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 a microbe air scrubber system (and the microbes used in it) exempt from Texas sales tax, and is monitoring/maintenance of the system taxable?
**The microbe air scrubber system qualifies for the manufacturers' phased-in exemption under Tax Code Section 151.318, and microbes sold together with the system as part of that sale are also…
Can a janitorial services company buy its cleaning equipment and supplies tax-free under a resale certificate?
**Generally no for equipment and supplies used up on the job, but yes for items left behind with the customer.** The Comptroller ruled that separately pricing janitorial equipment on a…
Is a New York corporation owned by tribal members and operating entirely on an Indian reservation exempt from Article 9-A franchise tax?
No. A New York domestic corporation that runs a bingo operation entirely on the St. Regis Mohawk Reservation and is owned entirely by tribal members is still subject to the Article 9-A franchise…
Were Calli Beverage, Fortune Delight, NuPlus Bulk, Electrosport, and Evergreen subject to Florida sales tax?
No. The Department relied on the state agriculture agency's Food Laboratory classification of all five products as dietary food supplements and found them exempt from Florida sales and use tax under…
Did rent paid by a related corporation to a grantor trust qualify for Florida's related-entity debt-payment exemption?
No. The rule's exception applied only to payments between related corporations that were co-makers of the debt securing the real property. It did not extend to a grantor trust, partnerships, or…
If a company buys or builds equipment mainly to control air and water pollution — vapor recovery systems, leak detectors, cathodic protection, double-wall tanks, cleanup gear — is that equipment exempt from Alabama sales, use, and property tax, and deductible for franchise and income tax?
Mostly yes. Company A, an Alabama petroleum business, planned to buy or self-construct five kinds of environmental equipment (vapor recovery systems, in-line leak detectors, cathodic protection,…
Were separately stated flow-meter calibration and startup charges taxable when performed at the seller's factory?
Yes. Factory calibration and startup were assembly or fabrication, not jobsite installation, so their charges entered the taxable sales price.
Is electronic mail (e-mail) service taxable under Texas sales tax?
**Yes — electronic mail is a taxable telecommunications service in Texas.** The Comptroller's letter states that electronic mail has been subject to sales tax as a telecommunications service since…
Does a company owe Texas sales tax on fees charged to songwriters for demo placement and to music publishers for catalog/system access?
**Yes.** The Comptroller ruled that sales of the company's song catalog and system access are subject to Texas sales tax when sold to Texas residents — the company must collect 7.25 percent state…
After a lessor and lessee merge, can excess rental tax on one equipment item offset purchase-price use tax due on another?
No. The survivor must calculate tax and Regulation 1660(c)(6) credits item by item; tax paid on one asset cannot offset another asset's liability.
Is an independent contractor who fills in as a temporary secretary/word processor for law firms exempt from sales tax as a 'temporary help service'?
It depends on the facts, not the label. The Comptroller explains that, absent a written contract defining the relationship, Texas has historically applied common-law employer/employee tests — now…
Is unprocessed dirt, sand, or gravel taxable, and is digging/backfilling flow line ditches a taxable service in Texas?
**Digging and backfilling flow line ditches is not a taxable service, and the sale or delivery of unprocessed dirt, sand, gravel, or similar materials (merely sorted, sized, screened, washed, and/or…
Is tangible personal property incorporated into an underground drainage system on a farm exempt from Texas sales tax the same way underground irrigation system components are?
**No.** The Comptroller's letter states that Senate Bill 82 exempts components installed as part of an underground irrigation system on a farm or ranch used to produce agricultural products sold in…
Does a mailing service or a broker who collects payment for a 900-number telecommunications service have to collect Texas sales tax on those transactions?
**No — in both situations described, the letter holds the taxpayer is not responsible for collecting tax on the underlying sale.** For the mail-order referral business, a mailing service…
Is customizing a customer's car with performance and body enhancements taxable in Connecticut as a repair, or as fabrication of the customer's property?
