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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Are customer fees for using permanently installed storage lockers subject to Georgia sales tax?
No. The charges were essentially for nontaxable storage services. The lockers were also permanently attached to buildings and concrete foundations, and removal would cause significant damage, so they …
How can taxpayers check whether an older South Carolina advisory opinion was modified or superseded (per SC IL #14-14)?
Use the citator attached to SC Information Letter #14-14. It helps you determine what effect newer South Carolina advisory opinions have on previously published ones — whether an opinion was modified,…
Could a corporation carry an old Illinois net loss forward only after it missed the return box electing to give up the carryback period?
No. For the pre-December 31, 2003 loss addressed, the election to relinquish the carryback period had to be made on the loss-year return by its extended due date. The corporation did not check the ele…
Could an Illinois resident claim an other-state tax credit attributable only to nonprofessional gambling or lottery winnings?
Generally no credit was attributable to the nonprofessional gambling winnings themselves. Illinois limited the resident credit by the share of base income that would be sourced outside Illinois if eve…
Are the RFID tracking tags that marijuana growers are required to use exempt from Colorado sales and use tax as farm equipment?
They're taxable. The RFID tags Colorado requires growers to attach to track marijuana through the supply chain are subject to sales or use tax when purchased by cultivators. The grower's firm argued t…
How does SC Revenue Ruling 14-5 classify hotel room charges, mandatory fees, optional services, and additional guest charges?
Room charges and mandatory amounts that are part of furnishing accommodations generally fall into the 7% accommodations-tax base. Separately charged room service, laundry or dry cleaning, in-room movi…
Were a surgery center's required software training, bulk eye-surgery devices, distilled water, and documented purchases exempt from Virginia sales tax?
Mostly no. Required training was taxable as part of the medical-records system; bulk-purchased eye devices were not bought for named patients; and distilled water was not an exempt controlled or nonpr…
Were a Florida 501(c)(3)'s gift-shop and proposed thrift-shop sales exempt from sales tax?
No. Its current 501(c)(3) certificate exempted qualifying purchases by the organization, not its retail sales; it was not classified as a religious institution or an organization benefiting minors.
Did transformers, electrical distribution, compressed air, bulk gases, a machining center, and its isolated foundation qualify for Virginia's manufacturing exemption?
Yes. Virginia found the listed equipment directly used in manufacturing: 87% of the general electrical system served production, the compressed air and gases powered production, the machining center c…
Is a landfill operator a manufacturer because it produces and sells landfill gas, and can its gas or leachate systems qualify for Georgia's pollution-control exemption?
The landfill operator was not a manufacturer because it was primarily a waste-management and remediation service business, despite selling landfill gas. Its manufacturing exemption failed, but qualify…
Could a pension payor withhold Illinois tax from a nonqualified pension at a flat 5% without accounting for the recipient's claimed allowances?
No. The payor could withhold Illinois tax from the described nonqualified pension, but Section 701(a)(2) required withholding only on the distribution exceeding the proportionate withholding exemption…
What Virginia tax interest rates applied during the fourth quarter of 2014?
Virginia's fourth-quarter 2014 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 corres…
Would Georgia tax cable-modem internet access, including higher-speed tiers and non-itemized bundles, if the federal Internet Tax Freedom Act expired?
No under the Georgia provisions addressed. Internet access was not a service specifically listed as taxable, regardless of bandwidth. It remained nontaxable in a single-price bundle when the provider …
After Illinois eliminated partnership composite returns, did every nonresident partner have to file an individual Illinois return?
No. For the post-2014 rules described, the partnership had to withhold on Illinois-allocated pass-through income, and that payment was credited toward each partner's estimated liability. A nonresident…
How can a licensee appeal a decision of the Nebraska State Athletic Commissioner or a referee after LB 78 (2013) eliminated the old appeal procedure?
Athletic Commissioner Ruling 2014-1 sets up an interim appeals process for the Nebraska State Athletic Commission (boxing, professional wrestling, and mixed martial arts) after LB 78 (2013) abolished …
Was income earned by an Illinois prepaid funeral trust currently taxable to the trust, or permanently exempt from Illinois income tax?
