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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Are a town's 'pay-as-you-throw' trash-bag fees a taxable sale of bags or a nontaxable intangible right to dispose of trash?
Not taxable to residents. A Connecticut town ran a 'pay-as-you-throw' program: residents' trash is collected only if placed in special town bags, distributed (at town hall or through retail-store…
Are wigs and hairpieces for disease-related hair loss exempt from Connecticut sales tax as prostheses?
No -- and note this ruling is OBSOLETE: DRS marks it 'not current … reference purposes only' and states it was 'obsoleted by AN 94(5),' so do not rely on it. As issued, DRS held that wigs and…
When did a piano listing business become the retailer rather than merely a broker for the owner?
It was the retailer when it possessed the piano and could complete the sale and transfer title without further owner action. A sale needing special repair approval outside the listing agreement…
Is a post-production video animation studio that adds computer-generated special effects and animation to video programs (like TV ads, courtroom presentations, and product demonstrations) at the direction of the producer performing a taxable service?
No. The Comptroller ruled that a video animation studio that adds special effects and animation to video programs under a producer's direction, with no creative control of its own over the finished…
Is computer consulting — system design, analysis, and estimating — taxable in Texas, and when does it become taxable because it's tied to a hardware or software sale?
Computer consulting charges (system design, analysis, estimating) are not taxable in Texas unless the consultant also sells the hardware or software recommended in the engagement. If all equipment…
An oil and gas services company asked the Comptroller about the sales/use tax treatment of several things: well pressure testing services, flare stack sales and rentals, other rentals/leases of tangible personal property, an environmental/energy-conservation repair exemption, whether Texas has a state income tax, and direct payment permit procedures for contractors.
Well pressure testing services are not subject to Texas sales or use tax, though they may instead be subject to the 2.42% oil well service (occupation) tax under Chapter 191 of the Tax Code. Flare…
A nursing home operator hires Texas and out-of-state contractors to do electrical repair work at its nursing homes, sometimes billed as a lump sum and sometimes with materials and labor separately stated. Should the contractor charge Texas sales tax, and if the tax is owed but not collected, does the state pursue the nursing home or the contractor?
It depends on how the contractor bills the job, not on whether the contractor is based in Texas or out of state. On a lump-sum bill (materials and labor combined into one price), the contractor…
Can a farmer or rancher file a single agricultural/farm-purposes exemption certificate with a retailer and then just sign later invoices marked 'Exempt agricultural purposes,' instead of filing a new certificate for every purchase?
Yes. A farmer or rancher can file one properly completed exemption certificate with the retailer, who keeps it on file, and afterward the purchaser can simply sign subsequent invoices stamped…
Does a Texas hauler of dirt, sand, caliche, or rock have to charge sales tax on the material or on delivery charges?
It depends on whether the material is processed. Since June 1988, the Comptroller has exempted sales of unprocessed sand, dirt, and gravel from sales tax. But processing — including crushing,…
Is natural gas used to fuel a boiler that makes steam, which then powers chemical-processing equipment, exempt from Texas sales tax, or is it too 'one step removed' from manufacturing to qualify?
No, the natural gas is not too far removed from manufacturing to qualify. The Comptroller ruled that natural gas used to fuel a boiler that heats water into steam, where the steam powers equipment…
Are sales to mixed-blood descendants of the Ute Tribe who are not themselves enrolled tribal members exempt from Utah sales tax the way sales to enrolled tribal members are?
No. Utah's sales tax exemption for reservation sales applies only to enrolled members of a tribe who live within the reservation's exterior boundaries, evidenced by a Federal Bureau of Indian…
Is a service that verifies the bond ratings in a customer's portfolio a taxable information service, even if the customer considers their portfolio contents confidential?
