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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Can an electrical contractor buy its tools and materials tax-free under the new public-utility electricity exemption?
No. Because the new Section 144.058, RSMo electricity-generation exemption is limited to purchases by registered public utilities, and this electrical contractor is neither a utility provider nor regi…
Do the costs of building and maintaining private logging roads count as cost of goods sold (COGS) for Texas franchise (margin) tax purposes?
Yes. The Texas Comptroller ruled that a timber company's costs to build and maintain private logging roads — used to move harvested timber from the woods to its own lumber mill — qualify as cost of go…
We want to wholesale whole-leaf tobacco wraps — the leaves used to roll other tobacco or smoking material. Are they subject to Virginia's tobacco products tax?
No tobacco products tax — but don't celebrate yet, because the Department pointed the wholesaler straight at the CIGARETTE excise tax instead. A wholesaler asked whether TOBACCO LEAF WRAPS — whole tob…
Our data center equipment qualifies for Virginia's exemption, but we buy in bulk and can't produce invoices matching each item shipped from our out-of-state warehouse to the Virginia facility — can other records support our refund?
The refund denial was upheld — the exemption doctrine was on the taxpayer's side, but the paperwork wasn't. A communications company providing high-speed satellite broadband and secure networking held…
We refused to sign the auditor's waiver, but the audit still grew from three years to six — and can't our purchases share our sister company's manufacturing exemption since we jointly bought the equipment?
A split result with a clean rule: a nonfiler's audit can reach BACK six years without the taxpayer's consent — but it cannot be stretched FORWARD past the set period without a mutual agreement, and re…
Which freezing-plant machinery, equipment, and supplies qualify for Tennessee's industrial machinery exemption for a frozen-food manufacturer?
Mostly yes. For a frozen-food manufacturer, Tennessee's industrial machinery exemption covers the freezing system (freezers, compressors, evaporators, refrigerant/ammonia, chillers, piping/controls/va…
If I thought my accountant paid my New Mexico estimated tax, can I get the penalties waived when it turns out only my federal tax was paid?
No — the penalties stand. Raymond Merrick, a cybersecurity contractor who switched from a W-2 job to 1099 self-employment in 2022, didn't make New Mexico estimated tax payments because he believed his…
When I register a trailer that carries a big piece of equipment, does New Mexico's motor vehicle excise tax apply to the whole package, or just the trailer?
Yes — the taxpayer won a refund. Prestige Equipment Rental bought four trailer-mounted generators (used to supply power at remote oilfield sites) and paid New Mexico's 4% motor vehicle excise tax on t…
How is sales/use tax handled when a mobile home park owner buys, installs, and resells manufactured homes located in the park?
The park owner's purchase of the manufactured home from the manufacturer is a tax-free sale for resale. The park owner then owes tax on the first sale of that home to a purchaser (reported and paid on…
My accountant filed my Virginia tax appeal just one day late because of a personal emergency — will the Department make an exception?
No — Virginia's 90-day appeal deadline is enforced strictly with no exception for sympathetic circumstances, even a single day, though other remedies remain open. A taxpayer was audited for October 20…
My event venue rental packages include tables and chairs along with the space — does that make the whole rental taxable in Virginia, even without food or an overnight stay?
Yes — bundling any tangible personal property, like tables, chairs, or seating, into a single lump-sum venue-rental charge makes the ENTIRE charge taxable, and here the taxpayer couldn't prove otherwi…
I fabricate metal gates, fencing, and railings and then install them myself — am I a taxable retailer or a tax-exempt real-property contractor in Virginia?
It depends on which activity makes up the majority of your gross receipts — and here, incomplete records meant the taxpayer couldn't prove either way, so the auditor's sampled assessment stood. A meta…
I disputed a Virginia income tax assessment because I'm a military spouse who shouldn't have been taxed as a resident — why won't the Department even look at my case, three years later?
Because both the 90-day appeal deadline AND the separate 3-year protective-claim-for-refund deadline had already expired by the time she filed — years of informal correspondence with the Department di…
I told Virginia my sales tax assessment was 'overstated' — why wasn't that enough to get my appeal reviewed?
Because 'the assessment is overstated' is a conclusion, not grounds for an appeal, so the Department found no complete appeal was ever filed and closed the case. A real property and plumbing contracto…
I appealed my Virginia sales tax audit assessment by disputing the audit method, but the Department closed my case without addressing it — why?
Because the appeal never identified any specific error or cited any legal authority, so it wasn't a 'complete appeal' and the Department closed the case with the assessment intact. An auto-glass, repl…
I run a zipline and whitewater-rafting outfitter — do I owe Virginia sales tax on guided tours, or only on unguided equipment rentals?
