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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Did a taxpayer who moved abroad in 2018 successfully change his domicile away from Virginia, entitling him to a refund of Virginia income tax withheld from a 2019 retirement distribution?
Yes -- the Tax Commissioner found the Taxpayer changed his domicile to Country A when he moved there in November 2018, and directed that his Form 763-S nonresident withholding refund claim be processe…
Did an IT company's refund claim for aircraft and retail sales and use tax paid on its March 2008 return succeed?
No -- the Tax Commissioner upheld the denial. The Taxpayer could not document that it had actually overpaid aircraft sales and use tax, and its retail sales and use tax refund request for the March 20…
Does a business intelligence firm's BPOL exemption for benefits paid to contract employees depend on how much control its clients exercise over those employees?
Yes -- it depends on the facts of each engagement. The Tax Commissioner found the taxpayer's sample statements of work showed at least some engagements involved the kind of client control that would q…
Could the Virginia Tax Commissioner review a Business Tangible Personal Property tax assessment when the taxpayer had only emailed the locality instead of filing a formal local appeal?
No -- the Tax Commissioner determined he lacked jurisdiction because the Taxpayer never filed a proper local administrative appeal or received a final local determination from the county; the Taxpayer…
Was a fertilizer-additive plant properly classified as a 'processor' rather than a 'manufacturer' for Virginia BPOL tax purposes?
No -- the Tax Commissioner overturned the City's classification and found the Taxpayer is a manufacturer, because its chemical reaction between raw material oxides and sulfuric acid produced a substan…
After Stone v. Thompson abolished common-law marriage in South Carolina, what filing status can a common-law married couple use on their South Carolina income tax return?
It depends on WHEN and WHERE the common-law marriage was formed. In Stone v. Thompson (2019), the South Carolina Supreme Court abolished the ability to enter into a common-law marriage in South Caroli…
Can a divorced parent claim his child as a dependent on his New Mexico return when the child lives with him far less than half the year and no court order gives him the exemption?
No. Pedro Ramirez claimed one of his children as a dependent on his 2019 New Mexico return, and the Department reduced his refund. The hearing officer upheld the adjustment. A dependent must meet five…
Does licensing software to customers through an end user license agreement (EULA) count as an exempt software license, or is it a taxable retail sale, under Illinois sales tax rules?
It can be exempt. Illinois treats a software license as a non-taxable exempt license — not a taxable retail sale of tangible personal property — if the EULA is signed (including by valid electronic si…
If a boat (or other item) is located in Illinois and handed over to an out-of-state buyer here, does the Illinois dealer have to collect and remit Illinois sales tax, even though the buyer immediately takes it out of state?
Yes, tax applies. When an Illinois boat dealer sells a boat that is in Illinois at closing and the out-of-state buyer takes physical possession of it here, the sale is taxable in Illinois, even if the…
Does an Illinois retailer have to charge sales tax when selling collectible paper currency, coins, or bullion?
No, generally not. The sale of legal tender, currency, medallions, or gold or silver coinage issued by Illinois, the U.S. government, or a foreign government, and bullion, is exempt from Illinois Reta…
Does an out-of-state furniture retailer with no Illinois office have to collect Illinois Retailers' Occupation Tax as a remote retailer, or just remit Use Tax?
It depends on sales volume. A remote retailer with no Illinois office or warehouse must collect and remit the full local Retailers' Occupation Tax (destination-based, so it can be 10.25% in Chicago) o…
When a company drop-ships goods into Illinois, are those sales exempt from Illinois sales tax if the goods are being resold or exported out of the country?
Yes, potentially. A drop shipment can be tax-exempt either as a sale for resale (if the purchaser gives a valid Certificate of Resale) or as an interstate/export sale (if the seller is contractually o…
Does a nonprofit's isolated-or-occasional-sale exemption still apply when it sells through a marketplace facilitator like an online platform?
No. Once a sale is made through a marketplace, Illinois no longer treats it as an isolated or occasional sale, so the exemption from Retailers' Occupation Tax does not apply to that sale, regardless o…
Are subsidy payments an employer pays a third-party food service company to operate its employee cafeteria subject to Texas sales and use tax?
Yes. Texas ruled that subsidy payments an employer makes to a third-party food service company — covering the gap between the cafeteria's operating costs and its food/drink sales receipts, plus an adm…
Does South Carolina follow the federal IRC Section 163(j) limit on deducting business interest expense, or can taxpayers deduct their full business interest for South Carolina income tax purposes?
