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 payments by a corporation to independent sales corporations excluded from both the numerator and denominator of its Article 9-A payroll factor?
Yes -- payments to genuinely independent sales corporations are left out of the payroll factor entirely. Generra, an out-of-state apparel company with New York nexus, markets through three…
Were four credit-union loan forms subject to Florida documentary stamp tax when no single form contained a signed promise to pay a sum certain?
No, not as submitted. A taxable written obligation required a promise to pay, a sum certain in money, and the borrower's signature, and none of the four forms contained all three. A form could…
Is sales tax due when a corporation completely liquidates and distributes its vehicles to shareholders in exchange for their stock?
Yes, taxable here. When a corporation completely liquidates under IRC § 331 and distributes its vehicles to shareholders in exchange for their stock, that's a taxable "sale" for Utah sales tax…
If a retailer gives away merchandise for free as a promotion — like a shirt to the first ten customers, or a prize in a drawing — or sells items on a 'buy one get one free' basis, how is Texas sales tax handled?
It depends on whether the customer pays anything. On a 'buy one get one free' deal (or two-for-one pricing), the retailer only owes tax on the amount actually charged to the customer — not on the…
Are marketing consultation services subject to New York sales or use tax?
No. Marketing consultation — advising a company on its marketing efforts, writing a marketing plan, drafting questionnaires and scripts, and reviewing sales literature — is not one of New York's…
A company repairs and restores motor vehicles/trucks that it owns and holds for rental, using gas and electricity in the process. Is that gas and electricity exempt from tax the way it would be for a manufacturer, or is it taxable because it's being used on the company's own rental property rather than in manufacturing property for sale?
Yes, with a line drawn at what counts as "repair." A company that owns property it holds for rental can claim the manufacturing-type exemption for gas and electricity used directly in repairing or…
Is mobile radio data two-way (packet radio) transmission service taxable the same way as traditional cellular telephone service in Texas?
Yes. Both mobile radio data two-way transmission service (packet radio) and traditional cellular telephone service are taxable as telecommunications services if the communication originates in Texas…
Our organization is exempt from federal income tax under Section 401(a) of the Internal Revenue Code (a qualified pension/employee benefit trust). Does that also make us an exempt organization for Texas sales and use tax purposes?
No. Being exempt from federal taxation under IRC Section 401(a) does not make an organization exempt from Texas sales and use tax. Texas Tax Code 151.310(a)(2) only exempts organizations that…
Is a 'marking service' — attaching price tickets to merchandise — a taxable enumerated service, and is it exempt as work on goods held for sale?
It is taxable. A 'marking service' — attaching price-ticket labels to garments and other merchandise — is one of the enumerated services taxed under Tax Law § 1105(c). And it can't be purchased for…
Which catheter, implant, retrieval, and wire products sold to Florida hospitals and physicians were exempt from sales tax?
The described balloon-dilatation, drainage, angiographic, diagnostic, and drug-delivery catheters were exempt, as was the permanently implanted vena cava filter. Retrieval devices and the Katzen…
When were sales of creams and washes to incontinence patients exempt from California sales tax?
They were exempt when prescribed and filled by a registered pharmacist; sales by the seller's nonpharmacy medical-supply outlets were taxable.
Could a multistate warehouse company use customized blanket resale and nonresident certificates, including one Florida consolidated control number?
Customized forms were acceptable if they captured Florida's required information, but the company's consolidated 80-code control number could not replace a registration number. A single out-of-state…
Did a lessor owe separate tax on repair parts incorporated into equipment already taxed on rental receipts?
No, when the property remained in taxable rental service; a 1992 correction says the result changes when the lessor is the rental property's consumer.
A company leases a private telephone line to connect to its remote construction sites. The line is billed on a per-call basis, and only 12% of the calls originate in Texas (the rest originate in California, New Mexico, and New Jersey). Is any portion of the private line charge subject to Texas sales tax?
Yes, but only the Texas-connected portion. Long-distance telecommunications that originate in Texas and are billed to a Texas telephone number or billing/service address are subject to Texas sales…
A leasing company leases computer hardware to a client and collects tax on the lease payments. Because its lease agreement doesn't allow resale of software, the leasing company instead gives the client funds to buy the software directly from a vendor, and never takes title or possession of the software. Is that software funding a taxable financing lease, and can the software and hardware be scheduled together?
