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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How should a holding company with disregarded entities source service revenue for Florida corporate-income-tax apportionment?
Florida treated the company as a financial organization because a disregarded entity performed financial-type activities. It sourced financial services to the receiving customer or entity and other se…
Is the sale and installation of an F-5-rated prefabricated storm shelter, anchored into a concrete foundation, taxable as tangible personal property or exempt as an improvement to real property?
It depends on how you bill. A prefabricated storm shelter anchored into a permanent concrete foundation is an improvement to real property, so a lump-sum charge for its sale and installation is not ta…
Is a medical billing and coding company's lump-sum fee taxable, when its services include both nontaxable coding/claim-filing work and taxable insurance-claims-appeal work?
It depends on the mix. A medical coding and billing company's coding, eligibility-verification, and initial claim-filing services are nontaxable, but its work appealing denied insurance claims is a ta…
What does Illinois General Information Letter ST 18-0018-GIL conclude about Service Occupation Tax?
The Department declined to issue the requested Private Letter Ruling because the facts provided were too limited, and instead issued this General Information Letter explaining, in general terms, how R…
When does a vehicle qualify as a Texas trade-in, how must a dealer document it, and what must a blanket resale certificate show?
A trade-in reduces taxable value only when the dealer accepts it as consideration in the same purchase transaction. The buyer's order, installment contract and Form 130-U should document it. A blanket…
What does Illinois Private Letter Ruling ST 18-0007-PLR conclude about Liquor Tax?
The Department ruled that the taxpayer's flavored malt beverage (14% alcohol by volume) must be taxed as wine at $1.39 per gallon under the Liquor Control Act, not as beer at $0.231 per gallon, based …
A company sells licensed professionals a single-price membership that bundles document-drafting software, an online community, and education. Is the membership fee subject to Utah sales tax?
Yes. Because the single-price membership bundles taxable items (the document-drafting software and downloadable education) with nontaxable services (the online community, in-person and online-only edu…
Was Virginia required to prove residency and wage sourcing from the employer before assessing a nonfiler who refused to provide requested records?
No. Virginia could use federal information, a Virginia address, and reported wages to investigate and make a best-information assessment when the taxpayer did not respond. The taxpayer carried the bur…
Could Virginia hear a BPOL appeal based on a city employee's letter that did not identify itself as a final local determination?
No. A Department appeal generally requires a signed, dated final local determination from the commissioner, chief assessing officer, or an expressly designated signer, plus the prescribed notice. Beca…
Could Virginia decide BPOL payroll-apportionment disputes when the 2012 appeal was late and the county had not issued a valid final determination for later years?
No. The 2012 administrative correction request was filed after its three-year deadline and used a route reviewable in circuit court, not by the Department. For 2013 through 2016, the county's letter l…
Did equipment at medical practices acquired and operated by a nonprofit hospital qualify for Virginia's hospital property-tax exemption?
Yes. The nonprofit hospital acquired, owned, and managed practices that provided health programs and medical services to the public, satisfying the dominant-purpose test. The hospital classification e…
In a toll-road operator's revenue-sharing deal with TxDOT, are the roadside gantries and toll-collection equipment exempt from Texas sales tax as improvements to a state agency's realty?
Split ruling. The physical gantry structures a toll-road operator installs over the highway are exempt from Texas sales tax as improvements to TxDOT's exempt real property, but the toll-collection equ…
Can a lab that tests blood plasma samples for infectious diseases before its client manufactures medicine claim Texas's manufacturing exemption on its testing equipment and supplies?
No. A laboratory that tests source-plasma samples for infectious diseases on behalf of pharmaceutical manufacturers cannot claim Texas's manufacturing sales tax exemption on its testing equipment and …
Is the requirement that a taxpayer forfeit current capital loss and net operating loss carryforwards a valid condition for accepting an offer in compromise, and which losses does it cover?
Yes. Condition 5G of Form DTF-4.1, requiring forfeiture of current capital loss and net operating loss carryforwards, is a valid exercise of the Commissioner's discretion under Tax Law § 171(15). It c…
What does Illinois Private Letter Ruling ST 18-0006-PLR conclude about Manufacturing Machinery & Equipment?
Illinois ruled that a recycling company's sorting, separating, and baling equipment used to process scrap into marketable recycled commodities qualifies for the Retailers' Occupation Tax/Use Tax manuf…
Was tangible property acquired after 2003 by a nonprofit hospital LLC taxable merely because the city had not adopted a new exemption ordinance?
