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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Does a video post-production company's studio equipment and building qualify for New York's investment tax credit as property used in the production of goods by 'processing'?
Yes, for the equipment, and conditionally for the building. Unitel Video Services' activities -- recording, editing, and duplicating television commercials and programs, transferring film to videotape…
Is a private ambulance company that also provides emergency medical care en route taxed as a New York transportation corporation (barred from electing S corporation status), or as an ordinary Article 9-A business corporation (eligible to elect S status)?
The ambulance company is a transportation corporation under Sections 183-184, not an Article 9-A business corporation, and therefore cannot elect S corporation status. Even though it provides emergenc…
Is a corporation that owns trucks and leases them to a related transportation company taxed as a transportation corporation itself, or as an ordinary Article 9-A business corporation -- when the petitioner's own factual statements about who controls and drives the equipment contradict each other?
It depends on facts the Department could not resolve from a contradictory petition. If Petitioner truly relinquished supervision and control of its tractors and trailers to Sheehan Carriers, Inc. and …
Does New York's franchise tax exemption for 'limited-profit housing companies' organized under Article 2 of the Private Housing Finance Law also cover nonprofit 'housing development fund companies' organized under Article 11 of that same law -- and if not, can an Article 11 company still be exempt some other way?
No, the Section 209(4) exemption itself does NOT extend to Article 11 housing development fund companies -- it's narrowly construed to cover only limited-profit housing companies organized under Artic…
Could a physician's verbal order or a signed health-care referral count as a prescription for exempt therapeutic items?
Yes on the stated facts. After consulting State Board of Pharmacy personnel, the Comptroller treated both the physician's verbal orders and the submitted signed referral forms as prescriptions, so the…
How did Texas treat lump-sum subcontracts, itemized change orders, and freight under separated construction contracts?
The Comptroller examined each subcontract separately. A lump-sum subcontract improving real property made the subcontractor responsible for tax; itemized change orders kept the original lump-sum chara…
Were perennial food-producing plants exempt in the same way as the edible products they produced?
No. The 1985 letter distinguished the food product from the plant: apples, strawberries, and perennial herbs sold as food were exempt, but apple trees, strawberry plants, and perennial herb plants wer…
Were materials incorporated into an eight-ton-or-larger paddlewheel charter boat and restaurant exempt?
Yes under the stated exclusive commercial-use facts and Section 151.329. Component materials and attached items qualified, but personal use would trigger tax on the boat's fair-market rental value.
Was machinery and equipment bought to make wine exempt when the winery was owned and operated by the original grape producer?
Yes under the stated facts. The Comptroller distinguished winemaking from denim manufacturing and said machinery and equipment bought by a winery owned and operated by an original wine-grape producer …
Could a ticket seller give collected sales tax to promoters to report, and who remained accountable if they did not remit it?
Temporarily, the seller could pass collected tax to an accepting promoter while reprogramming, but the Comptroller did not release the seller from liability. Without a written assumption of responsibi…
Are a bottle-bill container handler's charges for collecting, transporting, processing, and accounting for empty deposit containers, and its sale of the processed materials, subject to sales tax?
None of the charges are taxable. Western New York Beverage Industry Collection and Sorting picks up empty non-refillable deposit containers from dealers, transports them, sorts and processes them into…
How did Texas distinguish seller-installed bowling equipment from equipment bought and installed by the bowling center?
Seller-installed automated scoring machines, pin-setting machines, alleys, returns, and related equipment permanently affixed to realty remained real-property improvements. The brochure's taxable-purc…
Who paid and collected tax under lump-sum versus separated home-improvement contracts?
Under a lump-sum contract, the contractor was the consumer: it paid suppliers' tax on materials and did not collect tax from the customer. Under a separated contract, the contractor was a retailer of …
Were admission tickets sold to preregister bidders at an auction taxable as amusement admissions?
