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 a federal real-property improvement contract entered before October 2, 1984 qualify for Texas's prior-contract exemption?
Yes. The letter said the federal real-property improvement contract entered before October 2, 1984 qualified for the prior-contract exemption from the stated historical 4 1/8% sales tax.
Was a separately stated charge for laboratory analysis of diesel-engine lubricating oil taxable in Texas?
No. The internal Tax Policy memo said a separately stated charge for testing diesel-engine oil was not taxable when performed alone, during unrelated repairs, or during engine repairs.
How did Texas tax oilwell pump-unit motor work, control-panel repairs, incidental charges, and overhead power-line construction?
Motor rewinding, installing a repaired motor, control-panel and cable repairs, and related incidentals were taxable. Separately stated labor to set poles and build new overhead power lines was not, wh…
When were Texas installation and repair labor for orthopedic or prescription therapeutic equipment exempt from tax?
Separately stated installation labor was not taxable. Repair labor was exempt for orthopedic equipment or prescribed therapeutic equipment when tied to the prescription; repair of nonexempt equipment …
Was testing blowout preventers a taxable transaction in Texas?
No. The Comptroller said the described blowout-preventer testing was not a taxable transaction, without explaining the testing method or legal basis.
Could a corporation lease employee parking with a resale certificate when it charged some employees but let others park free?
Spaces relet to employees for $50 could be leased with a resale certificate, and the corporation collected tax on the employee fee. For spaces provided free, the corporation had to pay tax on its $100…
Were Texas packing, crating, and shipping labor and the related packing materials taxable for domestic and international shipments?
Packing, crating, and shipping labor was not taxable. Materials protecting items shipped outside U.S. territorial limits could be bought with an exemption certificate, while materials for U.S. shipmen…
How did Texas require a direct-sales organization to collect and report state, city, and MTA tax for independent salespeople?
The organization was the seller responsible for collection and remittance based on suggested retail price. Independent sellers did not need permits or returns, and city or MTA tax had to be reconciled…
Was a Texas laundromat's wash-and-fold service charge taxable?
Yes. The Comptroller said the laundromat's entire wash-and-fold service charge was taxable.
How did Texas's October 2, 1984 tax change apply to seasonal and month-to-month fur storage already underway?
Seasonal storage begun before October 2, 1984 stayed nontaxable even with monthly payments. Month-to-month storage was taxable for periods beginning after that date; the source's example has conflicti…
Were State Fair of Texas carnival ride tickets and admissions taxable when the fair was a co-producer?
No. After reviewing the fair's midway expenses and contract, the Comptroller concluded the State Fair was a co-producer of the carnival, so ride tickets and admissions were not taxable. Tax already co…
New York Advisory Opinion TSB-A-84 (4)I: If a New Jersey resident wins a New Jersey lottery prize and later moves to New York, will the remaining prize installments be subject to New York personal income tax?
No. The Department ruled that a New Jersey lottery winner's remaining prize payments are accrued - and therefore excluded from New York tax going forward - once he becomes a New York resident, because…
If a company claimed the investment tax credit for several years on property that was also eligible for the (larger) eligible business facility credit, can it go back and amend its returns to switch to the eligible business facility credit instead?
Yes, within the normal refund statute of limitations. Flexovit USA, Inc. held Job Incentive Board certificates of eligibility for an eligible business facility for 1978-1981, but claimed only the inve…
Two affiliated companies share one office and split their combined operating expenses based on relative sales, with the company that overpaid its share reimbursed by the other. Does that reimbursement count as a 'business receipt' in the receipts factor used to calculate New York's business allocation percentage?
No. Mr. Daneli, Ltd. and its affiliate Pateli Fashions, Inc. -- both clothing manufacturers sharing one office, employees, and space -- apportion their combined operating expenses based on each corpor…
When were Texas zoo admissions, rides, tours, tobacco sales, and vendor commissions taxable?
Admissions and society-provided rides or tours were nontaxable if the zoo operator proved 501(c)-type exempt status, but taxable if it was for-profit. For-profit contractors' rides and tobacco sales w…
Was electricity purchased to transmit cable-television signals exempt from Texas sales tax?
