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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How did Texas tax brick-and-concrete residential mailboxes versus standard mailboxes on wooden posts?
Brick-and-concrete boxes were real-property improvements taxed by contract form; standard post-mounted boxes were taxable property with nontaxable stated installation.
Was electricity used for refrigeration and other operations in a nonprocessing warehouse taxable in Texas?
Yes. Electricity used to sell, warehouse, or distribute products without processing was taxable; only qualifying processing-area use could be exempt.
Did holding property in Texas for more than 30 days destroy the export exemption, and what proof did Rule 3.323 require?
Owner possession beyond 30 days created taxable storage, but freight-forwarder possession did not; export still required the rule's prescribed documentation.
How did Texas tax labor, parts, mileage, fluids, and subcontract work for heavy equipment versus licensed motor vehicles?
Heavy-equipment labor, mileage, and sublet work were taxable, while comparable motor-vehicle charges were exempt; parts and fluids followed contract form.
My corporation owns New York real estate. Before it liquidates under IRC § 333, its shareholders will first contribute all their stock to a new limited partnership pro rata to their existing ownership (some getting general-partner interests, some only limited-partner interests), and the corporation will then distribute all its assets to that partnership and dissolve. Does this trigger New York's Real Property Transfer Gains Tax?
No. B. Bros. Realty Corporation's proposed plan -- shareholders contributing all their stock to a newly formed limited partnership in exchange for pro rata partnership interests, followed by B. Bros.'…
How did Texas classify pipe upsetting, threading, coating, heat treating, and repair work, and which inputs and utilities were exempt?
Work on another maker's pipe was remodeling or processing, not fabrication; exemptions varied by transferred inputs, repair use, and utility predominant use.
Do municipal industrial development bonds -- held by an investment company as its sole asset, generating interest income -- count as 'investment capital' (rather than ordinary business capital) for New York's Article 9-A franchise tax, and if a company didn't originally classify them that way on its return, can it go back and reclassify them later to claim a refund?
Yes to both questions -- (1) municipal industrial development bonds meet the regulatory definition of 'other securities' under 20 NYCRR 3-4.2(c) (issued by a governmental body, customarily sold on the…
A not-for-profit corporation that merely holds title to real property for an exempt labor union local -- but HAS issued stock to the union's trustees -- has no net earnings and wants its New York corporate tax capped at the flat $250 minimum. Does issuing stock disqualify it from the non-profit exemption, and can a company simply elect the $250 minimum regardless of what the other computation methods produce?
No on both counts. Because Petitioner has issued STOCK (to the trustees of Local 1049 I.B.E.W.), it does not fall within the 20 NYCRR 1-3.4(b)(6) exemption for non-STOCK, non-profit corporations, even…
Did assigning or factoring lease-payment rights accelerate Texas sales tax on all remaining lease payments?
Yes. The lessor owed tax on all remaining payments when the lease proceeds were assigned, unless the contracts were merely pledged as loan collateral.
When a taxicab is leased with its city license, can the separately stated charge for the license be left out of sales tax?
The taxicab license charge is a registration fee, not a separately exempt intangible, and it fits into New York City's 90 percent rental computation. The Metropolitan Taxicab Board of Trade's members …
How did Texas tax pipe trade-ins, additional cash, prior tax, barter credits, and direct-payment-permit adjustments?
Trade-in value reduced the new pipe's price and extra cash was taxable, but using pipe as a trade-in was taxable use and did not recover its original tax.
Did a freight-forwarder delay or vessel-caused change in steamship line or export location require a revised Texas export certificate?
No revised certificate was required for a vessel-caused change if goods were irrevocably committed to export; a forwarder's 30-day hold did not bar refund.
What resale certificates and shipping proof did Texas require for interstate sales, exports, and Section 151.324 goods?
Interstate and export sales required the applicable resale and shipping records, while qualifying Section 151.324 goods used exemption certificates instead.
Could an agent buy property tax-free merely because foreign affiliates intended to export it later?
No. Export intent and purchase orders were insufficient; the agent needed export proof or a qualifying resale structure with title transferring in the United States.
Was the Oklahoma Municipal Power Authority exempt from Texas sales and use tax on its share of a Texas electric plant?
No. Texas excluded other states' governmental entities from exemption, and exempt cooperative members did not make the Oklahoma authority exempt.
Were balloon drops, balloon releases, centerpieces, decorations, and their installation taxable in Texas?
The decorations' selling price was taxable because customers kept them, but a separately stated charge to install the decorations was not taxable.
Did a fish farm raising fish for sale qualify for Texas's agricultural sales-tax exemption?
Yes. The exemption covered the fish and qualifying food, medication, and machinery or equipment used exclusively to raise them, subject to documentation.
Is the fee for a video club membership that gets me cheaper movie rentals subject to sales tax?
Yes — the video club membership fee is taxable. Douglas J. Fideor (Village Mall Video) asked whether a one-year video club membership — which lets a member rent movies at a lower rate — is subject to …
Were sales of the 1986 legal-tender Liberty commemorative coins subject to Texas sales and use tax?
