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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Was an estate's private distribution of appraised personal property among twelve heirs subject to Texas sales tax?
No. The Comptroller said the described distribution among the heirs was not taxable.
Did discretionary parking-rate adjustments preserve a pre-October 2, 1984 contract's Texas sales-tax exemption?
No. Discretionary evaluation and adjustment ended the exemption after adjustment; an older contract tied to an outside index could qualify.
How could a rental-vehicle owner recover motor vehicle tax paid when each vehicle was titled and registered?
Under the historical § 152.046(b) system, the owner could use tax collected on a vehicle's rental receipts to reimburse the motor vehicle tax paid to the county when that vehicle was titled and regist…
Which tractor, farm, and off-highway tires qualified for Texas's agricultural sales-tax exemption?
Exempt tires included repair or replacement parts used exclusively on farm machinery, tires for unlicensed vehicles, and manufacturer-designated farm or off-highway tires.
Was a contribution for placing a contributor's named brick in a public park walkway subject to Texas sales tax?
No. The contributor received neither title nor possession of the brick, so the contribution was not a sale of tangible personal property.
Must an out-of-state catalog seller with New York retailers and employee visits collect New York sales tax on its mail-order sales here?
Yes — the out-of-state catalog seller has nexus with New York and is a vendor that must collect New York sales and use tax on its retail mail-order sales to New York customers. The Orvis Company, a Ve…
Who reported tax after leased equipment and its lease were sold together to an investor, and was the combined transfer taxable?
The investor needed its own permit and return for lease tax. The simultaneous equipment sale and lease assignment were nontaxable because the investor bought to lease.
What Mexican import documentation did a purchaser need to obtain a Texas sales-tax refund from the retailer?
The purchaser had to give the retailer a copy of tariff and import-tax documents specifically matching the quantity and goods; general descriptions were insufficient.
How did Texas tax paging service, pagers furnished with service, pager rentals, and outright pager sales after October 1, 1985?
Pagers furnished with taxable service were state-taxed service inputs bought for resale; outright pager sales also carried applicable city and MTA tax.
New York Advisory Opinion TSB-A-85 (5)I: If a New York corporation elects New York S corporation status and its only income is interest, dividends, and capital gains, is that investment income taxable to a nonresident shareholder even though the same income wouldn't be taxable if the nonresident earned it directly?
Yes. The Department ruled that a nonresident shareholder of an electing New York S corporation must include his pro rata share of the corporation's investment income (interest, dividends, and capital …
Did a hotel have to collect Texas sales tax on local and intrastate long-distance telephone charges billed to guests?
Yes. A hotel reselling service was not a telephone company eligible for the basic-local-exchange exemption; local tax was deferred until October 1, 1987.
Was labor to repair licensed vehicles and their attached winches, loaders, augers, buckets, or lifts taxable in Texas?
Vehicle repair labor was nontaxable, but labor on attached equipment was taxable tangible-property repair; timber and poultry removal labor was nontaxable.
Was a charge for advertiser message time on a free telephone information service taxable in Texas?
No. Advertisers paid only for message time on the service; the digitized messages were not sold to them.
Is the admission charge to play a paintball 'survival game' — including the equipment used — subject to New York sales tax?
The admission charge to participate is not taxable, but separately sold extra supplies are. Charging patrons to play a paintball 'survival game' is an admission to a facility for a sporting activity i…
Is the single admission-and-equipment charge to play a paintball 'survival game' taxable, and what about a free t-shirt given to the winner?
The admission to play is not taxable, and the free winner's t-shirt is not taxed to the player, but the operator pays tax on both the equipment and the shirts. Charging a single fee to play a paintbal…
How is a vehicle lessor taxed on the diesel fuel and the various lease charges when it supplies fuel as part of the rental?
When a vehicle lessor supplies diesel fuel as part of the lease, it is treated as consuming its own fuel, and all its lease charges are taxable receipts. Because the lessor stores and dispenses diesel…
Must a college 501(c)(3) faculty-student association collect sales tax on admissions to the theatrical, athletic, recreational, and social events it holds to raise funds?
Mostly exempt, but athletic-event admissions are the key exception. The Jamestown Community College Faculty-Student Association is an IRC 501(c)(3) educational organization, presumed to qualify as a N…
When a gas utility transports natural gas that a customer or producer already owns or has under contract, under New York's 'contract carriage' program, do the utility franchise tax, the gross-income utility tax, MCTD surcharges, and sales tax apply to the fees the utility charges for that transport service?
The franchise tax under Section 186 applies to all contract-carriage fees as gross earnings. The gross-income tax under Section 186-a applies differently depending on the arrangement: if the utility i…
Were dedicated trunk lines and DID numbers sold to a mobile-telephone provider taxable, and could the provider use a resale certificate?
Yes. The telephone-company charges were taxable, but the mobile provider could give a resale certificate instead of paying tax.
Were noncommissioned officers clubs exempt from Texas limited sales tax on their purchases?
Yes. The Comptroller said NCO clubs were exempt from paying limited sales tax on purchases of taxable items.
Were lump-sum artwork restoration, frame-selection advice, and restoration work for charitable entities taxable in Texas?
