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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Are a hotel-industry providers online reputation and survey products taxable information services?
It splits. All four products are information services because the company collects, compiles, and analyzes data and gives hotels access to it. The online reputation product (Product A) is taxable: its…
When were a retailer's separately identified shipping charges excluded from Illinois sales tax?
Shipping was nontaxable when it was separately identified and the buyer could obtain the goods without paying a delivery charge, such as through qualifying free delivery or pickup, while the product p…
A Tennessee company assembles a manufacturer's products from parts the manufacturer supplies, drop-ships them, and also provides technical support and warranty support. Which of those charges are subject to Tennessee sales and use tax?
It depends on the charge. (1) The company's fees for ASSEMBLING the manufacturer's products — including the related Materials Fees and Shipping Fees — ARE taxable as fabrication of tangible personal p…
Does the Metropolitan Commuter Transportation Mobility Tax (MCTMT) apply to the wages an employer pays to federal work-study students?
No. The MCTMT does not apply to the part of an employer's payroll expense attributable to wages paid to federal work-study students. MCTMT payroll expense uses the IRC definition of wages, which exclu…
Is natural gas converted by a supermarkets fuel cell to electricity exempt from sales tax?
Partly. The supermarket does production activities (baking, cutting/packaging meat, slicing deli items) and sells those goods, so it produces tangible personal property for sale. Gas, electricity, and…
Could a hotel purchaser value acquired business property at its resale proceeds instead of the city's percentage-of-original-cost method?
No. Virginia law directed most business tangible property to be valued using percentages of original cost, meaning the capitalized cost when first purchased new, not a later buyer's allocated purchase…
Did new evidence show that a taxpayer who moved to Virginia in late October 2012 was only a part-year resident?
Yes. New documentation showed that the taxpayer left his job and prior-state domicile and moved to Virginia in late October 2012. Virginia treated him as a part-year resident, requested Form 760PY wit…
Could a merchant mariner exclude 2012 wages from Virginia tax without proving domicile in another state?
No. Working outside Virginia did not establish a new domicile. The husband retained a Virginia home with his wife, vehicles, a driver's license, and other ties, and provided no evidence of permanent d…
Should one-time tornado fence repairs stay in a manufacturer's audit sample, and did its new-gauge project qualify as research and development?
The tornado repairs were isolated and unrelated to normal meter manufacturing, so Virginia removed them from the sample and taxed them separately. The new-gauge project qualified as research and devel…
Is raising chickens for research/vaccine eggs (not food) a farming activity eligible for the sales tax exemption?
Yes. The petitioner raises chickens to produce fertilized, specific-pathogen-free eggs sold to vaccine manufacturers and research and educational institutions; the eggs are never sold for human consum…
Are wood shavings a commercial dog breeder buys to bed breeding dogs and their puppies exempt from sales tax?
No. The wood shavings are taxable. Even though the breeder sells the puppies, neither sales-tax exemption applies. The Tax Law section 1105-B exemption for production supplies covers only listed activ…
Did Virginia's Internet-service equipment exemption cover wireless service and equipment used for retail, wholesale, and telephone activity?
Wireless transmission itself did not defeat the exemption. Equipment directly serving retail Internet subscribers could qualify, while wholesale carrier service, telephone service, pager service, and …
Did a purchase price near half the assessed value and a lower appraisal automatically reduce Virginia recordation tax?
Not automatically. A recent assessment strongly indicated fair market value, and an appraisal alone did not prove the clerk unreasonable. Virginia requested a review of all reliable evidence; any stat…
Could a taxpayer challenge Virginia's 2008 and 2012 income-tax assessments after the 90-day administrative appeal periods expired?
No. The 2008 and 2012 assessments were issued in April 2011 and August 2013, making the appeal deadlines July 2011 and November 2013. The taxpayer did not appeal until February 2015, so Virginia could…
Did frequent moves and uncertain startup employment prove that this taxpayer established permanent domicile outside Virginia in 2012?
No. The taxpayer described his startup job and residence in another state as uncertain, moved frequently, used a Virginia address on his federal return, retained and renewed a Virginia license, and ke…
Did Virginia tax wages earned during a roughly 150-day Virginia work stay by a West Virginia domiciliary resident?
