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 fiber-optics manufacturing and research purchases qualified for Virginia sales-and-use-tax exemptions?
Virginia exempted stainless-steel scissors used during molten-glass production and a specially modified production socket. It taxed cleaning equipment, supports, storage, setup tools, timers, contamin…
Could Virginia refund special use tax paid on construction equipment more than three years before the refund request?
No. Although Virginia had authorized refunds for March 2011-September 2013 after determining the out-of-state contractor did not owe the special use tax, an April 2014 request could not reach payments…
Could a sign manufacturer prove that invoice charges labeled 'Ship/Handling' were actually exempt shipping rather than taxable handling?
Yes for this audit. Carrier invoices matched the amounts billed to customers and proved that the combined label represented shipping only, so Virginia removed the assessments and directed refunds or a…
Are separately billed hotel parking charges subject to Virginia sales tax when the customer also buys accommodations?
Yes. Parking sold to a customer who also purchased hotel accommodations was an additional charge connected with the room and was taxable, even when billed outside the room revenue. Parking sold by its…
Must an online marketplace collect Georgia sales tax when independent chefs prepare meals at customers' homes and the marketplace takes a service fee?
Yes. The marketplace advertised meal options and prices, scheduled orders, billed customers, collected their payments, and hired chefs to prepare the food. Georgia treated it as a dealer making taxabl…
Was a company's March 17, 2015 Form QBA timely for equity issued near the end of its 2014 calendar year?
Yes. Because the calendar-year company issued equity within three months of the end of 2014, its Form QBA deadline was April 1, 2015 under the regulatory exception. Department records showed a March 1…
Was a company's 2014 Form QBA timely when its certified-mail receipt said December 31 but the Department's envelope was postmarked January 2?
No. The Department's original envelope and application showed that the Form QBA was sent by first-class mail with a January 2, 2015 postmark. The company did not show that the special extension for la…
When may South Carolina require or allow alternative apportionment, including combined unitary reporting?
The Department could require, or a taxpayer could request, a reasonable alternative method when the statutory separate-entity formula did not fairly represent the taxpayer's South Carolina business ac…
Was a portable lighting tower using solar panels and batteries exempt as a Florida solar energy system?
No. The portable tower was a lighting system that used solar and electric components, not an exempt solar energy system. Qualifying solar modules, inverters, and charge controllers were exempt compone…
A company takes online orders and uses its own drivers to deliver goods to Tennessee customers on behalf of disclosed third-party vendors, collecting the sales tax and remitting it to the vendors. Must the company itself collect and remit Tennessee sales tax on those sales?
No. The company is not liable to collect or remit Tennessee sales tax on these sales. Under Tennessee's longstanding 'Rule 1' (Tenn. Comp. R. & Regs. 1320-5-1-.01), when a person sells tangible person…
What Virginia tax interest rates applied during the third quarter of 2015?
Virginia's third-quarter 2015 rates were 5% for tax underpayments and 5% for tax overpayments. The reduced rate for qualifying assessments in administrative appeals was 0%. Certain local delinquency a…
Did an internet subscription company have to collect sales tax or communications services tax on admission certificates?
No. The qualifying certificates were nontaxable gift certificates, and the admission provider collected sales tax when they were redeemed. The internet service was not subject to communications servic…
Were USAC Federal Lifeline Program disbursements to a telecom provider subject to Illinois Telecommunications Excise Tax?
IDOR did not decide. It lacked the billing invoices and enough information about how USAC administered the Lifeline disbursements. The letter noted that State and Federal governments were exempt, but …
When did South Carolina Revenue Ruling 15-4 exempt a residence rented for fewer than 15 days, and preserve its 4% property tax ratio?
A direct owner rental was exempt from sales tax on accommodations when the income came from a qualifying dwelling unit, the unit was actually rented for fewer than 15 days during the tax year, and the…
What deed-recording-fee rules and transaction examples did South Carolina Revenue Ruling 15-3 provide before later rulings superseded it?
This historical ruling described a $1.85 deed recording fee for each $500 or fraction of $500 of realty value, defined value to include money and money's worth, allowed specified lien deductions and s…
What affidavit must be filed with a South Carolina deed, and which sample affidavits does the Department provide (per SC IL #15-6)?
