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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Was Gold's Nutritionalysis 100% Pure Milk/Egg Protein Powder taxable when its label called it a protein drink supplement for muscle building?
Yes. It was a powdered drink mix expressly marketed as a protein supplement, so California excluded it from the food-product exemption.
Were utilities at fee-simple timeshare condominiums exempt residential use when units were occupied only by owners and never rented to nonowners?
Yes. The October 29 follow-up treated owner-only occupancy as exempt residential use. The attached earlier letter applied a 30-day and per-meter predominant-use test to mixed residential and…
Are the management fee and cost reimbursements paid to a food-service contractor to run a subsidized cafeteria subject to New York sales tax?
Yes. ARA Services would run a for-profit cafeteria open to the general public in a building whose landlord pays it a management fee plus cost reimbursements. Pure management of a for-profit…
What did South Carolina's October 1991 notice say about access to sanitized Tax Commission decisions and their index?
Sanitized Commission decisions and an index covering 1987 through September 30, 1991 were available for review at the USC law library and nine Tax Commission district offices, with quarterly updates…
Was treating customer-owned copper welding wire nontaxable repair when the vendor removed contamination, or taxable fabrication when it made new wire?
Heating the same wire to remove impurities and recondition it was nontaxable repair. Melting it into copper castings and drawing new wire was taxable fabrication.
Were Texas insurance claims adjusting or processing services taxable when performed for a surplus-lines or non-admitted insurer covering a Texas risk?
Generally yes. The provider had to presume the service was taxable when the insured person or property was in Texas. It could avoid collection when the insurer was not conducting insurance business…
Could a change order executed during construction retroactively convert a lump-sum real-property contract into a separated contract?
Yes. A retroactive amendment changed compensation to reimbursable actual costs plus a fixed fee and required amended and future invoices itemizing incorporated materials and other expenses. That…
Was artwork sold by a graphic artist to an advertising agency taxable when the agency used it only in conceptual ad-campaign development?
Yes. The artist delivered a finished product to the agency, so the sale was taxable. The agency's later use of that artwork as preliminary or conceptual material did not change the finished-art…
How did Texas tax underground-tank excavation, tank disposal, contaminated-soil removal, replacement installation, repair, inspection, and mixed charges?
Tank excavation was nontaxable demolition, but tank hauling and disposal were taxable. Qualifying contaminated-soil removal was exempt with a certificate. New installation followed construction…
How did Texas tax underground fuel-storage-tank removal, tank disposal, contaminated-soil disposal, repair or upgrading, and installation of a new tank?
Tank excavation and removal were nontaxable demolition, but hauling and disposing of the tank were taxable waste removal. Qualifying contaminated-soil disposal was nontaxable, repair or remodeling…
Did a company have to collect Texas sales tax for pumping, hauling away, and disposing of gasoline-contaminated water from underground fuel storage tanks?
No, if the liquid was an industrial discharge regulated by the Texas Water Commission and the provider held the required permit. The provider had to obtain and retain a completed exemption…
Could a software developer buy boxes, wrapping paper, envelopes, tape, and similar supplies tax free when they were used to package computer programs?
Yes. If the corporation produced computer programs as defined by Rule 3.308, it could buy the listed wrapping and packaging supplies tax free by giving its suppliers an exemption certificate instead…
Were bags supplied to third parties tax-exempt packaging when used for cement the company made versus cement it bought from other manufacturers?
Bags used to package the company's own manufactured cement were exempt even when an unrelated packager did the work. Bags supplied to other manufacturers for cement the company later bought and…
If an out-of-state trade-show promoter's only New York activity is renting a convention center for a single three-day franchise expo, does that one event make it subject to New York corporate franchise tax?
Yes. Blenheim Franchise Shows, Inc., a Florida-based producer of small franchise expos with its only office in Winter Park, Florida, produced 43 shows nationwide in 1990 -- only one of them in New…
Did ABC's South Carolina quality-control and customer-complaint visits exceed Public Law 86-272 solicitation protection?
