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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Does a Texas electric utility have to charge sales tax on the $8.00 monthly bill credit it gives residential customers for participating in a peak-demand program?
No. The Comptroller ruled that the $8.00 monthly bill credit given to residential customers for taking part in an electricity peak-demand program is a cash discount under Rule 3.301(d), so it is…
What documentation supported tax-free wholesale sales of vitamins, minerals, and nutritional products to different health professionals?
Pharmacists, chiropractors, and nutritionists needed valid resale certificates; qualifying doctors, surgeons, dentists, and podiatrists could use resale or exemption certificates.
How did California tax factory-built classrooms purchased, installed, and leased to school districts?
The lessor consumed the building and tax applied to 40% of its price, excluding completed-building placement; school real-property rent was untaxed.
Were video-game royalties taxable when a licensee received masters and the right to reproduce and distribute copyrighted software?
The reproduction-right royalties were not taxable, but data-format conversion and charges allocated to mechanical art and film were taxable.
How did California tax video-game reproduction licenses, media conversion, rentals, and related art and film?
Reproduction royalties were excluded, but conversion charges and the art-and-film portion were taxable; private-use game rentals were taxed on receipts.
If an advertising agency processes phone/mail orders and ships merchandise for an out-of-state manufacturer, who owes Texas sales tax, and what proof is needed that out-of-state shipments are tax-free?
The manufacturer, not the advertising agency acting as its order-processing agent, is responsible for collecting and remitting the 6.25% state tax plus local city tax on sales from the agency's…
Are spinal needles used by a physician during a diagnostic procedure exempt from Texas sales tax as hypodermic needles?
No. The Comptroller ruled that spinal needles used by a physician to perform a diagnostic procedure are not exempt hypodermic needles under Tax Code Section 151.313, because the physician uses the…
How did California treat corporate training-video production, raw stock the client claimed to own, duplicate copies, and private noncommercial videos?
Qualified training-video production was nontaxable and the producer consumed raw stock unless it sold materials before use; release-print duplicates and private videos were taxable.
Was an unlimited source-code license taxable when acquired to reproduce, modify, and distribute a copyrighted driver program?
No, under the stated assumptions. The contractor acted as agent, and the payment bought copyright reproduction and distribution rights rather than program use alone.
Was an unlimited driver source-code license taxable when a contractor acquired and modified it for resale products?
No on the stated assumptions. The contractor acted as buyer's agent, and the license granted reproduction rights for software to be published and distributed.
Were designs sold to printers and marketers for producing T-shirts or brochures exempt as sales for resale?
Generally no. The buyer consumed the artwork in production, so the designer's sale was taxable unless title passed to the buyer's customer before manufacturing use; related consultation and…
Does a trackmobile railcar mover lose its Texas rolling-stock sales tax exemption because it has rubber tires and can move under its own power on a highway?
No. The Texas Comptroller ruled that a trackmobile railcar mover is exempt rolling stock under Tex. Tax Code § 151.331, even though it has rubber tires that let it move over the highway from one set…
Were diagnostic chemicals and test kits sold to clinical laboratories exempt from Florida sales tax if physicians ordered the tests but pharmacists did not dispense the products?
Yes. Chemical compounds and test kits sold to clinical laboratories for analysis of human body fluids and tissue were exempt when used to diagnose or treat human disease; they did not have to be…
How did Utah tax equipment bought for rental both with an operator and without an operator?
Equipment acquired for rental both with and without an operator could be bought tax-free. The lessor collected tax on rentals without an operator. For rentals with an operator, it collected no…
Which parts of a customized employee-safety program were taxable, and how should the provider tax printing and binder inputs?
Client product surveys, training seminars, Material Safety Data Sheet file preparation, custom facility maps, customized guideline explanations, and telephone consultation were nontaxable.…
When did sweeping and pressure-washing services for parking garages and parking lots become subject to Texas sales tax, and as of what date must a provider start collecting it?
Sweeping and cleaning parking lots has been taxable since October 1, 1987. Sweeping and cleaning parking garages became taxable under a December 6, 1991 revision to Rule 3.356 (Real Property…
Is a consulting firm's software design and implementation work for an insurance fund taxable data processing/software licensing, or nontaxable custom programming?
