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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Where did a technology distributor source Illinois local sales tax after moving its headquarters but retaining its credit and distribution center?
All Illinois sales remained sourced to the city containing the company's credit department, invoicing and payment functions, IT systems, and primary Illinois distribution center. That included invento…
How can taxpayers check whether an older South Carolina advisory opinion was modified or superseded (per SC IL #16-10)?
Use the citator attached to SC Information Letter #16-10. It helps you determine what effect newer South Carolina advisory opinions have on previously published ones — whether an opinion was modified,…
If a digital marketplace collects and remits Colorado sales tax on its third-party sellers' sales as a 'jointly responsible' retailer, does that relieve the third-party sellers of liability — and are both relieved when a buyer presents an exemption certificate naming the marketplace as seller?
Largely yes. When a marketplace collects and remits Colorado sales tax on its third-party sellers' sales as a 'jointly responsible' retailer (an agent the Department may treat as jointly liable under …
How did Illinois tax equipment leases with a nominal buyout compared with true leases, installation, and other stated charges?
A lease with a dollar or other nominal purchase option was a conditional sale from the outset, so all lessor receipts were subject to Retailers' Occupation Tax. A true lease used no buyout or a fair-m…
Were separately stated shipping and handling charges on an online computer purchase automatically exempt from Illinois sales tax?
No. Separate statement alone did not break the link between sale and delivery. Freight was taxable when the customer had no pickup or qualifying free-delivery option. If a genuine free delivery or pic…
How could a crowdfunding investment qualify for Virginia's Qualified Equity and Subordinated Debt Investments Tax Credit under the 2016 guidelines?
An SEC-authorized crowdfunding investment made through an online solicitation, broker, or funding portal could qualify if it otherwise met Va. Code § 58.1-339.4. The business needed annual Virginia ce…
Did limited religious-group rentals or nonprofit status exempt a Christian camp from Illinois Hotel Operators' Occupation Tax?
Generally no for the described camp. A lodging facility renting exclusively to its own members may not be open to the public, but one renting to members and public groups is treated as public and all …
How did Illinois tax related-company equipment leases, a dental lab's custom dentures, and a dental practice's supplies?
Custom dentures were sales of service; the dentist and lab had to apply the serviceman and multi-service rules. Dentures generally qualified as medical appliances at the 1% State rate, while impressio…
Who owed Illinois tax when a glass contractor permanently installed materials, used subcontractors, and also sold some items over the counter?
The construction contractor was the end user and owed Use Tax on the cost of materials permanently incorporated into Illinois real estate, regardless of lump-sum billing. Customers owed no Use Tax, th…
After an out-of-state buyer restructures the ownership, is a holding company's gain from selling its partnership interest included in Colorado's apportionment factor?
On these facts, no. The gain is business income (the holding company's whole business was buying, holding, and selling the investment), and the company includes its distributive share of the partnersh…
Could a paid family caregiver deduct independent-contractor receipts without an NTTC because the healthcare company said it paid gross receipts tax?
No. Anthony Martinez was an independent contractor paid to care for his grandfather, so his receipts were taxable. The healthcare company refused to issue an NTTC, and Martinez produced no proof that …
Did Section 130.330(c)(3) generally exempt gases consumed in manufacturing, as Illinois GIL ST 99-0296 had stated?
No. IDOR corrected its September 29, 1999 General Information Letter ST 99-0296, which had incorrectly said the rules specifically exempt gases consumed in manufacturing. The correction states that ga…
Did Section 130.330(c)(3) generally exempt gases consumed in manufacturing, as Illinois GIL ST 11-0021 had stated?
No. IDOR corrected its April 1, 2011 General Information Letter ST 11-0021, which had incorrectly said the rules specifically exempt gases consumed in manufacturing. The correction states that gases a…
Did Section 130.330(c)(3) generally exempt gases consumed in manufacturing, as Illinois GIL ST 09-0112 had stated?
No. IDOR corrected its August 31, 2009 General Information Letter ST 09-0112, which had incorrectly said the rules specifically exempt gases consumed in manufacturing. The correction states that gases…
Did Illinois Use Tax apply when a new resident brought in an aircraft titled to an LLC after paying tax in another state?
