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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Is a restaurant's monthly fee to license a vendor's tabletop ordering tablets taxable, and are the charges patrons pay for premium content on those tablets taxable?
Yes to both. The monthly fee the restaurant pays for a license to possess and use the vendor's tabletop point-of-sale tablets is a taxable rental/license of tangible personal property, taxed at the ra…
When a data-destruction company takes customers' old computers as trade-ins or on consignment, does the trade-in credit or resale exclusion reduce the sales tax on its service?
Only sometimes. Data destruction is a taxable service. If the company takes a customer's equipment in part payment and intends to resell it exactly as received, the trade-in credit reduces the taxable…
If a home straddles the Bronx/Yonkers line but the house itself sits entirely in Yonkers, are the owners Yonkers or New York City residents for income tax?
Yonkers residents. Residency turns on where you are domiciled and maintain a permanent place of abode. Although the property straddles the border and has a Bronx mailing address, the actual dwelling s…
What does Illinois General Information Letter ST 20-0029-GIL conclude about Nexus?
It depends on the retailer's contacts with Illinois. A retailer with physical presence in Illinois (even 'more than the slightest') must collect Use Tax, and since October 1, 2018, an out-of-state ret…
What does Illinois General Information Letter ST 20-0028-GIL conclude about Construction Contractors?
Construction contractors in Illinois are treated as end users, not resellers, of the tangible personal property they buy to permanently incorporate into real estate, so they owe Use Tax on their cost …
Was a Lady Bird deed for unencumbered Florida property subject to documentary stamp tax when the life tenants retained complete control?
No. The enhanced life estate deed let the life tenants sell, mortgage, gift, or otherwise dispose of the property and divest the named remainderpersons without consent. Because their remainder interes…
Was a Lady Bird deed for mortgaged Florida property subject to documentary stamp tax when the life tenants retained complete control?
No. The enhanced life estate deed let the life tenants sell, mortgage, gift, or otherwise dispose of the property and divest the named remainderperson without consent. Because the remainder interest w…
Can an electrical contractor buy small hand tools tax-free because it is working on a project covered by the manufacturing machinery and equipment exemption?
No. The manufacturing machinery and equipment exemption only covers hand tools and other production related property that a manufacturer itself uses or consumes inside its manufacturing facility. A co…
When a manufacturer's customers pick up custom goods at its Tennessee facility but register and use them elsewhere, are those sales sourced to Tennessee for franchise and excise apportionment?
By the purchaser's location — not where the goods are registered or merely picked up. The Department ruled (advisory, non-binding) that for Tennessee franchise and excise (F&E) apportionment, a manufa…
Is an urgent-response medical-alert monitoring service taxable, and does it trigger sales tax or telecommunications taxes?
The monitoring service is exempt, but the device is taxable. The wearable device connects a user to the provider's out-of-state call center (or 911) when a button is pressed or a fall is detected. The…
Must a 501(c)(3) charity collect sales tax at a two-day annual fundraiser on its own goods and on goods it sells for absent vendors?
It depends on whose goods are sold. The charity's sales of its own items at a two-day annual fundraiser are exempt, because a once-a-year event isn't a 'shop or store' operated with regularity, freque…
What does Virginia Ruling of the Tax Commissioner P.D. 20-181 conclude about Residency : Domicile - Change, Part-year?
The Tax Commissioner found that the taxpayer had abandoned Virginia domicile in 2015 but re-established it in October 2017 by leasing a Virginia residence and registering a vehicle there, making him a…
What does Virginia Ruling of the Tax Commissioner P.D. 20-180 conclude about Residency : Domicile - Change Requires Both Abandoning One Domicile and Obtaining A New One.?
The Tax Commissioner abated the Virginia resident income tax assessments because the taxpayer had not yet completed a change of domicile to Virginia for 2016-2017 -- he still lived and worked mostly i…
State Tax Ruling
No relief: the Tax Commissioner ruled the taxpayer's appeal of a 2010 individual income tax assessment was barred because it was filed more than six years after the 90-day deadline in Va. Code § 58.1-…
Are tariff costs and tariff surcharges included in South Carolina's sales or use tax base?
A tariff cost is included in taxable gross proceeds or sales price when the seller or another party is the importer and passes the cost to the purchaser, whether the amount is embedded in the price or…
Could an acquired company stop filing Florida consolidated returns after its original affiliated group ceased to exist in a merger?