No. The taxpayer established West Virginia domicile and stayed in Virginia for only about 150 days, below the actual-resident threshold. Virginia's reciprocal agreement exempted her Virginia wages as …
Was Florida documentary stamp tax due when Maryland and Delaware mergers transferred conduit-entity interests holding Florida real property?
No, under the transactions presented. The merger laws transferred property by operation of law in a manner comparable to Florida's merger statute, so the related transfer documents were not subject to…
Did Virginia's new commissary exemption cover sales by third-party vendors in local, regional, and state correctional facilities?
The exemption covered tangible property and prepared-food sales in local correctional commissaries established by a sheriff, including commissaries operated under third-party contracts. It did not cov…
Is a fleet repairer's 'management fee' — charged for online access to its maintenance database/reports — subject to Colorado sales tax, and does it matter that the fee is separately stated from parts and labor?
It turns on whether the fee is optional. A fleet maintenance company's 'management fee' gives clients online access to its maintenance database — application service provider (ASP) software, which Col…
Is an SSL certificate subscription — which authenticates a website owner's identity and lets browsers verify the certificate is valid — subject to Texas sales and use tax as tangible personal property, data processing, an information service, or a telecommunications service?
Not taxable. The Comptroller ruled that SSL Certificates — the bundled authentication service, digital certificate, and resolution (validity-check) service sold by subscription — are not tangible pers…
Did a downloaded API make cloud-based biomedical analytics taxable in Illinois even when the API was incidental to the service?
Yes, under IDOR's service-transaction analysis. Remote-only cloud software was not taxable under the Department's 2016 guidance, but the company confirmed that its API was downloaded to the customer's…
What Illinois tax-appeal, manufacturing-exemption, filing, and video-gaming guidance did IDOR give in response to a 2016 annual survey?
IDOR could not complete the survey format but explained that the Independent Tax Tribunal heard listed Department disputes generally exceeding $15,000 and its final decisions went to the Illinois Appe…
Could drainage culverts, pavement concrete and steel, and buried utility lines qualify for Illinois's enterprise-zone building-materials exemption?
Potentially yes, if the materials were permanently incorporated into real estate located in an enterprise zone. IDOR could not decide without more facts. For purchases on or after July 1, 2013, the co…
Were subscription SEO and marketing tools exempt from Illinois tax when subscribers might receive a downloadable toolbar or API?
Cloud software never downloaded and only accessed remotely was not taxable under IDOR's 2016 guidance. But the provider was a serviceman, and its terms and emails indicated subscribers received a down…
Were cloud-based web collaboration services exempt from Illinois tax when customers might download access software?
Cloud-only software that was never downloaded and merely accessed remotely was not taxable under IDOR's 2016 guidance. But a SaaS provider was a serviceman, and any API, applet, desktop agent, produce…
Was a cloud-based physician-records service nontaxable when its agreements appeared to provide an API or desktop client?
Cloud-only software that was never downloaded and only accessed remotely was not taxable under IDOR's 2016 guidance. But the provider was a serviceman, and its agreements appeared to transfer an API o…
Which equipment used to turn utility natural gas into vehicle-ready compressed natural gas qualified for Illinois's manufacturing exemption?
Filters, dryers, compressors, holding tanks, high-pressure piping, and programmable logic controllers qualified when used primarily to manufacture compressed natural gas. Manufacturing began with the …
Which patient and non-patient sales by a nonprofit hospital affiliate with an E-number were exempt from Illinois Retailers' Occupation Tax?
The qualifying hospital affiliate did not owe Retailers' Occupation Tax on food, medicine, or grooming and hygiene products furnished to patients as part of hospital or clinic care, or on drugs sold t…
Could a contractor recover gross receipts tax on depreciable equipment and systems incorporated into a county-owned fire station?
No. Weil Construction's remaining claimed equipment, piping, cabling, electrical systems, signage, and other items were incorporated into a county fire-station project, making them taxable constructio…
Are BNSF retirement plan pensions and Railroad Retirement Board (RRB) pensions exempt from Kansas income tax?
