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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Did Alaska licenses, voter registration, and a claimed intent to return there end Kevin Fenner's New Mexico domicile for 2003 and 2005-2010?
No. Fenner established New Mexico domicile in 1994 and did not prove physical presence plus a bona fide intent to make another place his permanent home. Alaska licenses, voter records, vehicle registr…
Could Virginia residents keep a credit for Maryland tax on reciprocal wages after Maryland's refund deadline had expired?
No. Maryland-Virginia reciprocity made the residents' Maryland wages exempt from Maryland tax, so the Virginia credit did not apply. Virginia issued its assessment within three years of the return due…
Could taxpayers subtract gains from Virginia bonds when unrelated capital losses had already offset all of those gains in federal adjusted gross income?
No. Virginia's subtraction applied only to Virginia-obligation income included in federal adjusted gross income. Because unrelated current and carried-over capital losses had already offset all of the…
Did a merchant mariner abandon Virginia domicile by working at sea and leasing a residence in another state while retaining Virginia ties?
No. The taxpayer's out-of-state lease and maritime employment did not show a permanent abandonment of Virginia. He retained Virginia voter registration, a Virginia-resident spouse, return visits, powe…
Was the requesting taxpayer's web-based insurance-claims system taxable, or excluded as data processing?
The charges were not taxable for the specific service described because the provider's personnel collected insurance-claim data from multiple carriers, checked and corrected it, converted it to a stan…
What Virginia tax interest rates applied during the first quarter of 2015?
Virginia's first-quarter 2015 rates were 5% for tax underpayments and 5% for tax overpayments. The reduced rate for qualifying disputed assessments after the nine-month point was 0%, while the corresp…
Were a U.S. Public Health Service officer's active-duty wages exempt from New Mexico income tax, and could accountant reliance remove the penalties?
The wages were taxable, but the penalties were abated. Kathleen Franklin was an active-duty commissioned U.S. Public Health Service officer, yet the New Mexico exemption applied to the armed forces, w…
I set up an intentionally defective grantor trust (IDGT) and funded it with $5 million cash. I now want to exercise my substitution power to swap my New York apartment into the trust in exchange for cash equal to the apartment's appraised value. Since I already gave the trust the cash and I'm just swapping assets I control, is this exempt from New York's Real Estate Transfer Tax as a gift?
No -- it's taxable, not exempt. A grantor set up an intentionally defective grantor trust (IDGT), an estate-planning structure where trust assets are outside the grantor's estate for estate-tax purpos…
What are South Carolina's latest per capita income figures used to qualify for tax incentives (per SC IL #14-15)?
SC Information Letter #14-15 publishes the state and county per capita personal income figures the Department uses to test qualification for various South Carolina income, sales and use, and property …
Were optional customer contributions to an electric utility's solar pilot program subject to sales or gross receipts tax?
No. The separately stated, cancellable contributions were unrelated to electricity usage and were not enforced as utility charges, so they were neither charges for electricity nor gross receipts from …
Could an Illinois governmental unit use the exempt-organization event rules for food and alcohol sales at community festivals?
No. The limited sales exceptions in Section 130.2005 applied to qualifying charitable, religious, and educational organizations, not governmental bodies. Government sales to the public were taxable un…
Were cable-television converter boxes subject to a Virginia city's 2013 business tangible personal property tax?
No. Virginia held that cable converter boxes were property used in a cable television business and that the 1984 statutory change classified them as intangible property. The case was remanded to the c…
Did an inherited Virginia home, vehicle registration, driver's license, and federal-return address make a long-term foreign resident taxable as a Virginia resident?
No. The taxpayer had lived and worked abroad since 2006, held foreign residency status, participated in professional and civic life there, and filed a foreign tax return. Virginia found that he change…
Did Virginia's manufacturing exemption cover a propane storage tank and stair handrails on an exempt raw-material silo?
No. The propane itself was an exempt production supply, but the tank merely stored it and was taxable. The raw-material silo qualified as part of integrated manufacturing, but its stair handrails only…
Were granite countertops and glass activity walls in an indoor athletic facility taxable as business tangible personal property?
