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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Which retail products qualified as exempt nonprescription drugs or durable medical equipment in Virginia's audit?
Electrical heating pads and vaporizers qualified as durable medical equipment and were removed from the audit. A&D ointment, aloe vera, desensitizing toothpaste, contact lens solution, and disposable …
Does separately listing an Illinois shipping or delivery charge automatically make it nontaxable?
No. The charge was excluded only when the buyer and seller separately agreed to delivery apart from the property sale; a separate invoice line alone was insufficient. A pickup option or separate deliv…
Are out-of-state utility crews that come to Kansas for disaster work subject to Kansas taxes and registration?
Kansas Notice 15-12 explains the Kansas Disaster Utilities Response Act, created by Senate Bill 109 (2015), effective upon publication in the Kansas Register on April 9, 2015. The Act lets an out-of-s…
Are partner guaranteed payments still part of the Kansas nonwage business income subtraction?
Kansas Notice 15-11 explains that Section 3 of Senate Substitute for House Bill 2109 (2015) amended K.S.A. 79-32,117(c)(xx) to reduce the subtraction modification for certain nonwage business income b…
Must a Kansas taxpayer have a valid Social Security number for the whole year to claim an income tax credit?
Kansas Notice 15-10 explains that Section 2 of Senate Substitute for House Bill 2109 (2015) amended K.S.A. 79-32,265 to add that a taxpayer claiming an individual income tax credit must have held a va…
How long is the Kansas Rural Opportunity Zone income tax credit available after the 2015 extension?
Kansas Notice 15-09 explains that Section 27 of Senate Substitute for House Bill 2109 (2015) amended K.S.A. 79-32,267 to extend the Rural Opportunity Zone (ROZ) income tax credit. As originally enacte…
Can Kansas growers subtract the gain from selling Christmas trees grown in Kansas?
Kansas Notice 15-08 explains that Senate Substitute for House Bill 2109 (2015) amended K.S.A. 79-32,117 to create a new subtraction modification, in subsection (c)(xxiv), for the net gain from the sal…
What Kansas itemized deductions are allowed for individuals starting in tax year 2015?
Kansas Notice 15-07 explains that Senate Substitute for House Bill 2109 (2015) amended K.S.A. 79-32,120 to stop the phase-down of the Kansas itemized deduction and, beginning in tax year 2015, allow o…
What are the Kansas individual income tax rates for 2015 through 2018 after the 2015 changes?
Kansas Notice 15-06 explains that Senate Substitute for House Bill 2109 and House Substitute for Senate Bill 270 (2015) amended K.S.A. 79-32,110 to stop the phase-down of individual income tax rates t…
Which Kansas taxpayers owe zero income tax starting in tax year 2016?
Kansas Notice 15-05 explains that House Substitute for Senate Bill 270, enacted by the 2015 Legislature, added a new subsection (f) to K.S.A. 79-32,110 exempting certain lower-income taxpayers from in…
What did 2015 Senate Bill 112 change about Kansas biodiesel and renewable fuel incentive funds?
Kansas Notice 15-04 summarizes the motor fuel provisions of Senate Bill 112, enacted by the 2015 Legislature and effective June 26, 2015 upon publication in the Kansas Register. Section 247 amended K.…
What is the new Kansas cigarette tax rate on July 1, 2015 and what inventory tax is owed?
Revised Kansas Notice 15-01 explains that, effective July 1, 2015, the Kansas cigarette tax rate rose to $1.29 on each pack of 20 cigarettes (or $1.61 on each pack of 25). Wholesalers, retailers, and …
Was an HVAC equipment distributor a BPOL wholesaler when it sold mainly to contractors and business users rather than the general public?
Yes. The evidence showed sales mainly to HVAC contractors, government, and industrial customers for business use, little or no public retail activity, and individualized pricing consistent with wholes…
Did an out-of-state procurement company's Virginia customer and third-party vendors create corporate income-tax nexus?
Not enough facts were provided for a categorical answer. Buying and reselling services from an unrelated independent contractor would not by itself create nexus for an otherwise protected company. But…
Could Virginia still assess related corporations for 2000-2004 royalty transactions when one filed returns and the intangible affiliate did not?