It depends which pension. Kansas has a subtraction modification for Railroad Retirement Board (RRB) benefits, so RRB pensions are exempt from Kansas income tax. But there is no modification for a priv…
Does Kansas charge income tax on qualified Roth IRA distributions?
No, when the distribution is a qualified (federally tax-free) Roth IRA distribution. Kansas income tax starts from your federal income and has no special modification for Roth IRAs, so the federal tre…
Are there specific requirements a corporation must meet to end its Kansas two-factor apportionment election before the 10-year period ends?
No. There are no specific requirements a taxpayer must meet before the Secretary of Revenue will consider a request to end the two-factor apportionment election before the end of the 10-year period. T…
Can Kansas employers round income tax withholding to the nearest dollar?
Yes—rounding is optional. Employers who compute Kansas income tax withholding using the percentage method may round each amount withheld and remitted to the nearest whole dollar: drop amounts under 50…
Does Kansas give a credit or deduction for unemployment benefits repaid in a later year?
No. Unemployment compensation that was included in your federal adjusted gross income is subject to Kansas income tax, and when you repay it in a later year Kansas allows neither a subtraction modific…
Are worker-safety equipment and chemicals or gases used for product quality testing exempt at a Georgia manufacturing plant?
Yes. Purchases and rentals of the listed access, lighting, hearing-protection, and barricade equipment used for worker safety at the manufacturing plant were exempt from state and local sales tax. Che…
Did a trust created by a Virginia decedent owe Virginia fiduciary income tax when its trustee, property, and beneficiaries were all outside Virginia?
No, on the stated facts. The trust was a Virginia resident trust because a Virginia domiciliary created it by will, but domicile of the deceased grantor alone was insufficient nexus. With no Virginia …
Were an auto loan note, loan check, and modification rider subject to Florida documentary stamp tax when read separately?
No, while unfiled and read separately. Each document lacked at least one required element of a taxable written obligation, and none expressly incorporated the others. Filing or recording a security do…
Were subscriptions to highly customized, electronically delivered software and related cloud services subject to Florida sales tax?
No. The customized software was delivered and accessed electronically, and the cloud services provided hosted access, storage, and backup without transferring tangible products.
When a lease invoice shows one payment, are installation, financing, freight, document, and collection charges included in Georgia's sales-tax base?
Generally, the entire non-itemized lease payment is taxable. Freight and unavoidable services such as document or collection fees remain in sales price even if itemized. Installation, interest, financ…
Would Virginia abate tax when a taxpayer reasonably relied on incorrect written Department advice about a death-benefit subtraction?
Yes. Although the taxpayer was not eligible for the subtraction on the stated facts, an authorized Department representative had approved it in writing. Virginia abated the 2012 assessment because tha…
Were vehicle diagnostic charges exempt from Virginia sales tax when billed with replacement parts?
No. Under the law and policy applied to the audit period, diagnostic services billed with replacement parts were taxable services connected with a sale. A diagnostic-only transaction with no tangible …
Are 403(b) retirement distributions taxable in Kansas for K-12 school and university employees, and does moving a 403(b) to an IRA affect the exemption?
It depends on the account. Kansas starts from federal income and exempts retirement income only when a specific state subtraction applies. There is no subtraction for 403(b) accounts held by K-12 scho…
Are a deceased employee's wages exempt from Kansas tax, and does Kansas impose an estate or inheritance tax on them?
No exemption, but no death tax either. Kansas does not impose any inheritance or estate tax on a decedent's assets, including wages. However, wages an employee earned before death are subject to Kansa…
Is a company's monthly fee for medical credentialing services — collecting documentation, preparing applications, and obtaining insurer credentials for a provider's billing staff using cloud-based software — subject to Colorado sales tax?
No, on these facts. Medical credentialing — collecting documentation, creating profiles, preparing applications, and obtaining the credentials a provider's billing staff need to bill insurers — appear…
Is the electricity and natural gas a TV news station uses to produce and broadcast its programming exempt from Colorado sales tax — as energy used in 'radio communication' or as 'industrial' use?
