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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Is screen writing a taxable service in Texas, and what about related services like word processing and copying?
No — writing original copy (such as screen writing) is not a taxable service. But word processing and making copies are both taxable, and tax is also due when you sell books, brochures, flyers, or…
When a building owner leases space to a tax-exempt governmental entity and has remodel work done on that space, who is responsible for sales tax — the building owner (lessor) or the government tenant (lessee)?
It depends on who primarily uses and benefits from the improvements. The Comptroller applied a two-prong test: the work is exempt from sales tax only if (1) the lessee qualifies for exempt status…
Was a custom-fitted prescription legging orthosis exempt from California sales tax as a medicine?
Yes. California treated the prescribed legging as an exempt orthotic device because it supported the leg's internal venous and lymphatic structure and was fully worn on the patient.
Were the Multicom 500 and Lympha Press Mini exempt orthotic devices because patients wore their sleeves or leggings?
No. California taxed both compression systems because hoses connected the worn sleeve or legging to an external pump, so the complete device was not fully worn on the patient.
Is an investigation company's services taxable as security services under Texas sales tax, and does the company need a sales tax permit?
Yes. The Comptroller told this investigation company that its services are taxable as security services, meaning sales tax is due on the total charge billed to customers, and enclosed a sales tax…
Does Texas motor vehicle tax apply when a parent transfers vehicles to a newly incorporated subsidiary for stock or subject to a lien?
A stock-only transfer to a newly incorporated subsidiary caused no motor vehicle sales tax, but consideration such as assuming a vehicle lien made the transfer taxable. The letter's $10 gift-tax…
When an engineering/design/consulting firm also installs and sells the equipment it designs for, is its consulting fee taxable, or does bundling it with installation and equipment make the whole charge taxable?
Design, engineering, consulting, and advisory services standing alone are NOT taxable -- they aren't on the state's list of taxable services. But if a contract bundles those services together with…
Is a financial newsletter publisher's on-line news service subject to New York sales tax, and does its separately billed telephone consulting service escape tax as personal information?
Yes for the on-line news service -- it's a taxable information service because its content isn't personal or individual to any one subscriber, though it escapes the additional 5% telephone/telegraph…
Does a preschool play-group and party business owe sales tax on its charges, and does it matter whether the event includes food, drink, or entertainment?
Charges for preschool play groups (classes with social and educational activities) are NOT subject to sales tax, since that kind of class isn't an enumerated taxable service -- unless it's sold…
Is a wilderness travel company's all-inclusive trip package price (transportation, food, lodging, cabin fees, guide fees, air fare) subject to Texas sales tax?
It depends on where the trip happens. For trips within Texas, the bundled per-person package price itself is not taxable, but the individual taxable transactions that occur in Texas within that trip…
Is an unincorporated condominium association that only collects common charges and bank interest, owns no property, and is not engaged in business subject to the Article 9-A franchise tax?
Yes. The 440 East 6 Condominium is an unincorporated condominium association formed under Article 9-B of the Real Property Law to manage the common elements; its income is only common charges from…
Was a ticket broker's event guide an exempt periodical or printed sales message when its schedules were intended to drive ticket sales?
The schedules counted as advertising, so the guide was not an exempt periodical. Printed-message exemption depended on delivery to an independent distributor rather than the buyer.
Was a ticket broker's event schedule an exempt periodical or printed sales message, and did the printer's delivery method change the result?
The schedule was advertising intended to induce ticket purchases, so the publication failed the periodical test; printed-sales-message treatment depended on delivery to an independent distributor…
Is Coco Lopez, a coconut-based product used for making tropical drinks and cooking, taxable or exempt as a food product in Texas?
Exempt. The Comptroller ruled that Coco Lopez — a coconut, sugar, and water-based product used to make tropical drinks like Pina Coladas and for cooking — is an exempt food product for Texas sales…
Should a custom-closet installer collect tax on its lump-sum customer price or pay contractor use tax on fabricated cost?
The installer was a real-property contractor because the rail-and-bracket closet systems were permanently screwed to walls as fixtures. It should not collect sales tax on the lump-sum customer…
Could an out-of-state concrete fabricator credit tax paid there against Florida use tax on products imported for Florida real-property contracts?