No. Virginia treated the pre-2003 nonprofit-hospital provision as a classification exemption that continued after the constitutional and statutory changes. Property later acquired by a qualifying nonp…
Could Virginia accept a 2017 Qualified Equity and Subordinated Debt Credit application postmarked after the April 1 deadline?
No. Form EDC for a prior-year investment had to be filed by April 1. The application was postmarked April 17, 2018. Because the credit was capped and allocated among timely applicants, Virginia enforc…
Did a taxpayer prove she was a District of Columbia resident rather than a Virginia resident for 2015?
No. The taxpayer supplied no evidence establishing a District of Columbia domicile, while her Virginia resident returns before and after 2015 supported continued Virginia domicile. The assessment rema…
Could a Virginia resident claim all joint mortgage-interest and property-tax deductions when payments came from an account shared with a nonresident spouse?
No. A resident filing separately from a nonresident spouse had to account separately for deductions or allocate untraceable items by each spouse's income. Because the payments came from commingled fun…
Which replacement items for interstate auto-hauler trucks qualified for Georgia's common-carrier exemption, and what certificate did the seller need?
Cluster chains, replacement wheel straps, and ratchet wheel-strap tie-downs qualified because they became integral parts essential to an auto hauler's transport function. Tie-down bars, height sticks,…
Does a private investigation and forensic accounting company owned by a licensed CPA owe Texas sales tax on its services as a taxable 'security service,' or is it exempt because the owner is a CPA?
Taxable. Private investigative and forensic accounting services performed by a company holding an Investigations Company License are taxable Texas security services, and there is no exemption just bec…
Are a land surveying firm's right-of-way negotiation services for oil and gas pipelines taxable, when billed separately from — or combined with — the firm's taxable surveying services?
Nontaxable. A land surveying firm's right-of-way (ROW) services — negotiating easements, following up on land reclamation, and resolving owner issues for oil and gas pipelines — are not taxable real p…
When a customer damages a tire under a road hazard warranty and gets a credit toward a replacement tire, is the replacement tire taxable and can the original sales tax be refunded?
No refund, new tax due. When a customer damages a tire covered by a road hazard warranty and receives a credit toward a replacement tire, the tax paid on the original tire is not refunded, and the rep…
Is demolition debris removal a nontaxable industrial-solid-waste service, and can a demolition company buy third-party debris hauling tax-free for resale?
No, demolition debris removal is not exempt industrial solid waste — it's taxable municipal solid waste removal. Whether the whole job is taxable then depends on the type of demolition: partial demoli…
Is a law-firm subscription bundling document-drafting software, CLE courses, and an online community for one monthly fee taxable in full?
Yes. A legal-practice-support subscription that bundles a taxable document-drafting software license with nontaxable CLE courses and an online community for one lump-sum fee is taxable in full, becaus…
What is South Carolina's tax interest rate for underpayments and overpayments for the period beginning April 1, 2018 (per SC IL #18-7)?
5%. SC Information Letter #18-7 sets South Carolina's interest rate on tax underpayments and overpayments at 5% for the period April 1, 2018 through September 30, 2018. Interest is compounded daily, e…
Can a pharmacy buy prescription bottles and labels tax-free — under the medical-materials exemption, or the container/label exemption?
Yes — but through the container exemption, not the medical-materials exemption. A pharmacy CANNOT use the medical-materials exemption, because that requires a 'licensed provider' with authority to pre…
What prescription and documentation must a retailer collect to sell massage chairs, hot tubs, and similar therapeutic appliances tax-exempt in Texas, and does a chiropractor's prescription count?
A retailer needs only a written prescription (signed, with the practitioner's name/address/license info, identifying the item) for most therapeutic appliances like massage chairs and adjustable mattre…
Is cloud-based website hosting a taxable Texas data processing service, and does it matter where the customer or the underlying cloud data center is located?
Taxable. The Comptroller ruled that all aspects of a Texas company's cloud-based website hosting service (deploying code, monitoring, maintenance, bandwidth) are taxable data processing services -- ta…
Is a 25-year build-to-suit lease of a new charter-school campus, with a 20-year early-termination option, an exempt contract that lets the for-profit landlord buy construction materials tax-free?