Unguided equipment rentals are taxable, but GUIDED activities are exempt as a service — as long as any meals or other taxable items are separately itemized from the guided-tour charge. An outdoor recr…
My interior decorator separately billed for labor and marked up the furniture she sold me — is either charge exempt from Virginia sales tax?
The labor charge is exempt because it was separately stated, but the markup on the furnishings stays taxable because it's part of the goods' 'sales price.' A bank was audited for October 2015 through …
The county says my Machinery and Tools tax appeal was filed too late, but the delay was caused by the Department's own year-long filing mistake — what happens now?
The Department fixed the fairness problem itself: it restarted the one-year local-appeal clock from the date of its OWN corrective ruling, so the taxpayer's appeal counted as timely after all. A taxpa…
I hired an out-of-state vendor to create and mail marketing materials directly to potential customers in Virginia — do I owe Virginia use tax on that service?
No — because the business never made any use of the printed materials in Virginia itself, the out-of-state advertising vendor's direct mail charges weren't subject to Virginia use tax. An insurance pr…
The Department says it collected on my old tax bills before the deadline expired, but I haven't seen proof — can I get the Department to reconsider its ruling?
Only if you meet one of four narrow legal criteria for reconsideration — simply asking for proof isn't one of them, though the Department provided the proof anyway. In an earlier ruling (P.D. 24-23), …
I run a flower shop that sells arrangements in glass and metal vases — do I owe Virginia's litter tax just because those containers are on the taxable products list?
No — selling containers that happen to be on the litter tax's product list isn't enough if those items are merely INCIDENTAL to your real business, and here the Department also allowed a partial refun…
The IRS says it adjusted my federal return and increased my income, but I think the IRS made a mistake — can Virginia's assessment based on that IRS change be corrected?
Generally no — the Department does not look behind a final IRS determination of your federal income, though it gave this specific taxpayer one more chance to prove he's actively contesting the IRS's n…
If my commercial lease bundles rent for both the building and the furniture/equipment inside it, how is the taxable tangible personal property portion determined?
Only the portion of a bundled lease payment attributable to tangible personal property (furniture, equipment, fixtures) is subject to Virginia sales tax -- the real property portion is not. If the lea…
I manufacture an implant and instrument kit sold to physicians, not directly to patients — do sales tax exemptions for medical devices even apply, and does the 'true object' test matter here?
The exemption depends entirely on whether each sale is tied to a specific, identified patient — bulk sales to practitioners are taxable, and the 'true object' test doesn't even come into play because …
I paid a deposit on recycling equipment one year but didn't receive and use it until the next year — can I count that deposit toward the credit for the year I actually put the equipment in service?
No — the Recycling Equipment Credit is keyed to the year an amount was actually PAID, not the year the equipment was received or placed in service. A corporate taxpayer timely filed its Form RMC appli…
My husband's serious medical condition delayed us filing our tax returns by years — can Virginia still deny our refund because of the statute of limitations?
Yes — Virginia's three-year refund deadline has no built-in exception for medical hardship, however sympathetic the circumstances. A husband and wife filed their 2015 Virginia return in November 2019 …
When does South Carolina charge sales tax instead of the Infrastructure Maintenance Fee on boat, farm, and utility trailers?
Boat trailers under 2,500 pounds, farm trailers, and other utility trailers are subject to South Carolina state and local sales or use tax—not the Infrastructure Maintenance Fee—when they are privatel…
Does a company that runs electric-vehicle charging stations (and isn't a utility) have to charge Colorado sales tax on the fees customers pay to charge?
Generally no. Fees a non-utility operator charges customers to use electric-vehicle charging stations are not subject to Colorado state sales tax, because EV charging is a discrete, one-time sale rath…
During COVID I paid my New Mexico gross receipts tax on time but filed the returns late — can the state still charge me a late-filing penalty?
Yes — the late-filing penalties stand. Trane US Inc. paid its New Mexico gross receipts tax on time for June through September 2020, but its accountant couldn't file the CRS-1 returns because a depart…
Could a renewable-natural-gas plant's owner and contractors buy qualifying equipment tax-free under Florida TAA 25A-002?
Yes. The owner, contractor, and subcontractors could buy the listed qualifying machinery, equipment, and integral building materials exempt under section 212.08(5)(v), and each could issue an exemptio…
Since Illinois started taxing leases of tangible personal property on January 1, 2025, does a business that rents out scaffolding owe retailers' occupation tax on those rental charges, and can it accept a manufacturing exemption certificate (Form ST-587) for scaffolding rentals?
