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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If mined sand is unprocessed, can the mining company still claim a tax exemption on the electricity used to move it, even without the manufacturing-equipment exemption?
Yes for electricity used to transport the sand, no for equipment or natural gas. A sand mining company's washed, dried, sorted, and hydroclone-separated sand is unprocessed and exempt from sales tax; …
Is frac sand run through attrition mills (spinning-paddle scrubbers) to remove clay, then washed, dried, and sorted by size with no remixing, taxable 'processed' sand in Texas?
No, it's exempt unprocessed sand. A sand mining company's frac sand — even though it passes twice through attrition mills that spin the sand with polymer paddles to clean off clay — stays nontaxable u…
Could a New Mexico concrete contractor recover money taken by bank levy because private consultants had promised to arrange a tax payment plan?
No. Rojo Concrete Construction admitted its underlying tax debt and ownership of the Wells Fargo account. Two prior Department payment plans had ended after default, and neither a tax consulting firm …
Could a New Mexico rancher deduct Schedule F losses when the ranch had recent net losses but was operated in a businesslike manner with an intent to profit?
Partly. New Mexico had authority to determine the correct federal adjusted gross income even though the IRS had accepted the returns. But Ernesto Hurtado proved that his cattle ranch was operated for …
Are mandatory assessments paid by Florida homeowners for association-owned club facilities subject to admissions tax?
No for mandatory assessments paid by residential owners for association-owned common facilities. Annual charges to nonresident members and optional memberships or user fees were taxable, while qualify…
Is a 25-year build-to-suit lease for a Texas charter school campus an exempt contract, letting the landlord/developer buy construction materials tax-free?
Yes. A charter school's 25-year build-to-suit lease with a private landlord qualifies as an exempt contract under Tax Code § 151.311, letting the landlord issue exemption certificates instead of payin…
What does Illinois General Information Letter IT 19-0001-GIL conclude about Credit — Hospital Credit?
The Department explained that the Section 223 hospital income tax credit for a given taxable year equals the lesser of the real property taxes paid that year on hospital property (for use in the prior…
Does a retail bakery that bakes and sells its own kolaches and pastries qualify for Texas's reduced retail/wholesale franchise tax rate?
No. Even though a retail bakery's sales of kolaches and pastries count as "retail trade" revenue, the bakery doesn't qualify for Texas's reduced retail/wholesale franchise tax rate because 88% of its …
Does an older, non-current comic book issue lose Illinois's sales-tax-free 'newsprint and ink' exemption just because it's not the newest issue?
No. As long as the comic book title is currently published at least twice a year and this particular issue is sold at or below cover price, it stays exempt from Illinois Retailers' Occupation Tax as '…
Could New Mexico taxpayers avoid estimated-tax and negligence penalties when the Department mistakenly mailed an overpayment they had asked to apply to the next year?
No. Ronald and Paula Peterson asked New Mexico to apply their $2,978 2016 overpayment to 2017 estimated tax, but a Department data-entry error caused a refund check instead. They cashed the unexpected…
New York Advisory Opinion TSB-A-20(1)C: Does being 'formed for' a telephone business decide Article 9 vs Article 9-A status, and does deriving more than 50% of receipts from non-Article-9 activities make a corporation an Article 9-A filer?
What a corporation was 'formed for' is not dispositive; Article 9 vs Article 9-A status turns on what it is principally engaged in, and a corporation deriving more than 50% of its aggregate gross rece…
Do charitable organizations owe Illinois sales tax when they sell snacks to the students they serve?
It appears yes, taxable. The organization hoped its snack sales to students would qualify for the nonprofit noncompetitive-sales exemption, but IDOR found the students' dominant motive was buying food…
Did Silver Oak Drilling qualify as an eligible employer for New Mexico's High-Wage Jobs Tax Credit, and which of its 148 claimed positions qualified?
Silver Oak was an eligible employer, but only 12 positions qualified. Its two largest customers had New Mexico operations but were headquartered outside the state and authorized and funded purchases f…
What are South Carolina's 2019 county tier rankings for the job tax credit, and which counties qualify for the tax moratorium and reduced fee-in-lieu investment (per SC IL #19-2)?
SC Information Letter #19-2 sets the 2019 county designations that drive several South Carolina incentives. For the job tax credit, the 46 counties are ranked into Tiers I-IV (higher tiers = larger cr…
What are South Carolina's state and county per capita income figures used for tax incentive eligibility (per SC IL #19-1)?