Yes. The Comptroller ruled that verifying bond ratings against a customer's portfolio is a taxable information service, because the bond rating information itself is general information available to…
A company tests underground storage tanks for leaks using a van equipped with a computer, to help customers comply with Texas Water Commission leak-detection regulations. Should the company be collecting sales tax on these testing charges?
No. Charges to test whether an underground storage tank leaks more than allowed by Texas Water Commission or other regulatory standards are not taxable. However, the testing company still owes sales…
A company duplicates (dubs) master audio or video tapes into copies. Does dubbing count as manufacturing or processing, and can the company get a refund or reduction of sales/use tax on its dubbing equipment?
Yes — the Comptroller confirmed that making duplicates of master tapes is processing or manufacturing, so dubbing machinery and equipment can qualify for a phased-in sales/use tax refund or…
A commercial vehicle monitoring service places decals with an 800 number on trucking/shipping company vehicles so other drivers can call in complaints about how the vehicle is being driven; the service forwards the complaint reports back to the vehicle-owning company. Is this service taxable as an information service?
No. The Comptroller withdrew its two earlier opinion letters and ruled that this vehicle-monitoring service is not taxable because it qualifies as a proprietary information service under Rule…
As a bank, I made a construction loan to a cooperative sponsor, secured by a pledge of the sponsor's unsold co-op shares, proprietary leases, and purchase-money notes. The sponsor defaulted, and I'm about to foreclose under the UCC by bidding in my share of the debt. Will I become personally liable, as 'transferee,' for any unpaid Real Property Transfer Gains Tax the sponsor owes, once I take ownership of the pledged shares and leases through the foreclosure?
No transferee liability -- a 1992 statutory amendment specifically releases a secured party from personal liability for the transferor's unpaid gains tax when it enforces its lien on pledged…
Were Florida mortgages and mortgage-modification agreements executed and recorded under a confirmed Chapter 11 reorganization plan subject to documentary stamp or intangible tax?
No. Because the instruments were executed between the mortgagors and mortgagee in accordance with a plan confirmed under 11 U.S.C. § 1129, the Department concluded that 11 U.S.C. § 1146(c) barred…
Did a Florida corporation still have to notify shareholders of the value of stock that was unlisted, restricted, or worth less than its published or traded value?
Yes. The corporation had to give affected Florida shareholders a written annual value notice even though Forms DR-616 and DR-616S were no longer required. No particular notice form was required, but…
Could a soil-remediation company buy natural gas tax-free when it sold some cleaned soil but used most of it in its own road-construction contracts?
Only in proportion to the soil produced for retail sale. Gas used to remediate soil consumed in the company's road projects did not qualify for the boiler-fuel exemption. The company had to pay tax…
Are a meat packer's feed, hay, and packaging materials exempt from Connecticut tax as materials used in fabrication?
Mostly no. A Connecticut meat-packing plant bought live horses, slaughtered and butchered them, and packaged the meat (mostly for export to Europe). DRS held that the butchering and cutting of…
Was a charge to move tangible personal property taxable when the mover had to disassemble it and reassemble it at the new location?
No. Utah law taxed installation of tangible personal property in connection with other tangible personal property, but did not tax the charge to move property. Partial disassembly and later…
Were usage-based subscriptions to dial-up statistical databases taxable when customers received everything electronically?
No. Assuming the provider delivered no reports or other tangible property, remote database access and electronically transmitted reports were not taxable.
How is sales tax charged on the installation of a new lawn sprinkler system — what part of the cost, if any, is taxed on the invoice, and at what rate?
Installing a new sprinkler system is an improvement to realty, so how tax applies depends on billing: if the installer bills a lump sum, the customer owes no tax and the installer instead pays tax…
An out-of-state company leases equipment to customers in Texas, buying the equipment from outside Texas and delivering it to various Texas locations. After the Quill v. North Dakota decision, does this lessor still have to collect and report Texas sales and use tax?