South Carolina does NOT follow the federal IRC Section 163(j) limit on business interest expense for tax years beginning after 2017. South Carolina's adoption of the Internal Revenue Code is selective…
Through what date did South Carolina extend the simplified COVID-19 admissions tax refund procedure (per SC IL #21-3)?
Through June 30, 2021. SC Information Letter #21-3 extends the simplified admissions tax refund procedure the Department first announced in SC Information Letter #20-18. Under it, a qualifying busines…
Does electricity used in an apartment complex's common areas — pools, gyms, yoga rooms, clubhouses — qualify for Colorado's residential-energy sales-tax exemption?
No. Electricity used in an apartment complex's common areas — swimming pools, fitness centers, yoga rooms, clubhouses — does NOT qualify for Colorado's residential-energy sales-tax exemption and is ta…
Can a rural health care practitioner claim a New Mexico income tax credit refund after the three-year statute of limitations has run, if the eligibility certificate came in late?
No. Loretta Garrett, a rural health care practitioner, learned after filing her 2015 New Mexico return that she qualified for the rural health care practitioner tax credit. She obtained a certificate …
How does South Carolina's housing tax credit for low-income housing projects work — who qualifies, what taxes it offsets, how it passes through partnerships, and can it be sold?
South Carolina's housing tax credit (Code Section 12-6-3795, the 'Workforce and Senior Affordable Housing Act,' enacted May 14, 2020) gives investors in qualified low-income housing a state credit EQU…
How can taxpayers check whether a South Carolina Department of Revenue advisory opinion had been modified, superseded, or made obsolete through December 31, 2020?
Use the citator attached to SC Information Letter #21-2. It lists South Carolina Department of Revenue advisory opinions from 1987 through December 31, 2020 that the Department identifies as modified,…
Where can taxpayers find South Carolina Department of Revenue advisory opinions by tax topic through December 31, 2020?
Use the subject index attached to SC Information Letter #21-1. It organizes South Carolina Department of Revenue advisory opinions issued from 1987 through December 31, 2020 under administrative, alco…
Could a parent stop filing Florida consolidated returns after an acquisition ended the affiliated group that made the election?
Yes. Florida granted permission because the acquisition ended the taxpayer's former affiliated group and nullified its consolidated filing election. The taxpayer and members of its former group could …
Could a registered dealer avoid tax on its prime city lease by collecting Florida sales tax from its real-property sublessees?
Yes. The registered dealer could collect and remit tax on rent from its marina and restaurant sublessees instead of paying tax on the prime city lease, so long as it remained registered and annually g…
Are the chemicals a metal-plating and passivation business uses to clean, plate, coat, and treat customers' parts exempt from Illinois sales and use tax as manufacturing chemicals?
It depends on the chemical's role. Chemicals that directly and immediately change the customer's parts (cleaning, plating, chromate coating, sealing, passivation acids) can qualify for Illinois's manu…
Is a web-based (SaaS) fleet management service, and a free companion app that goes with it, subject to Illinois sales or use tax?
Generally no. Illinois does not tax subscription-based SaaS, so the fleet management service itself is not taxable. A companion app the provider gives customers for free is also not taxable if it's do…
Was a radio broadcaster's lease of tower space exempt because the tower stood on a privately owned dirt access road?
Yes. Although the Department said the tower site was not a right-of-way, additional facts showed that it was built on a privately owned dirt access road. Florida treated that road as a private street,…
Are web-based data analytics services — reports, dashboards, and analyst consulting — taxable in Tennessee, or a nontaxable service delivered through software?
Not taxable. The Department ruled that a company's web-based data analytics services — digital reports, an interactive analytics dashboard, and analyst consulting — are not subject to Tennessee sales …
What does Virginia Tax Bulletin 21-1 say about the increase to the Litter Tax rate and the new penalty for late payment?
Effective for Litter Tax returns due May 1, 2021, the base annual Litter Tax rate doubled from $10 to $20 per Virginia business establishment, and the additional Litter Tax on grocery/soft drink/beer-…
What are the current rules for claiming Virginia's Port Volume Increase Tax Credit, and how do I calculate and transfer it?
These are the Department of Taxation's updated Guidelines explaining the Port Volume Increase Tax Credit, an individual and corporate income tax credit of $50 per 20-foot-equivalent-unit (TEU) of incr…
Could the Department reconstruct a law firm's taxes from bank deposits and impose 50% penalties after years of known nonfiling and nonpayment?
Mostly yes. The Behles Law Firm stopped filing gross receipts and withholding returns in 2010, filed no relevant corporate income returns, and paid no workers' compensation fees, despite prior filing …
Is my Kansas mobile or manufactured home taxed as personal property or as real estate, and does eliminating the title change that?