It depends on who ends up owning the software. If the consulting firm keeps the rights to the software it develops, its fees are a taxable software license/lease. If the client (the Fund) owns the…
Is dog food, fertilizer, and other feed-store merchandise taxable in Texas, and when is feed for dogs and cats exempt from sales tax?
Generally taxable. Feed and supplies at a feed and grain store are exempt from Texas sales tax only when used exclusively on a farm or ranch for agricultural production, or for animals held for sale…
Are an asbestos-removal contractor's purchases of plastic disposal bags and plastic wall/floor poly taxable when the work is done for tax-exempt property owners?
The plastic disposal bags are 'actually transferred' to the customer along with the asbestos, so buying them isn't taxable; but the plastic poly used to seal walls and floors is consumed by the…
What Florida documentary stamp and historical nonrecurring intangible taxes applied when a $35 million letter-of-credit facility was secured by a Florida mortgage?
Documentary stamp tax was due on the $35 million secured amount when the mortgage was first recorded, with no second tax for recording its counterpart in another county. Historical nonrecurring…
How did California tax lump-sum solar-window tinting and vinyl pinstriping on buildings, vehicles, boats, and aircraft?
Building work made the installer a consumer of assumed materials; vehicle pinstriping was nontaxable, while used-window tinting followed repair rules.
Did trade shows and 25 to 30 annual California sales-representative trips create collection responsibility for an out-of-state software seller?
Yes under the historical rule applied. Trade-show lead generation and repeated representative visits to prospects and customers were physical selling presence under section 6203(b).
How did California tax lump-sum window tinting and vinyl pinstriping on buildings, vehicles, vessels, and aircraft?
Real-property work was a construction contract on the stated material assumption. Vehicle pinstriping was nontaxable, while tint repair depended on whether materials exceeded 10% of the charge.
In a paperless electronic-coupon system, how must a grocer disclose a manufacturer's coupon so tax is figured on the reduced price?
The grocer must show the item is a manufacturer's coupon item by marking 'MFG'/'M' on manufacturer coupons in its in-store circulars and newspaper inserts. An 'MFG'/'M' code on the shelf label alone…
How did Florida's historical intangible tax treat trust shares when a business trust held an all-exempt portfolio or mixed exempt and taxable assets at year-end?
An all-exempt year-end portfolio made the trust shares fully exempt. If any taxable asset was present, only the value attributable to protected federal or territorial obligations could be removed;…
Does a Texas private investigator have to charge sales tax on reimbursed expenses like mileage, hotel bills, and photographs billed to a client?
Yes, in most cases. Mileage, hotel bills, cassette tapes, photographs, film, and report-purchase costs billed by a private investigator are part of the taxable sales price of security/investigative…
Before January 1, 1993, did California's drop-shipment rule apply when goods moved directly from outside California to a California consumer?
No under the corrected historical rule. Section 6007 applied only when the goods were delivered from one California point to another California point.
Which apartment-complex common areas qualified for Florida's residential electricity sales-tax exemption, and what happened if one meter also served commercial uses?
Electricity for parking-lot lighting, swimming pools, common rooms, hallways, and stairwells qualified as residential use. Power for water or sewage systems, coin laundries, vending machines, and…
Could a buyer allocate part of a pregnant mare's lump-sum purchase price to an unborn foal allegedly bought for resale?
No. The contract priced each pregnant mare as one purchase and gave no foal value or live-birth refund, so the entire $225,000 lump sum was subject to use tax.
When a bankruptcy trustee sells a debtor's vessel, gaming equipment, inventory, and other assets by sealed bid, does Texas sales tax apply, or is the sale an exempt 'occasional sale'?
No exemption. Because title to the bankruptcy estate's assets legally vests in the trustee once the estate files for bankruptcy, a trustee-run sale can't meet the occasional sale exemption's…
When a Texas gas company passes its municipal franchise fee on to customers as part of the gas bill, does sales tax apply to that fee?
