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 a service/maintenance contract bought to cover exempt production equipment subject to New York sales tax?
No. A plastics manufacturer bought a factory protection plan covering only its on-site generator, which produces the electricity that directly and predominantly powers its production equipment. Mainta…
When a photographer transfers photos to a client to reproduce, is the charge taxable — and do expenses and digital vs. physical delivery matter?
It depends on whether it's a sale or a temporary transfer for reproduction, and on the medium. Selling a photograph on a physical medium (print, slide, negative, CD) delivered in New York is a taxable…
My New York retail business sells only vaping products (e-cigarettes, vape pens, and e-liquid) -- no cigarettes or tobacco. Do I need a cigarette/tobacco dealer registration, and do I owe any special New York excise tax on vaping products?
No tobacco dealer registration is needed, but a vapor products dealer registration is required. A retailer that sells only vaping products (no cigarettes or tobacco) is not required to obtain a certif…
State Tax Ruling
No. In P.D. 20-193, Virginia's Tax Commissioner upheld the denial of a Qualified Equity and Subordinated Debt Investments Tax Credit application because it was filed after the April 1 deadline, reject…
What does Virginia Ruling of the Tax Commissioner P.D. 20-192 conclude about Exemption : Nexus (P.L. 86-272) - De Minimis, Property, Payroll Compensation : Nonresident - Virginia Wages Virginia Source Income : Nonresident - Apportionment?
The Tax Commissioner found the subsidiary had no Virginia nexus in 2013 (no property or payroll in the state), but its 2014 and 2015 activities -- placing company laptops in the Virginia office and ha…
Was a fire extinguisher servicer's service-call surcharge taxable, and could it get its audit penalty, amnesty penalty, and interest waived?
No relief -- the Tax Commissioner held the service call fees (billed as either a 'surcharge' or 'service call fee') were taxable to recoup the taxpayer's own costs, and denied waiver of the compliance…
What does Virginia Ruling of the Tax Commissioner P.D. 20-190 conclude about Use Tax: Fixed Asset Purchases - Legal Obligation Applies to Both Dealer and Purchaser, Purchases - Caterer Audit: Records - Expenses, Sampling Exemptions: Catering - Nonprofit Organizations, Churches, and Governments, Certificates - Reasonable Care Administration: Penalty - First Audit, Interest?
The Virginia Tax Commissioner upheld the full use tax audit assessment against a restaurant/caterer, ruling that unpaid tax on untaxed online purchases is the purchaser's legal responsibility, the sam…
How did Nebraska treat GILTI, the federal section 250 deduction, and GILTI receipts for income-tax apportionment?
GILTI included in federal taxable income or adjusted gross income also entered Nebraska income. A domestic corporation's section 250 deductions were already reflected through federal taxable income, a…
Do a homebuilder's capitalized 'soft costs' — labor, interest, permits, services — count in the Tennessee franchise tax minimum property measure, or just the land and materials?
Yes — the soft costs count. The Department ruled (in an advisory, non-binding revenue ruling) that a homebuilder's capitalized 'soft costs' — labor, interest, permits, architectural/engineering servic…
Is a hosted call-handling/voice-recognition product a taxable sale of prewritten software, and where is the sale taxed?
Yes — it's a taxable sale of prewritten computer software. The company's proprietary software, hosted on its own out-of-state servers, determines callers' intent and routes calls for its customers; li…
Is a firm's automotive marketing product a taxable sale of prewritten computer software, or a non-taxable advertising service?
It's a non-taxable advertising service. The firm uses its own staff and proprietary software to gather dealership sales data, build marketing models, and design and launch targeted ad campaigns (email…
Are digital document services — scanning, data capture, validation and cloud storage of a customer's documents — subject to New York sales tax?
No. The provider scans and converts a customer's documents (Product A), captures and validates data from them (Products B and C), and hosts them in the cloud (Product D). Converting documents to PDF w…
Does a company that processes automobile insurance claims as the insurer's agent have to collect sales tax on the payments and on its administration fee?
No. The company administers auto damage claims as the agent of insurance companies — confirming coverage, processing the repair-shop invoices, and forwarding the insurer's payment to the repair garage…
State Tax Ruling
The Tax Commissioner upheld the county's BPOL tax assessments because the taxpayer, though it showed some software was developed and licensed, failed to prove how much of its gross receipts were attri…
What wage levels must Nebraska Advantage Rural Development Act and Microenterprise Tax Credit Act applications filed in 2021 meet?