Artwork repair was taxable on the total charge; frame-selection advice alone was nontaxable, and charitable treatment depended on the entity's approved exemption.
A food manufacturer incorporated in 1976 does a public stock offering that shifts about 36.5% of its shares to public investors -- founders still hold 63.5% -- does that ownership change make it a 'new business' eligible to cash out its unused investment tax credits as an immediate refund, instead of just carrying them forward?
No -- Petitioner is NOT a 'new business' under section 210.12(j) and cannot elect the immediate-refund treatment for its unused investment tax credit carryover. Even though roughly 36.5% of its outsta…
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…
When a New York mutual savings bank converts to stock form as a federal tax-free 'F reorganization,' does the bank owe any New York bank franchise (Article 32) tax on the conversion itself?
No new New York franchise tax results from the conversion itself. Because the mutual-to-stock conversion qualifies federally as a tax-free 'F reorganization' under IRC section 368(a)(1)(F) -- with no …
When a New York subsidiary with an unused net operating loss merges into its out-of-state parent, can the surviving parent carry that loss forward on its own New York corporation franchise tax return?
Yes, but only for the loss the subsidiary generated while it was actually subject to New York tax. Charrette Corporation could include, on its own New York franchise tax return, the net operating loss…
Is a freight forwarder that owns no trucks or planes taxed as a New York transportation corporation under Tax Law Sections 183-184, or as an ordinary business corporation under Article 9-A?
It depends on whether the forwarder acts as a principal or an agent. A freight forwarder that assumes control of and full responsibility for the shipment -- issuing its own bill of lading and paying t…
Did fitness equipment sold, rented, or leased to an individual under a doctor's prescription qualify for Texas exemption?
Yes, as a therapeutic appliance or device, if the prescription stated the condition being treated and specified the needed equipment type.
Did Texas's agricultural exemption cover a farm's mobile-telephone service, equipment, setup, and intrastate calls?
No. Mobile service, equipment, installation setup, and intrastate long-distance charges were taxable because communications equipment did not qualify.
Were aircraft carpet replacement, carpet cleaning, freight-box fabrication, and cargo-net fabrication taxable in Texas?
Qualified-aircraft carpet replacement was exempt, but carpet cleaning, freight-box construction, and cargo-net fabrication were taxable.
Can a homebuilder or commercial-building contractor claim New York's investment tax credit on the machinery and equipment it uses to construct homes and buildings?
No. New York's investment tax credit under Tax Law Sections 210.12 (corporations) and 606(a) (individuals) is limited to property principally used in the production of GOODS by manufacturing, processi…
Did an electrical-usage study establish predominant processing use and support a Texas sales-tax exemption and refund?
Yes. Predominant processing use qualified the electricity for exemption and a four-year refund if past use matched; operational changes could end eligibility.
What did Texas correct about telecom exemption letters, national banks, and prior-contract exemptions in 1985?
Texas did not issue the described exemption letters to governments, churches, or public schools; national banks were not exempt, and telecom contracts had no grandfathering.
Were separately stated glider rental, tow, and flight-instruction charges taxable in Texas?
The glider rental and tow were taxable, while instruction was nontaxable. The glider itself could be bought for resale but did not qualify for the aircraft exemption.
Was a restaurant disco bar's cover charge taxable when its only live entertainment was a disc jockey?
Yes. The Comptroller said the cover charge was taxable under the stated disco-bar and disc-jockey facts.
Could a signed shipper's letter of instruction plus a house bill serve as Texas proof of export?
Yes. A freight-forwarder-signed SLI accompanied by a house airway, ocean, or rail bill was acceptable proof under Section 151.307(b)(4).
Did a parent corporation owe Texas sales tax when a subsidiary transferred maritime equipment as a dividend using a nominal Coast Guard bill of sale?
No, as long as the Coast Guard fee shown for the required bill of sale was minimal.
Was applying protective chemicals to carpet and upholstery taxable, and could verbal agency advice relieve back tax?
The service was taxable. Relief could be available if an agency employee confirmed the contrary advice and the business proved reliance; otherwise back tax was due.
Was a separately stated handling charge connected with a taxable repair service subject to Texas sales tax?
Yes. The Comptroller confirmed that handling charges connected with a taxable repair service were taxable to the customer.
Are a parent scrap-metal corporation and its New York subsidiary in a 'unitary business' for combined reporting purposes, and must the parent file a consolidated report with its separate DISC subsidiary?
Petitioner and its New York subsidiary SH ARE in a unitary business -- both produce ferrous scrap metal (a related line of business) and there are substantial no-charge, no-profit intercorporate servi…
After the 1984 AT&T divestiture, when New York Telephone charges long-distance carriers an 'access charge' to originate or terminate their calls, are those access-charge receipts subject to New York's Section 186-a utility gross income tax?
No. New York Telephone's access charges to long-distance carriers -- both intrastate and interstate/foreign -- are excluded from its Section 186-a tax base as sales for resale, not sales for ultimate …
Could the national Girl Scouts organization, local councils, and individual troops buy equipment and supplies tax-free in Texas?
