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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Can a direct payment permit holder accrue local or MTA use tax based on where an item is first used, instead of where it was first stored?
**No.** Under Rule 3.377(c)(5), a direct payment holder cannot accrue local (city, county, MTA/CTD) tax based on the location of first use — the tax is due based on the location where items are…
Is a charge for licensing a copyrighted photograph or image for publication subject to Texas sales tax?
**No — a charge for licensing photographic images for publication is not subject to Texas sales tax.** However, charges for developing film are subject to sales tax, unless the photographer gives…
Is seismic surveying for oil and gas exploration (placing explosive charges and geophone receivers) a taxable surveying service in Texas?
**No — the Comptroller ruled this seismic surveying service is not taxable surveying.** The letter explains that laying out source points (explosive charge locations) and receiver points (geophone…
Is a breathing monitor that can be used independently of a ventilator exempt from Texas sales tax as a prosthetic device?
No — **the breathing monitors (Monitor LS-75 and VM-90) are taxable when sold to hospitals, clinics, doctors, etc.** The Comptroller ruled that the monitors do not meet the definition of a…
Does a general-purpose farm building, like a hog barn, qualify for the Texas agricultural sales tax exemption?
**No — a general-purpose farm or ranch building does not qualify for the agricultural exemption unless it is specifically designed to function as a piece of farm machinery or equipment.** The letter…
Are materials and labor exempt when contracting to improve real property for a tax-exempt organization, and is disaster-repair labor still exempt after October 1, 1993?
**Materials used in a contract to improve realty for an organization exempt under Tax Code Sections 151.309 or 151.310 are exempt, but only tangible personal property that is necessary and essential…
Are tracheal ('endo-trach') tubes purchased by hospitals exempt from Texas sales tax as prosthetic devices?
**Yes — tracheal tubes qualify as an exempt prosthetic device, so a hospital, other health care provider, or individual may purchase them tax free under Rule 3.284(c)(1), and no prescription is…
Are diagnostic reagents that veterinarians use on blood samples to test dogs and cats for disease exempt from Texas sales tax as drugs and medicines?
**No — the diagnostic reagents are not exempt as drugs and medicines.** The Comptroller explains that to qualify for the drug/medicine exemption, a substance must possess curative or remedial…
Are mobile offices/office trailers taxable as tangible personal property in Texas, and can I buy them tax-free for rental to customers?
**Yes — effective October 1, 1993, mobile offices became subject to limited sales and use tax as items of tangible personal property under Chapter 151.** A business that buys mobile offices in order…
Did the 1993 change to the sales tax law on disaster-area real property repairs affect labor to repair residential property, and when does tax apply to non-residential repair labor for damage that occurred before the law changed?
**No — residential property repair labor remains untaxed; the 1993 law change only affects non-residential property repairs.** The Comptroller confirms the change in the sales tax law regarding real…
Are environmental site-assessment and safety-consulting services performed by a professionally certified consultant subject to Texas sales tax?
No — the Comptroller ruled these services are **not subject to sales tax**. The consultant's site assessments, spill prevention control and counter-measure (SPCC) plans, Texas Workers' Compensation…
Does air-control machinery in a manufacturer's clean room qualify for Connecticut's manufacturing-machinery sales and use tax exemption?
Yes. A company that makes hypodermic needles was building a 'clean room' — an enclosed, environmentally controlled space — and installing machinery to regulate the air's temperature, pressure,…
In a bond-financed Industrial Development Authority (IDA) manufacturing project, which Alabama taxes get abated or exempted — deed recording tax, mortgage tax, sales and use tax, ad valorem tax, income tax on rent and bond interest, and the IDA's lease tax?
It depends on the tax and the document. In this IDA (Industrial Development Authority) bond-financed manufacturing project under the Tax Incentive Reform Act of 1992 (§ 40-9B-1 et seq.), the…
If a cellular phone company gives away a free phone as part of a promotion tied to a customer's donation to a charity, does the company owe use tax on the phone?