SC Information Letter #15-6 provides two sample affidavits for South Carolina's deed recording fee and supersedes SC Information Letter #06-12. Under S.C. Code § 12-24-70, an affidavit showing the val…
Which of an executive-search and leadership-consulting firm's services are subject to Connecticut sales and use tax?
It depends on the specific service. Executive and middle-management search are taxable employment-agency services, and most of the firm's assessment and consulting offerings — executive/board/cultural…
How should a debt-collection company that buys charged-off receivables apportion its income when it fits none of Colorado's standard receipt categories?
As a service provider. The company isn't a 'financial institution' (it doesn't handle financial transactions or provide financial services, isn't a bank, and doesn't earn over 50% from finance leases)…
Are single-serve condiment packets (butter pads, jelly, creamers) taxable when a restaurant buys them from a wholesaler, and does it matter how the restaurant hands them out?
Taxable. Individually wrapped butter pads, jelly packets, half-and-half creamers, and similar single-serve condiments are 'nonessential food articles' — they're for the customer's convenience and aren…
Is a monthly charge to lease unlit 'dark' fiber optic cable subject to Colorado sales or use tax?
Likely taxable. The Department's general understanding is that dark fiber — unlit fiber optic cable leased to a customer that must 'light' it themselves — is tangible personal property, not real prope…
Are replacement batteries for electric wheelchairs exempt from Colorado sales tax as repair/replacement parts for mobility enhancing equipment, and what documentation must the retailer keep?
Yes, with a prescription. A replacement battery for an electric wheelchair, motorized cart, or scooter is exempt as a component/replacement part of mobility enhancing equipment — but only when the equ…
Can a plumber who uses both lump-sum and time-and-material contracts just pay sales tax on materials at purchase for every job, even when billing time-and-material, if it never marks up the materials?
No. A contractor on a lump-sum contract pays tax on materials at purchase; a contractor billing time-and-material must collect tax from the customer on the materials, which requires a sales tax licens…
Were materials and equipment bought by a high-speed rail owner for incorporation into its rail system exempt from Florida sales tax?
Yes. Materials and equipment purchased by the system owner for incorporation as component parts of the high-speed rail system were exempt. Construction materials also had to satisfy the direct-purchas…
When were Illinois banquet-room, food, service, and decoration charges taxable?
The result depended on the transaction's true object. A room rental with only incidental snacks or nonalcoholic drinks could be nontaxable, but when food, alcohol, or beverages were the true object, r…
Did out-of-state liquor sellers have to collect Illinois tax on alcohol and shipping, and how could they recover tax paid in error?
IDOR did not make a seller-specific nexus determination. Under its 2015 framework, a seller without Illinois nexus did not collect, but customers self-assessed Use Tax; a direct-shipping winery licens…
For Texas franchise tax, can a farmer deduct the costs of growing crops as cost of goods sold, and does it matter whether the farmer owns the crops?
Yes, but only if the farmer owns the crops he sells — a farmer who owns and sells crops he grows is the "producer" of those crops and may deduct as cost of goods sold all allowable direct production c…
Are sales of downloadable video-game software, in-game content, access/point/subscription cards, and dollar-value gift cards subject to NY sales tax, and where is the sale taxed?
Most are taxable; dollar-value gift cards are not. Selling prewritten game software the customer downloads -- a full game or add-on content like new levels or maps -- is a taxable sale of tangible per…
Under Virginia's 2015 bulletin, when could a semiweekly employer request monthly withholding filing?
Effective July 1, 2015, an employer otherwise subject to semiweekly Virginia withholding could request monthly filing if it had no more than five employees subject to Virginia withholding. The written…
Is a nonresident's gain on redeeming S-corporation stock, and the interest on the installment note, New York source income when the corporation owns New York real estate?
The interest on the installment note is not New York source income (it is intangible personal property). But the portion of the gain attributable to the corporation's New York real property is New Yor…
New York Advisory Opinion TSB-A-15(4)C: Can a qualified New York manufacturer claim the real property tax credit for real property taxes it pays under a lease from a related party?
No. A qualified New York manufacturer cannot claim the real property tax credit for real property taxes it pays under a lease, because the credit covers leased-property taxes only when the property is…
Is a contractor's installation of permanently affixed electrical switchgear a nontaxable capital improvement, and what happens to the materials and field-service charges if it can't get a Form ST-124?