Yes. Because the lessor retains title to the equipment while it is leased and located in Texas, it is considered to have property in the state, which by itself is enough to make it "engaged in…
A general contractor has a separated contract (materials and labor billed separately) to build a new commercial building, and subcontracts landscaping (grass, bushes, trees) and a hardwired burglar alarm system to other companies who install those materials into the realty. How does sales tax apply between the subcontractors, the general contractor, and the customer — and does it matter if the job is residential instead of commercial?
The subcontractors' full charges (materials and labor) to the general contractor are taxable. The general contractor can either pay tax to the subcontractors and pass that cost through as part of…
A hotel resells telecommunications services to guests (marking up local and long-distance calls) but also uses the same trunk lines and phone equipment for its own business calls. Can the hotel buy the phone lines and equipment tax-free with a resale certificate, or get a refund of the sales tax it already paid?
No, not in full. A hotel cannot in good faith issue a resale certificate for trunk line service that it also uses for its own business calls — resale certificates may only be issued for lines…
Are charges for a children's summer camp and instructional classes (like karate, tennis, basketball, volleyball, and cheerleading) for kids ages 3-17 subject to Texas sales tax?
No. Rule 3.298(a)(2) specifically identifies children's day camps or boarding camps and instructional classes in any sport or musical discipline as non-amusement services, so charges for these camps…
Are bacterial/microbial products used by feedlots, poultry farms, swine farms and dairies to digest livestock waste in catch ponds exempt from Texas sales tax as a farm/ranch exemption item?
No. The Comptroller ruled that microbial products used to biodegrade manure and other waste in livestock catch ponds do not qualify for the farm/ranch sales tax exemption, because that exemption is…
Could a federal property clause be presumed part of a research contract merely because acquisition regulations required it, even though the executed contract omitted it?
No. The executed contract controlled; later equipment authority did not imply title passage, and reformation could not change earlier tax consequences for the state.
Could a federal contractor treat employee travel fuel and meals as Aerospace overhead resales when employees paid personally or used a company credit card?
Only company-card purchases could qualify. Personal employee purchases remained the employee's transactions even after reimbursement; the contractor never bought that property.
Could a federal contractor treat employee travel purchases made with company credit cards as exempt indirect costs under the Aerospace decision?
Yes, if the company card made the contractor the purchaser and the costs were properly allocated to government contracts containing the required title-passage clauses. Reimbursing employees for…
Are urological catheters, incontinence devices, and ureteral stents exempt from Texas sales tax as prosthetic devices, even if they are only implanted or used on a temporary basis?
Yes. Urological catheters qualify for the Texas sales tax exemption for prosthetic devices regardless of whether they are used internally or externally, and no prescription is required. The…
Sidney and Freda Esikoff filed their 1987 New York return as full-year nonresidents on Form IT-203, without checking the part-year-resident box or attaching the required Form IT-360, and later filed an amended 1987 return. When the Department audited them, they asked whether the statute of limitations had already run out on assessing additional tax for that 1987 return.
The Department didn't decide the two biggest questions - whether the return was fraudulent (which would allow assessment at any time) or whether the extended six-year period for omitting more than…
Business Operations Systems & Svcs., d/b/a Computerized Payrolls, a payroll preparation service in Cheektowaga, New York, asked whether it must furnish its own employer identification number (EIN) to its employer-clients so they can complete the WT-1 Return of Tax Withheld filed with New York State, and if so, whether it could instead give clients a different identification number.
Yes - the payroll service must furnish its own EIN to its clients, and no, it cannot substitute a different identification number. Because the WT-1 Return of Tax Withheld requires an employer to…
How did South Carolina calculate sales tax on vehicles and trailers sold to nonresidents under its July 1992 guidance?
The tax was the lesser of the tax imposed by the purchaser's state of residence or the tax imposed under South Carolina Chapter 36. No South Carolina tax was due if the purchaser's home state would…
Were plastic-wrapped trays of five or ten dozen mini-donuts and 18 or 36 muffins, marketed as party platters, exempt bakery products for home consumption?