Yes, and Form RUT-25 was required when the aircraft was titled or registered in Illinois. The exemption for a nonresident individual who used property outside Illinois for at least three months did no…
Did Section 130.330(c)(3) generally exempt gases consumed in manufacturing, as Illinois GIL ST 09-0101 had stated?
No. IDOR corrected its July 31, 2009 General Information Letter ST 09-0101, which had incorrectly said the rules specifically exempt gases consumed in manufacturing. The correction states that gases a…
Could Sonja Foote deduct cattle-breeding losses when seven of the nine federal profit-motive factors weighed against treating the ranch as a business?
No. Land and herd appreciation supported a profit motive, and startup losses were neutral, but seven factors weighed against the cattle operation. Foote showed no business plan, separate bank account,…
Would the Illinois Department of Revenue verify the tax, fee, and procedure information in a private vehicle title-and-registration textbook?
No. IDOR would not approve the accuracy of a private legal publication. It advised the publisher to consult Illinois statutes, administrative rules, and Department publications, said the previously pu…
Does a paid income tax return preparer need a separate Illinois-issued PTIN, and which Illinois tax returns require a PTIN?
No — the PTIN required on Illinois returns is the same Preparer Tax Identification Number already issued by the IRS; Illinois does not issue its own PTIN. Once Department rules take effect for tax yea…
Where did an Illinois distributor source local tax on warehouse walk-ins and sales processed through a separate headquarters office?
Walk-in sales were sourced to the warehouse city because binding the sale, payment and invoicing, and inventory were there. All other Illinois sales were sourced to the Illinois headquarters city afte…
What is South Carolina's tax interest rate for underpayments and overpayments for the period April 1, 2016 through December 31, 2016 (per SC IL #16-9)?
4%. SC Information Letter #16-9 sets South Carolina's interest rate on tax underpayments and overpayments at 4% for the period April 1, 2016 through December 31, 2016. Interest is compounded daily, ex…
Could a tile installer deduct resale-service receipts using an incomplete Type 2 NTTC and a correct Type 5 NTTC obtained after the 60-day audit deadline?
No. Hector Martinez's Type 2 NTTC was the wrong series and was incomplete, while his correct Type 5 NTTC was executed after the mandatory 60-day audit deadline. The AHO upheld $28,268.57 tax and $3,96…
What Virginia tax interest rates applied during the fourth quarter of 2016?
Virginia's fourth-quarter 2016 rates were 6% for tax underpayments and 6% for tax overpayments. The reduced rate for qualifying assessments in administrative appeals was 1%. Certain local delinquency …
Were separately stated fees for loading aviation fuel into an aircraft subject to Illinois Retailers' Occupation Tax?
It depended on who controlled the loading arrangement. If the aircraft operator contracted with the fuel seller to buy and load fuel and the seller selected the loader, the into-plane fee was taxable …
Was a Florida equipment lease a taxable written obligation to pay money for documentary stamp tax purposes?
No. The agreement was a true equipment lease because payment depended on the lessor providing the equipment and allowing quiet enjoyment during the term. That conditional obligation was not subject to…
Did employment, a driver's license, and living in a camper in another state end the husband's Virginia domicile in 2013?
No. The husband worked and obtained a license in another state, but lived in a Virginia-registered camper, became a student, and retained a Virginia home, spouse, voter registration, vehicles, family,…
Did resale certificates obtained years after an audited sale prove that an IT provider's data-warehouse appliance sale was exempt?
No. The seller obtained the certificates more than three and nearly four years after the sale, so they were not accepted in good faith at the transaction. Virginia also could not validate the buyer as…
Did long-term work, housing, licensing, and marriage abroad establish that this taxpayer had left Virginia domicile by 2012?
Yes. Nearly two decades of employment abroad, leased homes, a foreign driver's license and vehicle registration, and marriage to a citizen of that country outweighed the taxpayer's retained Virginia l…
Could taxpayers avoid Virginia's three-year refund deadline by carrying a late-claimed overpayment forward as a credit?
No. Virginia applies the same three-year limitation to refunds and overpayment credits. The Department had no record of the 2011 return before January 2016, and a signed April 2012 copy plus preparer …
Could this couple deduct carried-forward Virginia 529 contributions and subtract gain from publicly traded Virginia-company stock?
