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 did Senate Bill 30 change the Kansas low income exclusion that zeroes out tax liability?
Kansas Notice 17-04 explains that Section 4 of Senate Bill 30 (2017) amended K.S.A. 79-32,110 to lower the low income exclusion -- the taxable-income level at which certain individuals have zero Kansa…
How did Kansas change individual income tax rates and withholding for 2017 and 2018?
Kansas Notice 17-02 explains that the 2017 Legislature, in Senate Bill 30, increased individual income tax rates retroactively for tax year 2017 and increased them further for 2018 and later years, am…
Is a building in a qualifying census tract for the historic rehabilitation credit when the Office of Parks, Recreation and Historic Preservation has approved it, even though the tract's median income later looked too high?
Yes. The determination by the New York State Office of Parks, Recreation and Historic Preservation (OPRHP) that the building is in a qualifying census tract for the rehabilitation-of-historic-properti…
Does Virginia's three-year refund deadline also prevent a taxpayer from applying an old income-tax overpayment as a credit to a later year?
Yes. The court held that receiving an overpayment by check and applying it as a credit are functionally the same recovery. Because the taxpayer claimed his 2011 overpayment more than three years after…
Could Martin Moore challenge an old gross receipts tax assessment by protesting the later warrant of levy after he had not timely protested the assessment itself?
No. Moore received the gross receipts assessment but did not protest it, pay it, or furnish security. After 90 days he became delinquent, and the Department could collect by levy. His later protest co…
Which equipment at a rotogravure printing plant was directly used in manufacturing and subject to Virginia local machinery-and-tools tax?
Virginia split the equipment by use. Cylinder coating and engraving equipment, walking surfaces, handrails, and noise enclosures were not taxable machinery and tools. Bindery printers used inside prod…
Did a taxpayer prove he was only a part-year Virginia resident when his return and records showed substantial Virginia ties?
No. His part-year return listed Virginia residence for the entire year while assigning all income outside Virginia, and he failed to document the claimed State A domicile. A Virginia address, driver's…
Did the Servicemembers Civil Relief Act exempt a military spouse who formed extensive Virginia ties and stayed after the service member retired?
No. The Act protected a spouse present solely because of military orders, but did not prevent the spouse from voluntarily acquiring Virginia domicile. Her Virginia voter registration, home purchase, s…
Would sending documents to the IRS overturn Virginia assessments based on the IRS's current audit adjustments?
No. Virginia would not look behind the IRS's current final adjustments, and merely submitting rebuttal documents to the IRS did not show the Virginia assessments were wrong. If the IRS later changed t…
Could a retiree subtract the full amount of pension contributions attributed to years worked in other states without records of their state tax treatment?
No. Virginia's subtraction covered only federally deductible employee contributions that another state had actually taxed, not employer contributions or investment earnings. The retiree's basic-annuit…
Would unused Virginia coalfield credits survive a Chapter 11 reorganization, entity conversions, and two short tax years?
Generally yes. Credits stayed with subsidiaries that remained legal entities, including entities converting to pass-through status, and could flow to the new parent consolidated group. The ruling also…
What Virginia returns did a temporarily assigned employee owe when she worked and kept housing in Virginia but moved among several states?
She had to file a 2012 nonresident return for Virginia-source work and a 2013 resident return because the evidence indicated Virginia domicile. If she could prove she moved and changed domicile to Sta…
Could an acquiring corporate group switch from separate to combined Virginia returns by adopting the target group's filing method without advance permission?
No. The acquiring parent and its existing affiliates had already elected separate Virginia returns, so the acquired group had to follow that method absent timely permission to change. The target repre…
Did an exemption from federal self-employment tax prevent Virginia from taxing income included in federal adjusted gross income after an IRS audit?
No. Federal self-employment tax is separate from income tax, and Virginia taxed the income because it was included in federal adjusted gross income. Virginia accepted the current IRS audit result, but…
Could Virginia consider an administrative tax appeal filed more than 90 days after the assessment notice was mailed?
No. Virginia mailed the assessment on March 29, 2016, making the 90-day administrative appeal deadline June 27. Because the taxpayer did not file until August 4, the Tax Commissioner could not reach t…
Was a Pennsylvania-domiciled college student a full-year Virginia resident when he kept Virginia housing and moved here permanently after graduation?
