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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How did Virginia tax furnished apartment rentals shorter or longer than 90 days, and who paid tax on the furniture?
The provider had to register and collect sales tax on furnished accommodations rented for less than 90 continuous days. Stays of 90 days or more were not taxable; month-to-month stays required collect…
Did Virginia's agricultural sales-tax exemption cover rented water-treatment equipment and salt used to irrigate greenhouse plants for sale?
Yes. The greenhouse grew plants for wholesale and retail sale, and the equipment treated irrigation water to prevent iron from yellowing the plants. Virginia found the rented treatment units and the s…
If one company sells the food and a separate subsidiary provides the cooking and serving labor, are the labor charges taxable catering in NY?
No, the subsidiary's food-preparation labor isn't taxable catering -- provided the two companies stay genuinely separate. Food-preparation services alone aren't a taxable service under section 1105(c)…
What physical, numbering, sales, and recordkeeping standards does SC Revenue Ruling 14-3 set for bingo paper?
Bingo paper used in South Carolina must meet DOR standards for durable and legible paper, statutory card design, random numbers, printed face value, manufacturer identification, serial and permutation…
Were a hotel's mandatory banquet gratuities of 20% taxable when part was retained by the house and the hotel was not treated as a conventional restaurant?
No. Virginia's statute excluded mandatory gratuities up to 20% of the meal price without requiring the full amount to be distributed to employees, and the exemption covered hotels and other places ser…
Was a September 2013 refund claim for tax year 2009 timely when the taxpayers paid by the original due date and filed within Virginia's extension period?
Yes. Because the taxpayers paid the full estimated balance by the May 2010 due date and filed their original return before the six-month extended due date, the three-year refund period ran from that e…
Could an S corporation holding company subtract gain from distributing portfolio-company stock because it lacked a unitary relationship with that company?
No. The company had employees and property, so it was not a passive investment pass-through entity. Managing and disposing of investments was its normal business, and it did not provide clear and coge…
Are single-use osmolarity test cards used to diagnose dry eye disease subject to NY sales tax when sold to eye-care practitioners?
Yes, when sold to providers who use them for compensated care. The osmolarity test cards qualify as medical equipment or supplies under section 1115(a)(3) because they are used to diagnose a medical c…
Does the operator of a coin-operated game room with no admission fee and no other sales need a NY sales tax Certificate of Authority?
No -- the operator is not required to obtain a Certificate of Authority, because he isn't a 'person required to collect tax.' Receipts from coin-operated amusement devices (here a pinball machine, juk…
If a social or athletic club opens membership to the public on a first-come basis, do its dues, initiation fees, and assessments stop being subject to NY sales tax?
No -- the club's dues, initiation fees, and assessments stay taxable. Removing the exclusivity-of-membership clause and admitting the general public does not change the club's status as a 'social or a…
Could Florida hotels treat rooms for nongovernmental exempt organizations as tax-exempt using the proposed documentation?
Yes, if accepted in good faith. The hotels recorded the exempt entity on the folio, kept its valid Florida exemption certificate and a signed guest declaration, and required direct entity payment.
Were the requesting taxpayer's cloud computing, data storage, and related data-transfer usage fees taxable in South Carolina?
No for the specific services described. DOR concluded that the taxpayer's scalable virtual computing service, cloud data-storage service, and associated upload, download, and internal data-movement fe…
Did an economic-obsolescence appraisal prove that a county's percentage-of-original-cost machinery valuation exceeded fair market value?
No. The county uniformly used a statutory percentage-of-original-capitalized-cost method and thoroughly considered the appraisal. The appraisal did not adequately support its economic-obsolescence and…
Were dollar-for-dollar warehouse operating-expense reimbursements excluded from BPOL gross receipts as agency funds or loan repayments?
No. The reimbursements were part of the operator's cost-plus warehouse-management receipts. The operator lacked stated client-vendor contracts and segregated accounting required to show agency, and th…
Did pharmaceutical salespeople, Virginia clinical trials, and employee recruiting and lobbying create Virginia corporate-income-tax nexus?
The ordinary sales solicitation appeared protected by P.L. 86-272, but Virginia could not decide the overall nexus question on the submitted facts. The company had to test whether clinical-trial provi…
How did a vending operator with machines at both nonprofit schools and for-profit businesses have to report Virginia sales tax?
