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 an Illinois non-home-rule village's voter-approved municipal sales tax apply to boats and automobiles?
No. The taxable base was set by statute, and the Non-Home Rule Municipal Retailers' Occupation Tax excluded property titled and registered by an Illinois agency, including boats and automobiles. The s…
How did Illinois tax game access codes, downloadable software, subscription or points cards, and online content?
Cards or coupons redeemable for property were generally intangible when sold, with tax arising when property was redeemed. Ordinary electronically transferred data was intangible, but downloaded canne…
Is a telecommunications carrier protected from the section 186-e excise tax if it accepts a resale certificate from a foreign carrier that has no certificate-of-authority number?
No. A section 186-e resale certificate (Form CT-120) is not properly completed without the purchaser's certificate of authority (COA) number, so it cannot rebut the presumption that the sale is taxabl…
Is a company providing temporary housing to students and interns in a former dorm operating a taxable 'hotel' for NY sales tax?
No. The accommodations don't qualify as a hotel, so the room charges aren't subject to State or local sales tax. The company rents rooms in a former college residence hall only to enrolled students or…
I hold an oil and gas lease on New York real property, and I'm extending its primary term by paying my lessor an additional sum, per an option clause in the lease. I want to record an affidavit documenting that extension with the county clerk. Do I have to complete and file Form TP-584 (the Real Estate Transfer Tax return), including Schedule B, to record that affidavit?
Yes. Extending an oil and gas lease's primary term -- even under an option clause already written into the original lease -- is itself an additional conveyance of an interest in real property, so Form…
Which video-game access codes and stored-value cards must a Kansas retailer charge sales tax on?
It depends on whether the customer ends up with downloadable prewritten software. A retailer's sales of access codes and stored-value cards for video-game content break down this way: codes for downlo…
Does Colorado's low-emitting heavy-vehicle exemption carry through to a long-term lease, and who is the 'dealer' that completes Form DR 1369?
Yes. Because a long-term lease (over three years) is treated as a sale, the low-emitting heavy-vehicle exemption flows through to the lease payments. The 'dealer' for Form DR 1369 is whoever sells or …
Were band-performance payments taxable to John Widell when he received the checks and distributed all of the money to other musicians?
Yes. John Widell operated Broomdust Caravan as a sole proprietor, gave the bars his Social Security number, received and cashed their checks, and then paid the other musicians. Even though he kept non…
Could New Mexico sustain a gross receipts tax assessment against Mariah Ranch when the disputed receipts were outside the assessed period or belonged to Lawrence Burke personally?
No. The decision abated the entire assessment. It held that $525,046 attributed to Lawrence Burke was received outside the period stated in the assessment, leaving no jurisdiction to decide those rece…
How should a city resolve BPOL and machinery-and-tools liabilities when it classified the taxpayer as a manufacturer but both sides lacked complete records?
Virginia remanded the case. The city had to credit every payment the taxpayer could verify, while the taxpayer had to provide records separating the activities and receipts of multiple entities. If an…
Could taxpayers carry a 2010 overpayment into 2011 when their original 2010 return was filed after Virginia's refund deadline?
No. The same three-year limitation that barred a cash refund also barred carrying the overpayment forward. Because the original 2010 return was filed in June 2014, after the May 2, 2014 deadline state…
Did returning to Virginia for about two weeks within six months of moving away prevent a taxpayer from proving a domicile change?
No. Although returning to Virginia within six months was prima facie evidence that the taxpayer had not abandoned Virginia domicile, the full record showed a genuine move from State B to State A. Virg…
Could taxpayers use Virginia's Historic Rehabilitation Tax Credit subtraction to restore a partnership-interest loss disallowed by the IRS?
No. Virginia's subtraction applied to gain or income recognized from allocating or applying Historic Rehabilitation Tax Credits, not to a loss on selling a partnership interest that the IRS disallowed…
Could taxpayers apply a January 2012 estimated payment to 2012 after it had already been credited and claimed for 2011?
No. Local and Department records showed that the January 2012 payment was applied to 2011 under the estimated-tax schedule and the taxpayers claimed it on their 2011 return. It could not also be credi…
Could an employer reduce estimated Virginia withholding assessments by filing its annual return and supplying W-2 and payroll records?