No. The Comptroller said electricity purchased to transmit cable-television signals was not exempt from sales tax.
Was repair labor taxable when a manufacturer paid the full cost under its warranty, and how were those charges reported?
No tax was due on repair labor when the manufacturer paid the entire warranty-repair cost. The repairer had to keep warranty records and could deduct charges to the manufacturer from gross sales when …
When a waterproofing contractor repoints mortar, recaulks joints, and reroofs a building, which parts are taxable repairs and which are tax-exempt capital improvements?
Most waterproofing work — repointing mortar, recaulking joints, and rebuilding masonry — is a taxable repair of real property, but re-covering and insulating a complete roof is a tax-exempt capital im…
Is the electricity a manufacturer uses to light its production facility exempt from sales tax under the production exemption?
Electricity used to light a manufacturing plant is taxable — it is not used 'directly and exclusively' in production, so it fails the § 1115(c) exemption that covers power running the production machi…
How does a registered motor-fuel distributor that sells gasoline through its own stations compute the sales tax, and when is the tax due?
A registered motor-fuel distributor that sells gasoline through its own retail outlets must compute sales tax on the statutory selling-price base — not on its own purchase price — and the tax becomes …
Which pieces of a computer system that produces NC control tapes for exempt factory machines qualify for New York's production-machinery exemption?
Of a five-machine computer system that produces NC control tapes, only the tape punch unit — used exclusively to punch the tapes — is exempt production machinery; the computer, disc drive, plotter, an…
When an advertising supplement is inserted into a shopping paper, is the supplement's area counted in the percentage of the publication devoted to advertising?
When an advertising supplement is included as part of a shopping paper, the area of that supplement is not counted in computing the percentage of the publication's printed area devoted to advertising …
Is reconditioning already-installed kitchen cabinets — new doors, drawer fronts, hinges, pulls, and veneers — a taxable repair service or a tax-exempt capital improvement?
Reconditioning already-installed kitchen cabinets is a taxable repair/servicing of real property, not a tax-exempt capital improvement, so the contractor must charge sales tax on the whole job. Nu*Loo…
Are charges to pick up containers of chemical waste from a plant and deliver them to a treatment/disposal company subject to sales tax?
Charges to pick up filled chemical-waste containers from a plant and haul them away are taxable trash removal — a service to real property under § 1105(c)(5) — even though the separate treatment and d…
Is a common carrier's satellite up-linking and down-linking of television signals taxable telephony/telegraphy, and is its transmission equipment exempt?
A common carrier's satellite up-linking and down-linking of television signals is taxable 'telephony and telegraphy' under § 1105(b) — not exempt cable-TV entertainment — but the receipts are exempt w…
Are a telephone company's charges for installing and repairing telephone systems subject to sales tax, and does it matter whether repair equipment is used?
Charges for installing and repairing telephone equipment are taxable, and repair charges are taxable whether or not repair equipment is used; the only relief is where equipment is sold installed as a …
Is a general contractor's payment to an excavation subcontractor a taxable equipment rental, or an exempt service that's part of a capital improvement?
A general contractor's payment to an excavation subcontractor is a nontaxable service, not a taxable equipment rental, because the contractor has no right to direct and control the equipment or operat…
In a car lease where the customer trades in a vehicle, is the trade-in allowance included in the sales tax base or excluded?
A trade-in vehicle accepted in part payment and intended for resale is excluded from the sales tax base even in a lease, so tax is measured only by the cash portion — here $14,000, not the full $18,00…
When did Texas treat commercial refrigeration, cooking, HVAC, and exhaust equipment as personal property or real property for repair-labor tax?
Repair labor on personal property was taxable, including commercial refrigerators and cooking equipment merely attached to a wall or floor. Labor on built-in real-property equipment, central HVAC syst…
Was labor to repair or service an above-ground or below-ground swimming pool or spa taxable as work on real property?
Repair or service labor on a permanent real-property improvement was not taxable. A below-ground pool qualified, as did an above-ground pool or spa attached to a deck with fill-and-drain plumbing inco…
Was the sale of advertising space in Texas newspapers and magazines taxable?