For the filing corporation, the ordinary assessment period generally barred a royalty adjustment unless fraud or an in-period net-operating-loss carryforward issue applied. For the affiliate that had …
Did renewable one-year overseas work end Virginia domicile, and was accountant advice reasonable cause to waive the late-filing penalty?
No. Renewable one-year overseas employment was temporary, while the taxpayer bought a Virginia home, kept a Virginia vehicle and license, and used a Virginia address. Virginia found he remained domici…
Did Maryland partnership income reported on Schedule E qualify a Virginia couple for the full border-state tax credit?
No. Virginia's special border-state rule covered qualifying earned income and business income reported on Schedule C, not the husband's partnership income reported on Schedule E. The ordinary credit t…
Did a copy of an unrecorded Virginia return overcome an IRS-based assessment when the taxpayer supplied no federal transcript or proof of payment?
No. Virginia had no record of the claimed state return or payment, the IRS had no federal return, and IRS income information exceeded the income on the taxpayer's copy. The assessment remained due, bu…
Could a Virginia resident subtract an entire IRA distribution because retirement contributions had been taxed by another state, and carry unused subtraction forward?
No. Only the prorated portion attributable to documented contributions that were federally deductible but taxed by the other state could be subtracted; investment earnings could not. The taxpayer lack…
Was a company's president personally responsible for unpaid sales and withholding taxes when she signed payroll reports and tax checks?
Yes. Virginia found that the president knew about the company's tax obligations and had authority to prevent nonpayment because she signed payroll reports as president, signed sales-tax checks, access…
Is a Virginia retailer's layaway cancellation fee taxable when the order is cancelled, payments are refunded, and title never transfers?
No. When the customer cancelled the layaway, the retailer refunded the purchase payments and never transferred title or possession of the merchandise. Because no retail sale occurred, the separate $10…
Which installed home-improvement sales had to be treated as contractor real-property work, and could Virginia credit use tax paid to the first receiving state?
Virginia removed many installed items because the retailer acted as a consuming contractor rather than making installed retail sales under the law then applicable. It also allowed a possible credit fo…
Could Virginia estimate a restaurant's sales from income-tax returns when audit-period register records were missing, and did first-audit penalty apply?
Yes. Because the restaurant did not preserve or provide audit-period sales journals and register reports, Virginia used the difference between sales-tax and income-tax return sales and extrapolated it…
Could Virginia project a grocery store's three-year sales from a two-day observation, and did the 50% fraud penalty apply?
Yes. With no supporting records, Virginia reasonably used one low-sales day and one high-sales day chosen with the store to project food, nonfood, and phone-card sales across the audit period. Unsuppo…
How do Kansas retailers report July 2015 sales when they lawfully charged both the 6.15% and 6.5% state rates?
Kansas Notice 15-03 (June 30, 2015) is the companion to Notice 15-02 and explains a rate-increase adjustment that certain retailers claim on their July 2015 sales and use tax return so they do not pay…
Were Santa Fe Tow and Emergency Lock & Key acting as AAA's disclosed agents when AAA paid them fixed rates for roadside services to its members?
No. AAA imposed extensive branding, dispatch, background-check, and service-quality requirements, but written contracts expressly called the businesses independent contractors, denied agency, and gave…
Could Harold's Grading preserve an assessment protest postmarked one day after the 90-day deadline because a Department employee initially said “yes” to a January 31 date?
No. The Department served the October 30, 2014 assessment on October 31, making January 29, 2015 the 90th day. Harold's protest was postmarked January 30 and was one day late, depriving the Department…
Is Nebraska Revenue Ruling 22-13-1 (Tax Guidance for Individuals in a Same-Sex Marriage) still in effect?
No -- it has been rescinded. Revenue Ruling 22-15-1 (individual income tax), issued June 29, 2015, formally rescinds Revenue Ruling 22-13-1, 'Tax Guidance for Individuals in a Same-Sex Marriage' (issu…
What gold, silver, and platinum bullion sales qualified for Virginia's exemption under Tax Bulletin 15-6?
Under the 2015 bulletin, a transaction over $1,000 was exempt only for refined bullion containing at least 90% gold, silver, or platinum whose value depended on metal mass and purity and did not excee…
Could an Illinois retailer advertise sales as tax-free, omit tax from receipts, and pay the sales tax itself?
