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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For a company that readies foreclosed properties for sale, which of its services and reimbursements are subject to NY sales tax, and what does it owe on its own purchases?
Appraisals and the management fee aren't taxable, but resold utility, protective, and repair/maintenance services are -- unless the customer is exempt. The company gets bank-owned (REO) properties int…
Were out-of-state domiciliaries who spent more than 183 days in Virginia taxable as Virginia residents in 2010 and 2011?
Yes. Virginia treated the couple as actual residents from February 4 through December 31, 2010 and for all of 2011 because they maintained a Virginia abode and spent 282 and 270 days in Virginia. Thei…
Could an electrical contractor use a city's Form ST-12 or federal energy-grant funding to buy lighting-upgrade materials tax-free?
No. Virginia held that the electrical contractor was the taxable user and consumer of materials installed in city facilities. The city's Form ST-12 could not pass through its government exemption, fed…
Was a 2014 Virginia amended return claiming credit for another state's 2009 assessment filed within the special one-year period?
Unresolved. The normal May 3, 2013 deadline had passed, but Virginia law allowed one year from another state's final determination. Because the record did not establish when that determination became …
Did a death-benefit distribution from a federal pension plan qualify for Virginia's annuity-contract subtraction?
No. Virginia's subtraction required a federally taxable lump-sum death benefit from an annuity contract between a customer and an insurance company. The taxpayer's payment came from a federal pension …
Could a taxpayer avoid Virginia's estimated-tax, extension, and late-payment penalties after filing by October 15 but paying nothing?
No. The taxpayer made no estimated payments, paid nothing by the May 1 original due date, and still paid nothing with the October 2013 return. Virginia upheld the estimated-tax addition, a 12% extensi…
Which of a credit-card fraud-management firm's services -- fraud scoring, managed review, chargeback, payment gateway, implementation, consulting, support -- are subject to NY sales tax?
The fraud-detection services are taxable protective services; the chargeback and payment-gateway services are not. Any ongoing service whose function is to detect or prevent fraud or theft is a protec…
Could a service company situs BPOL receipts outside the city based on a contract requiring work at an out-of-state facility?
Possibly. The contract strongly suggested that the services were performed at an out-of-state definite place of business, but the taxpayer still had to document which employees performed the work and …
Could an Illinois resident claim a credit for other-state tax on wages that the employer's W-2 sourced entirely to Illinois?
No, on the records presented. The W-2 sourced 100% of the compensation to Illinois, and the taxpayer showed no other income that Illinois rules would source outside the state. The credit limit was the…
Was documentary stamp tax due on an LLC-interest assignment made before the LLC bought Florida real property?
No. The LLC was not a conduit entity when the membership interest was assigned because it did not yet own Florida real property. The deed tax was also correct if the short-sale requirements were met a…
What result is verifiable from the published order in Karl Edward Beisel v. Virginia Department of Taxation?
The Chesapeake Circuit Court granted the Department's demurrer and dismissed Karl Edward Beisel's case with prejudice in a final, appealable order. The published source says the reasons were in an Apr…
Could Magnum Builders avoid negligence penalty by relying on accountants who believed later audit-document extensions also extended the expired 60-day NTTC deadline?
No. Magnum did not prioritize obtaining construction NTTCs when transactions occurred, despite its accountants' reminders. The Department hand-delivered a 60-day notice to Magnum's designated accounta…
Could an out-of-state capital loss make a Virginia nonresident's income apportionment factor equal 100%?
Yes. In the ruling's example, a $200 out-of-state capital loss reduced income from all sources but not Virginia-source income. With both the numerator and denominator at $500, the nonresident apportio…
Could Gail Stefl avoid gross-receipts penalty and interest because medical and mental-health problems, intense work stress, and a temporary tax-office closure contributed to late payment?
No. Stefl knew gross receipts tax was due but did not pay it in 2013 while focused on a complex consulting project, dealing with lingering medical and mental-health problems, and facing a temporary cl…
Could a corporation and its subsidiaries keep filing a Florida consolidated return after an unrelated parent acquired them?
