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 assigning a Florida property owner's lessor rights under tenant leases subject to documentary stamp tax?
No. The assignment transferred only the owner's lessor rights, including the future rental stream, and not a possessory leasehold or other interest in Florida real property.
Which machinery and equipment used to generate electricity qualifies for Florida's sales-tax exemption?
Machinery and equipment directly integrated into producing electricity qualified, including certain plant-support equipment and dedicated enclosures. Transmission equipment, general real-property impr…
Could a New Mexico business recover gross receipts tax overpayments discovered during audits when its refund filings and later challenges missed statutory deadlines?
No. Inner Works discovered that it had overpaid gross receipts tax by failing to deduct qualifying sales of services to out-of-state purchasers. Its July 2015 claim for 2009 qualified for a special on…
Did South Carolina waive the estimated-tax underpayment penalty for farmers and fishermen for tax year 2018 (per SC IL #19-8)?
Yes. Following IRS Notice 2019-17, South Carolina will waive the estimated-tax underpayment penalty for qualifying farmers and fishermen for tax year 2018 if they file their income tax return and pay …
How does South Carolina individual income tax conform to the federal Tax Cuts and Jobs Act and related laws (per SC IL #19-7)?
SC Information Letter #19-7 summarizes how South Carolina's individual income tax conforms to the Internal Revenue Code through February 9, 2018. Under the 2018 SC Taxpayer Protection and Relief Act (…
How does a Texas city with special-population hotel-project authority qualify, measure the 1,000-foot ancillary-facility radius, and pledge project taxes — and which facilities count as ancillary?
This replacement ruling answers nine questions for a city authorized to run a hotel project by a special population/geography category (96,000+ residents in the county containing the San Gabriel River…
Which ancillary facilities count toward a Texas hotel project's 1,000-foot tax-rebate zone, and does a spa/fitness center qualify as a 'shop'?
A spa or fitness facility does NOT qualify as a tax-rebate-eligible 'shop' or ancillary facility for a Texas hotel project because it doesn't exclusively sell tangible personal property, but retail sh…
Is a company's generic weather/market forecasting service, sold to multiple clients, subject to Texas sales tax, and does custom forecasting made just for one client get treated differently?
As originally issued: generic forecasting reports sold to multiple clients were a taxable information service (with 20% of the charge exempt), while custom forecasts built just for one client using th…
Are an interior designer's furniture markups, mover charges, and reimbursed expenses subject to Florida sales tax and discretionary surtax?
Yes. Furniture markups and passed-through storage, handling, and reimbursed expenses were part of taxable sales price. Markups counted toward the $5,000 surtax limitation on documented single sales; s…
How was South Carolina's state-tax addback calculated for individuals itemizing deductions in tax years 2018 through 2025?
For tax years 2018 through 2025, an individual who itemized federally and deducted state and local income tax or elected general sales tax generally added back the lesser of: itemized deductions excee…
Can an online software marketplace that facilitates downloads by independent vendors be treated as a vendor required to collect New York sales tax?
Yes, at the Commissioner's discretion. The operator runs app/software marketplaces where independent software vendors (ISVs) sell downloadable prewritten software; the operator hosts the products, col…
My tax-prep software vendor charges sales tax on the annual license, which I accept, but also on a separate 'REP access' fee each time I use an add-on module for a client -- is that REP fee taxable?
The Department could not answer this taxpayer's actual question -- it said it was unable to determine, on the facts given, whether the per-use REP access fee is a charge for computer software or is pr…
Was income earned by a bona fide tribal member from work pursued on the tribe's Virginia reservation exempt even if the member lived off reservation?
Yes. Virginia clarified that the exemption turned on bona fide tribal membership and income derived from activities pursued on that tribe's reservation, not on the member also residing there. A tribal…
What 2018 estimated-tax penalty relief did Virginia provide to qualifying farmers, fishermen, and merchant seamen?
Virginia automatically waived the 2018 estimated-tax underpayment penalty for qualifying farmers, fishermen, and merchant seamen who filed their return and paid all tax due by April 15, 2019 instead o…
What Virginia tax interest rates applied during the second quarter of 2019 to assessments, refunds, disputed assessments, estimated tax, and local taxes?
