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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Was a church's direct purchase of a prefabricated roof system exempt when the supplier separately contracted with the prime contractor for installation?
Yes. The church exercised a direct-purchase option, issued the purchase order, received the invoice, paid the supplier directly, took title at job-site delivery, was added to required liability…
Does a contractor who recovers salvable crude oil while cleaning up waste oil pits and evaporation ponds owe Utah oil and gas severance tax on that recovered oil?
No. The Utah Tax Commission ruled that a contractor cleaning up waste oil pits and evaporation ponds owes no oil and gas severance tax on the crude oil it salvages, because the contractor is not an…
Were piano brokers retailers when revised agreements required the owner to deposit a bill of sale and separately authorize its release before title could pass?
No. Although the brokers handled offers, money, escrow, liens, and delivery, they could not transfer title without the owner's later bill of sale and authorization, so further owner action remained…
Are an insurance group's affiliated companies' equipment purchases and leases, made as an agent of a city industrial development agency (IDA) under a bond-financing job-retention deal, exempt from sales and use tax?
Yes, generally -- purchases and leases made as the IDA's disclosed agent are exempt from sales and use tax as long as the IDA genuinely owns the property, and exempt maintenance/repair covers only…
Is a subscription regulatory-update newsletter an exempt periodical, or a taxable information service?
It is a taxable information service, not an exempt periodical. The publisher's RCRA Update is a bimonthly service consisting mostly of photocopied Federal Register pages plus staff summaries of EPA…
Are recording tape and equipment rentals used to make promotional demo tapes taxable, or exempt as production equipment?
They are taxable. An artist-promotion company bought recording tape and rented equipment to make demonstration tapes it sent free to record companies. Buying tape and renting equipment are taxable…
When a kitchen contractor sells cabinets, does it collect sales tax from the customer, or pay tax on its own purchase of the cabinets?
It depends on whether the contractor installs them. If the contractor merely sells the cabinets without installing them, it is making a retail sale and must collect sales tax from the customer under…
Is a computerized 'check-in' calling service — like a wellness check or latch-key-kid monitoring service that automatically calls emergency contacts if someone doesn't respond — subject to Texas sales tax as a security service?
No, not in this case. **The Comptroller ruled this particular computerized monitor calling service is not subject to sales tax.** The service would be taxed as a security service only if a license…
Which charges of a company that copied subpoenaed records and served process were taxable, and which legal-process charges were not?
Photocopies and costs or services incidental to their sale were generally taxable; subpoena preparation, no-record certificates, and qualifying skip tracing were not.
Which charges for CAD circuit-board designs, design media, drawings, and photoplots were taxable?
The design service, ordinary design representations, and modem transfer were excluded; camera-ready drawings, photoplots, and other manufacturing aids were taxable.
Can a company lease marine cargo containers tax free, and are the cleaning of those containers and the equipment used to clean them also tax exempt?
The lease of the marine cargo containers themselves is tax free, and the cleaning service performed on them is also tax free — but the machinery, equipment, and building used to house the cleaning…
Did documentary stamp tax apply when a mother and son deeded their own shares of mortgaged property to their own revocable trusts?
No, if each grantor transferred only that grantor's own interest to a separate revocable trust and remained the trust's sole lifetime beneficiary. The Department found no real relinquishment of…
How does Utah sales tax apply to a motor vehicle lease where the lessee prepays the entire lease in one lump sum at signing, instead of paying monthly?
The full lump-sum prepaid lease payment is subject to Utah sales tax, all due and payable at lease signing -- not spread out like a conventional monthly lease. The lessor (not the dealership…
Was retouching a customer’s photographic negatives taxable when the finished negatives were destined for an out-of-state photographer?
The retouching was taxable fabrication labor, but section 6396 exempted the sale if the retoucher shipped the negatives out before using them here. Making prints in California made the retouching…
Did California tax materials, fabrication, and leased equipment held temporarily in California before use on Hawaii construction projects?
California taxed materials delivered and fabrication performed in the state, subject to the stated contractor exemption. Equipment kept only for transport to sole Hawaii use was excluded.
