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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When a business sells the same product both at retail and bundled into a service (like a science kit included in a camp sign-up fee), how does it figure Illinois sales tax on the bundled item?
It depends on which of four Service Occupation Tax methods applies -- separately stated selling price, 50% of the entire bill, cost price (if a registered de minimis serviceman), or Use Tax on cost pr…
When a company sells custom signs into Illinois and has them installed by an independent contractor, does it charge sales tax, or does the customer owe use tax -- and what about the freight and installation charges?
It depends on the sign. A sign with 'commercial value' to more than just that buyer (e.g., a generic 'insurance' or 'hamburgers' sign) is taxable retail sale under Retailers' Occupation Tax, including…
Were receipts from DEA hazardous-material cleanup jobs in New Mexico deductible because DEA headquarters and the final disposal facilities were outside the state?
No. Advanced Environmental Solutions identified, packaged, labeled, removed, and temporarily stored hazardous materials from DEA-authorized sites, mostly in New Mexico. Although DEA headquarters appro…
If I sell modular homes bought from out-of-state factories and have contractors permanently install them, do I owe Illinois sales/use tax, and do I need to file monthly sales tax returns?
It depends on whether you're contractually obligated to permanently affix the home to real estate. If you are, you're acting as a construction contractor and you owe Use Tax on your cost price of the …
Could Virginia estimate 2014-2016 income tax from available information when a resident failed to file returns, and did reliance on a preparer excuse penalties?
Yes. After the taxpayer failed to respond adequately or file returns for 2014-2016, Virginia could estimate liability from IRS and other information in its possession. Reliance on a tax professional d…
Could taxpayers obtain a refund on a 2010 Virginia return first filed in October 2014 by measuring the deadline from an extended due date?
No. Because the original 2010 Virginia return was filed after the extended due date, the extension was not valid for measuring the refund period. The taxpayers had three years from the original May 2,…
Did a three-year foreign work assignment change a taxpayer's Virginia domicile for the 2014 income-tax year?
No. The taxpayer's three-year foreign employment commitment and temporary immigration status did not show an intent to remain abroad permanently or indefinitely. He also retained two Virginia residenc…
Could a Virginia business appeal its wholesale-versus-retail BPOL classification directly to the Tax Commissioner based on the county auditor's letter?
No. The county's decision to classify all receipts as retail was an appealable event, but the auditor's letter was the initial audit decision—not a response to a local appeal—and it was not signed by …
Can a contractor get audited purchases removed from a use tax assessment by later producing documents proving sales tax was already paid, and can the interest be waived?
The contested purchases were removed, but the interest stayed. A construction company sought reconsideration of a retail sales and use tax audit (July 2009 through June 2015). The auditor had held sev…
Was High Desert Recovery liable as West Rock's successor when it continued the repossession business and retained the predecessor's assets?
Yes. High Desert Recovery continued West Rock's repossession business under the same manager, at the same location, with several of the same employees, clients, services, and transferred tangible asse…
Which parts of a Florida airport ground lease are taxed as real-property rent, and how does a tenant recover overpaid tax?
Exclude aircraft-storage space and areas used exclusively for aircraft landing or taxiing from the section 212.031 rent tax. On the stated measurements, about 58% of rent remained taxable, and any ove…
Does equipment installed during a building expansion — like a hand-washing/sanitizing station, cabinetry and workstations, and internal wall systems — qualify for the Illinois Enterprise Zone building materials sales-tax exemption?
It depends on whether the items are permanently affixed to the real estate, but based on the limited facts described, the Department said it appears the specific items described (a hygiene/sanitizing …
What does Illinois Private Letter Ruling IT 18-0011-PLR conclude about Sales Factor -Intangible Property?
Yes -- the Illinois Department of Revenue ruled that a taxpayer originating senior secured loans to customers in the ordinary course of business is treated as a 'dealer' for purposes of the Illinois s…
For Illinois sales-factor sourcing, is a taxpayer that originates loans to customers still a 'dealer' in intangible property even though it qualifies for the federal negligible-sales exemption from mark-to-market accounting?
Yes -- the Illinois Department of Revenue ruled that a taxpayer who regularly originates loans to customers in the ordinary course of business is a 'dealer' in intangible personal property under 35 IL…
What does Illinois Private Letter Ruling IT 18-0009-PLR conclude about Sales Factor -Intangible Property?