Yes. Virginia abated the 2009 estimated assessment after finding that an annual return had been filed, and it returned the 2010 and 2011 assessments for adjustment because the employer's W-2 forms and…
Did a taxpayer prove that computer-controlled medication management systems had to be classified as computer equipment for local BTPP tax?
No. The systems combined computers and peripherals with medication drawers and shelving, and the taxpayer did not prove the computer components could be reprogrammed and used separately. The county's …
Were a data center's fixed monthly circuit-access fees subject to Florida gross receipts tax on electricity?
No gross receipts tax applied because the data center was not an electric distribution company and charged by circuit rather than electricity used. The fees were instead taxable consideration for lice…
Did a business owner prove that a city's BPOL and BTPP assessments were wrong based on separate businesses, contracting, out-of-state work, and property value?
Only in part. The taxpayer did not document separate businesses, contractor work, excluded insurance proceeds, or eligibility for an out-of-state BPOL deduction, so the BPOL assessments were upheld. T…
Could Virginia excuse a refund claim filed several weeks after the three-year deadline because the taxpayer was traveling and unfamiliar with the law?
No. The original 2010 return was filed in June 2014, after the May 2, 2014 refund deadline stated in the ruling. Va. Code § 58.1-499 D gave the Department no discretion to excuse the late filing based…
Did a military spouse prove that she retained another state's domicile and qualified for relief from Virginia income tax for 2011?
No. The taxpayer did not prove that she retained the same out-of-state domicile as her military spouse. Living and working in Virginia, registering her vehicle there, and obtaining a Virginia driver's…
Could taxpayers avoid Virginia assessments based on final IRS changes merely because they were still contesting the federal audit?
No. Virginia does not look behind the IRS's final determination and could assess the unreported federal changes at any time because the taxpayers did not file amended Virginia returns. If the IRS late…
Did a federally taxable annuity death benefit qualify for Virginia's subtraction when the payment came from a retirement plan?
No. Virginia's subtraction was intended for qualifying federally taxable lump-sum death benefits from annuity contracts with insurance companies, not payments from retirement plans. The 2010 assessmen…
Could S corporation vehicle depreciation be claimed as a Virginia fixed-date-conformity subtraction instead of through federal income?
No. Ordinary depreciation under IRC § 167 had to flow through the S corporation's federal Schedule K-1 and the taxpayers' federal adjusted gross income; it was not a separate Virginia fixed-date-confo…
Was a nonresident military spouse's Illinois self-employment income from providing child care exempt under the Servicemembers Civil Relief Act?
Yes, conditionally. The federal protection was not limited to employee wages and could extend to a military spouse's self-employment income to the extent it came from the spouse's own services. The sp…
Could Southwest Mobile Service deduct maintenance services resold by its customer using a timely multijurisdictional certificate or NTTCs obtained after New Mexico's 60-day deadline?
No deduction was allowed. The multijurisdictional certificate applied in New Mexico only to tangible personal property, not maintenance services, and both NTTCs were executed after the Department's 60…
Could Santa Lucia deduct independent-contractor service receipts when its Type 5 NTTC was executed two days after New Mexico's 60-day deadline?
No. Sarah Fresquez's Type 5 NTTC from Santa Lucia, LLC was executed on July 17, 2014, two days after the Department's July 15 deadline, so the service-for-resale deduction was disallowed. She also fai…
How did Virginia classify and situs an engineering-services company's BPOL receipts, and could it appeal a vehicle BTPP assessment?
Virginia found the company was a business-service provider, not a contractor, for 2009-2010 and ordered a classification-based refund. It remanded 2011-2012 classification and situs for records, denie…
Would the Virginia Department order a county to issue a machinery-and-tools-tax refund after two prior determinations?
No. The Department said it had fulfilled its duties by issuing a final determination and a reconsideration determination, and it would not direct how the county implemented them. If the county's inact…
What federal tax changes did Virginia adopt for 2014 returns when it advanced its Internal Revenue Code conformity date?
Virginia advanced its fixed conformity date from January 2, 2013 to December 31, 2014 for tax years beginning in 2014. It adopted the Tax Increase Prevention Act of 2014 but retained specified Virgini…
How did South Carolina Revenue Ruling 15-2 apply the construction-material exemption for major manufacturing and distribution facilities?
