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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As a manufacturer, can I buy tooling made for a specific customer without paying Virginia sales tax, and then hand that tooling over to the customer tax-free?
Both steps are tax-free, the Department ruled. A Virginia packaging manufacturer can (1) buy customer-specific tooling and dies -- cutting dies, printing plates -- exempt under the manufacturing exemp…
I've lived and worked abroad for years but kept a Virginia driver's license, voter registration, and a couple of properties. Am I still a Virginia resident for income tax?
The assessments were abated -- the taxpayer successfully changed his domicile from Virginia to a foreign country ("Country A") before 2019, so he owed no Virginia income tax for 2019 or 2020. Changing…
How long do I have to ask Virginia to reconsider a final determination, and can I get reconsideration by re-arguing the same points?
Too late -- the assessment stands. A Virginia dealer asked the Department to reconsider a determination that had upheld its sales and use tax assessment (the dealer hadn't provided enough records to e…
My customers bought for resale, but I collected their exemption certificates late -- some after the audit started. Will Virginia still honor them?
Partly upheld, partly reduced -- and how each certificate fared turned entirely on WHEN it was received and whether the buyer could be verified. A tobacco distributor tried to knock out an audit asses…
Virginia says IRS data shows I should have filed a return, but I think I lived in another state. What happens if I don't respond to the Department's questions?
The assessment was upheld -- but with a final 30-day chance to fix it. The Department got IRS data suggesting this taxpayer should have filed a 2020 Virginia return; he hadn't, and when asked for info…
What major South Carolina tax law changes came out of the 2025 legislative session?
This Information Letter is the Department's plain-language summary of the significant tax law changes enacted in South Carolina's 2025 legislative session, organized into income/bank/withholding, prop…
The Department issued a bigger second assessment after my audit waiver expired, and it won't drop a sampled sale where the customer paid the tax. Are either of those right?
Mixed -- the taxpayer won a refund on the late second assessment but lost the sampling argument. An engineering firm was audited (Oct 2018-Sept 2021) after the auditor found its sales were sourced to …
My resale certificate is undated, and for another customer I never collected tax but they say they paid it. Will Virginia honor either?
Mixed result -- one customer's exceptions removed, the other's upheld. A specialty coffee roaster was audited and assessed on sales where it hadn't collected tax or obtained an exemption certificate. …
Which quality-assurance testing machines and supplies used by a Tennessee food manufacturer qualify for the industrial machinery exemption?
It depends on when the testing happens. For a manufacturer, equipment and supplies used to test the product during manufacturing are exempt: in-process testing equipment (metal detectors, fat analyzer…
If a seller passes on the cost of a federal tariff to a buyer in Illinois, is that tariff amount subject to sales or use tax?
Yes, if the seller is the importer of record (consignee) who paid the tariff and passes that cost on to the customer, the tariff becomes part of the selling price and must be included in gross receipt…
Does an online marketplace facilitator have to remit Colorado's firearms and ammunition excise tax on guns and ammo sold by third-party sellers through its platform?
No. A marketplace facilitator that never takes title or possession of the goods is not the 'vendor' for Colorado's 6.5% firearms and ammunition excise tax. The third-party seller is the vendor and rem…
When a supplier's on-site technicians only power equipment on/off and do maintenance — but the customer's own staff actually run it — is that a taxable equipment rental or a nontaxable operator-provided service?
It's a taxable equipment rental, not a nontaxable operator-provided service. The supplier's on-site technicians only activate/deactivate the equipment and perform maintenance and monitoring — they don…
What project-income method did Florida approve for the Capital Investment Tax Credit in TAA 25C1-002M?
Florida approved a fixed weighted factor determined at commencement of operations: one-third job change and two-thirds property. The factor multiplied the taxpayer's Florida adjusted federal income to…
Does an open-ended staffing arrangement with no end date and continuously rotating workers qualify for Texas's sales tax exemption for temporary employment services?
No. A staffing arrangement that continues indefinitely, with no end date and rotating staff filling the same ongoing housekeeping roles, does not supplement the client's workforce for a limited, speci…
Do Kansas meat processors need an exemption certificate for custom slaughtering and processing?
No. Kansas Notice 25-01 (which replaces and supersedes Notice 24-12) explains that the custom slaughtering, butchering, cutting, dressing, processing, and packaging of an animal for human consumption …
Is post-production storage and loading equipment 'machinery and tools used in manufacturing' subject to Virginia's local M&T tax, or is it exempt because production is already finished?