The income was deferred, not permanently exempt. Section 4a(c) required the trust principal and accrued earnings or losses to be held in suspense because the ultimate recipient was not yet known. The …
Were a franchise regional developer's shares of monthly royalty fees taxable commissions, and which local gross-receipts rate applied?
The commissions were taxable, but the Department used the wrong local rate. BBCB received a share of franchisees' monthly royalty fees only while it remained obligated to inspect and report on the New…
Did Illinois separately recognize foreign subsidiaries that had elected federal disregarded-entity status?
No. A subsidiary disregarded as separate from its corporate owner for federal income-tax purposes was also disregarded for Illinois income tax. Its income and loss became items of the owner, and its p…
Did an Illinois employer have to withhold Illinois income tax from a nonresident engineer working mainly from an out-of-state home office?
No, on the described facts. More than 95% of the engineer's work occurred at a permanent out-of-state home office, and the occasional Illinois client meetings and inspections were incidental to those …
When a landlord renovates a former retail building (a furniture store) into a charter-school campus and leases it back for 30 years, does that renovation contract qualify as exempt under Tax Code § 151.311 -- the same as new ground-up construction?
Yes. In what the Comptroller describes as a question of first impression not previously addressed with these precise facts, the Comptroller ruled that a build-to-suit lease and purchase option under w…
When is propane a taxable 'special fuel' in Colorado, and how must propane dealers license, report, and pay tax on it?
Propane is a 'special fuel,' and any propane that is or may be used to propel a motor vehicle is taxable—so a dealer must be licensed (§ 39-27-104) unless it is certain none of its propane will go to …
What vendor discount applied to Kansas and Oklahoma retailers under the reciprocal use-tax agreement?
For transactions on or after July 1, 2010, Kansas and Oklahoma retailers received a reciprocal 1% discount on timely remitted use tax, capped at $2,500 per month. The revised notice also states that, …
What Kansas compensating-use-tax discount applied to Colorado retailers after July 1, 2009?
Colorado retailers received no Kansas compensating-use-tax vendor discount on Form CT-9U returns filed on or after July 1, 2009. The revised notice also lists later reciprocal rates for Nebraska, Miss…
Did alarm equipment left at customer sites qualify for Illinois's replacement-tax investment credit when the company kept ownership and charged for monitoring?
Not if the company's only ordinary-course receipts came from alarm-monitoring services and equipment leases. Illinois treated a lessor as the equipment's end user rather than a retailer selling tangib…
Did purchases of self-service key-cutting kiosks qualify for Florida's new-business machinery exemption?
No. Although the kiosks appeared to meet the machinery definition, placing one in a big-box store was not opening a new fixed facility, and customers—not the taxpayer—operated the machines to produce …
Are a Georgia colocation center's separately stated cross-connect and electrical-power charges subject to sales tax?
No. Cross-connect access to dark fiber was a nontaxable service rather than a cable lease, and the operator's power charge was not a retail electricity sale because it was not acting as a regulated el…
Could a retired pastor subtract the federally taxable remainder of a Section 403(b) distribution from Illinois income after using part as a housing allowance?
Yes, if the payments originated from a Section 403(b) plan. The portion properly used as a clergy housing allowance was excluded from federal gross income under Section 107 and therefore was not part …
Did a protective claim preserve disputed Land Preservation Tax Credits and transferees' ability to amend 2011 returns beyond the normal deadlines?
Yes. Virginia found undue hardship and treated the protective claim as tolling the five-year carryover while the easement-credit dispute remained pending. The donor and known or future transferees rec…
Did conservation easements qualify for Virginia land-preservation credits when the tracts had already been proffered as open space for residential developments?
No. The tracts had already been set aside as open space through rezoning proffers within residential developments, making the later easements nonqualified donations. Their development value had alread…
Was a Virginia corporate refund return timely when filed within one year after an IRS adjustment to NOL carrybacks, despite the ordinary three-year period?
Yes. The IRS finalized adjustments to 2001-2002 NOL carrybacks in August 2012, and the corporation filed its amended 2000 Virginia return in March 2013. That was within the special one-year period for…
Which in-state activities did SC Revenue Ruling 14-4 identify as creating sales-and-use-tax nexus?