South Carolina's per capita income is $41,633, and SC Information Letter #19-1 lists the per capita income figure for each of the 46 counties (from Dillon at $27,111 to Charleston at $57,281). These f…
Does selling a financial-planning company that uses proprietary spreadsheets and software qualify for Virginia's technology-business capital-gain subtraction?
No. A financial-planning and investment-management company did not become a qualified technology business merely because proprietary spreadsheets, forms, charts, graphs, and other programs were includ…
May part-year Virginia residents exclude income earned before moving to Virginia when calculating the credit for low-income individuals?
No. For the credit for low-income individuals, a part-year resident starts with federal adjusted gross income and may make only the Virginia additions and subtractions authorized by statute. Income ea…
Does a notice saying a taxpayer plans to appeal preserve Virginia's 90-day tax-appeal deadline if it gives no grounds or supporting facts?
No. A complete Virginia administrative appeal had to state the taxpayer's grounds and relevant facts within 90 days after the assessment was mailed. The taxpayer's letter was only a notice of intent, …
Did a taxpayer successfully abandon Virginia domicile after moving for an indefinite job, listing the Virginia home for sale, and relocating with a spouse?
Yes. The Commissioner found that the taxpayer changed domicile in March 2014 by leaving for indefinite employment, physically relocating with his spouse, listing the Virginia home for sale, using the …
Are home-staging design fees exempt from Virginia sales tax when furniture-rental and design charges appear separately on the same invoice?
No. Interior-design services are exempt when sold alone, but listing design and furniture-rental charges separately on the same invoice still created a taxable lump-sum transaction under 23 VAC 10-210…
Must a Virginia wedding planner collect sales tax on planning fees and pass-through vendor charges for catering, cakes, salon work, and officiants?
Generally no on the documented facts. The Commissioner found that the planner was not a caterer because it did not prepare, deliver, or serve food, and that its true object was nontaxable event-planni…
Are tickets to Georgia business-training seminars taxable admission charges when the program is educational but includes brief entertainment?
No. Tickets to seminars providing about 16.5 hours of business instruction were not taxable admissions because attendees came for job-training-like education and self-improvement, not amusement or ent…
What does Illinois Private Letter Ruling ST 18-0013-PLR conclude about Automobile Renting Tax?
The Department ruled that a company leasing used vehicles through a mobile app on a 45-day, monthly-renewing term is a 'rentor' subject to Illinois Automobile Renting Occupation and Use Tax (5% of gro…
Did the Tax Cuts and Jobs Act's zero federal personal-exemption amount eliminate Louisiana personal exemptions and dependent tax benefits?
No. Federal law kept the number of taxpayer, spouse, and dependent exemptions but set the federal amount to zero for 2018-2025. Louisiana used the federal count with its own state amounts, so its exem…
Could New Mexico eliminate the payroll factor from Discover Bank's special financial-institution apportionment formula merely because payroll was less than 3% of income?
No. Discover Bank used New Mexico's prescribed property-payroll-receipts formula for financial institutions. The Department deleted payroll because its everywhere payroll averaged 1.69% of income, inc…
Could Washington residents who adopted four New Mexico special-needs children claim New Mexico's $1,000-per-child refundable adoption credit?
No. Mark and Ikesha Owens adopted four New Mexico children certified as special needs and received $29,036.40 of adoption-related assistance from the state. They followed Department forms and claimed …
Does Texas use tax apply to payments a company makes on an aircraft that will be delivered outside Texas and used predominantly out of state during its first year?
No use tax is due. Texas use tax does not apply to a company's payments on an aircraft — structured as a lease that converts into a purchase — because the aircraft will be delivered outside Texas and …
Is a third-party company's charge for ERP-software maintenance and support — including tax, legal, and regulatory updates delivered electronically — subject to Colorado sales or use tax?
No. The company isn't selling taxable computer software — it's selling maintenance and support services. Even if some tangible personal property changes hands while providing those services, it is de …
Does a county's later partial reduction of a BPOL assessment create a new appealable event and restart the local appeal deadline?
No. The appealable events were the original 2013 and 2014 assessments, not the county's November 2016 partial reductions. Because the taxpayer did not file local appeals by December 31, 2014 and Decem…
Is a manufacturer's data-center property exempt from local BTPP tax when the center supports manufacturing but also runs segregated government IT and call-center services?