Yes, for their own use. The exemption belonged to the organizations and did not extend to individual members.
Did equipment trade-in value reduce the amount subject to Texas sales tax?
Yes, if the trade-in was a taxable item of a type the retailer normally sold.
Were backhoe-with-operator charges connected with flowline repairs taxable in Texas?
They were taxable when charged by the flowline repair company as part of its repair service, but nontaxable when a third party provided only the backhoe and operator.
Was a federally tax-exempt association required to collect Texas sales tax on tickets to its annual football game?
No. The Comptroller said the association was exempt from collecting and paying sales tax on the event's ticket sales under Section 151.3101.
Could an electric cooperative recover tax on its ownership share of generating-project property purchased after its operating agreement?
Yes, for purchases from the agreement date based on its ownership percentage, using supplier refunds and a project-specific exemption certificate; earlier purchases did not qualify.
How did Texas's October 1, 1985 telecom change affect packet-switching and data-processing charges?
Actual data processing remained nontaxable, but the intrastate long-distance portion had to be separately stated and taxed; incidental modems remained provider-taxed inputs.
Was a service that amplified and retransmitted two-way-radio signals taxable in Texas?
Yes, effective October 1, 1985, because the statutory telecommunications definition encompassed radio signal booster service.
Could a health spa collect Texas sales tax on only 10% of its membership dues and fees?
No. Membership fees were fully taxable unless each member could select services or classes so that the individual's fee was unique.
Was a voice-message retrieval service that signaled customers' pagers taxable in Texas?
Yes. The Comptroller classified it as taxable telecommunications service, including telephone paging, rather than excluded computer time sharing.
How did Texas sales tax apply to an oilfield electrician's repairs, installations, modifications, and real-property work?
Repairs and modifications to personal property were generally fully taxable; new installations and material sales taxed materials but not labor or equipment, while identified real-property work was no…
Did the 30-day export presumption apply to goods held by a freight forwarder arranging shipment?
No. A retailer with the proof specified by Rule 3.323(c)(1) was not responsible for the 30-day period, and a forwarder's shipment arrangements were not purchaser storage.
How did an advertising agency's role as agent, seller, or consumer affect Texas sales tax?
The Comptroller could not classify the listed charges without knowing the agency's role; Rule 3.321 imposed different results for agents, sellers, and consumers.
Can a seller get a sales tax refund or credit for a bad-debt loss when a third-party-financed sale defaults and it repossesses the property?
No — the seller gets no sales tax refund or credit for that bad-debt loss. Heavy Duty Truck Parts sold trucks whose buyers financed through a finance company, with the seller sometimes acting as guara…
Are admission tickets to a music venue exempt as dramatic or musical arts, or taxable as a cabaret because it serves food and drink?
The admission charges are fully taxable as cabaret charges, not exempt as dramatic or musical arts admissions. Tralfamadore Cafe presents live music (Melba Moore, Kris Kristofferson, Stan Getz and oth…
Does a batting-cage operator charge sales tax on batting-practice fees, on bat/helmet rentals, and does it owe tax on the pitching machines?
Batting-practice fees are exempt, but equipment rentals are taxable and the operator owes tax on its machines. Charging customers to use pitching machines for batting practice is a charge for a partic…
A U.S. sales-agent company maintains a New York showroom-sales office exclusively for a related foreign manufacturer -- displaying/selling samples, soliciting orders that are filled entirely from the manufacturer's own out-of-state plant -- but the manufacturer keeps tight control over the office (approving its design, setting all sale terms, controlling hiring/firing). Does maintaining that showroom keep the manufacturer within P.L. 86-272's protected 'mere solicitation' safe harbor, or does it cross the line into taxable New York activity? And is the U.S. sales-agent company itself taxable for providing that agency service?
The related alien manufacturer (Hauserman, Ltd.) IS subject to New York franchise tax -- maintaining the New York showroom-sales office exceeds P.L. 86-272's protected solicitation activities, since t…
Two commonly-controlled subsidiaries of the same parent (one profitable, one running losses) plan a tax-free statutory merger mid-year -- however the merger is structured (whichever entity survives), how much of the loss-making subsidiary's current-year losses can offset the profitable subsidiary's income for that same year, and can older, prior-year net operating losses be used right away too?
Regardless of which subsidiary survives the merger, Techtran Systems' current-year (fiscal 1985) losses may offset the other subsidiary's income earned in that SAME fiscal year only in a PRORATED amou…
Did holding goods for export over 30 days defeat a refund, and how were bonded imports treated?
A customs broker's prompt receipt and holding for shipment could overcome the storage presumption; imports retained import status while in bond, and resale could still prevent use tax after removal.
Which carpet, upholstery, Scotchgard, and deodorizer services and purchases were taxable in Texas?
Carpet and furniture-upholstery services were taxable, while automobile-upholstery cleaning and Scotchgard were not; cleaning chemicals were taxable inputs, but transferred deodorizer and Scotchgard w…
Were sterile arthroscopy drapes exempt as orthopedic, prosthetic, or therapeutic devices?
No. Although necessary to surgery, the drapes did not qualify under those device or appliance categories and remained taxable.
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