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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Could Santa Fe Baking avoid negligence penalties after its office manager omitted 33 months of gross receipts tax while continuing to file and pay withholding tax?
No. Santa Fe Baking's office manager omitted the gross receipts portion of CRS returns for 33 months while continuing to file and pay withholding tax. The AHO held that Department system silence was n…
Could dealership service-loaner vehicles qualify for Illinois' interim-use exemption before retail resale?
Possibly. A dealer-owned vehicle bought for resale could qualify while used as a loaner only if it stayed in sales inventory, remained available for sale, and met the rule's accounting and depreciatio…
Who owed Illinois tax when a financing company paid a contractor to install energy-efficiency equipment and recovered costs through a capital lease?
The installer owed Use Tax on its cost because the LED or HVAC work was a construction contract improving real estate. The financing company could not give a resale certificate and was not technically…
What does SC Revenue Ruling 15-13 say about South Carolina's Debt Setoff and GEAR collection programs?
South Carolina DOR may help governmental claimant agencies collect qualifying debts through Debt Setoff and GEAR. The ruling lists potential actions such as intercepting state income tax refunds or wa…
Can a petroleum terminal operator claim the sales tax exemption on the natural gas it uses to heat customer-owned fuel oils, on the theory that the heating is part of processing (blending) or part of transporting a material extracted from the earth?
Denied, for lack of proof. The Comptroller declined to rule that a petroleum terminal operator's natural gas -- used to heat and keep warm stored fuel oils awaiting transport -- qualifies for either t…
Did a state university's Illinois Telecommunications Excise Tax exemption also exempt its service from the infrastructure maintenance fee?
No. Although qualifying state universities were outside taxable retail telecommunications under the excise-tax law, the Infrastructure Maintenance Fee Act had no state-university exemption. The retail…
Which charges by an indoor rock-climbing gym — memberships, passes, classes, guided climbs, and birthday parties — are subject to Georgia sales tax?
Essentially all of them. Georgia taxes charges for admission to places of amusement and for participation in amusement activities, so the gym's memberships, daily passes, climbing classes, guided outd…
Were cover-crop seeds exempt as a sale for resale when the cover crop was plowed into soil before a later cash crop?
Yes, if the cover crop was plowed into the soil, became part of the next crop, and that next crop was actually sold. The retailer then made a sale for resale and needed a valid Certificate of Resale. …
Were a fuel hauler's rebillings sales for resale when fuel was charged to one customer but delivered to another?
They appeared exempt as sales for resale on the limited facts, but only with proper documentation. The purchaser had to provide a signed Certificate of Resale using its own active registration or resa…
Could Corporate Executive Board replace Virginia's statutory corporate apportionment method with customer billing-address sourcing for its subscription income?
No. The Arlington Circuit Court upheld Virginia's statutory apportionment method for CEB's 2008-2010 income. CEB did not prove the method unconstitutional, inequitable, or grossly distorted, and its p…
How is Georgia sales tax applied to a cellular 'Shared Plan' that bundles taxable voice access with nontaxable data across multiple devices?
The whole lump-sum charge is taxable unless the provider unbundles it. Georgia taxes cellular voice/telephone service but not data, so a single price covering both is fully taxable by default. The pro…
Can a Virginia locality or its economic development authority earn transferable Land Preservation Tax Credits by donating a conservation easement?
No. Virginia concluded that a locality is not a 'taxpayer' under the tax-title definition, and an economic development authority is likewise a governmental political subdivision outside the listed tax…
Could Virginia residents use the special border-state credit for partnership income reported in Maryland, North Carolina, and West Virginia?
No. The special rule applied only to qualifying income from one contiguous state, and in 2012 only North Carolina met the required tax-base condition. The taxpayers' North Carolina partnership income …
Could a nonfiler overturn a 2012 Virginia assessment by claiming domicile in another state but providing no objective evidence?
No. The taxpayer ignored two residency-document requests and provided no objective evidence that he had abandoned Virginia domicile and acquired another one. The best-information assessment remained p…
Were machines that made disposable wax patterns and ceramic molds directly used in manufacturing and subject to a Virginia city's machinery-and-tools tax?
