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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Do I have to charge Texas sales tax for boarding or training dogs at my kennel?
No. The Texas Comptroller ruled that boarding dogs and training dogs are both nontaxable services, so a kennel does not charge its customers sales tax on those charges. However, the kennel owner…
Can a seller accept a faxed or photocopied Mexican pedimento de importacion as proof of export before issuing a Texas sales tax refund?
Yes. The Comptroller confirmed that a seller may accept a legible fax or photocopy of a pedimento de importacion, rather than requiring the original, as proof that goods were exported to Mexico. A…
As first mortgagee, I'm set to receive a commercial building free and clear under a Chapter 11 reorganization plan, in full satisfaction of my $90 million loan. The plan also wipes out an unrelated second mortgage on the same building with no payment to that lender. Does the discharged second mortgage debt count as part of MY consideration for New York's Real Property Transfer Gains Tax, even though I'm not paying it and get no benefit from its discharge?
No -- the discharged second mortgage debt is NOT part of the first mortgagee's consideration; consideration is only the amount of the recipient's OWN debt that gets extinguished. Prudential…
Were shares of a money-market fund holding Student Loan Marketing Association obligations exempt from Florida intangible tax?
Yes, so long as the fund's January 1 portfolio contained only tax-exempt assets. Federal law treated the association's obligations as United States government obligations for state property-tax purposes.
How did California calculate whether a fishing vessel was used principally outside state territorial waters?
Compare outside-water time with inside-water time across all actual fishing operations, including travel to and from fishing grounds. Outside time must be greater. Storage and idle time in…
Could a subsidiary transfer all operating property and liabilities to Newco, then spin Newco through the corporate chain to the same public-company shareholders without tax?
Yes, conditionally. The January 15 letter treated the proposed transfer as exempt because all business tangible property moved and at least 80 percent ultimate ownership would remain unchanged,…
Could California levy life-insurance interest or dividends owed by an out-of-state insurer doing business in California to out-of-state taxpayers?
Yes. Staff said the insurer had to comply because it did business through California agents, and state law did not exempt policy dividends or interest from garnishment.
Is a petroleum additives package sold with a vehicle warranty taxable in Texas, and is the warranty repair labor taxed?
Yes — the sale of the petroleum additives package is taxable as tangible personal property. Whether the warranty repair labor is later taxed depends on billing: a lump-sum labor-and-parts charge is…
Which extra automobile-rental charges did RR 93-1 include in taxable gross proceeds?
All listed add-ons were taxable: fuel charges, collision-damage waivers, personal-accident coverage, extended liability protection, personal-effects coverage, and combined accident/effects coverage.…
Were meals sold to state-prison inmates exempt as meals furnished to residents of an institution?
No. A prison was not an institution within the statute's defined exempt categories, so inmate meals—and snack foods included in those meals—were taxable.
Does a Texas business have to charge sales tax for pumping out grease traps/septic tanks or clearing stoppages in sewer lines?
It depends on what exactly is done and for whom. Removing waste from a septic tank or grease trap that is part of a sewer system is a non-taxable service, but cleaning out a sewer line for a…
Can a contractor rent equipment tax-free to improve real property on a federal construction project like the Superconducting Super Collider?
No. Since October 2, 1984, when the Texas Legislature repealed the prior exemption, a contractor's rental of equipment used to improve real property on a federal government job is taxable. In this…
Was furnishing a mixer truck, driver, cement, and labor to solidify a customer's hazardous waste an equipment lease or taxable fabrication?
It was taxable fabrication, not a lease. The contract supplied truck and mandatory driver as a unit without transferring possession/control.
Did later out-of-state shipment exempt logo merchandise already sold and billed while held in the seller’s California warehouse?
No under the assumed contract. Title passed when the goods entered the warehouse, and the contract did not require out-of-state shipment, so later customer-directed delivery did not exempt the…
Does a Texas resume-writing and career counseling service have to charge sales tax on preparing a client's resume?
No, generally not. If you interview a client and write an original resume from that consultation, the charge for consultation and preparing the resume is not taxable, even if produced on a computer…
Can a creditor or client who hires an automobile repossession company issue a resale certificate instead of paying sales tax on the repossession service?
