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 Florida exempt coronary balloon catheters after reconsidering an earlier ruling that treated them as taxable?
Yes. The Department said the catheter exemption covered every medical device that was in fact a catheter, so coronary balloon catheters remained exempt until the warned-about rule amendment.
In a limited partnership, is the corporate general partner subject to franchise tax, is a corporate limited partner subject, and how is an affiliate's administrative fee added back to earned surplus?
The corporate general partner is subject to the franchise tax, because the limited partnership is doing business in Texas. A corporation whose only Texas connection is being a limited partner is not…
Were charges for terminal storage and pipeline handling bailments or taxable leases of property?
They were nontaxable bailments where the companies kept exclusive control of facilities and handled customer commodities. Charges for office, dispatch, storage, or repair space were taxable…
Were all payments under an airport merchandise-concession agreement taxable as Florida real-property rent?
Yes. The agreement gave the concessionaire assigned airport space for its shop, so Florida treated every Article VII payment as consideration for a taxable lease rather than a nontaxable license.
Were color overhead transparencies made from a client's outline notes taxable, and how did that differ from producing one transcription or multiple copies?
The transparencies and total charge were taxable because the physical output was the true object; one original transcription was a service, but additional copies were taxable.
Could an out-of-state optional-warranty company give a California appliance repairer a resale certificate for repair parts?
No. The warranty company consumed the parts, so the California repairer made taxable retail part sales and separately stated nontaxable labor.
Was the full charge taxable when a word-processing business used a customer's hard-copy outline to produce color overhead transparencies?
Yes. The physical transparencies were the true object, so the entire charge was taxable whether or not they had cardboard frames. The same letter treated one audio or hard-copy transcription as a…
Were washers and dryers exempt as an occasional sale when owners sold a combined snack-bar and laundromat business?
No. Legal Division treated the same-address, unseparated snack bar and laundromat as one seller-permit retail business, so its washers and dryers were taxable. The source supplies no amended-return…
If a customer gives a seller a resale certificate on a rental, but never actually re-rents the item, is the seller liable for the uncollected tax?
Not necessarily. In this December 1992 letter, the Comptroller's Tax Administration Director tells a trade association that on audit, the agency will review a seller's documentation on a…
Does an airline owe Texas sales or use tax on peanuts, donuts, and disposable cups, stir sticks, and napkins given to passengers?
No tax is owed on the peanuts and donuts because the airline buys them in bulk, and bulk food purchases aren't taxable. The disposable cups, stir sticks, and napkins used for non-complimentary…
How did Florida determine exempt share value for an out-of-state business trust with federal and Florida obligations?
The trust itself was exempt. Direct federal and territorial obligations were removed from share value; the rest was exempt only if every remaining asset was exempt, with year-end as the sole…
Would Utah follow federal IRC section 332 and allow tax-free liquidation of two wholly owned subsidiaries into their parent corporation?
Yes. Although Utah had not expressly adopted IRC section 332 and its liquidation provision could otherwise recognize gain or loss, the Commission found that recognition would create a Utah asset…
Did making maintenance optional for a few powerful or preferred customers make it optional for every buyer?
No. Optionality was transaction specific; a customer required to buy maintenance faced a taxable mandatory agreement even if favored customers did not.
Is a maintenance agreement optional merely because preferred customers can buy or lease equipment without it?
No. Mandatory status was transaction-specific: a customer's required maintenance was taxable even if favored customers got different terms.
Were computer-maintenance charges optional and excluded from taxable rent when the lessee could choose between two lessor-provided plans?
No. Choosing between two lessor plans was not optional maintenance because every choice required buying maintenance from the lessor.
Does an insurer become the lessee of medical equipment merely because it pays the provider for a covered patient's rental?
No. Under the letter's assumption, the patient lease carried use tax even if insurance paid; a direct insurer lease put sales tax on the lessor.
Were separately stated chemical-toilet cleaning charges excluded from taxable rent when the lease said service was optional?
Yes. The revised lease made cleaning optional from the lessor, and customers could hire another qualified provider without breaching it.
Did an insurer become the purchaser or lessee merely because it paid a patient's bill for home-therapy equipment?
No. The patient remained the purchaser or lessee, so ordinary tax rules applied. A direct insurer contract instead shifted the applicable levy to sales tax on the provider.
Did a repair company outside a surtax county have to collect that county's surtax when employees performed repairs there?
No under the 1992 dealer-location rule. The company had no location or qualifying supplier delivery in the county, but the source notes that surtax shifted to delivery location effective January 1, 1994.
If a customer's credit card payment turns out to be unauthorized or fraudulent and the credit card company charges the sale back to the business, can the business claim a bad debt deduction for sales/use tax purposes?
Yes. This internal Comptroller memo concludes that a charge-back for an unauthorized or fraudulent credit card payment is treated the same as a bad debt from a bad check, and it qualifies for a bad…
Is a risk retention group made up of governmental housing authorities exempt from the Article 33 franchise taxes on insurance corporations as a state instrumentality?