Yes. ABC's technicians and plant managers inspected rejected yarn, decided whether it was defective, proposed remedies, and advised customers how to adjust machinery or processes. The ruling held…
Did section 6563 prevent California from issuing a new determination for a tax period that remained open after an earlier determination and hearing?
No. The memorandum treated section 6563 as authority that can extend the Board's ability to increase a determination, not as a restriction on an otherwise open period.
Was the S.B. 324 fee charged by a local recording insurance agent for services outside the insurer-paid commission subject to Texas sales or use tax?
No. The authorized fee itself was not subject to sales or use tax. But the agent still had to pay vendors' tax on any taxable property or services acquired for the client, and that tax became part…
Did the taxpayer's publication qualify as a magazine, and what objective criteria did Texas use to distinguish a magazine from a newsletter?
Yes. The publication qualified because it had paid subscribers, appeared monthly, contained articles by various writers, and used a second-class postal permit. Texas also considered whether a…
If an out-of-state manufacturer's only New York presence is a handful of employee-days per year repairing products it sold, is that enough activity to make it subject to New York's corporate franchise tax?
Yes. The American Crane Corporation, a North Carolina crane manufacturer with all operations based in Wilmington, sent a small service department into New York for a maximum of about two weeks a…
Were a printer's sales of advertising inserts exempt when the retail-business customer—not the printer—contracted with newspapers for insertion and distribution?
Inserts for sold newspapers could be supported by resale certificates; free-newspaper inserts became exempt October 2, 1991, and qualifying printed sales messages required proper carrier delivery.
How did California tax a stage-production company's design work, scenery, models, out-of-state projects, installation, and equipment rentals?
Transferred designs, models, scenery, platforms, and related production charges were generally taxable; qualifying out-of-state shipments and installation labor could be excluded, and actual…
Could a taxpayer file monthly Texas sales-and-use-tax returns using a 13-period accounting calendar, and how were period-end dates assigned to returns?
Yes. Periods ending on days 1-10 were reported on the prior month's return due on the 20th of that month; periods ending on days 11 through month-end were reported on that month's return due the…
Was a monthly fee for access to a computer database of found animals taxable when people reporting found pets supplied information for free?
Yes. The monthly fee paid by owners of lost pets for access to the found-animal database was taxable as an information service under Rule 3.342.
Were automobile hand controls and a vehicle modified for an orthopedically handicapped person exempt from Texas tax?
Yes under the stated conditions. Hand brakes were exempt orthopedic devices when they enabled a person with missing, damaged, or nonfunctioning organs or appendages to drive, and § 152.086 exempted…
If a company has no office in New York but its employees occasionally spend a small amount of time there, does any of their compensation count in the numerator of the Article 9-A payroll factor?
No -- the payroll factor numerator is zero. Himont USA, Inc., a Delaware company with no office or place of business in New York and no New York-resident employees, had a small property factor…
When could a DME company sell qualifying medicines tax-free to nursing homes and long-term-care facilities?
The memorandum said qualifying health facilities could use exemption certificates, while mixed-use buyers could use resale certificates and pay use tax on taxable items withdrawn for their own use.
Was a confidential, client-tailored medical literature search a nontaxable proprietary-information service when its source material came from public-access databases?
No. The search was a taxable information service because the client had no enforceable proprietary rights in the public-access source material. Tailoring the search, keeping results confidential, or…
When were a property manager's repair and maintenance services exempt for permanently assigned employees, related corporations, rental property, and dollar-for-dollar reimbursements?
The employee exclusion required rental property, permanent assignment to one owner's property or properties, and dollar-for-dollar reimbursement. Common ownership alone did not merge separate…
Were a nonprofit club's charges for horse-stall space and feeding taxable when stable access was a membership privilege versus being offered to members and nonmembers alike?
The charge was taxable effective October 1, 1991 if the right to stable a horse was a privilege of club membership. It was not taxable if the stable facilities were available to members and…
Could a contractor deduct preliminary design work from the taxable price of brochures written, designed, and printed for California?