For applications filed on or after January 1, 2021: the Nebraska Advantage Rural Development Act required wage level is $14.95 per hour (up from $14.49 in 2020), and the Nebraska Advantage Microenterp…
Does Illinois sales tax apply to lease payments or fees charged to a lessee, such as a vehicle lease disposition fee?
No, not under Illinois law. Illinois taxes the lessor's cost of the leased property (as a Use Tax on the lessor as end user), not the lease payments or fees charged to the lessee. Illinois imposes no …
Could a separately filing corporation use all income on its Florida return as income from its Capital Investment Tax Credit project?
Yes, on the represented facts. Because the corporation filed separately and all of its Florida activities related to the certified project, Florida agreed to use the taxable income on its separate ret…
Did White Sands military R&D and testing qualify for New Mexico's transformational acquisition program gross receipts deduction after DOD reorganized the named office?
Yes. TEST and EWA Warrior performed research, development, test, and evaluation work at White Sands Missile Range under a post-2005 Department of Defense acquisition contract. Their war games, simulat…
A car dealer sells an optional product that pays a future down payment toward a replacement vehicle if the buyer's car is totaled. Is that product taxable — and is the down payment it later funds taxable?
The dealer's sale of the product itself is not taxable — it isn't a transaction Utah taxes, and it isn't a 'service plan.' But when the product later pays a down payment to a dealership for a replacem…
Can a commercial landlord that resells submetered electricity to tenants claim a credit for the sales tax it paid on that electricity?
Yes. The landlord buys electricity (paying sales tax), uses some in common areas, and resells the rest to tenants based on submetered usage, with a lease markup. Because it's reselling electricity, th…
When a company licenses short-term use of event facilities, which add-on charges — docking, electricity, parking, cleaning, waste, security, staff — are taxable?
The core charge for using the space is not taxable. The company licenses facilities for short-term use under revocable license agreements, so its 'fixed term occupancy charge' is rent for real propert…
At a sports and amusement facility, which charges are taxable — participatory sports, trampolines and bounce houses, and birthday parties?
It depends on the activity. Charges to participate in actual sporting activities — here volleyball and junior soccer — are not taxable, because Tax Law § 1105(f)(1) exempts charges to a patron for usi…
Can a diesel fuel distributor sell kero-jet fuel to a licensed kero-jet-only distributor (not an airline) exempt from New York prepaid sales tax?
No. The aviation-fuel exemptions apply only to retail sales of fuel to an airline for use in its airplanes. Because this distributor sells kero-jet fuel to a licensed Distributor of Kero-Jet Fuel Only…
Are a sightseeing cycleboat operator's tour ticket receipts taxable, and does it owe sales tax on the boats, fuel, and maintenance?
The tours aren't taxable, but the equipment is. Receipts from sightseeing cycleboat tour tickets aren't subject to sales tax, because tour services aren't among New York's enumerated taxable services.…
Is a bio-absorbable steroid-releasing sinus implant, sold bundled with or separate from its delivery system, taxed at Illinois' 1% low rate as a medical appliance?
It depends on the product. The Department could not determine, from the limited facts given, whether the bundled sinus implant qualifies for Illinois' lower 1% sales tax rate as a 'medical appliance' …
State Tax Ruling
Denied. The Tax Commissioner rejected the taxpayer's request to reconsider P.D. 20-78, holding that the parties merely disagreed over how to interpret the same apportionment statute rather than the De…
What does Virginia Ruling of the Tax Commissioner P.D. 20-187 conclude about Residency : Domicile - No Virginia Domicile Established?
The Tax Commissioner abated the assessment: the taxpayer proved he did not become a Virginia domiciliary or actual resident until 2018, so he owed no Virginia individual income tax for 2017.
What does Virginia Ruling of the Tax Commissioner P.D. 20-186 conclude about a corporate group's request to change from filing separate Virginia returns to filing a combined return, including which affiliates were eligible for inclusion?
The Tax Commissioner granted the requested change from separate to combined filing only in part: two affiliates without Virginia-source income (Asub1 and Allc1) were not eligible and must file separat…
What does Virginia Ruling of the Tax Commissioner P.D. 20-185 conclude about Exemption: Occasional Sale - Sale or Exchange of Substantially All Assets of a Division of a Business (Criteria), Medical Practice?