No. The Comptroller ruled that the charter school's 25-year lease is NOT an exempt contract under Section 151.311, because the lease includes a 20-year early-termination option that undercuts the requ…
May a Florida tenant use appraised values—not only square footage—to allocate taxable rent for multiuse hotel and golf property?
Yes. Appraisal values could be used if they reasonably valued the taxable rental, but actual square footage still had to identify hotel dwelling units and common areas rather than relying on an estima…
Who owes Georgia tax on free printed advertising materials mailed or shipped to customers, company stores, and third-party retailers, and where is the tax sourced?
The advertiser owed sales or use tax on free printed materials delivered to Georgia customers, its stores, or third-party retailers, at the rate for each delivery location. QR codes, posters, and bann…
Did employees Raytheon rehired through its Ktech asset acquisition occupy new jobs eligible for New Mexico's High-Wage Jobs Tax Credit?
Mostly no. The 2013 credit law applied because Raytheon filed its applications in 2015. Raytheon's purchase of substantially all Ktech assets and transition of about 120 employees was an acquisition, …
Does Colorado's $2-per-day vehicle rental fee restart when a short-term rental is terminated and the customer immediately signs a brand-new rental for the same vehicle?
Yes. When the company terminates the first short-term rental and writes a brand-new rental ticket for the next rental (even of the same vehicle), the second rental is a new contract—not a 'renewal' th…
How are sales of cereal malt beverage and beer taxed in Kansas after the 2017 and 2018 law changes?
Kansas Notice 18-04 explains two law changes -- effective April 1, 2019 -- affecting how cereal malt beverage (CMB) and beer are sold and taxed. Under 2017 House Substitute for Senate Bill 13, a CMB r…
How much did Kansas oil and gas conservation fees increase in 2018 and when?
Kansas Notice 18-03 announces that the Kansas Corporation Commission amended K.A.R. 82-3-206 and K.A.R. 82-3-307 to increase the conservation assessment on oil and gas production, effective June 15, 2…
Are manufacturer cash rebates on a new motor vehicle exempt from Kansas sales and use tax?
Kansas Notice 18-02 explains that, effective July 1, 2018 through June 30, 2021, a cash rebate granted by a manufacturer to the purchaser or lessee of a new motor vehicle is not subject to Kansas reta…
Can concrete mixer truck operators claim a Kansas motor fuel tax refund for non-highway fuel use?
Kansas Notice 18-01 says that a person who operates a truck designed, equipped, and used exclusively for concrete mixing and delivery may claim a refund of 25% of the motor fuel tax paid on fuel used …
Which packaging, storage, and warehouse equipment at a Virginia soft-drink plant was directly used in manufacturing and subject to local M&T tax?
Bulk-shipping palletizers, wrappers, and passive storage were not manufacturing machinery. Water-cooling and pressurized-air systems supporting bottle molding were taxable. The taxpayer failed to prov…
Did delayed voter registration and licensing prevent a taxpayer from proving that he changed domicile from Virginia before 2009?
No. The taxpayer bought and occupied a home in the other state in 2008, later registered to vote and obtained its driver's license, and explained that his Virginia address was leased property and his …
Was HMX Construction liable for its predecessor's tax, penalty, and interest as a successor in business?
Partly. HMX was a successor because it had the same owner as the predecessor, used the same recordkeeping system, continued homebuilding, claimed the earlier company's achievements as its own, and att…
Can a manufacturer's representative that buys equipment from manufacturers and resells it to customers under its own contracts take the cost of goods sold (COGS) deduction, even though it never physically handles the product?
Yes. A manufacturer's representative that contracts separately to buy equipment from manufacturers and resell it to its own customers — never physically touching the product, which ships directly from…
Is a Connecticut staffing company that employs healthcare workers and places them with client providers selling taxable personnel services?
Yes. Because the company employs the healthcare practitioners and the clients control what work they do and how, the true object is furnishing staff, so the charges are taxable personnel services unde…
Is a bundled call-tracking-and-marketing-consulting service package a taxable data processing service or a nontaxable consulting service?
Nontaxable. The Comptroller ruled that a lump-sum call-tracking, recording, and reporting package sold alongside marketing consulting is nontaxable consulting services, because the essence-of-the-tran…
Did an equity investment need to satisfy every qualified-investment rule for Virginia's qualified-business capital-gain subtraction?
