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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Were snacks sold from unattended honor boxes taxable as vending-machine sales, and did the location of the tray matter?
No, an open nonmechanical honor box was not a vending machine. Snacks were generally exempt after November 1992, but sales at expected eating facilities could be taxable.
Are hospital gowns sold to a hospital or medical center subject to Texas sales tax?
**Yes — hospital gowns are taxable when sold to a hospital or medical center.** Unless the hospital, nursing home, or other institution itself qualifies for an exemption under Tax Code Section…
Is a business's fee for picking up and collecting used oil, used oil filters, used antifreeze, and used brake fluid for recycling subject to Texas sales tax?
**No — the Comptroller determined that collection services for used oil, used oil filters, used antifreeze, and used brake fluid to be recycled or re-refined are not subject to Texas sales tax.**…
Under South Carolina Revenue Ruling 93-11, was a lessor or lessee responsible for property tax on leased real and personal property?
The lessor was generally liable as owner. Liability shifted to the lessee for financing arrangements and specified exceptions, including unit valuation and qualifying 99-year real-property leases;…
Which in-state activities did South Carolina Revenue Ruling 93-10 treat as protected solicitation under Public Law 86-272, and which activities destroyed immunity?
Protection covered interstate sales of tangible goods when South Carolina activity was limited to solicitation, ancillary acts, de minimis activity, or specified independent-contractor work. Regular…
Could South Carolina tax trademark royalty income from an out-of-state licensor without the licensor's physical presence in the state?
Yes. The notice reports that the South Carolina Supreme Court found nexus because Geoffrey purposefully licensed trademarks for use in the state and held a South Carolina franchise interest and…
Does a Connecticut manufacturer owe use tax on product displays it buys, stocks with its goods, and gives free to retailers?
It depends on where the retailer is. A hardware maker bought empty product displays from an out-of-state supplier, stocked them with its hardware in Connecticut, and gave the stocked displays free…
How did California staff recommend registering a Massachusetts or business trust and determining trustee or beneficiary liability?
Staff recommended requiring the trust instrument, registering the trust with every trustee individually, treating trustees as sellers and partners for Board purposes, obtaining their asset…
Was an insurance holding company's one-time $150,000 sale of in-house software exempt as an occasional sale?
Potentially. It was exempt only if the seller made no disqualifying series of property sales and was not offering the software for sale; holding-company status alone gave no insurance exemption.
Can a city exempt residential gas and electricity from local sales tax differently — for example, repealing the tax on one energy source but not the other, or only part of the local tax?
**No.** The Comptroller's letter states the answer to both questions is "no": a municipality cannot repeal only a portion of the local tax as it applies to residential gas and electricity, and it…
Did a Wisconsin corporation have Florida tax nexus when its president controlled the business from a company-equipped Florida home office?
Yes. The executive set policy, handled financing, made daily and capital decisions, visited Florida customers, and used company-owned office equipment in a Florida home. Those activities created…
Did guaranteeing an anchor tenant's supplier debt make shopping-center owners original owners of the grocery inventory or excuse successor liability when they bought the store?
No. The broad debt guarantee conveyed no title to inventory. The owners later bought the business for $63,000, and escrow payments to creditors benefited the seller. Secured claims consuming the…
How did Florida's annual intangible tax apply to a municipal-bond fund and its shares when the portfolio sometimes held taxable assets?
The investment-company fund itself was exempt. Its shares were fully exempt only when the valuation-date portfolio was 100% exempt. If any taxable asset remained on that date, only the portion…
Were initiation fees and annual dues taxable when a yacht-owners club provided information and purchasing help but no recreational facilities?
No. The nonprofit club operated only an administrative office and owned no clubhouse, marina, dock, restaurant, vessel, or other recreational or physical-fitness facility. Its initiation fees and…
Can 'Direct' distributors in a direct-sales organization get their own sales tax permits, and how do they handle tax on non-company items like tapes, books, and business tools?