Generally yes, the lessor owes state and local retailers' occupation tax on scaffolding rental receipts starting January 1, 2025, and no, an ST-587 manufacturing machinery and equipment exemption cert…
Is a roll-off dumpster trash-removal service subject to Illinois sales tax as a lease of the dumpster, or is it a nontaxable waste-disposal service?
It's taxable, but as a service transaction, not a flat exemption. The Department ruled that a roll-off dumpster provided as part of a trash-removal service is a lease of tangible personal property inc…
Is an online auction listing service a 'marketplace facilitator' in Illinois if the seller processes payment directly?
The Department read the definition broadly and would not adopt the narrow reading the requester proposed. Under 35 ILCS 120/1 and 86 Ill. Adm. Code 131.130(a)(1)(B), a marketplace facilitator both lis…
When figuring Colorado's 10% residential energy storage tax credit, does the purchase price include the cost of the on-site generation (like solar panels) paired with the batteries, or only the storage system itself?
Only the storage system itself. Colorado's 10% residential energy storage credit is based on the purchase price of the storage system and its batteries (including batteries paired with on-site generat…
Since Illinois started taxing equipment leases on January 1, 2025, whose location sets the tax rate, and does Chicago's lease tax stack on top of the new state tax?
The lease is sourced to the equipment's primary location (usually where the lessee tells the lessor it will be used), not the lessor's or lessee's business address. And no, the new state and local lea…
Does Texas's manufacturing sales tax exemption cover a steel manufacturer's dedicated quality-control lab equipment — lathes, presses, ovens, and materials-testing machines — used to test finished plates before sale?
Yes. Equipment a manufacturer uses exclusively to prepare and test product samples for quality control — here, a lathe, mechanical press, ovens, and testing machines like a Charpy impact tester, tensi…
Does a dumpster rental business have to charge Illinois sales tax on the rental, delivery, and waste-removal charges, or is it a nontaxable sale of service?
It depends on how the dumpster's cost compares to the total bill. Renting out a dumpster is a lease of tangible personal property, and effective January 1, 2025, leases transferred as an incident of a…
When a company's own operators keep full remote control of a frac-sand handling system at all times — with the customer never able to touch the controls — is that a taxable equipment rental?
No — it's a nontaxable service, not a taxable equipment rental, because the customer never has operational control: the provider's own operators keep exclusive custody of the remote/logic controllers …
Can I deduct contributions to a Kansas adoption savings account on my income tax return?
Kansas Notice 24-22 explains 2024 House Bill 2465, which created the Adoption Savings Account Act and amended K.S.A. 79-32,117. Starting July 1, 2025, an individual can open an adoption savings accoun…
I install fences and patios along with roofing and deck work — can my county tax my fence and patio revenue at a higher rate than my other contracting work?
No — fences and patios both count as 'structures' under Virginia's BPOL contractor definition, so ALL of this business's installation work qualifies for the lower contractor tax rate, not a split rate…
I mistakenly charged sales tax instead of paying use tax as a contractor — now that Virginia law changed in 2024, can I get credit for the sales tax I already collected and remitted against my use tax assessment?
Possibly, but only through a case-by-case review the Department is now sending back to the auditor — a brand-new law effective July 1, 2024 (Va. Code § 58.1-1812 C) lets contractors get a one-time cre…
My county charged me a BPOL late-payment penalty and interest — can I appeal that penalty to the Virginia Department of Taxation?
No — the Department has no jurisdiction over a dispute that's ONLY about penalty and interest, and even if it did, penalty waivers are entirely up to the locality's own discretion while interest can n…
I donated clothes, books, furniture, and household items to charity across three years — why did Virginia allow some of my deductions and deny others?
Because Virginia's (federally conformed) substantiation rules require progressively more paperwork as a donation category's value rises, and this couple only had enough proof for their SMALLEST-value …
Did Florida's temporary impact-window and door exemption apply when delivery occurred after June 30, 2024 under TAA 24A-001?
Yes, if payment occurred from July 1, 2022 through June 30, 2024. Delivery after the exemption period did not change the result, so the seller did not charge sales tax and the contractor did not remit…
Did Florida's temporary impact-window and door exemption apply when delivery occurred after June 30, 2024 under TAA 24A-022?
Yes, when payment occurred from July 1, 2022 through June 30, 2024. For qualifying remote orders, the order also had to be accepted during the exemption period for immediate shipment without a purchas…
Do hotels have to charge sales tax on meeting-room rentals, and are nonprofit organizations exempt from that tax?