Yes, subject to three conditions. The acquisition and merger ended the taxpayer's original affiliated group, and the surviving entity became part of a new parent's group that filed separate Florida re…
What does Illinois General Information Letter ST 20-0026-GIL conclude about Construction Contractors?
Construction contractors who permanently affix tangible personal property (like cleanroom walls, doors, flooring, or filtration systems) to real property are treated as the 'end user' of that property…
Does a foreign corporation that only stores inventory at a Tennessee toll manufacturer, and has no U.S. effectively connected income, owe Tennessee franchise tax?
No. The Department ruled (in an advisory, non-binding revenue ruling) that a foreign corporation — one treated as a corporation for federal tax purposes — that stores inventory at a Tennessee toll man…
If a customer refuses to pay the sales tax an aircraft repair station charged, does the repair station still have to remit that tax to Illinois?
Generally yes, a retailer must remit sales tax to Illinois even if a customer refuses to pay it. But here, Public Act 101-629 retroactively revived the Section 2-5(40) exemption for aircraft parts, eq…
Does a not-for-profit college that trains optometrists owe Illinois sales or service occupation tax on the prescription eyewear it provides to patients as part of student training?
No. The Illinois Department of Revenue ruled that the college does not owe Retailers' Occupation Tax or Service Occupation Tax on prescription eyeglasses and contact lenses transferred to patients as …
If an out-of-state investment fund's only Tennessee connection is owning mortgages secured by Tennessee property, does it owe Tennessee franchise and excise tax?
No. The Department ruled that a non-U.S. limited partnership fund whose only connection to Tennessee is owning mortgages (some secured by Tennessee property, with some borrowers possibly in Tennessee)…
What does Virginia Ruling of the Tax Commissioner P.D. 20-178 conclude about Tangible : Administration - Failure to Issue Final Local Determination?
The Tax Commissioner ruled he had no jurisdiction to decide the taxpayer's business tangible personal property tax appeal because the county's e-mail response was not a valid 'final local determinatio…
Could New Mexico residents count $1,875 paid toward delinquent 2016 state income tax as an 'other payment' credit against their 2018 tax?
No. Edward and Linda CdeBaca paid $1,875 during 2018 toward their delinquent 2016 New Mexico income tax and received credit against that 2016 liability. They could not count the same payments again as…
Is an IRA funded by rolling over a federal employee's Thrift Savings Plan exempt from New York income tax, and what about other private retirement accounts?
The IRA distributions are exempt only to the extent they represent the rolled-over Thrift Savings Plan (TSP) amount, which qualifies for the federal-employee pension subtraction under Tax Law § 612(c)…
Are an employer's nonqualified deferred-compensation payments to nonresidents protected from New York tax, including payments made before employment ends?
Only the post-termination payments are protected. Payments from an excess-benefit nonqualified deferred-compensation plan made to a nonresident after termination of employment are 'retirement income' …
What does Illinois General Information Letter ST 20-0030-GIL conclude about Computer Software?
It depends on what is actually transferred to the customer. Illinois taxes sales of tangible personal property, and 'canned' (pre-written) computer software counts as tangible personal property, so se…
Does an out-of-state seller owe Illinois sales tax on a sale that is drop-shipped to an Illinois customer if the out-of-state buyer never gave a resale certificate?
Yes, generally. Under Illinois rules, a drop-shipped sale can qualify as a tax-exempt sale for resale, but only if the out-of-state buyer gives the seller a valid Certificate of Resale (or other adequ…
What does Virginia Ruling of the Tax Commissioner P.D. 20-177 conclude about Exemption : Rooms, Lodgings & Accommodations for 90 Continuous Days?
The 90-continuous-day exemption applies separately to each room based on the fewest rooms rented on any single day during a rolling 90-day window, and it does not extend to meals -- if a room charge i…
What does Virginia Ruling of the Tax Commissioner P.D. 20-176 conclude about Administration : Accounting - Application of Overpayments; Collections - Offsets?
Denied. The Tax Commissioner upheld the Taxpayer's 2018 corporate income tax assessment and underpayment penalty, ruling that the Department had properly offset the Taxpayer's prior-year overpayment a…
What does Illinois General Information Letter ST 20-0022-GIL conclude about Construction Contractors?