No. Despite containing more than six bakery items, the plastic-tray packaging and 'party platter' marketing indicated immediate consumption at party occasions rather than later home consumption. The…
Were pallets sold to a farmer exempt when the farmer sold food products on them to wholesalers and did not get them back?
Yes, if the farmer used them only to hold products sold with the pallets and customers did not customarily return them; a valid certificate supplied proof.
A country club imposes a one-time mandatory assessment on its members to pay for a special county road assessment, and passes the money on to the county for use on previously dedicated and accepted roads. Is that mandatory assessment subject to Texas sales tax?
Yes. The Comptroller ruled the one-time mandatory assessment is taxable as an 'assessment or fee charged for a special privilege, status, or membership classification' in a private club under Rule…
A monument company designs, letters, and installs headstones and vaults; inscribes dates of death on existing stones; and does jobs like moving/leveling headstones or adding curbing and marble to cemetery lots. Which of these are taxable, and how does the tax apply?
It depends on the job. Designing, lettering, and installing a headstone or vault makes the company a contractor improving realty: under a lump-sum contract it pays tax to its own supplier on its…
A taxpayer who was long domiciled in New York City sold his co-op apartment, bought a Connecticut home he intends to make permanent, registered to vote and got a driver's license in Connecticut, moved his company's headquarters there, and will spend fewer than 183 days a year in New York - while still keeping his Montauk vacation home, New York club memberships, and relationships with New York bankers, advisers, and attorneys. Has he changed his domicile from New York to Connecticut and become a New York nonresident?
The Department declined to decide whether Taxpayer actually changed his domicile, because that is a question of fact that falls outside the scope of an Advisory Opinion - an Advisory Opinion can…
What significant South Carolina tax changes were enacted in the later part of the 1992 legislative session?
The update covers miscellaneous, income, and sales-and-use-tax changes, including biennial licenses, a 5% car-rental surcharge, a higher deed tax, solid-waste rules, nonresident-owner withholding,…
What did South Carolina announce about public access to Tax Commission decisions through June 1992?
Sanitized decisions and an index covering 1987 through June 30, 1992 were available for public review. The official PDF omits the promised index, and copies were not then sold because of budget limits.
A Texas general contractor has a written separated new construction contract with a nonprofit entity but sends monthly lump-sum progress billings (only separated into materials/labor/profit in a final summary billing). Does that billing practice turn the whole contract into a lump-sum contract for sales tax purposes?
No. Monthly lump-sum progress billings alone do not convert a written separated new construction contract into a lump-sum contract. But lump-sum progress billings without any written separated…
A pipeline contractor asks about the sales tax treatment of four kinds of jobs: removing and abandoning a pipeline, abandoning a pipeline in place and filling it with concrete grout, replacing an overhead pipeline crossing with a new underground pipe tied into the old line, and removing/disposing of old pipe. How is each taxed?
It depends on the job: (1) removing and abandoning a pipeline is not taxable unless it's done as part of a repair; (2) abandoning a pipeline in place and filling it with grout was first ruled…
A pawnbroker was previously told (in a March 13, 1992 letter) that it should not charge sales tax when a customer redeems their own pawned property. Is that always true, or does it depend on whether the pawnbroker already declared the goods forfeited?
It depends on timing. If the original owner redeems the pledged property before the pawnbroker has exercised its option to treat the goods as forfeited, that redemption is not a taxable sale. But…
If a pawnshop customer gets their pledged goods back after the redemption period has passed, is that a taxable retail sale, or is it still just a loan repayment?
It depends on whether the pawnbroker has already recorded the goods as forfeited. If the pledgor redeems the goods before the pawnbroker exercises the forfeiture option and records them as…
Was a free car rental earned through a frequent-renter program subject to Florida sales tax, use tax, and the rental-car surcharge?