For April 1 through June 30, 2019, Virginia's ordinary state interest rates were 8% on tax underpayments and assessments and 8% on noncorporate overpayments and refunds, reflecting federal 6% rates pl…
For a combined group's Texas franchise tax report, how do you apportion receipts from sales to a Texas warehouse, sales to unaffiliated buyers in and out of Texas, and sales between the group's own members?
A four-part combined-group apportionment ruling: (1) a supplier has Texas nexus and Texas-sourced receipts just from having inventory in a Texas warehouse it still owns, even before selling it; (2) sa…
What does Illinois General Information Letter ST 19-0005-GIL conclude about Nexus?
The Department declined to fill out a multistate nexus survey, saying nexus is too fact-specific for a General Information Letter -- but it laid out the general framework: remote sellers with no physi…
What does Illinois General Information Letter ST 19-0004-GIL conclude about Food?
The high (general merchandise) rate applies. Illinois taxes food 'prepared for immediate consumption' -- food a retailer makes ready to eat without substantial delay -- at the high rate, not the low g…
Does pallet racking, a conveyor system, or forklifts qualify for Illinois's Enterprise Zone building materials sales tax exemption?
Picking carts, a floor scrubber, cherry pickers, and reach trucks do NOT qualify for Illinois's Enterprise Zone building materials exemption, because they are mobile equipment, not items permanently a…
Does Illinois charge sales tax on digital art files that customers download electronically?
No. Illinois Retailers' Occupation Tax and Use Tax (the state's 'sales tax') apply only to sales of tangible personal property, so a home-based designer's digital art files sold and downloaded electro…
What is South Carolina's tax interest rate for underpayments and overpayments for the period ending June 30, 2019 (per SC IL #19-6)?
6%. SC Information Letter #19-6 sets South Carolina's interest rate on tax underpayments and overpayments at 6% for the period January 1, 2019 through June 30, 2019. Interest is compounded daily, exce…
Could a New Mexico grandmother claim two minor grandchildren as dependents when they lived with and were supported by her but another taxpayer also claimed them?
Yes. Priscilla Montoya credibly proved that her two minor grandsons lived with her for more than half of 2017 and that she provided their home, food, clothing, school transportation, supplies, program…
Can a Florida government retroactively remove sales tax after its contractor already bought public-works materials and paid the tax?
No. Once the contractor bought the materials and paid tax, the government could not retroactively supply exemption documents. The government had not directly ordered, been invoiced for, paid for, take…
Did tax paid to vendors excuse untaxed employee sales or Virginia use tax when records were missing and an out-of-state tire vendor never remitted the tax?
No. Attire and tools resold to employees were taxable retail sales; the contractor should buy them under resale certificate, then collect and remit tax from employees. Current invoices could not prove…
How did the Veterans Benefits and Transition Act change Virginia tax residency elections for military spouses beginning in 2018?
Beginning with taxable year 2018, a qualifying military spouse could annually elect the service member's state residence for tax purposes even when the spouses previously had different domiciles. The …
Is a stand-alone vehicle trade-in appraisal service sold to car dealerships' customers a taxable information service in Texas?
Yes. A stand-alone motor vehicle trade-in appraisal service sold to a dealership's customers is a taxable information service (80% of the charge is taxable), because the service provider — not the dea…
Is a subscription-based online childhood education curriculum (with lessons, live tutoring, and assessments) subject to Texas sales tax?
No. A subscription-based online curriculum for home-schooled and classroom students — including lessons, videos, worksheets, live tutoring, and guided assessments aligned to Texas TEKS standards — is …
Is a SaaS platform that turns clients' raw customer data into structured advertising databases taxed as a data processing service or an information service?
It's a taxable data processing service (only 20% exempt under Tex. Tax Code § 151.351), not a nontaxable service and not an information service, because the platform processes, reformats, and restruct…
Is a trade association's live/recorded webinar training for bank employees, with free downloadable training materials, subject to Texas sales tax?
No. A nonprofit trade association's live and recorded webinar training for bank employees — including continuing-education and regulatory-compliance content, chat-room Q&A, and free downloadable train…
Is a company's online webinar training course subject to Texas sales tax as an amusement or information service?
No. A company's online webinar training courses are nontaxable educational services under Texas sales tax law, not taxable 'amusement services' or 'information services,' even though customers can ear…
Which pieces of compression, cooling, and refrigeration equipment in a Texas LNG export facility qualify for the sales tax manufacturing exemption?