RR 14-4 is a detailed physical-presence nexus checklist covering South Carolina property, inventory, offices, representatives, installation and repair work, affiliates, delivery, printers, advertising…
Could a taxpayer carry underclaimed 2008-2009 Virginia prepaid-tuition deductions into 2010 when each year's contributions were already fully deductible?
No for the prior-year amounts, but Virginia allowed $6,000 for 2010. The taxpayer had two contracts with $3,300 and $2,700 annual contributions, both below the $4,000-per-contract limit. Because the o…
Must a Kansas school collect sales tax on t-shirts it buys and resells to students at cost, even with no profit?
Taxable. A Kansas school is a registered retailer under K.S.A. 79-3602(ii) and must collect sales tax on the goods, admissions, and enumerated services it sells at retail — including t-shirts it buys …
Did Illinois's Telecommunications Excise Tax exempt all interstate calls?
No. The interstate-commerce entry was not a blanket deduction. Illinois taxed an interstate call originating or received in Illinois when the charge went to an Illinois service address, subject only t…
Could Virginia attribute another LLC's sales to the taxpayers' business and treat financed piano inventory as personal withdrawals?
No. Evidence showed the taxpayers' LLC and the manager's LLC were separate legal entities, so the other LLC's sales could not be attributed to the taxpayers. Third-party financing was a normal way to …
Did a Maryland piano seller have to collect Virginia tax merely because a separate Virginia store used the same name?
No. Virginia found no evidence that the Maryland seller and same-named Virginia store were affiliated or the same legal entity, and the seller did not meet the then-applicable sufficient-activity test…
Could Virginia assess one piano retailer for untaxed sales made by a separate Maryland company using the same name?
No. The evidence showed the Virginia LLC and the Maryland piano company were separate legal entities with different owners, despite using the same name and sharing connections to a management company.…
Does Colorado sales tax apply to a separately stated prepaid-fuel charge or to freight/transportation charges on a vehicle?
It depends. A prepaid-gasoline charge is likely NOT taxable as long as it's optional and separately stated, because gasoline itself is exempt from state sales tax — but if the customer is required to …
How did Nebraska sales tax apply to an initial equipment purchase followed by a sale and immediate leaseback?
With contemporaneous, specific financing documents, the user could pay tax on the initial purchase and the later sale and leaseback were not taxed. Without proof that the property was intended for the…
Could a California domiciliary who was an actual Virginia resident claim a Virginia credit for California tax on income earned outside both states?
No. Virginia treated the taxpayer as a California domiciliary and Virginia actual resident, and did not allow a Virginia credit for California tax on income from outside Virginia. She could amend with…
Did a Florida contractor have to charge sales tax for cleaning and repairing commercial kitchen exhaust hoods?
No. The Department found exhaust hood cleaning outside the taxable NAICS cleaning classification and treated hood repairs as real-property improvements; the contractor instead owed tax on taxable repa…
Were admissions to a public-university festival held at public beach venues subject to Florida sales tax?
No. The Department treated the public university as a governmental sponsor and the beach venues as publicly owned recreational facilities, so the specified festival admissions qualified for the exempt…
What is South Carolina's tax interest rate for the period ending December 31, 2014 (per SC IL #14-13)?
3%. SC Information Letter #14-13 sets South Carolina's interest rate on tax underpayments and overpayments at 3% for the period October 1, 2011 through December 31, 2014. Interest is compounded daily,…
Could an acquired Florida corporate group stop consolidated filing, and who kept deferred depreciation subtractions?
Yes. The old affiliated group ceased to exist when an unrelated parent acquired it, so the former subgroup could not keep filing consolidated returns; each original asset purchaser retained its remain…
Did a proposed mortgage-loan master repurchase agreement owe Florida documentary stamp or nonrecurring intangible tax?
Generally no at signing because the agreement contained only contingent, not unconditional, sums certain. Recording its pledged collateral could trigger documentary stamp tax, but not intangible tax a…
Could an off-airport parking operator use audited effective tax rates when it separately stated tax on receipts?
No. Because the operator separately stated sales tax, it had to remit the tax collected and calculate tax at the statutory county rate, using the bracket system for fractional-dollar charges.