Yes. Florida taxed full manufactured cost but credited a like tax lawfully imposed and paid to the fabrication state; any Florida shortfall became due upon import. Tax had to be paid to the other…
If a surplus lines insurer charges a separate engineering inspection fee to an applicant, is that fee subject to Texas sales tax even though the surplus lines premium (which may end up including that fee) is already subject to the 4.85% surplus lines premium tax?
Yes. The Comptroller held the engineering inspection fee is a taxable insurance service subject to the 6.25% Texas state and local sales tax, separately from the 4.85% surplus lines premium tax the…
Is a lumbo roll and cuff weight with heel strap exempt from Texas sales tax as a therapeutic or orthopedic device?
The lumbo roll and cuff weight with heel strap qualify as therapeutic devices under Rule 3.284(a)(11) and (c)(7), so no tax is due when they are sold to an individual with a prescription from a…
Does the Texas manufacturing exemption cover costumes, cameras, and other equipment used directly in producing a motion picture, video, or audio recording that will be sold, licensed, distributed, broadcast, or exhibited?
Yes, as of this 1993 letter. The Comptroller said machinery, equipment, and accessories used directly in producing a motion picture, video, or audio recording — including costumes, cameras, lights,…
Does a not-for-profit 'call before you dig' organization owe sales tax on its member dues, which fund both its damage-prevention education/seminars and its call center that locates underground utility lines?
Yes -- the call center that fields calls from contractors and relays them to utility members is itself a taxable telephone answering service, and because members can't buy the education, seminar,…
Was a leg strap used to secure an indwelling Foley catheter exempt from California sales tax?
Yes. California treated the strap as an exempt related supply because it secured an already-exempt Foley catheter to the patient's thigh.
Were sales of Amino Acids Pure Muscle Building Formula and Amino 1000 capsules taxable when marketed as nutritional supplements for exercise?
Yes. Capsule form, nutritional-supplement labeling, and the stated protein-maintenance purpose placed the products within the taxable supplement rule.
Were sales of Fat Burners and Advanced Formula Fat Burners taxable when the tablets and capsules were designed to reduce fat and develop lean muscle?
Yes. Their tablet or capsule form and stated fat-reduction and muscle-development purpose placed them within the taxable dietary-supplement rule.
Is transferring tangible personal property from a corporation to a newly-formed partnership, in exchange only for a limited partner interest, a taxable sale for Texas sales tax purposes?
No. The Comptroller ruled that when a corporation contributes tangible personal property to a newly-formed limited partnership solely in exchange for a limited partner interest — with no other…
Is a teleconferencing service provided by a company that isn't a telephone carrier a taxable telecommunications service in Connecticut?
No. A company that provides teleconferencing by bridging multiple phone calls through a computerized 'audio bridge' — while its own coordinators introduce, monitor, and manage the calls — is NOT…
For a limited partnership and its partners, where is the partnership's commercial domicile, and which entities have Texas franchise-tax nexus?
The partnership itself owes no franchise tax because partnerships are not subject to it, even though it has Texas nexus (one partner services its receivables from a Texas branch). Its commercial…
In a proposed acquisition using tiered partnerships, which corporate partners are subject to Texas franchise tax and how is their income apportioned?
The corporate general partners are subject, but the corporate limited partners, individuals, and the partnerships themselves are not. In a proposed acquisition using tiered partnerships (ABC, ABC…
Are a Morgan Stanley financing affiliate's purchases, leases, and maintenance contracts for a New York City office building -- entered as the disclosed agent of the New York City Industrial Development Agency (IDA) -- exempt from sales and use tax?
Yes, generally -- purchases, leases, and maintenance/repair/service contracts entered by the financing affiliate as the IDA's disclosed agent are exempt from sales and use tax, and so are the lease…
Was tooling sold to a foreign customer exempt when the California manufacturer kept it after full payment and might use it before any export?
Not without a contractual foreign-delivery duty and actual export before functional use. Making only test articles did not by itself defeat a qualifying exemption.
