordinary clinic sales and nonmedicine items such as foggers and …
Were health-club membership contracts signed before October 2, 1984 exempt from Texas sales tax?
Yes. The Comptroller said contracts entered into before October 2, 1984 qualified for the prior-contract exemption, but that exemption expired September 30, 1987.
New York Advisory Opinion TSB-A-86 (3)I: If a New York resident contributes to an IRA and later becomes a nonresident before withdrawing the funds, is the IRA distribution subject to New York personal income tax?
Only partially, based on where the underlying employment was performed. The Department ruled that Robert Vincent Smith's IRA distribution, received after he became a nonresident, is subject to New Yor…
New York Advisory Opinion TSB-A-86 (2)I: Does logging equipment used to cut and deliver logs to a paper company qualify for New York's investment tax credit, even though the logger performs the work as a contracted service rather than using the equipment in his own manufacturing business?
Yes, for the production equipment - but not for the trucks. The Department ruled that an individual who uses chain saws, loaders, and skidders to cut logs and deliver them to a loading area for a pape…
New York Advisory Opinion TSB-A-86 (1)I: If a New York resident wins the state lottery and later becomes a nonresident before receiving all of the annual prize installments, is the remaining prize money subject to New York personal income tax?
Yes, generally all at once, unless the winner posts a bond. The Department ruled that a Lotto jackpot winner who becomes a nonresident must accrue and include in his New York adjusted gross income - f…
How should a repair shop handle third-party vehicle-storage fees paid for a customer?
The shop should pay tax on the storage fee, not issue a resale certificate, and bill it as a storage reimbursement without adding tax again.
Were salads, dressing, and soup sold from an in-store salad bar taxable in Texas?
Yes. They were taxable because utensils were provided or the food was heated; the retailer also had to keep records separating grocery and food-service sales.
How did Texas tax and source ticket sales for home games, mail orders, subcontractors, and games outside Texas?
Home-game tickets used the event city's rate and allocation; out-of-state games were not subject to Texas sales tax, with special use-tax and agent rules.
What Texas sales-tax exemptions applied to sales by Boy Scout troops?
The Comptroller said Boy Scout branches qualified as educational organizations, allowing one tax-free sale yearly and exempt qualifying food sales.
When a New York mutual savings bank converts to stock form -- a federal tax-free 'F reorganization' -- does New York's bank franchise tax and personal income tax follow the same tax-free treatment, both for the bank itself and for its depositors who receive stock subscription rights?
Yes, on both fronts. Because the mutual-to-stock conversion qualifies as a tax-free reorganization under IRC section 368(a)(1)(F) for federal purposes -- with no gain/loss to the bank, carryover basis…
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