State Tax Rulings

What did Illinois tell a commercial tax-guide publisher, in response to its annual multistate survey, about how the state's sales and use tax applies to marketplace-facilitator fees, digital products, information services, and similar hot topics?

How did Florida TAA 25A-005 tax a city's curbside parking and separate parking lots?

Curbside parking on the shoulders of public streets was not taxable. Fees for separate city-owned lots adjacent to the streets were taxable parking rentals because sidewalks and swales separated the l…

Do a medical device company's bone growth stimulation devices qualify for Illinois's 1% reduced sales tax rate as 'medical appliances,' or are they taxed at the general 6.25% rate?

No -- the Department ruled that the taxpayer's bone growth stimulation devices (marketed as combined magnetic field and low-intensity pulsed ultrasound devices) do not qualify as 'medical appliances' …

If the IRS audits my federal return and raises my income, can I fight the resulting Virginia assessment by arguing the IRS got it wrong?

No -- the assessment stood. When the IRS audits your federal return and increases your income, Virginia starts from your federal adjusted gross income and follows that final federal result; it does no…

Is a ready-mix concrete producer that delivers to job sites a taxable 'ready mix concrete contractor,' and where does it source local sales tax on its sales — the plant or the delivery site?

The producer is a seller of materials, not a "ready mix concrete contractor," because its own crew doesn't finish or incorporate the concrete into the property — the customer's crew does. As a materia…

Are food, medicines, drugs, and medical appliances exempt from Illinois sales tax, or are they taxed at a special rate?

Qualifying food, prescription and non-prescription medicines, drugs, and medical appliances for human use are NOT exempt from Illinois sales tax -- they are taxed at a reduced state rate of 1% (plus a…

What must South Carolina collegiate sporting venues with beer and wine permits do under Act 42, and how does the Department penalize violations?

Under 2025 Act 42 and new S.C. Code § 61-4-523, every South Carolina collegiate sporting venue that holds a beer and wine permit must -- regardless of seating capacity, and effective May 12, 2025 -- r…

Does a Colorado bakery have to charge state sales tax on packaged baked goods sold individually, in multi-packs, or as catering and bulk orders?

No. Cold, packaged baked goods sold by a bakery with no eating facilities are exempt from Colorado state sales tax as food for home consumption, including multi-packs and catering or bulk orders, as l…

Does a Missouri veterans' nonprofit have to charge sales tax on meals it sells to raise money for the post and for charitable donations?

No. The Department ruled that a Missouri non-profit veterans' organization's sales of meals to fund its post and charitable donations are exempt from Missouri sales tax, because the sales are within t…

Does a city have to charge sales tax on concessions, sunscreen, swim diapers, and goggles it sells at its municipal aquatics center and other Parks and Recreation events?

No. Because the aquatics center and its sponsored events are a place of amusement or recreation owned and operated by the municipality, and all proceeds benefit the city's Parks and Recreation Departm…

Is a mobile app operator's fee to truck-stop fuel sellers — charged for running the discount-fuel app that generates codes and transaction reports — taxable as a Texas data processing service?

Yes. The app operator's percentage-based fee to fuel stops is taxable as a data processing service, because generating per-driver fuel codes, verifying purchases, and compiling transaction reports for…

When I buy something at a shopping center that charges a Public Improvement Fee (PIF), is that PIF part of the price that gets sales-taxed?

Yes. A Public Improvement Fee (PIF) — a private fee a developer or landlord adds to purchases at certain shopping centers to fund parking, landscaping, and other on-site improvements — is part of the …

Does Illinois sales/use tax apply to a SaaS company's paid subscription fees and its free downloadable mobile app?

No sales tax applies to the SaaS subscription fees themselves, because Illinois does not tax software accessed only remotely through the cloud and never downloaded. The free mobile app is a separate q…

My out-of-state company licenses highly customized software and provides equipment to an Illinois customer, but we keep ownership of both and have no employees or offices in Illinois -- is this revenue Illinois-source income for corporate tax purposes?

The Department wouldn't give a final yes or no -- nexus and income-sourcing questions like this are considered too fact-specific for a letter ruling and are resolved only in an audit. It did lay out t…

What did Illinois tell a commercial vehicle-tax-guide publisher in response to its 2026 annual survey about how the state taxes vehicle sales, leases, and out-of-state deliveries?

This isn't taxpayer guidance -- it's the Department's reply to a commercial publisher's annual survey updating a vehicle-tax reference guide. The Department refused to bless or correct the publisher's…

Does a grocer have to charge the higher 6.25% sales tax rate on cold salads, or the preferential 1% low food rate?

