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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When was a custom millwork transaction an Illinois construction contract rather than a retail sale with installation?
A combined contract to sell and install cabinets, countertops, or other property permanently affixed to a structure was a construction contract, making the contractor the end user taxable on material …
Did two automation-software licenses qualify as nontaxable Illinois licenses, and how were maintenance and updates treated?
IDOR declined to classify the two agreements. Canned software was taxable unless a license met all five regulatory conditions. Separately sold optional maintenance was generally nontaxable when sold, …
How can taxpayers check whether an older South Carolina advisory opinion was modified or superseded (per SC IL #14-18)?
Use the citator attached to SC Information Letter #14-18. It helps you determine what effect newer South Carolina advisory opinions have on previously published ones — whether an opinion was modified,…
How did Virginia tax a country club's 20% service charges, minimum quarterly food charges, and fertilizer reimbursements?
Virginia removed tax from the club's mandatory service charges of 20% or less and from quarterly charges imposed when members bought too little food. Fertilizer reimbursements were taxable retail sale…
Were hotels' mandatory 20% service charges on banquet and meeting meals subject to Virginia sales tax?
No. Mandatory gratuity or service charges of 20% or less on the hotels' meal charges were excluded from taxable sales price; only the portion above 20% was taxable. Virginia reversed the assessments a…
Was a deed transferred after confirmation and pursuant to a Chapter 11 plan subject to Virginia state and local grantor's tax?
No. Because the affiliate's deed transfer occurred after confirmation and pursuant to the Chapter 11 plan, federal law barred Virginia's state and local grantor's tax. The Department ordered its porti…
Was a post-confirmation deed transfer required by a Chapter 11 plan subject to Virginia state and local grantor's tax?
No. The affiliate's property transfer occurred after confirmation and pursuant to the Chapter 11 plan, so 11 U.S.C. § 1146(a) barred the state and local grantor's tax. Virginia ordered its portion ref…
Did a trust administered outside Virginia have to file a Virginia fiduciary return when its creator and primary beneficiary had Virginia ties?
Yes. The Virginia decedent's will exercised a power of appointment and created the trust, making it a resident trust. Although its trustee and property were outside Virginia, its primary beneficiary l…
How did Virginia resolve estimated withholding assessments when an employer had missing returns and incomplete payroll records?
Virginia ordered the 2009 assessment adjusted using the W-2 information supplied. The 2010 assessments remained based on the employer's own annual reconciliation unless better records were produced. V…
Was a private country club's mandatory 20% service charge on banquet meals subject to Virginia sales tax?
No. The country club qualified under the broad restaurant definition used for the meal-charge exclusion, so its mandatory service charge of 20% was not taxable. Only a portion above 20% would be taxab…
Were an active-duty U.S. Public Health Service officer's wages exempt from New Mexico income tax as active-duty service in the armed forces?
No. Thomas Hammack was an active-duty U.S. Public Health Service officer, but he was not detailed to the Army or Navy. New Mexico's armed-forces pay exemption and the federal definitions distinguished…
Were Illinois sales of tobacco products to out-of-state wholesalers or retailers exempt from Tobacco Products Tax?
For tobacco products other than little cigars, purchases by wholesalers not selling at retail and purchases by wholesalers or retailers for delivery outside Illinois were exempt. The seller had to obt…
Did Illinois rule that dry-film photoresist sold for printed-circuit-board manufacturing qualified for the machinery and equipment exemption?
No determination was made. The manufacturing exemption was use-based, so IDOR would not issue a supplier-specific ruling because the supplier was not the user. A customer using the photoresist could r…
What are South Carolina's 2015 county tier rankings for the job tax credit, and which counties qualify for the tax moratorium and reduced fee-in-lieu investment (per SC IL #15-1)?
SC Information Letter #15-1 sets the 2015 county designations that drive several South Carolina incentives. For the job tax credit, the 46 counties are ranked into Tiers I-IV (higher tiers = larger cr…
Were a bottle maker's cartoning equipment, alleged ghost assets, and idle machinery subject to local machinery-and-tools tax?
The cartoning equipment was exempt because it served shipping rather than the manufacturing process. Virginia did not overturn the county's treatment of alleged ghost assets and idle machinery because…
Were cable-television converter boxes subject to a Virginia city's business tangible personal property tax?
