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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Were a section 501(c)(3) nonprofit's performance tickets exempt when a venue sold them as the nonprofit's agent?
Yes. The nonprofit's own admission-ticket sales were exempt under section 212.04(2)(a)2, and tickets sold through the venue agent also qualified under the contract described. Sales of food and tangibl…
Is sales tax owed on perpetual software license fees and annual maintenance fees for canned (non-custom) software like SAP?
It depends on the license terms. Illinois taxes sales of "canned" (non-custom) software like SAP, including maintenance fees for updates, unless the license agreement meets all five criteria in 86 Ill…
Can an ROTC instructor paid by a school district subtract that pay as military pay on Illinois Schedule M?
The Department did not give a yes-or-no answer. It explained that Illinois law lets active-duty and National Guard members subtract military pay on Schedule M, but said civilian pay generally does not…
Are non-combustible tobacco capsules used in a vaping device taxable 'tobacco products' under the Illinois Tobacco Products Tax Act?
No. The Illinois Department of Revenue ruled that a company's imported tobacco capsules, used in a vaping device that heats but never burns or combusts the tobacco, do not meet the statutory definitio…
Does a sandwich-shop chain owe Retailers' Occupation Tax on a separately stated delivery charge when customers can also pick up the same food in-store at the same price?
No. The Illinois Department of Revenue ruled that because the taxpayer's customers can always pick up their sandwiches, chips, and drinks in-store at the same price with no delivery charge, there is n…
Does a retailer owe sales or use tax on cooperative direct-mail advertising materials produced and mailed by a third-party advertiser?
No. A retailer that hires a cooperative direct-mail advertiser — one that bundles ads for several businesses into a single mailer — does not owe sales or use tax on the materials produced and mailed. …
How does Illinois source a nonresident self-employed consultant's income when the client is headquartered in Illinois but the work is mostly done elsewhere?
Illinois says the income is business income, not wages, so it is sourced under the state's services-sourcing rule rather than by counting workdays: because the consultant's client was a corporation wi…
Could the Department decide whether a personal-vehicle tax should be prorated after the owner moved away?
No. Tax on an ordinary personal vehicle is neither a local business tax nor local mobile property tax within the Department's jurisdiction. Even though the city's final letter gave misleading appeal i…
Could the Virginia Department review a city's local food-and-beverage tax assessment?
No. Department review is limited to specified local business, property, mobile-property, and utility taxes. Local food-and-beverage tax, commonly called meals tax, is not on that list, so the taxpayer…
Did a city's failure to issue promised BPOL refunds create an appealable denial?
Apparently yes. Although the city had not issued formal written findings, it promised partial refunds and then failed to pay them for more than a year. Virginia treated that inaction as an apparent de…
Did a city's failure to pay promised BPOL refunds amount to an appealable denial?
Apparently yes. The city promised partial refunds but neither paid them nor issued written findings for more than a year. Virginia said that inaction appeared to deny the refund, permitting a local ap…
Did a city's failure to pay promised BPOL refunds amount to an appealable denial?
Apparently yes. The city promised partial refunds but neither paid them nor issued written findings for more than a year. Virginia said that inaction appeared to deny the refund, permitting a local ap…
Could a laboratory claim the BPOL out-of-state deduction merely because Virginia staff coordinated testing with out-of-state labs?
No. The deduction required receipts attributable to business conducted in another taxing jurisdiction, not merely coordination between Virginia and out-of-state employees. Virginia upheld the county's…
What are the required wage and investment levels for Nebraska Advantage Act applications filed on or after January 1, 2018?
This ruling sets the 2018 thresholds. For Nebraska Advantage Act applications filed on or after January 1, 2018, the base average annual wage requirement is $26,146, and the required investment and em…
Do refractory materials stacked in layers on kiln cars, which both protect the car and help distribute heat evenly to bricks being fired, qualify for the Texas manufacturing sales tax exemption?
It depends on the layer's function. Refractory materials stacked on kiln cars that serve EXCLUSIVELY to distribute heat evenly during brick firing qualify for the manufacturing exemption -- but the bo…
Could a home-based business reduce BTPP value by the percentage of time equipment was used personally?