Yes -- the Illinois Department of Revenue ruled that a taxpayer who regularly originates loans to customers in the ordinary course of business is treated as a 'dealer in securities' for purposes of th…
Under Illinois Income Tax Act Section 304(a)(3)(C-5)(iii)(a), is a company that originates loans to customers a 'dealer' for sales-factor sourcing purposes even though it qualifies for the federal 'negligible sales' exemption from mark-to-market accounting?
Yes -- the Illinois Department of Revenue ruled that a taxpayer regularly originating loans to customers is a 'dealer in securities' for Illinois sales-factor sourcing purposes under 35 ILCS 5/304(a)(…
For Illinois sales-factor sourcing purposes, is a taxpayer that regularly originates loans to customers still a 'dealer in securities' even though it qualifies for the federal negligible-sales exemption from mark-to-market accounting?
Yes -- the Illinois Department of Revenue ruled that a taxpayer originating loans to customers in the ordinary course of business is a 'dealer in securities' for purposes of the Illinois sales-factor …
Under Illinois Private Letter Ruling IT 18-0006-PLR, is a loan-originating taxpayer still a 'dealer' for Illinois sales-factor sourcing purposes even though it qualifies for the federal 'negligible sales' exemption from mark-to-market accounting?
Yes -- Illinois PLR IT 18-0006-PLR holds that a taxpayer who regularly originates loans to customers in the ordinary course of business is still considered a 'dealer' under 35 ILCS 5/304(a)(3)(C-5)(ii…
What does Illinois Private Letter Ruling IT 18-0005-PLR conclude about Sales Factor -Intangible Property?
Yes -- the Illinois Department of Revenue ruled that the taxpayer, which regularly originates loans to customers in the ordinary course of business, is a 'dealer' for purposes of the Illinois sales-fa…
What does Illinois Private Letter Ruling IT 18-0004-PLR conclude about Sales Factor -Intangible Property?
Yes -- the Illinois Department of Revenue ruled that a taxpayer who regularly originates loans to customers in the ordinary course of business is treated as a 'dealer' for purposes of the Illinois sal…
What does Illinois Private Letter Ruling IT 18-0003-PLR conclude about Sales Factor -Intangible Property?
Yes -- even though the taxpayer qualified for the federal 'negligible sales' exemption from mark-to-market dealer accounting under Treas. Reg. 1.475(c)-1(c), the Illinois Department of Revenue ruled i…
Were two nonprofit directors personally liable as employers for the corporation's unpaid withholding taxes merely because they were listed as officers and could sign checks?
No. Dr. Sistar Yancy and Robert D. Townsend were volunteer directors with check-signing authority, but the executive director prepared returns and checks and decided which obligations to pay. The boar…
Is Illinois Telecommunications Excise Tax imposed on fire alarm monitoring services?
It depends on how the fire alarm company bills for the phone/transmission line. Fire alarm services provided by telecommunications retailers, or by other retailers that resell telephone services, ARE …
Does a restaurant owe sales tax on the trays, platters, and lids it buys and gives customers with food?
It depends on whether the item is essential to handing the food to the customer — and this GIL sets out the test without deciding it. A free article, bag, or container a food vendor gives a customer i…
How does Florida's $5,000 discretionary sales surtax limitation apply when one invoice sells several quantities of different tree types?
Treat each tree type as its own bulk item. The $5,000 surtax limitation applied to the line whose same-type trees totaled $14,400, but not to the two tree-type lines whose totals were below $5,000.
Do vitamins and dietary supplements qualify for Illinois's low 1% sales tax rate, or do they get taxed at the general 6.25% rate?
It depends on the label. Vitamins and dietary supplements are generally treated as 'food' and taxed at the low 1% state rate (plus local taxes) under 86 Ill. Adm. Code 130.310 -- unless they purport o…
Is aircraft repair and maintenance work performed by a Class IV FAR Part 145 facility still exempt from Illinois sales tax under 35 ILCS 105/3-5(35), regardless of the aircraft's weight class?
No longer exempt for anyone. The Department did not reach the taxpayer's specific question about aircraft weight class, because the exemption itself sunset on December 31, 2014 by operation of law und…
Could New Mexico place a tax lien on a deceased business owner's estate and spouse when the underlying assessments named only the business?
No. The Department issued 42 gross receipts tax assessments only to Special Events Marketing Tal, then years later filed a $29,776.04 lien against owner Richard Shoudt's estate and Diane K. Shoudt. Ne…
Were a medical staffing company's New Mexico receipts excluded as disclosed-agent reimbursements or deductible as health-care services?
No. Ready Tech-Go employed and paid medical professionals, contracted with New Mexico facilities as an independent contractor, billed one hourly rate, and kept the difference between that rate and emp…
How did Virginia's 2018 Worker Retraining Tax Credit guidelines define eligible retraining and the new manufacturing-student training credit?