No. The countertops and glass walls were attached to the building, essential to the concession and activity areas, and intended as permanent additions. Virginia classified them as real-property fixtur…
Could a Virginia part-year resident claim a credit when a neighboring state taxed all of her wages, including wages also taxed during her Virginia-resident period?
Yes. The neighboring state's return taxed the taxpayer's entire wage income, not merely wages from her pre-Virginia residency period. Because those earned wages were also subject to Virginia tax durin…
Could a copier company deduct the supply portion of bundled maintenance contracts with governments and nonprofits without separately invoicing supplies?
Yes, for the documented supply portion. New Mexico law did not require a separate invoice when reliable records readily established the tangible-property amount in mixed copier maintenance contracts. …
Was GEO selling the Town of Clayton a license for resale when it built, managed, and operated a town-owned jail housing state prisoners?
No. GEO's agreement required it to provision, manage, and operate Clayton's jail and supply staffing, security, food, health care, programming, maintenance, and other core services. Accreditation was …
Was a private prison operator selling a license for resale when a county paid it per inmate to operate a county-owned correctional facility?
No. Cornell Corrections managed and operated Bernalillo County's correctional center, supplying staffing, security, food, medical care, maintenance, programming, and other essential services for a per…
Were walk-in bathtubs, stairway wheelchair lifts, and outdoor ramps exempt as durable medical equipment without a physician's prescription or work order?
No. The products met Virginia's durable-medical-equipment criteria, but a sale was exempt only when purchased by or on behalf of an individual under a licensed physician's prescription or work order. …
How does Georgia sales tax apply to prepackaged meal replacements and vitamin supplements labeled with Nutrition Facts or Supplement Facts?
Products with Nutrition Facts labels qualified as food for off-premises consumption and were exempt from Georgia state sales tax but remained subject to local tax. Products with Supplement Facts label…
Could a corporate member separately account for its Florida LLC income instead of including partnership factors in apportionment?
No. The corporation had to combine its share of the partnership-taxed LLC's property, payroll, and sales with its own factors. It did not prove the standard formula was unreasonably or arbitrarily dis…
Is a single charge for leasing a prescribed cancer-therapy system and buying its replacement supplies exempt from Georgia sales tax?
Yes. The patient possessed and controlled the self-administered therapy system, so the transaction was a lease of prescribed durable medical equipment. The frequently replaced supplies were treated as…
A Tennessee blood and plasma processor must run federally required disease tests on the blood it turns into products for sale. Are the chemical reagents used in that testing exempt from Tennessee sales and use tax?
Yes, with conditions. The chemical reagents the company uses to run federally required disease tests on donated whole blood and source plasma are exempt from Tennessee sales and use tax as 'industrial…
If a charter school sells undeveloped land it already owned to a single landlord LLC, who then builds a new campus and leases it back for 25 years, does that sale-leaseback structure qualify for the § 151.311 construction exemption?
Yes. The Comptroller ruled that a build-to-suit lease and purchase option qualifies as an EXEMPT CONTRACT under Tax Code § 151.311 where the charter school first SOLD undeveloped land it already owned…
If a charter school already owns undeveloped land it can't afford to build on, SELLS it to landlord entities who then build the campus and lease it back for 25 years, does that sale-leaseback financing structure still qualify for the § 151.311 construction exemption?
Yes. The Comptroller ruled that a build-to-suit lease and purchase option qualifies as an EXEMPT CONTRACT under Tax Code § 151.311 even where the charter school first SOLD undeveloped land it already …
When a 17-campus charter-school network has three out-of-state LLCs jointly acquire land and build a new campus, then lease it back for 25 years with a purchase option in years 2-5, does the construction qualify as exempt under § 151.311?
Yes. The Comptroller ruled that a build-to-suit lease and purchase option under which three Idaho LLCs, acting jointly as "Landlord," acquire previously unimproved land and construct a new campus to a…
Were cloud services that processed and routed calls inside customers' phone systems taxable communications in SC PLR 14-4?
Yes for the requesting taxpayer's service. DOR treated monthly charges for cloud-based call processing and routing, voice and video support, voicemail, audio and web conferencing, presence, and mobili…
Are walk-in bathtubs, in-home wheelchair lifts, and modular ramps exempt from Colorado sales tax as medical equipment?