Yes on the available evidence. Even if Pennsylvania domicile continued until July, the taxpayer likely maintained a Virginia place of abode from college in January through May and again after moving p…
Could a retailer use Oklahoma sales tax paid on fixtures shipped by common carrier to offset Virginia use tax?
No. Oklahoma treated delivery to a common carrier for shipment outside the state as an exempt interstate sale, even though the retailer hired the carrier. The Oklahoma tax was therefore paid in error …
Could a Virginia retailer credit Oklahoma sales tax paid on fixtures that a common carrier picked up in Oklahoma and delivered to Virginia?
No. Oklahoma treated the common carrier's possession as shipment outside the state, so the fixture sales were exempt interstate transactions even though the retailer hired the carrier. The Oklahoma ta…
Could a repair business receive an audit credit for sales tax paid to vendors without invoices from the audit period proving the payments?
No. Vendor lists, general claims that vendors charged tax, and sample invoices from outside the audit period did not prove sales tax was paid on the specific resale purchases under audit. Virginia uph…
Could a retailer use exemption certificates obtained after an audit and unsupported bag claims to remove sales and purchases from the assessment?
Mostly no. Certificates dated after the audit, missing registration data, or using the wrong nonprofit form did not prove good-faith exempt sales. Virginia removed only the identified political-subdiv…
Could David Graham deduct four years of horse-breeding and racing losses against other income as expenses of a for-profit business?
No for 2012-2015. Applying the federal profit-motive factors, the AHO found Graham's horse activity was driven by personal passion rather than a good-faith profit objective. He kept few financial reco…
Was an owner-crewed yacht charter exempt from Florida sales tax when the charterer lacked operational control?
Yes. Because the owner furnished the captain and crew and retained operational control, the charter was a service transaction rather than a taxable rental of tangible personal property.
If my company still offers a pickup option (even a shrinking one), are our delivery charges tax-exempt, and would eliminating pickup entirely make delivery charges taxable?
As long as customers genuinely have the option to pick up the item without paying a delivery charge, the delivery charge is not part of the taxable selling price. If pickup is eliminated and delivery …
If I separately state equipment rental or lease charges from VoIP service charges on the bill, do I still owe Illinois Telecommunications Excise Tax on the equipment charges?
No, equipment rental or lease charges are excluded from the Illinois Telecommunications Excise Tax as long as they are disaggregated and separately stated from the telecommunications service charges i…
Does Illinois sales/use tax apply to computer software, including software as a service (SaaS)?
It depends on how the software is delivered: Illinois generally taxes sales of "canned" (prewritten) computer software as tangible personal property, but custom software and software-as-a-service arra…
How did Virginia's July 2017 law change the sales-tax treatment of separately stated automobile repair shop-supply charges?
Beginning July 1, 2017, automobile repair shops had to collect sales tax on separately stated shop-supply charges, whether or not the supplies transferred to the vehicle or customer. The shops could b…
The IRS reclassified me from contractor to employee, so I had to amend my old state returns and pay more tax. I wasn't at fault — do I still owe New Mexico interest, and isn't the assessment too old?
Yes, she still owed the interest, and no, it was not time-barred — the protest was denied. Kelly Day was treated as an independent contractor (1099s) by Edible Communities, Inc. for 2009-2011 and file…
How does the new infrastructure maintenance fee change sales tax on vehicle sales for South Carolina dealers effective July 1, 2017 (per SC IL #17-10)?
SC Information Letter #17-10 (Revised) is a notice to motor vehicle, motorcycle, and trailer dealers and retailers about the new infrastructure maintenance fee (IMF) under Act No. 40, effective July 1…
Was a corporation exempt from county BPOL tax when it packaged and sold only farm products that it had grown itself?
Yes. Virginia's farm-products exemption applied because the same corporate taxpayer grew all produce sold from the county facility. Packaging its own products did not create a taxable wholesale busine…
For Texas sales tax, is labor to replace or abandon a natural gas pipeline taxable real property repair, or non-taxable new construction/demolition?
It depends on depth and method, ruled across twelve fact scenarios: labor to lay a new pipeline in a new trench beside the old one, or at a depth at least one-third greater or shallower than the old p…
Does an out-of-state online seller of snack bars owe Illinois sales or use tax, and at what rate, if its products are stocked in an Illinois warehouse?
It depends: the Department declined to give a binding nexus determination and instead explained the general rules. An out-of-state seller has no Illinois collection duty unless it has physical presenc…
Are admission tickets to an exempt organizations charity softball game subject to New York sales tax?