No. The 1985 letter said auctions were not amusement services, so selling admission tickets to an auction for bidder preregistration was not taxable.
Were charges for laboratory blood typing and dentists' wax impressions taxable within a child-identification service?
No. The Comptroller said charges for blood typing and wax dental impressions were not taxable, whether the company retained the resulting information or transferred it to clients.
When were delivery charges taxable for fresh water, taxable goods, and a water-KCL mixture?
Delivery of nontaxable fresh water was not taxable, but mixing it with taxable KCL made the mixture taxable. Delivery of taxable goods was taxable unless separately stated and occurring after the sale…
Were charges to haul fresh water to frac tanks at a customer's well location taxable?
No under the stated facts. Section 151.315 exempted the sale of water, and the letter said charges to transport nontaxable items were not taxable.
Is the lease of a relocatable modular office building subject to sales tax, even though it is classified as real property for real-property-tax purposes?
The lease is taxable as a rental of tangible personal property; the modular building is not a capital improvement even though it is taxed as real property for real-property-tax purposes. Hudson River …
Can a charter fishing boat operator buy its boats, fuel, and supplies exempt as commercial fishing, and are its charter fees taxable admissions?
The operator's boats, fuel, and supplies are taxable because charter sport fishing does not qualify for any commercial-fishing exemption; but the charter fees it charges customers are exempt as partic…
When were vehicle and equipment leases to federal banks or other governmental organizations exempt from Texas tax?
For motor vehicles, the historical exemption required title in the lessor's name, a lease to a qualifying public agency, and exempt license plates; standard plates made the vehicle taxable, and tax on…
Could a foreign buyer obtain a Texas sales-tax refund by proving promptly that purchased goods cleared U.S. Customs?
Possibly, at each retailer's option. Tax was due when taxable goods were transferred in Texas, but a retailer could refund it and seek reimbursement if the buyer proved the same goods cleared U.S. Cus…
Could an oil-and-gas operator use its own direct-payment permit for purchases made for subsidiary-owned leases?
Only in the stated general-partner arrangement. Otherwise, each qualifying subsidiary needed its own permit; the operator could buy under a subsidiary's permit only when a legal purchasing-agency agre…
When a petroleum business passes its Article 13-A gross receipts tax through to customers in the price they charge, does that passed-through tax amount itself get folded back into the company's own taxable gross receipts, creating an additional tax liability?
Yes -- passing the tax through creates additional tax liability. The Article 13-A gross receipts tax applies to ALL receipts from petroleum sales without any deduction for cost or expense, and is trea…
When was condominium electricity exempt residential use versus taxable commercial use?
Owner use and tenant stays of 30 days or more were exempt residential use; stays under 30 days were taxable commercial use. The association could claim exemption if it substantiated over 50% qualifyin…
Was the total charge taxable for converting a motor vehicle to LG fuel or dual gasoline/LG fuel?
Yes. The Comptroller classified each described bolt-on conversion as remodeling because it changed the vehicle's form, shape, or style without changing its identity or nature. Both parts and installat…
How did Texas treat lump-sum golf tours, included Texas amusement tickets, and separately stated tickets?
The tour operator did not collect tax on a lump-sum tour. For a Texas amusement ticket included in the package, tax was paid to the supplier; if separately stated, the operator could buy it for resale…
What sales-tax treatment applied when drilling tools, their lease, and lessor rights moved through a trust before customer rentals?
The Comptroller treated execution of the lease, the combined lease assignment and equipment transfer, and the trust-to-operator lease as nontaxable resale steps. The operating lessee collected tax on …
Were customer charges for provider-controlled water-conditioning systems taxable equipment rentals or nontaxable services?
They were nontaxable services under the stated arrangements because the provider retained ownership and operating control and performed all maintenance. Billing equipment and service separately did no…
Could seasonal cotton gins claim an electricity exemption on off-season bills that spread processing-period charges across the year?