It depends on how the salad is made. Under 86 Ill. Adm. Code 130.310, a pre-made cold salad stored in a sealed container qualifies as food not prepared for immediate consumption and is taxed at Illino…

My reinsurance company wants to switch how it sources Illinois reinsurance premiums for apportionment -- from tracking each ceding company's own ratio of Illinois-located risk to simply counting premiums from ceding companies domiciled in Illinois -- can I get permission to make that change?

Yes -- the Department granted the requested election change under IITA Section 304(b)(2) and 86 Ill. Adm. Code 100.3420(e)(2), letting the taxpayer switch from 'Method B' (tracking each ceding company…

Is a solar-panel construction contractor exempt from Illinois Use Tax on materials when its contract is with a third-party owner instead of directly with the tax-exempt school district that will host the panels?

No. Because the contract is with a third-party PPA company that will own the solar panels, not with the tax-exempt school district itself, the construction contractor cannot buy the materials tax-free…

If I file and pay my New Mexico income tax late because of a preparer or software mistake, can I get the penalties and interest waived for good faith?

No — the penalties and interest stand. George and Carol Scott filed their 2021 New Mexico income tax return late (July 2023, past the October 17, 2022 extended deadline), made no estimated payments, a…

Were post-merger homeowners-association assessments taxable admissions under Florida TAA 25A-004?

No. The assessments were mandatory, paid to a statutory homeowners association as a condition of property ownership, and used for common-area maintenance rather than entitlement to use club property.

Does a city have to collect sales tax on concessions it sells at its own city parks through its parks and recreation department, when all the proceeds benefit the city?

No. Missouri exempts fees and charges at municipally-owned places of amusement, entertainment, or recreation when all proceeds benefit the municipality, and the Department ruled this exemption extends…

If my company anodizes, electroplates, etches, and cleans customers' metal parts but never sells any product, do I need to charge sales tax on those services, and do I owe tax on the chemicals and supplies I use to perform them?

No and yes. Missouri does not tax anodizing, electroplating, etching, or cleaning services because they aren't among the specific services listed as taxable in Section 144.020, RSMo -- but the company…

Are the computers, software, and related equipment a Tennessee manufacturer uses to run its production lines exempt from sales tax as industrial machinery?

Mostly yes for the systems that actually run the production lines. For a manufacturer, the computer hardware and software used to monitor and control production — line-optimization (MLO) and quality/s…

My inherited IRA payments pass from my father's estate, through a trust, and finally to me -- and the 1099-R was issued to the estate, not to me directly. Do I still get Illinois's retirement-income subtraction?

Yes. Illinois's retirement-income subtraction follows the IRA distribution through the estate-to-trust-to-beneficiary chain: whichever entity or person actually retains a given dollar gets the subtrac…

Our family partnership holds Illinois farmland as its only asset -- can the one-time capital gain from selling that farmland be excluded from the Illinois Personal Property Replacement Tax as nonbusiness income and reported on my personal return instead of the partnership's?

No. Because the property sold is located in Illinois, Illinois gets to tax the gain on the partnership's own return regardless of whether it's classified as business or nonbusiness income -- the real-…

Should a direct mail printing company charge Retailers' Occupation Tax or Service Occupation/Use Tax on printing, addressing, and mailing jobs, depending on who controls the mailing and where the items are delivered?

It depends on who controls the mailing and where items go. If the printer prints, addresses, and mails items at the customer's direction (the customer keeps control), the full job is subject to Servic…

Does an Illinois auto body shop owe sales/use tax on shop supplies like sandpaper and masking tape, or can it charge customers tax-free for them as a resale?

Auto repairmen and body shops owe Illinois Use Tax on consumable supplies (sandpaper, masking tape, paint thinner, etc.) that are used up in the shop and never physically leave with the customer's car…

Is a saké-based beverage taxed as wine ($1.39/gallon) or as spirits ($8.55/gallon) under the Illinois Liquor Control Act, especially once distilled spirits are added to it?

Plain saké is generally treated like beer/wine-type fermented beverage, but once brewer's alcohol or distilled spirits are added to it, the Department says it becomes a 'spirit' taxed at $8.55 per gal…

Does a cafeteria operator owe Illinois Retailers' Occupation Tax on the extra subsidy an employer pays it to cover cafeteria losses?

No. Because the employer's year-end subsidy payment is calculated only after the accounting period ends and is not tied to any individual food sale, the Department ruled it is not part of the operator…

How does South Carolina's New Jobs Credit work for employers creating jobs at a new or expanded facility?