No. Virginia law directed the city to value business tangible personal property using a percentage of original cost. The taxpayer cited no authority allowing an additional reduction based on the owner…
Was a gasoline retailer's BPOL tax based on gallons sold or gross receipts, and was its 2013 refund timely?
Gross receipts. Virginia BPOL tax applied to the retailer's total gasoline-sale receipts, not the number of gallons sold. The February 2017 refund request for 2013 also came more than three years afte…
Could Golden Services, a hospice, deduct qualifying managed-care and Medicare Part C receipts under the 2007 version of Section 7-9-93 despite regulations excluding hospices?
Yes. Golden Services' managed-care and Medicare Part C payments satisfied every condition in the 2007 version of Section 7-9-93. That statute did not limit the deduction to a particular type of taxpay…
Could a taxpayer receive a 2012 Virginia income tax refund when the original return was filed in December 2016?
No. The 2012 return had to be filed by May 2, 2016 to claim the overpayment, but the taxpayer filed it in December 2016. Virginia's three-year refund statute gave the Department no discretion to pay t…
Did wages earned and taxed in another country escape Virginia income tax for a Virginia resident in 2013?
No. A Virginia resident is taxed on foreign wages included in federal adjusted gross income. The former foreign-income subtraction had been repealed, the other-state credit does not cover foreign coun…
Could a taxpayer use historic rehabilitation credits that accompanied an LLC partnership interest assigned by the prior owner?
Yes. Virginia generally does not allow a historic rehabilitation credit to be transferred by itself, but the taxpayer received the prior owner's LLC partnership interest. Under IRC § 704 and Virginia …
Could a taxpayer use historic rehabilitation credits that accompanied an LLC partnership interest assigned by the prior owner?
Yes. Virginia generally does not allow a historic rehabilitation credit to be transferred by itself, but the taxpayer received the prior owner's LLC partnership interest. Under IRC § 704 and Virginia …
Could a beneficiary use historic rehabilitation credits allocated to trusts that had matured before the credit distribution?
Yes. Because the taxpayer had reached the trusts' maturity ages before the credit distribution, IRC § 678(a) treated him as owner and the trusts as disregarded grantor trusts. He could use their histo…
Does Georgia's State Hotel-Motel Fee apply to shared camp lodging and private rooms in a nonprofit retreat center's lodge?
It depends on the accommodation. Shared dorms, cabins, and multi-unit housing were not subject to the State Hotel-Motel Fee because guests lacked private sleeping accommodations and linens. The separa…
Could a government owner buy public-works materials directly from suppliers without Florida sales tax under its proposed contract?
Yes. The amended contract required the government owner to issue purchase orders, receive supplier invoices, pay vendors directly, take title and risk of loss upon delivery, and give each supplier its…
Could Spelman Investments recover $14,746.07 of CRS filing penalties when it paid its taxes but mistakenly failed to file returns after New Mexico changed its online system?
No. When New Mexico moved to TAP, Spelman paid its CRS taxes on the payment page but did not separately file the related returns from May 2014 through July 2016. The mistake was unintentional, and Spe…
Do a Georgia manufacturer's light bulbs, lamps, and building-attached light fixtures qualify for the manufacturing machinery and equipment exemption?
Bulbs and lamps used by a manufacturer in making tangible personal property at a manufacturing plant qualify as manufacturing equipment, whether readily disposable or designed for long-term use. But l…
Were tickets to a nonprofit ballet company's Georgia performance exempt from sales tax under the temporary fine-arts admission exemption?
Yes. The ballet was a qualifying fine-arts performance, and the performing organization was a tax-exempt 501(c)(3) whose primary mission met the statutory arts-programming requirements. Ticket sales w…
Does underreported cable franchise fee revenue increase a locality's Trust Fund distribution when the corrected fee remains below its percentage share?
No. An underreported cable franchise fee increases a locality's Communications Sales and Use Tax Trust Fund distribution only when the franchise fee owed exceeds the locality's ordinary percentage dis…
Does underreported cable franchise fee revenue increase a locality's Trust Fund distribution when the corrected fee remains below its percentage share?
No. An underreported cable franchise fee increases a locality's Communications Sales and Use Tax Trust Fund distribution only when the franchise fee owed exceeds the locality's ordinary percentage dis…
Could alleged oral advice that a taxpayer had five years to file preserve a late 2012 Virginia refund claim?
