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 an auto-parts locator service that gives customers access to a maintained database a taxable computer and data processing service in Connecticut?
Yes. An out-of-state company ran an auto-parts locator that let Connecticut insurers and salvage yards find parts either by logging into the company's mainframe database or by calling an '800' line…
Who owed California sales tax when an aircraft buyer gave a nonresident exemption certificate but was found to be a California resident?
The purchaser owed tax on the $55,025 aircraft price: the certificate relieved the dealer, but the buyer did not qualify for the nonresident or interstate-commerce exemptions.
How did California tax a convention exhibit leased to a California customer for use at a Texas show and later returned for storage?
Proven Texas-use rent was untaxed; California use required proration, though storage solely for later outside use could be excluded.
Could a later equipment lessor retroactively ratify a law firm's earlier purchases as purchases made by its agent, avoiding taxable sale-leaseback treatment?
Not for purchases made before any relationship existed. Later purchases could qualify because the evidence showed the firm intended to buy for the lessor after their relationship began.
Was an aircraft purchaser liable for sales tax after giving a California dealer a nonresident exemption certificate and flying the aircraft to Oregon?
Yes. The certificate shifted the dealer's liability to the purchaser, who was also a California resident and did not qualify for the nonresident or interstate-commerce exemptions.
As sponsor of a non-eviction cooperative conversion, I estimated the Real Property Transfer Gains Tax consideration for my unsold shares based partly on a wraparound mortgage. I'm now negotiating to give the co-op board back my unsold, underperforming shares, and as an incentive I'll reduce the underlying mortgage by $375,000. Does that mortgage reduction lower my gains-tax consideration?
Only PARTIALLY -- the $375,000 mortgage reduction lowers the gains-tax consideration solely to the extent it's allocable to the STILL-UNSOLD shares being returned to the cooperative board, not to…
When a building is gutted to its outer walls, are the construction services taxable renovation or exempt new construction in Connecticut?
Mostly untaxed new construction -- with one taxable exception. A company kept only the exterior walls of a former warehouse and built a new gabled skylight roof (adding cubic footage), new interior…
Did the historical DOD flexible-progress-payment clause itself accelerate title, or require FAR 52.232-16 to be read into contracts that omitted it?
No. The DOD clause contained no title language, and FAR 52.232-16 could not be implied; accelerated title required a clause actually set out or incorporated.
Could a taxpayer recover use tax paid on Wright Linear Pumps and their compression appliances?
No. California said the refund claim should be denied because the pump systems were taxable treatment devices, not fully worn orthotic or prosthetic devices.
Is natural gas used to fuel boilers at a towel rental (industrial laundry) business exempt from Texas sales and use tax as gas used in processing?
No. The Comptroller ruled the natural gas used to fuel the boilers at a towel rental company was not exempt, because the boilers themselves are not equipment directly used in processing the rental…
Is a satellite farm-data subscription a taxable computer service, are its ad transmissions taxable, and who owes tax on the receiving equipment?
A company beamed around-the-clock farm-market data (grain/livestock quotes, weather, news) by satellite to subscribers using company-owned receiving equipment, and also let 'information providers'…
Could a linen customer buy commingled California-bound inventory tax-free because some would later leave the state?
No. California-origin shipments were taxable sales, and unidentified commingled out-of-state inventory could not be covered by an exclusion certificate.
Can a property management company buy supplies and services tax-free on behalf of FDIC/RTC-owned properties it manages, and can it fix past sales tax it mistakenly paid?
Yes. A property management company acting as agent for the FDIC or RTC can issue a sales tax exemption certificate to its vendors for purchases made for FDIC/RTC-owned properties, as long as it has…
Can a contractor buy construction materials tax-free when they will be built into property owned by New York State?
Yes. A subcontractor widening and lengthening a Meadowbrook Parkway ramp owned by the New York State Parks Department may buy the materials without paying sales tax. Although a sale of materials to…
Is separately-stated labor to install a product excluded from Connecticut sales tax when the product is attached to real property?
It depends on the type of real property. A company sold mailboxes and offered separately-stated installation (sinking a post, attaching the box). Conn. Gen. Stat. § 12-407(8)(e) and (9)(e) exclude…
Was a citrus-tree nursery's one-percent state assessment taxable when included in or separately added to the customer price?
Yes. Sales tax applied to the customer's total charge whether the nursery absorbed the assessment, embedded it in the price, or stated it separately.
We're merging a related corporation that owns real estate into our company, with its former shareholders receiving stock in ours. The two companies are owned by overlapping family members, but not in identical percentages -- does New York's Real Property Transfer Gains Tax apply to this merger, or does the mere-change-of-identity exemption cover it?
The merger is a taxable controlling-interest acquisition, but the mere-change-of-identity exemption applies proportionally -- so gains tax was owed only on the small SLICE of beneficial interest…
Were installments paid after July 1, 1991 taxable when a non-equity country-club membership was sold in 1989?
No. The membership sale occurred on October 1, 1989, before the cited July 1, 1991 effective date, so later installment payments were not taxable. The club had to refund tax it collected in error.