No — the equipment escaped the local Machinery & Tools (M&T) tax. A limestone quarry that also makes lime products appealed a county's M&T assessment on three 'lime load-out' assets used to store and …
My locality treated a phone call as my BPOL tax appeal — is that a valid local appeal, and can the state Tax Commissioner still hear my case?
A phone call is NOT a valid local appeal, so the Department still had no jurisdiction to decide the case on the merits — but, on reconsideration, it gave the taxpayer a fresh two-month window to file …
As a veterinary supplier, are the animal vaccines and the regenerative medical devices I sell to veterinarians exempt from Virginia sales and use tax?
Split result. Animal vaccines that veterinarians buy and administer ARE exempt from Virginia sales and use tax, but regenerative medical devices are NOT. Vaccines qualify because Virginia exempts a ve…
I didn't keep my restaurant's register tapes, and the auditor estimated my tax. Can I still knock it down by claiming exempt nonprofit sales and that my prices included the tax?
The estimated assessment was upheld -- the restaurant's missing records sank every argument. A restaurant with incomplete books was audited (April 2019-March 2022); because it hadn't kept its cash-reg…
I paid Virginia sales tax by mistake on exempt purchases and later got a use tax audit bill. Can I credit that overpaid tax against the audit, and what if the vendor is gone?
No — the audit assessment was upheld and both the credit and the refund were denied. A technology-services company was audited and assessed use tax on untaxed purchases; during the audit it asked for …
Is selling bitcoin (or other cryptocurrency) taxed as a sale of tangible personal property or a security for Texas franchise (margin) tax purposes, and where is that revenue sourced?
Neither. Texas ruled that selling bitcoin (and cryptocurrency generally) is the sale of intangible property for franchise (margin) tax purposes — not tangible personal property and not a security. Tha…
Are the turbines, cables, foundations, and software a contractor buys to build an offshore wind farm exempt from Virginia sales and use tax under the manufacturing exemption?
Mostly yes. This is an advisory ruling for a contractor building an offshore wind farm about 24 nautical miles off Virginia's coast (in federal waters) that it will transfer to a utility once complete…
Is a single-seller e-commerce platform (like a photographer's order and payment site) a 'marketplace facilitator' that must collect Illinois sales tax on behalf of its business customers?
Generally no. If customers reach a seller's page only through a code, link, or unique URL specific to that one seller, and the platform does not let them search or browse for other sellers' products, …
Does a licensed tobacco distributor owe Illinois Tobacco Products Tax on a sale to another licensed distributor, and can it be held liable if that second distributor never remits the tax?
Sales of tobacco products from one licensed distributor to another licensed distributor are not subject to Illinois Tobacco Products Tax. The tax applies only when the last distributor in the chain se…
Are a cable company's lease receipts for set-top boxes and remote controls exempt from Illinois sales tax if the equipment is already taxed under Chicago's Amusement Tax?
Yes. The Illinois Department of Revenue ruled that a cable television provider's lease receipts from equipment (set-top boxes, remote controls) leased to Chicago customers are exempt from state and lo…
How does South Carolina's Utility License Fee Credit work — who can claim it, for what, and how much?
It's a nonrefundable credit against South Carolina's Utility License Fee (the § 12-20-100 corporate license fee paid by utilities, electric cooperatives, telephone/telegraph, gas, power, water and sim…
If an online shoe retailer with no Missouri stores charges customers one combined 'shipping and handling' fee for orders shipped by common carrier, does Missouri sales tax apply to that fee?
Yes. Because Applicant bundled a non-taxable shipping charge together with a taxable handling charge into one combined fee that could not be separated, Missouri treats the entire shipping-and-handling…
Does Missouri's sales and use tax exemption for research and development apply to a business whose R&D activities (experimentation, prototyping, and testing) are not connected to manufacturing, processing, or producing a product?
No. Missouri's R&D sales/use tax exemption under Section 144.054.2, RSMo only covers equipment, machinery, and materials used in research and development that is related to manufacturing, processing, …
If our PAC buys branded t-shirts or tote bags to give supporters in exchange for their donations, do we owe sales or use tax on those items?
Yes. The PAC itself owes Missouri sales tax on promotional gift items bought in-state, or use tax on the same items bought out-of-state, because giving them to donors counts as the PAC using and consu…
If a subcontractor for a tax-exempt organization (like a school or church) rents equipment such as a lift, does the subcontractor have to pay Illinois sales tax on the rental?
Generally yes. Illinois now taxes lease receipts directly (effective January 1, 2025), and a rental to a subcontractor is taxable unless the subcontractor itself qualifies -- for example, as a constru…
Does an out-of-state company that sells cloud-based software and app subscriptions to an Illinois client owe Illinois Service Use Tax or sales tax on those subscription charges?