No. The Comptroller said the sale of space in newspapers and magazines was not taxable.
Were museum admission charges sold by a Texas tax-exempt organization taxable?
No. The Comptroller agreed that the tax-exempt organization's museum admission charges were not taxable, while stating that this exemption on its sales applied only to amusement services.
Were materials for federal real-property lump-sum contracts bid before October 2, 1984 exempt under Texas's prior-contract rule?
Yes. Materials bought for the described federal real-property lump-sum contracts bid before October 2, 1984 qualified for the prior-contract exemption, which the letter said remained valid only throug…
Which tax-exempt park-board admissions, rentals, parking fees, equipment rentals, and vending-machine sales were taxable in Texas?
The listed park, museum, fishing, bumper-boat, locker, and pavilion charges were nontaxable for the exempt Park Board. Vending sales, civic-center parking, and movable-equipment rentals were taxable; …
Were annual-fair admissions and extra ride or game charges taxable when a tax-exempt organization or a for-profit operator provided them?
Fair admissions were not subject to state or city sales tax because the tax-exempt organization sold the amusement service. Extra amusements were exempt only when it provided them directly; for-profit…
Were costs of storing, preserving, and towing an impounded vehicle taxable under Texas's Abandoned Motor Vehicle Act process?
Storage and preservation costs were taxable and the tax was deducted from sale proceeds before payment to the owner or lienholders. Separately stated charges such as towing were not taxable.
New York Advisory Opinion TSB-A-84 (3)I: How is a nonresident employee's sick leave and vacation pay allocated to New York if she worked entirely within New York during the year, and can a nonresident couple claim the federal marriage penalty deduction based on the lower-earning spouse's out-of-state income?
Sick leave and vacation pay are allocated using the same working-days method used when a nonresident works partly in and partly out of New York - and since the wife here had no non-New-York working da…
New York Advisory Opinion TSB-A-84 (2)I: If someone sells New York real property in exchange for a private life annuity and then moves out of New York, must the future annuity payments be accrued and taxed all at once under New York's change-of-residency rule?
No. The Department ruled that a private life annuity's future payments are not accruable under Tax Law § 654(c)(1) when the taxpayer changes from resident to nonresident, because the amount ultimately…
New York Advisory Opinion TSB-A-84 (1)I: If an IRA's funds are invested entirely in tax-exempt New York and Puerto Rico municipal bonds, is the IRA distribution still tax-exempt when withdrawn?
No. The Department ruled that even though interest on New York and Puerto Rico municipal bonds is normally excluded from federal gross income under Internal Revenue Code § 103, that exemption doesn't …
Was leasing propane tanks to Texas customers taxable, and could the lessor buy the tanks with a resale certificate?
Yes. The propane-tank leases were taxable, and the lessor could give its supplier a resale certificate instead of tax when acquiring the tanks for lease.
Were major-appliance repair parts and labor taxable when the manufacturer paid the full warranty-repair cost?
No. Repair parts and labor were not taxable when the manufacturer paid the entire cost under its warranty. The repairer had to keep records showing that the parts and services were for manufacturer-wa…
Which Texas charges for pet grooming, boarding, training, and handling were taxable?
Pet grooming was taxable. Charges for pet boarding, training, and handling were not taxable.
Does an advertising agency's purchase order disclose principal-agent status clearly enough to buy materials as its client's agent for sales tax purposes?
An advertising agency's purchase order that says it is 'an accredited advertising agency and as such' acting as agent for its client does not clearly disclose principal-agent status, so the agency is …
Could a Texas retailer round a sales-tax rate when its cash register could not program the full rate?
No. The law did not permit rounding the rate. If the retailer rounded up, it had to remit the extra tax collected; if it rounded down, it had to pay the difference between tax collected and tax actual…
How did Texas tax financing leases of removable energy-management systems, including demonstration units, interest, and installation charges?