No. The capital-gain subtraction did not import every “qualified investment” condition from the separate credit statute. Equity or subordinated debt was sufficient for the investment form. Because the…
Was a foreign-created trust a Virginia resident trust because its sole trustee was in Virginia, and how was its investment income treated?
Yes. A trust administered by a Virginia fiduciary was a resident trust. Income included in federal taxable income generally entered Virginia taxable income unless modified; federally excluded income g…
Did bank statements prove a Virginia resident separately paid the mortgage deductions claimed apart from a nonresident spouse?
No. The statements showed balances, deposits, transfers, and payments but did not identify the source of deposited funds or prove that separately owned funds paid the mortgage. An account in one spous…
Was Virginia's fiduciary tax assessment against a bankruptcy estate valid when it missed the federal prompt-determination deadlines and denied a debtor credit?
No. Virginia did not notify the trustee of examination within 60 days or finish within 180 days after the proper prompt-determination request. The assessment was untimely. The estate also inherited th…
Could a corporation carry forward a federal 2011 net operating loss when Virginia fixed-date conformity adjustments eliminated the Virginia loss?
No. Virginia taxable income required federal taxable income plus fixed-date additions minus fixed-date subtractions. Because the 2011 additions exceeded the federal loss and subtractions, the corporat…
Could a corporation use foreign-source-income subtractions to increase Virginia NOL carryovers?
No. Virginia would not let foreign-source-income subtractions create or enlarge a Virginia NOL after federal taxable income reached zero. But the audit had to correct its IRC § 965 calculation, and af…
Could taxpayers recover old payments caused by a preparer's failure to claim withholding credits?
No. Virginia refunded only payments still within the statutory period and said it had no discretion to refund older payments. The appeal was also incomplete, and reliance on a preparer did not relieve…
Were a vascular practice's bulk purchases of stents exempt as patient-specific prosthetic devices or hemodialysis supplies?
No. A stent could qualify as a prosthetic implant when bought for a specific patient and could qualify when purchased for hemodialysis. But the practice bought undifferentiated bulk inventory and coul…
Were a sod farm's sales to its affiliate exempt as resale transactions?
Only in part. Sod actually resold by the affiliate qualified for resale treatment after the farm supplied a facially valid resale certificate. Sod the affiliate used in real-property installation cont…
Are an IT vendor's PC deployment, maintenance, and asset-management services taxable in Texas, or do they qualify as nontaxable 'services by employees'?
Taxable. The Comptroller ruled that an IT vendor's PC pre-deployment, installation, break-fix, move/add/change, asset-management, and reporting services are all taxable in Texas because they're perfor…
Is admission to a children's scaled-city role-play facility a taxable amusement service or a nontaxable educational program?
Taxable. The Comptroller ruled that admission to a scaled-city facility where children role-play adult jobs is a taxable amusement service, because the instructors don't meet the scholarly/expert stan…
Could a taxpayer challenge a 2007 Virginia assessment in 2018 after missing the appeal deadline?
No. The 2018 appeal of a July 2010 assessment was untimely and incomplete, and the no-return assessment was upheld. Because Virginia collected the assessment on March 8, 2018, the ruling allowed a lim…
Were Virginia's 2011 and 2012 individual income tax assessments issued within the statute of limitations?
The 2011 assessment was too late and was abated because Virginia found no fraudulent intent that would keep the assessment period open. The 2012 assessments were timely because they were issued within…
What Virginia tax interest rates applied during the third quarter of 2018?
For July 1 through September 30, 2018, Virginia's ordinary interest rates were 7% on tax underpayments and assessments and 7% on overpayments and refunds. The reduced rate for qualifying disputed asse…
Is a Canadian corporation with no U.S. permanent establishment, claiming a Canada-U.S. treaty exemption from federal income tax, automatically exempt from Georgia corporate income tax?
Not automatically. A foreign corporation doing business in Georgia must file a return and compute its Georgia taxable net income, which starts from federal taxable income. If the Canada-U.S. treaty me…
Could a law firm avoid a $4,900 penalty when accounting-staff turnover caused its $783.48 unclaimed-property report to be filed 49 days late?
No. Guglielmo & Associates' unclaimed-property deadline was properly calendared and remained accessible despite sudden accounting-staff turnover, except for at most 24 to 48 hours. The firm did not re…
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