**Yes.** The Comptroller ruled that if a cellular phone seller gives a person a cellular phone because that person made a donation to a charity, the seller must pay tax on the acquisition cost of…
Is a CPA's 'write-up' work of entering, maintaining, and retrieving payroll-check data taxable as data processing in Texas?
**Yes — entering, maintaining, and retrieving information from payroll checks is taxable data processing service in Texas**, even though the client (not the CPA) actually computes and writes the…
Does Texas sales tax apply to fees a government agency charges for copies of public records?
**No sales tax is due on the fee for the first copy of a public record that a governmental body is required to furnish under the Open Records Act — but sales tax is due on any additional copies of…
Could a balloon seller exclude a $15 charge by asserting it was for a singing telegram rather than taxable delivery?
Not without records. The petition was denied because invoices were needed to prove the charge was for a nontaxable optional service, and oral advice gave no reliance relief.
Does a dental clinic owe sales tax on the electricity it uses for X-rays, making crowns/bridges/appliances, dental lights, and air conditioning for patients?
**Yes — the dental clinic must pay sales tax on its electricity and natural gas.** The Comptroller ruled that a dentist using electricity to take and develop X-rays, manufacture crowns, bridges, and…
If a cellular phone company gives away a free phone to a customer who donates to charity, does the company owe sales or use tax on that phone?
It depends on who is giving the phone away. **If a cellular phone service provider gives a subscriber a free phone as part of the cellular service because the subscriber donated to a charity, the…
Did receivables of a non-Florida corporation acquire Florida taxable situs when its representatives regularly called on Florida customers?
Yes. The receivables arose from business regularly conducted in Florida through company representatives and received the benefit and protection of Florida law and courts. The Department therefore…
Is a non-stock cooperative housing corporation that has taxable income exempt from Connecticut's corporation business tax?
No — not if it has taxable income. A non-stock cooperative housing corporation CAN qualify as a 'cooperative housing corporation' under Conn. Gen. Stat. § 12-214(a)(5) and Conn. Agencies Regs. §…
Can a vehicle lessor report California tax on rental receipts when the registration names only the lessee?
No. Lessee-only registration prevents rental-receipt treatment, so tax applies to the vehicle's sale to or use by the lessor unless the registration is corrected.
When a California vehicle lease is prepaid in one lump sum, when is use tax collected and who can owe it after the dealer assigns the lease?
Use tax on the full lump-sum rent is collected and paid when the lessee prepays it. A dealer and later assignee can both face liability, subject to credit for tax paid.
Would a taxpayer's 1990 Chapter 7 discharge cover unreported tax if California was not scheduled or notified?
Probably not. Staff said unscheduled pre-petition debt was not discharged, but directed the district to inspect the bankruptcy record and seek further advice if California was listed.
Was Cattle Stress Bolus exempt animal feed or a taxable drug?
It was a taxable drug, not exempt feed. Its concentrated vitamins, three-day dosing, and recovery purpose showed it was intended to overcome specific deficiencies.
Did Cattle Probiotic-Plus qualify as exempt animal feed?
Yes, conditionally. Because its label did not show treatment of a specific deficiency or limited dosing, counsel assumed it met normal nutritional needs; if so, it was exempt feed.
Did Calf Probiotic-Plus qualify as exempt animal feed?
Yes, conditionally. Its 30-day use in milk or water for newborn calves indicated normal nutrition supporting growth; if that was its purpose, sales were exempt as feed.
Did Calf First Aid qualify as exempt animal feed?
Yes, conditionally. It appeared to provide a newborn calf's normal nutritional requirements; if it did and was not treating a specific deficiency, its sales were exempt as feed.
Does a company that processes Medicare claims under a federal government contract owe sales tax on the claim forms, checks, and supplies it uses to do that work?
Yes — **the claim forms, checks, and other supplies the company uses to process Medicare claims are taxable to the company**, because those items are not sold or transferred to the federal…
How did California Staff Counsel answer a commercial artist's questions about advertising-agency purchases, photographers and assistants, reproduction rights, production labor, shipping, video, and production equipment?