For taxable years 2018 and later, an employer could claim 30% of eligible worker-retraining expenditures, subject to certification and special per-employee caps for private-school courses. A manufactu…
Was a court reporter personally liable for a sole proprietorship's gross receipts tax after forming an LLC but failing to update the New Mexico tax registration?
Yes. Ana Koeblitz formed New Mexico Depo, LLC in January 2012, but the business continued using the sole proprietorship's CRS account and did not register the LLC with the Department until 2018. Exter…
Could Wagner Equipment avoid civil penalties when a key employee's sudden retirement caused seven months of withholding returns to go unfiled even though the taxes were paid on time?
No. Wagner Equipment paid its withholding taxes on time but failed to file seven monthly CRS-1 returns after a 34-year employee retired on two weeks' notice. Keeping her temporarily as a remote contra…
Does a city-owned golf-resort hotel and conference-center development qualify for Chapter 351 tax rebates, and are its design and construction contracts exempt from sales tax as improvements to public property?
Partly yes on rebates, but no on the construction contracts. The city can qualify as an eligible central municipality (Section 351.001(7)(C)) once it adopts a capital improvement plan for a conference…
In a mixed golf-resort/hotel/conference-center development on city-owned land, which pieces qualify for hotel-project tax rebates, and are the construction contracts tax-exempt?
A mostly-no ruling on a complex multi-facility development: retail shops, restaurants, coffee shops, bars, and parking DO qualify as tax-rebate-eligible facilities ancillary to the hotel, but the spa/…
Does a company that only 'cross-docks' already-Illinois-stamped cigarette packages (loading them onto pallets or trucks with other grocery items for delivery to retailers, without stamping, selling, warehousing, or repacking them) need a license under the Illinois Cigarette Tax Act?
Based on the limited facts described, likely no. The Department said that if a person does not meet the definitions of 'distributor,' 'secondary distributor,' 'transporter,' or 'retailer' under the Ci…
Can an Illinois wholesaler sell unstamped cigarettes and tobacco products to a Missouri-licensed distributor without paying Illinois cigarette tax?
The Department did not give a yes-or-no answer. It responded with a General Information Letter (GIL) instead of the Private Letter Ruling the taxpayer had been told to request, and simply pointed the …
How does Illinois sales/use tax apply to a software license/maintenance agreement, including annual licensing fees and charges for updates or maintenance?
It depends on whether the software is 'canned' or 'custom' and how the agreement is structured. Canned (pre-written) computer software is generally taxable as a retail sale, but a software license esc…
What are the required wage and investment levels for Nebraska Advantage Act applications filed on or after January 1, 2019?
This ruling sets the 2019 thresholds. For Nebraska Advantage Act applications filed on or after January 1, 2019, the base average annual wage requirement is $26,895, and the required investment and em…
Which events at a qualifying nonprofit Georgia theater counted as tax-exempt fine arts under the temporary 2017-2020 admissions exemption?
Under the temporary exemption then in effect, musical theater and scripted radio performances qualified as fine arts. General narrative or book-tour events, stand-up comedy, popular performance art su…
Does Illinois approve or confirm the accuracy of another state's chart summarizing motor-vehicle sales/use tax rates and rules across states?
Not exactly. The Department said it cannot formally approve publications other than its own, but noted the submitted chart 'generally appears to be correct,' and it then supplied additional guidance o…
How should a Florida qualifying project calculate and allocate income for the Capital Investment Tax Credit?
Use a separate project ledger and pro forma return applying GAAP and section 220.13 to income earned after operations begin. Allocate the resulting Capital Investment Tax Credit among partners by owne…
Did an IT-services company prove a Virginia NOL carryforward and out-of-state cost-of-performance claim for a 2012 refund?
Not yet. Fixed-date conformity adjustments left the company with positive Virginia federal taxable income for 2011, so no Virginia NOL carried to 2012. Its aggregate payroll and property data did not …
Were Harris Corporation's $5,038,488 of High-Wage Jobs Tax Credit applications timely after a 2016 amendment changed New Mexico's filing deadlines?
Yes. Harris acquired Exelis, retained the previously approved New Mexico jobs and employees, and filed three applications for later qualifying periods on December 22, 2016. The 2013 law allowed those …
A retailer sells and installs custom wall-mounted storage systems. Is the installed system a taxable retail sale of goods, and are separately stated installation charges taxable?