No. The old affiliated group ceased to exist when the unrelated parent acquired it, and the acquired corporations became bound by the new parent's separate-filing election. Deferred items had to be re…
Were interior-design fees taxable when the designer also sold furniture and other property under the same contract?
Yes. Because the design fees were related to the designer's sale of furniture and other tangible personal property, the fees were part of the taxable sales price even when invoiced separately.
Were paid or free-trial online memberships with shipping, streaming, e-books, music, storage, and discounts taxable in Illinois?
IDOR did not specifically classify the described membership. It said membership fees generally were nontaxable intangibles when no tangible property was transferred. If membership itself entitled the …
Did nonprescription durable medical equipment receive Illinois's reduced medical-appliance tax rate?
Only if the item directly substituted for a malfunctioning body part. Prescription or medical use alone was insufficient. Qualifying appliances used the 1% State rate plus local tax described in 2015;…
Could a government contractor retroactively amend an older contract so its property purchases became purchases for resale to the city?
No retroactive effect appeared available. A contractor normally bought items for its own use unless the government contract explicitly required a sale and transfer of property to the government. An au…
How did Illinois tax equipment fabricated out of state and permanently installed by out-of-state contractors at an Illinois jobsite?
IDOR could not decide without the contracts. A contractor permanently affixing equipment to Illinois real estate was the end user and owed Use Tax on cost. Under the 2015 letter, the State rate was 6.…
Was a marital-trust remainder exempt from Virginia's postponed inheritance tax when no Virginia estate tax was actually paid?
No. Virginia held that the marital-trust remainder was not exempt from postponed inheritance tax because no Virginia estate tax was actually imposed and paid after the estate tax became effectively re…
Was an 18% mandatory banquet gratuity excluded from Virginia's taxable sales price even though 3% was kept as a house gratuity?
Yes. Virginia held that the entire 18% mandatory gratuity was excluded from taxable sales price because it did not exceed 20% of the meal price. The 3% house share did not make the lump-sum charge tax…
Were Sharon Ray's Usana payments taxable gross receipts when she recruited New Mexico customers who ordered products online and used her associate ID?
Yes. Ray recruited and enrolled New Mexico customers, they ordered Usana products online using her associate ID, products were shipped to them, and she received compensation tied to purchases. Those a…
When must an out-of-state investment pass-through entity file in Virginia and withhold for nonresident owners?
A pass-through with no Virginia business or source income did not file or withhold merely because its investment manager worked in Virginia but was not on its payroll. A second entity investing in an …
Did moving to another state for full-time work end a taxpayer's Virginia domicile when his family and major ties remained in Virginia?
No. Virginia held that the taxpayer had not abandoned his Virginia domicile. Although he worked, leased a home, registered a vehicle, and held a license in another state, his family and home remained …
Could Virginia residents claim an out-of-state tax credit for the District of Columbia Unincorporated Business Franchise Tax?
No. Virginia held that the District of Columbia Unincorporated Business Franchise Tax was a franchise tax, not an income tax similar to Virginia's individual income tax. The residents' 2013 credit was…
Could Virginia residents claim a Virginia credit for California tax on California wages when California law offered the reciprocal credit?
Generally no. Virginia denied the credit because California law ordinarily allows the Virginia resident to claim the reciprocal credit on the California nonresident return. The couple's California ret…
Could taxpayers apply a claimed 2008 Virginia overpayment to 2009 tax when their first 2008 return was filed in June 2014?
No. Applying an overpayment to another year's liability was subject to the same deadline as a refund. The 2008 return was due May 1, 2009 but was not filed until June 17, 2014, so Virginia denied the …
Were tumor-treating-field cancer therapy devices exempt from Virginia sales tax as durable medical equipment?
Yes, when purchased by or on behalf of a specific individual. Virginia found the tumor-treating-field devices qualified as durable medical equipment. Bulk sales or leases to for-profit hospitals, phys…
Could the Department disqualify Walt Arnold Commercial Brokerage from a managed audit based on copies of multiple nonfiler notices without evidence they were actually mailed or received?
No. The Department attached six copied nonfiler notices bearing the correct address but presented no evidence of its ordinary generation and mailing procedures. Arnold credibly testified that neither …
When were a charitable nonprofit hospital's sales of medicines, skin-care, and grooming products to patients exempt?