**Yes — the Comptroller's office decided that any 'Direct' distributor may obtain a sales tax permit and report tax on their own sales**, reversing prior denials, effective for procedures…
Does a computer software marketing aid built by an out-of-state vendor for a Texas manufacturer qualify for the 'developed from scratch' exemption, and is it taxable even though the master copy stays out of state?
**No exemption applies here, and the software is taxable.** The Comptroller held the Rule 3.308(b)(4) exemption for software "created from scratch" only applies when the software is built for the…
Are standalone elevator inspection services subject to New York sales tax?
Yes, when the customer is the property owner or lessee. Inspecting elevators to check code compliance is a diagnostic service that counts as maintaining real property under Tax Law section…
Were litigation costs advanced by a contingency-fee law firm taxable accounts receivable before a client recovered money?
No. Under the reviewed contracts, clients owed nothing until a case ended with a recovery, and the firm could not bill advanced costs before then. Costs recorded for unresolved cases therefore were…
Does a for-profit medical lodging facility have to collect Connecticut room occupancy tax once it is licensed as a health care institution?
No -- once it is licensed. A for-profit 'Medical Hotel' provided short-term rooms, 24-hour nursing care and meals to patients recovering from procedures or treatments. It had a Certificate of Need…
Can a company get a sales tax refund on insurance/actuarial services by prorating the tax based on the ratio of its Texas to out-of-state insurance premiums?
No — the Comptroller denied the refund request. **Prorating insurance service tax based on the ratio of Texas to out-of-state premiums is not a valid method** under Rule 3.355. The letter found the…
If a construction contract says the contractor will 'pay all sales taxes,' does that satisfy Texas's tax-included-price rule, and who is liable for the tax?
**No — that contract clause is not enough on its own.** The Comptroller explains that under Rule 3.286(d)(3), a bill, contract, or invoice must either separately state the sales tax amount or…
Is a land survey to locate a farm/ranch fence line taxable, even though the fence materials themselves are exempt?
Yes, the survey is taxable. **A land survey to determine or confirm property boundaries is a taxable real property service under Rule 3.356 (Real Property Services), even when the survey is done to…
Does a property manager have to collect sales tax on services like security, janitorial, pool, and lawn care that are purchased from independent contractors?
**Yes.** The letter states that taxable services purchased by a property manager from independent contractors are taxable — for example, a pool service, a lawn service, or a janitorial service hired…
Is a hotel's separate convention center subject to sales tax on room rental, and what happens when meals are served in it?
**Renting the convention center space by itself is not taxable — a rental of real property is not subject to sales tax.** But when meals are served, the analysis splits: charges for meeting rooms…
How did the original TAA treat a municipal-bond fund's valuation-date taxable assets before the Department issued a revision?
The original ruling exempted the fund itself and fully exempted shares only for a 100% exempt valuation-date portfolio. It said taxable valuation-date assets made all non-federal net asset value…
Could an advertising agency offset excess tax charged on sign installation against tax due on finished artwork merely because both appeared on one invoice?
No. One invoice did not make different property one transaction; reimbursement on signs could not offset liability on separately sold finished artwork.
Is a retinal angiographer's x-ray service for ophthalmologists taxable under Texas sales and use tax?
**No — the Comptroller ruled the retinal angiographer is providing a non-taxable health or medical diagnostic service.** Because the service itself is non-taxable, none of the fee (whether for…
Is a reading lamp prescribed by an optometrist for vision rehabilitation exempt from Texas sales tax as medical equipment?
**No — the reading lamp does not qualify for the medical equipment exemption.** The Comptroller's response states that the reading lamp described (prescribed by an optometrist, used along with…
If a for-profit company produces a charity booklet and donates all proceeds to an exempt organization, is the sale of the booklet exempt from Texas sales tax?
**No — donating all the proceeds to a nonprofit does not make the sale exempt.** The Comptroller explains that the Section 151.312 exemption for periodicals/writings turns on who publishes or…
Is sales tax due on charges for calls to 900 telephone numbers, and who is responsible for collecting it if the 900 number is sub-leased to another company?