No. The entire brochure price was taxable because the contractor used the finished art to produce its own printed product, did not furnish finished art to the client, and showed no qualifying…
Did the 1991 removal of the Section 501(c)(7) club exemption make dues and membership fees taxable for fraternities, sororities, scouts, and similar service organizations?
No. The Comptroller's clarification said dues and membership fees paid to fraternities, sororities, scouts, and similar service organizations were not subject to the newly enacted amusement-services…
Could an amusement provider be designated as solely responsible for sales tax when a ticket agent sold admissions and a successor disputed who had to collect and remit?
No sole designation was given. The parties' contract could assign collection and remittance duties, but it did not bind the Comptroller. If the ticket tax was not reported and paid, Texas would hold…
Were a nonprofit country club's membership dues exempt when members prepaid them before the October 1, 1991 repeal of the club exemption?
Yes. Dues actually received before October 1, 1991 were exempt with no limit on how far ahead a member could prepay. Later income recognition did not make them taxable, but the club had to keep…
Was a charge for drug-screening urinalysis taxable, and what happened if the consultation also included licensed background or character investigations?
Urinalysis by itself was not taxable. If the same consultation included background checks, character investigations, or similar work requiring a license under the Private Investigators and Private…
How did the October 1, 1991 effective date apply to a private club's initiation fees, equity component, installment payments, and operations assessment?
The member's joining date controlled. Fees assessed to members joining before October 1 were nontaxable even if paid later; fees for members joining on or after that date were taxable, including the…
Can a customer give a contractor a capital-improvement certificate after the contract is signed and the first tax invoice is paid, and who then owes tax?
Yes, the customer can furnish the certificate later, with limits. Once Action Scale receives a properly completed Certificate of Capital Improvement, it must stop collecting sales tax on future…
Which dental-lab charges did SC Revenue Ruling 91-19 treat as exempt prosthetic production, taxable products, or services?
Charges for listed stages used to manufacture exempt dentures or crowns were part of the exempt prosthetic-device sale, even when several labs billed separate stages. Surgical trays and night guards…
How did California tax a satellite information subscription that included company-owned receiving equipment, startup fees, and monthly charges?
Satellite transmissions were nontaxable services, but the equipment appeared leased; tax could be measured by timely paid equipment cost or by attributable rentals depending on acquisition and…
Were subscription charges for satellite data transmissions and the receiver equipment both subject to California tax?
Transmission charges were not taxable; the receiver was apparently leased, with tax on cost after a valid election or otherwise on attributable rent.
Were natural gas and electricity exempt when a plant manufactured restaurant equipment partly for sale to franchisees and partly for use in company-owned restaurants?
Only the utility used to manufacture equipment sold to franchisees was exempt. Utility used to make equipment for the company's own restaurants was taxable. Because the submitted study did not…
Were truck-time and per-gallon charges for disposing of oil and water from a groundwater test well taxable as waste removal?
No, if the waste was an industrial discharge regulated under a Texas Water Commission permit. The provider needed a properly completed exemption certificate; without one, the service was presumed…
Is a contract to care for and maintain live plants (like office interior plants) subject to Nebraska sales tax?
Yes. Under Revenue Ruling 01-91-2, when the owner of live plants that are not incorporated into real property buys an agreement providing for the continuing care or upkeep of those plants, the sale…
Did allocating overhead costs to qualifying federal contracts make the overhead purchases nontaxable when the taxpayer's own contract lacked a title-passage clause?
No. Cost allocation and similar accounting treatment did not replace a title-passage clause; overhead tied to contracts lacking the required clause remained taxable.
Were fees for storing fire- and water-damaged property and the premium for bailee's insurance subject to Texas sales tax?
No. The Comptroller said both the storage fees for fire- and water-damaged items and the bailee's-insurance premium were nontaxable, and allowed continued reliance on the June 1989 Sales Tax Review.
Is the sale of advertising space in a free discount-shopper directory subject to New York sales tax?