An E-number charitable hospital did not owe Retailers' Occupation Tax on drugs or grooming products sold to a current patient in furtherance of hospital or clinic care. After the patient left, later s…
Is a restaurant's separately stated delivery charge taxable when the customer is never told there's a delivery fee they could avoid by picking up the meal?
Taxable here. A delivery charge escapes sales tax only if it's both (1) separable from the sale and (2) separately stated in a way the customer actually knows about before buying. This restaurant's fe…
Could a Virginia county obtain reconsideration of an M&T tax decision when it filed its request after the 45-day deadline?
No. The prior determination was dated January 8, 2015, making the adjusted 45-day deadline February 23 because February 22 was a Sunday. The county did not file until March 10, so Virginia could not r…
Was a taxpayer who moved out for permanent work and returned to Virginia in May 2011 a full-year or part-year resident?
Part-year resident. Virginia found that the taxpayer had abandoned Virginia domicile before 2011 and did not become a Virginia resident again until he returned in May. His submitted part-year return w…
For Utah corporate franchise tax, does a freight-forwarder reseller of transportation services use the single sales-factor apportionment formula, and does it source its sales to the shipment's origin, its destination, or its own direct customer's location?
Two separate answers. First, NO — this freight forwarder is NOT a "sales factor weighted taxpayer" and can't use the single-sales-factor apportionment formula in § 59-7-311(3)(c), because its NAICS co…
Which dealers had to make Virginia's accelerated sales-tax payments in June 2015 and 2016, and how did payment and reconciliation work?
For June 2015 and June 2016, a dealer with at least $2.5 million of taxable sales or purchases in the prior fiscal year generally had to prepay 90% of the previous June's sales-and-use-tax liability, …
Did pilot-line equipment qualify for Virginia's R&D sales-tax exemption when it was also used for quality control and customer-specific work?
No. Although the technical center performed qualifying research, the same pilot-line equipment also supported quality control, customer-specific modifications, cost reduction, and competitor analysis.…
Could a Virginia seller reduce an audit assessment with valid customer exemption certificates obtained after the audit began?
Yes. Certificates obtained after an audit begins are not accepted as having been taken in good faith and receive greater scrutiny, but Virginia found the submitted customer certificates valid and sent…
Did installed bowling lanes, pinsetters, ball returns, and scoring equipment become real-property fixtures for Virginia sales-tax purposes?
Yes. Virginia found the bowling equipment became part of the real property after installation. It was annexed to the premises, adapted to the bowling-alley use, and intended to remain. The contractor …
Could Virginia devalue a land-preservation credit carryforward when the original 2008-2009 assessment periods had expired?
Yes, for the unused carryforward. Virginia could not assess the owners' closed 2008 and 2009 returns, but it could reduce remaining credit and assess later open years. It accepted the Department's $26…
Could a leased county residence be a property company's BPOL business location when the records instead supported the owner's city home?
No. The company did not prove that the county rental property was a definite place of business. With no evidence of another business location, Virginia upheld the owner's city residence as the company…
Did a federal extension give a taxpayer until July 2014 to file an original 2010 Virginia return claiming a refund?
No. Because the taxpayer did not file the original Virginia return by the extended due date, the Virginia extension was negated and the refund period ran from the original May 2, 2011 due date. The Ju…
Could Virginia residents subtract all CSRS pension payments because their contributions had already been taxed federally and by Delaware?
No. Virginia's subtraction required contributions that were deductible federally but taxed by another state. The husband's CSRS contributions had been taxed federally, so their basis was already recov…
Did a couple establish another-state domicile in 2011 even though they returned to Virginia that November and one retained a Virginia license?
Yes. The husband changed domicile in February 2011 and the wife in March after the couple sold their Virginia home, bought a home in another state, moved vehicles, registered to vote, and obtained lic…
Where were a service company's BPOL gross receipts sitused when its owners worked out of state but it proved no other definite place of business?
Unresolved pending more proof. Virginia gave the company 30 days to document any definite place of business outside the city. If the city office was its only definite place, all receipts belonged ther…
Was a worker entitled to refunds when her employer withheld Virginia tax after she abandoned Virginia domicile for a foreign assignment?