**Sales tax is due on 900-number calls that originate from points within Texas**, and the telecommunications firm that transmits the calls collects the charge — including the tax — from the customer…
Is finish-out labor on a vacant, never-finished building taxable as remodeling, or exempt as new construction?
**Tenant finish-out labor is taxable as nonresidential remodeling** even on a building that was never finished out before, as long as the building was previously occupied or used in its unfinished…
Is a child identification/registration service (videotape and photo registration in case a child goes missing) taxable under Texas sales/use tax?
**No — the Videotape Registration Service and Photo Registration Service themselves are not taxable**, according to this 1993 Comptroller letter ruling. The company charges $20 for a kit to produce…
Was a country club's charge to cut and serve a customer-furnished wedding cake subject to California sales tax?
Yes. Serving the outside bakery's cake for consideration was a sale of food under section 6006(d), so the cake-cutting and serving charge was taxable.
When a developer has a contractor improve realty that will later be sold to a water district, can the contractor buy materials tax-free under Tax Code Section 151.311?
**It depends on who has the contract with the governmental entity.** Effective October 1, 1993, if the water control and improvement district (WCID) itself contracts with the developer for the…
If a contractor donates building materials to a tax-exempt airport authority before incorporating them into the building, are the materials and consumable supplies used in the job exempt from Texas sales tax?
**Building materials that a subcontractor purchases under an exemption certificate and donates to the airport before those materials are incorporated into the building are exempt — no tax is owed on…
How were shares of tax-exempt investment funds valued for Florida's annual intangible tax?
The ruling used only the portfolio held at the annual valuation point. Shares were exempt proportionately for direct obligations of the United States and the listed territories and possessions; if…
What Florida sales taxes did a festival host owe on admission charges and space rented to food, drink, and merchandise vendors?
The host had to register and collect tax on total vendor-space rent, including any percentage of vendor sales treated as rent, whether the site was donated or leased. If the host paid tax on its own…
Are charges for computer installation, training, troubleshooting, consulting, and network administration taxable in Texas?
It depends on what is being installed and whether you sold it. **Separately stated instruction/training charges are not taxable. Installation of software or external hardware you sold is taxable; if…
Did a nonprofit association owe sales tax on journals included with dues when postal rules required a stated subscription price?
Member distributions were not taxable when no stated or implied dues amount paid for the journal. But separately stating a member price to obtain second-class mailing privileges made that amount…
Was a county's systems-furniture purchase exempt after a turnkey contractor assigned the vendor contract to the county?
Yes, subject to audit verification. The freestanding furniture remained tangible personal property, and the county would buy in its own name, issue the purchase order, receive the invoice, pay the…
Is the NEEDLYZER needle destroyer device subject to Texas sales tax?
Yes, unless the buyer is exempt. **The NEEDLYZER is taxable unless it is sold to a governmental entity or another organization that qualifies for exemption.** The letter describes the device, per…
Can a retailer that leases (rather than rents) motor vehicles buy repair and replacement parts for those vehicles under a resale certificate?
Yes. **The Comptroller concluded that Rule 3.294 should be amended to let retailers who lease vehicles purchase repair and replacement parts under a resale certificate, the same treatment already…
Could a self-financing vehicle dealer pay all Texas sales tax upfront, and would repossession create a refund?
Yes, the dealer could pay all tax at once, but no dealer refund was available if the vehicle was later repossessed. Self-financing dealers still had to register and report, and failure to register…
When does a vending-machine tax-included sign create excess tax reimbursement on exempt sales?
A sign limiting tax inclusion to taxable or applicable items presumes reimbursement only on taxable sales, so exempt sales do not create excess reimbursement. The published annotation contrasts that…
Were separately listed packing, crating, shipping, and handling charges excluded from California sales-tax gross receipts?
Packing, crating, and handling remained taxable, including surcharges. Only qualifying separately stated transportation was excluded, capped at actual carrier cost.
Did a vending machine's posted tax-included statement mean its same-price exempt food sales to students included excess tax reimbursement?