Property and fabrication could be acquired for resale only before use; retail photo charges included production costs and handling, while qualifying post-sale transportation could be excluded.…
Could California keep a nominee lien on a former marital residence transferred to the ex-wife shortly after the taxpayer learned of audit liability?
Yes. Staff treated the no-consideration transfer as fraudulent and the unsold residence as undivided community property available for tax accrued before separation.
How should California pursue sales tax when a Chapter 11 trustee operating the debtor's business filed or paid late?
File an administrative claim for the full post-petition liability and penalties. Staff said the stay barred separate collection action or permit revocation before plan confirmation.
Is the exchange of 'trade dollars' between a taxpayer and its vendors subject to Texas sales tax?
**Yes — both sides of the exchange are taxable sales.** The Comptroller ruled that issuing and redeeming 'trade dollars' (five-dollar face-value credits given to vendors in exchange for…
Metro-North Commuter Railroad Company asked whether two categories of employees who work in both New York and Connecticut - (1) employees paid collectively-bargained travel time to reach a temporary out-of-state work assignment, and (2) employees who work a set schedule of days in New York and are 'on call' at home in Connecticut - qualify for the federal Amtrak Reauthorization and Improvement Act's exemption from New York income tax on compensation paid to interstate rail employees who perform 'regularly assigned duties' in more than one state.
It depends on the category. Employees paid travel time to reach a single, temporary out-of-state assignment (like a conductor sent to flag a specific New York construction site) are NOT exempt -…
Were component parts used to repair a lithotriptor exempt from Florida sales tax?
Yes. Because lithotriptors were specifically exempt medical appliances under the rule then in effect, component parts necessary for their operation and performance were also exempt. Although the…
Did California have to release its tax lien when a federal forfeiture order omitted it from the claims payable on sale?
No. Staff said release was optional as a title-clearing courtesy because the tax remained unpaid, although California would receive nothing under the existing court order either way.
Is a heart/lung machine used during surgery exempt from Texas sales tax as a prosthetic device?
**Yes — the heart/lung machine qualifies as an exempt prosthetic device under Texas Tax Code Section 151.313(a)(4)** because it performs the function of a vital organ (both heart and lung), whether…
When separate vendors each do part of an oil and gas well workover, is each vendor's job taxed on its own, or based on the overall well-servicing job?
**Taxability is determined within the context of the overall service, not vendor-by-vendor.** The Comptroller confirmed it will not follow Comptroller's Hearing No. 28,608 (which had looked at each…
Are a golf course's membership initiation fees, annual dues, and driving-range fees subject to New York's tax on social or athletic club dues, even though it markets memberships and calls itself a 'country club'?
No -- because members have no proprietary interest, no control over activities or management, membership is open to the general public on a first-come, first-served basis limited only by the…
Must a customer that resells purchased business forms only to tax-exempt New York municipalities still register as a sales tax vendor and give its supplier a resale certificate?
Yes -- a manufacturer selling business forms to a customer must collect sales tax on those sales unless the customer furnishes a properly completed Form ST-120, Resale Certificate. The fact that the…
How is income from servicing extended warranty contracts allocated to New York for the Article 9-A receipts factor?
Receipts from servicing extended warranty contracts are 'other business receipts' under 20 NYCRR 4-4.1(b)(5), and they are allocated to New York when they are earned in New York -- that is, where…
Are sales to a New York customer, drop-shipped to the customer's out-of-state buyers, New York receipts for the business allocation percentage?
It depends on where the goods are shipped, not who the customer is. For the receipts factor of the Article 9-A business allocation percentage, receipts from sales of tangible personal property are…
How did California sales-tax staff classify and register an out-of-state limited liability company in 1993, before California regulated LLCs?
In October 1993, staff treated an out-of-state LLC as a section 6005 person responsible for California sales and use tax and seller registration, recommended that the permit name its LLC form and…
What did a secured creditor have to prove to defeat California's levy on a taxpayer's commingled bank accounts?