No. The original 2012 return was filed in December 2016, after the May 2, 2016 refund deadline. The alleged five-year advice was not documented in writing, and Va. Code § 58.1-1835 applies to assessme…
Was a March 2017 Virginia estate tax refund claim timely after the IRS accepted the estate's Form 890-AD in December 2015?
No. The federal change became final when the IRS accepted Form 890-AD on December 7, 2015, so the estate had until December 7, 2016 to amend its Virginia return. Filing in March 2017 was late; the lat…
Must a Virginia partnership withhold for nonresident partners on guaranteed payments for services performed outside Virginia?
Not if the guaranteed payments are not Virginia-source income. Payments made without regard to partnership profitability are treated more like compensation; when the nonresident partners perform the s…
Did a fencing contractor prove that cash withdrawals recorded as tools and materials were personal and not taxable purchases?
No. The contractor's ledger recorded the cash checks in small-tools and materials expense accounts, and the contractor supplied no invoices or other proof that the money was withdrawn for personal use…
Were a dental practice's implant purchases exempt because they were ordered for specific patients?
Only purchases proven to be for specific patients qualified. Shipping implants to a lab, buying from registered vendors, or handwriting a patient's name later did not by itself establish exemption or …
Are separately stated FCC regulatory and PEG grant fees excluded from Virginia communications sales tax?
It depends. A separately stated government fee is excluded only when law requires the provider to add it to the service price. A fee the provider may pass through at its discretion remains taxable. Th…
How did Illinois's mid-2017 income tax rate increase (P.A. 100-22) affect 2017 tax computations, exemptions, the R&D credit, and estimated tax penalties?
Illinois explains that P.A. 100-22 raised the individual/trust/estate rate to 4.95% and the corporate rate to 7% effective July 1, 2017, so 2017 filers generally compute tax using a blended rate (a we…
Can a business with an existing Nebraska Advantage (or LB 775) project file a new application for a subsequent project covering the same activities, and how does timing affect its benefits?
Yes, you can file for a subsequent project covering the same activities -- but timing is everything. Revenue Ruling 29-17-2 (issued December 13, 2017) says a taxpayer with an Employment and Investment…
Could Kenneth White's estate recover a valid $1,000 income tax overpayment after waiting until 2016 to pursue the Department's inaction on the 2007 refund claim?
No. White's timely 2006 PIT-1 return made a valid $1,000 refund claim, and the Department had no apparent reason for failing to act. But the estate did not protest or sue within 210 days of the Octobe…
Does a joint development agreement between two unrelated oil-and-gas companies create a separate taxable entity for Texas franchise tax purposes, and can each company still deduct its own cost of goods sold?
Yes to both. Two unrelated oil-and-gas companies' Joint Development Agreement and Joint Operating Agreement — under which they jointly develop leasehold interests, share expenses, and each take their …
Was propane used only to heat a condominium residents' common-area swimming pool exempt from Florida sales tax?
Yes. The residents-only pool was a commonly owned area used exclusively for residential purposes, so propane used to heat it qualified for the residential fuel exemption. If any utility passing throug…
Does a casual seller — an individual selling personal property, a company selling small items at auction, or an auction seller — owe Illinois sales or use tax on the transaction?
It depends on whether the seller is regularly in the business of selling that type of property. Illinois does not impose Retailers' Occupation Tax (and the buyer owes no matching Use Tax) on an isolat…
Is Kansas nonwage business income (from an LLC, S corp, or sole proprietorship) taxable again after Senate Bill 30?
Kansas Notice 17-03 (revised December 6, 2017) explains that Section 5 of Senate Bill 30 (2017) amended K.S.A. 79-32,117 to end the 2012 exemption for nonwage business income. The 2012 law had let ind…
Was Agman Louisiana's gain from selling its WGI interest business income apportionable to New Mexico rather than nonbusiness income allocable to Louisiana?
Yes. Agman's WGI interest was not merely passive. Its corporate group retained board influence, initial management and administrative ties, insurance links, preferred storage access with lowest-price …
Do propane haulers need a Kansas liquid fuel carrier license, and by when?