No — the funds provided for the software are a loan, not a financing lease, so the leasing company doesn't have to add tax to the client's repayment of principal and interest on it. The software…
Was sales tax due on a copy-machine lessee's reimbursement of the lessor's tangible personal property tax?
Yes. Because the lease required the lessee to reimburse the personal property tax as a condition of possessing the copier, the reimbursement was part of the rental gross proceeds and subject to…
Can a business use measured kilowatt (KW) demand — the peak-usage figure a utility uses for billing — as the determining factor for the predominant-use sales tax exemption on electricity, instead of the method set out in the Comptroller's rules?
No. Kilowatt demand only measures the electricity used during peak billing periods, not total usage, and is merely a utility billing cost factor. It is not a determining factor for predominant use…
Gordon Tresch, a retired New York public employee, receives yearly distributions from a deferred compensation plan he contributed to while working as a town clerk. Part of his 1984 contribution was already taxed by New York up front, under a rule since repealed, even though it wasn't taxed federally that year. When that same money comes back to him as a distribution, must he pay New York tax on it again?
No, not on the part already taxed. Because Tresch's $7,500 contribution was already included in his New York adjusted gross income back in 1984 under the now-repealed Tax Law section 612(b)(26), he…
As a licensed household-goods mover, can I haul the packing debris and cardboard boxes left over from a move to the dump without needing a Truck Mileage Tax permit?
Yes, conditionally. Tax Law § 504.5 exempts vehicles used exclusively to transport household goods from the truck mileage and fuel use taxes. A certificated household goods carrier that, immediately…
Is a shareholder personally required to file the corporation's franchise tax report, or personally liable for the corporation's unpaid franchise tax and penalties?
No on both counts. The franchise tax report obligation under section 211.1 falls on the corporation (the 'taxpayer' defined in section 208.2), not on its individual shareholders. So a shareholder is…
Did county discretionary sales surtax apply to long-term Florida vehicle leases when title and registration showed only the out-of-state lessor's name and address?
No, under this 1992 ruling, when the title and registration displayed only the lessor's name and out-of-state address. If a lessee's surtax-county address appeared alone or together with the…
Did an amusement-machine contract correctly calculate both the tax on machine receipts and the tax on the owner's license to use the location's real property?
The initial tax on $1,000 of machine proceeds was correctly computed at $72.44, but the second tax was wrong. It had to equal 6% of the host location's proceeds—the amount paid for the real-property…
Is dredging (removing mud, sand, or silt) from a river, channel, pond, or boat slip subject to Texas sales tax?
It depends on whether the dredging changes the waterway. Dredging done at a new construction site, or done to remove sand/silt from a naturally occurring river, lake, or channel without changing its…
What South Carolina tax interest rate applied for the period beginning July 1, 1992?
The rate was 8%. Interest was compounded daily, except that simple interest applied to an underpayment of a declaration of estimated tax.
Are the House Bill 11 franchise-tax surcharges that utility companies show as a separate line item on customer bills included in the sales tax base?
Yes. This internal Comptroller Audit HQ memo instructs auditors that the H.B. 11 franchise-tax surcharge a utility shows on a customer's bill is a reimbursement to the utility for its own added…
Can a contractor accept a direct payment exemption certificate for underground storage tank, fence, and concrete replacement work, and how does the answer depend on whether the work is new construction or remodeling?
Split answer depending on the work: (1) a new underground storage tank is new construction, taxable as a lump-sum contract unless material charges are separately ticketed to the customer; (2)…
Were a health institution's at-cost charges for authorized photocopies of patient medical records subject to sales tax, and could it recover tax collected in error?
The at-cost copies were not taxable because the institution had no object of gain and released confidential records only under specified legal authorization. Refund claims were limited to three…
Are charges by contractors who trace telephone circuits and lines (as part of a telephone bill auditing service) subject to Texas sales tax?
No. The Comptroller ruled that tracing circuits is not a taxable service, so charges by contractors who trace telephone circuits and lines from the telephone company demarcation point to the…
Who could represent a taxpayer before South Carolina tax authorities under the law effective May 4, 1992?
Generally, attorneys, certified public accountants, and enrolled agents could represent clients. The law also allowed self-representation and specified officers, employees, partners, fiduciaries,…
When a contractor's work will be occupied by the tax-exempt US Postal Service, does the contractor's sales tax obligation depend on whether the contract is with the landlord or directly with the Postal Service, and on whether the work is remodeling or new construction?