Personal property, unless BOTH of two things are true. Under K.S.A. 79-340 as the directive restates it, a mobile or manufactured home is personal property unless '[t]he title to the mobile or manufac…
Were per-diem receipts for housing state prisoners at privately operated county prisons deductible as licenses sold for resale?
No. GEO's contracts with Guadalupe and Lea Counties predominantly required operating secure correctional facilities—staffing, training, security, food, health care, transportation, and programming—not…
What form or information does a manufacturer need to document a Certificate of Resale in Illinois, and can a Multijurisdictional exemption form be used instead of the state's own forms?
Yes, a Multistate Tax Commission Uniform Sales & Use Tax Exemption/Resale Certificate can serve as a valid Certificate of Resale as long as it contains everything 86 Ill. Adm. Code 130.1405 requires: …
When a Texas port authority leases unimproved land to a private stevedoring company that will build a container yard, can the contractor buy construction materials tax-free under the governmental-improvement exemption?
Yes. Texas ruled that construction materials, consumables, and taxable services purchased to build both phases of a container-yard project at a Texas port — even though a private stevedoring company w…
Does Illinois Service Occupation Tax or Use Tax apply when a company sells two-component spray-on bedliner products to franchisees/dealers who apply them to customers' trucks?
The franchisees and dealers who buy the bedliner components and spray them onto customers' trucks are acting as 'servicemen' under the Service Occupation Tax Act, so they can buy the components from t…
Under Illinois's Parking Excise Tax, who has to collect and remit the tax when a garage operator sells parking spaces to a web-based aggregator that resells them to the public?
The web-based aggregator, not the garage operator, is the one that owes the Parking Excise Tax on its resale price, because an aggregator that buys parking for resale and itself contracts with the par…
Does Illinois Retailers' Occupation Tax apply when a leased rail car or truck is destroyed and the lessee pays the stipulated loss value and takes title?
Generally no. When a true-lease lessor who is not otherwise in the business of selling like-kind property has leased equipment destroyed, the lessee's payment of the stipulated loss value and the less…
Can a cash-basis Illinois used motor vehicle dealer that prepays a customer's sales tax get a credit or refund when the customer defaults on the financing?
Yes, but only in a limited way. Illinois denied the dealer's request for a full refund of prepaid tax on defaulted accounts, but ruled that because the dealer can actually claim a federal bad-debt ded…
Did the Virginia Tax Commissioner grant reconsideration of a prior determination that denied a sales tax refund based on the Internet Service Provider exemption and the electronically delivered software exemption?
No -- the Tax Commissioner denied the request for reconsideration, finding no misstatement of facts or misapplication of policy on either the ISP exemption or the electronically delivered software exe…
Did buying heavy equipment and assuming its debt make a new family oilfield company liable for the failed seller's entire $3.70 million tax assessment?
Only to the transferred property's value. M&J Oilfield Services became a successor in business when it acquired a track loader and backhoe loader from M & J Dumptruck & Backhoe Services and assumed $6…
Can an unlicensed motor fuel distributor sell fuel tax-free to the federal government while its Illinois distributor license is still pending?
No. Illinois only allows tax-free motor fuel sales to the federal government or its instrumentalities when the seller is a licensed distributor at the time of the sale. See 35 ILCS 505/6 and 86 Ill. A…
Is natural gasoline excluded from the definition of taxable 'gasoline' under the Illinois Motor Fuel Tax Law?
No. The Illinois Department of Revenue concluded that natural gasoline is included in the statutory definition of 'gasoline' under 35 ILCS 505/5, so licensed distributors must report it on their month…
Can an auto dealership claim the Illinois Use Tax interim-use exemption for vehicles it titles to a captive finance company and uses as service loaners?
The Department did not rule on whether this dealership's loaner vehicles qualify for the Use Tax interim-use exemption. It declined to issue a Private Letter Ruling because the matter was already befo…
How does Illinois source local Service Occupation Tax and Retailers' Occupation Tax when a company uses production managers and a network of outside suppliers to fulfill custom orders?
Local Service Occupation Tax and Retailers' Occupation Tax are sourced to the location where the company's own selling activities occur (here, its production managers), not to the location of an outsi…
Does a federal construction contractor owe Illinois Use Tax on materials and equipment it buys to fulfill federal government contracts?
Generally yes. The Department explained that a government contractor who buys items to fulfill a contract with a governmental unit is using those items and owes Illinois Use Tax, even if ownership of …
Does Virginia's manufacturing sales and use tax exemption cover materials used to construct a new electrical generating facility?