Partly. Data-center property supporting the manufacturer's overall operations, including manufacturing, was capital used in manufacturing and not subject to local BTPP tax. Property segregated for a g…
Can a nonprofit appeal a city's refusal to recognize a BPOL exemption before the city issues an assessment or takes another appealable action?
No. The Department lacked jurisdiction because the city had not issued or increased an assessment, denied a refund, or taken a business-classification action. A conclusion that the nonprofit's gross r…
Are a provider's broadband recovery fee, service activation fee, and early termination fee subject to Virginia's communications sales and use tax, or barred by the Internet Tax Freedom Act?
The fees are taxable and the Internet Tax Freedom Act does not bar the tax. A provider of local telephone and high-speed Internet access appealed a communications sales and use tax assessment (Decembe…
Were broadband recovery, activation, and early-termination fees taxable when charged only with Internet access service?
Yes. Virginia treated the broadband recovery, activation, and early-termination fees as taxable communications services even though they accompanied Internet access. The Internet Tax Freedom Act did n…
Can a cigarette retailer defeat a Virginia sales-tax assessment based on distributor purchase records without providing resale, sales, or inventory documentation?
No. Distributor records showed tax-free cigarette purchases exceeding the retailer's reported sales, and the retailer produced no resale certificates, sales records, or inventory documentation explain…
What Virginia tax interest rates applied during the first quarter of 2019 to assessments, refunds, disputed assessments, estimated tax, and local taxes?
For January 1 through March 31, 2019, Virginia's ordinary state interest rates were 8% on tax underpayments and assessments and 8% on noncorporate overpayments and refunds -- the federal 6% rates plus…
A company tracks visitors to its customers' websites and apps and gives them analytics reports through a dashboard. Is that data-analytics service subject to Tennessee sales and use tax, even though it relies on software the customers access?
No — the data-analytics service is not taxable. The company collects data about the users of its customers' websites and apps (via tracking code the customer installs or data the customer sends), anal…
Can an Accountable Care Organization (ACO) exclude the Medicare Shared Savings Program payments it receives from CMS from its Texas franchise (margin) tax total revenue?
Yes. An Accountable Care Organization (ACO) that receives payments from CMS under the Medicare Shared Savings Program (MSSP) and passes them on to its member health care providers may exclude those pa…
Is shipping tax-free in Illinois if it's listed as a separate line item from the price of the item?
No. Under Illinois GIL ST 18-0044-GIL, listing shipping and processing fees as separate line items does not by itself make them tax-exempt. They're taxable as part of the retailer's gross receipts unl…
For a combined-group member in START-UP NY, must income from a previously conducted line of business be disregarded for the tax elimination credit even if earned out of state, and do employees lose their wage exemption if the business faces proportional recovery?
Yes to both protections. The subsidiary must disregard income from a line of business it previously conducted when computing its tax factor for the Tax-free NY area tax elimination credit, even if tha…
Does a charity owe sales tax on its catering sales and on renting out its facility?
It depends. Catering — food and drink served by a caterer — is taxable in Colorado, but a charitable organization's sales can be exempt if they are for fundraising, number 12 or fewer in the calendar …
Will the Department order a BPOL refund for internet-access receipts under the Internet Tax Freedom Act when the locality claims it was grandfathered?
The Department declined to order a refund, so the city's denial stood. A taxpayer sought refunds of BPOL tax paid to a city for 2013-2015 on gross receipts from internet access services, arguing the f…
Can the Department of Taxation hear an appeal of a locality's personal property (car) tax on an individual's personal vehicle?
No -- the Department has no jurisdiction over this appeal. A taxpayer appealed a city's 2018 tangible personal property tax on his personal vehicle, arguing it should be adjusted because he left Virgi…
Is a bank board member's director compensation subject to the local BPOL (business license) tax?
The director's fees can be subject to BPOL tax. A Virginia city asked whether an individual who serves on a bank's board of directors is conducting a "business" for the local Business, Professional an…
Are insurance-company payments to an affiliated pharmacy exempt from BPOL tax as transactions between members of an affiliated group?
Yes -- those payments are exempt from BPOL tax. A city asked the Department whether payments a health insurance company makes to an affiliated pharmacy qualify for the affiliated-entity exclusion. In …
Were tickets to a nonprofit ballet company's performance exempt from Georgia sales tax under the temporary fine-arts exemption in effect in 2018?