No. Virginia classified the cable converter boxes as intangible property under Va. Code § 58.1-1101 A 2a, so the city could not impose business tangible personal property tax on them. The case was rem…
Could a national securities exchange use Virginia's financial-corporation apportionment method?
Yes, if more than 70% of its gross income came from qualifying financial-service fees. Virginia treated the exchange's transaction, issuer, and some market-technology services as financial services; a…
Did Virginia voting, driver's licenses, a vehicle, and an investment home make foreign residents Virginia domiciliaries for 2009?
No. Although the taxpayers owned a Virginia investment home, registered to vote, obtained Virginia driver's licenses, and registered a vehicle, they retained their established foreign domicile and had…
Was a Virginia refund claim timely when an overseas taxpayer filed on July 1, three years after the automatic extended due date?
Yes. Because the taxpayer was overseas on the original May 1 due date, Virginia's July 1 extension applied automatically. The return claiming a refund was filed exactly three years after that extended…
How do Kansas sales, use, and transient guest taxes apply when a buyer presents a federal diplomatic Tax Exemption Card?
Kansas honors the diplomatic Tax Exemption Card issued by the U.S. State Department's Office of Foreign Missions (OFM) -- and the American Institute in Taiwan equivalent -- for state and local sales, …
Did Florida communications services tax apply when a Florida serving carrier handled roaming for foreign-carrier customers?
No, when the roaming customers' places of primary use were outside Florida. The foreign carriers were the home service providers, while the Florida taxpayer acted only as the serving carrier.
How did Illinois's 2014 local sales-tax sourcing rules locate primary selling activities, sales offices, master agreements, and Internet sales?
A retailer generally sourced to a jurisdiction where at least three of five primary selling activities occurred. A separate sales office needed all first three: authorized sales personnel, binding agr…
How did Virginia's 2015 guidelines treat first-time home buyer savings accounts, tax subtractions, eligible withdrawals, and penalties?
An account holder could designate qualifying financial accounts, subtract federally taxable account earnings from Virginia income, and use distributions for a qualified beneficiary's Virginia down pay…
What did Virginia's pre-2016 guidelines require to qualify for, calculate, and claim the Research and Development Expenses Tax Credit?
For tax years beginning before 2016, Virginia offered a generally refundable credit for qualified research conducted in Virginia above a calculated base amount. The guide used 15% and 20% rates on cap…
Could Plumbwest obtain more gross receipts tax deductions with NTTCs produced after the deadline or reopen a completed hearing to hire counsel?
No. The Department reduced Plumbwest's gross receipts tax from $30,956.13 to $27,897.33 for NTTCs already produced, but any additional certificates would be untimely under the mandatory 60-day rule. T…
Was a membership fee taxable when it was calculated from the savings on each retail purchase?
Yes, based on the facts described. Membership fees generally were nontaxable intangibles when they transferred only membership rights. Here, the fee was charged with each purchase, tied to that item's…
Is a hospital vendor-credentialing service -- compiling vendor documents and issuing access badges -- a taxable 'data processing service' in Texas, and can the credentialing company buy the access badges tax-free?
Taxable data processing, not a nontaxable security service. The Comptroller ruled that a company's healthcare-facility vendor-credentialing service -- compiling vendor-submitted documents and accredit…
Were cloud-based camera, lock, sensor, and alert services taxable security services in Nebraska?
Yes. Recurring charges for cloud-based surveillance and alerts were taxable security services when the protected property was in Nebraska. Installation tax depended on whether devices remained tangibl…
How did Kansas change the vendor discount rate for Missouri and Nebraska retailers?
Kansas Notice 14-17 reduces the reciprocal 'vendor discount' Kansas allows out-of-state retailers who collect and remit the Kansas Retailers' Compensating Use Tax. Under agreements in effect since 196…
How should a consolidated corporation calculate project income for Florida's Capital Investment Tax Credit?
The company had to prepare pro forma project income under GAAP and Florida adjustments, apply the project's Florida apportionment fraction, and use the corporate tax rate to determine project tax liab…
How does South Carolina recognize same-sex spouses for property tax and deed recording fee rules?