It had to trace identifiable collateral-sale proceeds under the lowest-intermediate-balance rule. Sales-tax reimbursement and replenished or untraceable funds were excluded.
If a manufacturer is located outside a taxing city's limits but inside a taxing county, does it owe city use tax based on the vendor's location?
It depends on what the certificate covered and how the item was actually used. **The letter gives two possible answers, not one rule:** if the manufacturer's resale or exemption certificate validly…
Is a video production company a 'manufacturer' for Texas sales tax purposes, and can it rent or lease production equipment tax-free?
**Yes — effective October 1, 1993, producing a motion picture, video, or audio recording (a copy of which is sold, offered for sale, licensed, distributed, broadcast, or otherwise exhibited) counts…
Are materials used to build new railroad track — rails, ballast, bridges, cross ties, culverts — exempt from Texas sales tax, and how do contractors and material suppliers document that exemption?
**Yes — materials to build railroad road bed, railroad track, and cross ties are exempt from Texas sales tax under Tax Code Section 151.331**, and this exemption applies regardless of whether the…
Could California file a new notice with a different number after releasing an earlier notice for the same statutory tax lien?
Yes. Staff distinguished the underlying statutory lien from individual recorded notices and said a timely new notice could extend the lien even with a different number.
Was a taxpayer entitled to refunds because a county lien release supposedly ended California's collection period?
No. Staff found a separate Secretary of State lien filing apparently remained unreleased and said payments within the applicable ten-year lien periods were not refundable.
How were an advertising agency's copywriting, research, and supervision charges treated when it sold exempt printed messages and taxable camera-ready art?
Services included in an exempt printed-message contract shared the exemption, but charges tied to separately sold camera-ready art were included in that art's taxable gross receipts.
Were a lymphedema air-compression pump and its pneumatic garments exempt as a prosthetic device?
No. California taxed the system because the patient wore the garment but the connected pump remained nearby, so the complete device was not fully worn on the body.
Is an illustrator's one-time transfer of an illustration to a magazine publisher a taxable lease when the illustrator keeps the original?
Yes. One-time magazine use was a tangible-illustration lease, so the illustrator had to collect, report and pay publisher use tax.
How did California tax a Texas vehicle lease after the lessee moved the vehicle into California?
It depended on entry within 90 days of purchase, county rates and a timely election; 90 days from lease signing did not decide it.
Did billing by the hour make an independent graphic designer's computer presentation and illustration work nontaxable?
No. The letter treated independent-contractor design and illustration charges as taxable regardless of hourly billing, and also taxed temporary magazine-use rights.
Which copywriting, consultation, research, and supervision charges were taxable when an agency sold camera-ready art with exempt printed sales messages?
Charges tied solely to taxable camera-ready art were taxable; a contract only for exempt printed sales messages included copywriting in the exempt measure.
When a corporation transfers its assets to a new company in exchange for less than 100% of that new company's stock, is the transfer taxable in Texas?
**Yes — when multiple companies each contribute assets to a newly formed corporation and no single contributing company receives 100% of the new corporation's stock, the transfers of tangible…
Is a fee for acting as an umpire between two arbitrators subject to Texas sales tax?
It depends on the context: **the Comptroller's October 8, 1993 letter says a general charge to act as an umpire between two arbitrators, plus an associated mileage charge, is not subject to tax** —…
Did a seller-financing dealer owe tax on unpaid installments when title filing was delayed only by the buyer's missing insurance proof?
No. If missing buyer liability-insurance proof was the only reason the county would not accept the title application, the permitted dealer could keep remitting tax as payments were received rather…
If a taxpayer already received a refund for one issue in an audited tax period, can they later claim a refund for a different issue in that same period?
**Yes.** The Comptroller's internal policy memo states that a final refund determination on one issue (one set of transactions) does not bar — under res judicata or otherwise — a later refund claim…
Are barricade services and plastic pavement marker tabs used by highway contractors subject to Texas sales tax?
**Yes for barricade service (taxed as equipment rental), but plastic marker tabs can be bought tax-free as consumable supplies.** The letter states that charges for barricade service are treated as…
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