Yes under the temporary law then in effect. Ballet was expressly included as fine art, and the performance was presented by a tax-exempt 501(c)(3) organization whose primary mission advanced the arts …
Is a deed from a corporation to its revocable chapter 736 trust exempt from Florida documentary stamp tax?
Do not rely on this TAA: Florida withdrew it effective December 17, 2021. Historically, the 2018 ruling said the deed was not exempt because a chapter 736 trust was not a section 689.071 land trust.
Is a Land Preservation Tax Credit application timely if the taxpayer says it was mailed on time but the Department never received it until after the deadline?
No -- the credit was denied because the application was not received by the deadline. Taxpayers claimed the Land Preservation Tax Credit on their 2016 return for a donation made November 21, 2016. Und…
Can a Virginia taxpayer subtract research expenses disallowed federally because of the R&D credit even if the research was done outside Virginia, and must it file an amended Virginia return?
Yes to the subtraction, and yes it must file an amended Virginia return. An S corporation filing a Virginia pass-through return asked whether it may subtract the business-expense reduction caused by c…
If a taxpayer filed separate federal and Virginia returns, can Virginia hold him to a later amended joint return he never signed?
No -- the assessment was revised in the taxpayer's favor. He originally filed his 2013 Virginia return separately from his spouse; the Department later received an amended 2013 joint return, processed…
After an assessment was upheld because a business never produced its records, can it get one more chance to provide them?
Yes -- the Department granted one final opportunity to provide the records. A gas station and convenience store operator had a retail sales and use tax assessment (January 2013 through April 2017) uph…
What is Virginia's income tax subtraction for investing in a certified Virginia REIT, and who qualifies?
Virginia allows an individual and corporate income tax subtraction for income from an investment made on or after January 1, 2019 and before December 31, 2024 in an entity the Department has certified…
Can an auctioneer sell shipping or storage containers tax-free under Georgia's GATE agricultural exemption, including portable-storage containers?
Yes. Containers of any size, dimensions, or physical makeup can qualify when used for packaging, caring for, storing, transporting, or shipping agricultural products in a qualifying operation. Portabl…
Can an airplane used for precision-agriculture crop imagery qualify for Illinois's farm machinery and equipment sales tax exemption?
It depends on how the aircraft is actually used. Illinois's farm machinery and equipment exemption can cover an aircraft IF it is used primarily for a qualifying production-agriculture activity, such …
If our out-of-state company has no offices in Illinois but has one remote employee working from home in Chicago in customer service, do we have to register and collect Illinois sales tax?
Yes. Illinois told this company that having even one employee working in Chicago -- even in customer service with no sales duties -- gives it physical presence in Illinois, which satisfies the Commerc…
Are fuel trailers sold for farm use exempt from Illinois sales tax, and does sales tax apply to a GPS subscription on leased farm equipment?
It depends for the fuel trailers: they qualify for Illinois's farm machinery and equipment exemption only if used primarily in production agriculture, not if used mainly for transportation or other no…
Do livestock shade systems (permanent or mobile) qualify for Illinois's farm machinery and equipment sales-tax exemption?
No. The Illinois Department of Revenue said both the permanent and the mobile livestock shade systems are treated as improvements to real estate, like fences or barns, not as exempt 'farm machinery an…
After a car is bought back by the manufacturer under Illinois's lemon law, how does the consumer get the Illinois sales tax on it refunded?
The consumer generally can't get it directly -- only the dealer/retailer that actually remitted the sales tax to the Illinois Department of Revenue can file a claim for credit, and only after first re…
When can the Department hear a business tangible personal property tax appeal, and what happens if the taxpayer used the wrong local appeal route or appealed before assessments were issued?
The Department had no jurisdiction over either part of the appeal. A freight-transportation taxpayer was assessed business tangible personal property (BTPP) tax by a county for 2015 and anticipated as…
Can the Illinois Department of Revenue excuse a retailer from sales tax it should have collected because its systems weren't ready, or only waive the penalties?
The Department cannot abate (excuse) sales tax that was required to be collected and remitted, including for a retailer whose systems weren't ready by its economic-nexus start date -- but it can grant…
Are charges for web-based Cloud Collaboration Service, an add-on Audio Conference Bridging Service, and a bundle of the two subject to the Illinois Telecommunications Excise Tax?
It depends on the product. The Cloud Collaboration (software) service is generally not taxable because it's accessed remotely from the cloud rather than downloaded. The Audio Conference Bridging add-o…
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