No. The Comptroller ruled that a client (such as a lender) who hires a company to repossess an automobile cannot issue a resale certificate to avoid sales tax on that repossession service. The…
Is a health maintenance organization licensed under Article 44 of the Public Health Law an insurance corporation taxable under Article 33?
No. A health maintenance organization licensed under Article 44 of the Public Health Law is not an insurance corporation for franchise tax purposes and is not taxable under Article 33. As long as…
Our building's fee owner needs to convert floors of a Manhattan office tower into condominium units and convey the units occupied by a major tenant to the NYC Industrial Development Agency, so the tenant can get IDA financing benefits, then lease those units back. Do the conveyance to the IDA, the IDA leaseback, the eventual reversion, and a restated/consolidated lease with the tenant trigger New York's Real Estate Transfer Tax or Real Property Transfer Gains Tax?
Exempt at every step. Resnick Water St. Development Co., fee owner of One Seaport Plaza, needed to convey condominium units occupied by tenant Prudential Securities, Inc. (PSI) to the New York City…
Is a foreign sales corporation organized in a U.S. possession subject to New York franchise tax, and is its exempt foreign trade income excluded for New York?
A foreign sales corporation (FSC) organized in a U.S. possession (here, the Northern Mariana Islands) is a foreign -- but not an alien -- corporation for Article 9-A, because a U.S. possession is…
Is a company whose only district activity beyond solicitation is maintaining an office subject to the metropolitan transportation business tax surcharge?
Yes. A company that maintains an office in the metropolitan commuter transportation district (MCTD) is subject to the metropolitan transportation business tax surcharge under Tax Law section 209-B,…
Are federal military Survivor Benefit Plan payments to a service member's survivors subject to Kansas income tax?
No -- they are exempt from Kansas income tax. This 1993 internal memo addresses the federal Survivor Benefit Plan, under which a retired armed-services member can elect to take less monthly…
Were diagnostic reagents applied only to removed tissue samples exempt as prescription medicines in California?
No. California treated the reagents as taxable because they were applied only to samples removed from patients and never to a patient's body.
Were the described intravenous sets and temporary infusion catheters exempt as prescription medicines in California?
No. California treated the IV sets as taxable devices and found no exemption for the temporary catheters used to infuse medication or nutrients.
If my advertising agency's invoice lumps taxable and nontaxable charges together, can I still use my direct payment permit to self-accrue the tax?
No. Under Rule 3.288(h), a direct payment permit holder can only issue a valid direct payment exemption certificate to a vendor that separately states its taxable and nontaxable charges. If an…
In the modified opinion, are an asbestos contractor's plastic bags and poly taxable, and what changes when the removal is part of a capital improvement?
Same core result as the original opinion — disposal bags are 'actually transferred' (not taxable) and plastic poly is consumed by the contractor (taxable) — but this modified opinion adds that when…
How did HMO payment, ownership, and no-cost patient use affect medicines, durable equipment, oxygen systems, diaphragms, and hearing aids?
Insurance payment alone did not change taxability, but an HMO retaining ownership and providing equipment at no charge was the taxable consumer rather than the patient.
Is converting a plugged oil or gas well into a water well taxable as remodeling under Texas sales tax rules, and how does sales tax apply to water well drilling, equipment, and repairs?
Yes — the Comptroller ruled that converting a plugged oil well into a water well is remodeling, as is plugging an existing water well; cleaning out an existing well is a repair, not remodeling.…
Is a contractor's operation and maintenance of cogeneration plants built with industrial-development-agency financing exempt from sales tax as government activity?
Operating the plant isn't exempt government activity, and because the contractor bills one lump-sum operation-and-maintenance fee without separating taxable from nontaxable charges, it must collect…
When a retailer sells discounted cellphones to customers who also sign a carrier service contract, are the phones taxable 'promotional items' the retailer can't buy for resale?
The phones are purchased for resale, not promotional items. Because the retailer sells the phones (bundled with service) at a profit rather than giving them away or selling below cost, it buys them…
As fee owner of our Manhattan office tower, we need to convey the condo units occupied by a major tenant to the NYC Industrial Development Agency so the tenant can get IDA financing benefits, then lease those units back from the IDA and sublease to the tenant -- with the IDA's title later reverting to us, possibly repeatedly as the deal is restructured. Does any of this trigger Real Estate Transfer Tax, Real Property Transfer Gains Tax, or Mortgage Recording Tax?