Yes. When a natural gas company passes along its municipal franchise fee as part of what it charges customers for gas, that fee is part of the taxable sales price, so the gas company must charge…
Does the prior contract exemption from a state sales tax rate increase apply to a contract to simply buy electricity (or other goods), or only to a contract/bid to perform work for a third party?
No. The prior contract exemption from a sales tax rate increase only protects contracts or bids in which the purchaser agreed to perform a contract for a third party using the purchased items. A…
Did Florida's former related-party rule exclude warehouse rent used to pay mortgage debt owed equally by a corporation and its sole shareholders?
Under the former rule, yes: the Department treated the sole shareholders and corporation as related and found them equally liable, so qualifying mortgage-debt payments were not rent. But the source…
Were a corporation's lease payments to its 97% owners exempt from Florida's commercial-rent tax because the corporation guaranteed the owners' mortgage debt?
No exemption applied. The corporation's rent payments were taxable because unrelated owners held 3% of its stock, so the payment did not satisfy the ruling's related-entity requirement. The…
Were diabetes-testing reorder packs, analytical columns, reagents, sample cups, wash solution, and analyzer-control fluid exempt from Florida sales tax?
Only some components were exempt. Diagnostic reagents, buffers, reference standards, and diluent were exempt when sold separately, but analytical columns, sample cups, wash solution, and…
Were the sale of a shuttle van to a service subcontractor and its later repurchase taxable?
Yes. No exemption covered either transfer; the source said tax applied to the original sale and to the repurchase, with collection mechanics depending on licensing.
Does a contractor building a new golf course owe Texas sales or use tax on site preparation work like clearing, grading, excavation, and earthmoving for tee boxes, greens, and bunkers?
No tax applies to the contractor's own new-construction labor for site preparation, because building a new golf course is new construction and new construction labor isn't taxed. But the contractor…
Is a caterer's separately stated 18% 'service charge' taxable, or is it an exempt gratuity?
Taxable. A caterer's 18% 'service charge' is part of the taxable receipt because it isn't designated a gratuity (the menu even says it isn't) and it's really the staff's wages — and wages can't be…
How did Florida's historical intangible tax value shares of an out-of-state business trust holding federal, territorial, exempt, and taxable securities?
Year-end holdings controlled. Federal and territorial obligations were removed from taxable value; if the remaining portfolio contained any Florida-taxable asset, that remaining value was taxable.…
Were all pharmaceuticals, including proprietary or over-the-counter medicines, exempt when sold for nursing-facility patients under physician prescriptions?
Yes. Pharmaceuticals meeting the statutory drug or medicine definition were exempt from Rhode Island sales and use tax when sold under a physician's prescription to nursing-facility patients. The…
When a Texas equipment lease is renewed or extended, does the seller charge sales tax at the old rate from the original lease or the new rate in effect at renewal?
A renewal or extension of an equipment lease is treated as a brand-new lease, not a continuation of the old one. So the lessor must charge, report, and remit Texas sales tax at whatever rate is in…
Is enclosing and finishing out an existing open-air pavilion structure taxed as remodeling or as new construction under Texas sales tax rules?
It's taxable remodeling, not new construction. The Comptroller ruled that adding a concrete slab, walls, and plumbing/wiring/AC to an existing occupied pavilion is remodeling because no new square…
Was a combined 'CIF Oakland delivery' amount for Italian equipment a separately stated transportation charge excludable from use tax?
No. CIF combined the goods, insurance, and freight, so transportation was not separately stated and tax applied to the full contract amount.
If a Texas oil field well service company passes on its fuel costs and over-the-road trip permit costs to customers, is that reimbursed amount subject to Texas sales tax?
Yes. When an oil field well service is taxable under Rule 3.324, the fuel costs and over-the-road (trip) permit costs a company passes on to its customers are part of the company's overhead and must…
Does an out-of-state company owe Texas use tax on catalogs it directs to be mailed to Texas customers, even though the catalogs are printed and mailed from outside Texas?
Yes. The Comptroller ruled that a company with Texas sales representatives owes Texas use tax on catalogs mailed to Texas consumers on its behalf, because choosing which Texas addresses receive the…
Does a Texas shop that sprays a protective polyurethane coating on pickup truck beds have to charge sales tax on the job?