The installed storage systems stay tangible personal property, so the whole sale is a taxable retail sale and the retailer is not a real-property contractor. But the separately stated installation cha…
Was Phillips 66 entitled to abatement of a $9,369.03 penalty when a Department system error and employee advice delayed its severance-tax payment by one day?
Yes. Phillips 66 tried to file its April 2018 Oil and Gas Severance Tax report a week before the deadline, but the Department's TAP system rejected valid property and pool codes. After Department staf…
If an online used-car dealer opens a licensed Utah location, are its Utah sales — including cars shipped straight from out of state to the buyer — sourced to that dealership and subject to Utah sales tax?
Yes. Once an online used-car retailer has a licensed Utah dealership, every sale to a Utah customer is sourced to that Utah location for sales tax — including vehicles shipped directly from out of sta…
Did Virginia's net-operating-loss carryforward method apply to a corporation filing separate Virginia returns?
Yes. Virginia held that the cited NOL calculation method applies to corporations filing separate, consolidated, or combined returns. It upheld the prior adjustment to the taxpayer's carryforward and d…
How did Virginia correct a corporation's foreign-source-income expenses, foreign partnership loss, and currency amounts in its sales factor?
Virginia remanded the foreign-source-income expense calculation for review of the corporation's separate-company pro forma data. It removed the partnership loss and required the corporation's share of…
Did a military spouse become domiciled in Virginia after buying a home and obtaining a Virginia driver's license?
No. Although the couple bought a Virginia home and the spouse obtained a Virginia driver's license, she kept substantial ties to the prior state and later surrendered the Virginia license. Virginia fo…
How did Virginia limit a resident's credit for Delaware income tax when Delaware computed nonresident tax using an allocation percentage?
Virginia limited the credit to the lesser of Delaware tax paid or Virginia tax on the Delaware income actually subject to tax. It applied Delaware's allocation percentage to Delaware net taxable incom…
Was a taxpayer a Virginia resident when he spent only 161 days there but kept a long-term job, home, license, vehicles, and voting ties?
Yes. The taxpayer was not an actual resident because he spent only 161 days in Virginia, but he remained a domiciliary resident. His long-term Virginia job, home, voter registration and voting, vehicl…
Could a cigarette retailer abate tax on purchases above $40 by citing fraud allegations involving a different distributor?
No. Distributor records showed untaxed purchases for resale, and the retailer provided no documentation proving that purchases above $40 were fraudulent. A police investigation involving another distr…
Could a cigarette retailer defeat a reconstructed sales-tax assessment by claiming that distributor purchases were fraudulent?
No. Distributor records showed untaxed cigarette purchases for resale, and the retailer produced no sales, resale, or fraud documentation to overcome the assessment. The police report had been closed …
Could a corporation subtract fees for technical services performed abroad and challenge Virginia's use of later refunds to pay old assessments?
No. Virginia limited qualifying foreign technical fees to fees incidental to foreign property rental or licensing, not compensation for stand-alone technical services. It also upheld the statutory off…
A company imports printed gift cards into a Tennessee warehouse and ships them to restaurants and retailers across the country. Does it owe Tennessee sales or use tax on the cards, and can it buy them tax-free for resale?
It depends on where the cards end up. The company imports printed gift cards from an out-of-state vendor, stores them in a third-party Tennessee warehouse, and ships them to its restaurants and retail…
How should a monitored-security dealer be classified for BPOL, and where were receipts from customers served by its city office sitused?
Virginia classified the company as one business-service provider, not a contractor plus separate retail and wholesale businesses. Equipment and installation were ancillary to selling monitoring servic…
Did living and working in another state from a recreational vehicle establish a new domicile when Virginia ties remained?
No. Even if the husband acquired ties to the other state through work and living there in an RV, he did not prove abandonment of Virginia. The Virginia home, vehicle and RV registrations, driver's lic…
When did a taxpayer end Virginia domicile after a temporary move to one state before permanently settling in another?
Virginia domicile continued until June 2014. The taxpayer's temporary move to an intermediate state did not establish a new domicile, and the actions showing residence in the destination state occurre…
Could Virginia assess additional 2014 tax from a final IRS income adjustment when the taxpayers filed no amended Virginia return?
Yes. Virginia began with federal adjusted gross income, required taxpayers to report the final federal change, and could assess at any time when they failed to amend. The Department relied on IRS data…
Did working and leasing homes in another state end Virginia domicile when the taxpayer kept a Virginia home, spouse, vehicles, and license?
No. The taxpayer established work and residences in the other state, but did not prove abandonment of Virginia. His spouse and home remained in Virginia, along with vehicle registrations, a driver's l…
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