Construction contractors in Illinois are treated as end users, not retailers: they owe Use Tax on their cost price of materials permanently incorporated into real property (like an installed gas stati…
What does Illinois General Information Letter ST 20-0021-GIL conclude about Enterprise Zones?
Sales of tangible personal property used or consumed in operating a pollution control facility are exempt from Illinois Retailers' Occupation Tax (and therefore Use Tax) only if the facility is locate…
If I rent out my property through a third-party booking platform, am I responsible for Hotel Operators' Occupation Tax if the platform fails to remit it?
Generally yes: the Hotel Operators' Occupation Tax obligation belongs to the owner/host of the rented accommodations, not the third-party booking platform, unless that platform has a separate agreemen…
Does an Illinois retailer still owe Retailers' Occupation Tax on petroleum product sales to a purchaser that is exempt from use tax under federal law?
Yes, the exemption still applies. Illinois confirmed that receipts from selling petroleum products (motor fuels) to a purchaser that is exempt from use tax by operation of federal law -- here, a compa…
Is computer software subject to Illinois sales and use tax, and how does that apply to software licenses, leases, and services like death-record and address searches?
Generally yes: 'canned' (prewritten) computer software is taxable tangible personal property in Illinois, while custom-written software generally is not. A software license escapes tax only if it meet…
What does Illinois General Information Letter ST 20-0023-GIL conclude about Nexus?
It depends on whether the out-of-state company has a physical presence in Illinois, meets the Wayfair economic-nexus thresholds ($100,000 in sales or 200+ transactions to Illinois customers), or (star…
How is Illinois sales tax calculated on food and dietary products made from industrial hemp extract, like balms and tincture drops?
It depends on how the product is used and labeled. Illinois taxes hemp-extract items intended for internal human consumption (like tincture drops taken under the tongue) as food at the low 1% rate und…
What does Illinois General Information Letter ST 20-0014-GIL conclude about Construction Contractors?
When a construction contractor permanently affixes tangible personal property to real property, Illinois treats the contractor as the 'end user' of that property, meaning the contractor owes Use Tax (…
Is nonqualified deferred compensation paid to a nonresident in substantially equal annual payments over 10 years subject to New York income tax withholding?
No. Two series of substantially equal annual payments made over a 10-year period under a nonqualified deferred compensation plan qualify as 'retirement income' protected by the federal Pension Source …
Are a retired federal employee's TSP distributions (lump sum or periodic) and an IRA funded by a TSP rollover exempt from New York income tax?
TSP distributions, whether taken as a lump sum or as periodic payments, may be subtracted from federal income under the federal-employee pension subtraction (Tax Law § 612(c)(3)(ii)). When TSP money i…
What does Virginia Ruling of the Tax Commissioner P.D. 20-175 conclude about Virginia Taxable Income: No Deduction for Out-of-State Income Credit : Taxes Paid to Another State - North Carolina?
The Virginia Tax Commissioner held there is no deduction or subtraction from Virginia taxable income for income earned in another state (here, North Carolina); the correct remedy is the credit for tax…
What does Virginia Ruling of the Tax Commissioner P.D. 20-174 conclude about Dealer: Vehicle Repair Administration: Refund - Taxes Paid On Inventory, Statute of Limitations?
Partial win: the Tax Commissioner agreed to credit the taxpayer for sales tax it had erroneously paid to vendors on items later assessed as retail sales, but only for amounts the taxpayer documents it…
State Tax Ruling
No. The Virginia Tax Commissioner ruled that an Indian Tribe is not exempt from Virginia retail sales and use tax on purchases occurring off its reservation, even when the items are for the Tribe's ow…
What does Virginia Ruling of the Tax Commissioner P.D. 20-172 conclude about Audit: Identity Theft, Fraud, Records?
The Tax Commissioner upheld the full sales tax assessment against a cigarette retailer, ruling that the taxpayer's bare claim that its distributor accounts were used fraudulently, without supporting d…
What does Illinois General Information Letter ST 20-0018-GIL conclude about Miscellaneous?
This isn't taxpayer guidance in the usual sense -- it's the Illinois Department of Revenue's reply to a publisher's annual 50-state tax survey. The Department declined to fill out the questionnaire it…
Did Kansas give corporate filers penalty relief for 2019 income tax returns?