Split answer that turns on who signs the contract, not who occupies the space. Work under a contract with the nonexempt landlord is taxable even though the US Postal Service (a tax-exempt entity)…
Does wearing an item of tangible personal property (like a watch) in Texas before it is exported disqualify it from the sales tax export exemption, and does a particular bill of lading form satisfy the proof-of-export rule?
Yes -- wearing tangible personal property in Texas before it is exported (the letter's example is wearing a watch) constitutes a taxable 'use' in the state, so the item does not qualify for a sales…
Is a voice mail service sold nationwide, with all calls terminating in Texas but toll charges billed to out-of-state customers, subject to Texas sales tax?
Split by origin, not termination: long-distance telecommunications charges are taxable only if the call originates in Texas and is billed to a Texas telephone number, billing address, or service…
Does a builder owe sales tax on factory manufactured homes it buys, and does it matter who hires and pays the crane crew that sets the home on the foundation?
It depends on who arranged the installation. An uninstalled factory manufactured home is taxable tangible personal property, but a home sold with installation as a component of the sale (a capital…
If a securities-trading partnership has its main office, staff, and trading operations in New York, but trades only for its own account rather than as a dealer, is a nonresident general partner taxed by New York on the guaranteed payments and distributive share the partnership pays him - even when those payments pass through a second, tiered partnership first?
No. Because the partnership traded solely for its own account - it wasn't a dealer, had no customers, and didn't make a market - it fell within the Tax Law § 631(d) trading-for-own-account safe…
Is a not-for-profit cooperative that provides electronic messaging (store-and-forward and host computer polling) services only to its members exempt from Texas sales tax collection duties, and are those messaging services taxable telecommunications services?
No -- being a not-for-profit cooperative, and running what the member called a 'private network,' does not exempt the Entity from collecting and remitting Texas sales tax. Both store-and-forward…
Do magazine subscriptions distributed by first-class mail qualify for Texas's sales tax exemption on newspapers and magazines?
No. Magazine subscriptions distributed by first-class mail do not qualify for Texas's sales tax exemption on newspapers and magazines. Rule 3.299(b)(2) specifically requires that exempt magazine…
How did South Carolina's 1992 federal-conformity update change estimated tax payments for corporations and certain individuals?
Corporations using current-year liability had to pay 93% rather than 90%, with no penalty for installments due before June 1, 1992. Certain higher-income individuals could use prior-year tax only…
Are telephone and telegraph services in Kansas subject to sales tax, and starting when?
Yes, as of June 1, 1992. The 1992 Kansas Legislature enacted House Bill 2892 (the "School Finance Bill"), which for the first time taxes the sale of telephone and telegraph services that originate…
Is developing and maintaining a database of a client's own membership data a nontaxable information service, or a taxable sale of tangible personal property?
It is a taxable sale of tangible personal property. Building and maintaining a computer database from a client's own membership data and returning it on floppy disks or computer reports merely…
Were deli scale labels showing weight and 'Keep Refrigerated' exempt container labels?
Yes, when affixed to packaging sold with the food. The weight and refrigeration instruction made them product labels rather than mere price or shipping tags.
Did collecting sales tax on a background-music service fee eliminate the provider's use tax on speakers and other equipment it owned at customer sites?
No. The recurring music fee, connection charge, and installation charge were taxable program-service receipts, while the provider was the ultimate consumer of speakers, amplifiers, controls,…
How did California classify listed splints, skin products, scrub brushes, shoes, and insulin syringes?
California exempted qualifying joint-support splints and listed skin treatments, conditionally exempted impregnated scrub brushes, and taxed shoes and hospital insulin syringes.
Were surgical scrub brushes exempt when sold with Hibiclens or iodophor cleanser?
Only if the brushes were sold impregnated with a preparation recognized as medicine; brushes sold separately remained taxable.
Were cast shoes, cast sandals, and post-operative shoes exempt orthotic devices in California?
No. California taxed the described footwear because it was not an integral part of a leg brace or artificial foot and did not otherwise qualify under the stated exception.
Did bimonthly Science Citation Index issues and a separately sold ten-volume, ten-year cumulative index both qualify as periodicals before July 15, 1991?