How many one-day tax-free sales or auctions can a 501(c)(3) organization and its chapters hold each calendar year in Texas?
Two. **Effective August 30, 1993, a 501(c)(3) organization (and each chapter of the organization) may hold two tax-free sales or auctions per calendar year, each lasting no longer than 24…
Was Texas motor vehicle tax due when an owner transferred vehicle title to a living trust created for that same owner's benefit?
No. The Tax Administration Division said motor vehicle tax was not due when a person transferred vehicle title into a living trust established for that same person's benefit.
Is an escort service, body guard service, or massage parlor subject to Texas sales tax, and what does someone need to do to legally operate one?
Yes. **Sales tax is due on all services provided by massage parlors, Turkish baths, or escort services**, including on utilities, equipment, towels, and machinery used to perform the personal…
Does a directional drilling company have to collect Texas sales tax on its services to well owners?
No, not if it plans and performs the drilling engineering, provides its own equipment and personnel, controls when specialized equipment is attached to the drill pipe, and monitors the drilling to…
How does a vendor recover tax reimbursement it returns to a customer after the amount was already reported to California?
A same-quarter collection and return may be deducted on the return. If already reported for an earlier quarter, the vendor must file a refund claim instead.
Is a company that assembles custom sterile and non-sterile medical/dental/first-aid packs a 'manufacturer' for Texas sales tax purposes, and how is tax figured on the packs themselves?
It depends — the company is a manufacturer only for the sterile packs, not the non-sterile ones. The Comptroller ruled that the taxpayer is considered a manufacturer of the custom-designed sterile…
Is a school's yearbook sale exempt from Texas sales tax if it is designated as the school's one-day tax-free sale?
Yes. **A public or nonprofit private school that qualifies as a tax-exempt organization can designate its yearbook sale as its one-day tax-free sale, and if it does, the sale is tax-free — even if…
Is the fee for filing a lien on a delinquent debt a taxable debt collection service in Texas?
Yes. **Filing a lien for a delinquent debt is a taxable debt collection service under 151.0036 of the Texas Tax Code**, whether it is billed alone or together with other debt collection services,…
Does a contractor owe sales tax on armored-car transport, delivery, and storage services when it performs them as an authorized agent of a New York State agency?
No. The charges are exempt. The petitioner arranged armored-car transport and bulk storage of federal food-stamp coupons for the New York State Department of Social Services. Storage services (Tax…
Could machinery bought outside California be used here before shipment to an out-of-state facility without creating use tax?
Only for defect testing. Production use in California was taxable; a California parent-to-subsidiary retail sale was also subject to sales tax.
How did a software lessor have to prove that a group of modified television-station programs qualified as custom software?
Program by program. The lessor had to allocate the fee, identify each program's base price and modifications, and prove customization was at least half of that program's charge.
Were word-processing charges taxable when customers received a diskette, a hard copy, both forms, extra copies, or pages with illustrations?
Basic word processing was a nontaxable service, including initially required disk and paper output. Extra copies and pages combining type with illustrations were taxable.
Could a board manufacturer buy special tools for resale when customer title passed before the tools were used?
Yes. With title passing to the customer before manufacturing use, the company could buy the tools for resale or claim a tax-paid-purchases-resold deduction.
Was a customer-specific computer program still treated as custom when an outside programmer created it?
Yes. The customer charge was not taxable when the program did not already exist and a subcontractor created it to the customer's special order.
Was a payment to a prior landlord for early termination of a tenant's old office lease subject to Florida sales tax as rent?
No, unless the prior landlord recorded the payment as rental income. The payment permanently ended the tenant's occupancy rights and relieved the new landlord of its promise to cover the old rent;…
Does building a warehouse before it's operational create Utah corporate franchise and sales tax nexus, and can a company get relief from filing/collecting until the facility opens?
Nexus is created, but the Commission agreed to defer the resulting tax obligations. A national mail-order retailer planning a roughly one-million-square-foot Utah warehouse and distribution facility…
Is a per-unit 'production fee' charged under a packaging machine lease a taxable lease charge, or an exempt royalty for use of the machine's patent?