It depends on what is actually transferred. Illinois does not tax software-as-a-service subscriptions where nothing is downloaded and access is purely cloud-based -- but an out-of-state "serviceman" t…
If a marketplace facilitator already collected Virginia sales tax on my sales, can I still get a refund of tax I also remitted — even if I file the claim on the last day of the three-year deadline without the amended return?
No — the refund was denied on a strict deadline technicality, even though the seller appeared to have paid twice. An out-of-state dealer sold tools to Virginia customers through a marketplace facilita…
Which of my factory purchases qualify for Virginia's manufacturing exemption — and can the Department waive interest on tax I should have collected?
A mixed result, remanded. A metal fabricator audited for 2017-2020 challenged the sales/use tax on two welding machines and 80% of two forklifts, and asked the Department to waive interest on tax it f…
Is the equipment and supplies a Tennessee manufacturer uses to treat its incoming process water and its wastewater exempt from sales tax as pollution control facilities?
It depends on which side of the process the item is on. For a manufacturer, the equipment that treats the wastewater the plant discharges — equalization tanks, pumps, circulators, feed pumps, instrume…
Does Illinois's Automobile Renting Occupation and Use Tax apply to the rental of watercraft (boats)?
No. The Department ruled that a boat is not an "automobile" under the Automobile Renting Occupation and Use Tax Act, because a boat is not a "vehicle" under the Illinois Vehicle Code -- it is not tran…
I took an out-of-state job for two years, then moved back to Virginia — was I a Virginia resident the whole time for income tax?
Yes — he never abandoned his Virginia domicile, so he was taxable as a Virginia resident for 2020 (with credit for the other states' tax). A Virginia domiciliary took a job in 'State A' in February 20…
I moved to another state years ago but kept voting in Virginia and renewing my Virginia driver's license — am I still a Virginia resident for income tax?
Yes — he stayed a Virginia domiciliary resident, so his income was taxable in Virginia (though he gets credit for the other state's tax). A retiree left Virginia in 2011, moved to 'State A' in 2014, b…
My pension contributions were taxed by another state before I moved to Virginia — can I subtract part of my pension payments on my Virginia return, and how do I compute it?
Yes — the retiree qualifies for Virginia's retirement income subtraction, and because his pension pays fixed monthly annuity payments he must use the federal 'simplified method' to compute how much of…
Can back-end rebates from a component manufacturer reduce the 'original cost' of my equipment for Virginia's local business tangible personal property (BTPP) tax?
Yes — the rebates reduced the taxable cost basis, and the taxpayer largely won (remanded for verification). A data-center operator bought server racks from 'Rack Sellers' and separately received cash …
I collected Virginia sales tax that I think was exempt for research and development — can I get a refund from the Department before I pay my customer back?
No — the refund was denied. An automation company built a prototype robotic tote-sorting system for a retailer's Virginia warehouse and collected/remitted Virginia sales tax on the components, labor, …
Are factory-built (prefabricated/modular) home modules exempt from Colorado sales tax, and who owes tax — the manufacturer's suppliers, the builder, or the home buyer?
Mostly exempt. A Colorado maker of prefabricated/modular housing modules buys its materials tax-free under a wholesale/manufacturing exemption, and its sales of the finished modules are partially exem…
We claimed the Employee Retention Credit years ago without reducing our wage deduction, and the IRS is only now letting us recognize the overstated wages as income in the year we actually receive the credit -- can we take Illinois's offsetting subtraction in that same later year instead of the original wage year?
Yes, in this specific situation. Illinois normally ties its ERC-related wage-expense subtraction to the same year the wages were originally paid and the deduction should have been disallowed, and Illi…
How did Florida TAA 25A-003 tax a building-component manufacturer's retail sales and lump-sum contracts?
Retail sales were taxable, while customers on lump-sum real property contracts were not charged sales tax. The manufacturer owed use tax and plant-county surtax on fabricated cost for those contracts.…
Which parts of a healthcare practice-management software suite are subject to Tennessee sales tax, and what happens when they are bundled into one price?
It depends on the product. Tennessee taxes remotely accessed software, so the 'Manager' electronic-health-record product is taxable. But 'Billing and Claims' (a billing-and-collection service the vend…
Does Texas's sales tax exemption for equipment used to recycle fracturing wastewater cover a company's water-treatment plant that treats wastewater for resale — including water it eventually disposes of in a saltwater well?
