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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Were labor and parts to clean and repair reusable ISO marine cargo tank containers exempt from Texas sales tax?
Yes, if the containers qualified under Rule 3.297(b)(2) as component parts of commercial vessels exceeding eight tons displacement and the customer supplied an exemption certificate.
How did Florida tax master video tapes, studio charges, props, sets, and production equipment used by a television producer?
Master-tape sales to the production industry were taxable only on tangible elements, and qualifying production equipment, props, sets, and component materials could receive a producer refund if used…
Could a buyer purchasing goods only for export outside the United States obtain a Texas permit and use resale certificates?
No. The letter said export-only purchases were outside the resale definition. The buyer instead had to document export with carrier, customs, destination-country, or freight-forwarder records.
Was a customer's original purchase of exclusively created software from a contract programmer taxable in Texas?
No. The original custom-software purchase was not subject to sales or use tax because the customer obtained ownership rights. The customer then had to collect sales tax on copies sold to others.
Was transferring an Oregon corporation's operating assets to a related Texas corporation subject to Texas use tax?
Not if the transfer was a capital contribution with no consideration. Cash, stock issued where ownership was below 100%, or debt forgiveness or assumption could make it a sale; a transfer of all…
Was restoring a customer's dirty solvent and returning that same solvent taxable repair or manufacturing processing in Texas?
It was repair, not processing. The Comptroller corrected an earlier letter because restoring the same customer's solvent to usable condition fit Rule 3.292 and was expressly excluded from processing…
How could a Section 501(c)(7) club recover Texas tax it mistakenly collected on pre-October 1991 member charges?
The club first had to refund members or credit their accounts with written permission. Only then could it seek state reimbursement or a return credit under Rule 3.325, within the four-year…
Did an equipment lease with a purchase option equal to 10% of original cost automatically qualify as a Texas financing lease?
No automatic answer was possible. The option was nominal only if, when the contract was signed, it was estimated to be less than 10% of the equipment's fair market value when exercised, or another…
Which parking-lot, street, debris-scraping, and ice-control cleaning services were taxable in Texas?
Parking-lot sweeping, power washing, and periodic cleaning were taxable from December 6, 1991. Public-road cleaning and debris scraping, plus salt or sand spread for icy driveways or sidewalks, were…
Were public-street cleaning charges taxable, and did fixed-price contracts signed before December 6, 1991, receive transition relief?
Public-road and public-street cleaning was not taxable. Fixed-price parking-lot or sidewalk cleaning contracts signed before December 6, 1991, stayed untaxed until renewal, extension, or renegotiation.
When did Texas begin taxing parking-lot cleaning, and were older fixed-price contracts protected?
Parking-lot sweeping and cleaning became taxable December 6, 1991. Binding fixed-price contracts signed earlier stayed untaxed until renewed, extended, or renegotiated; public-road cleaning remained…
Were repair parts installed in Texas on foreign-plated vehicles exempt when the vehicles were immediately driven back to Mexico?
No. Driving the installed parts in Texas on the trip to Mexico was Texas use, so the parts lost their export character and the seller had to collect sales tax.
Could a Section 501(c)(7) singles club recover tax collected on dues and admissions, and were its member charges taxable?
The club first had to refund tax to members and guests before claiming a state refund or credit. The letter said membership dues were not taxable, but separate dance or entertainment admission…
Which industrial testing, inspection, training, heat-treating, and welding-information services were taxable in Texas?
Testing, training, inspection, expediting, and AutoCAD inspection reports were nontaxable. Heat treating that restored weakened property was taxable repair, and welding-code publications were…
How did Texas tax vehicle window etching with a theft guarantee and a chemical protection package with a warranty?
Window etching was taxable; a mandatory bundled guarantee made the whole charge taxable, while an optional guarantee was not. Chemical protection application and its warranty were exempt, but the…
When were documentary stamp and nonrecurring intangible taxes due on a $30 million bond letter of credit secured by partnership mortgages?