Taxable. The Commission held that a per-unit 'production fee' charged under a patented packaging machine's lease is an additional taxable lease charge — compensating the lessor for equipment wear…
Could a defense contractor buy employee safety shoes ex-tax when part of their overhead was allocated to federal progress-payment contracts?
Only for qualifying federal allocations. The contractor could buy all shoes ex-tax, then pay use tax on commercial and nonqualifying federal portions measured by full cost.
Were customized scholarship reports generated by matching each client's application data against a computer database taxable sales?
No. The client bought customized research and information, while the report merely delivered that service; standardized preprinted reports would be taxable.
Is a company's fee for helping a long-term disability insurance claimant apply for Social Security disability benefits a taxable insurance service in Texas?
No. The Comptroller ruled that assisting an insured in applying for Social Security disability benefits is **not taxable as an insurance service**. The company in this letter contracts with…
What major South Carolina revenue-law changes did the Department summarize from the 1993 legislative session?
The 30-page update covers four broad areas: alcoholic beverage control, the Catawba Indian Claims Settlement Act, motor vehicles, and taxation. It reports act-by-act changes with effective dates,…
Which catalog batches were exempt when a non-California printer sent some directly to a mailing house, some to the client, and some to the client's warehouse for later mailing?
Only the direct printer-to-mailing-house batch qualified. Catalogs delivered to the client or its warehouse were taxable because purchaser receipt occurred before later customer distribution.
Is picking up used oil and oil filters from public collection centers for recycling a taxable waste collection service in Texas?
No. **The Comptroller ruled that picking up used oil and oil filters from public collection centers for recycling is not a taxable waste collection service.** The letter explains that the rule…
Could California accept tax on pre-receivership bank leases while the FDIC served as receiver and also impose late penalties?
California could accept tax the FDIC paid for the bank's continuing pre-receivership lease obligations. But federal law barred penalties and fines against the FDIC, so late-filing and late-payment…
Is the rental fee for a cryogenic gas vessel that is rented to a customer and refilled at the customer's site taxable, or is the vessel a tax-exempt 'returnable container'?
The rental fee is NOT taxable. In this internal reconsideration memo, the Comptroller's Tax Administration Division agreed that the taxpayer's cryogenic vessels should continue to be treated as…
Is a private contractor exempt from sales tax on materials used to build city-owned airport facilities that the contractor then leases back from the city for 15 years?
No, the materials are taxable. **Even though the city immediately owns the airport terminals, hangars, and similar facilities the contractor builds, the contractor is not exempt from sales tax on…
Is installing a vapor recovery system on an existing underground fuel tank taxable as remodeling, or exempt as new construction?
It depends on timing. **If the vapor recovery system is attached to an existing underground fuel tank, the job is taxable remodeling of nonresidential real property, and tax is due on the entire…
Is electricity used to recharge the batteries of golf carts held for rental exempt from Texas sales tax?
Yes, that electricity is exempt. **The Comptroller's Tax Administration Division confirmed that electricity used to recharge batteries on electric golf carts held for rental is exempt, treating it…
Does a motor vehicle dealer's fleet of leased vehicles that move between offices and states qualify for a property tax exemption, or does registering them under the International Registration Plan avoid Utah's uniform fee?
A county assessor's own analysis in this record concluded that a motor vehicle dealer's leased fleet vehicles ('B inventory,' as distinct from true dealer sales inventory) are NOT exempt from Utah's…
Are a tire shop's recycling fees -- both what it charges customers and what it pays haulers -- subject to sales tax?
It depends on the transaction. When a customer buys or has tires installed and the shop keeps the old tires, the $1.50 recycling fee is a charge for servicing tangible personal property and is…
Is a corporation dissolved by proclamation in 1981, holding only real property as nominee for others, subject to Article 9-A franchise tax?