Kansas Notice 17-13 explains that propane haulers must obtain a Kansas Liquid Fuel Carrier license. Under K.S.A. 55-507, a liquid fuel carrier must be licensed to transport liquid or motor fuels of 12…
Are travel trailers and fifth wheels motor vehicles for Georgia's $5,000 TSPLOST tax-base limit?
Yes. Although travel trailers and fifth wheels are not self-propelled, they are designed primarily for use on public roads. Georgia therefore treated them as motor vehicles for O.C.G.A. § 48-8-241(d),…
Can a repair seller avoid Georgia sales tax by accepting an unregistered coordinator's resale certificate or the truck owner's exemption certificate?
No. The repair seller could not accept the coordinator's resale certificate in good faith because the coordinator lacked a valid Georgia sales-tax registration number, could not fully complete the cer…
Is a charter school's 10-year campus lease (with renewal options) an exempt improvement-to-realty contract if the campus's useful life is 22 years?
No. The Comptroller ruled that the charter school's 10-year initial lease term is NOT an exempt contract under Section 151.311, because 10 years falls far short of the campus's 22-year useful life -- …
Were one-night hotel no-show charges taxable when the reservation effectively guaranteed the guest a room all night?
Yes. The hotels held a room until 3:00 or 4:00 a.m. and would place an overbooked guest at a comparable hotel, so the reservation effectively guaranteed lodging for the night. The forfeited one-night …
Does Illinois sales tax apply to a mobile app subscription and bundled distributor services sold by a multi-level-marketing company?
It depends on what is actually transferred: if the mobile app, dashboard, and personal-website bundle involve no transfer of tangible personal property (e.g., cloud-based access with nothing downloade…
Does a pending challenge to an IRS audit cancel Virginia's assessment based on the current federal adjustment?
No. Virginia treated the current IRS adjustment as controlling and kept the assessment due. If the IRS later changed its findings, the taxpayers could file an amended Virginia return within one year o…
Did a worker change domicile after moving from Virginia for a permanent out-of-state job, making Virginia wage withholding refundable?
Yes. The worker accepted permanent employment, obtained housing and a driver's license, registered a car, and took steps to sell Virginia property. Although his wife and some assets remained in Virgin…
Did a Canadian corporation with no Virginia office or employees owe Virginia corporate tax or have to file a return?
It appeared to owe no Virginia corporate income tax because the treaty produced no federal taxable income, but it still had to file a Virginia return if registered with the State Corporation Commissio…
Did medical disability extend Virginia's deadline to claim a 2012 income tax overpayment credit?
No. Virginia law did not suspend the three-year refund period for mental or physical disability, so a January 2017 return was too late to claim or carry forward the 2012 overpayment.
Did a taxpayer who moved abroad establish that he was no longer domiciled in Virginia for 2013?
Yes. After weighing all facts, Virginia found the taxpayer was not domiciled in the Commonwealth during 2013 and abated the assessment. His foreign residence, spouse's citizenship and property abroad …
May restaurants subtract payroll deductions lost because they claimed the federal tip-credit when computing Virginia taxable income?
No. Virginia law provides no subtraction for payroll expense deductions reduced by the federal IRC § 45B tip-credit, whether the restaurant reports on an individual or corporate return.
Did a former Virginia resident change domicile while attending school and later working in other states during 2013?
Partly. She remained a Virginia domiciliary while in graduate school, but changed domicile when she moved for indefinite employment in June 2013. Her pre-move capital gains were Virginia income, yet f…
Could a taxpayer challenge old Virginia income tax assessments and overturn later estimates without filing returns or records?
No for 2007-2010: the appeal was years late, so Virginia lacked jurisdiction. For 2011-2014, the timely appeal failed because the taxpayer supplied no returns or evidence, though he received 30 days t…
Was heat-resistant masking tape used in powder coating exempt manufacturing equipment, and could vendor-paid tax reduce a use-tax audit sample?
The masking tape was exempt because it was integral to powder coating and performed a quality-control function during production. But sales tax paid incorrectly to a vendor did not belong in a sample …
Did a Virginia auto repair shop owe tax on diagnostic and environmental charges and estimated underreported sales?
Yes. Diagnostic charges were taxable when connected with parts sales, environmental charges were taxable, and the shop did not disprove estimated underreported sales. Only separately charged repair la…
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