The Comptroller treated spraying a protective polyurethane coating onto a pickup truck bed as motor vehicle maintenance. The coating material itself is taxable, but the labor and skill to apply it…
Is the sale of two land drilling rigs, along with their associated equipment, an exempt occasional sale when the rigs are only part of the seller's business but each rig is separately tracked as its own identifiable segment?
Yes. The Comptroller ruled that selling two land drilling rigs (and their associated equipment) qualified as an exempt occasional sale, even though the rigs were not the seller's entire business,…
Must a national fraternity's parent organization collect sales tax when it sells pins, cards, and supplies to its chapters and members?
Yes. When the parent organization sells items like ID cards, pins, and supplies to chapters or members, those are retail sales — it buys them tax-free for resale but must collect sales tax on the…
Is replacing an underground fuel oil storage tank a nontaxable capital improvement, even though it can eventually be taken out of service?
Yes. Installing a replacement underground fuel oil tank — poured on a concrete slab, buried, and asphalted — is a capital improvement, so the work isn't taxable. No local law forces its removal when…
Did vessels that caught live bait for sportfishing boats engage in commercial deep-sea fishing for California's watercraft exemption?
Catching live bait for sale or financial consideration was a commercial fishing operation, not mere hauling. But a vessel sale was exempt only if every other requirement of section 6368 and…
Was a vessel's use catching live bait for passenger-fishing boats and public sale a commercial use under section 6368?
Yes. Catching bait for financial consideration was a for-profit fishing operation. The vessel could qualify for the watercraft exemption only if its use also satisfied every remaining statutory and…
Could a California county buy the Norplant contraceptive implant tax-free for distribution through its health clinic?
Yes. California treated Norplant as medicine because the implanted system released hormones, and allowed the county's clinic purchase with a proper exemption certificate.
Were helicopter repair parts exempt when a pilot flew the repaired aircraft from California to its out-of-state owner?
Under the stated noncarrier assumptions, yes when the repairer hired, controlled and paid the pilot and the sales contract required outside delivery; no when the owner hired and paid the pilot.
Does a company have to charge sales tax on the full pre-rebate price when it later pays its customers a cash rebate based on their volume of purchases?
No. The Comptroller ruled that volume-based cash rebates a company pays its customers after the sale are excludable from the sales tax base, as long as they are properly documented, the tax refunded…
How did Florida's historical intangible tax apply when a Florida parent transferred receivables to an out-of-state subsidiary and the affiliates filed a consolidated return?
The out-of-state subsidiary's purchased receivables were taxable only to the extent owed by Florida-domiciled customers. The parent was not taxed on receivables transferred before January 1 if its…
Which natural-gas uses at an integrated poultry operation qualified for Florida's industrial fuel exemption, and how was mixed use reported?
Gas used to process dressed chicken for sale and to make sanitation hot water was exempt; hatchery and feed-mill gas was taxable because the chicks and feed were not sold. Rendering gas had to be…
Does a Texas contractor owe sales tax on labor to install wall-to-wall carpet, and does it matter if the job is new construction, repair, or a gutted building?
It depends on the type of property and the type of job. Labor to install wall-to-wall carpet in residential property is never taxed. For nonresidential property, labor is exempt only if the job…
Does a Texas company that reclaims land after strip mining (dirt work, fertilizing, planting, and hay production) owe sales or use tax on its equipment, and can the agricultural exemption or resale certificates apply?
The reclamation company owes tax on the machinery and equipment it uses; the agricultural exemption does not apply because the land is being restored after strip mining, not farmed. Reclamation…
If a contractor tears out a parking lot down to the soil and rebuilds it, is that taxable remodeling or tax-free new construction under Texas sales tax rules?
It is nontaxable new construction. Because the asphalt and base material are entirely removed down to the soil before the parking lot is rebuilt, the project counts as new construction rather than…
Were discounted employee product-evaluation vehicles exempt demonstrations or bona fide leases?
No. They were taxable company-car fringe benefits, not regular resale inventory or arm's-length leases; counsel recommended denying the petition.
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