No. The Comptroller said sales of the proof half-dollar, silver dollar, and gold five-dollar Liberty Coins were exempt.
Did immediate federal title under NASA and acquisition regulations make a contractor's equipment purchase exempt from Texas sales tax?
No, not by itself. Items actually sold and transferred to the government could be bought for resale, but contractor-used goods remained taxable.
Could hotels give resale certificates for trunk-line service used both for hotel business and resale to guests?
No. Mixed-use trunk lines did not support a good-faith resale certificate; hotels needed separate business lines or had to pay tax and credit the resold share.
Are welding supplies used to maintain production machinery exempt, and do voltage transformers count as exempt production equipment?
Welding supplies used to maintain production equipment qualify for the § 1105-B reduced (0% after March 1, 1981) state rate, but the transformers do not get the production exemption. Gernatt Asphalt P…
Is a landlord's separate charge to a commercial tenant for heated and chilled water used to heat and cool the space taxable?
Taxable — the landlord's charge for heated and chilled water is taxable as steam and refrigeration service. Robert M. Markham, P.C., a prospective New York City tenant, asked whether a landlord's sepa…
Is a central coolant and chip-handling system for metal-cutting machines exempt production equipment, and how is its foundation and installation labor taxed?
The coolant/chip handling system itself is exempt production equipment, but its foundation materials are taxable and its assembly and installation labor fall under the § 1105-B reduced (0% after March…
Is a nonlawyer service that fills out and files uncontested-divorce forms for clients subject to sales tax?
Not taxable — the divorce-form preparation and filing service is not subject to sales tax. Bonnie Herde (Divorce Yourself) helps people get uncontested divorces by filling out legal forms from informa…
Is pizza sold unheated for takeout taxable, or does it fall under the exception for unheated food commonly sold in food stores?
The unheated pizza is taxable unless the vendor can prove it is of a type commonly sold, in the same form and packaging, in food stores such as bakeries — and each selling method must qualify separate…
Is a machine that recycles foundry sand for reuse in manufacturing exempt as production equipment?
The sand reclamation unit is not exempt as production machinery under § 1115(a)(12), but it qualifies for the § 1105-B statewide exemption if purchased on or after March 1, 1981. Buffalo Forge Company…
Does a video-rental 'membership fee' that only entitles the customer to discounted rentals count as a taxable prepayment for those rentals?
Yes — the membership fee is taxable, reversing the earlier opinion going forward. This 1985 modified opinion corrects TSB-A-81(20)S, issued to Norman Eiger in 1981, which had held that a video-rental …
Were student parking-permit charges taxable after Texas changed its September 1984 policy?
No. The later policy treated student parking permits as nontaxable, and the school could seek a refund after identifying students and refunding their tax.
Which telephone-company charges to radio common carriers and cellular providers were taxable in Texas?
Switch connections, transmitter lines, and enhanced services were taxable; administrative basic local exchange service was not, and resale certificates could apply.
Was a play-by-mail game a taxable amusement service in Texas?
Yes. The game fit the then-current definition of amusement services as entertainment, recreation, pastime, diversion, or pleasurable enjoyment.
A foreign parent corporation owns 100% of one New York subsidiary and 79% of a second, different New York subsidiary engaged in a related but distinct business -- does common majority ownership by the same parent make the second subsidiary 'substantially similar in ownership' to the first, disqualifying it as a 'new business' for the investment tax credit refund election, even though the two subsidiaries aren't owned in identical percentages or by identical shareholders?
Yes -- Corporation C (79%-owned by the common parent, Corporation A) IS 'substantially similar in ownership' to Corporation B (100%-owned by the same parent), and therefore does NOT qualify as a 'new …
Were well logging, perforating, bridge-plug setting, cementing, and mast-truck services taxable in Texas?
The listed wire-line well services were nontaxable; mast-truck service followed the underlying job, while a bare mast-truck rental was motor-vehicle taxable.
Was a two-way specialized mobile radio service with dispatch and telephone interconnection taxable in Texas?
Yes. The Comptroller said the entire specialized mobile radio service described in the request was taxable.
Was electricity used to run flight simulators taxable, and was flight instruction a taxable service or amusement in Texas?
Simulator electricity was taxable commercial use, but flight instruction was neither a taxable service nor a taxable amusement.
How did the Comptroller's 1985 internal memo classify directory, disconnect, prewiring, conduit, pole, deposit, refund, and access charges?
The memo gave taxable and nontaxable classifications for several telecom charges, made two results conditional, and left cable-pair and interconnect issues open.
Were intrastate telecommunications sold to licensed and certificated carriers exempt from Texas sales tax?
No. The Comptroller said there was no exemption for intrastate telecommunications provided to carriers defined in Rule 3.297(a)(1).
Were sales of the legal-tender Liberty Coins authorized by P.L. 99-61 subject to Texas sales tax?
No. The Comptroller said the Liberty Coins authorized to support restoration of the Statue of Liberty were exempt from Texas sales tax.
Were pollution-control materials exempt when financed by Clean Air Financing Act bonds or Regional Waste Disposal Act financing?
Clean Air Financing Act bond-funded materials were exempt, but the Regional Waste Disposal Act had no comparable exemption; refund proof was required.