Yes, with one narrow carve-out. Compressors and coolers that pressurize or temperature-condition the gas stream to the specs required by an already-exempt piece of processing equipment (like the Acid …
Could a New Mexico contractor avoid gross receipts tax penalty and interest because its customer said a direct-pay certificate made the customer responsible for the tax?
No. Apple Electrical Contractors stopped billing and paying New Mexico gross receipts tax after a major customer said it had a New Mexico direct-pay certificate and paid the tax itself. The customer n…
How did Virginia's 2019 emergency conformity law affect 2018 income-tax returns, GILTI, business interest, NOLs, and individual refunds?
Virginia advanced its fixed conformity date to December 31, 2018, generally adopting the Tax Cuts and Jobs Act and Bipartisan Budget Act rules for 2018, while preserving listed exceptions such as bonu…
Could a divorced New Mexico taxpayer use head-of-household status when her college-student son lived with her from June 24 through the end of the year?
Yes. Pamela Castaldi credibly proved that she was unmarried, maintained her home at her own expense, and supported her college-student son, who was under age 24 and lived with her from June 24 through…
Does a joint ownership agreement, where a nominee holds legal title to real property for five co-owners, create a separate entity subject to Texas franchise (margin) tax?
No. A nominee that holds bare legal title to real property for five co-owners under a joint ownership agreement (JOA) is not a taxable entity for Texas franchise tax purposes — it's not a partnership …
What does Illinois General Information Letter IT 19-0003-GIL conclude about Subtraction Modification (Retirement Income)?
No: dividends paid on company stock held in a regular taxable brokerage account (as opposed to an IRA or qualified retirement plan) are not retirement income and may not be subtracted from adjusted gr…
Could Virginia source nearly all of an online-services company's receipts to Virginia under the costs-of-performance rule even though more than 95% of its sales were to out-of-state customers?
Yes. The Supreme Court of Virginia upheld the Department's use of costs-of-performance sourcing because the company's online content was developed by Virginia employees and stored on Virginia servers.…
Is frac sand that's washed, dried, and sized taxable as 'processed' material, or exempt as unprocessed sand, under Texas sales tax law?
It depends on whether the sand is recombined after sizing. A frac-sand producer's 40/70 sand stays exempt unprocessed sand because it needs no recombining after washing, drying, and size-separation, b…
Could Halliburton deduct gross receipts from hydraulic-fracturing chemicals as sales of chemicals in lots over 18 tons?
No. Halliburton used the products while performing hydraulic-fracturing services; it did not sell them to well operators merely because contracts discussed goods or invoices stated product amounts sep…
Are monthly membership fees for a fitness center that ONLY offers scheduled, instructor-led training classes (no open gym access) taxable as an amusement service in Texas?
No. Monthly membership fees for a fitness center are not taxable as an amusement service when members can ONLY attend scheduled classes led by certified coaches — with no open access to the facility o…
Can a Virginia cigarette wholesaler reduce an estimated sales-tax assessment by producing signed resale certificates and sales invoices after the audit?
Yes, for the documented sales. The Commissioner accepted customer-signed resale certificates and invoices as sufficient wholesaler records and ordered those sales removed from the assessment. Cigarett…
Are an auto auction's sales of total-loss vehicles to foreign buyers exempt from Virginia retail sales tax as motor-vehicle sales, resale transactions, or foreign exports?
No, not on the documentation presented. The Tax Commissioner upheld retail sales tax because the salvage or nonrepairable vehicles no longer had valid DMV titles, the foreign buyers' multijurisdiction…
A tissue bank charges medical-research clients fees to recover, process, store, and ship donated non-transplantable human tissue. Are those charges subject to Utah sales tax?
No. The Commission held the tissue bank is selling nontaxable services, not tangible personal property. Although body parts are 'tangible personal property,' Utah's Anatomical Gift Act bars selling th…
Could a cigarette wholesaler overturn reconstructed sales with unsigned invoices and resale certificates first supplied on appeal for inactive or nonfiling customers?
No. Virginia wholesalers must keep purchaser name, address, registration number, date, goods, price, and separate wholesale and retail records. The taxpayer's unsigned cash invoices lacked verificatio…
Can a business appeal a city's partial denial of a BPOL tax refund directly to the Virginia Department of Taxation?