Virginia allowed the 529 deductions because records showed unused contributions from two contracts remained available for 2012 and 2013. It denied the capital-gain subtraction because the publicly tra…
Was a prepaid grocery-delivery membership covering three months of shipping and handling subject to Illinois sales or use tax?
No. The membership prepaid shipping and handling for future grocery orders but did not itself transfer tangible personal property. IDOR treated it as an intangible, so the membership receipt was not s…
Were public-university employees exempt from Virginia motor-vehicle rental tax when they paid personally for business-travel rentals?
No. The exemption applied when the Commonwealth or a political subdivision rented and directly paid for the vehicle. An employee's personal credit card or cash payment was not payment by the Commonwea…
Did a company prove exempt fence-installation labor or agricultural use of a tractor and loader in its Virginia use-tax audit?
No. Installation labor was bundled with fencing materials and no corrected invoice supported a separate exempt amount. The company also did not prove that it owned the cattle or farm, purchased cattle…
Did Illinois's historical full exemption for biodiesel blends above 10% include 10.1% through 10.9%, and how were those sales and overpayments reported?
Yes. Through December 31, 2018, blends containing more than 10% but no more than 99% biodiesel were fully exempt, including 10.1% through 10.9%. Until Form ST-1 changed, those decimal blends could be …
Did an equipment lease become a conditional sale when customers could not return the equipment and had to make a 10% balloon purchase or trade up?
Yes. The addendum eliminated the return option and required the customer either to buy the equipment for 10% of original cost or roll remaining payments into a new equipment lease. IDOR found that the…
Are herbal aloe beverages marketed with health claims taxable in Connecticut, or exempt as food products?
Exempt. The herbal aloe products — ready-to-drink, liquid concentrate, and powder-for-water — are exempt from Connecticut sales and use tax as food products for human consumption under Conn. Gen. Stat…
Did timely Type 6 construction NTTCs protect architectural design-build receipts when the pre-2012 transactions technically required Type 5 resale certificates?
Yes. SMPC's architectural services were resold by general contractors in taxable design-build contracts, so the transactions qualified for the service-for-resale deduction. Although the pre-2012 work …
Could an Illinois landscape contractor buy temporary project materials tax-free when working for a government or other exempt entity?
Generally no. A landscape contractor could buy property tax-free for permanent incorporation into exempt-entity real estate by giving the supplier the required certification. But silt fencing, ditch c…
Did a Virginia-created resident trust owe Virginia fiduciary income tax when its trustee, beneficiary, and securities were outside Virginia?
No, on the stated facts. The trust was a Virginia resident trust because a Virginia domiciliary created and funded it, but it lacked sufficient current nexus after his death because the trustee, benef…
Could a taxpayer use the federal claim-of-right method on his 2015 Virginia return after repaying income reported in 2014?
Yes. Virginia follows an individual's federal IRC § 1341 election. The taxpayer claimed the credit in the repayment year, attached the Virginia and federal computation schedules, and reported the bene…
Did the husband's unemployment after military retirement mean this Virginia couple did not have to file a 2012 resident return?
No. The husband received more than $50,000 of retirement income, the wife had wage income, and unemployment compensation was taxable. The couple had to file a Virginia resident return and received 30 …
Is a long-term lease of aircraft to a Colorado operator that the FAA authorizes as an on-demand charter/air-taxi service exempt from Colorado sales and use tax under either aircraft exemption?
Likely taxable — neither aircraft exemption appears to fit. A long-term aircraft lease (over 3 years) is treated as a taxable sale, with tax on the lease payments. The first exemption (§ 39-26-711) is…
Were asphalt-terminal throughput charges taxable rentals of equipment or real property, or nontaxable handling services?
They were nontaxable services. The terminal operator supplied and controlled the equipment, employees, and facility, while the customer never possessed the equipment or controlled the product-storage …
Did third-party lenders' financing of car dealerships' software licenses relieve the software seller of New Mexico gross receipts tax?
No. Market Scan sold taxable software licenses directly to customers, while its recommended lenders made separate financing loans that they were free to decline. Market Scan did not prove that the len…
Were cathodic corrosion-protection contracts taxable property sales or real-property-improvement contracts?