A couple legally married under any state's law is treated as married and as spouses for South Carolina property-tax and deed-recording-fee purposes. That recognition can support the 4% legal-residence…
How must legally married same-sex couples file South Carolina income tax returns under Revenue Ruling 14-8?
A same-sex couple legally married under any state's law must file South Carolina income tax returns as married filing jointly or married filing separately, matching the federal filing status for that …
Were product-referral commissions, fiddle performances, and earthmoving jobs exempt from gross receipts tax as nonbusiness or isolated activities?
Mostly no. Russell Burris's Noni product-referral commissions were payment for promotional services, and lacking a CRS number did not make them nontaxable. About 20 fiddle performances and six earthmo…
Was propane or electricity used in an RV park's residents-only coin laundry exempt as residential household fuel?
Yes. The coin laundry was a residents-only common area used for a residential household activity, so its separately metered propane or electricity qualified for the residential-fuel exemption.
For Texas franchise tax, can a concessionaire exclude the percentage-of-receipts payments it makes to a venue owner or event promoter from total revenue as 'flow-through funds,' or deduct them as cost of goods sold?
No — a food-and-beverage concessionaire's payments to facility owners or event promoters under a concession agreement are NOT excludable from total revenue as 'flow-through funds mandated by contract'…
Is a company's fee for representing claimants in Social Security disability applications and appeals a taxable 'insurance service' in Texas?
No. The Comptroller ruled that a managed-care company's division providing Social Security disability (SSDI) representation services -- completing applications and appeals, gathering medical records, …
Could an Illinois dealer document a nonresident vehicle sale when the buyer had an Illinois driver's license?
Yes, but the Illinois license created a rebuttable presumption of Illinois residency. The dealer had to retain clear nonresidency evidence, such as out-of-state voter, home, tax, credit, or property r…
Could nonresidents use Virginia 529 programs, deduct contributions on a Virginia return, and avoid creating Virginia domicile?
Yes. The inVEST, CollegeWealth, and CollegeAmerica programs were open nationwide, and a nonresident with Virginia-source income could deduct eligible contributions when computing Virginia taxable inco…
How should an information-security company situs service receipts for BPOL tax when it had a Virginia headquarters and several data centers?
The Virginia headquarters and the staffed out-of-state management center were definite places of business, but mere servers at the other data centers were not. Service receipts had to be sitused first…
How much of a nonresident employee's wages from a Virginia LLC was Virginia-source income when his work-location records were doubtful?
Virginia treated 123 of 260 workdays in 2010 and 115 of 260 in 2011 as Virginia workdays. The taxpayers' claim that all services were performed from another state was not persuasive given the husband'…
Could a live-performance business overturn Virginia use-tax audit items without records showing electronic delivery, out-of-state assets, or tax already paid?
Not without proof. The taxpayer initially failed to document electronic software delivery, assets that allegedly never entered Virginia, and tax already paid on an asset. Virginia remanded the audit f…
Which advertising-business purchases remained subject to Virginia consumer use tax after the taxpayer supplied additional audit records?
Virginia removed many documented purchase lines, but kept consumer use tax on DVDs, exhibit cases, brochures, pens, and videos tied to the advertising business's media and promotional services. Other …
Did a prior New Mexico tax refund and Department penalty letter operate as a binding ruling that prevented later tax on Medicaid receipts?
No. Torrance County Counseling conceded that its Medicaid payments were taxable and abandoned its deduction challenge. A 2007 refund, refund check, warrant remittance, and separate letter about a repe…
Could a New Mexico combined unitary group use net operating losses that member corporations had reported in earlier separate-return years?
Yes. Covenant's wholly owned New Mexico subsidiaries had generated net operating losses on separate returns before the parent elected combined unitary reporting in 2012. Federal Section 172 and New Me…
Did Shawn Edwards prove that his 2005-2006 receipts were exempt employee wages when he did not attend the hearing or submit worker-classification evidence?
No. The hearing had been continued so Shawn Edwards could attend and file an IRS Form SS-8 on whether he was an employee or independent contractor, but he did neither. His attorney's last-minute argum…
Could a golf-package booking business avoid gross receipts tax penalty and interest because its owner stopped filing while experiencing depression?