Exempt across the board. The Chase Manhattan Bank, N.A., fee owner of One New York Plaza, needed to convey condominium units occupied by tenant Prudential Securities Incorporated (PSI) to the New…
How did Florida's revised ruling tax shares of a municipal fund that temporarily held a taxable asset at year-end?
Direct federal and territorial obligations remained exempt, but any taxable asset made the rest of net asset value taxable. The trust itself was exempt, and the last business day was the sole…
How were South Carolina counties ranked for the new jobs tax credit for tax years beginning in 1993?
The notice ranked 16 counties as less developed, 15 as moderately developed, and 15 as developed. The historical credit was $1,000 per new full-time job with 10 new jobs, $600 with 18, or $300 with…
How could California assert an increased determination at or before a taxpayer's hearing, and what written-notice formalities applied?
An increase needed no special form and could first be announced orally at the hearing if the taxpayer was notified; statutory notices still had to be written and properly served.
Were a foundation's annual report and twice-yearly newsletter exempt printed sales messages or nonprofit periodicals?
They were not printed sales messages and were too infrequent for the post-October 1992 periodical rules, but printing sold from November 1991 through October 1992 was exempt.
Were a foundation's annual report and twice-yearly newsletter exempt as printed sales messages or nonprofit periodicals, and did the historical period matter?
They were fundraising, not printed sales messages, and too infrequent after October 1992; November 1991–October 1992 printing was exempt.
Were charges for wedding videography, editing home videos, and duplicating customer tapes taxable?
Yes. Private noncommercial videos were not qualified motion pictures, and producing, editing, or duplicating them was taxable even with customer-supplied equipment.
In this January 1993 Texas ruling, an Arkansas printer bought manufacturing equipment in Louisiana tax-free and later brought it into Texas — did Texas use tax apply?
It depends on how long the equipment was used outside Texas first. If the equipment was used in Arkansas for one year or more before being moved to Texas, no Texas use tax is due. If it was used…
Must a private homeowner collect sales tax on the rent when a guest pays to stay in the home during a special event like the 1993 World University Games?
No. A private home not regularly used for lodging guests isn't a 'hotel,' so short-term paid stays during the event aren't subject to New York's hotel occupancy sales tax.
In an outsourced copy-service arrangement, who owes sales tax on the copies, on the toner and paper, on outsourced repairs, and on copier lease payments?
Charging by the copy is a taxable sale of tangible personal property. The provider buys toner and paper for resale (ST-120), and can pass through outsourced repairs tax-free only if separately…
Are a county fire district officers association's purchases of goods and services exempt from New York sales and use tax as a state instrumentality?
Exempt. The Department held the association is an instrumentality of New York State under Tax Law § 1116(a)(1), so its purchases of tangible personal property and services are exempt from state and…
Are a fire district officers association's purchases of goods and services exempt from New York sales and use tax as a state instrumentality?
Exempt. The Department held the association is an instrumentality of New York State under Tax Law § 1116(a)(1), so its purchases of tangible personal property and services are exempt from state and…
May a New York parent file a combined Article 9-A report with its wholly owned foreign sales corporation subsidiary organized in a U.S. possession?
Possibly -- it is up to the Commissioner. A foreign sales corporation organized in the U.S. Virgin Islands is a foreign but not an alien corporation, because a U.S. possession is not a foreign…
How did Florida value common and preferred shares of a business trust holding exempt and taxable securities?
Both share classes were fully exempt when the portfolio held only exempt assets. With taxable securities at year-end, shares were taxed in proportion to taxable assets while the federal-obligation…
How did Florida's original ruling determine exempt share value for an out-of-state business trust?
It exempted the trust and carved out direct federal and territorial obligations, but any taxable asset made the remaining value taxable. The source directs readers to revised TAA 93C2-001R.
Could a charitable organization buy building materials tax-free for a medical facility while its contractor handled ordering and delivery?