Yes. Virginia found that making wax patterns and ceramic molds was part of the metal producer's manufacturing process because each stage transformed raw materials into a substantially different produc…
How should a door supplier and installer structure and tax lump-sum versus retail-sale-plus-installation contracts?
Contract terms controlled. A nonitemized finished-job contract was generally lump sum, so the contractor paid tax on materials and did not tax the customer. A properly itemized retail-sale-plus-instal…
A company hosts proprietary software and offers it two ways: a subscription where the client logs in and uses the software, and an outsourcing package where the company does the work and the client rarely touches the software. Which charges are subject to Tennessee sales and use tax?
It depends on the package. The Subscription Package — where the client logs in and uses the company's hosted software itself — IS taxable as remotely accessed software (Tenn. Code Ann. § 67-6-231(a)(2…
When does a steel subcontractor collect sales tax, which exemption certificates can it accept, and what's taxable on a taxable job?
A subcontractor does NOT collect sales tax on its charges to a prime contractor when the job is for a Tax Law section 1116(a) exempt organization or is a capital improvement, provided it receives the …
When a real-property lease for a residential facility bundles in furniture, fixtures, and equipment as part of the rent, does the landlord have to charge sales tax on that bundled tangible personal property?
No sales tax is due. The Comptroller ruled that when a landlord leases real property (land, buildings, and improvements) together with furniture, fixtures, and equipment as part of a single rental cha…
Are a cloud DNS-security firm's services taxable in New York, does its data center create nexus, and are its software plug-ins a separate taxable sale?
Yes to nexus and to tax. The firm (and its predecessor LLC) has had New York nexus at least since 2006, when it established a data center here -- physical property in the state is more than a slight p…
Can a cost-reimbursement Army facilities contractor buy property tax-free as purchases for resale?
No. The contractor has a cost-plus contract to operate, maintain, and repair facilities at a New York Army post, buying property in its own name (with title passing to the Army on delivery) and gettin…
Are a couple Yonkers residents or New York City residents when their house sits entirely in Yonkers but the front yard and mailing address are in the Bronx?
They are Yonkers residents, subject to the Yonkers resident income tax surcharge. Residency follows the dwelling's location and the couple's domicile; the residential structure sits wholly in Yonkers …
Were triathlon athlete participation fees exempt when the organizer charged spectators taxable admission to controlled viewing areas?
Yes. The athlete participation fees were exempt so long as the organizer charged and collected sales tax on spectator admission to controlled areas at the events.
On a long-term motor-vehicle lease, does the lessee owe Colorado sales or use tax on the lessor's monthly charge for an optional, separately stated maintenance agreement?
No. Because the maintenance agreement is optional and separately stated, the lessee does not owe Colorado sales or use tax on the lessor's monthly maintenance charge. Instead, the lessor (or its third…
Is a separately stated charge to install a custom-made, freestanding closet organizer into a customer's home included in the Colorado sales/use tax calculation?
Yes, on these facts. The separately stated 'installation' charge for a custom-made closet organizer is included in the sales/use tax calculation. The product is made to order and isn't finished until …
Can manufacturing production-control software be sold tax-free as machinery used directly in production or in research and development?
No. The software lets manufacturers quote prices, process orders, schedule jobs, control materials, track labor, and ship orders -- coordinating and monitoring the production process. But it does not …
Are online hotel-booking services that can't set the room price 'room remarketers' that must collect New York hotel sales tax?
No. The two services let travelers reserve hotel rooms (including in New York) through their websites and collect a non-refundable deposit (typically 10%) and certain fees, which they keep as their ch…
Is a monthly fee to operate and maintain a sewage treatment plant subject to New York sales tax?
Yes. The company's daily work at sewage treatment plants -- inspecting the plant, reviewing records, testing the treated water, oiling and adjusting pumps and equipment, maintaining logs and pump stat…
Is a monthly fee to operate and maintain a sewage treatment plant subject to New York sales tax?
Yes. The company's daily work at sewage treatment plants -- inspecting the plant, reviewing records, testing the treated water, oiling and adjusting pumps and equipment, maintaining logs and pump stat…
Is a charge to bring a mobile video-gaming theater (a game-equipped trailer) to a customer's event taxable in New York?