Is a medical-claims processing and collection service a taxable computer service or business management service in Connecticut?
Neither -- it's not taxable. A company processed, managed and collected doctors' and hospitals' insurance and Medicare/Medicaid claims, retaining a percentage of what it collected as its fee, and it…
Are a management company's nutrition and food-service charges to a nursing home taxable business management services in Connecticut?
It depends on who eats the meal. A management company ran a nonprofit nursing home's food service -- buying food as the home's agent, preparing and delivering meals, cleaning kitchen equipment, and…
Is cleaning up an oil spill or remediating contaminated soil at an oil and gas site taxable in Texas?
It depends on location and cause. Cleaning up an oil spill at the well site, or one caused by oil/gas/geothermal exploration, development, or production activity and regulated by the Texas Railroad…
Does a Connecticut DRS Ruling stop being reliable when the underlying law or regulation changes, even without notice from the Department?
Yes -- automatically. DRS held that one of its Rulings ceases to have any force and effect once the law or regulation it was based on changes, as of the effective date of that change and without any…
Could a credit-card manufacturer exclude a separate interim tape-processing charge when it converted customer data into tapes its embossing equipment could read?
No. Converting the tape was a step in manufacturing the credit cards, not a separate original-information service, so the manufacturer could not exclude or deduct the charge.
Could a credit-card maker exclude a separate charge for converting customer data to readable tapes?
No. The tape conversion was a step in manufacturing the credit cards, so its separately stated charge remained part of taxable gross receipts.
Were a donor's life payments and a hospital-support charity's interest under a charitable gift annuity exempt from Florida's former intangible tax?
Yes. The donor's life annuity interest was exempt as money because money included the cash equivalent of annuities, and the section 501(c)(3) corporation owed no intangible tax on its interest.
Were a qualifying Florida-focused investment fund and its common and preferred shares exempt from Florida's former intangible tax?
Yes. The Department answered all three questions affirmatively: qualifying shares were exempt when the tested portfolio held only exempt government obligations, and the out-of-state investment…
Did four submitted credit-union loan and advance forms owe Florida documentary stamp tax as written obligations to pay money?
No. None of the four forms contained or incorporated all three required elements: a promise to pay, a sum certain in money, and the borrower's signature.
Were unique written astrology personality profiles and forecasts taxable, and what happened if a provider reused an earlier client's identical report?
Unique client-specific profiles were nontaxable services, but selecting and sending a previously prepared profile to a new client was a taxable sale.
When were a sales agent's fees subject to Connecticut sales tax on the sale of a business's tangible property?
Only in narrow circumstances -- and this ruling is now obsolete. A company introduced buyers and sellers of businesses and business assets for a contingent fee, without negotiating the deals. DRS…
Was the mandatory amount labeled as a tip in a riverboat cruise-and-meal package included in taxable gross receipts?
Generally yes. A proven share paid to ship personnel who did not prepare or serve food or drinks could be excluded, but the taxpayer had to substantiate that allocation.
Was a manufacturer's charge taxable when it removed impurities and reprocessed unwanted paint that a county had collected and mixed from many donors?
Yes. Because paint obtained from many sources was commingled and reprocessed for the county, the manufacturer's processing charge was taxable.
Does a Texas health club have to charge sales tax on personal training session fees?
No, not if the training is one-on-one and the trainer actually puts the client through the workout (not just designs a program and shows equipment use). A separately stated charge for that kind of…
Was a contribution of substantially all phosphate-business assets to a joint venture exempt as a resale or occasional sale?
Partly. Inventory and salvage held for resale qualified with the required certificates, and usable operating assets qualified as an occasional sale if the stated frequency limits were met. Titled…
How did Florida sales tax apply when an amusement-park business exchanged themed assets, inventory, vehicles, and real estate with an affiliate?
The themed assets qualified as an occasional sale; resale inventory required a valid certificate; titled aircraft, boats, and vehicles were taxable; and unitemized personal property transferred for…
Did each monthly rental agreement under a Florida Mini-Lease program restart the 30-day rental-car surcharge?
No. While the original Mini-Lease remained in force, its monthly agreements were not separate rentals that restarted the surcharge. An extension was a renewal, however, so the surcharge applied to…
Can a Texas business scan invoices and resale/exemption certificates and store them electronically instead of keeping paper copies?
Yes, with two conditions: the business must keep back-up hard copies of resale/exemption certificates specifically, and it must provide the Comptroller's auditors with sufficient equipment to…
Can a publisher treat several differently-named weekly shopping guides as geographical editions of one shopping paper for the sales tax exemption?
No, not on these facts. A publisher wanted its four weekly shopping guides treated as geographical editions of a single 'shopping paper,' so they would count as one issue when testing the…
Did a free monthly publication averaging about 52% advertising qualify for Florida's sales-tax exemption for primarily advertising publications?
No under this ruling. The Department found that about 52% advertising was not 'primarily advertising,' so printing costs were not exempt. The ruling is expressly obsolete due to a later policy…
Can a Connecticut corporation deduct dividends it receives from a regulated investment company that aren't deductible on its federal return?