Were Juice Plus+ capsules exempt when their label described fruit-derived ingredients but did not call them supplements or claim a vitamin, mineral, protein, or calorie purpose?
Yes. The 1993 label did not call Juice Plus+ a supplement or show a covered nutritional-intake purpose, so California treated it as exempt food.
After the October 1993 change to Sec. 151.311, can contractors accept exemption certificates for materials and consumable supplies used on realty-improvement jobs for exempt entities?
It depends on timing and contract type. As of October 1, 1993, Sec. 151.311 was amended to let contractors buy tax-free, with an exemption certificate, both materials incorporated into realty and…
Did a furniture retailer violate section 6205 by advertising no sales tax, and could it still report the sales as tax-included?
The ad did not violate section 6205 because that restriction applied to use tax. But without a valid tax-included notice, the retailer could not back tax out of its prices.
Was an aircraft truly leased to a common carrier when the owners retained scheduling approval and control over the aircraft and pilots?
No. The agreement did not transfer possession and control to the carrier. Owner scheduling approval, pilot control, and operating records showed that the owners remained the operators.
Is a resident-screening company's charge to its clients for credit checks, background checks, and risk analysis taxable as a credit reporting service, or exempt as a non-taxable information service?
Taxable as a credit reporting service. The Comptroller found the essence of the transaction was 'credit reporting' under Tex. Tax Code 151.0034, so the company's total charge to its customers is…
Does a public ambulance authority owe motor vehicle tax on leased ambulances, and can a for-profit ambulance company claim the House Bill 895 emergency-vehicle exemption?
A public agency (Area Metropolitan Ambulance Authority) leasing vehicles titled in its own name will not owe the 6 1/4% motor vehicle tax as long as the vehicles carry exempt tags — if it fails to…
What change did South Carolina make in December 1993 to its nonresident vehicle-sales guidance?
The notice updated Vermont's purchase and use tax rate from 4% to 5%, effective September 1, 1993. It modified the state charts from IL 93-25 but said that notice's worksheets and general…
Who owed tax on an oil company's aircraft-refueler truck sales before and after the July 3, 1984 registration exemption?
Before July 3, 1984, the registered vehicles triggered direct use-tax payment by buyers. After section 4021 removed registration, the seller owed sales tax on the refueler sales.
Could a California supplier accept resale certificates from the in-state recipients of drop shipments for an out-of-state reseller without California nexus?
Yes. Timely, valid certificates accepted in good faith from the California recipients could relieve the supplier, whether delivered directly or through the out-of-state reseller.
Could a California drop shipper accept resale certificates from the out-of-state buyer's California customers?
Yes, but it was not required to. Without certificate protection, the California deliverer was deemed retailer when the out-of-state seller made a retail sale.
Did Texas treat a day-to-day open-ended vehicle contract as a rental even when the customer kept the vehicle more than 180 days?
Yes. Administrative hearings had treated day-to-day open-ended contracts as rentals regardless of how long the customer actually kept the vehicle. A purchase order specifying more than 180 days was…
Why do some hospitals lose (or newly qualify for) their Texas sales tax exemption, and does that change anything for businesses that do work for hospitals?
A 1993 legislative change added a new criterion hospitals must meet to qualify for the sales tax exemption: they must provide a certain amount of indigent or charity health care. The Texas Health…
Is a $100 'reinstatement fee' charged to customers renewing an expired computer maintenance agreement taxable, even if it's separately stated on the invoice?
Yes. The Comptroller ruled that the $100 reinstatement fee is taxable, even if separately stated, because it is part of the charge for computer program maintenance on software sold by the same…
How did South Carolina PLR 93-8 tax a mutual fund's exempt-interest dividends, capital-gain dividends, and insured defaulted-bond interest?
Qualifying exempt-interest dividends attributable to South Carolina, U.S., or listed territorial obligations were exempt, including qualifying insured matured interest. Capital-gain dividends…
Does a DC-powered siren used to call or gather cattle on a farm or ranch qualify for the farm machinery and equipment sales tax exemption under Rule 3.296(a)(5)(A)?