No. A client that publishes a discount shoppers directory and earns income only from selling advertising space in it is providing an exempt advertising service, not a taxable information service.…
Which refund deadline governed Florida estate tax, and did a later federal estate-tax determination extend the deadline for a separate refund claim based on another state's domicile assertion?
The specific four-year estate-tax nonclaim period controlled over the general three-year refund statute. A timely final federal determination could preserve a refund tied to changed federal estate…
Were recurring club assessments billed in late September for October taxable, and were September amusement services taxable if payment arrived after October 1, 1991?
October assessments billed in advance at the end of September were taxable. By contrast, billings for amusement services actually provided in September were nontaxable even when the club received…
Did a secured lender become liable for borrowers' unpaid Florida sales tax when it repossessed grocery-store collateral worth less than the debt under liens perfected before the state's tax warrants?
No. The lender's perfected security interests predated the tax warrants, the secured debt exceeded the collateral value, and the borrowers had no equity. With no voluntary sale and no purchase money…
Were concession-stand food sales exempt when a school-associated group sold them as a fundraiser and kept all net proceeds for its exclusive use?
Yes. Under the stated facts, the sales were exempt because the group was associated with a public or private elementary or secondary school, the sales were part of its sponsored fundraising drive,…
Was regularly scheduled cleaning of kitchen vent hoods and exhaust systems nontaxable preventive maintenance or taxable building cleaning?
It was taxable building and grounds cleaning under Rule 3.356. Although the work helped prevent fires and had maintenance features, Texas found it closer to chimney or duct cleaning than to the…
Were monthly data-processing, remote computer access, software modification, workstation, implementation, and dedicated-circuit charges taxable when the provider's computer was in Florida?
Yes. Remote access to the provider's Florida computer was a taxable rental or license of tangible personal property. Monthly and implementation charges, additional workstations, and…
Which for-profit country-club membership dues did historical SC Revenue Ruling 91-18 subject to admissions tax?
The ruling taxed social dues that included discounts or privileges for other club facilities for all open periods. Beginning April 1, 1992, it also taxed true social dues and the full amount of…
Were sales to Amtrak exempt from California sales and use tax even though Amtrak was not a United States instrumentality?
Yes. The 1991 memorandum said federal law exempted Amtrak from state sales and use taxes, so California treated sales to Amtrak as exempt under Revenue and Taxation Code section 6352.
How did Texas tax HVAC maintenance and repair contracts for tangible equipment, commercial real-property systems, and residential real-property systems?
Tangible-equipment service was taxable. Scheduled preventive maintenance on commercial realty was nontaxable, but repair charges were taxable and an unallocated lump sum became taxable when repairs…
Which supermarket bags and food-packaging supplies were taxable at checkout, produce, bakery, and meat departments?
Checkout and produce bags were taxable. Bakery packaging was exempt only when the store baked its own goods and supplied an exemption certificate. Meat trays, film, pads, and paper were exempt…
Was the absorbable Collastat collagen sponge exempt as prescription medicine in California?
No. California treated Collastat as a taxable temporary biological dressing because it stopped bleeding and supported clot formation like a traditional bandage or dressing.
Was a temporary bovine-collagen corneal shield exempt as prescription medicine in California?
No. California treated the shield as a taxable temporary biological dressing because it protected and hydrated the cornea while the tissue healed.
Did one subscription installment paid before July 15, 1991 grandfather the entire magazine subscription after California repealed its general exemption?
Yes. A partial payment to the retailer before July 15, 1991 made the entire subscription 'paid for' before that date for section 6362.3's historical grandfather clause.
Could a pharmacy buy prescription labels, patient-use information, and bags tax free when pharmacists compounded chemicals and mixed medicinal solutions?
Yes. Texas treated compounding raw chemicals and mixing liquids and solids into medicines as processing, so the prescription labels, patient-use information, and bags used to convey those medicines…
Who had to collect Texas tax on sales made through a direct-sales company's local distributors, and how did churches and schools document exemption?
The direct-sales company had to collect and report tax on its distributors' Texas sales. Churches and schools generally needed exemption documentation; a public-school purchase order was sufficient.
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