Documentary stamp tax was due when the $30 million mortgage was recorded because it incorporated the payment obligation; the ruling calculated $96,000 under historical rates. Other contingent…
When a business straddles two adjoining municipalities, which city gets the local sales tax revenue?
It goes to the city where the inventory is physically located or from which it's shipped or delivered -- not necessarily the city where the licensed business address sits. Under Utah Code §…
Was a printer's sale of a publisher's convention-center guides exempt when separate carriers and delivery services distributed them free?
Yes on the stated assumptions. The publisher consumed the guides, advertising-space charges were nontaxable, and the printer's special-order sale met the delivery conditions.
Were a publisher's sales of customized-cover Dollar$ense issues exempt when financial institutions bought them for free distribution to customers?
Yes. Dollar$ense was published as a free-distribution periodical, and section 6362.7 covered the publisher's sale to institutions that would distribute it without charge.
When were the oilfield services in this Texas letter nontaxable completion work rather than taxable tubing-fishing repair?
The letter's Item 1 services were nontaxable because they accompanied completion work bringing a well to productive status. Item 2 was taxable because fishing for tubing repaired or maintained…
Is customized computer software and software maintenance taxable in New York, and how do separately stated charges affect the answer?
It depends on separately stating the charges. Under the software rules effective September 1, 1991, pre-written software that is modified or enhanced to a specific purchaser's specifications is…
Could a power-plant subcontractor use the customer's exemption number, and who could recover tax paid on qualifying generating equipment when required affidavits were missing?
No contractor could use the customer's exemption number. Because the required affidavit chain was missing, the subcontractor had to pay tax. Only the customer-owner could claim the equipment…
Could a California tanker-truck manufacturer use vehicle exemptions when an out-of-state customer took delivery at the California plant?
Not on the stated facts. Section 6388.5 covered trailers and semitrailers, not the completed tanker truck, and section 6388 required purchase from a dealer outside California.
Could an exempt oil-and-gas operator buy taxable goods and services for jointly owned properties without paying suppliers Texas tax?
Yes, using a resale certificate, but it had to allocate the purchases and collect tax from nonexempt joint owners on their billed shares. Its own share stayed exempt, subject to records and certificates.
Could parts and consumable supplies bought in Texas for African and federal offshore drilling platforms qualify for export or drilling-equipment exemptions?
Parts and consumables could qualify for an export refund if exported from the United States without Texas use or consumption. The narrower drilling-equipment exemption required detailed facts about…
Was a flat-day-rate horizontal drilling package with specialized equipment and technical personnel taxable in Texas?
No. The complex planning, measurement, and drilling package was a nontaxable service, and equipment was incidental. The provider paid tax on its inputs; actual standalone equipment sales or rentals…
Were private-club locker, room, boat-slip, golf-cart, bag-storage, and minimum food-and-beverage charges taxable in Texas?
Yes. The Comptroller treated them as payments for special membership privileges, taxable whether separately stated and, for food minimums, even if the member never consumed food or beverages.
Was an incineration facility's charge to destroy hazardous medical waste collected from healthcare facilities taxable in Texas?
No. The Comptroller said the incinerator's charge to destroy the medical waste was not taxable on the stated facts.
Were dues paid by dart clubs to a Section 501(c)(7) association taxable when the association provided no dartboards or amusement facilities?
No. The association's member-club dues were nontaxable because it provided no amusement facilities. Individual clubs that did provide facilities had to tax dues collected from their own members.
Were public admission charges to automobile shows run by Section 501(c)(6) new-car trade associations taxable in Texas?
No. The Comptroller said the trade associations' public auto-show admissions were exempt under Rule 3.298(g)(1)(A).
Could a business obtain a permanent 30-day extension for filing Texas sales-tax returns because it handled a large volume of returns?
No. The Code did not allow a permanent extension. The Comptroller could grant one discretionary 45-day extension for unusual circumstances, with a written request and payment of 90% of estimated…
Was a personalized home-mortgage analysis and accelerated-payment report a taxable information service or an exempt personal service?