Generally no on both counts, with conditions — meeting-room rentals aren't taxable as long as no overnight accommodation or tangible personal property is bundled into the charge, and that exemption al…
My county keeps taxing my limestone quarry equipment as 'processing' instead of exempt mining equipment, even after Virginia already ruled on this for my earlier tax years — what happens now?
The case goes back to the county for a fresh determination — because the county's 2022 decision was issued just before the Department had already ruled, in the same taxpayer's earlier-years case, that…
The auditor estimated my sales and use tax liability instead of using my actual sales figures — can I get that assessment overturned just by arguing it was based on an estimate?
No — arguing that an assessment is 'based on an estimate' isn't enough to overturn it when the dealer itself failed to provide the complete records the law requires. A Virginia retail dealer was audit…
My nonprofit stables horses and rents out conference space to support our educational programs — do we owe sales tax when we charge horse owners for stabling?
No — charges to customers for horse stabling are exempt as a service, but the nonprofit providing that service still owes sales tax on the feed, medications, and other supplies it buys to care for the…
My county's taxpayer-services team emailed me a denial of my BPOL penalty waiver request — does that email count as a final determination I can appeal to the Virginia Tax Commissioner?
No, on two independent grounds — the Department has no jurisdiction over a BPOL dispute limited to penalty and interest, and even if it did, an informal email from a county's general taxpayer-services…
My county denied my request to waive a BPOL late-payment penalty and interest — can I take that dispute to the Virginia Tax Commissioner?
No — the Department has no jurisdiction to review a local BPOL dispute that's limited to penalty and interest, because Virginia's appeal statute only reaches disputes over the actual amount of tax owe…
I sell prepared school lunches to preschools, daycares, and private schools — do I need to charge sales tax, and does it matter whether the parent or the school pays?
It depends entirely on WHO is buying, not which school the food goes to — sales to a parent are always taxable, even for a nonprofit or religious school, while sales to the institution itself can be e…
Can a business buy tangible personal property tax-free from a seller by claiming it is for resale, and what must a valid Certificate of Resale contain?
Yes, but only if the purchaser has an active Illinois registration or resale number and gives the seller a properly completed Certificate of Resale (Form CRT-61 works) containing everything required b…
I'm an independent contractor paid by an out-of-state company for work I actually do in New Mexico — do I owe New Mexico gross receipts tax?
Yes — the gross receipts tax and penalty stand, but interest was cut off. Dr. Mohammed Abdul Muqeet Adnan, a physician doing a New Mexico fellowship, moonlighted as an independent contractor at two Ne…
Were packaged artisan cheese and charcuterie boards exempt from Florida sales tax under TAA 24A-021?
Yes. The described packages, sold for one price and containing sliced meats and cheeses, crackers, olives, chocolate-covered snacks, wrapped nuts, and serving utensils, were exempt food products under…
If my customer hires their own shipping company to pick up goods at my Colorado dock and deliver them out of state, is the sale sourced to my location or to the customer's?
The sale is sourced to where the customer actually receives the goods — not the seller's dock. When a buyer hires its own third-party carrier to pick up goods at the seller's Colorado location (an 'Ex…
Does a manufactured (mobile) home dealer owe sales tax or use tax when it sells a home that gets permanently installed on a lot, versus one it just delivers without installing?
It depends on installation. If the dealer permanently incorporates the manufactured home into real estate (wheels, tongue, and hitch removed), the dealer acts as a construction contractor and owes use…
Does paying Chicago's Personal Property Lease Transaction Tax on e-bike and e-scooter rentals exempt a micromobility company from Illinois sales and use tax, both before and after the state's new January 1, 2025 lease tax takes effect?
Through December 31, 2024, Illinois imposes no state sales/use tax on true-lease receipts at all, so a company already paying Chicago's Personal Property Lease Transaction Tax owes no additional state…
I'm a remodeling contractor who charged sales tax to my customers the way the old law required — now that the law has changed and I'm being assessed use tax on the same materials, can I get credit for the sales tax I already collected?
Possibly, through a case-by-case review the Department is sending back to the auditor — this is one of the Department's first rulings applying the brand-new one-time credit created by Virginia Code § …
Does a Tennessee private dining club have to charge sales tax on the membership dues and initiation fees it collects?
Yes. Dues and initiation fees paid to a members-only private dining club are subject to Tennessee sales tax. Because the club offers live entertainment, games, and activities, admission to that entert…
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