Yes. Admission charges to places of amusement, including sporting events, are taxable. Although a registered exempt organization generally need not collect tax on admissions, that exemption does not a…
What is South Carolina's tax interest rate for underpayments and overpayments for the period ending September 30, 2017 (per SC IL #17-9)?
4%. SC Information Letter #17-9 sets South Carolina's interest rate on tax underpayments and overpayments at 4% for the period April 1, 2016 through September 30, 2017. Interest is compounded daily, e…
What tax and fee changes take effect July 1, 2017 under South Carolina's Infrastructure and Economic Development Reform Act (per SC IL #17-8)?
SC Information Letter #17-8 summarizes the tax and fee changes under the South Carolina Infrastructure and Economic Development Reform Act (Act No. 40, enacted May 10, 2017) that become effective July…
A contractor builds a fiber-optic network for a telecom company, installing cable and conduit on leased poles and in easements. Is the lump-sum charge for that construction subject to Tennessee sales and use tax?
Yes — the whole turnkey charge is taxable, because the fiber network stays tangible personal property. The contractor handles engineering, procurement, and construction (EPC) of a fiber-to-the-home ne…
An out-of-state for-hire trucking company drives through Tennessee and sometimes picks up or delivers there. When does it owe Tennessee franchise and excise tax?
It depends on what the trucks actually DO in Tennessee, not just that they drive through. An over-the-road, for-hire trucking company based in another state — with no Tennessee office, property, or em…
What Virginia tax interest rates applied in the third quarter of 2017 to assessments, refunds, disputed assessments, estimated tax, and local taxes?
For July 1 through September 30, 2017, Virginia's ordinary interest rates were 6% on tax underpayments and assessments and 6% on overpayments and refunds. The reduced rate for qualifying disputed asse…
Did filing both part-year and nonresident returns prove that a couple abandoned Virginia domicile during a brief 2015 absence?
No. The couple's filing history showed Virginia residence before and after an absence of less than six months, creating prima facie evidence that they never abandoned Virginia domicile. Because they d…
Could a retiree obtain Virginia's previously taxed contribution subtraction without records supporting the retirement-income claim?
Not without documentation. Virginia taxes retirement income included in federal adjusted gross income unless a specific subtraction applies, and federal tax paid on that income does not itself create …
Did federally taxable lump-sum death benefits from annuity contracts qualify for Virginia's death-benefit subtraction without being life-insurance proceeds?
Yes. The statute required payments from an annuity contract with an insurance company, received by a beneficiary in a lump sum, and subject to federal income tax. The payments met all three conditions…
Does a later acquisition disqualify Virginia's long-term capital-gain subtraction when the original company qualified at the time of investment, and what proof must the investor provide?
A later merger or acquisition does not by itself defeat Virginia's long-term capital-gain subtraction if the original company was a qualified business when the investment was made. But this taxpayer h…
Could insurance-company disability pension income qualify for Virginia's disability subtraction even when reported on Form W-2?
Yes. Form W-2 reporting did not control when the insurer confirmed the payments had changed from salary continuation to disability pension income and the husband remained disabled under Social Securit…
Could a restaurant raise a new gratuities issue after the 90-day appeal period by calling it a reconsideration request?
No. The restaurant raised gratuities after the 90-day deadline and had not included that issue in its original timely appeal. Reconsideration could correct facts, apply changed law or policy, or consi…
Can Virginia hold a minority shareholder and corporate officer personally liable for unpaid company sales and withholding taxes when he knew of the delinquency but lacked responsibility and authority over tax payments?
No. Although the taxpayer was a 15% shareholder, vice president, secretary, director, and knew the company was behind on taxes, his father controlled budgeting, bills, and tax payments. Because the ta…
Did inventory owned at Virginia fulfillment centers require an out-of-state online seller to register and collect Virginia sales tax?
Yes. The seller retained ownership and control of inventory stored at Virginia fulfillment centers, which was sufficient activity under the inventory-nexus rule. Its collection and remittance duty beg…
Could an online retailer with Virginia fulfillment inventory close its registration and recover tax collected since voluntarily registering in 2015?
No. Owning goods for sale at a Virginia fulfillment center required registration under the inventory-nexus rule effective June 1, 2017. The retailer also could not recover tax collected since its Augu…
Did an out-of-state internet seller have to collect Virginia sales tax because its resale inventory was stored in a Virginia fulfillment center?