No. The retailer had to collect Use Tax from customers by adding it to the selling price. Advertising that sales were tax-free or that the retailer would absorb the tax violated the Use Tax Act and wa…
Were graduation caps and gowns sold or rented directly to students tax-exempt because their schools were exempt organizations?
No exemption applied to sales made directly to students merely because they attended exempt schools; the exempt organization itself had to buy directly using a valid E-number. True cap-and-gown leases…
How long did South Carolina Revenue Ruling 15-6 say a Department of Revenue tax lien remained enforceable?
A Department of Revenue tax lien expired ten years after it was filed with a clerk of court or register of deeds. At expiration, the lien was no longer enforceable in any manner and ceased to encumber…
Who became liable for Virginia's Forest Products Tax under Tax Bulletin 15-5, and what records and filings were required?
Effective July 1, 2015, the bulletin generally placed the tax on the first fixed-place manufacturer that processed, used, consumed, or stored Virginia forest products for out-of-state sale. If no manu…
Could a nonresident Electing Small Business Trust claim Virginia credit for California ESBT income tax and the California Mental Health Services Tax?
Yes. California's separately computed ESBT tax was still a broad-based fiduciary net income tax, and the 1% Mental Health Services Tax on income over $1 million also qualified. The credit had to refle…
Could a nonresident keep Virginia itemized deductions when supporting records were unavailable and a tax preparer had prepared the return?
No. The taxpayer did not substantiate the itemized deductions after repeated requests, could not show that a claimed package had been received, and said records were lost, destroyed, or unavailable. V…
Was an all-terrain vehicle exempt from Virginia use tax when used to spray pastures, haul cattle feed, herd cattle, and move farm equipment?
Yes. The ATV qualified for Virginia's agricultural exemption because it was used in cattle and pasture operations, including spraying herbicides, hauling minerals and feed, herding and inspecting catt…
Did Virginia reopen a mail audit for more invoices when a retailer repeatedly failed to document claimed exemptions, tax payments, labor charges, and extrapolation errors?
No. The retailer had already received repeated requests and an extra year to provide records, yet still could not document its claimed exemptions, tax payments, duplicate items, labor charges, or extr…
Were optional bed-making and midweek housekeeping charges taxable when added to invoices for short-term Virginia accommodations?
Yes. Even though guests chose the services, they were separately charged, and the manager passed the money to a third party, bed making and midweek housekeeping were directly connected to the rented a…
How did Illinois distinguish a taxable conditional sale from a true lease of equipment?
A nominal purchase option or guaranteed sale generally made the arrangement a conditional sale, so all lessor receipts were taxable. A true lease generally had no buyout, or only a fair-market-value o…
How did Illinois sales-tax credit rules apply when a defective boat was replaced through a lawsuit settlement?
The result depended on structure. If the dealer refunded the first boat's price and tax and the customer bought a second boat, whoever paid the first tax to IDOR could seek credit or refund. If the fi…
Is a prescription cancer-treatment device that uses electric fields exempt from Connecticut sales and use tax?
Yes. Gross receipts from the retail sale of the Product — an FDA-approved, prescription-only device that uses alternating electric fields to treat glioblastoma (an aggressive brain cancer) — are exemp…
Did a taxpayer's unsupported claim of another-state residence justify changing Virginia's 2011 income-tax assessment?
No. The taxpayer used a Virginia address on the federal return, had filed Virginia returns before 2011 and again for 2012 and 2013, and supplied no objective evidence of the claimed other-state domici…
Did an overseas job transfer end a couple's Virginia domicile when they kept a Virginia home, vehicles, licenses, and obtained a Virginia divorce?
No. The couple had established Virginia domicile in 2010 and retained a Virginia home, vehicles, licenses, and the wife's presence while the husband worked abroad. A Virginia divorce order also recite…
Could a military member satisfy Virginia's extended-active-duty subtraction when the 90-day period crossed two tax years?
Yes. Virginia said the extended-active-duty period could exceed 90 consecutive days across two tax years; it did not have to exceed 90 days within 2011 alone. But only qualifying basic pay included in…
Did the Servicemembers Civil Relief Act toll Virginia's deadline for a military member's 2007-2008 withholding refund claims?