The renter owed no sales tax because the free rental produced no gross proceeds. The rental company, however, owed use tax on the value expended for the promotional rental and the $2-per-day…
Once a Utah facility is certified for the pollution control sales/use tax exemption, what counts as a tax-free 'qualifying purchase' -- equipment, consumable supplies, and electricity used to run the certified equipment?
It depends on the category. Purchases of certified pollution control equipment, and replacement equipment/parts to repair it, qualify for the exemption. Consumable supplies, chemicals, and cleaning…
Did plotting, scanning, and large-document enlargement or reduction qualify as manufacturing so the service bureau's equipment purchases were exempt?
No. Laser and color plotting were customized professional services like drafting or architecture; enlargement and reduction resembled photocopying rather than offset printing; and scanning was…
Did Utah's waste-tire recycling fee apply to an interstate carrier's vehicles when the seller delivered them outside Utah?
No fee was due when the seller delivered the purchased vehicles outside Utah because the tires were sold and delivered out of state. If vehicles were sold and delivered in Utah, however, the fee was…
When a financed vehicle is repossessed, which lender is entitled to a sales tax refund on the unpaid purchase price -- and does it matter whether the loan came directly from a bank or was assigned to the bank by the selling dealer?
It depends on how the loan originated. Utah Code § 59-12-107(8) lets the SELLING DEALER get a refund of sales tax paid on the unpaid purchase price when a financed item is repossessed, and Rule…
When a manufacturer submits a list of capital equipment purchases for a plant expansion, how does the Utah Tax Commission decide project-by-project (and even unit-by-unit within the same purchase order) which items qualify for the manufacturing sales tax exemption?
It depends item by item, and even unit by unit within the same purchase. Equipment that creates new capacity, launches a new product line, or expands production qualifies for Utah's manufacturing…
Did a commercial printer have to report and remit sales tax for the return period when the customer had not yet paid the invoice?
Yes. Utah required tax to be remitted with the return for all sales made during that return period. A sale had to be reported for the period in which it was made even if the customer account had not…
Were meals sold by a county-run residential school to youth and senior students exempt, and were meals bundled with outside facility rentals exempt too?
Student meals were exempt because the county facility was a public school with scheduled, credentialed instruction. Meals bundled with outside rentals were taxable.
A company already owns and has paid tax on computer equipment. It then transfers title to a lender for cash (roughly 10 times the equipment's fair market value) and simultaneously leases the same equipment back, keeping possession, depreciation for federal income tax purposes, and all the risks and costs of ownership. Are the lease payments subject to Texas limited sales tax?
No. Because the borrower never gave up possession, risk of loss, or (for federal income tax purposes) title, and the sale price and buyback price were tied to the amount of funds advanced rather…
Does South Carolina's June 1992 policy index PDF contain the promised document entries?
No. The official two-page PDF stops after listing five major categories and contains no document-by-document entries.
Were a long-term lease of tax-paid equipment to a financer and the simultaneous sublease back to the owner subject to California tax?
No, assuming California acquisition tax was timely paid. That made the same-form prime lease and simultaneous sublease tax-paid.
Did a commissioned California firm answering prospects' basic software questions create use-tax collection responsibility for an out-of-state seller?
Yes under the historical rule applied. The California firm answered prospects' questions to help make sales and was paid only when a sale occurred, making it a sales agent under section 6203(b).
Was the homeowners' prime lease to their bed-and-breakfast corporation exempt when the corporation sublet 98% of the space to guests and retained 2% for kitchen use?
The homeowners did not have to collect tax on the prime lease because the registered corporation sublet 98% of the premises, collected tax from guests, retained only an incidental 2%, and gave the…
Were a private club's separately stated gratuities exempt from Florida sales tax when members could choose zero, 15%, or another amount?
Yes. The gratuities were not taxable because members could change them to any amount, including zero; the club stated them separately; and it distributed them fully to employees at least every six…
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