Yes. Under the 2017 inventory-nexus amendment, owning goods for sale at a Virginia fulfillment center was sufficient activity to require dealer registration. Beginning June 1, 2017, the seller had to …
My new cattle-ranching operation has lost money every year so far — can New Mexico deny my loss deductions by calling it a hobby, or can I still deduct the losses?
The rancher won — the losses were deductible because the operation was genuinely run for profit, not as a hobby. Dustin and Clarissa Ptolemy reported farm losses on their New Mexico returns for 2011-2…
What major Virginia state and local tax changes did the Department of Taxation identify in its 2017 Legislative Summary?
Virginia's 2017 Legislative Summary was a broad historical guide, not a taxpayer ruling. Major changes included a Fiscal Year 2018 tax-amnesty program, new electronic filing and payment mandates, IRC …
Can Virginia personally assess a majority shareholder and CEO for unpaid corporate income tax when he knew of the liability but continued paying operating expenses while the company wound down?
Yes. The taxpayer conceded he met Virginia's corporate-officer definition, knew of the 2014 corporate income tax liability before the return was filed, and continued paying salaries and other operatin…
Could a countertop fabricator avoid Virginia sales tax on fabrication and related service charges by claiming Department representatives gave incorrect advice, and how did a July 2017 law change affect later transactions?
No relief was available for the May 2013-April 2016 audit. The taxpayer could not document qualifying written Department advice under Va. Code § 58.1-1835, and fabrication labor plus services connecte…
Are breast pumps, nursing bras, and other breastfeeding supplies taxed at Illinois's reduced 1% rate for medical appliances?
Mostly no. The Department said the listed breastfeeding items (breast pumps and parts, shields, shells, nursing bras, lactation supplements/cookies) don't appear to directly substitute for a malfuncti…
Is machinery and equipment used primarily to harvest hay for sale exempt from Illinois Retailers' Occupation Tax and Use Tax as farm machinery and equipment?
Yes. Under 86 Ill. Adm. Code 130.305, machinery and equipment (new or used) that is used or leased primarily in production agriculture is exempt from Illinois Retailers' Occupation Tax and Use Tax, an…
Where did Illinois source local retailers' occupation tax for an industrial supplier's branch, remote-order, online, and affiliate sales?
Over-the-counter branch sales were sourced to the ordering branch. Specified phone, fax, email, eProcurement, special-branch, and affiliate sales were sourced to the Illinois headquarters after primar…
My employee misread the due date and we paid our withholding tax a few days late — can New Mexico waive the penalty and interest?
No — the company lost, and both the penalty and interest stood. Hyundai Corporation USA owed New Mexico withholding tax of $746,694 for the period ending June 30, 2016. The payment was due July 25, 20…
Under Virginia's 2017 guidelines, how did purchasers and dealers claim refunds of erroneously paid retail sales and use tax, what made a claim complete, and when did limitations and interest begin?
The purchaser generally had to seek a refund from the dealer first. If the dealer could not provide it, a direct Department claim required a complete Refund Claimant Return, transaction spreadsheet, i…
Did the Servicemembers Civil Relief Act preserve a military couple's claimed Florida domicile after they moved to Virginia under the wife's orders, bought a home, registered and voted in Virginia, and obtained Virginia licenses?
No. Military orders alone do not change domicile, but the Servicemembers Civil Relief Act also does not prevent a servicemember or spouse from acquiring a new domicile. The couple failed to show that …
I was assessed for a prior owner's unpaid tax as a successor in business — can I get the hearing officer to bar the state from collecting the penalty and interest before it happens?
No — the protest was denied as not ripe, though the underlying protection may still help later. The Local Vapory, LLC (a Las Cruces vapor-products shop, sole member Chaz Betts) was assessed about $28,…
If I lease a motor vehicle under a true lease and then buy it before the lease ends, do I get credit against the purchase tax for the sales/use tax already paid on my lease payments?
No. Under a true lease, the lessor (not the lessee) owes Use Tax on its cost price of the vehicle, and lease receipts themselves are not taxed. When a lessee later buys the leased vehicle before the l…
Did a military contractor employee's documented combat-zone service extend the Virginia refund period for 2011 and 2012 returns filed in July 2016?
Yes. IRS documentation showed that the military contractor employee qualified for the federal combat-zone postponement. Virginia extended both return due dates to June 15, 2015, so the July 29, 2016 f…
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