Two periods, two answers. For the taxable years while the corporation was incorporated (here, the years ended February 28, 1978 through September 30, 1981), it owes the Article 9-A franchise tax…
Did a free weekly publication containing television listings and about 38% advertising qualify for Florida's shopper or community-newspaper exemption?
No. It was not a community newspaper because it lacked routine reports of current events and general-interest matters, and it was not a shopper because advertising was not its primary content. The…
Can a company treat the sale of one piece of equipment to a third party as a trade-in credit against its purchase of different equipment from the same seller, when the paperwork for the two deals was written up separately?
No. This internal Comptroller memo concludes that crediting the proceeds from the sale of one piece of equipment (an IBM 3890-AD4 machine sold to a third-party buyer) against the price of a…
Did Texas include a vehicle's unit property-tax value in the motor vehicle sales-tax base under Senate Bill 878?
No. Comptroller John Sharp said he would interpret Senate Bill 878 according to the stated legislative intent and would not require a vehicle's unit property-tax value to be included in its sales…
Does Texas sales tax apply when a cellular phone dealer sells discounted phones bundled with a service contract, or gives away free-service coupons obtained at no cost from carriers?
It depends on price and cost. **If a dealer sells a cellular phone for 25% or more of its acquisition cost, the transfer is a taxable sale; if sold for less than 25% of acquisition cost bundled with…
Is a veterinarian's purchase of canine heart worm diagnostic test kits subject to Texas sales tax?
Yes. The distributor was correct to start charging tax on the diagnostic test kits (Assure/CH canine heart worm test kits). The letter states this is not a change in policy — the kits were not…
Is restoration of a building's deteriorated balconies and catwalks a tax-exempt capital improvement or a taxable repair?
It is a taxable repair, not a capital improvement. A co-op hired a contractor to inspect, test, clean, patch, and coat the deteriorated concrete of its balconies and catwalks -- removing cracked and…
Can an oilfield well-servicing company issue a resale certificate for the liquid micro-organisms (bacteria) it pumps downhole to remove paraffin and scale build-up, or uses in oil-spill clean-up?
No, in both cases the company must pay sales tax on the micro-organisms itself. **Micro-organisms pumped into a well bore to remove paraffin, scale build-up, and corrosion do not become a part of…
Were promotional luggage tags exempt printed sales messages or interstate-commerce sales when sent through a California mailing house?
The tags were not printed sales messages. Only 6,000 shipped directly to Utah were interstate sales; 164,000 delivered to a California mailing house were not.
Would tax apply when a company transferred manufacturing assets to a new corporation solely for first-issued stock and later sold that stock?
No on the proposed facts and valid-business-purpose assumption. The exchange used only first-issued Newco stock, without cash, notes, assumed debt, or other property. Any later stock sale was only…
Were a purchase-money security agreement and a Florida UCC-1 financing statement subject to documentary stamp tax?
The unrecorded security agreement was not taxable because it did not contain the complete set of three elements required for a written obligation: a promise to pay, a sum certain, and the borrower's…
Is labor to fabricate and remodel scaffolding used to repair, remodel, and maintain licensed and certificated aircraft taxable in Texas?
No, it's exempt. **Charges to fabricate and remodel scaffolding used to repair, remodel, and maintain aircraft that are licensed and certificated carriers are exempt under Tax Code Section…
Can a service provider (like a caterer or wedding consultant) rent tangible personal property tax-free using a resale certificate, and what happens if a customer wrongly issues one to avoid tax?
No — a person who provides a service, rather than making a rental, must pay sales tax on the tangible personal property they rent to perform that service; they cannot buy or rent it tax-free with a…
Was a commissioned photograph purchased for resale merely because its image was reproduced in corporate reports that the corporation sold?
No. Reproducing the image was a use, not physical incorporation. A title transfer was a taxable sale; possession without title was a taxable lease on which the photographer collected use tax.
Did a subsidiary give taxable consideration by assuming deferred-tax, early-retirement, and warranty liabilities accrued on the transferor's financial statements?
Yes. Because the accrued contingencies represented probable, reasonably estimable liabilities, the transferee's assumption was consideration for the assets. Future obligations arising only after…
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