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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What does Illinois General Information Letter ST 18-0015-GIL conclude about Nexus?
The Department explained the general nexus rules but did not confirm the taxpayer's specific conclusion: whether this out-of-state distributor must collect Illinois Use Tax depends on nexus, and separ…
Is a club's credit-card 'convenience fee' subject to New York sales tax?
Yes, to the extent the underlying charge is taxable. A social or athletic club adds a convenience fee — a percentage of the credit-card purchase — to offset its card-processing costs. 'Receipt' is the…
Did Mosaic Potash prove entitlement to $1,772,593.89 of denied High-Wage Jobs Tax Credit for claimed new jobs, resident employees, and later qualifying periods?
No. The Department could examine whether each claimed position was genuinely new instead of treating headcount growth as conclusive. Mosaic did not rebut the finding that 60 claimed jobs covering 92 p…
Are fees paid by a condominium association to its food-service manager taxable as rent or a license to use real property?
No. The association paid the manager for services and bore the operating losses; the manager paid nothing for use of the premises. The fees were not taxable rent, but the manager had to register and r…
Are paid subscriptions for ad-free game, music, eSports, and other live streams plus enhanced chat features taxable in South Carolina?
Yes. The Department treated both paid subscription tiers as taxable communication services because they provided ways or means to receive streamed voice or messages plus subscriber-only transmission f…
What does Illinois General Information Letter ST 18-0014-GIL conclude about Prepaid Sales Tax?
The Department did not resolve the taxpayer's specific refund request, but explained that a reseller registered solely under Section 2c whose sales are all nontaxable owes no prepaid sales tax on moto…
Could New Mexico include General Electric's foreign dividends and Subpart F income in the tax base of its elected domestic consolidated group?
Yes. GE elected New Mexico's federal consolidated-group reporting method, which included the aggregate income of its domestic consolidated group. The AHO held that adding foreign dividends and Subpart…
What does Illinois General Information Letter ST 18-0013-GIL conclude about Prepaid Sales Tax?
Yes: the Illinois Department of Revenue told this fuel importer that, because it was already filing Illinois sales tax returns, it was responsible for collecting and remitting prepaid sales tax on the…
What does Illinois General Information Letter ST 18-0012-GIL conclude about Rental Purchase Agreement Tax?
The Department did not give a definitive yes-or-no answer; it stated only its general opinion that items taxed at the 1% state sales tax rate (such as the durable medical equipment described by the re…
If a company earns a Texas historic-structure rehabilitation tax credit and sells it to another company that later claims it, does the buyer need to make an extension payment, and when does the credit expire?
ALERT: A 2023 law (SB 1013) later moved the certified historic structure tax credit statute from Tax Code Chapter 171 to Chapter 172 and expanded a related federal-tax exception, effective 9/1/2023, a…
What Texas motor vehicle tax applies when federal surplus vehicles go to public agencies, 501(c)(3) charities, or other nonprofits?
Public agencies received federal surplus vehicles exempt from motor vehicle tax. A qualifying 501(c)(3) recipient owed $10 gift tax, while a nonprofit without 501(c)(3) status or another nonexempt rec…
What does Illinois General Information Letter ST 18-0011-GIL conclude about Coal Mining Equipment?
The Department found that gypsum a utility sold to a company (for use as a pond-lining coating) is a consumable supply, not exempt coal mining equipment, so it appears not to qualify for the Retailers…
Did living and working in Maryland during 2014 end a taxpayer's Virginia domicile or invoke wage reciprocity?
No. The Maryland apartment, withholding, and return did not outweigh the taxpayer's Virginia license, vehicles, voter registration, and surrounding years of Virginia residency. Reciprocity did not app…
Did payments from a joint account prove that a resident spouse separately paid all itemized deductions?
No. Checks and statements from a jointly held account did not establish that the resident spouse alone funded the itemized expenses, so proportional allocation applied. She could still claim both depe…
How were joint deductions, dependent exemptions, and dependent-care expenses allocated to a resident military spouse?