A financing lease was a sale, taxed at possession or the first payment due date. Demonstration units were taxed when the lease was signed. The full lease was taxable unless interest and installation w…
Which Texas storage-stall charges for automobiles, recreational vehicles, trailers, and a boat with its trailer were taxable?
Storage charges for automobiles, recreational vehicles, and trailers became taxable October 2, 1984. A single charge for storing a boat together with its trailer was not taxable.
Was a lump-sum architectural-model project a taxable sale of a model or a real-property construction service in Texas?
It was a taxable sale of an architectural model, not a real-property contract. Tax applied to the sales price including materials and labor, while materials incorporated into the model could be bought…
Was electricity used to extract oil from the ground exempt from Texas sales tax, and what certificate was required?
Yes. The Comptroller said electricity used to extract oil from the ground was specifically exempt, and the purchaser had to give the utility company an exemption certificate.
Was a Texas utility's minimum bill taxable when the meter appeared to show zero natural-gas or electricity consumption?
Yes, unless conclusive evidence showed no consumption. The minimum bill was part of the utility's gross receipts and presumed taxable even when the meter face appeared to show zero use.
Did Texas require colleges and universities to collect tax on student and faculty parking permits and fees in 1984?
No. On September 25, 1984, Comptroller Bob Bullock reversed an earlier September 17 instruction and said colleges and universities did not need to collect tax on student and faculty parking permits an…
Was an employer-paid desk coffee service taxable, and which disposable and reusable items could the provider buy tax-free?
The provider collected tax on its total coffee-service charge to the employer. Nonreusable items furnished with the coffee could be bought tax-free, while reusable items and taxable supplies used in t…
When were bicycle-race entry fees nontaxable, and were practice admissions and annual track memberships taxable in Texas?
A contest entry fee was nontaxable if it met the stated competition-and-prize test or was required to use the facility. Practice admissions were taxable, and the annual membership fee became taxable O…
Was pure masonry cement subject to Texas sales and use tax, and what happened when it was mixed with other substances?
Pure masonry cement was not subject to sales and use tax because it was taxed under another law. Cement mixed with sand, gravel, or any substance other than water became taxable.
How did Texas tax parking fees, separately stated towing and returned-check charges, government parking, consulates, supplies, and operator reporting?
Parking fees were taxable, but separately stated towing and returned-check charges were not. The operator or owner reported tax based on who received receipts, government employees were not exempt, an…
Were railroad crossties shipped into Texas exempt as supplies essential to operating locomotives and trains?
Yes. The Comptroller treated railroad ties as supplies essential to train operations under Section 151.331, so the seller did not collect Texas use tax when the purchaser issued an exemption certifica…
Were entry fees to professional golf tournaments and charity pro-am events taxable when charged by a nonprofit organization?
No. Entry fees to both professional golf tournaments and charity pro-am events were not subject to state sales tax when charged by the nonprofit organization, which had to keep written proof of its IR…
How did Texas's October 2, 1984 amusement tax apply to private health-club memberships, dues, initiation fees, and existing contracts?
Private health-club membership fees and monthly dues became taxable October 2, 1984. Preexisting contracts remained exempt for their term, and pre-October 2 payments were exempt even for later-startin…
How did Texas's October 2, 1984 amusement tax apply to private figure-salon memberships, dues, initiation fees, and existing contracts?
Private figure-salon membership fees and monthly dues became taxable October 2, 1984. Preexisting contracts remained exempt for their term, and pre-October 2 payments were exempt even for later-starti…
Were admissions to live-entertainment performances taxable in Texas, and did nonprofit amusement-service sales qualify for exemption?
Live-entertainment admissions became taxable amusement services on October 2, 1984. Sales of amusement services by nonprofit organizations were exempt.
An out-of-state typesetting company's New York salesmen solicit orders, pick up customer manuscripts for delivery to the out-of-state plant, and deliver the finished typeset negatives back to New York customers. Does that combination of activities stay within Public Law 86-272's protected 'solicitation' safe harbor, or does it create New York franchise tax nexus?
The corporation remains exempt from New York's Article 9-A franchise tax -- its New York activities fall entirely within Public Law 86-272's protected safe harbor. The out-of-state typesetting company…
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