Yes, it's a capital improvement, so the charges aren't taxable -- and missing the ST-124 shifts the burden of proof, not the result. Replacing a building's medium-voltage switchgear -- bolted and hard…
Could Virginia part-year residents claim an out-of-state credit for New Hampshire Business Enterprise Tax paid on the same income?
No. Virginia held that the New Hampshire Business Enterprise Tax was based on enterprise-value expenditures such as compensation, interest, and dividends, rather than income. It therefore was not subs…
Is removing or abandoning a disused oil tank as part of an oil-to-gas heating conversion subject to NY sales tax?
It depends, and there's a one-year rule. Removing a disused oil tank, or abandoning it in place (cleaning and filling it with sand, foam, or concrete), is by default a taxable real-property maintenanc…
When a commercial airline gets a federal-excise-tax refund on aviation fuel, can it also recover the Colorado sales tax it paid on that refunded excise-tax amount?
Yes. The federal excise tax that gets refunded to a commercial airline acts more like a refundable deposit than part of the fuel's purchase price, so Colorado sales tax paid on that refunded portion s…
Is acquiring tangible personal property by foreclosing on a security interest a taxable sale, and is manufacturing machinery used in an enterprise zone exempt?
Two answers. A lender taking possession and title of property by foreclosing on its security interest is NOT a taxable sale (the statute excludes foreclosure/repossession) — but if the lender later se…
Was a nonresident former employee's lawsuit settlement Illinois-source compensation when the employment claims arose while based in Illinois?
Yes. The Department treated the settlement as wages because the claims arose from the former employer-employee relationship and entirely from acts during a period when the employee was based in Illino…
Does Texas tax an optional extended warranty or service contract sold with a motor vehicle, and are parts used for covered repairs taxable?
The separately invoiced optional warranty or service contract was not taxable whether the vehicle was sold or leased. However, repair parts used to perform work under the contract remained subject to …
Is the sale of an extended warranty or service contract on a motor vehicle taxable in Texas, and can the warranty provider buy replacement parts tax-free using a resale certificate?
No, the sale of an extended warranty or service contract on a motor vehicle isn't itself subject to Texas sales/use tax or motor vehicle tax, whether the vehicle is sold or leased -- but the used-car …
Are charges for recovering propane from old or unusable tanks and returning it to the customer subject to NY sales tax?
No. The propane-reclamation service is not subject to sales or use tax. Except for the special gas/utility tax under Tax Law sections 1105(b) and 1105-A, propane is not treated as tangible personal pr…
Does a hotel's 20% 'set-up fee' for a public room make the room rental taxable, and is the set-up fee itself taxable?
The set-up fee is part of the rent for the public room, so it is taxable only when the room rental itself is taxable. The hotel charges a 20% 'set-up fee' (sometimes called a service charge) on every …
Is a drop-shipment facilitation service that routes and translates order/inventory data between e-commerce merchants and their suppliers subject to NY sales tax?
No. The drop-shipment facilitation service is not subject to sales or use tax because its primary function is data processing, which is not a taxable service. The 'Drop Ship Master' service connects e…
Does Georgia's parent-teacher-organization sales-tax exemption cover a nonprofit school's annual fundraising auction?
No. Although the school was a Section 501(c)(3) nonprofit and parents participated in its operations, its regular and primary activities were educational. Georgia classified it as a school rather than…
When is South Carolina's 2015 sales tax holiday and what items are exempt (per SC IL #15-7)?
South Carolina's 2015 sales tax holiday runs from 12:01 a.m. Friday, August 7, 2015 through midnight Sunday, August 9, 2015. During that three-day weekend, the 6% state sales and use tax and any appli…
Was postage taxable when a seller charged one non-itemized price for an envelope with preprinted postage?
No, if the seller kept sufficient accounting records substantiating the separate postage and envelope costs. Sales tax remained due on the envelope portion of the bundled price.
Was Illinois tax computed before or after a manufacturer coupon reimbursed to the retailer?
Before the reimbursed discount. A manufacturer, distributor, or other coupon for which the retailer received full or partial reimbursement remained part of gross receipts and selling price. The retail…
How did Florida communications services tax apply to one charge bundling DSL internet access with telephone service?