An eligible South Carolina employer can earn the New Jobs Credit by operating a qualifying facility and creating and maintaining the required net increase in qualifying full-time jobs. The traditional…

When are shipping, storage, and other fulfillment-contract line items subject to Illinois sales tax on a sale of tangible personal property?

It depends on whether an "inseparable link" exists between the sale of the goods and the service charge. If the charge (including delivery) isn't separately identified, or is separately identified but…

Are a travel-marketing company's magazines, direct-mail flyers, and membership fees subject to Illinois sales and use tax?

The Department declined to rule on the specific facts and instead gave general guidance: periodicals published at least twice a year in newsprint-and-ink form (like the company's bimonthly travel maga…

How is household income defined for the Kansas property tax refund for seniors and disabled veterans?

Kansas Notice 25-05 explains 2025 House Bill 2231, which amended K.S.A. 2024 Supp. 79-4508a to define "household income" for the property tax refund program for seniors 65 and over and disabled vetera…

What is the Kansas historic preservation tax credit and how much is it after the 2025 changes?

Kansas Notice 25-04 explains 2025 Senate Bill 227, which amended K.S.A. 2024 Supp. 79-32,211 to set new percentages for the income, privilege, or premium tax credit for restoring and preserving qualif…

Does Kansas exempt data center construction and equipment purchases from sales tax?

Yes, for qualified data centers that meet strict thresholds. Kansas Notice 25-03 explains 2025 Senate Bill 98, which added new subsection (xxxx) to K.S.A. 79-3606. A "qualified firm" that invests at l…

How did 2025 changes limit the Kansas Affordable Housing and Housing Investor tax credits?

Kansas Notice 25-02 explains 2025 House Bill 2289, which changed two housing credits. For the Kansas Affordable Housing Tax Credit (K.S.A. 79-32,306), HB 2289 caps the total credit that can be awarded…

Does Illinois sales tax apply to a membership fee that gives customers access to exclusive dining events and third-party restaurant perks, but no tangible goods?

No. Illinois treats membership fees as intangibles, so they are not subject to Retailers' Occupation Tax or Use Tax when the membership itself transfers no tangible personal property. But if a members…

Can an Illinois retailer legally advertise that customers 'pay no sales tax' on their purchase?

No. Illinois law makes it a Class A misdemeanor for a retailer to advertise, or otherwise tell customers, that it will absorb the tax or that tax will not be added to the selling price -- this letter …

Is an employer-sponsored telehealth benefit — including online questionnaires, medication profiles, educational content, and at-home test kits — subject to Texas sales tax?

No. Telehealth services aren't a taxable service category in Texas at all, and this provider's related questionnaires, medication profiles, and educational content don't independently qualify as taxab…

I gave Virginia my donation lists to back up my charitable deductions, but they were disallowed. Why?

The assessment was upheld. This taxpayer claimed charitable-contribution itemized deductions for the 2020 tax year and, asked for proof, submitted donation lists. The Department found that at least 8 …

In Virginia, is computer software taxable, and how are software maintenance contracts taxed -- especially when they are bundled with computer hardware?

Partly for the taxpayer. Virginia treats software delivered electronically as an exempt service and software delivered on a physical medium (or bundled with a taxable sale of hardware) as taxable tang…

I sent Virginia my donation lists to support my charitable deductions, but they were disallowed. Why?

The assessments were upheld. This taxpayer claimed charitable-contribution itemized deductions for 2020, 2021, and 2022 and, asked for proof, submitted donation lists. The Department found that at lea…

We filed jointly and sent Virginia our donation lists, but our charitable deductions were still denied. Why?

The assessments were upheld. This married couple claimed charitable-contribution itemized deductions for 2020, 2021, and 2022, but when the Department asked for proof, it found that at least 14 of the…

The Department disallowed my charitable deductions even though I sent in donation lists. Why isn't my documentation good enough?

The assessments were upheld -- the documentation was not credible. This taxpayer claimed charitable-contribution itemized deductions for 2020, 2021, and 2022, and when the Department asked for proof, …

How much documentation do I need to deduct donations of used goods like clothing and furniture on my Virginia return -- and if I don't have an appraisal, can I at least deduct part of it?

Mostly upheld, with partial relief. Virginia follows the federal (IRS) rules for proving noncash charitable donations, which set three tiers of documentation: for property up to $500 you need a detail…

I backed up my charitable deductions with donation lists, but Virginia disallowed them. Why?