Yes. A risk retention group whose members are governmental housing authorities is an 'instrumentality' of government and is exempt from the Article 33 franchise taxes on insurance corporations under…
Is a bank holding company subsidiary a banking corporation taxable under Article 32, or is it taxed under Article 9-A?
Not necessarily a banking corporation. A corporation 65 percent or more owned or controlled by a bank holding company is a 'banking corporation' subject to Article 32 only if it is also principally…
Who owed California use tax on MTE vehicles rented directly to the U.S. Navy?
The lessor, not the Navy. A contract could reimburse the lessor's cost, but invoices should not represent that the federal lessee itself was being charged tax.
Was a later sale of bottled-water pallets taxable when the customer decided to keep them for internal store transport?
Yes. The customer bought the pallets for its own internal use, and the water seller had already used them as returnable containers before the later sale.
Is the Agent Orange Settlement Fund subject to New York franchise tax under Article 9-A or personal income tax under Article 22?
No. The Agent Orange Settlement Fund is not subject to New York franchise tax under Article 9-A or personal income tax under Article 22. The IRS ruled that the Fund -- established before the…
Gerard Dowling, a NYC Transit Police sergeant, received full salary while out on sick leave in 1990 for two service-connected injuries. Can that sick pay be excluded from his federal and New York taxable income as "workmen's compensation" under IRC section 104(a)(1), given that his union's collective bargaining agreement (not a formal statute) is what actually spells out the sick-pay entitlement?
Yes, but only from a specific cutoff date. Because Public Authorities Law § 1204-c incorporates the Sergeants' Benevolent Association's collective bargaining agreement by reference and makes the…
Could a borrower draw a line of credit back to its face amount before renewal and renew that balance without additional documentary stamp tax?
Yes, if the advance occurred before renewal, bore interest like any other advance, and every section 201.09 condition was met. A temporary accounting entry later reversed was insufficient. A…
Did individual landlords and their corporate automobile-dealership tenant qualify as related parties when one landlord owned 90% of the tenant?
No. The Department required the individual lessors to own 100% of the corporate tenant's stock. Because one lessor owned 90%, the other owned none, and an unrelated person owned 10%, the parties did…
Were a not-for-profit country club's monthly equity-member assessments taxable when they repaid a mortgage and began before July 1, 1991?
Yes, assuming the assessment was not a refundable deposit. The assessment remained taxable even though it began before July 1, 1991, and a new member could not inherit the former member's claimed…
Under this invalidated 1992 advisement, were an advertising agency's bundled creative and production charges taxable when it separately charged nothing for transferred materials?
Historically, no. Because the invoices separately charged nothing for video dubs, storyboards, or other transferred property, the Department treated the charges as exempt service transactions and…
Did a fast-food delivery chain have to use Florida's published concession effective sales-tax rates?
No. The published rates were optional and carried a compliance presumption. A lower company-developed rate could be used, but it had no presumption and had to be proven accurate without exception on audit.
What South Carolina tax interest rate applied for the three-month period beginning January 1, 1993?
The rate was 7%. Interest was compounded daily, except that simple interest applied to an underpayment of a declaration of estimated tax.
How was a lump-sum and royalty contract taxed when it transferred technical materials plus the licensed right to reproduce technology in integrated circuits?
Only the value of transferred tangible materials was taxable; the amount attributable to federally protected manufacturing and sales rights was nontaxable intangible property.
If I dig up caliche and haul it to a customer's job site, do I have to charge Texas sales tax on the hauling/delivery charge?
It depends on whether the caliche is processed. If you simply dig caliche out of the ground and haul it to the customer's site, neither the caliche nor the transportation charge is taxable. But if…
Did FAR 52.216-7 or FAR 52.216-13 accelerate federal title merely because they governed allowable cost and payment?
No. Neither clause passed title before contractor use; cost-reimbursement contracts needed FAR 52.245-5, while facilities contractors remained consumers.
Was the Edge Bar exempt after Proposition 163 repealed California's temporary snack-food exclusion?
Yes. Beginning December 1, 1992, food bars were again nontaxable, and a bar was not one of the product forms covered by Regulation 1602(a)(5).
Was a software-upgrade promotion a true discount when customers had to surrender old software licenses?
No on the stated records. The required surrender and agreed value made it a trade-in, so that value stayed in taxable gross receipts unless the contract clearly separated a discount.
Could a software seller exclude an agreed trade-in value by describing part of the upgrade promotion as a discount?
No. The agreed software trade-in value stayed in taxable gross receipts because the contracts did not clearly provide both a trade-in and a separate discount.
Could a California designer use a historical percentage to classify computer-design charges as preliminary art?
No. The designer had to identify actual physical proofs prepared before finished-art approval and keep client-dated approval or similar evidence; a historical 60% allocation was not enough.
Can a retailer use SKU codes on cash register tapes (instead of a written item description) to support a Texas sales tax export refund claim?
Yes. The Comptroller's office confirmed that a cash register tape showing only a SKU code, with no separate written description of the merchandise, does not by itself prevent a retailer from getting…
Would tax apply when a company moved its one-half airplane interest to a new corporation solely for that corporation's first-issued stock?
