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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Who consumed asphalt when one contractor produced paving material and another placed it under contracts signed in a claimed joint venture's name?
The acting combination consumed asphalt under the construction contracts, but the producing contractor made taxable retail sales to that combination measured by its material bid line items.
Is labor to power-wash and acid-clean hotel air conditioning units taxable in Texas, or is it exempt real property maintenance?
It depends on how the unit is installed. Units installed into a window opening are tangible personal property, so the full charge to power-wash or acid-clean them is taxable. Units installed into…
Does a research and development joint venture's purchase of software with a useful life over six months qualify for the Texas Section 151.348(b) sales tax exemption?
Yes. The Comptroller confirmed that a company qualifying as a joint research and development venture under 15 U.S.C. Section 4301 is exempt from sales tax on taxable items with a useful life over…
Were individualized golf handicap and tournament-report services taxable, and how were printed scorecards and labels treated?
The handicap and tournament services were exempt because the customer owned the data, each report was individualized, and the provider could not reuse or distribute it. Generic scorecards and…
When did California treat a vehicle, vessel, or aircraft as first functionally used outside the state rather than in California?
Designed purpose controlled. Commercial carriers needed outside cargo, passengers or a specific California assignment; personal craft were used on the inbound trip.
When did California treat a vehicle, vessel, or aircraft as first functionally used outside the state rather than in California?
It depended on the property’s designed purpose. Commercial carriers needed an out-of-state load, passenger group, lease, or charter; personal-use craft were functionally used on the first trip…
Is wrapping and packaging material used to ship shucked and unshucked oysters exempt from Texas sales tax?
Through September 30, 1991, wrapping and packaging used to ship both shucked and unshucked oysters to customers was exempt from Texas sales tax. After that date, the general…
Does a Texas auto shop owe sales tax on window tinting, alarm installation/repair, and cellular phone sale/installation/repair for vehicles?
It depends on the activity. Tinting a vehicle's windows and repairing a customer-owned alarm are treated as nontaxable motor-vehicle maintenance/accessory-repair labor. But selling and installing a…
A New York S-corporation shareholder who moved to Virginia asks three questions: (1) are dividends paid out of his corporation's accumulated earnings from the years it was a New York C corporation taxable to him as a nonresident for New York personal income tax purposes; (2) if he later buys another business in New York, does that purchase - by itself, whether he moves back right away, moves back later, or never moves back and runs it from Virginia - change his New York residency status; and (3) if he doesn't buy the New York business and simply stays in Virginia, will he be treated as a New York nonresident?
Dividends a nonresident shareholder receives that represent a distribution of the corporation's accumulated earnings from years it was a New York C corporation are not New York-source income under…
Were condominium owners' long-term lease payments for developer-owned recreational facilities taxable as rent or admissions in Florida?
The Department's final stated position was that payments by the condominium unit owners for undivided leasehold interests in the recreational facilities were exempt under section 212.031(1)(a)4. and…
Is the natural gas used by a tortilla factory (tortilleria) exempt from Texas sales tax as gas used in manufacturing, or is it taxable commercial/residential use?
Taxable. The Comptroller ruled that gas used by a tortilleria to make tortillas (and other items like barbacoa) that are packaged warm and sold for immediate consumption through a drive-up window,…
Is boarding up or tarping a damaged home or business to protect it from vandalism or weather a taxable sale of materials, or a nontaxable improvement to real property?
Taxable. The Comptroller ruled that temporarily boarding up or tarping a damaged residence or business is a sale and installation of tangible personal property (plywood, boards, tarps), not an…
Did a partnership and tenant corporation qualify as related entities for Florida's former commercial-rent debt-payment rule when the two partners owned 78% of the corporation?
No. The partnership's two equal owners held only 78% of the tenant corporation, while unrelated shareholders held 22%, so the entities were not related under the former rule. The Department…
Were a city's direct purchases of building materials exempt when its design-builder and subcontractors bore the risk of loss before installation?
No on the original facts. Even though the city issued purchase orders and paid vendors, the materials were not exempt because the design-builder and subcontractors bore the risk of loss before…
Was a videotape documenting Oakland fire cleanup and showing government and the public how cleanup funds were spent a qualified motion picture?