It depends on the item — and all of them need a prescription. In-home wheelchair mobility lifts and modular ramps appear to qualify for Colorado's MOBILITY ENHANCING EQUIPMENT exemption, because they'…
Which wheelchairs, mobility equipment, replacement parts, and accessories were exempt from Florida sales tax?
Wheelchairs, scooters, walking aids, and specifically adapted replacement parts were exempt without a prescription. Lifts, ramps, carriers, bath benches, and oxygen holders required a prescription; co…
How did Illinois's 2014 local sourcing rules apply to leases treated as conditional sales?
Illinois used origin sourcing, so ultimate destination was not the controlling shortcut. The conditional-sale presumption applied only when the agreement was a conditional sale and the property was in…
Were a private club's dues and initiation fees taxable as admissions when members gained clubhouse access?
Yes. The dues and initiation fees gave members access to a clubhouse that facilitated social, boating, and other recreational activities, so the charges were taxable admissions.
A Tennessee firm rents out IT contract workers by the hour for software projects — business analysts, systems analysts, programmers, QA testers, database administrators, project managers. Which of those hours must it charge Tennessee sales tax on?
It depends on the role. The firm rents out IT staff by the hour, and Tennessee taxes the hours of its Programmers and Database Administrators — because their work is the creation or programming of sof…
Is hurricane rental insurance charged with a South Carolina vacation rental subject to accommodations tax?
An optional hurricane rental insurance charge is not subject to South Carolina sales tax under the ruling. A mandatory charge is part of the accommodations price and is taxed at 7% when the guest occu…
How did Virginia tax an out-of-state company's equipment leases, maintenance contracts, delivery, Internet access, and third-party billing?
The out-of-state lessor had to register and collect tax on Virginia leases. Half of a flat parts-and-labor maintenance contract was taxable; qualifying installation and transport charges were exempt; …
What are the required wage and investment levels for Nebraska Advantage Act applications filed on or after January 1, 2015?
This ruling sets the 2015 thresholds. For Nebraska Advantage Act applications filed on or after January 1, 2015, the base average annual wage requirement is $23,979, and the required investment and em…
Could an admission provider buy catered meals tax-free for resale when premium tickets included the meals at no separate charge?
No. The admission provider was the end consumer because it sold admissions and did not separately state a price for the food. The caterer had to collect tax, and the provider was liable if it could no…
Could demolition and replacement construction qualify for South Carolina's abandoned-building credit under PLR 14-3?
Yes for the requesting taxpayer under the historical law described. Demolishing the qualifying nonhistoric abandoned building and constructing a replacement at the same location did not disqualify the…
Was electronically delivered software exempt when it was an integral part of a taxable medical hardware system?
No. Although electronically delivered software is generally nontaxable by itself, this software and its related services were integral to a taxable medical hardware system. Virginia included the charg…
Is engineering built into a Kansas steel sale taxable, even if billed separately?
The whole sale is taxable. Engineering services on their own are not a taxable service, but when they are part of providing tangible personal property they are included in the selling price and taxabl…
Did a public airport owner's proposed direct-purchase procedure qualify building materials for Florida's governmental exemption?
Yes. The public owner directly issued purchase orders and payments, took title and risk of loss at delivery, and provided exemption and entitlement certificates, while the contractor acted only as int…
Is the monthly rental of a prescription device that treats brain tumors with alternating electric fields subject to Colorado sales or use tax?
Exempt. The rental of this cancer-treatment therapy — a prescription device that delivers alternating electric fields through scalp electrodes to slow recurrent brain-tumor (GBM) cell division — is ex…
When may a seller exempt welding fuel gases, shielding gases, and hand tools sold to Georgia manufacturers or agricultural producers?
Qualifying manufacturers could buy necessary manufacturing fuel gases and shielding gases exempt with a proper certificate, but fuel gas known to be used for unrelated repair work was taxable. Agricul…
When were restaurant delivery charges and processing fees part of the taxable sales price of a meal?
Mandatory delivery charges were taxable. A separately stated delivery charge was not taxable when the customer could avoid it by picking up the meal. Processing fees were always taxable, and the franc…
Must Virginia finish collecting an assessed tax within seven years, or only begin a collection effort within that period?
