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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Were annual season-pass fees for resort cabins, cottages, and campsites taxable in Texas?
Cabin and duplex-cottage fees were fully subject to hotel occupancy tax, while campsite reservation fees were not subject to hotel or amusement tax.
Which automobile machine-shop services were taxable repair, remodeling, processing, or parts sales?
Ordinary repair and maintenance labor was not marked taxable, but engine-performance remodeling, flow testing, reconditioned parts, and mixed jobs were taxable.
Could a telephone company accept one blanket exemption certificate for a customer's multiple locations?
Yes, if every location and number was identified. The certificate also had to describe the services plainly and list the purchaser's phone number.
Did a Texas seller owe sales tax on off-road vehicles sold to Arkansas residents?
Yes when the buyer took delivery in Texas, even if Arkansas motor-vehicle tax was collected; documented vehicles delivered into Arkansas were exports.
Could a business obtain an electricity-tax refund when the utility account remained in the prior owner's name?
Yes, with the prior owner's written assignment for open periods, plus a valid study showing more than 50% qualifying manufacturing electricity use.
Which downhole well services were taxable in Texas, including logging, perforating, and pipe recovery?
Logging, perforating, separately stated caliper work, drill-pipe or casing recovery, and plug setting were nontaxable; some tubing recovery was taxable.
Was an ambulance exempt from Texas motor vehicle tax when it was not purchased by a volunteer fire department?
No. The Comptroller said § 152.087 exempted an ambulance only when a volunteer fire department purchased it. The ambulance also did not qualify under § 152.086's historical disability-related vehicle …
Does a sales agent who only arranges orders have to report the sales or collect New York tax on drop-shipped goods?
An agent who only arranges orders isn't the vendor, but must make sure suppliers collect tax on New York deliveries. Edna Jacobs, d/b/a Industrial Sales, takes phone orders for appliances and places t…
Is installing a satellite dish antenna a tax-exempt capital improvement, or a taxable sale and installation?
The dish and its installation are taxable; only the concrete foundation is a capital improvement. Multi-View Communication installs satellite dish TV antennas that are welded or otherwise attached to …
Was oil-based drilling mud treated as rented property or as a taxable sale when consumed during drilling?
It was a taxable sale, not a rental or lost-item reimbursement. The mud was a consumable supply, and the Comptroller denied the sales-tax refund.
A non-stock, non-profit corporation exists solely to hold title to real property for a labor union local, and is federally exempt under IRC section 501(c)(2) as a title-holding company -- is it exempt from New York's Article 9-A corporate franchise tax?
Yes -- a non-stock corporation organized other than for profit, with no net earnings inuring to any officer, director, or member, that is exempt from federal income tax under IRC section 501(a) (here,…
Does a nonprofit service club have to collect New York sales tax on candy it sells to fund charitable work?
Yes — the club must collect sales tax on its candy sales. The West Seneca Lions began selling candy mints around West Seneca, with the proceeds going to a Project Fund that helps the blind, disabled a…
Were separately stated charges for assembling rented board roads at the job site taxable?
Yes. Texas reversed its prior installation treatment and required tax on board-road assembly charges for contracts made on or after March 21, 1986.
Were design work, contract blueprints, and separately sold extra blueprint copies taxable in Texas?
Design services and included copies were nontaxable, but extra copies sold above the contract quantity were taxable unless the sale qualified for exemption.
Was the requester's existing diplomatic tax-exemption card still valid for Texas sales tax?
No. Based on information from the U.S. Department of State, the Comptroller said the requester's existing exemption card was no longer valid.
Were utilities exempt when a building owner included them in rent charged to the Mexican Consulate?
No. The building owner, not the consulate, bought the natural gas and electricity, so the utilities were taxable commercial use.
Did a series of asset transfers between commonly owned affiliates qualify as an exempt occasional sale?
No. Even with substantially similar ownership, at least 80% of the property had to move in one transaction; the months-long series was taxable.
Was a car bought in Texas for use in Mexico exempt from Texas motor vehicle sales tax?
Yes, if the car was intended exclusively for use outside Texas, driven directly out of state, and not titled or registered in Texas. Texas registration conclusively showed Texas use and made sales tax…
Who had to collect and remit Texas sales tax in a direct-sales organization using independent salespersons?
The direct-sales company was the seller and had to collect tax based on suggested retail price; its independent salespersons did not need permits or returns.
Was a grain-handling system built for the landowner an improvement to realty in Texas?
Yes. The system and permanently attached components were real property, and those components remained realty when temporarily removed for repair.
Could a health club exclude diagnostic-analysis and optional-service charges from taxable membership fees?
Diagnostic analysis had to be included in the membership price unless the prescribed-service exemption applied; genuine optional charges could be separated.
Which welding, repair, loading, and hauling charges on nine oilfield invoices were taxable?