Untraced itemized deductions were allocated proportionally between the spouses. The resident spouse could claim all dependent exemptions and the full child-and-dependent-care deduction because her sep…
Could a Virginia spouse claim all joint itemized deductions and dependent exemptions when the military spouse was a nonresident?
Only in part. Without proof of separate payment, joint itemized deductions had to be allocated between the spouses based on income. The resident spouse could claim both dependent exemptions because he…
What does Illinois General Information Letter ST 18-0010-GIL conclude about Service Occupation Tax?
The Department did not give a yes/no answer on collecting sales tax on 'sublet' auto repair parts and labor; instead this GIL explains the general Service Occupation Tax framework for multi-service (s…
What does Illinois General Information Letter ST 18-0009-GIL conclude about Manufacturing Machinery & Equipment?
There is no Illinois sales-tax exemption for electricity used in manufacturing (electricity is taxed separately under the Electricity Excise Tax Law), but machinery and equipment used more than 50% of…
Were a grower's plants and nursery equipment exempt from local Merchants' Capital and property taxes?
Only the plants. Plants grown from the taxpayer's own clippings were agricultural products held by their producer and exempt from Merchants' Capital tax. The county could still classify the business a…
Did a civilian spouse share the service member's out-of-state domicile without ever becoming physically present there?
No. The husband established Virginia domicile through his abode, job, resident filing, vehicle, and license. After marriage he could not acquire the wife's other-state domicile without physical presen…
Could unused Virginia rental losses create a Virginia-only net operating loss deduction in a later resident year?
No. The rental losses had already reduced federal adjusted gross income in the earlier years. Because no federal net operating loss deduction applied in 2013 and Virginia law did not create a separate…
Did Virginia's seven-year collection limit bar old income tax liabilities for 1998 and 2000 through 2002?
No. Paying the 2000 through 2002 assessments through Virginia's amnesty program waived the taxpayer's appeal rights for those years. The 1998 liability was assessed in 2005, when a 20-year collection …
Could spouses file a joint Virginia resident return while subtracting all income of the nonresident service member?
No. Electing a joint Virginia resident return required computing both spouses as residents. Because the wife was actually a nonresident service member, the couple could amend to separate treatment and…
Which equipment for a Florida municipal natural-gas power project qualifies for the electricity-generation sales-tax exemption?
Machinery and equipment directly integrated into electricity generation qualified; listed site or nonqualifying items did not. The city's proposed affidavit failed because it omitted the statutory war…
Is Colorado's paint stewardship fee on architectural paint part of the taxable purchase price — so that sales tax applies to the fee — and what if the paint sale itself is exempt?
Yes — and an amended clarification. Colorado's paint stewardship fee on architectural paint is included in the purchase price, so sales tax is calculated on the fee too. Sales tax is figured on the 'p…
What does Illinois General Information Letter ST 18-0008-GIL conclude about Motor Vehicles?
The Department declined to formally approve an outside survey chart on motor vehicle taxation, but confirmed the chart's general accuracy and explained Illinois' rules: trade-in credits reduce the tax…
What does Illinois General Information Letter ST 18-0007-GIL conclude about Sale For Resale?
The Department declined to endorse or complete a private trade-group survey on drop shipments, but pointed to its own rules: an Illinois seller documents a drop-shipment sale for resale with a valid C…
Does an out-of-state contractor owe Illinois sales or use tax on installing, maintaining, and supplying car wash equipment in Illinois?
A construction contractor who permanently affixes tangible personal property (like installed equipment, electrical, or plumbing materials) to real property is the end user of that property and owes Il…
Could a part-year resident claim a Virginia credit for another state's tax on income earned while the taxpayer was a Virginia resident?
Yes. The taxpayer could claim the credit for State A-source income earned during the portion of the year he was a Virginia resident, because that income was taxed by both states. No credit was availab…
Was a land-preservation-credit assessment timely when mailed before the deadline but adjusted years later?
Yes. Department records showed the assessment was mailed to the taxpayers' last known address before the May 2012 deadline. The 2017 adjustment after the credit was revalued did not alter the original…
Did moving, working, and leasing a home in another state end Virginia domicile when the taxpayer kept major Virginia ties?