No exemption: the Tax Commissioner upheld the use tax assessment because the Taxpayer failed to show the purchased oral surgery practice was a separate and distinct division of the Seller's larger hea…
State Tax Ruling
The Tax Commissioner ruled in the taxpayer's favor: because the taxpayer was not part of an affiliated group filing on a different basis for Virginia and federal purposes, it was bound by its federal …
What does Virginia Ruling of the Tax Commissioner P.D. 20-183 conclude about Tangible: Administration - Jurisdiction, Statute of Limitations for Refunds Classification of Property: General v. Manufacturing - Food Service?
The Tax Commissioner ruled the Taxpayer's 2012 refund claim was time-barred under the three-year limit in Va. Code § 58.1-3990, and remanded the manufacturer-vs-business-service classification questio…
What does Illinois General Information Letter ST 20-0032-GIL conclude about Computer Software?
Generally, no. A software-as-a-service provider is treated as a 'serviceman,' and if it does not transfer any tangible personal property (including computer software) to the customer, the charges are …
What does Illinois General Information Letter ST 20-0031-GIL conclude about Nexus?
It depends on which sales count. Illinois's GIL explains that under 'Wayfair nexus,' a remote retailer must collect Illinois Use Tax once its cumulative gross receipts from Illinois sales hit $100,000…
Did lump-sum vacation packages sold by a related travel agent qualify for Florida's no-additional-tax treatment?
Yes. The licensed travel agent bought packages containing admissions, accommodations, and meals; tax was paid on every taxable component; the customer paid one lump sum with no component itemization; …
Is a service of hanging a client's own artwork on the wall subject to New York sales tax?
Yes. Installing tangible personal property is a taxable service under Tax Law § 1105(c)(3), whether or not any property is transferred with it. Hanging a client's artwork — pictures, mirrors, tapestri…
Is a separately itemized crating charge on an invoice for taxable goods subject to New York sales tax?
Yes. A vendor's receipt includes its charges for shipping, delivery, and handling, and crating is a handling charge tied to delivery. When the underlying goods are taxable and delivered in New York, t…
Are a health and fitness club's membership fees subject to New York City local sales tax?
Yes. New York City taxes charges by weight control salons, health salons, gymnasiums, and similar establishments, and a club offering cardio and strength machines, weights, and training and workout ar…
When does the brownfield site-preparation credit window close after a Certificate of Completion, and do later 'Phase II' development costs qualify as site preparation costs?
The site-preparation credit may be claimed for up to five tax years after the year the Certificate of Completion (CoC) issues, so a December 2013 CoC means the last year is 2018. Phase II excavation, …
Is the charge to install a household appliance subject to Tennessee sales tax, and does it matter whether the appliance is free-standing or built-in?
It depends on whether the installed appliance stays tangible personal property or becomes part of the building. The Department ruled (in an advisory, non-binding revenue ruling) that the charge to ins…
How does Kansas sales tax apply when a customer pays with bitcoin or other digital currency?
Kansas Notice 20-04 addresses how the Retailers' Sales and Compensating Tax Acts apply to digital currency (bitcoin, cryptocurrencies, and similar electronic value that is not legal tender). It answer…
When a pre-paid funeral contract's guaranteed merchandise goes up in price by the time of death, does the funeral home owe extra Tennessee sales tax on the increase?
No. The Department ruled that a funeral home selling pre-need (pre-paid) funeral contracts should NOT collect additional Tennessee sales tax from the customer or next of kin when the price of the guar…
Were fencing materials, hardware, and prefabricated cattle-containment devices exempt from Florida sales tax when used on a farm?
No. Florida found no Chapter 212 exemption for posts, wire, hardware, gates, cattle panels, cattle guards, pens, or electric-fencing materials used to contain cattle. The agricultural exemption listed…
Are sales of hydrogen fuel at New York refueling stations for fuel-cell electric vehicles subject to sales and use tax?
No. Although the sale of hydrogen gas is generally taxable, Tax Law § 1115(a)(42) exempts hydrogen used directly and exclusively in the engine of a motor vehicle. That exemption applies to the prepaid…
Can a dairy cow hoof trimmer who does custom work for dairy farms buy his truck, tools, and supplies tax-free under New York's farming exemption?
Mostly yes. Because the hoof trimmer does custom work that is part of dairy farm production, his trimming truck, tilt table, chute and gates, the tools and supplies to maintain and sanitize them, cow-…
Does an events venue have to charge sales tax on its site fee, and on the amounts it exchanges with its exclusive caterer?