It's taxable, but as fabrication — not as a repair. A company added engine and body 'enhancements' (customization) to customers' vehicles, boosting their performance and value. DRS held this is NOT…
Were materials used without extra customer charges for callbacks, warranty repairs, corrections, modifications, and makeovers exempt as business overhead?
No. They were additional materials consumed in performing construction contracts, so tax applied to cost; there was no deduction merely because they were wasted or unbilled.
Were post-confirmation advances under a revolving loan created by a confirmed Chapter 11 plan subject to Florida's nonrecurring intangible tax?
No. Each advance ordinarily would have been taxable because the revolving loan was secured by Florida real property, but the Department found the advances exempt for as long as the loan remained…
How did Florida's annual intangible tax apply to fund shares holding municipal leases or repurchase agreements backed by federal securities?
The investment-company funds themselves were exempt, and shareholder net asset value was fully exempt when the valuation-date portfolio held only exempt assets. Municipal lease obligations and…
Could a frozen-strawberry processor buy carbon dioxide without tax as an ingredient or nonreturnable packaging material?
No. The processor bought CO2 as a freezing and preservation aid, not to incorporate it into strawberries, and the gas did not qualify as a container.
Did California treat urinary bags and urinary meters the same way for sales and use tax?
No. Urinary bags were exempt as necessary, integral catheter supplies, while meters appeared to be treatment devices and were taxable.
How did California classify broad categories of implants, kits, catheters, oxygen equipment, surgical items, grafts, and dressings?
California gave category-level rules: qualifying permanent implants, catheters, grafts, and related supplies could be exempt, while many kits and temporary devices were taxable.
How did California staff define a permanently implanted medical device for the prescription-medicine exemption?
The 1993 opinion used intent as the test: an implant was permanent if intended to remain at least six months, even if it actually had to be removed sooner.
Were reusable esophageal dilators exempt from California sales tax as implants or prosthetic devices?
No on the assumed facts. The opinion taxed reusable dilators presumed to be inserted only long enough for treatment and removed because they were neither permanent implants nor external prostheses.
Was a wastewater filtration contract a nontaxable service when the provider owned and maintained the equipment and replaced its carbon?
No. The customer's true object was using the system, so it was a lease; rental tax still depended on the stated tax-paid/timely-election exception.
Did California use tax apply when resale inventory was handed to a California carrier as an out-of-state promotional gift, and what about shipments to the retailer's own offices?
Promotional gifts were used in California when handed to the carrier, so tax applied; shipments to the retailer's own out-of-state offices retained title and could avoid California tax if no other…
Are vitamin and mineral supplements for horses exempt from Texas sales tax?
**Yes — vitamin and mineral supplements for horses are exempt from Texas sales tax**, according to this Comptroller letter, unless the item is not clearly for horses only, in which case the seller…
Is a toxic-waste cleanup company's service taxable, and are the equipment and supplies it uses during a cleanup subject to sales tax?
Yes -- the cleanup service itself is taxable as processing and real-property-maintenance work, and the company's own cleanup equipment (booms, vacuums, earth-moving machinery) and protective…
Does a condominium's common-area electricity qualify for New York's reduced residential energy sales tax rate, including electricity used for the pool, laundry room, and a rooftop antenna lease?
Partly. Hall lights, stairway lights, heaters, and outside lighting tied to the residential building are common-area uses that DO qualify for the reduced residential energy rate. But electricity for…
Who had to sign a South Carolina property-tax return under the Department's 1993 policy?
The taxpayer had to sign, although a person with an appropriate power of attorney could sign for the taxpayer. If someone else prepared the return, that return preparer also had to sign it.
What did South Carolina announce about public access to Commission decisions through September 1993?
Sanitized Commission Decisions and an index covering 1987 through September 30, 1993 were available for public review at the University of South Carolina School of Law Library and Department…
How did California tax an illustrator's first-publication rights when the publisher returned the original artwork after use?