Not immediately. A city's denial of part of a BPOL refund is an appealable event, but the taxpayer must first file a local appeal within one year of the denial. The city's existing letter was not a va…
Were fees for game-terminal software activation codes taxable when the codes were sent electronically and no tangible property accompanied them?
No. The terminal software was already installed, and an operator paid only for an electronically transmitted code that activated or renewed access. Virginia treated the code as an electronically deliv…
Can an Illinois partnership claim a refund or credit itself when it overpaid pass-through withholding on behalf of its nonresident partners?
No. Under 86 Ill. Adm. Code 100.7035(e), a partnership (or other pass-through entity) may not claim a refund or credit for an overpayment of pass-through withholding made on behalf of a partner; the i…
Which assessments remain exempt after a Florida homeowners' association merges with a recreational club?
Regular mandatory assessments and qualifying equity capital contributions were exempt. Optional benefitted and operating assessments for golf and tennis, along with voluntary dues, fees, and other opt…
How can taxpayers check whether an older South Carolina advisory opinion was modified or superseded (per SC IL #19-4)?
Use the citator attached to SC Information Letter #19-4. It helps you determine what effect newer South Carolina advisory opinions have on previously published ones — whether an opinion was modified, …
Where can taxpayers find South Carolina Department of Revenue advisory opinions by tax topic through December 31, 2018?
Use the subject index attached to SC Information Letter #19-3. It organizes South Carolina Department of Revenue advisory opinions issued from 1987 through December 31, 2018 under administrative, alco…
May a Florida janitorial company buy restroom supplies tax-free for resale when it also provides taxable cleaning services?
Yes for restroom consumables separately itemized and priced as customer purchases. No for chemicals, polishes, and solutions the janitorial company itself consumed while cleaning; it remained the taxa…
Does a hotel owe Texas sales tax on staffing fees it pays a temporary employment service for housekeeping and banquet/catering employees?
No. A hotel's purchases of temporary housekeeping and food-and-beverage staffing services are exempt from Texas sales tax under Tax Code § 151.3503(a)(2) because the hotel maintains its own regular st…
May a Florida landlord allocate rent for multiuse commercial property by square footage when different areas have different sales-tax treatment?
Yes, assuming the areas had similar rental value. Square footage was a reasonable way to apportion rent among differently taxed uses, but areas designated for an exempt use could not also be used occa…
Which BPOL assessments could a taxpayer still challenge when the county issued late and supplemental assessments during a local appeal?
The county had to abate the 2013 BPOL assessment because it was issued outside the three-year assessment period. The taxpayer's appeal time for the original 2015 and 2016 assessments had expired, so t…
Can a Virginia taxpayer use the government-employee salary subtraction for a federal retirement annuity reported on Form 1099?
No. The subtraction applies to qualifying salary earned as a federal or state employee, not a federal retirement annuity reported on Form 1099. The Department also rejected reliance on return instruct…
Does an out-of-state rental-listing website create Virginia corporate income tax nexus by employing one Virginia salesperson?
Not on the limited facts presented. The Department said the Virginia salesperson appeared not to create nexus if the employee only solicited and signed contracts subject to out-of-state approval and a…
Is a Virginia seller of topsoil, mulch, stone, compost, and soil mixes a real-property contractor when it only sells and delivers the materials without installing them?
No. The Tax Commissioner treated the business as a retailer because its invoices showed sales and delivery of tangible products but no installation or other work on real property. The special contract…
Is sand mined from Texas sand dunes, washed in paddle-agitated attrition cells and dried to under 0.1% moisture, taxable as processed sand?
No. A sand mining company's product — mined from Texas sand dunes, washed in paddle-agitated 'attrition cells' to remove clay, dried to under 0.1% moisture, and screen-sorted into precise sizes with n…
How is Texas sales tax computed on an employee incentive program that charges website-design fees, transaction fees, and reward certificates redeemable for merchandise or gift cards?
A four-way split: website design/consulting charges are a taxable data processing service (80% taxable); transaction fees for issuing reward certificates are NOT taxable because certificates are an in…
Does washing frac sand in 'attrition cell scrubbers' to remove clay make it taxable processed sand under Texas law?
No. A frac-sand producer's sand — washed in attrition cell scrubbers to remove clay and organics, then dried and sorted into two sizes with no remixing — stays exempt unprocessed sand because the scru…
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