The ruling exempted construction materials incorporated into a new or expanded manufacturing or distribution facility when the taxpayer planned at least $100 million of real and personal property inve…
When a company builds and tests a custom piece of equipment in Colorado that it intends to sell, are the components subject to Colorado use tax during the design, build, and test process — and what happens if the company ultimately keeps the equipment to use itself?
On these facts, no use tax during development. Components a company builds into a custom piece of equipment and tests in Colorado are NOT subject to Colorado sales or use tax during the design, build,…
Did a salesperson's mileage schedule and meal receipts substantiate the unreimbursed employee expenses claimed on a 2013 Virginia return?
Yes. The mileage itinerary excluded the stated home-to-first-client commute, accounted for the employer's flat reimbursement, and documented travel between clients; the taxpayers also supplied the bus…
Did a technical-services company prove that its 2010 BPOL receipts belonged outside the city, and was interest due on later refunds?
Only in part. The taxpayer had not yet proved that its 2010 service receipts should be sitused outside the city, so that issue was remanded for 30 days of evidence. The city nevertheless had to pay st…
Does Colorado sales tax apply to a late-payment fee a seller charges when a customer pays an invoice late?
No. A late-payment fee is not included in the sales tax calculation as long as it is separately stated from the purchase price. Sales tax is a transactional tax fixed when the sale is created, and a l…
Were sales of prewritten measurement software retail or wholesale sales for Virginia BPOL classification purposes?
No. For BPOL purposes, the prewritten measurement software was not physically transferred goods, wares, or merchandise and therefore was neither a retail nor wholesale sale. It was classified as a bus…
Did pollution-control equipment certified after January 1 qualify for Virginia's local property-tax exemption for that same year?
No. The equipment had to be certified by the January 1, 2013 tax day to receive the pollution-control property exemption for 2013, and its March certification was too late. The case was remanded for t…
Did an antique seller avoid gross receipts tax because the antique-mall owner collected tax at checkout and later issued an NTTC?
No. Classic Cobwebs sold antiques directly to consumers through rented mall booths, so its receipts were presumed taxable. The mall owner's December 2014 NTTC came after the audit's 60-day deadline, n…
Does paying New Mexico combined fuel tax on time prevent a late-filing penalty when the corresponding return is filed months late?
No. Alon USA timely paid $927,776.01 of January 2014 combined fuel tax by February 25, but its return was not filed until May 5. Alon stipulated that the filing failure was not caused by a Department …
How does South Carolina sales and use tax apply to kayak and paddle-board rentals, tours, and businesses that do both?
Equipment rentals were taxable, while charges for guided river or lake tours were nontaxable service charges. A rental-only business could buy the equipment for resale without tax; a tour-only busines…
Must a nonprofit Virginia hospital have a religious affiliation for its property to qualify for the hospital-and-charity tax exemption?
No. Religious affiliation was not a requirement under the authorities discussed. The hospital still had to satisfy three factual conditions, including exclusive hospital use and operation exclusively …
Was a home-based worker paid by a foreign company operating a licensable Virginia business rather than working as an employee?
Yes. Form 1099 treatment, Schedule C business income and expenses, a home-office deduction, and 40-hour weekly work from the home or field supported independent-business status. The county's 2006-2011…
Did Virginia's seven-year collection limit bar a 2014 collection effort on sales-tax assessments converted to a responsible officer in 2004?
No. The converted bills were governed by the 20-year collection period in effect when the 2003-2004 assessments were issued, not the seven-year period in the 2015 statute. Virginia's 2014 collection e…
How did Illinois tax medical-record services delivered on paper, CD, or electronically to in-state and out-of-state recipients?
IDOR could not assign liability without invoices or determine whether the arrangement was multi-service. Electronic transmission was not tangible property. Paper or CD delivery could create service-ta…
How did Illinois tax a direct-mail postcard campaign bought from an out-of-state advertising agency and rebilled to dealers?
IDOR could not decide without invoices, contracts, and the parties' registration status. The campaign could be a service with postcards transferred incident to it and a multi-service arrangement betwe…
Are bulk water sales subject to Colorado sales or use tax when the water is sold to the oil and gas industry — and does it matter whether the customer takes it by tanker truck or through a pipeline?