The assessments were upheld. This taxpayer claimed charitable-contribution itemized deductions for 2020, 2021, and 2022 and, asked for proof, submitted donation lists. The Department found that at lea…

When can a Virginia hotel stop charging sales tax on a long-term guest's room, and what proof does it need if the exemption is questioned on audit?

The assessment was upheld. A Virginia hotel may treat room charges as exempt only AFTER a guest has stayed 90 continuous days -- not before. Virginia exempts rooms furnished to a transient for more th…

Does an out-of-state advertising firm owe Virginia use tax on the direct-mail postcards and letters it creates and has a third party print and mail to Virginia residents?

No Virginia sales or use tax is due on these facts. An out-of-state advertising business that develops and creates direct-mail pieces from customer data, and hires out-of-state vendors to print and ma…

Does an out-of-state publisher owe Virginia sales or use tax on magazine subscriptions, advertising services, mailed advertising postcards, and electronic newsletters and email lists sold to Virginia customers?

Nothing the out-of-state publisher sells is subject to Virginia sales or use tax on these facts. Virginia exempts sales of newspapers, magazines, and other publications issued at intervals of three mo…

As an out-of-state roofing contractor who buys materials and rents equipment in Missouri and pays sales tax on them, but doesn't charge my customers sales tax, am I following Missouri law, and do I need a Missouri sales tax license?

Yes, this roofing contractor's practices comply with Missouri law. As a construction contractor, it is the final user/consumer of the materials and equipment it uses on a job, so it correctly pays sal…

If a satellite TV (or similar) company's equipment and operations are all out of state, are its subscription fees exempt from New Mexico gross receipts tax as a service performed outside the state?

No — the refund is denied and the receipts are taxable. DIRECTV sought about $26.27 million in gross receipts tax (GRT) refunds on New Mexico subscription fees, arguing its satellite service is 'perfo…

Is a company's cleanup and removal of non-hazardous spills from Texas highways — including its rolloff-box charges — a taxable real property service, even when billed to a state agency?

Yes. Removing and disposing of Class 1-3 non-hazardous spills from Texas roadways is a taxable real property service, and stays taxable even when the state highway department is billed or a government…

When will Virginia grant reconsideration of a final determination -- and can I get it by arguing the Department reached the wrong result or by raising a new legal argument?

The assessments stand -- none of the four reconsideration grounds were met. This is a follow-on to P.D. 24-120, where the Department upheld additional telecommunications minimum tax against an affilia…

I'm a contractor who charged my customers sales tax on real-property installation jobs but should have paid use tax on my own materials. Can Virginia give me credit for the sales tax I already remitted?

Relief granted -- the contractor gets a one-time credit. A garage-door seller/installer was assessed consumer USE tax on materials it bought and consumed on Virginia real-property installation jobs; a…

My sales and use tax audit didn't credit use tax I already paid, and it covers months after I closed my business. Can I get the credit and have the closed months removed?

Partial relief -- the case is sent back to the auditor. A consuming contractor was assessed sales and use tax on untaxed purchases and raised two points. First, it wanted credit for use tax it had acc…

How does a telecommunications pass-through entity owned by a separately filing corporation compute its Virginia minimum tax -- against its own income tax as if it were a corporation, or against what its owner actually paid?

The assessments stand -- though the Department fixed its own reasoning to get there. A telecommunications business run as a single-member LLC (a pass-through) was wholly owned by a corporation that fi…

Does a prepaid wireless plan with unlimited voice minutes have to collect Colorado's prepaid wireless 911, 988, and TRS/telephone-disability-access charges?

No. Because the units (voice minutes) in an unlimited plan never decline with use in a known amount, the plan isn't 'prepaid wireless telecommunications service' under § 29-11-101(21), C.R.S., so the …

What South Carolina tax interest rate applies from January 1 through September 30, 2025, and what rate is paid on eligible refunds?

The listed rate for South Carolina tax underpayments and overpayments from January 1 through September 30, 2025 is 7%. Interest is compounded daily, except that simple interest applies to underpayment…

My POS vendor didn't charge tax on the software and setup services bundled with the equipment. Are those exempt, and can I claim tax I say I already paid?

The assessment was upheld. A restaurant and entertainment venue was audited and contested three items -- all lost. (1) POS system: the venue bought a point-of-sale package bundling tangible equipment,…

We cut, bend, and shear metal for customers. Does that make us a manufacturer that can buy equipment exempt from Virginia sales tax?

The assessment was upheld -- the manufacturing exemption was properly denied. A steel and metals retailer-wholesaler claimed the exemption for cutting, bending, and shearing equipment, and the Departm…