The telephone portion was taxable, while the high-speed internet-access portion was not. Florida accepted the provider's allocation because its regular books and records reasonably identified the taxa…
Could Virginia extend an expired Land Preservation Tax Credit so a purchaser could claim the remaining 2006 credit in 2012?
No. A Land Preservation Tax Credit earned in 2006 could be carried only through the five following tax years, 2007-2011. Virginia had no statutory authority to add another year or permit use or transf…
Did a West Virginia resident owe Virginia income tax on wages earned while working in Virginia in 2011?
No. Virginia found that the taxpayer had established West Virginia domicile for 2011 despite renewing a Virginia driver's license. Because he was a West Virginia resident earning wages in Virginia, th…
How did Illinois tax videoconference room, bridging, and ISDN charges?
IDOR did not specifically classify the described bridging or ISDN services. A room or service transferring no tangible property avoided retail, use, and service taxes. Actual telecommunications charge…
If a retired SUNY employee does a direct trustee-to-trustee rollover of 401(a) and 403(b) tax-deferred annuities into an IRA, is the rolled-over money later taxed as New York income?
No. Because the retiree's Existing Plans were funded with contributions from the State University of New York, a New York State public employer, the portion of any future IRA distribution that represe…
My two-member LLC bought land, built a 40-story building, and plans to convert it into a two-unit condominium, distributing one unit to each member in proportion to their original ownership share. Is distributing the condo units out of the LLC to its members a taxable conveyance for New York's Real Estate Transfer Tax, given we already paid the tax when the LLC bought the land?
Yes, exempt -- but only if each member's post-conversion condominium ownership percentage matches their original ownership allocation in the LLC's Operating Agreement. A two-member LLC bought New York…
For a uniform/linen rental-and-laundry business, which items can be bought for resale, and are monogramming and lost-item fees taxable?
The company is a laundry service, so the items it launders can't be bought for resale, but the non-laundered storage items can. Renting uniforms, gowns, and linens that the company launders, maintains…
Does a retailer collect NY sales tax when it sells built-in appliances on an installed basis, or is that a capital improvement?
Selling built-in appliances installed is a capital improvement, so the retailer doesn't collect tax from the customer -- the retailer pays the tax on the appliance instead. Publication 862 classifies …
Did Virginia's mining exemption or customers' direct-payment permits protect a contractor's untaxed mine-site purchases from use tax?
No. Virginia upheld the use-tax assessments. Vegetation-control chemicals, power-transmission poles, and protective fencing were not used directly in mining, and customers' direct-payment permits did …
Could Virginia decide which printing-facility property was taxable before the city corrected its machinery-and-tools tax assessments?
Not yet. Virginia did not decide which property was taxable. It remanded the case because the city had acknowledged that some machinery-and-tools tax treatment was wrong but had not corrected the 2010…
Could Virginia residents subtract their full Kansas public-employee pension because Kansas had taxed some plan contributions?
Only in part. Virginia did not allow a subtraction for the entire Kansas pension. The taxpayers could subtract the documented portion attributable to KPERS contributions made after July 1, 1984 that h…
Were cable-television converter boxes taxable as local business tangible personal property in Virginia?
No. Virginia classified the cable-television converters, or set-top boxes, as intangible property exempt from local business tangible personal property tax under Va. Code § 58.1-1101(A)(2)(a). The cas…
Did a granulated drink mix with a Supplement Facts panel qualify for Virginia's reduced food rate, and who owed undercollected tax?
No. Virginia classified the drink mix as a dietary supplement because it carried a Supplement Facts panel, so the full sales-tax rate applied. Because the dealer had charged too little tax on Virginia…
Did nutritional shakes labeled with a Supplement Facts panel qualify for Virginia's reduced sales-tax rate for food?
No. Virginia treated the shakes as dietary supplements because their labels carried Supplement Facts panels, so they did not qualify as food for home consumption and were taxable at the full rate appl…
Could CSW deduct pond-liner sales to an industrial-revenue-bond project as government sales after buying the liners tax-free with a Type 6 construction-material NTTC?
No. CSW bought the pond liners tax-free using a Type 6 NTTC, which identified them as construction material intended to become an ingredient or component of Intrepid's solar solution mine project. Sec…
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