No. The bimonthly index was a periodical, but the separately sold ten-year cumulation was not issued as a volume in that series and therefore did not qualify.
Does a dissolvable corneal collagen shield used after eye surgery qualify for New York's sales-tax exemption for medical supplies?
Yes, as a medical supply. A corneal collagen shield — placed in the eye after surgery and absorbed within about a day — is not a drug or medicine but qualifies as an exempt medical supply under Tax…
Are writing and editorial services to produce an annual membership directory taxable, or is the directory manuscript intangible and exempt?
The writing and editorial charges are not taxable. An original manuscript — here, the annual membership directory ('Service Guide') a firm writes and edits — is intangible personal property, not…
Were installation, maintenance, and repair charges for rail-mounted roll-over car-wash systems taxable as work on tangible personal property?
Yes. The systems were movable personal property rather than permanent realty fixtures, so total installation, repair, or maintenance charges—including separately stated labor—were taxable when parts…
Could a Pennsylvania owner bring a $2.2 million boat back to Florida for limited leisure use without Florida sales or use tax after using it elsewhere for six months?
Yes, only on the stated conditions. The owner had to use the boat for at least six months in another taxing jurisdiction before reentry, remain a nonresident with no Florida property or business,…
Which restaurant purchases did South Carolina Revenue Ruling 92-3 treat as tax-free resale or packaging items, and which as taxable supplies?
Food, beverage ingredients, and containers or wrapping used to sell and deliver them were generally tax-free. Napkins, straws, utensils, cleaning items, furniture, office supplies, and other…
May a scaffolding rental company buy or rent scaffolding tax-free for resale, and is the labor to erect the scaffolding taxable?
Split ruling: COMPANY A may buy or rent scaffolding tax-free by giving its supplier a resale certificate, since it is reselling (renting) the scaffolding onward to its customer. But the labor to…
Are genealogy research, book sales, teaching, and notarial services provided by a genealogy business subject to Texas sales tax?
Split ruling. Sales of genealogy and family-history books are taxable on the full sales price (not just the markup), and preparing a genealogical report by pulling from the company's own maintained…
Does a nonprofit private fishing club have to collect sales tax on boat stall and locker rentals, and on membership dues, charged to its members?
No. The Comptroller ruled that a nonprofit (IRC Sec. 501(c)(7)) private fishing club does not have to collect sales tax on boat stall and locker rentals or on membership dues and fees. Although…
Was a computer consulting company's $700,000 sale of 13 programs exempt as an occasional sale when it had recently sold hardware?
No, according to the appeals reviewer. Consulting and hardware sales were one business, and 14 repossessed-equipment sales plus a $5,000 system sale made the company a retailer.
Is a computer-using accountant's preparation of financial reports, payroll tax filings, and income tax returns for clients subject to Texas sales tax as data processing?
Split ruling. Using a computer to prepare financial reports (check register, payroll register, general ledger, financial statements) is not taxable, and a computer 'data processing fee' passed on…
Can a company holding a Texas Direct Payment Permit use it (instead of a resale certificate) to buy equipment it will resell to a customer, and is welding/repair labor on that equipment taxable?
Split into three answers. A Texas Direct Payment Permit may only be used to buy taxable items tax-free for the permit holder's own use (with tax later accrued on first use), not for items being…
Is a computer company's lease of software, sale/installation/support of third-party software, contract programming, and scanning-to-computer-file service taxable under Texas sales tax?
Mixed ruling across five situations. Leasing software you created (you keep legal rights) is taxable on the full lease/support charge because that's not true contract programming; selling or…
Is the sale of a security-monitoring customer contract from one alarm company to another subject to Texas sales tax?
No. The Comptroller ruled that when one security company sells its customer monitoring contracts to another company (who then takes over billing and monitoring), the transaction is the sale of an…
Are membership dues paid to a private hunting and fishing club subject to Texas sales tax as an amusement service?
No -- membership dues and annual fees for a private hunting club are not subject to Texas sales tax, because hunting itself is not a taxable amusement service, and this holds true even though the…
Are urological catheters, catheter trays, supplies, and replacement parts exempt from Texas sales tax as prosthetic devices?
Yes. Urological catheters, catheter trays, supplies, and replacement parts are exempt from Texas sales tax as prosthetic devices under Tex. Tax Code § 151.313(a)(4). No prescription is required to…
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