No. The taxpayer likely established a home and indefinite employment in State A, but he did not prove abandonment of Virginia domicile. Renewing a Virginia driver's license while living away, along wi…
Could a taxpayer overturn a Virginia residency assessment without supplying the domicile information the Department requested?
Not on the record provided. The taxpayer retained a Virginia driver's license and vehicle registration, filed Virginia resident returns before and after 2013, and did not answer the domicile questionn…
How does Georgia sales tax apply to a senior-living facility's mandatory dining allowance and extra meal charges for long-term independent-living residents?
The mandatory dining allowance included in a long-term independent-living service fee was not taxable to the resident; the facility instead paid tax on food it bought to provide those meals. Charges f…
Does a single-member LLC, wholly owned by a tax-exempt IRC Section 401(a) trust and disregarded for federal income tax purposes, still owe Texas franchise tax?
Yes. A single-member LLC that is disregarded for federal income tax purposes (and so files no federal return of its own) is still a separate "taxable entity" for Texas franchise tax, even when its sol…
Could New Mexico use an unpublished spreadsheet-based replacement analysis to deny MVT Services' High-Wage Jobs Tax Credit for jobs that were not newly created?
Yes. The Department could sort and filter MVT's employee data to identify positions that appeared to replace existing jobs. That spreadsheet technique was an audit method, not a rule that had to be pr…
Which parts of Par Five Energy Services' disputed $135,792.11 High-Wage Jobs Tax Credit qualified under New Mexico law?
Par Five won $33,335.65 but lost $102,456.46 of the disputed credit. Six newly hired employees filled jobs that already existed, so satisfying the headcount test did not make those positions new jobs.…
Does Virginia's royalty-addback exception cover all royalties reported by an affiliate, or only the portion actually taxed after state apportionment?
Only the portion actually taxed by another state after apportionment qualifies. But the affiliate receiving the royalties does not have to be the entity that paid the tax. The court reversed and reman…
Was a refund request timely when the taxpayer sent Virginia the IRS reversal within four months of the federal change?
Yes. The taxpayer had one year after the final federal change to request a Virginia refund and supplied the IRS reversal within four months. That documentation was sufficient, so Virginia ordered a re…
Was a 2008 assessment untimely because the taxpayers said they never received it and the amount was adjusted years later?
No. Department records showed that the assessment was mailed to the taxpayers' last known address within the three-year period. Mailing made the assessment timely even if the taxpayers did not receive…
Was a seller of data-storage hardware, related software, and support a wholesaler or a business-service provider for local BPOL tax?
A wholesaler for 2011 through 2014. The physical data-storage systems were the primary product, while the installed operating system and related installation, training, consulting, and support were an…
Could taxpayers obtain review of a 2011 refund after the ordinary three-year period when they promptly reported a final federal change?
Yes. Although the ordinary refund period had expired, Virginia law gave the taxpayers 60 days after the final federal determination to request a refund. They supplied the IRS letter within 30 days, so…
Can a qualifying Texas city use state mixed beverage tax from a qualified hotel project, along with other project-tax rebates, to pay hotel-project bonds?
No, not for state mixed beverage tax. The city could receive state hotel occupancy and sales tax rebates plus local taxes a governmental body agreed in writing to rebate, but Section 351.102(c) did no…
Could a commissioned officer count all of July and taxable hazardous-duty pay in Virginia's 2013 combat-zone subtraction?
Yes. Any service in a combat zone for part of a day qualified the entire month of July. For 2013, the subtraction also included the officer's taxable hazardous-duty pay, along with the monthly basic-p…
Did working and leasing a home abroad end Virginia domicile when the taxpayer's family and major connections remained in Virginia?
No. Employment, housing, a driver's license, and an unsuccessful permanent-residency application showed an effort to establish domicile abroad. But the taxpayer did not prove abandonment of Virginia b…
In Kansas, can a general contractor use a resale exemption certificate to buy a subcontractor's construction labor tax-free, and how must contractor sales tax be shown on invoices?
No. In Kansas, taxable labor services on real property cannot be resold, so a general contractor cannot use a resale exemption certificate to buy a subcontractor's labor tax-free; the subcontractor mu…
Were a library's payments reimbursing Paragon Construction for payroll excluded from gross receipts because Paragon acted as a disclosed payroll agent?