The nonprofit-only rule did not apply because some machines were at for-profit businesses. Under the historical rates in the ruling, the operator generally had to remit 7% on the wholesale cost of all…
Did documentation support refunds for Virginia sales tax allegedly paid in error to two vendors during an audit period?
Only in part. Virginia found the records sufficient for Vendor A and allowed a refund with interest, but denied the Vendor B claim because the taxpayer did not prove that tax had been paid erroneously…
Are Kansas charges for internet access taxable, and does it matter if the federal ITFA moratorium expires?
Not taxable — and that won't change even if the federal moratorium lapses. Kansas sales tax applies to telecommunication services under K.S.A. 79-3603(b), but K.S.A. 79-3602(aaa)(6) defines 'telecommu…
In a stack of affiliated REITs and LLCs, which entities are 'captive REITs,' which are 'public REITs,' and who has to add back the dividends-paid deduction and file a combined Tennessee franchise and excise tax return?
It depends on each entity's ownership and how its shares trade. A REIT is a 'captive REIT' if it has a federal REIT election, is at least 80% owned (directly or indirectly) by one entity or individual…
A company's stock was bought in a deal where the parties made a federal § 338(h)(10) election, so the company was 'deemed' to acquire its own manufacturing assets. Can it claim Tennessee's franchise & excise industrial-machinery credit on those assets?
No. A company whose stock was bought in a deal where the buyer and seller jointly made a federal I.R.C. § 338(h)(10) election cannot claim Tennessee's franchise & excise industrial-machinery credit on…
A company sells a hosted 'cloud collaboration' service that instructs and augments a customer's phone equipment for voice, video, messaging, presence, and conferencing, keeping all hardware and software on its own out-of-state servers. Is that service subject to Tennessee sales and use tax, and how is it sourced and rated?
Yes — it's taxable, but as telecommunications, not software. The company's Cloud Collaboration Service (hosted voice, video, messaging, presence, and conferencing that instructs and augments a custome…
If I bill taxable and exempt goods together as a single bundled charge, can I tax only the taxable portion or treat it as an exempt service?
No -- the entire bundled charge is subject to sales tax if any item in it is taxable. Billing taxable and exempt tangible personal property as one combined per-day charge does not transform the sale i…
What result is verifiable from the published order in Timothy S. Hunt v. Commonwealth of Virginia?
The Norfolk Circuit Court held that sovereign immunity prevented it from hearing the requested declaratory-judgment action. It sustained the Commonwealth's demurrer without leave to amend and dismisse…
For an existing Texas cloud-computing data center planning a 100,000+ square foot expansion, seven questions: does hosting customer data violate the exemption's single-occupant rule; is the pre-2013 existing center itself exempt; can the expansion qualify on its own; can shared jobs/investment/electricity/equipment be split between the old and new parts; do contractor-staffed jobs count; does providing some telecom service disqualify the project; and is a backup generator outside the building eligible?
A foundational, seven-question ruling on the qualifying data center exemption (Sec. 151.359). Key holdings: (1) hosting customers' data and letting them run their own programs on the operator's own se…
Would Nebraska have begun taxing internet-access charges if the federal Internet Tax Freedom Act moratorium expired in 2014?
No. The Department said Nebraska taxed only specifically enumerated services, and internet access as then defined by federal law was not among them. Providers and purchasers therefore would not have c…
Is the fee to enter walk-through haunted funhouses an exempt charge to use a 'device,' or a taxable admission to a place of amusement?
It is taxable. The fee is an admission charge to a 'place of amusement' under Tax Law section 1105(f)(1). Patrons pay to enter the physical space of the funhouses, move through them by their own locom…
Is assistive software that lets a severely disabled person operate a computer with a single switch (eye blink, breath puff) exempt as a prosthetic device?
Yes -- it qualifies as a prosthetic device exempt from sales and use tax under Tax Law section 1115(a)(4) when bought by a person with a disability. The software replaces the lost motor function the p…
Is an online food-ordering platform a vendor or co-vendor of the restaurant meals, and are its fees to restaurants taxable?
No -- the platform is not a 'vendor' of the restaurant meals under Tax Law section 1101(b)(8), and it cannot be designated a co-vendor jointly liable for the sales tax. It provides internet advertisin…
Is the salary a U.S. Foreign Service officer earns while assigned to the U.S. Mission to the United Nations in New York City subject to New York State personal income tax?