Could an Illinois-only leg count as an interstate trip for the rolling-stock exemption?
Generally yes. A carrier-for-hire trip solely between Illinois points could count when the passenger's journey or property's shipment originated or terminated outside Illinois. The carrier had to docu…
Does South Carolina follow the federal final 'tangible property' regulations on capitalizing or deducting property costs (per SC IL #14-11)?
Yes. SC Information Letter #14-11 confirms that for income tax purposes South Carolina will follow the IRS's final 'tangible property' regulations under I.R.C. §§ 162(a) and 263(a) — the rules on when…
Did a military spouse remain a Virginia domiciliary in 2009 after selling her Virginia home and moving abroad with the service member's orders?
No. The spouse sold her Virginia home and vehicles, moved to the foreign duty station, established a home there, used the foreign address on her federal return, and let her Virginia driver's license e…
Were airline ground-support equipment, repair parts, labor, and maintenance contracts exempt from Virginia sales tax?
Yes when sold to a qualifying scheduled common-carrier airline for direct use in its service. Ground-support equipment and repair parts were exempt, separately stated installation and repair labor was…
What were the significant South Carolina tax-law changes from the 2014 legislative session, as summarized by the Department (per SC IL #14-12)?
SC Information Letter #14-12 is the Department's brief summary of the significant tax and regulatory law changes enacted in South Carolina's 2014 legislative session, organized into categories: (1) in…
Were naval-equipment sales Virginia sales when the equipment was built and first tested elsewhere but delivered to Virginia warehouses and a vessel?
Yes. Virginia used destination, not title passage or acceptance testing. Equipment delivered to a federal warehouse was received in Virginia; contractor warehouses were transportation stops, but deliv…
A Tennessee retailer sells trail mixes, glucose tablets, electrolyte drinks, non-alcoholic beer, coupon books, hearing aid batteries, and propane. Which are taxed at the lower 5% food rate, which at the full 7% rate, and which are exempt?
It depends on the item. Most of the retailer's edible products — non-alcoholic cocktail mixes and beer, all three trail mixes, fiber drink mix, food thickener, all the oral electrolyte solutions/powde…
Was an adult whose parents moved to Virginia still a Virginia domiciliary after a permanent foreign transfer, marriage, home purchase, and residence visa?
No. The taxpayer was already an adult when her parents moved to Virginia, and by 2008 her permanent foreign job, home, marriage, and residence process established a new domicile. She had never lived, …
Did wages of a Virginia-resident employee who traveled nationwide belong in an out-of-state company's Virginia payroll-factor numerator?
It depended. If the employee performed no services in Virginia, the wages were not Virginia compensation. If some work occurred in Virginia, wages stayed outside the numerator when State A directed th…
Could a taxpayer overturn a late-penalty assessment and IRS-based estimated assessments after missing the appeal deadline and failing to file returns or records?
Not on the existing record. The 2008 appeal was filed well after Virginia's 90-day deadline, and the 2009-2011 estimates remained presumed correct because returns and supporting records were missing. …
Could a Virginia part-year resident claim credit for New York tax on wages earned after moving to Virginia while continuing to work in New York?
Only if she could prove she was not also a New York resident while domiciled in Virginia. A Virginia part-year resident may receive the credit for tax paid to another state where she was a nonresident…
Could Virginia adjust federal itemized deductions when the taxpayer's Schedule A amounts and supporting records did not substantiate the claimed deductions?
Yes. Virginia matched the state-and-local-tax reduction to Schedule A, recalculated overstated job mileage, and disallowed unsupported property-tax and charitable deductions. The taxpayer received one…
Could an advertising firm remove allegedly isolated printing, software, and asset purchases from Virginia's audit samples without transaction records?
No. Printing-related services were taxable with the printed property, and the firm did not document that software and other purchases were electronically delivered, isolated, or unusual. As a service …
Did Virginia's industrial-processing exemption cover a waste collector's bins, trucks, and equipment used to sort and bale recyclable paper and metal?
No, on the facts presented. The bins and collection trucks were taxable property used in a waste-disposal service. The sorting and baling operation also failed the industrial-processing test because t…
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