No. The Department sharply reduced Golf New Mexico's 2008-2009 gross receipts tax after separating client money passed through to golf resorts from the business's own booking fees, and the company con…
Could a commission-paid nail technician avoid gross receipts tax as an employee or claim a resale deduction using NTTCs issued after the audit deadline?
No. Kevin Pham received commission checks and Forms 1099 from two salons, set his own hours, and had no withholding, workers' compensation, or unemployment coverage, so he did not prove exempt employe…
Was a nurse an employee exempt from gross receipts tax after a patient's mother began paying him directly, and what later changed in the amended decision?
No. The original decision held Christopher O’Connor's direct respite-care payments taxable because he did not prove employee status, and it upheld tax and interest for 2008-2011 plus penalties for 200…
How did new video, music, grocery, and pricing benefits affect tax on an online membership program?
The portions attributable to video and music were subject to communications services tax when charged to a Florida service address. Separately stated qualifying shipping and member-pricing benefits di…
When do Georgia income-tax-credit carryforward periods run after excess credits are approved for use against withholding, and must quality-jobs, film, and research credits be used in a set order?
For income-tax use, each credit keeps the carryforward period stated in its own statute. For withholding-tax use, the period begins with the first withholding period after the period named in the Depa…
When a company installs a custom VIP interior into a 'green' (interior-less) aircraft that a customer already bought from the manufacturer, is that manufacturing (with its sales-tax exemption) or taxable remodeling -- and does it matter that the FAA issues a new Standard Airworthiness Certificate only after the interior goes in?
Remodeling, not manufacturing -- and an FAA airworthiness certificate or pilot's license proves nothing about Texas tax status. The Comptroller ruled that a company hired to design and install a custo…
How did Florida tax digital-video rentals and permanent purchases delivered by streaming or download?
Neither rentals nor purchases were subject to sales tax because no tangible property was furnished. Timed rentals were taxable video services under communications tax, while permanent purchases were n…
Were an electric utility commission's sales of electricity to its creating city subject to Florida gross receipts tax?
Yes. The commission was a distribution company separate from the city, and the city was its retail customer. The commission therefore owed 2.5% gross receipts tax on the utility-service receipts.
Could canned software be licensed tax-free in Illinois, and how was custom software treated?
Yes, as a general rule. A canned-software license and its later updates were not taxable when the license met all five conditions in Section 130.1935(a)(1). Separately, qualifying custom software prep…
Does a homeowner owe Connecticut sales tax on propane bought to fuel a standby generator at home?
No. The sale of propane used to run a standby generator at a residential dwelling is exempt from Connecticut sales and use tax under Conn. Gen. Stat. § 12-412(3)(A), which exempts gas -- including bot…
Which Nebraska hunting-access, guide, exclusive-land, and animal fees were subject to sales tax?
Nonexclusive access to land for hunting was a taxable admission. Guide and animal fees charged by the admission seller entered the taxable price, while a separately hired guide's service was not taxab…
Can a Louisiana lessor buy repair parts tax-free for property held for lease or rental?
Yes, when the lessor buys the part separately from taxable repair services and installs it in property held for lease or rental. Lessee purchases and parts consumed by a repair shop remain taxable.
Was a retired tradesman an employee exempt from gross receipts tax when an estate paid him hourly for recurring property-maintenance work?
No. Edward Chavez worked 20-30 hours per week maintaining up to 14 estate homes and was paid hourly, but six of seven employee factors supported contractor status. The estate issued Forms 1099, withhe…
What is South Carolina's tax interest rate for the period ending March 31, 2015 (per SC IL #14-16)?
3%. SC Information Letter #14-16 sets South Carolina's interest rate on tax underpayments and overpayments at 3% for the period October 1, 2011 through March 31, 2015. Interest is compounded daily, ex…
An S corporation's shareholders are selling their stock and making a federal § 338(h)(10) election (treating the stock sale as an asset sale), with part of the price paid as a later earn-out. Is that gain — including the earn-out — counted in the company's Tennessee excise-tax net earnings?
Yes. When an S corporation's owners sell their stock and make a federal I.R.C. § 338(h)(10) election (which treats the stock sale as a deemed sale of the company's assets), the gain the S corporation …
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