Yes, when the trailer is delivered to a New York location. The business brings a 32-foot trailer with five widescreen TVs and consoles (Wii, Xbox, PlayStation) to events like children's birthday parti…
Does a company owe sales tax on short-term rentals of furnished single-family homes, condos, and apartments that aren't part of a hotel?
No. The company rents eight furnished single-family units (homes, condos, an apartment) -- some owned, some leased, one managed -- none part of a hotel, motel, or lodging facility, for stays of two ni…
Are a broker's fees and material reimbursements taxable when the broker buys building materials for a contractor?
It depends on whether the broker is a true agent. If the broker acts as the contractor's agent, the purchase is treated as a retail sale directly from the vendor to the contractor: sales tax is due on…
Which of a broadcast studio's twelve charges to a TV-station customer are subject to New York sales tax?
Only the charges tied to tangible property are taxable; the electronically delivered production services are not. The studio rebroadcasts a Japanese station's content in the U.S. and bills twelve sepa…
Is removing and testing a piece of a building for asbestos, and reporting the results, taxable in New York?
Yes, generally. Removing a piece of a building (brick or wall), sending it to a lab for asbestos analysis, and reporting the results is taxable as the maintenance, servicing, or repair of real propert…
Could a multi-park operator use its proposed matrix to calculate county surtax on single-park, multi-park, and multi-state admissions?
Yes. The Department accepted the proposed matrix under the operator's specific facts because multi-park admissions covered locations in different surtax counties and the park of use could be unknown w…
Did Virginia accept a taxpayer's appraisal and order a recordation-tax refund for land conveyed subject to a leasehold interest?
Not yet. Virginia rejected land-use assessment as the recordation-tax measure but found that a qualified appraisal could be relevant to fair market value. The county clerk had to reconsider the underl…
Could Denise Thomas deduct property-inspection receipts using a Type 2 NTTC received about two months after the Department's 60-day deadline?
No. Thomas performed taxable property-inspection services and did not possess an NTTC by the Department's May 12, 2015 deadline. The buyer delivered a Type 2 NTTC in August, about two months late. Sec…
Were baked goods from a home-based cottage-food bakery exempt when sold for off-premises consumption or at vendor events?
Generally yes. Off-premises bakery sales and vendor-event sales were exempt food products, unless the event charged admission. Products normally regarded as candy remained taxable.
Did a contractor installing blinds, shutters, and flooring pay Use Tax on materials or collect sales tax from the customer?
The contractor paid Use Tax on its cost of materials permanently affixed to real estate and did not owe Retailers' Occupation Tax on construction-contract receipts. The customer owed no Use Tax, and a…
Is a subscription fee for streaming or accessing digital content over the Internet subject to Connecticut sales and use tax?
Yes. A recurring subscription fee for streaming or otherwise accessing digital content over the Internet is subject to Connecticut sales and use tax when sold to a Connecticut customer, because provid…
Is a mobile point-of-sale device that sells paid premium content a taxable coin-operated device in Kansas?
Yes — it is a taxable coin-operated device. Because the mobile point-of-sale device grants customers paid access to premium content (news, videos, sports, games — 'amusement and diversion'), the Depar…
Must a company that prints and mails a client's monthly statements to Georgia recipients collect Georgia sales tax, when the client is located out of state?
Not on these facts. The printed monthly statements are 'direct mail' — specifically 'other direct mail' (bills and statements) — and their sale is generally taxable. But Georgia sources 'other direct …
Can a pallet-sorting company claim Georgia's manufacturing machinery exemption on the sortation machine it buys?
No. The company removes, sorts, and resells used pallets without altering them, and its NAICS code (541614, logistics consulting) is not a qualifying manufacturing classification. Because merely sorti…
Could a husband under age 70 claim his older wife's unlimited Virginia prepaid-tuition deduction by saying he bought the contracts as her agent?
No. The husband created and owned the prepaid tuition contracts and made the contributions in his own name, so the under-70 purchaser's $4,000-per-contract limit applied. Marriage alone did not prove …
Were custom closet systems lightly secured to walls taxable retail property or real-estate improvements, and were installation charges taxable?