Yes, based on the facts given. The Comptroller ruled that a siren built to call or gather cattle to be fed or worked, powered by direct current from a vehicle battery (not AC power, so it has no…
Is an alarm/paging unit attached to an incubator used to hatch emu eggs exempt from Texas sales tax as farm equipment?
Partly. The alarm unit itself, placed in the incubator, qualifies for the farm/ranch agricultural exemption under Tax Code Section 151.316. But the paging device it triggers does not qualify if it…
Did a cooperative member's mortgage on a membership certificate and proprietary lot lease trigger Florida's nonrecurring intangible tax?
No. The member could not mortgage the cooperative's land, so the lien reached only the member's membership certificate and proprietary lease, which the Department treated as intangible personal…
Is extracting core samples from new oil/gas well exploration sites taxable in Texas, and does the service provider owe tax on the equipment and materials used?
No, the coring service itself is not taxable. The Comptroller ruled that extracting core samples associated with exploration for new oil/gas well sites is a nontaxable service, but the service…
After SB 82 repealed the old 25% sales tax fraud penalty and replaced it with the General Provisions chapter's 50% fraud penalty, which rate applies to audit assessments that were already pending and billed at 25% before the changeover date but not finalized until after it?
This is an internal Comptroller Tax Policy memo, not a response to a taxpayer letter. It resolves an internal question about which fraud penalty rate to apply during the SB 82 transition:…
Did a mutual savings bank's section 351 reorganization into a mutual holding company and stock savings bank create Florida taxable income?
No, if the described reorganization produced zero federal taxable income and required no Florida adjustment. The Department answered all 14 requested corporate-tax consequences in the affirmative,…
Could a supply-house vendor buy construction materials for resale and sell them tax-free directly to a Florida school board?
Yes, under the proposed structure. The vendor could buy the materials tax-free for resale and sell them directly to the school board without sales tax because the board paid the vendor directly,…
Could a supply-house vendor buy construction materials for resale and sell them tax-free directly to a qualifying church?
Yes, under the proposed structure. The vendor could buy the materials tax-free for resale and sell them directly to the church without sales tax because the church paid the vendor directly, took…
Were calligraphy charges taxable when lettering customer-furnished property, and did the same rule apply to addressing items for mailing?
Calligraphy was taxable artwork even on customer-furnished property, but hand or mechanical addressing solely for mailing was nontaxable.
Were calligraphy charges taxable when the customer supplied the paper or other item being lettered?
Yes. California treated handlettering as artwork and taxable fabrication even on customer-furnished items, except for addressing done for mailing.
Was heavy equipment still leased when it required a licensed operator but the customer could hire an independent operator instead of the owner's operator?
Yes. Customer could hire an independent licensed operator, so existing ex-tax equipment was leased and taxed on rents; future same-form property could use purchase-price tax.
Were fees for processing customer diaries or logs into hard-copy cost and expense summaries taxable?
No. The hard copy was incidental to processing customer-furnished information. The provider consumed its materials, but separately charged materials or extra copies were taxable.
Were training charges taxable when sold with computer programs and hardware?
Mandatory training was taxable even if separately stated. Genuinely optional training contracted for at a reasonable, separately stated price was nontaxable.
Is producing a master film, audio, or video recording treated as manufacturing for Texas sales tax purposes, and is duplicating (dubbing) that master taxable?
Yes — producing a motion picture or audio/video recording for sale, license, distribution, broadcast, or exhibition is manufacturing, so producers, production companies, and post-production…
Is installing theater chairs in a new theater taxed the same as removing and replacing chairs in an existing theater?
No. Installing theater chairs for the first time in a newly constructed theater is a nontaxable improvement to realty, but removing old chairs and installing new ones in an existing theater is…
Were shares of a business trust exempt from Florida intangible tax when its valuation-date portfolio held only exempt securities?
Yes. Fund shares were exempt when the portfolio held only assets exempt from Florida intangible tax on the valuation date. Earlier holdings during the prior year did not matter. If the portfolio…
Were Florida commercial-loan notes taxable when borrowers signed them and delivered them to the lender or its agent outside Florida?
No, under this ruling's facts. The notes were signed and accepted outside Florida, so their later return to Florida for safekeeping did not trigger documentary stamp tax. Filing a Florida UCC-1…
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