Yes after reconsideration, if the predominant charge on the off-season bill was attributable to seasonal processing use. The March 14 letter reversed the attached February 22 answer, which had denied …
Could an amusement park collect and remit tax at its own jurisdiction's rate on tickets consigned for same-price resale?
Yes in both confirmed scenarios. The park could collect and remit tax at its own local and state rate when a consignee resold tickets at cost, including when the consignee sold statewide and received …
When were golf or tennis tournament entry fees not taxable under the corrected 1985 answer?
Only when both conditions were met: the entry fee exceeded the usual green or court fee for the same period, and part of the fee funded tournament awards. The letter called this a clerical correction,…
Was dog grooming taxable when performed for cosmetic reasons versus as a necessary part of medical treatment?
Cosmetic dog grooming was taxable regardless of who performed it. Shearing or clipping that was necessary to an actual medical treatment was not taxable.
Which listed truck and equipment repair-labor charges were taxable after the October 2, 1984 change?
Repair labor remained exempt for the listed motor vehicles—garbage, dump, flatbed dump, wrecker-lift, and car-hauler trucks, plus dump trailers—but was taxable for dozers, loaders, backhoe/loader trac…
When could condensate used as well-treating fluid be sold tax free, and when was tax due?
Condensate was generally taxable. A well operator could give an exemption certificate when treating its own well and the condensate remained in and was sold with the crude; a reseller could give a res…
Was a bulk sale of coupons taxable when customers later exchanged them at the box office for amusement tickets?
No at the coupon-sale stage because the coupons were not themselves amusement admissions. Sales tax was collected from the customer when the coupon was exchanged at the box office for an admission tic…
Who collected and reported tax when amusement parks placed tickets with at-cost distributors versus markup resellers?
For non-ticket sellers distributing tickets at cost or free, the parks could assume collection and liability, and the distributors needed no permits or reports. Markup resellers were admission sellers…
When did a farm or ranch computer qualify for the agricultural sales-tax exemption?
Only when used exclusively to produce, process, pack, or market agricultural products. Dairy, crop, feeding, and breeding records qualified; household expenses, payroll, and tax reporting did not. STA…
What rate applied to leases signed before October 2, 1984, and how were renewals treated?
The historical prior-contract rule preserved the rate in effect when a pre-October 2 lease was signed, including open-ended contracts, through September 30, 1987. Renewals and renegotiations were new …
Were data-processing leases and sales to the U.S. Government taxable, and did an out-of-state seller need a Texas permit?
The federal government could rent, lease, or buy tangible property for its own use without tax. The Virginia seller needed no Texas permit or collection duty on isolated direct-shipped sales because i…
When could nonprofit volunteer groups sell food and drinks tax free at an annual fundraiser, and were festival T-shirts taxable?
The $6 T-shirts were taxable. Food and drink could qualify only at a no-longer-than-one-week annual fundraiser run exclusively by nonprofit volunteers, with no catering, paid preparation or service, c…
Did a pre-October 2, 1984 software lease qualify for prior-contract relief, and was there an occasional-lease exemption afterward?
The existing software lease remained untaxed until modification, extension, or September 30, 1987, whichever came first. Effective October 2, 1984, no occasional lease or rental provision remained, so…
Were nightclub and bar admission charges taxable when the venue had a dance floor but no live entertainment?
Yes. The February 22 letter corrected the attached January 30 answer and said admission charges to nightclubs and bars with dance floors were taxable even without live entertainment.
Which oilfield heating, cleaning, water, brine, KCL, hauling, testing, and well-killing charges were taxable?
The 16-part answer was operation-specific: testing tubing leaks, produced-water hauling, fresh water, and certain oil-cleaning steps were not taxable; steam cleaning, paraffin removal, sand cleanout, …
Were canoe excursions taxable under Texas's newly enacted tax on amusement services?
Yes. The 1985 letter classified canoe excursions as amusement services and said they were subject to sales tax effective October 2, 1984.