It was an exempt personal service because each report analyzed one client's mortgage, was furnished only to that client, and was not substantially reused in reports for others. The provider still…
Were Nature's Sunshine herb capsules exempt when the reviewed label called them an herbal food combination and did not describe them as dietary supplements or adjuncts?
Yes. Capsule form alone did not defeat exemption, and the reviewed label did not call the herbal combination a dietary supplement or adjunct.
Was a building-attendant service that checked equipment and called employees about problems taxable as Texas security service?
No. The attendant only monitored systems, turned off equipment left on, and notified employees without making repairs, and the state licensing board said the service did not require a…
Were charges to wash or sweep Texas parking lots, sidewalks, driveways, drive-throughs, and delivery areas taxable?
Yes, beginning December 6, 1991, under the Rule 3.356 amendment. Sweeping or otherwise cleaning public roads and public streets remained nontaxable.
Could a federal credit union buy beer and wine for its grand opening without paying Texas sales or use tax?
Yes. A federal credit union organized under 12 U.S.C. § 1768 was exempt on taxable items or services bought for its own use and could give the seller an exemption certificate.
How did Texas distinguish lump-sum repair and painting charges for motor vehicles from charges for equipment?
Equipment repair or painting was fully taxable. Lump-sum motor-vehicle repair or painting was nontaxable to the customer while the provider paid tax on materials; one combined vehicle-and-equipment…
How did Texas tax permanent truck and railroad scale installations in existing roadbeds versus new construction?
Upgrading an existing roadbed was fully taxable remodeling. New construction followed lump-sum or separated-contractor rules; qualifying railroad-track materials could be exempt, but scales not…
Were remodeling materials and labor exempt for a historic building owned by an exempt entity but primarily used by its for-profit subsidiary?
Materials were taxable because the for-profit subsidiary received the primary benefit. National Register listing could exempt remodeling labor, but not materials; Texas Historical Commission listing…
How did resale certificates and sales-tax permits work through general contractors and subcontractors on separated Texas construction contracts?
Each separated new-construction contractor needed its own permit and resale certificates. Subcontractors accepted certificates from generals, and the general collected from the owner; nonresidential…
When could federal real-property contractors buy incorporated materials without Texas tax after the 1991 House Bill 11 changes?
Only through qualifying prior-contract relief, a separated new-construction contract, or otherwise taxable nonresidential repair or remodeling. Equipment and ordinary consumables remained taxable to…
What documentation made a municipal construction contract separated, and did a Texas city need to issue exemption certificates with progress payments?
The signed separated contract itself proved sales of incorporated materials to the exempt municipality, so no municipal exemption certificate was required. Unit-price bid documents needed binding…
Which farm and ranch software programs qualified for Texas's agricultural sales-tax exemption?
Five listed livestock and meat-management programs were exempt when bought by original producers for their own products. Bookkeeping, recordkeeping, accounting, mixed-use programs, and sales to…
Did natural-gas and electric-service contracts qualify for prior-contract protection from Texas tax-rate increases when they passed tax changes to customers?
No. The pass-through clause shifted tax increases to customers, defeating prior-contract relief under Rule 3.319(c)(3), and any rate increase made the agreements new contracts under Rule 3.319(c)(2).
Is a medical-records storage-and-retrieval subscription service a taxable information service or a taxable storage service in New York?
It's taxable — as a storage service, not an information service. Immediate Medical Records' subscription service (organizing, computer-storing, and on request transmitting a client's medical records…
Is a telephone sales-lead generation service a taxable information service in New York, and does handing over written lead reports change that?
No. Alan/Anthony's telephone sales-solicitation service — calling potential buyers with a client-approved script to generate qualified sales leads and reporting them to the client in writing — is…
If a corporation with deferred installment-sale gain on New York real estate transfers the remaining notes to an affiliate before the gain is fully recognized, must it accelerate the deferred gain into New York entire net income right away?