Virginia's position was that it must make or institute a collection effort within seven years after assessment, but it need not finish collection within those seven years. Once some collection action …
How did Virginia resolve two sales/use-tax audits involving fixed assets, return reconciliations, wrong tax rates, exemption certificates, and customer-paid use tax?
Virginia sent both paid audits back for document review and adjustments. Reconciliations and several exemption certificates supported reductions; fixed-asset tax required more seller proof; customer-p…
Are amortized equipment charges in an IT-services contract taxable when the provider keeps title, possession, control, and operation of the servers?
No. The itemized contractual asset charges were part of nontaxable data-processing and server services because the provider owned, possessed, controlled, selected, and operated the equipment. The prov…
Could Illinois residents claim a credit for Indiana tax on nonprofessional gambling winnings when their other reported loss was entirely Illinois-sourced?
No. Illinois capped the other-state credit by the share of base income that would be sourced outside Illinois under Illinois's own rules. Nonprofessional gambling winnings were not treated as out-of-s…
Was a separately stated, customer-adjustable restaurant gratuity subject to Florida sales tax?
No. Because the gratuity was separately stated and the restaurant distributed 100 percent to employees without retaining a monetary benefit, it was excluded from the taxable sales price.
Is selling a discount loyalty card subject to Kansas sales tax?
No. Selling a one-year 'loyalty card' that gives a pawn shop's customers a 10% store discount plus better pawn terms (extra cash on new pawns, free interest after five redemptions, better loan offers …
Could a corporate group stop filing consolidated Florida returns after major divestitures, acquisitions, growth, and a changed business focus?
Yes. The combined changes in business focus and operational growth established good cause, but the request missed the 90-day deadline for the first year sought, so permission began in a later year and…
Would IDOR verify a private vehicle title-and-registration publication, and what 2015 motor-vehicle lease change did it flag?
IDOR would not approve the accuracy of a private legal publication. It said the previously published information generally remained correct, but flagged Public Acts 98-628 and 98-1080, which changed t…
A Tennessee firm resells ERP software and separately offers optional consulting services — training, configuration, project management, data conversion, documentation, testing, and report writing. Which of those services must it charge Tennessee sales tax on?
Mostly no. Of the firm's optional consulting services, only Report Writing is taxable on its own — and only when it includes software coding or programming that isn't merely incidental, which makes it…
What were the eligibility, calculation, transfer, and asset-sale rules for South Carolina's expired Angel Investor Credit?
Before the Act's December 31, 2019 repeal, a qualifying angel investor could receive a nonrefundable South Carolina income tax credit equal to 35% of a cash investment in a registered qualified busine…
Is a 'consolidated freight charge' for moving goods between a seller's own facilities subject to Colorado sales tax, even if separately stated?
Probably taxable. A 'consolidated freight charge' — a fee for moving goods between the seller's own plants to combine a customer's order into one shipment — escapes sales tax only if BOTH conditions h…
Does Colorado's interstate-commerce exemption apply to lease payments on trucks, and how is the exemption documented?
It can apply to lease payments, but two conditions matter — and the second likely defeats it here. Colorado's interstate-commerce exemption (§ 39-26-712(1)(b)) reaches a LEASE only if the lease is tre…
Did qualifying Illinois charitable hospitals owe Retailers' Occupation Tax on patient food and medicine or employee cafeterias?
No, under the stated conditions. Hospitals meeting Section 2-9's exemption criteria did not incur Retailers' Occupation Tax on food and medicine sold to patients or on cafeteria food sold through faci…
Could a joint account holder undo a New Mexico tax levy when she supplied all the money but had given her deceased brother withdrawal rights?
No, not through the levy protest. Elaine Lopez opened the accounts and made every deposit, but she added her brother Richard as a joint owner and authorized him to withdraw funds. After his death, she…
Could a Florida commercial tenant fully credit tax collected on a sublease when prime-lease tax was higher?
Yes, for the one service-plaza location and month reviewed. Because tax paid on the prime lease exceeded tax collected from subtenants, the tenant received a full credit for the collected sublease tax…
How did Virginia income-tax filing change when it began recognizing same-sex marriages in October 2014?
Virginia began recognizing same-sex marriages valid under any state's law for Virginia income-tax purposes. Legally married couples could file jointly or as married filing separately, and couples who …
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