Could a lender recover Texas motor vehicle tax it financed when the borrower defaulted and lost the truck tractor?
No. The Comptroller said tax was legally imposed on the motor vehicle sale and remained due even after the borrower defaulted and lost the truck tractor. Texas law provided no refund to a lienholder m…
When was tax due on financing and operating leases, and could an equipment-acceptance certificate establish possession?
For financing leases, tax arose at possession or the first payment due, whichever came first; a later balloon payment already included in the base was not taxed again. An acceptance certificate could …
What state, city, and MTA sales taxes applied to tickets for traveling carnival rides?
All ride tickets sold and redeemed were subject to state tax and applicable local tax. City tax followed the ride's operating location, MTA tax applied within the proper authority, and rides in a non-…
Which pulling-unit, pressure-testing, hot-oil, and equipment-cleaning services were taxable?
Pulling-unit work to remove or install pumps, rods, or tubing was taxable with mileage and per diem. Ordinary pressure testing and heating crude to remove sale-blocking impurities were not taxable; ho…
Was Gulf Salt Dome Ceiling Fluid exempt from sales and use tax when it met the Tax Code definition of diesel fuel?
Yes, if the product qualified as diesel under Tax Code Section 153.001(4). It still had to be accounted for on the distributor's monthly diesel-fuel tax report.
How were hydrostatic testing, repair, fabrication, leasing, and delivery of compressed-gas semi-trailers taxed?
The described testing and non-remodeling work were not taxable because the trailers were motor vehicles. Fabrication components could be bought for resale; motor-vehicle tax arose at registration for …
Was a customer charge for use of a skin-tanning booth taxable?
No under the facts presented. The 1985 letter stated simply that the charge for a tanning booth was not taxable.
Was $1 paid for a token redeemable for food or drink taxable as an amusement admission, and when was food tax collected?
The $1 token charge was not an admission because the token functioned like a gift certificate. Sales tax was collected when the token was redeemed for food or drink.
Were rental charges for safe-deposit boxes affixed to building walls or floors taxable?
No under the stated facts. The Comptroller said the box-rental charges were not taxable and suggested refunding tax previously collected from customers and applying for a refund. The response did not …
When were scuba excursions, crewed boat charters, and lump-sum diving travel packages taxable?
A standalone scuba excursion was a taxable amusement, while a crewed boat charter used only for transportation was not taxable. A lump-sum travel package dominated by nontaxable travel services was no…
How did Texas tax hole-digging equipment mounted on a conventional truck versus a specialized half-cab chassis?
Design controlled. A conventional truck with an attached hole digger was taxed as a motor vehicle, while a half-cab specialized unit was taxable equipment. Repair tax treatment also differed.
When did a physician-prescribed Texas health-club membership qualify for a sales-tax exemption?
Health-club fees were exempt when supported by a licensed practitioner's written prescription to treat a specific malady. Each membership renewal needed a new or extended prescription to remain exempt…
Were grease-trap services, standalone consultations, and silver reclamation from printer waste taxable?
Grease-trap pumping, modifications, and installation were not taxable when the concrete traps were permanently embedded in the earth. A separately stated consultation without a tangible-property sale …
Did equipment added to a pre-October 2, 1984 Texas master lease preserve the occasional-sale exemption?
Yes, if Texas tax had been paid on the equipment. The old master lease remained one exempt transaction, but post-October 2, 1984 additions were taxable to the extent they increased the lease price.
Can a restaurant avoid Texas sales tax by labeling a required meal price as a charitable contribution?
No. A required set payment for a taxable item is a sale, not a charitable contribution. Restaurant meals sold for stated amounts were taxable even though menus and checks labeled the prices as contrib…
Was pumping hot oil down a Texas well bore to remove paraffin or another obstruction taxable?
Yes. Pumping hot oil down a well bore to dissolve paraffin or remove another obstruction was taxable maintenance because the tubing was tangible personal property.
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