No federal or state law exempts Foreign Service wages from New York tax the way Tax Law § 631(e) exempts military pay. If Petitioner is a nonresident, his USUN wages are New York source income taxable…
What did the 2014 Kansas legislation change for motor fuel and natural gas taxes?
Kansas Notice 14-15 (revised, dated August 19, 2014) summarizes two 2014 motor fuel bills. House Bill 2057 (effective July 1, 2014) amends K.S.A. 79-3492 to add energy-equivalent conversion formulas (…
Could a nonresident use Illinois passive losses before federal law allowed them, and how were released losses sourced to Illinois?
No loss was available for Illinois before it was allowed in federal adjusted gross income. Illinois had no separate modification overriding the federal Section 469 limitation. When a suspended passive…
Would IDOR decide which lodging businesses owed a county accommodations tax and the Illinois hotel tax?
IDOR would not address the county ordinance because it did not administer that local tax. For the state hotel tax, the GIL gave the general rule—6% of 94% of gross room-rental receipts, excluding perm…
Does a maintenance provider owe Georgia tax when customer-owned replaced parts become its property and are later refurbished and reused?
Yes. Under the maintenance agreement, ownership of removed parts passed from the customer to the provider in exchange for consideration, creating a retail sale because the provider did not acquire the…
Could retirees count a 2012 balance paid in 2013 as a 2013 estimated payment while excluding their January 2014 quarterly estimate?
No. Roger and Louise Bumstead's $810 payment made in April 2013 paid their 2012 income-tax balance; its calendar-year payment date did not turn it into a 2013 estimated payment. Conversely, their Janu…
Could a nationwide commercial-property owner use separate accounting for one Illinois rental property instead of Illinois's statutory apportionment formula?
Not on the submitted record. Owning an identifiable Illinois rental property and providing a property-specific income schedule did not show that the statutory formula failed to fairly represent the ma…
Could a manufacturer force machinery revaluation using depreciation schedules while refusing the county's requested federal and Virginia returns?
Not yet. The county could require complete tax returns and schedules to verify original capitalized cost, and the manufacturer's depreciation schedules were insufficient. Virginia found the denial pro…
Did a taxpayer living abroad remain a Virginia resident in 2009 because she kept a Virginia license and voter registration?
No. After weighing all evidence, Virginia found that the taxpayer abandoned her Virginia domicile and established domicile in another country by 2005. Selling her Virginia home and vehicle and living …
How did Illinois answer a 2014 sales-tax survey on nexus safe harbors, special charges, local taxes, and virtual currency?
Illinois reported no nexus safe-harbor zones. Retained restocking fees were not taxable gross receipts, but the customer received all sales tax back. Handling was taxable; a genuine separately contrac…
Was a hotel's full contract charge for canceled rooms and meals taxable when the agreement labeled it liquidated damages plus applicable taxes?
Yes. The customer remained obligated to pay 100% of the contracted rooms, food, and beverages as liquidated damages plus applicable taxes. Virginia treated the balance, after credit for services the c…
Who collected Virginia tax when an out-of-state consignor sold goods for resale to a separate online seller that lacked Virginia nexus?
Under the 2014 facts, neither company collected tax on the retail sale. X did not sell to Virginia consumers and was not a Virginia dealer; Y made the consumer sale but had no Virginia nexus. Y should…
Did periodic moves to another state, without a permanent home or steady job there, establish a new domicile outside Virginia for 2009?
No. The taxpayer moved between Virginia and State A as employment required, but did not establish a permanent abode, steady employment, or significant State A ties beyond a vehicle registration. Her V…
Could a Florida corporate group end consolidated filing after its businesses, revenue mix, and membership changed?
Yes. The Department found the group's changed business focus, service growth, acquisitions, divestitures, and altered membership were good cause, subject to four conditions.
Could a Florida corporate group stop filing consolidated returns after major changes in its business and group structure?
Yes. The Department found the group's substantial growth and changed business focus were good cause to discontinue consolidated filing, subject to effective-date and deferred-item conditions.
Were separate closed-end truth-in-lending and loan/security documents subject to Florida documentary stamp tax?
No, while unrecorded. Neither document contained a signed promise to pay a sum certain, and a reference did not expressly incorporate the other form; filing or recording either security document would…
How did Illinois's 2014 Telecommunications Excise Tax guidance treat Internet access, lit fiber, and dark-fiber leases?