Was an automated manufacturing-facility rack system tangible personal property or an improvement to realty in Texas?
It was tangible personal property. The contractor was advised to separate materials from installation and collect tax from the customer on materials.
Which mail-room services are taxable, and does the mailer owe tax on the folding and postage machines it buys?
Addressing (label-affixing) is taxable, but folding, inserting, sealing, collating and posting are exempt if separately stated — and the mailer owes tax on the mail-room machines it buys for its own u…
Is the cost of printing a free advertising-only paper taxable, and are ad fees or subscriber postage charges taxed?
An advertising-only publication is not a tax-exempt newspaper or periodical, so the printing that produces it is taxable — but the advertising revenue is exempt and subscriber 'handling' charges are t…
Who had to collect and report Texas sales tax in a direct-sales organization using distributors and salespeople?
The direct-sales company had to collect and report the tax, using suggested retail price for salesperson inventory and actual price for consumer sales.
Was labor to repair aluminum dump trailers subject to Texas sales tax?
No. The letter treated the dump trailers as motor vehicles and said repair labor was exempt; Rule 3.292(b) applied sales tax to materials only.
Is the charge for occupancy in a convalescent home, plus separately billed telephone and air conditioning charges, subject to New York sales tax?
No — the convalescent home's occupancy charges are not subject to sales tax, and the separately billed telephone and air conditioning charges are exempt as well. New York's hotel occupancy tax (Tax La…
Are charges for the use of tanning beds and hot tubs subject to New York sales tax?
It depends on location. Statewide, charges for the use of tanning beds and hot tubs are not subject to New York State or county sales tax — using these facilities is neither a retail sale of tangible …
Do the food and supplies a company buys to raise dogs and ferrets for sale qualify for New York's manufacturing or production exemptions from sales tax?
No — the food and supplies are taxable. Marshall Research Animals raises beagles and ferrets in closed breeding colonies and sells them, and it wanted its feed and similar supplies exempt under the pr…
Does a contractor on an Industrial Development Agency project owe sales tax on the materials, equipment, and supplies it buys for the work?
It depends on whether the contractor is a designated agent of the IDA. An Industrial Development Agency is a tax-exempt public corporation (Tax Law 1116(a)(1); 20 NYCRR 529.2), but a contractor is nor…
How were a public Sesquicentennial committee's purchases and sales of medallions and other merchandise taxed in Texas?
Necessary committee purchases were exempt, designated Lone Star Medallions were exempt, but other merchandise sales were taxable and required a permit.
Was the fee for membership in a merchant discount-card service subject to Texas sales tax?
No. The Comptroller said selling memberships in the discount service was not a taxable transaction.
Can an out-of-state seller with no New York presence cancel a sales tax registration it took on voluntarily?
Yes — the out-of-state seller may cancel its voluntary registration, because it is not otherwise required to collect New York tax. V. H. Blackington & Co., a Massachusetts manufacturer of uniform insi…
Can a store discard its detailed cash register tapes and keep only daily sales summaries?
No — daily cash register summaries are not an adequate substitute; the detailed cash register tapes must be kept. A CPA, Daniel Goldberg, asked on behalf of a client that makes only taxable sales whet…
Is a transfer of trucks and equipment to a corporation in exchange for its stock tax-free as an organizational transfer, when it happens long after the corporation was formed?
No — the transfer is a taxable retail sale, not a tax-free organizational transfer. New York excludes from 'retail sale' a transfer of property to a corporation upon its organization in exchange for i…
Which food, merchandise, refreshments, rental, and admission charges of an audited museum were taxable in Texas?
One qualifying volunteer annual fundraiser could exempt food and drinks; alcohol, merchandise, rental refreshments, and shop sales were taxable, but admission was not.
Was a charge for monitoring, analyzing, and recommending fixes for excessively vibrating equipment taxable in Texas?
No. The company inspected and tested the equipment and made recommendations but did not repair it, so its charge was not subject to sales or use tax.
Was property contributed by two companies to capitalize a new partnership subject to Texas sales and use tax?
No. The transfers were nontaxable when ownership interests substantially matched contributed values and no consideration other than those interests was received.
Was a customized questionnaire-based business performance analysis service taxable in Texas?
No. The analysis service was nontaxable, but the provider had to pay tax to suppliers on all materials used to provide it.
When could a Texas seller avoid collecting tax on exported goods, and what documentation was required for Texas delivery?
Oilfield goods could use an exemption certificate; other exports needed proof before title or possession passed, and Texas delivery was presumed taxable until documented.
When were oxygen-therapy cylinders, their rentals, and prescribed oxygen exempt from Texas sales tax?
Prescribed therapy cylinders and oxygen were exempt for individuals; resale and oxygen-connected rentals could be exempt, but empty-cylinder purchasers owed tax.
Which truck, trailer, heavy-equipment, and farm-equipment repair labor was taxable after October 2, 1984?
Truck and trailer repair labor was nontaxable as motor-vehicle work; heavy-equipment labor was taxable, and farm-equipment labor required an exemption certificate.
How these rulings are useful
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