No, if the commencing corporation's first-issue stock was the sole consideration for the one-half aircraft interest. Counsel emphasized that anything else received would be taxable at its money…
Does a Texas business that repairs and maintains aircraft for licensed/certificated carriers have to charge sales tax on parts, labor, or the equipment it buys to do the work?
No. In this December 11, 1992 letter, the Comptroller told the requester that repair and maintenance services on aircraft belonging to licensed and certificated carriers are not taxable — no tax on…
If I sell equipment to a leasing company and lease it back under an operating lease, is that a nontaxable financing arrangement or a taxable sale?
It depends on whether the leaseback is a true financing lease or an operating lease. In this December 1992 ruling, the Comptroller held that a sale-leaseback where the equipment reverted to the…
Can a Texas motor vehicle rental company show property tax, title fees, and registration fees as separate reimbursement line items on customer invoices?
Yes, but only as a cost reimbursement, not as a collected tax. The Comptroller told a motor vehicle rental company that it cannot collect county property tax directly from customers as a tax (only…
Is a scholarship-matching or financial-aid database search service taxable in Texas?
Yes. A service that matches students to scholarships using a database is a taxable information service under Texas Rule 3.342. The provider owes tax on materials, supplies, and equipment used to…
If a fraternity or sorority charges students one combined fee for room and meals, does it owe sales tax on the meal portion even though meals aren't billed separately?
Yes. Even if a fraternity or sorority bills students one lump-sum charge for room and board without breaking out the cost of meals, Texas sales tax must still be collected and reported on the…
Did South Carolina Revenue Ruling 92-15 treat state agencies, counties, municipalities, and other political subdivisions as generally subject to sales and use tax?
Yes. The historical definition of 'person' included the state, agencies, authorities, political subdivisions, and municipalities. Their retail sales were subject to sales tax, and their retail…
Were electronically delivered consulting, text, software, and information sold through a California-hosted online marketplace taxable, and could the platform be the retailer?
Electronic transfers without tangible property were nontaxable; a mailed hard copy made the full charge taxable, while the platform's retailer status remained fact-dependent.
Which listed supports, braces, splints, and rehabilitation products did California treat as orthotic devices?
California treated many fully worn corrective supports and braces as orthotic devices, but taxed appliances, accessories, and insufficiently described products.
Did a cervical pillow and a bed-attached balanced suspension sling qualify as exempt orthotic devices in California?
No. California taxed both products because neither was fully worn on the patient: the pillow rested on the bed and the sling attached to the bed.
Which sales by a nonprofit youth summer camp were taxable?
The meal portion of camp fees, regularly operated camp-store souvenirs, and firewood were taxable; snack-food treatment and school or youth-group exceptions depended on separate rules.
Did HUD-code housing units without California housing approval and insignias qualify for the factory-built-housing partial sales-tax exemption?
No. Without the required approval and insignia, the units were neither qualifying factory-built housing nor mobilehomes, so ordinary retail and construction-contractor rules applied.
How did California treat electronically delivered information, remote-access fees, storage, and mailed hard copies?
Electronic delivery, remote access, connection, and storage were excluded on the stated assumptions; mailing a hard copy made the entire information charge taxable.
Why did South Carolina Revenue Ruling 92-16 permit 'Two Anyway Bingo' but reject 'Almost Two Anyway Bingo' under the historical Bingo Act?
'Two Anyway Bingo' was permissible because the caller could preannounce several geometric configurations and require players to complete any two of them using called numbers. 'Almost Two Anyway…
Were customer-specific language translations taxable when transferred on floppy disks, and what happened with extra copies or translations sold to a broader market?
A single-customer translation was a nontaxable service even on disk, but extra copies and standardized translations offered to the public were taxable property sales.
Did an Associated Students directory qualify as a printed sales message when 276 of its 708 pages were advertising?
No. Advertising did not exceed half of the printed area, so the directory failed the principal-purpose test and the assumed printer's sale was taxable.
Is an electric mobility cart (three-wheel scooter) used in place of a wheelchair exempt from Texas sales tax?
Yes. The Texas Comptroller ruled that electric powered carts (three-wheel scooters) used in lieu of a wheelchair qualify for exemption from sales tax, and no prescription is required. Repair parts…
Does Texas tax a corporation's contribution of operating assets and vehicles to a newly formed partnership for a partnership interest?
A vehicle contribution to a newly formed partnership caused no motor vehicle tax when the partnership paid no consideration beyond the ownership interest, while consideration such as an assumed lien…
Is the electricity my sand-mining client uses to dredge, wash, sort, and convey sand exempt from Texas sales tax?
It depends on what the electricity powers. Electricity used to convey or pump sand to, through, and away from the plant is exempt as transporting a material extracted from the earth, regardless of…
If the Comptroller's office told us a resale certificate was OK on a mid-lease sublease, but that policy later changed, do we still owe sales tax on the sublease we already signed?
Yes, but only for the sublease already in place. The Comptroller's office honored a resale certificate a lessee issued to its lessor for a mid-lease-term sublease because the lessee had relied on…
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