It was a taxable artwork lease. The illustrator had to collect use tax on rent and report it for the period payment was received.
How did Texas calculate use tax on a vehicle leased outside the state and later brought into Texas?
Texas used the vehicle's original purchase price without a deduction for depreciation or prior out-of-state use. The applicable rate was the rate in effect when the vehicle entered Texas, and…
Is the license and service fee a company pays to access training materials (books, videotapes, videodiscs, software) subject to Texas sales tax?
**Yes — the license and service fee for accessing the training materials is taxable, but a separately stated charge for the training itself is not.** When the company (ABC CO.) uses the training…
When a building owner hires an independent managing agent to hire, pay, and supervise building maintenance staff, are those workers' wages exempt from New York sales tax as employee wages, or taxable as the managing agent's service charge?
It depends on who really controls the workers. Where the building owner -- not the managing agent -- sets staffing levels, work hours, shifts, and pay rates, funds the payroll (even though the agent…
Are receipts from selling custom industrial-control software, and from ongoing modification/updating services on that software, subject to New York sales and use tax?
No -- software designed and developed to a specific purchaser's own specifications ('custom' software) stays exempt from sales and use tax after the September 1, 1991 law change, and so do charges…
Is a research firm's government-funded pilot plant, built to test a new pollution-control process at a power station, exempt from sales and use tax as research equipment, government property, production machinery, or a capital improvement?
Partly. Tangible personal property bought for use directly and predominantly in the experimental/laboratory research is exempt. Property that becomes part of a permanent capital improvement (the…
Under California's historical child-care facility startup credit, how did the $50,000 annual cap interact with tax liability and carryovers?
The credit was 30% of qualified startup costs but no more than $50,000 generated for a year. Only the part of that allowed credit exceeding current tax could carry forward; costs producing a…
When could a high-school youth group sell student-made calendars and address books without sales tax?
When a genuine school-affiliated youth group produced and sold them irregularly or intermittently and kept the profits for its purposes. Store sales and improperly stated tax remained taxable.
Is electricity used to manufacture signs exempt from Texas sales tax when the company also installs most of the signs it makes?
**It depends on whether the finished sign is sold as tangible personal property or as an improvement to realty.** Electricity used directly in manufacturing a sign qualifies for the sales tax…
Did modifying a travel trailer qualify it for Texas's historical disability-related motor vehicle tax exemption?
No. The historical exemption covered vehicles modified for operation by or transportation of a person with an orthopedic disability. Because a travel trailer was not designed to transport people,…
Is the charge for tattooing a person, including applying a temporary tattoo, subject to Texas sales tax?
**No — the charge for tattooing people, including applying a temporary tattoo, is not taxable**, because it is a service rather than a sale of tangible personal property. The person who applies the…
Is a cartoonist or caricature artist's charge for drawings at a catered party taxable under Texas sales tax law?
**Yes — a charge for a cartoonist (caricature artist) is taxable as the sale of graphic art, not as a nontaxable entertainment charge**, and the cartoonist must collect and remit sales tax on…
Were receivables taxable on January 1 after a Florida parent sold them to an out-of-state subsidiary with no Florida business situs?
No. The subsidiary owned the receivables on January 1 and had no Florida business situs, while the parent retained only ministerial servicing duties without discretion. The subsidiary's purchase…
Does South Carolina's September 1993 policy index PDF contain the promised document entries?
No. The notice says a policy-document index is attached, but the current official two-page PDF stops after listing seven major categories and contains no document-by-document entries.
Does South Carolina's September 1993 policy citator PDF contain the promised status entries and exhibits?
No. The notice says a policy-document citator is attached, but the official three-page PDF ends after its definitions and cumulative-topic explanation. It contains no document-level status entries…
When a leased vehicle is sold (for example, the lessee buys it at the end of the lease), who collects the Kansas sales or use tax?