Yes. It served commercial or industrial purposes and a local government, so the charge was nontaxable and the consultant consumed production materials.
Which parts of a county computer-system installation were taxable: hardware, data conversion, software, training, or travel?
Hardware and software installation were excluded, data conversion was taxable, optional training was generally excluded, and travel followed the related task.
Does Texas charge sales tax on telemanagement services that get refunds for clients who were overbilled by telecom companies?
No. The Texas Comptroller ruled that telemanagement services consisting of obtaining refunds for clients who were overbilled for telecommunications services and equipment are not subject to Texas…
Does a Texas laboratory that tests soil, water, wastewater, and materials samples and sells the results as a report have to charge sales tax on that service?
No. The Comptroller ruled that a laboratory's testing and analysis of soil, water, wastewater, concrete, and metal samples is not a taxable service under the information services rule. But the lab…
Were notes, mortgages, liens, and future advances under a confirmed Chapter 11 plan exempt from Florida documentary stamp and historical intangible taxes?
Yes, while the transactions conformed to the confirmed Chapter 11 plan and court order. The described notes, mortgages, guarantees, liens, and plan-authorized advances were exempt, but advances made…
How are hazardous-waste cleanup, remediation, and related site services taxed under Connecticut's services-to-real-property tax?
It splits several ways. A company cleaned up hazardous waste at industrial and commercial sites -- decontaminating facilities and running groundwater/soil remediation. Connecticut taxes services to…
Are environmental and safety training and consulting services for a manufacturer taxable business management services in Connecticut?
It depends on whether it's training or consulting. A manufacturer that generates hazardous waste hired a provider for a mix of environmental and safety services. DRS split them under the…
If a health club member gets a written prescription from a doctor for an exercise program, is the membership fee exempt from Texas sales tax?
Only partly, and only for some members. The Comptroller ruled that a health and fitness facility's membership and initiation fees are exempt from sales tax as an amusement service only to the extent…
Is an electric cart bought as a substitute for a wheelchair exempt from Texas sales tax?
Yes. The Texas Comptroller confirmed that an electric powered cart bought to use in place of a wheelchair is exempt from Texas sales tax, and no doctor's prescription is required for that exemption.
How did Florida apportion the income of a mutual-fund distributor with field wholesalers in other states?
The company could apportion because its out-of-state wholesalers could create taxability elsewhere. Florida treated it as a financial organization using property, payroll, and sales factors, with…
When did South Carolina Revenue Ruling 92-10 apply casual excise tax, use tax, or no tax to transfers of vehicles, motorcycles, boats, motors, and airplanes?
The historical ruling used a transaction matrix. An in-state purchase triggered casual excise tax at titling if sales tax had not been paid. An out-of-state retailer purchase generally triggered use…
Could a related corporation with no federal contracts allocate its overhead purchases to an affiliate's government contracts under Aerospace?
No. The entities were legally separate and the purchasing corporation was not a party to the federal contracts, so its overhead could not be allocated to them.
Did federal title and bank-account clauses make dried sand bought with federal funds a direct sale to the United States rather than a taxable contractor purchase?
No. The captive DOE construction contractor consumed the sand in improving California realty, and federal funding or agency language did not shift the tax to the government.
Does a shop that adds armor and modifies brakes/suspension on motor vehicles have to charge sales tax on the whole job, and can it buy the armor materials tax-free?
Yes. Texas treats this armor and brake/suspension work as taxable 'remodeling,' so the shop must collect tax on its total charge — materials, skill, and labor combined. The shop can buy incorporated…
Did filing only a Florida UCC-1 for collateral securing an out-of-state loan trigger documentary stamp tax, and could the borrower claim the lender's refund?
No tax was due if no obligatory loan document was signed, delivered, filed, or recorded in Florida with the UCC-1. The borrower could apply for refund of the lender's $4,800 payment if the…
Was Florida documentary stamp tax due on a line-of-credit note signed, delivered, and accepted in Georgia but held and funded by a Florida lender?