Likely yes for the actual corporation, but the Department can't pre-commit in an advisory opinion. Corporation X sold New York City real property in 1982 on an installment basis with no gain…
For New York's corporate payroll-factor computation, are payments to independent corporate sales representatives (rather than employees) excluded from both the numerator and denominator of the payroll factor?
Yes. The taxpayer, an out-of-state apparel designer/distributor, sold through three independent corporate sales representatives whose own employees (salespersons) worked in New York and nearby…
Does a manufacturer's radiographic weld-inspection system qualify for Utah's manufacturing sales tax exemption?
Yes. The Utah State Tax Commission ruled that a propane tank manufacturer's radiographic inspection system — used to X-ray weld seams so the company could certify 100% of its welds, use thinner…
If a company bills customers a single monthly 'terminal rental' charge that covers a leased computer terminal, software, and a financial-data feed, is the whole charge taxable, or only the equipment-rental part?
The whole bundled charge is taxable. Leasing a computer terminal and software is a taxable rental of tangible personal property under Utah Code Section 59-12-103(1)(k). Receiving financial data or…
When a resort sells a single bundled vacation package price covering a hotel room, meals, airfare, car rental, ski passes, and other activities, how do sales tax, transient room tax, and the tourism tax apply?
Even when a resort charges one flat package price or daily rate, each component is taxed as if it were sold separately -- the innkeeper's internal records must reasonably allocate the price among…
Were Vitasoy Vanilla Delite, SoyMoo Non-Dairy Soy Drink, and Edensoy Natural Soy Beverage exempt as ordinary ready-to-use soy drinks?
Yes. Their labels merely listed ingredients and did not present the ready-to-use drinks as dietary supplements, so California treated them as exempt food.
Did a pre-1991 light-rail contract remain fixed-price when labor, material, and later-enacted tax increases could be passed to the purchaser?
No. Government-index formulas did not cure adjustable labor and material costs, and the contract's handling of a prior tax increase showed that later taxes could be passed through.
Were club memberships tax exempt when a university paid for memberships issued in individual employees' names?
No. Employees were not exempt entities merely because they worked for the university, and university payment did not turn individual memberships into sales to the university. A membership issued…
Which archery-club dues, range fees, tournament entry fees, admissions, prizes, and concession sales were taxable in Texas?
Club dues and range fees were taxable. Genuine competition entry fees could be nontaxable when they substantially exceeded ordinary range use or were paid only to compete; admissions, concessions,…
Were unused private-club food, beverage, and liquor minimum charges subject to Texas sales tax?
Unused food and beverage minimums were taxable for nonprofit Section 501(c)(7) clubs from October 1, 1991, and for-profit clubs from October 1, 1987. Liquor minimums subject to alcoholic-beverage…
How did Texas tax floor-covering installation, materials, tools, and labor for remodeling, new construction, and residential jobs?
Nonresidential floor-covering remodeling was taxable on the total materials-and-labor charge. New construction, unfinished pre-occupancy buildings, residences, and new additions followed contractor…
Are individualized investment-evaluation and consulting reports a firm prepares for pension plan sponsors and money managers taxable information services?
No. SEI's investment-evaluation and consulting services for pension plan sponsors and money managers are not taxable. The reports it prepares — Investment Policy Planning, Asset Allocation,…
Is asbestos removal taxable in New York when it is done as part of a capital improvement, such as reinsulating pipes and boilers?
No — not on these facts. Asbestos removal by itself is a taxable service (maintaining/repairing real property under Tax Law § 1105(c)(5)). But when the removal is a constituent part of a capital…
When an out-of-state seller drop-ships goods to a New York third party at an out-of-state customer's request, must the seller collect New York sales tax, and on what amount?
Yes. When Crescent Metal Products, an Ohio manufacturer registered as a New York vendor, drop-ships goods to a third party in New York at the request of its out-of-state customer, it must collect…
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