It depends on whether catering is involved. When the venue is rented together with catering, the nonrefundable site fee is a taxable 'other charge' made in connection with the sale of food and drink. …
Are a convenience store's single-serve yogurt cups taxable when the store also offers a few tables and seats for customers?
Generally no. The yogurt cups are exempt food when sold for off-premises consumption, because they're sold unheated and in the same form, quantity, and packaging as in a grocery store. The mere presen…
Is the fee a New York firm pays for remote 'managed IT services' on servers located outside New York subject to sales tax?
No. Most parts of the managed IT service — hardware/software help-desk support and data backup — aren't taxable services to begin with. The only potentially taxable component is the IT-security work, …
Are a company's two online government-RFP services — one that distributes RFPs and one that notifies contractors of bid opportunities — subject to New York sales tax?
One is, one isn't. The Procurement Service, which lets government agencies build and distribute their requests for proposals to a wide pool of contractors, is not an enumerated taxable service, so it …
Are a recycler's charges to collect and process used oil and oily waste taxable as a trash removal service in New York?
Generally no. Because the recycler tests, accepts, and recycles only oily waste that has economic value (it recovers and sells the oil) and its fees can depend on the oil's market price, the waste isn…
How does New York sales tax apply to a contractor's purchase, sale, and installation of residential and commercial solar energy systems?
It varies by component and timing. Solar modules, racking, and inverters bought for installation at a specific customer's residence or commercial premises qualify as solar energy systems equipment, ex…
Are charges for a cloud webcasting and virtual-communications platform — plus its optional add-on services — subject to New York sales tax?
Mostly no. The core charge for the cloud webcasting/webhosting platform is not taxable: hosting events isn't an enumerated service, and the software-driven features (registration pages, webinar tools,…
Are payments from a former employer's nonqualified deferred compensation plans, received after the taxpayer retired and left New York, subject to New York income tax?
No. The distributions qualify as 'retirement income' under the federal Pension Source Law (4 USC § 114), which bars states from taxing the retirement income of a nonresident. They are also not New Yor…
How do you calculate the portion of IRA withdrawals that is exempt from New York income tax when the IRA was funded solely with federal Thrift Savings Plan rollover funds?
Only the portion representing the rolled-over TSP amount is exempt under Tax Law § 612(c)(3)(ii); post-rollover gains are not and may instead use the $20,000 subtraction under § 612(c)(3-a). One accep…
What does Illinois Private Letter Ruling ST 20-0007-PLR conclude about Motor Fuel Tax?
Yes. The Department ruled that a licensed Illinois motor fuel distributor can sell dyed diesel fuel tax-free to an unlicensed out-of-state fuel exchange platform's customers, as long as the fuel is fo…
Is a lump-sum digital marketing package — bundling website development, social media marketing, SEO, a local-review software plugin, and pay-per-click advertising — taxable as a data processing service in Texas?
Yes. Texas ruled that a company's lump-sum digital marketing package — website design/hosting/maintenance, social media marketing, SEO services, a local-review software plugin, and pay-per-click (PPC)…
Does a vibration-monitoring company owe sales tax on the seismograph equipment it buys to provide monitoring services?
Yes. The seismograph is tangible personal property, and the company buys it to use in providing its vibration-monitoring service — it doesn't resell the equipment to customers, and no equipment exempt…
Does a county terminal-pay 401(a) plan funded only by converting an employee's accrued leave qualify for New York's full public-pension subtraction?
No. Distributions from the plan (and from IRAs funded by rolling it over) do not qualify for the full public-employee pension subtraction under Tax Law § 612(c)(3)(i), because converting an employee's…
When someone assumes another person's existing long-term car lease in New York, is sales tax due again, and on what amount?
Yes, tax is due again. Assuming an existing long-term motor vehicle lease is a new, separate taxable sale. Sales tax is due up front on the total remaining monthly payments, plus any down payment and …
Which personal-care products — lotions, medicated powders, an acne kit, glucose tablets — are exempt from New York sales tax as drugs or medicines versus taxable as cosmetics?
It depends on each product. New York exempts drugs and medicines (and dietary foods) but taxes cosmetics and toilet articles even if they contain medicinal ingredients. Here, moisturizing and anti-itc…
Does a car rental company owe sales tax on the repair and maintenance services it buys for the vehicles in its rental fleet?
No. Because the vehicles are held exclusively for rental — and a rental is itself a 'sale' under New York law — the fleet is property held for sale in the regular course of business. Repairs, maintena…
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