Kansas Notice 20-03 explains that the Department gave penalty relief for 2019 corporate income tax returns. The extended Kansas due date of October 15, 2020 matched the federal return; to allow more t…
State Tax Ruling
Yes on both points raised: the Tax Commissioner ruled that the taxpayer's prototype marine engines kept their research-and-development sales tax exemption because the one-time demonstration use was de…
What does Virginia Ruling of the Tax Commissioner P.D. 20-170 conclude about Administration : Audits - Employee/Subcontractor, VEC Information?
Partial win for the taxpayer: the Tax Commissioner did not cancel the withholding tax assessment but sent it back to audit staff, ruling that VEC information alone cannot establish that workers are em…
What does Virginia Ruling of the Tax Commissioner P.D. 20-169 conclude about Sales Price: True Object, Exemptions - Manufactured Signs, Permit Fees, Permit Procurement Fees, Installation?
Manufactured signs are taxable tangible personal property, so permit fees and permit procurement fees billed with a sign purchase are part of the taxable sales price, but the taxpayer's separately sta…
State Tax Ruling
Mixed outcome: the sign sold to a church stayed taxable because the church never gave the Taxpayer an exemption certificate, but the billboard/advertising charges were removed from the audit because t…
If a business didn't have invoices ready during a Virginia sales and use tax audit, can it still fix the assessment by submitting invoices later during the appeal?
Yes, but only for the specific line items where the taxpayer actually produced the missing invoices. Virginia's Tax Commissioner removed audit line items from a dermatology practice's use tax assessme…
When Tennessee corporations merge, does the surviving company keep the net operating loss carryforwards of the companies that merged into it for franchise and excise tax?
Usually not — the survival exception is narrow. For Tennessee franchise and excise (F&E) tax, a net operating loss (NOL) carryforward can normally be used only by the taxpayer that generated it; in a …
Does a restaurant have to charge sales tax or communications tax on premium content fees (games, news, songs) charged through tabletop ordering devices?
No. The Tax Commissioner ruled that fees a restaurant charges customers for access to premium content (games, news/social media, song selection) on tabletop ordering devices are charges for a service,…
If I temporarily moved to California for work and paid California tax, do I still owe Virginia income tax as a domiciliary resident, and can I claim a credit for the California tax?
Yes to both. The Tax Commissioner ruled the taxpayer remained a Virginia domiciliary resident despite living in California for nine months in 2016 (he never abandoned Virginia and returned to his Virg…
What happens to a Virginia sales and use tax appeal if the taxpayer submits the missing documentation after filing it?
The Tax Commissioner closed the appeal because the taxpayer had by then supplied the documentation that was missing during the audit. The records were referred to field audit staff for review and any …
Does a contractor who fabricates and installs mailboxes at new homes owe use tax on the materials, even if the finished mailboxes become real property?
Yes. Virginia upheld the use tax assessment because a contractor who fabricates tangible personal property (like mailboxes) and installs it so it becomes real property is a "using or consuming contrac…
If Virginia returns my sales tax refund request because it was submitted on a CD, does the three-year filing deadline still count against me?
Granted in part: the Tax Commissioner found the Taxpayer's refund requests were timely filed in December 2015, even though the Department had returned them because they were submitted on a CD, and gav…
Where did Florida source a multistate taxpayer's service revenue for the corporate income tax sales factor?
Florida used market sourcing. Service income was sourced to the location where the services were provided, identified in the redacted ruling as where the recipient was located or resided. When that re…
How could a consolidated Florida taxpayer revise its method for calculating income and tax from a Capital Investment Tax Credit project?
Florida approved a revised pro forma method. The taxpayer would compute separate-company Florida taxable income using its apportionment fraction, apply the corporate tax rate, multiply that liability …
Could a sole proprietor defeat a gross receipts tax assessment by arguing that income reported on federal Schedule C was not necessarily business income?
No. Marduk Consultants was a registered New Mexico sole proprietorship, had originally provided computer-repair or consulting services, and reported income on federal Schedule C for 2012–2016 while fi…
In a communications sales and use tax audit, did the cable/video provider succeed in overturning the erroneous-remittance charge, the cable right-of-way fee assessment, the related interest, and the bad-debt credit denial?
Mixed outcome: the Tax Commissioner gave the taxpayer another chance to document its erroneous-remittance claim (audit reopened on that point), but denied relief on the cable right-of-way fee assessme…
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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