It depended on each installation. Deeply buried or concrete-integrated systems intended to remain tended to be real-property improvements, while suspended or easily removable systems tended to be taxa…
Could a full-time state employee deduct cattle-operation losses when six federal profit-motive factors weighed against the ranch?
No. David Gonzales devoted substantial time to cattle and possible appreciation favored him, while drought-related losses were neutral, but six factors weighed against a profit motive. The AHO upheld …
A company buys software, hosts it on its own servers outside Tennessee, and has its Tennessee employees access it remotely to do their work and to support its affiliates. Are its software purchases or its affiliate support fees subject to Tennessee sales and use tax?
No to both questions. (1) The fees the company charges its Affiliates for support services are NOT taxable, because those services aren't specifically enumerated under Tennessee law — and it is the co…
When did Illinois tax a telecommunications late fee, and could the Department decide whether the fee on this customer's bill was taxable?
A late fee separately stated from telecommunications charges was not subject to Telecommunications Excise Tax, while a fee not separately stated was taxable. For sales tax, a true finance charge was e…
Did gain from a qualified Virginia technology company's sale of internet domain names qualify for the capital-gain subtraction?
No. Even if the LLC was a qualified technology business and the gain was long-term, the subtraction applied to gain from the taxpayer's equity or subordinated-debt investment in the business. Internet…
Was a federal Civil Service Retirement System annuity exempt from Virginia income tax like Social Security benefits?
No. Virginia's subtraction covered Social Security and benefits included federally solely under IRC § 86, not CSRS annuities. Any CSRS amount included in federal adjusted gross income remained in Virg…
Could Virginia residents claim an other-state income-tax credit for New Hampshire's Business Enterprise and Business Profits Taxes?
No. The Business Enterprise Tax was based on business expenditures, and the Business Profits Tax was not a broad-based individual net-income tax. Neither was substantially similar to Virginia's indivi…
Who determines actual property value for Virginia recordation tax when the purchase price, appraisal, and assessment differ?
The circuit-court clerk makes the factual valuation, and Virginia generally defers unless the result is unreasonable. A recent assessment strongly indicates fair market value, but the clerk may consid…
Did a lower purchase price and appraisal automatically require recordation-tax refunds when the clerk used the property's assessed value?
Not automatically. A recent assessment strongly indicated fair market value, and an appraisal alone did not prove the clerk unreasonable. Virginia asked the clerk to reconsider all reliable evidence; …
Did compensation in the New Hampshire Business Enterprise Tax base make it a qualifying income tax for Virginia's other-state credit?
No. The tax base included compensation, interest, and dividends paid or accrued, making it a tax on business expenditures rather than a broad-based individual income tax substantially similar to Virgi…
What did Virginia advise a town about BPOL authority, tax bases, appeals, out-of-state receipts, and receipt situs?
A county generally could not duplicate a town's BPOL tax without town permission. A locality could use gross receipts or Virginia taxable income but had to use one base for all business classes. Appea…
Did a corporation substantiate Virginia's foreign-source-income subtraction for overseas software licensing and related technical services?
No. Technical-service fees qualified only when incidental to qualifying foreign property licensing, but the corporation did not provide the requested software and trademark license contracts despite e…
Was a minority corporate officer personally liable for unpaid Virginia sales and withholding taxes handled by the treasurer?
No. Although he was an officer and later knew of the delinquencies, the evidence did not show authority to take over the treasurer's tax duties or prevent the failures. The struggling corporation coul…
Was a corporate secretary personally liable after learning of unpaid Virginia sales and withholding taxes and taking control of some payments?
Yes. After learning of the delinquencies, the officer directed and made company and personal payments, signed checks, and had joint discretion over corporate bills. Virginia found duty, knowledge, aut…
Do deferred retirement payments made to retired partners of a professional-services LLC out of current partnership earnings qualify for Illinois's retirement-income subtraction modification?
Yes. The Illinois Department of Revenue concluded that payments to retired LLC members that meet the requirements of IRC Section 1402(a)(10) - excluded from net earnings from self-employment - qualify…
Can a New York taxpayer subtract gambling losses (up to winnings) from income as a subtraction modification, instead of itemizing?
No. There is no basis in the Tax Law for a subtraction modification for gambling losses. Because New York starts from federal adjusted gross income (which includes full gambling winnings), losses can …
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