Welding and salt-water-line work were taxable; roustabout loading and pipe hauling were not. Ambiguous invoices were presumed taxable.
Was a storage-trailer rental tax-exempt because a contractor used it on an independent school district construction project?
No. Motor vehicle rental tax was due because the contractor, not the independent school district, rented the storage trailer. The public-agency exemption required a direct rental to the agency, so the…
A New York condominium association (organized under Real Property Law Article 9-B) doesn't issue stock certificates to unit owners, but earns income from garage/parking/laundry rentals, commercial space leases, and interest -- is it a 'corporation' required to file a New York Article 9-A franchise tax return, regardless of how it elects to file its federal return?
Yes -- even though the condominium association doesn't issue stock certificates, each unit owner's proportionate 'common interest' is itself evidenced by a written instrument (the deed/declaration) un…
Who bore the Texas sales-tax risk when a Mexican customer refused to provide proof that goods were exported?
The Texas seller did. The customer was not excused from Rule 3.323 documentation, and the seller owed collection and remittance without proper proof.
Which swabbing, tubing, drilling, testing, and acidizing-related well-service charges were taxable?
Most swabbing, testing, cement-drilling, plug, packer, and acidizing-related work was nontaxable; two rod-and-tubing jobs were taxable.
Is renting a self-service storage unit a taxable storage service or a tax-exempt lease of real property?
Exempt — a self-service unit is a lease of real property, not a taxable storage service, if it meets the tests. The Storage Shed leases specific numbered, enclosed spaces (e.g., 10' x 10') that tenant…
What certificates and export records could a Mexican twin plant use for materials bought from Texas vendors?
Component materials and qualifying manufacturing items could use an exemption certificate; the plant's own equipment and supplies needed proof of export.
Were queen-bee cups, beekeeping supplies, honey, and bees subject to Texas sales tax?
Queen-bee cups were taxable unless bought for resale or qualifying honey production; honey and listed production supplies were exempt, but clothing was taxable.
Which materials and equipment for a federal-agency hospital construction project were exempt from Texas sales tax?
Items incorporated into the federal hospital project were exempt from state, city, and MTA tax; equipment and supplies not incorporated remained taxable.
Was a performer's charge for recording a voice-over for a television commercial subject to Texas sales tax?
No. The performer's voice-over fee was neither tangible personal property nor a taxable service, although the station's total production charge was taxable.
Did Texas's commercial-vessel sales-tax exemption cover a fiberglass vessel displacing less than eight tons?
No. The letter said the exemption required at least eight tons displacement, exclusive and direct commercial use, and sale by the builder.
Were a foreign corporation's officers and directors personally liable for Texas sales tax when the corporation lacked required permits?
Yes, for tax that should have been collected and remitted during their tenure. They were not personally liable for tax incurred before they became officers or directors.
Must an out-of-state catalog seller that has retailers, employee visits, and trade-show activity in New York collect New York sales tax on its mail-order sales here?
Yes — the out-of-state catalog seller has nexus with New York and must collect New York sales and use tax on its retail mail-order sales to New York customers. The Orvis Company, a Vermont seller of h…
Which repair, appliance, assembly, crating, and packing charges to moving companies were taxable in Texas?
Repairs were taxable even when move-related, while listed labor services billed to licensed moving-company agents were nontaxable; materials remained taxable.
Is an architectural model maker's charge a non-taxable service or a taxable sale of tangible personal property?
Taxable — the whole charge is a sale of tangible personal property, not a service. Awad Architectural Models builds three-dimensional models from architects' drawings; roughly 90% of its work is desig…
Did a provider of Las Vegas-style parties have to collect Texas sales tax or hold a sales-tax permit?
Not unless the provider charged admission. The party service was otherwise nontaxable, but the provider owed tax on all equipment and property used.
Did assigning a rental-vehicle purchase contract and security title to a new lienholder trigger Texas motor vehicle sales tax?
No. The car dealer remained the buyer obligated to take title under the original conditional-sale contract. Corporation B merely replaced Corporation A as contract holder and held title as security fo…
What certificates and shipping records did a Texas seller need for offshore-use and export sales-tax exemptions?
Texas required a complete exemption claim for qualifying offshore goods or prescribed export proof; vague offshore wording and unsupported Texas delivery were insufficient.
How did Texas tax vehicle window-tinting charges before and after the February 12, 1986 rule change?
Before February 12, film and installation were taxable unless labor was separately stated; afterward, lump-sum jobs were nontaxable and separated materials taxable.
In a leased-department arrangement where the host store collects the money, who is responsible for the sales tax?