During the federal Internet-access moratorium then ending November 1, 2014, qualifying Internet access and lit fiber used by ISPs to provide it generally were not taxable. Other telecom services, incl…
Was federal tobacco excise tax included in the wholesale-price base for Illinois Tobacco Products Tax?
Yes. The federal excise tax was imposed on the manufacturer or importer and treated as the manufacturer's cost of doing business. It was included in wholesale price for Illinois Tobacco Products Tax w…
Did a couple living in their out-of-state home for medical treatment reestablish Virginia domicile because they owned a Virginia townhouse and used its address?
No. The couple moved into their State A home in 2009 so the husband could receive nearby hospital treatment. Although they owned Virginia property, registered two children's vehicles there, and used a…
What did rescinded Illinois GIL ST 14-0041 say about Illinois-only rolling-stock trips?
Historical only—ST 14-0046-GIL rescinded this letter. ST 14-0041 had said an Illinois-only carrier-for-hire trip could generally count when the passenger journey or property shipment originated or ter…
What did rescinded Illinois GIL ST 14-0040 say about nonprofit hospital patient and cafeteria sales?
Historical only—ST 14-0048-GIL rescinded this letter. ST 14-0040 had said an exclusively charitable nonprofit hospital with an IDOR exemption number did not owe Retailers' Occupation Tax on patient fo…
Did unsupported factual disagreements and previously requested but unproduced records justify reconsidering Virginia's 2005-2010 income-tax assessments?
No. The taxpayer did not satisfy a reconsideration ground or provide new documentation supporting nonresidency or disputing Virginia-source income. State A records contradicted his license claim, he r…
Did a timely appeal of a foreign-source-income adjustment preserve unrelated audit issues that were first raised more than 90 days after assessment?
No. The original timely appeal challenged only the foreign-source-income subtraction. Because the taxpayer did not identify the other alleged audit errors within 90 days of the December 2011 assessmen…
Was a manufacturer's separately stated consolidated freight charge for moving goods between its own plants taxable?
Yes. Moving products from one company facility to another to consolidate a customer's order was incoming freight and a retailer cost of doing business. The charge remained part of taxable gross receip…
Could a corporation obtain administrative relief after appealing Virginia corporate-income-tax assessments beyond the 90-day deadline?
No administrative appeal relief was available because the corporation filed on March 28, 2014, after both 90-day deadlines, and it did not identify an assessment error. Virginia instead gave it 30 day…
Could Virginia residents claim credit for Pennsylvania tax on an independent-contractor honorarium for teaching a university course abroad?
Only if the couple was actually liable for Pennsylvania tax. The husband appeared to be an independent contractor, so the honorarium was not employee compensation covered by reciprocity. But because h…
Did Virginia apply a Fairfax County circuit-court ISP equipment exemption statewide, and which purchases qualified for a refund?
No. Virginia continued to construe the ISP equipment exemption narrowly and declined to apply the Fairfax County Cisco decision statewide. It allowed a refund, with interest, only for equipment the au…
Did Virginia communications tax and the Internet Tax Freedom Act exempt activation fees for mobile plans providing only Internet access?
No. Internet access itself was not taxed, but Virginia treated activation and connectivity as separate taxable communications services. The Department also found that connectivity was not an incidenta…
Were Internet reactivation charges taxable, were cable rights-of-way fees payable to Virginia, and could a missed-return penalty be waived?
Virginia upheld all three audit issues. Internet reactivation charges were taxable communications services even though Internet access itself was not taxed; the cable operator had to remit its rights-…
Did a telecom repair pricing agreement qualify for the rule taxing only half of a parts-and-labor maintenance contract?
No. The agreement set prices for optional repair and replacement transactions but imposed no predetermined fee or total charge when signed. It was a pricing agreement, not a qualifying maintenance con…
Did a telecom repair pricing agreement qualify for the rule taxing only half of a parts-and-labor maintenance contract?
No. The agreement set prices for optional repair and replacement transactions but imposed no predetermined fee or total charge when signed. It was a pricing agreement, not a qualifying maintenance con…
Did Virginia sales tax remain due on the remaining payments under a noncancellable equipment lease after the customer returned the equipment early?
Yes. The four-year lease was noncancellable and required payment despite dissatisfaction. Returning the equipment after one year did not eliminate the remaining gross proceeds, so the out-of-state les…
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