It depends on whether the seller is a licensed Kansas vehicle dealer. A lessor that holds a valid Kansas Vehicle Dealers License (under K.S.A. 8-2403) collects the Kansas sales tax on the purchase…
Was a vessel bought at a U.S. Customs forfeiture auction subject to California use tax?
No. Customs was an unincorporated federal agency, and the forfeited vessel was neither reported surplus property nor contractor inventory. Section 6402 therefore exempted the purchase, and counsel…
Is equipment rented or leased for making a motion picture, video, or audio recording exempt from Texas sales tax?
**Yes, effective October 1, 1993, a producer may claim an exemption from tax on qualifying machinery or equipment rented or leased for the production of a motion picture or a video or audio…
Which parts of a sulfuric-acid and cogeneration complex did the cancelled TAA treat as exempt energy-production equipment?
Cancelled. Before the taxpayer cancelled the TAA on September 29, 1993 to provide more information, its text treated specified boiler-feedwater and condensate equipment as exempt but denied the…
Were electricity sales under a utility's filed residential tariff exempt from Florida sales tax?
Yes. The Department treated a unit classified as residential under the utility's Public Service Commission tariff as a residential household, making the owner's or tenant's electricity purchases…
Which hotel rooms rented continuously to an employer for rotating crews qualified for Florida's six-month transient-rental exemption?
Only the minimum number of guaranteed rooms continuously rented for longer than six months qualified; additional or interrupted rooms remained taxable. Using the hotel's spreadsheets, the Department…
Could a vendor refund tax on an equipment sale after the buyer used the property, arranged a sale-leaseback, and later supplied a resale certificate?
No. Functional use made the original sale taxable, and routing the later lessor's payment through the vendor was neither a return nor a rescission.
Could an equipment vendor refund sales tax after its customer used the equipment, then sold it to a lessor and leased it back?
No. The customer's functional use made the original purchase a taxable retail sale, and the later paperwork was neither a resale nor a qualifying merchandise return.
Could customers moving to Japan use Certificate E, a California blanket sales-tax exemption form, to buy merchandise for export?
No. Certificate E required a qualifying carrier purchaser; export instead depended on retailer-controlled shipment, actual foreign delivery and retained proof.
Did the $2 residential or $4 commercial surcharge apply to a forced-placed dwelling fire master policy and its certificates?
The residential-only master policy carried the $2 surcharge when issued to a Florida mortgagee. Each certificate for Florida residential property also carried $2, while a certificate covering…
When a state, county, city, and industrial development authorities give a company a free plant site, cash reimbursements, grants, and other incentives to locate a factory in Alabama, is the value of those inducements taxable as corporate income — or excludible as a gift?
Excludible as gifts. To induce Company A to build a production facility in Alabama, the State, a county, a city, and two industrial development authorities signed agreements giving Company A a free…
Could a corporation transfer its operating assets to a wholly owned subsidiary and immediately merge that subsidiary into an unrelated buyer without sales or use tax?
Yes, conditionally on the hypothetical facts. Liability assumption made the subsidiary transfer a sale, but the stated property and ownership tests could exempt it. The merger also could be…
What California tax applied when a company let an at-will executive use a tax-paid car and transferred title after four years?
Rent was not taxed. A free four-year title transfer was not a sale, but an early title payment was taxable at the amount paid—not the car value.
When must architects, engineers, or contractors in Texas charge sales tax on copies of blueprints or plans, and when do they instead owe tax as the purchaser?
**It depends on whether the copies are provided to the original client under the professional service agreement, or sold separately to someone else.** When an architect or engineer gives copies of…
How did Texas require a seller-financing dealer to report a vehicle sale when the dealer paid all tax at title transfer?
The dealer could pay all tax to the county with timely title and registration documents, but still needed a financing-seller permit. Receipts from that sale went into gross receipts, not taxable…
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