The host store (licensor) reports and remits the tax, but both it and the licensee are jointly liable. Peter Knych holds a license to sell goods he buys from an unrelated third party at a host busines…
A Puerto Rico-chartered bank's HOME OFFICE (not its New York branch) holds U.S. government securities, and federal law (IRC section 882(e)) forces the bank to treat that interest as U.S.-trade-or-business income purely because it also has a U.S. branch -- does that federal rule pull the interest income into New York's bank franchise tax base too, and if so, how much of it is New York's share?
Yes -- because Article 32's entire net income starts from federal taxable income, and section 1453 has no modification carving out IRC section 882(e) interest, a Puerto Rico bank's U.S.-obligation int…
Were parking, canoe-rental, and customer-shuttle charges subject to Texas sales tax?
Parking and canoe-rental fees were taxable, but separately stated charges for shuttling customers were not taxable.
Did greasing, painting, rebuilding, or overhauling used drilling bits qualify for Texas manufacturing exemptions?
Rebuilding or overhauling qualified as remanufacturing, but greasing or painting did not; exemption applied only to items used exclusively in qualifying work.
Did a physician's prescription for swimming therapy make a planned swimming pool exempt from Texas sales tax?
No. The Comptroller said a swimming pool did not qualify as an exempt therapeutic device even though a physician prescribed swimming as therapy.
Were fees for coupon advertising on cash-register tape and the related design setup charge taxable in Texas?
The periodic advertising-space fee was nontaxable, but employee-fabricated artwork or design was taxable; the provider owed tax on tape and printing costs.
Do I owe sales tax on the fee I pay my equipment lessor to cancel a lease early and get released?
Yes — the early-termination fee is taxable. Robert L. Goodrich and Bruce A. Sahs (R.L. Goodrich & Company) lease computer equipment under a seven-year lease at $1,169 a month plus sales tax and now wa…
What did the Comptroller's 1986 internal guidance say changed in Franchise Tax Rule 3.406 and its throwback-rule application?
Two policy changes applied to reports due on or after January 9, 1986; other revised provisions reflected older policy and could apply back within limitations.
A not-for-profit homeowners association elects federal 'homeowners association' tax treatment under IRC section 528 and its only income is member assessments (for maintaining roads and recreational facilities) plus bank interest -- is it exempt from New York's Article 9-A corporate franchise tax, or at least is its NY taxable income limited to just the interest income?
No to both questions -- the association is NOT exempt from Article 9-A, and its New York taxable income is NOT limited to just its interest income. Even though the association is a not-for-profit corp…
Does a gas utility charge sales tax on new gas-service hookups, and does it owe tax on the pipe and materials it installs?
The utility must collect sales tax on new gas-service installation charges, and it owes sales or use tax on the pipe, fittings, tools and supplies it buys. Syracuse Suburban Gas Company installs new s…
Are student textbook purchases paid for by government grants like PELL or VA exempt from sales tax as sales to the government?
Taxable — the grant-funded textbook sales are subject to sales tax. Erie Community College's bookstore sells textbooks to students who receive aid from PELL, the Trade Readjustment Act, the Veterans A…
Were equipment sales, rentals, and leases to federal service contractors exempt when title passed immediately to the government?
Not merely because title passed or the contractor acted for the government. Items used by an independent contractor were taxable unless actually sold and transferred to the government.
Was a bookstore's fee for admission to a merchandise-display area a taxable amusement charge in Texas?
Yes. The merchandise display was an event under Rule 3.298, and an event could be an ongoing activity rather than a single or infrequent occasion.
When were a retailer's inbound and outbound equipment freight charges taxable under Texas's 1986 delivery rule?
Inbound factory-to-retailer freight was taxable. Retailer-to-customer freight escaped tax only if separately stated, common-carrier delivered, and FOB retailer.
Which muffins, milk, and other beverages sold by a takeout shop were subject to Texas sales tax?
Heated muffins and beverages sold in cups were taxable; unheated muffins sold without utensils and milk sold in cartons were not taxable.
Was renting a tanning booth or tanning bed a taxable amusement service in Texas?
No. Under the facts presented in the 1986 letter, renting a tanning booth or tanning bed was not a taxable amusement service.
When related companies move equipment between each other, is it a taxable sale — and does it matter that no money changes hands?
It depends on how the transfer is structured. Browning-Ferris Industries owns majorities of many related subsidiaries and asked whether moving tangible property between them — with no money changing h…
If I drop-ship goods into New York for an out-of-state buyer who can't give a New York resale certificate, do I have to collect New York sales tax?
Yes — the vendor must collect New York sales tax on a drop-shipment delivered into the state. Touche Ross asked about an importer (X Company, a registered New York vendor) that sells goods in Californ…
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…
Could a church use a Texas sales-tax exemption certificate before the Comptroller had approved its exempt status?
No. The Comptroller's records showed the church had not qualified; after approval, it could give its utility an exemption letter and certificate.
How these rulings are useful
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