Yes. Virginia found that the worker abandoned her Virginia domicile and established domicile in another country before 2010. Her employer had incorrectly withheld Virginia tax, and her timely nonresid…
Was a military spouse working in Virginia in 2008 a resident, or a nonresident taxable only on Virginia-source wages?
Nonresident. Virginia found that the military spouse had not abandoned his other-state domicile and spent no more than 183 days in Virginia. He still owed Virginia tax on wages earned from Virginia em…
Is a 'bead blasting' service that removes stubborn scale build-up from swimming pool tile ordinary nontaxable pool cleaning/maintenance, or taxable real property restoration -- and does the answer change for a residential vs. a commercial pool?
Restoration, not routine cleaning -- and the tax result differs by property type. The Comptroller ruled that a 'bead blasting' service (using microscopic glass beads sprayed by an air compressor to re…
Did a motor carrier overturn a city BTPP assessment when it refused requests needed to reconcile conflicting truck-location evidence?
No. The carrier's GPS data and affidavit conflicted with information from its manager, and it did not provide the city's requested reconciliation, mileage, or alternative records. Because the local as…
Is an online employee wellness service with health education, personal tracking, and an annual biometric assessment subject to Georgia sales tax?
No. The online health-information and wellness service was not among the services Georgia specifically designated as taxable. The provider remained responsible for sales or use tax on items it used to…
Which banquet and event charges — guarantees, room setup, extra labor, off-site fees, below-minimum fees, IT/router, electricity, and audiovisual rentals — does Colorado sales tax apply to?
It depends on the charge. Fees tied to catering prepared meals — room setup, extra labor, below-minimum, and hotel-billed off-site fees — are taxable as part of the meal. Audiovisual equipment rentals…
Are a company's medical-records services — coding, abstraction, and secure online storage — subject to Colorado sales or use tax?
No. The Department reaffirmed its earlier PLR 13-005 view that retrieving and copying medical records is a service, not a sale of tangible personal property. So coding, abstraction, and secure online …
If a buyer paid sales tax on a mandatory car warranty that was later wiped out in the manufacturer's bankruptcy, can the buyer get a sales-tax refund on replacement parts they then had to pay for?
No. Sales tax is a transactional tax fixed when each deal is made. The mandatory warranty was properly taxed when the car was bought, and its later discharge in the manufacturer's bankruptcy doesn't u…
Could employees deduct internet and vehicle costs when the internet amount lacked support and the employer paid for fuel?
Partly. Virginia upheld the internet-expense adjustment because the taxpayers did not document the larger amount claimed, but restored the net mileage deduction because the standard mileage rate cover…
Could taxpayers subtract full IRA distributions when only part represented retirement contributions previously taxed by another state?
Not yet. The previously taxed contributions could qualify, but investment earnings could not. Virginia gave the taxpayers 30 days to prove the contribution balance, year-end account values, and distri…
Was a federal IT and systems contractor properly classified as a professional engineering business for local BPOL tax?
Unresolved. Virginia found evidence that the contractor performed professional engineering services, but the taxpayer had not provided the requested gross-receipts breakdown and the county had reviewe…
How should Virginia's graduated recordation-tax rates apply when a supplemental deed increases secured debt from $35.4 million to $65 million?
The taxable increase was $29.6 million, but the rate brackets had to continue from the $35.4 million existing debt rather than restart at the first bracket. Virginia taxed $4.6 million at $0.16 per $1…
Was a corporate president personally liable for old withholding tax when he helped complete audits and began a payment plan?
No. The president qualified as a corporate officer with knowledge and authority, but Virginia found no willful failure. He hired an accounting firm that helped complete the audits and directed payment…
Was an April 2014 claim timely for a corporate estimated payment deemed paid and self-assessed on September 15, 2009?
No. With no return filed, the estimated payment and self-assessment were deemed made on September 15, 2009. The protective-claim period expired September 17, 2012, so the corporation's April 2014 requ…
Could a Virginia resident subtract pension income from another state without proving that state previously taxed the plan contributions?
No. The pension was included in the Virginia resident's federal adjusted gross income, and she did not prove that the other state had previously taxed contributions that the federal government had not…
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