No. Paragon, not the Embudo Valley Library, employed the temporary local workers, issued their paychecks, withheld taxes, provided workers' compensation coverage, and claimed the wages as its own busi…
Could an Arizona resident included on a Virginia unified pass-through return also claim the entity payment and an Arizona tax credit on a separate return?
No. By electing the unified return, the nonresident accepted its restrictions and gave up the separate credit for tax paid to Arizona. The entity's unified payment was not withholding tax that could b…
Did living in other states end a couple's Virginia domicile when they kept a Virginia home, business interests, licenses, and registrations?
No. Even if the couple acquired domicile in State A, they did not prove that they abandoned Virginia. They kept a Virginia residence, business interests, driver's licenses, vehicle registrations, and …
Did a taxpayer win reconsideration because the city had not proved that its BPOL tax on internet access was grandfathered under federal law?
No. Virginia agreed that a locality claiming the Internet Tax Freedom Act's grandfather exception bears the burden of proving it. But the Department concluded that the state administrative appeal proc…
What Virginia tax interest rates applied during the second quarter of 2018 to assessments, refunds, disputed assessments, and local taxes?
For April 1 through June 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 assessme…
Could a business claim Virginia's BPOL out-of-state deduction merely because county employees worked with employees in another state?
No. Virginia had jurisdiction to reconsider whether it had misapplied the governing standard, but the deduction still required receipts from business in another jurisdiction. Because the county employ…
Could a couple claim a pass-through entity's unified Virginia payment and an Arizona tax credit on their separate nonresident return?
No. The husband's election to join the pass-through entity's unified return accepted its restrictions and relinquished the separate credit for tax paid to Arizona. The unified entity payment also was …
Must a federal instrumentality pay Georgia's $5-per-night State Hotel-Motel Fee when it rents hotel rooms?
No, when the federal instrumentality itself pays. The Department ruled that its Georgia accommodation purchases are exempt from the State Hotel-Motel Fee when payment is made by a check or wire drawn …
How would Virginia treat nonresident S corporation shareholders if a stock purchase uses an IRC § 338(h)(10) election?
Virginia follows an IRC § 338(h)(10) election as made federally. The Virginia S corporation is deemed to sell its Virginia assets, making the resulting gain or loss Virginia-source business income to …
Could a Virginia nonresident subtract foreign-source income before applying the nonresident apportionment formula?
No. Virginia repealed the individual foreign-source-income subtraction effective in 2003. A nonresident first computes income as if resident and then applies the Virginia-source apportionment factor, …
Which location's local sales tax rate applies when a grocery store's flower outlet sells flowers online for pickup or delivery from a different city than where the order was placed?
Local sales tax on online flower orders is sourced to the location where the order is fulfilled -- meaning the store location from which the flowers are picked up or delivered -- not the location wher…
What is South Carolina's tax interest rate for underpayments and overpayments for the period beginning April 1, 2018 (per SC IL #18-2)?
5%. SC Information Letter #18-2 sets South Carolina's interest rate on tax underpayments and overpayments at 5% for the period April 1, 2018 through June 30, 2018. Interest is compounded daily, except…
Could a late original return serve as a timely protective refund claim after the taxpayer paid a Virginia nonfiler assessment?
Yes. The ordinary deadline for a 2011 refund had expired, and the later appeal itself was six days too late. But the original return had been filed within three years of the paid assessment and could …
Could a taxpayer defeat Virginia nonfiler assessments by alleging that the IRS information was fraudulent without providing evidence?
No. Virginia was authorized to use IRS information to determine the resident's liability, and the taxpayer supplied no evidence that the information was fraudulent. The assessments remained due, and t…
Could Wall Colmonoy correct a timely Technology Jobs and R&D Credit application that named Wall Co., Inc. and used the wrong CRS number after the deadline?
No. The December 29 application named Wall Co., Inc. and used an invalid CRS number, so the Department could not verify that the applicant was a taxpayer eligible for the $36,196 credit. The correct e…
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