They were generally taxable retail products because anti-tip brackets and finishing nails allowed removal without meaningful damage, indicating the systems remained tangible personal property. Design …
Could one owner combine two single-member LLCs on one Virginia pass-through return after electing S-corporation treatment for both?
No. Electing S-corporation treatment made each single-member LLC a separate, non-disregarded pass-through entity for Virginia filing purposes. Federal grouping of their activities for passive-loss ana…
Is a nonresident employee's compensation taxable by Illinois when she travels through a multi-state territory for an Illinois-based employer but her base of operations (her home) is in another state?
No. Because the employee's services are not localized in any single state and her base of operations is her home in another state, none of her compensation is allocated to Illinois -- even though she …
Does an out-of-state manufacturer create Illinois corporation income tax nexus just by having its leased rail cars pass through, wait in, or sit empty in Illinois while delivering goods?
The Department would not issue a formal ruling on whether nexus exists because the question is too fact-specific, but it explained that merely shipping or delivering goods into Illinois by leased rail…
Were participant fees for coached rowing lessons subject to Illinois sales, use, or service taxes?
Generally no, if the rowing program transferred no tangible personal property to participants. IDOR said the listed Illinois sales, use, and service taxes would not apply to the lesson fees on that co…
Did a District of Columbia resident who commuted to a Virginia job and earned only wages owe Virginia income tax for 2013?
No. Virginia had no reciprocal income-tax agreement with the District of Columbia, but the taxpayer qualified for the separate daily-commuter filing exclusion. He lived in D.C., worked exclusively in …
Did a military home of record in another state prevent Virginia from treating a service member as domiciled in Virginia for 2012?
No. The service member's home of record did not outweigh his long-term Virginia home, driver's license, vehicle registrations, resident returns, family residence, and decision to remain after retireme…
Could a Virginia resident exclude short-term National Guard pay as extended active-duty pay or under the Servicemembers Civil Relief Act?
No. The taxpayer was a Virginia resident, did not show qualifying active military status under the Servicemembers Civil Relief Act, and did not prove extended active duty exceeding 90 days. The Nation…
Can a Texas data center count third-party staffing agency employees toward the 20-qualifying-job requirement needed to keep its data center sales tax exemption, and what counts as the required 'shared employment responsibilities'?
It depends on the actual contract terms. The Comptroller ruled that a qualifying data center MAY count third-party contract employees toward its 20-qualifying-job requirement (Tax Code Section 151.359…
Were a stand-alone electronically delivered ERP upgrade and its maintenance and support services subject to Florida sales tax?
No. The major upgrade was a stand-alone software product delivered electronically without tangible property, and its related maintenance and support were also nontaxable. Timely tax refunds had to be …
How did Illinois tax bundled computer hardware, canned software, maintenance, labor, updates, and delivery charges?
Canned software was generally taxable regardless of delivery method; qualifying licenses and custom software could be nontaxable. A maintenance bundle with unseparated canned-software upgrades was ful…
Were a materials seller's flat delivery charge, added fuel fee, and dumpster fee included in Illinois taxable gross receipts?
A separately identified delivery charge was excluded when customers could pick up the goods and the seller documented that option. The added fuel fee was taxable as a business cost even if separately …
Would IDOR verify a private publisher's Illinois motor-vehicle title, tax, lease, fee, and procedure guide?
No. IDOR would not approve a private legal publication and directed the publisher to statutes, rules, and official materials. To reduce errors, it supplied historical corrections on Form RUT-50, Chica…
Could a vehicle lessor obtain an Illinois tax refund when a long-term lessee moved out of state or ended the lease early?
No. Illinois taxed the original sale of the vehicle to the lessor, not the long-term lease, so the lessee's later move, retitling, or early termination did not change the tax. Monthly reimbursement by…
How did IDOR implement Public Act 98-628's alternate selling price for qualifying motor vehicles leased longer than one year?
For qualifying vehicles and defined leases over one year, tax remained imposed on the sale to the lessor but selling price became the lease-contract consideration plus later vehicle charges. Early ter…
Did Virginia accept a taxpayer's appraisal and immediately refund recordation tax calculated from a higher county assessment?
Not immediately. Virginia treated the county assessment as strongly presumed accurate but directed the circuit-court clerk to reconsider actual fair market value using the taxpayer's appraisal and all…
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