No. The servicemember filed Forms 763-S in September 2013, after the Virginia refund deadlines for 2007 and 2008. The cited Servicemembers Civil Relief Act provisions deferred collection and tolled co…
Could a bakery receive audit credit for claiming it collected the reduced food rate but mistakenly remitted the general sales-tax rate?
No. Virginia agreed the bakery products qualified for the reduced food rate, but the bakery could not prove it had collected that lower rate while mistakenly remitting the general rate. Summary report…
What process did a Virginia city have to follow to qualify for, track, and receive sales-tax revenue from a proposed arena?
The city first had to execute a qualifying lease, issue bonds, or enter a facility contract and obtain a Tax Commissioner ruling. Contractors then had to register for special use-tax treatment, and th…
Did a second conservation deed create a new easement, or merely reform the original deed so the corrected Land Preservation Tax Credit application could proceed?
It merely reformed the original deed. The second deed reaffirmed the original gift, reasserted its restrictions, and cured defects rather than making a new donation. The appraisal correctly valued the…
What Virginia state and local tax legislation did the Department summarize from the 2015 General Assembly session?
The Department's informational guide summarized 2015 enacted changes to taxes it administers and local taxes on which it assists, including general administration, income tax, sales and use tax, tobac…
How does the July 1, 2015 increase in the Kansas sales and use tax rate to 6.5% apply to sales, leases, services, and contracts?
Kansas Notice 15-02 (June 22, 2015) explains that the Kansas state sales and use tax rate increased from 6.15% to 6.5% on July 1, 2015, and sets out transition rules determining which rate applies to …
Did a Multistate Tax Commission certificate protect Caleb Dutton's New Mexico diesel-repair receipts when the buyer resold the services and parts?
No. Dutton timely accepted the multistate certificate in good faith after asking Oasis for New Mexico tax documents, but New Mexico recognized MTC certificates as NTTCs only for sales of tangible pers…
Could a seller use one Illinois ST-587 or resale certificate for repeated manufacturing-equipment purchases?
Yes, in limited circumstances. A sufficiently specific ST-587 could cover multiple purchases fulfilling one contractor-manufacturer contract or repeated repair-part purchases for identified equipment.…
What did Illinois's 2015 rules require of an online textbook retailer with employees in Illinois?
Its Illinois salesperson and account manager appeared to require registration and Use Tax collection, though IDOR lacked facts to decide Retailers' Occupation and local tax. Under the 2015 Internet-sa…
Are walk-in tubs, in-home wheelchair lifts, and modular ramps exempt from Georgia sales tax as medical or mobility equipment?
Prescribed in-home wheelchair lifts and modular ramps were exempt as mobility-enhancing equipment. Walk-in tubs were taxable even with medical features because installation made them real-property fix…
Did Illinois Telecommunications Excise Tax apply to bandwidth an Internet provider bought to supply Internet access?
To the extent the provider bought and supplied the bandwidth so customers could connect to the Internet or access online content and services, the 2015 letter treated it as Internet access covered by …
Did an out-of-state CPAP seller using an Illinois drop shipper have to collect Illinois tax from Illinois customers?
IDOR did not decide because the seller provided too little information. It identified the standard drop-shipment rules and resale-certificate requirements, describing a typical transaction as an out-o…
How did Illinois tax materials bought by construction contractors for permanent incorporation into real estate?
Contractors were the end users and owed Use Tax on material cost, generally paying suppliers and not issuing resale certificates. Customers owed no Use Tax, and any pass-through could be labeled reimb…
Could a leased soybean seed-treatment system qualify for Illinois's farm machinery exemption?
Potentially, but IDOR lacked enough facts to rule on this system. Machinery bought for lease qualified when the lessee used it primarily in production agriculture and the purchaser-lessor certified th…
Could an affiliated group stop filing consolidated Florida returns after substantial growth and changes in business focus?
Yes. The group's changed business focus, divestitures, spin-off, and operational growth established good cause to stop consolidated filing, subject to four stated conditions.
Were software training, consulting, and conversion services taxable when the software package included a mailed DVD?
Yes. Although some software was electronically conveyed, the same contract delivered additional software on a DVD and contemplated tangible delivery. That made the package a taxable retail sale. Becau…
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