No tax was due on the note because the loan documents were signed and delivered in Georgia. But the security agreement would become taxable if filed with the Florida UCC-1 financing statement or…
Could a Florida clerk knowingly overstamp a deed to make a $140,000 real-estate sale appear to have $160,000 of consideration?
No. The clerk had to affix the proper documentary stamp tax calculated from the actual consideration certified on the statutory return and could not knowingly use either a deficient or inflated…
Was Florida documentary stamp tax due when a New York transfer agent re-registered plan-held shares and mailed certificates to Florida participants?
No. The original issue occurred in New York when authorized but unissued shares entered the plan's book account. Later re-registration into a participant's name and mailing the certificate to…
When did renewal or consolidation of a revolving promissory note avoid additional Florida documentary stamp tax?
A renewal avoided added tax when it did not exceed the permitted unpaid balance plus undisbursed credit and met the original-note, tax-payment, and obligor conditions. If a renewal exceeded that…
Under the 1992 rules, did aircraft fuel qualify for the air-carrier exemption when the flight went first to Alaska or Hawaii?
No. Alaska and Hawaii were not foreign destinations; the letter treated the exemption as applying when the flight's first destination was foreign.
Did fixed rent qualify for California's historical fixed-price lease protection when mandatory maintenance and tax charges could increase?
No. Mandatory maintenance could increase, so all lease costs were not fixed; the tax clause also passed later tax increases to the customer.
When can a Texas retailer accept an export certificate in good faith, and when does a sale to a Mexican buyer become taxable?
A Texas retailer cannot accept an export certificate in good faith if it already knows the goods have not yet left the country. But the retailer also does not have to collect sales tax until the…
Which surveying services are taxable and which are exempt under Texas sales tax?
It depends on the type of survey. Surveys that establish or determine a property boundary (boundary surveys, lot staking for conveyance, platting) are taxable. Surveys that only locate structures…
Can a paging company give its local telephone company a resale certificate for the incoming phone lines and numbers it leases and then provides to its paging customers?
Yes. Because the paging company passes the leased telephone numbers and incoming lines through to its paging customers as part of a taxable paging service, it may issue a resale certificate to the…
Can a Texas business file sales tax returns based on a 4-4-5 (or 5-4-4) retail fiscal accounting calendar instead of standard calendar months?
Yes. Texas lets a business file sales tax returns on its 5-4-4 (or similar 4-4-5-style) fiscal accounting calendar instead of strict calendar months, as long as returns are still due the 20th and…
Is a one-time sale of the right to reproduce a photograph subject to sales tax, and what about buying the photograph outright?
Selling the one-time right to reproduce a photograph is not taxable — it's treated as a royalty, and the customer only takes temporary custody. But buying the photograph outright from the…
Does a veterinary clinic collect sales tax on pet food and pet supplies, and what about grooming — given the special veterinarian tax rules?
A veterinarian pays sales tax when it buys pet food, supplies, and medicine, and does not collect tax when it resells those animal-care items to customers. But grooming is a taxable service, so the…
Does a company that arranges repair and maintenance work through subcontractors and bills customers a marked-up price owe sales tax on its charges?
Yes. A company that contracts to have repair and maintenance done, subcontracts the actual work, and bills the customer a marked-up price is acting as a prime contractor. Under Tax Law § 1105(c)(5)…
Does a document-plotting, scanning, and reproduction business qualify for Utah's manufacturing sales tax exemption on its equipment as a separate manufacturing establishment?
No. The Tax Commission ruled that laser plotting, color electrostatic plotting, document enlargement/reduction, and document scanning are service activities (comparable to drafting, photocopying,…
If a Texas trucking company's driver buys a replacement tire in another state and pays that state's sales tax, can the Texas tire dealer credit that tax against the Texas use tax owed when the truck returns to Texas?
Yes. Texas use tax is owed on tires bought outside Texas only if the truck carrying them comes back to Texas within one year of purchase. When it does, the dealer can credit any sales or use tax…
Does a Texas broker owe sales tax on the fees earned brokering animal fat and byproducts sold to Mexican buyers, or on the underlying sales themselves?
No. The Comptroller ruled that a broker's fees for arranging sales of animal fat and byproducts between a seller and Mexican buyers are not subject to Texas sales tax. The underlying sales…
Does a city Bureau of Vital Statistics have to charge sales tax when it sells summary lists of births in response to verbal open-records requests?