Yes. The charity executed purchase orders, took title and risk, received invoices, and paid vendors directly. It also had to give vendors a proper exemption certificate or include its information in…
When did a club have to report sales tax when members could pay annual dues in one payment or two installments?
The club reported tax when each dues payment was received, not when it sent a December statement. January collections went on the January return, and the remaining June payment was taxed then.
Are wheelchair lifts, stairway lifts, pool lifts, and disability-operated power door openers exempt from New York sales tax as artificial devices, and is their installation taxable?
Exempt. Wheelchair lifts, stairway lifts, pool lifts, and power door openers operated only by disability controls are artificial devices exempt under § 1115(a)(4), and their installation and repair…
Does South Carolina's 1992 year-end policy citator PDF contain the promised status entries and exhibits?
No. The notice says a policy-document citator is attached, but the official three-page PDF ends after its definitions and cumulative-topic explanation. It contains no document-level status entries…
Does South Carolina's 1992 year-end policy index PDF contain the promised document entries?
No. The notice says a policy-document index is attached, but the current official two-page PDF stops after listing five major categories and contains no document-by-document entries.
Is a custom-designed communication board (like a FACTS board) for someone who cannot speak exempt from Texas sales tax?
No. The Comptroller found no statutory exemption for a communication board (a FACTS board) designed for someone who cannot communicate verbally. Texas law exempts certain items used by the deaf and…
Is the labor to dig out and haul away contaminated soil taxable in Texas?
It depends on whether the soil leaves the property. Labor to excavate (dig out) contaminated soil is not taxable if the service provider leaves the soil on the customer's premises. But if that…
Does a Texas business have to charge sales tax on data recovery services, like retrieving deleted computer files?
Yes. The Texas Comptroller ruled that charges for labor or services performed to recover or retrieve deleted computer data are taxable as data processing services under Rule 3.330. The provider must…
Were ABC's Advantage Card and Business Card warehouse-club membership fees subject to South Carolina sales tax under PLR 92-11?
Yes. The paid membership fees were part of the consideration for buying merchandise because Advantage Card and Business Card members paid the posted wholesale price, while 90-day free members paid…
Did SC PLR 92-10 impose sales or use tax when exempt manufacturing machines were sold to a lessor and leased back to the manufacturer?
No. The sale to the lessor, the lease back to ABC, and ABC's continued use of the machines were exempt because the equipment was used to manufacture tangible personal property for sale. The ruling…
What 1992 base-period Treasury-bill rate applied to South Carolina deferred tax tied to DISCs and foreign trade receipts?
For the one-year period ending September 30, 1992, the base-period Treasury-bill rate was 4.23%, with a .04308 annual factor compounded daily over 365 days. The letter said taxpayers generally used…
Does Texas charge sales or use tax when a company licenses its programming-language source code and specifications to other developers?
No, not automatically. Texas taxes the sale or license of a 'completed computer program,' but licensing raw source code and specifications so a licensee can build its own derived program is not…
A partnership is transferring 100% of its partnership interests to a bank, in exchange for the bank cancelling debt and releasing guarantees -- but the partnership's underlying real estate is worth $10 million while the debt being cancelled is $15 million. For New York's Real Property Transfer Gains Tax, is the taxable 'consideration' the $15 million in cancelled debt, or the $10 million fair market value of the real estate?
The taxable consideration is the $10 million fair market value of the underlying real estate -- NOT the $15 million in debt actually cancelled to acquire the ownership interest. A partnership held a…
Can a taxpayer rely on an older California FTB Legal Ruling without checking later statutes, regulations, administrative guidance, and court decisions?
No. FTB said every Legal Ruling states its official conclusion under the law existing when issued, but later law or decisions may supersede all or part of it. Reliance on a ruling superseded by a…
Does a licensed customhouse broker corporation with several offices need to file a separate Texas Customs Broker's Export License application for each office?
No. A licensed customhouse broker corporation with multiple offices should file a single Texas Customs Broker's Export License application listing each location, rather than a separate application…
Did two family-owned corporations qualify as related corporations for Florida's former mortgage-debt rent rule?
No. Owners holding half of the dealership held no stock in the realty company, so the proposed sale-leaseback parties were not related corporations under the rule. The Department also planned to…
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