No -- but note this ruling has been REVOKED by Ruling 93-24, and DRS marks it 'not current ... for reference purposes only,' so do not rely on it. As originally issued, DRS held that a Connecticut…
Is the labor to install, connect, and calibrate store refrigeration/freezer display units subject to Texas sales tax?
It depends on how the units are wired together. If several self-contained freezer/refrigeration units are connected to share one compressor, the labor to connect them into that single system is…
Could one Florida contract separate nontaxable in-wall computer cabling from taxable network equipment and installation?
Yes, if four stated conditions were met, including separate contract and invoice charges. The network equipment and its installation were taxable; qualifying cabling work was treated as a…
Did a licensed special-fuel broker need a separate Part I Florida sales-tax registration to buy and resell No. 6 residual fuel?
No, for the described broker-chain transactions. The firm's special-fuel license adequately documented resale purchases without a separate Part I registration, provided it bought from and sold only…
Did a refiner's self-produced commercial-grade butane and propane qualify as exempt waste by-products, still gas, or gas delivered through pipes?
No. The gases were marketable refinery products rather than low-value waste, and they were separate products rather than a still-gas mixture. Moving the refiner's own property through its internal…
Could one long-term lease of 22 pieces of manufacturing equipment qualify as an exempt occasional sale?
No. The recommendation treated the 22-item, 50-month lease as a taxable continuing business despite being one agreement. It accepted $644,915 of receipts, followed an absent reaudit, and shows no…
How could an MTE lessor preserve an FRV election while waiting six months to know whether California use was exempt?
File and pay FRV tax timely when the MTE first enters California, then claim a refund after six months if the interstate exemption or out-of-state principal-use exclusion applies.
Can one long-term equipment lease be a taxable business rather than an exempt occasional sale in California?
Yes. A single continuing lease can be a business; the 50-month lease of 22 equipment items generated taxable rent and did not qualify as an occasional sale.
Did California treat a refinery's self-consumed commercial-grade butane and propane as exempt pipeline-delivered gas, waste by-products, or still gas?
No. The appeals recommendation treated the refinery's use as taxable because moving its own gas internally was not delivery to a consumer, and the commercial-grade gases were neither waste…
Were optional software-maintenance charges taxable when the contract provided updates and future releases?
Yes. Updates and future releases were treated as tangible property; separately optional consultation could be excluded, but bundled consultation was taxable.
Was a separately billed source-code license taxable when an OEM needed it to distribute bundled products?
No. The source code was incidental and necessary to the excluded object-code license, and separate billing did not change that result.
Is a service that reviews a store's cash-register internal controls a taxable information or detective service?
No, as described it is not taxable. A consultant observes how a retail store's cash-register operators ring up sales and make change, then writes a report to management about the store's internal…
Will the Department use an advisory opinion to approve a taxpayer's method of computing sales tax?
No. The Department declined to rule. A GM subsidiary that places computers at customer premises asked whether the method it used (and that had been examined on audit) to determine sales tax would be…
Could a supply house buy school-construction materials for resale tax-free and sell them directly to a Florida school board exempt?
Yes, with the required certificates. The supply house could give vendors its resale certificate, and its direct sales to the school board were exempt when the board paid directly and provided its…
Did replacing the trustee and beneficiary of a trust holding leased mobile transportation equipment create a sale of the equipment?
No, under the assumed trust structure. The equipment remained trust property, so the existing irrevocable election to pay use tax on fair rental value continued.
Did replacing the trustee and beneficiary of a trust holding leased MTE create a new sale and FRV election?
Not if the trust remained the MTE owner. Its irrevocable FRV election continued. A true title transfer to an assignee would be a sale and permit a new timely election.
Did tax apply when a graphic-finishing business reimbursed reprinting costs after ruining a customer's print job?
No additional tax applied. The customer paid only the original printer price, and any reimbursement for replacement printing was damages rather than a property sale.
Who was the retailer at an antique mall when dealers used a central cashier, and what changed when booth sales were allowed?
A mandatory central checkout made the mall operator the retailer of all mall sales. With optional central checkout, the operator reported central sales and dealers reported direct booth sales,…
Are hospital gowns, urinary drainage bags, cushions, and benzoin swab sticks exempt from Texas sales tax when purchased by a hospital?
It depends on the item. Hospital gowns are taxable. Urinary drainage bags are exempt. The cushions described were found taxable for lack of qualifying information. Benzoin swab sticks are exempt…
Does Texas sales tax apply to a dialysis re-use machine and a reverse osmosis water-purification machine used in home dialysis treatment?
It depends on how the equipment is used. The Comptroller told this taxpayer that a Dialysis Re-Use machine (used to clean artificial kidneys after dialysis) and a Reverse Osmosis machine (used to…
Is adding fiber optic cable to an existing cable TV distribution system taxed as new construction or as taxable remodeling in Texas?
It depends on how the cable is installed. Adding fiber optic cable as a separate line that supplements (not replaces) the existing coaxial distribution plant is treated as nontaxable new…
Was an auction consignee legally required to give consignors resale certificates?
No, but a certificate protected consignors that had bought inventory tax-free by documenting continued resale holding without disqualifying use.
How these rulings are useful
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