Only partly. Energy used to power the TV broadcast TRANSMITTER appears to be EXEMPT under the 'radio communication' energy exemption — the Department reads the 1937 'radio communication' term to inclu…
Could Virginia's other-state tax credit use a pass-through entity's full distributive income when the other state taxed a smaller amount?
No. The credit calculation could include only the pass-through income actually taxed by the other state after its conformity modification. Virginia therefore upheld the reduced credit and assessment.
Could a taxpayer overturn Virginia's 2012 nonfiler assessment without evidence that he was not a Virginia resident?
No. Virginia could use IRS information and estimate the liability when no return was filed. Because the taxpayer produced no objective evidence that he was not a Virginia resident required to file for…
How did Virginia treat restaurant gift-card sales and sales to a nonprofit customer that provided no exemption certificate?
Gift-card sales were removed because tax applies when the card is redeemed for taxable property, not when sold. Sales to the claimed nonprofit stayed taxable because the restaurant had no exemption ce…
Could a company collect Virginia sales tax only on the equipment portion of a financial lease for installed energy-efficiency upgrades?
Yes, conditionally. The itemized lease treatment was acceptable only if the installed equipment remained tangible personal property. If it became a real-property fixture, the contractor was the taxabl…
Were urgent-response medical monitoring, wireless data, and ordinary cell-phone services subject to Illinois Telecommunications Excise Tax?
IDOR would not confirm the company's specific treatment in a nonbinding GIL. It said ordinary mobile phone service incurred Telecommunications Excise Tax, while wireless data plans generally fell unde…
Which nursing-home meal supplies qualified for Medicare or Medicaid flow-through exemption treatment under Illinois service-tax rules?
Only qualifying property transferred to patients and paid for by Medicare or Medicaid received proportional exemption treatment under the serviceman's chosen tax method and proper E-number documentati…
Where did a fuel distributor source Illinois local tax on delivered fuel oil, warehouse lubricant sales, and card-lock gasoline sales?
Delivered fuel-oil sales were sourced to the city containing the sales and administrative office, even when fuel came from third-party racks or storage elsewhere. Lubricant sales from inventory at a s…
Were an online grocer's home-delivery and local-pickup charges included in taxable Illinois gross receipts?
The $2.99 pickup charge was taxable because it reimbursed the grocer's cost of moving goods between its facilities. The separately stated $5.99 home-delivery charge was excluded because customers had …
Could the university buy construction materials tax-free through owner-direct purchases for its campus project?
Yes. The proposed process qualified if the university issued purchase orders, received invoices, paid vendors directly, took title, assumed risk of loss through installation, and issued the required c…
Did a taxpayer abandon her Virginia domicile when she moved to another state for employment in 2012?
Yes. Even assuming she had established Virginia domicile earlier, her move for employment, new permanent home, and other evidence showed that she abandoned it in 2012. Virginia abated the assessment.
Could Virginia recover a refund after the taxpayer filed a second return showing fewer deductions and more tax due?
Yes. Virginia treated the second return as an amended return. Because it showed higher liability after a refund had already been issued, the excess refund became an underpayment that the Department co…
Was a husband a Virginia domiciliary resident in 2011 when the couple claimed he remained domiciled elsewhere?
Yes. The evidence tied the husband to the couple's Virginia home, while the couple provided no proof that he maintained or acquired domicile elsewhere. He had to file as a Virginia resident for 2011.
Could Virginia residents claim an out-of-state income-tax credit for New York's Metropolitan Commuter Transportation Mobility Tax?
No. Virginia found that the New York MCTMT was a targeted payroll and self-employment tax, not a tax substantially similar to Virginia's broad individual income tax. Denying the credit also did not vi…
Was an interstate motor carrier exempt from Virginia use tax or entitled to apportion the tax among the states where it operated?
No. Virginia's motor-vehicle common-carrier exemption had been repealed, and the use tax was not apportioned by operating miles. The Department did order the audit revised because its extrapolation du…
Could the seller accept digitally signed electronic exemption certificates instead of paper certificates?
Yes. The proposed electronic certificates were acceptable because the seller validated required information and digital signatures, retained reproducible records, and made its authentication process a…
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