No, not under the specific fracturing-wastewater-recycling exemption (§ 151.355(7)) — that exemption requires the treated water to actually be reused in fracturing work, and this company mainly treats…
When could a marketplace provider avoid collecting Florida sales tax on export sales under modified TAA 23A-016M?
When the property was irrevocably committed to export in a continuous, unbroken stream of commerce and shipping documents described the property, shipment date, final destination, and freight forwarde…
As an out-of-state ticket broker who buys and resells tickets to Missouri events, do I have to collect and remit Missouri sales or use tax on those resales?
No. Because the broker buys tickets in arm's-length transactions for fair market value from venues that already collect and remit sales tax on the initial sale, the broker's later resale of those same…
If my company processes donor biological samples through leukapheresis to create a new cell-therapy product for research and therapeutic customers, are the materials I purchase for that process exempt from Missouri sales and use tax?
Yes. Missouri ruled that materials purchased for use in a cell therapy and leukapheresis process -- which separates white blood cells from donor biological samples to create a new, marketable product …
If our app lets customers order food for pick-up or delivery from local restaurants and we use a third-party company's drivers, are we a marketplace facilitator, and do we have to collect and remit tax on those orders?
It depends on where the restaurant is located. The platform is a marketplace facilitator, but for orders from Missouri restaurants delivered to Missouri customers, the restaurant (not the platform) re…
Is a mandatory freight charge a retailer passes on to customers subject to Missouri sales tax?
Yes. Because the retailer requires its customers to pay the freight fee as part of the purchase, the charge is bundled into the taxable sale price of the tangible personal property and is fully subjec…
Does a campground owe sales tax on cabin, tent, and RV site rentals to guests who stay 30 days or more?
Cabin rentals to individual non-business guests who contract for and actually stay 30 consecutive days or more are exempt as permanent-resident lodging, but tent camping sites and RV sites are never e…
Can a global architecture firm buy computers tax-free in Missouri if its headquarters -- but not all its offices -- is located there?
Yes. Because the firm's Missouri office administratively manages all of its more than twenty integrated, centrally-directed offices worldwide, it qualifies as "headquartered in this state" and can cla…
Does a company that only shows ads linking to a retailer's own checkout page, without ever collecting or transmitting the customer's payment, count as a 'marketplace facilitator' that must collect Illinois sales tax?
The Department confirmed that an advertising platform is not a 'marketplace facilitator' under Illinois law as long as it never directly or indirectly collects payment from the customer and transmits …
Are a religious school's mandatory laptop rentals to students, billed as part of tuition, exempt from Illinois sales tax as a 'noncompetitive' sale like school yearbooks?
The Department did not give a yes-or-no answer. It explained that, effective January 1, 2025, leases of tangible personal property are themselves taxable sales in Illinois, and then walked through the…
My diagnostic lab was denied a Virginia sales tax refund on reagents for January 2017 — do reagents qualify for the medicines and drugs exemption?
No — the refund was denied. This is one of four materially identical April 2025 rulings (P.D. 25-54 (the full write-up), 25-60, and 25-61) in which an operator of medical diagnostic laboratories in Vi…
My diagnostic lab was denied a Virginia sales tax refund on reagents for 2016 — do reagents qualify for the medicines and drugs exemption?
No — the refund was denied. This is one of four materially identical April 2025 rulings (P.D. 25-54 (the full write-up), 25-60, and 25-62) in which an operator of medical diagnostic laboratories in Vi…
My diagnostic lab was denied a Virginia sales tax refund on reagents for 2014-2015 — do reagents qualify for the medicines and drugs exemption?
No — the refund was denied. This is one of four materially identical April 2025 rulings (P.D. 25-54 (the full write-up), 25-61, and 25-62) in which an operator of medical diagnostic laboratories in Vi…
I didn't give the auditor my records, so Virginia estimated my sales tax from my federal returns — can the estimate itself be challenged as overstated?
Partly — the estimate itself was justified, but the Department found the auditor's own methodology flawed in two of three areas even though the taxpayer proved nothing. A Virginia dealer failed to pro…
Virginia assessed me income tax based on IRS data, but I didn't live or work in Virginia that year — isn't saying so enough to cancel the assessment?
No — the assessment was upheld because the taxpayers never backed up their claim. IRS information suggested a married couple should have filed a 2019 Virginia return; they hadn't, and when the Departm…
I filed an old Virginia return late and asked for the overpayment to be credited forward instead of refunded — does the three-year refund deadline still block it?
Yes — the credit was denied and the resulting assessments were upheld. A taxpayer (now deceased) filed his 2016 Virginia return on August 13, 2020, asking that the overpayment be CREDITED as an estima…
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