No. The statement created a presumption that reimbursement was included only in taxable sales, so exempt student sales contained no reimbursement.
Who owed California tax when a local representative arranged an out-of-state manufacturer's direct shipment to a consumer?
Either relationship was taxable. A representative selling on its own behalf owed or collected tax; if it solicited as the manufacturer's agent, its California activity made the manufacturer collect…
Did a nonprofit foundation qualify for the charitable-sales exemption when its wine auction raised money for worthy charities?
No. The foundation raised funds rather than directly relieving poverty or selling principally to assist financially distressed purchasers.
Could a charity wine auction tax only the listed retail value and treat the winning bid's excess as a donation?
No. Sales tax applied to the full auction price even when bidders knew the retail value and intended the excess to benefit a charity.
Is a consulting and monitoring service that tells a customer when to have their trash compactor emptied subject to Texas sales tax?
No, the consulting and monitoring service itself is not taxable. **Consulting, monitoring, and advising a customer on the fullness of their trash compactor on a stand-alone basis is not taxable**,…
Did South Carolina PLR 93-6 apply the historical $300 maximum tax to each item in a university supercomputer system used for research and development?
Yes. Each item qualified because the system was used exclusively to develop software and other R&D products and was housed in a restricted, separately staffed facility devoted exclusively to…
Does a bank owe sales tax when it forwards checks, imprinters, or electronic capture machines to customers, or when it charges notary fees?
It depends on the bank's role in the transaction. **If the bank simply forwards a customer's order to a vendor and passes through the exact vendor charge, the bank is acting as the vendor's agent…
Did an out-of-state municipal-securities fund have Florida corporate-tax nexus when it used independent brokers but had no Florida office, people, property, or management?
No. The fund, trust, and related series had no Florida office, employees, salespeople, property, or management, and all assets were held and managed outside the state. Independent broker-dealers…
Did a promotional circular remain a printed sales message when its bottom half was an order and service-request form?
Yes. The circular's principal purpose was promoting the kits, so the integrated request form did not defeat qualification; other order and delivery conditions still applied.
Did assigning an affixed building separately from its site make the proposed sale-leaseback a taxable sale of personal property?
No. Because the building would remain physically attached, the proposed transfer was a real-property transaction. Separate legal ownership and a contract label calling it personal property were…
If a contractor builds a new exterior wall (with window openings) around an existing building, and adds four new floors, but the new wall doesn't create any usable space, is that new construction or remodeling for Texas sales tax purposes?
It's remodeling, not new construction. **Because the new brick wall built around the existing three-story structure did not create any usable space, the Comptroller ruled that the construction of…
We're lending over $50 million to a borrower under a revolving credit facility secured by warehouses in multiple states, including one in New York. The New York mortgage caps its own secured amount at a fixed dollar figure well below the total loan, and says all daily readvances and repayments get applied to the OTHER states' collateral first, with the New York amount reduced only by the truly final repayment. Will we only pay New York mortgage recording tax once, on that fixed cap?
Yes -- a one-time tax on the properly capped New York amount, as long as the mortgage's own allocation language controls. BT Commercial Corporation made an over-$50 million revolving loan to a…
Were rent payments between related corporations exempt as mortgage-debt payments when the mortgage was signed by one corporation and individual shareholders?
No. The rule applied only when both related corporations were equally liable co-makers on the third-party debt secured by the property. Here the mortgage parties were the lessor corporation and two…
Were soft-drink vending sales exempt when a religious organization had federal church status but Florida certificates labeled it charitable?
Not yet. The organization's Florida exemption certificates identified it as charitable rather than as a church, so vending-machine receipts remained taxable. If the Department later issued a…
How should a tenant calculate its sales-tax credit when a medical-office subtenant used different rooms for limited hours and days?
The tenant could not use only the subtenant's days of use. The credit had to reflect both the square footage available and the hours allowed in each area, then apply the share of working days used,…
How these rulings are useful
- See how the rule applies: A letter ruling shows how a state revenue department actually applied the tax law to a specific business and set of facts.
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