It depends on the specific item -- the Tax Commissioner could not give a yes-or-no answer because the Taxpayer did not identify the actual materials, equipment, or supplies involved, so the ruling ins…
Does an online food-ordering and local-delivery platform have to collect Tennessee sales tax on orders from local restaurants and stores, or does it escape the marketplace-facilitator collection duty as a 'delivery network company'?
It can qualify as a 'delivery network company' and avoid the collection duty. The Department ruled (in an advisory, non-binding revenue ruling) that an online platform connecting Tennessee customers w…
Was an extra charge for a mobile-app security feature taxable when bundled with or separately stated from alarm monitoring?
Yes. The optional mobile-app feature worked with and enhanced the company's taxable security monitoring service. Florida treated it as a component of taxable protection services—and said its features …
How did Florida tax lump-sum contracts to fabricate and install structure-mounted and freestanding commercial signs?
Florida treated the contracts as sales of tangible personal property because sign fabrication predominated over the incidental real-property work. The sign maker correctly charged sales tax on each fu…
Was a hospital's rental of an automated instrument that analyzed blood and urine exempt from Florida sales tax as a test kit or blood analyzer?
No exemption applied. Florida treated the large automated immunoassay system as a laboratory instrument, not a test kit. It also analyzed urine as well as blood, so the Department did not treat it as …
Is fabricating and installing a permanent non-canvas awning a taxable installation or a non-taxable capital improvement?
It's a capital improvement, so the installer shouldn't charge customers sales tax on the job. The business builds awnings from metal framework and PVC/vinyl material (no canvas), securely attached so …
Is a contract packager's charge to fill, weigh and seal a food manufacturer's product subject to New York sales tax?
No. A food manufacturer outsources packaging to an unaffiliated company, supplying both the food and the bags and paying per bag to have the product filled, weighed, and sealed, then reselling it. Fil…
We accidentally filed a discharge of our mortgage by clerical error. If we now record a new agreement to restore the same debt and terms, does that count as an exempt "supplemental mortgage," or do we owe mortgage recording tax again?
Mortgage recording tax must be paid again. Tax Law § 255 exempts a "supplemental mortgage" recorded to correct or perfect a prior mortgage on which all tax was already paid, from further recording tax…
Did paying Arizona sales tax on assets delivered to Virginia excuse the Taxpayer from Virginia use tax?
No -- the Tax Commissioner upheld the assessment because the fixed assets were delivered to and used in Virginia, so Virginia use tax was due regardless of the Arizona tax the vendor mistakenly collec…
What happened when a Virginia rental business appealed a sales and use tax assessment issued because it had not filed its returns?
The appeal became unnecessary -- the Taxpayer filed its overdue sales and use tax returns and paid the tax due, so the Department cancelled and reversed the assessments on its own records, and the Tax…
Is a coaching service that administers a DISC behavioral self-assessment and gives each employee a report subject to sales tax?
No. The coach teaches effective listening and communication and, as part of the service, has each employee take a DISC self-assessment and receive a report analyzing their behavioral style. Coaching/f…
Is fabric sold for more than $110 exempt under New York's clothing exemption if the buyer will make several garments from it?
No. New York exempts clothing and footwear costing less than $110 per article, and 'clothing' includes fabric, thread, buttons, zippers and similar items that become part of clothing. But the $110 tes…
Are services to create, host, maintain and optimize a client's mobile website subject to New York sales tax?
No. The company designs, builds, hosts, maintains, and optimizes mobile websites for retailers, all for a fixed monthly fee. Website development — design, creation, and the operation of a site the dev…
Are an environmental firm's testing, remediation-design, monitoring, construction-oversight, and consulting charges subject to New York sales tax?
It varies by service. Testing and monitoring of real property — even if no remediation follows — are taxable services of maintaining/servicing/repairing real property (§ 1105(c)(5)), UNLESS they are e…
Is a spinal-cord-stimulator pain system exempt as a prosthetic device or medical equipment when sold to physicians, hospitals, and pain clinics?
No — those sales are taxable. The implant blocks pain by delivering electrical pulses to the spinal cord; it doesn't replace a missing or permanently inoperative body part, so it isn't an exempt prost…
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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- Binding only on the requester: A ruling is binding on the department only for the taxpayer who asked. It is persuasive, not a substitute for your own ruling or professional advice.
- Research across states: Compare how different states treat the same issue, from SaaS and food exemptions to nexus and contractor purchases.