No. The Comptroller ruled that summary lists of births sold by a city Bureau of Vital Statistics are exempt from Texas sales tax under Rule 3.341(a), because the office is required under the Texas…
Does a tenant owe sales tax on removing and replacing fuel tanks when the property is leased from a state agency and title to the improvements vests in that agency?
No tax is due. Because the tenant leased the site from the New York State Department of Transportation — an exempt agency under Tax Law § 1116(a)(1) — and title to the tanks vested in the Department…
Could California offset a taxpayer's refund against that taxpayer's assessment while a redetermination petition was still pending?
Yes. The memorandum concluded that the underlying tax was already due and payable even though the determination was not yet final.
Were a Florida gas utility's charges for transporting customer-owned natural gas subject to gross receipts tax when another seller sold the gas outside Florida?
No. The utility received payment only for transporting customer-owned gas purchased from another seller outside Florida, not for selling the gas itself, so the transportation receipts were not…
Did Utah's revised lease rule apply retroactively, and how were operating leases and conditional-sale leases taxed?
The 1991 rule change applied prospectively. A conditional-sale lessee—not the lessor—could elect lease treatment, taxing total payments, or sale treatment, taxing the purchase amount without…
Were Consumer Reports, Zillions, Travel Letter, and Consumer Reports on Health exempt when published by a section 501(c)(3) organization without commercial advertising?
Yes, if each was a periodical. Counsel received no copies and expressly assumed, rather than determined, that status.
Was an aircraft bought for resale when the buyer planned to transfer it solely for first-issue stock to a new corporation that would run the charter business?
No. The buyer acquired it for a nontaxable corporate contribution, not resale, so the buyer's use was taxable. A qualifying lease to the new carrier could produce a different result.
Is a discounted group-sales amusement-park ticket taxable when admission is called 'free,' and is installing a fiberglass tubeslide a nontaxable capital improvement?
The whole group ticket is taxable unless it separately states admission and rides. An amusement park's ride charges escape tax only when its pay-one-price ticket separately states the taxable…
Is an anesthesia ventilator exempt from Texas sales tax as a prosthetic device, even though the anesthesia machine it plugs into is taxable?
Yes. The Comptroller ruled that anesthesia ventilators, which mechanically breathe for a patient who cannot breathe on their own under anesthesia, qualify as exempt prosthetic devices under Rule…
Were field layout, attachment, and removal charges connected with rented sprinkler pipe included in taxable rent?
No. Layout and attachment were excluded installation labor, and pipe removal was an optional service; both were removed from the tax measure.
Did a buyer's convenience-termination right defeat fixed-price rate protection when the buyer still had to compensate the seller?
No. The remaining payment duty made termination conditional rather than effective solely on notice, so the two pre-cutoff sales contracts qualified; later change orders did not.
Did change orders inherit a main contract's protection from the July 15, 1991 sales-and-use-tax rate increase?
No. Each change order was a separate contract that had to qualify independently; the post-cutoff change orders here were subject to the new rates.
Could a Florida studio claim the production-equipment sales-tax refund when providing production or postproduction services without being the producer?
Yes. The refund exemption was not limited to producers, sub-producers, or co-producers; any purchaser or lessee meeting the equipment and exclusive production-use tests could qualify. Editing,…
Under South Carolina Revenue Ruling 92-9, could banks request return extensions, use a noncalendar tax year, and seek refunds of pre-1991 bank-tax overpayments?
Yes, subject to the historical procedures. A bank could request an extension for good cause by the original due date, filing a tentative return showing 100% of anticipated tax and remitting that…
Did South Carolina Revenue Ruling 92-8 permit bonus-number, bonus-card, progressive, wheel-or-balloon, or odd/even cover-all bingo games?
No. The historical ruling rejected all five formats. Bonus-number and bonus-card prizes improperly increased the announced prize; progressive play offered multiple prizes and reused covered spaces…
How these rulings are useful
- See how the rule applies: A letter ruling shows how a state revenue department actually applied the tax law to a specific business and set of facts.
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