It depends on how the water moves. Bulk water taken by tanker truck (in tanks) IS subject to Colorado sales or use tax, because water is corporeal tangible personal property and the Department's regul…
Can a Georgia domiciliary who is also taxed as a resident of another state claim Georgia's credit for taxes paid to other states on both business income and investment income?
Yes. Assuming the taxpayer is domiciled in Georgia, he may claim the O.C.G.A. § 48-7-28 credit for taxes paid to the other state on both his business income and his investment income, subject to the s…
Is contract manufacturing (making goods from a customer's own raw materials) a non-taxable service, and does doing some of it cost a manufacturer the machinery exemption under § 39-26-709?
When a manufacturer makes goods entirely from the customer's own raw materials, there's no transfer of property, so it's a non-taxable service, not a sale. And the manufacturing-machinery exemption (§…
Can a service organization claim Georgia's manufacturing exemption for leased printing equipment used by a small internal print division?
No. Although the internal division printed and sold tangible products and collected tax on them, it was not a separate legal entity and represented only a small share of the organization's revenue. Be…
Could a low-income housing project in a designated brownfield area receive a refund of sales tax paid on building materials?
Yes, conditionally. Every housing unit had to serve a person in one of the statutory eligible categories, and the owner had to file a timely refund application with the required proof of materials and…
Are a camera maker's cloud-storage service plans subject to Colorado sales or use tax — both the software/server side and the cellular-data side?
Likely mixed. The cloud software and storage appear non-taxable because the company looks like an application service provider (ASP), whose hosted software Colorado does not tax. But the cellular-data…
If a Colorado contractor pays sales tax on construction materials and only later gets an exemption certificate, must the supplier go back and refund or credit that tax?
No. A supplier is not required to go back and refund or credit sales tax it correctly charged before a contractor presented an exemption certificate. The contractor must apply to the Department for a …
Amended Texas Private Letter Ruling: Is converting pipeline-quality natural gas into liquefied natural gas (LNG) at a new Texas LNG plant exempt manufacturing 'processing,' or is it all just excluded 'transportation' activity because the gas is being prepared for overseas shipment?
AMENDED RULING (corrects typographical errors in a December 19, 2014 original). At least some of the activities that convert pipeline-quality natural gas into liquefied natural gas (LNG) at a planned …
Was a nurse an employee exempt from New Mexico gross receipts tax after a patient's mother began paying him directly for respite care?
No. Christopher O’Connor's direct payments from a patient's mother were taxable business receipts, not exempt employee wages. Although she set his schedule and paid him hourly, she did not withhold ta…
Can I subtract from my Colorado taxable income the dividends and capital gain distributions a mutual fund pays me from U.S. and Colorado government obligations?
Only true interest income qualifies—not dividends or capital gain distributions. Colorado lets you subtract interest from U.S. obligations and doesn't add back interest from Colorado state/local oblig…
Were consignment and loaner fees for surgical instruments and implant sample kits taxable rentals in Florida?
Yes. Transfers of surgical instruments and sample kits for consignment or loaner fees were rentals. Without a valid resale certificate, tax applied to rental proceeds for property located in Florida d…
Does using a boat broker prevent a private vessel sale from qualifying for Louisiana's isolated or occasional sale exclusion?
Not necessarily. The exclusion could apply if the owner was not in the boat-selling business, had no pattern of repeated sales, bought the vessel for personal use, and kept title or possession until t…
Are an online marketing company's customer-review platform and its separately billed SaaS analytics product subject to NY sales tax?
The review platform isn't taxable but the analytics product is. The Core Offering -- which captures, moderates, and displays customer feedback on the client's and other retailers' websites -- compiles…
Was downstream reseller documentation enough for an out-of-state seller drop shipping directly to an Illinois customer?
The documents provided were incomplete. The seller had to obtain a valid resale certificate from its own purchaser containing all required information, including that purchaser's number or qualifying …
Did grass seed, sod, trees, hydromulch, and fertilizer qualify for Illinois's enterprise-zone building-materials exemption?
Permanently planted trees, shrubs, topsoil, sod, and grass seed generally qualified as building materials for an eligible enterprise-zone project. Hydromulch and fertilizer did not. The sale also had …
Did an Illinois self-assessing electricity purchaser include third-party supplier bills in taxable purchase price?
Yes. The aggregate purchase price included payments to the electricity supplier and, when different, the transporter for supply, transmission, delivery, and directly related services unless specifical…
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