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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Starting January 1, 2025, does Illinois Retailers' Occupation Tax apply to leases of tangible personal property, and how is the tax on lease payments sourced?
Yes. Effective January 1, 2025, Illinois treats most equipment leases as taxable retail sales, so lessors owe State and local Retailers' Occupation Tax on lease receipts (with an exception for titled …
For Tennessee franchise and excise tax, where does a manufacturer source drop-shipment sales — to the third-party merchant it bills, or to the end customer who receives the goods?
To the end user. The Department advised that an out-of-state manufacturer selling through third-party merchants sources its sales to where the end customer is located for Tennessee franchise and excis…
The auditor's sample included some materials I bought knowing a customer would immediately buy them from me — can I get those specific purchases removed from an estimated assessment?
Yes, partially — two of the three disputed purchases were removed from the audit sample because the Taxpayer proved it knew, at the moment of purchase, that a specific customer would immediately buy t…
My audit includes a building permit charge and two big-box retailer purchases I say were already taxed — plus a broader dispute over use tax on materials I already collected sales tax on. What can be fixed?
Mixed result — the case is being sent back for review of the new one-time erroneous-sales-tax credit, one disputed audit exception (a building permit) was removed outright, but two other disputed reta…
I install garage doors and collected sales tax from my customers the whole time — now I'm assessed use tax on the same materials. Is there any relief?
Possibly — this is another case-by-case referral for Virginia's brand-new one-time erroneous-sales-tax credit, applying the same doctrine as several companion rulings issued the same week. A garage do…
My corporation owes back sales tax, litter tax, and withholding tax from years after I sold my ownership stake and resigned — can the Department come after me personally for it?
No — because the Taxpayer had already sold 95% of the company and resigned as an officer, director, and employee well before the tax periods the corporation failed to pay, the Department found he wasn…
I sell and install floor coverings and cabinetry, collecting sales tax on everything — now I'm being assessed use tax too on the materials I installed. Is there any relief now that the law has changed?
Possibly, through a case-by-case field audit review under Virginia's brand-new one-time credit — but the underlying use tax assessment itself was correct, because this business was a 'dual operator' u…
If my utility passes through a municipal franchise fee on my gas or electric bill, is that fee subject to Colorado sales tax?
Yes. A municipal franchise fee — the charge a city imposes on a utility for using its streets and rights-of-way, often passed through to customers — is part of the taxable purchase price of commercial…
Which canned and bottled coffee beverages were exempt under Florida TAA 24A-020?
The product-by-product table classified 44 of 48 beverages as exempt coffee products and items 5-8 as taxable soft drinks. Coffee being the first ingredient did not automatically decide taxability; ot…
Does Illinois charge sales tax on a video game's online subscription, in-game items, and virtual currency?
No. Illinois ruled that a video game publisher's monthly online subscription fees, in-game items (cosmetics, boosts, name changes, expansions), and virtual currency are all exempt from Retailers' Occu…
How do South Carolina's credits for rehabilitating certified historic and owner-occupied historic structures work?
South Carolina offers two nonrefundable historic-rehabilitation credits. A project that qualifies for the federal § 47 credit generally receives a 10% state credit, with an election for 25% capped at …
I install traffic-management and tolling equipment on highway gantries for VDOT — is that equipment 'real property' I owe use tax on, or does it stay tangible personal property I can buy and resell tax-exempt to the government?
The equipment stayed tangible personal property, not real property -- because it was designed for easy removal and a short 5-to-7-year service life rather than to last for the life of the highway gant…
My audit was closed using estimates from my tax returns because I couldn't produce records in time — now that I actually have the records, can I get a fresh look?
Yes — because the Taxpayer now says the previously missing records are available, the Department is sending the case back to field audit staff for a fresh review, rather than treating the earlier best…
What Illinois sales tax rate applies to food, and does that rate apply to tobacco-free snuff-alternative products?
Food sold at retail for off-premises consumption is taxed at Illinois's low State rate of 1% plus applicable local taxes, per 86 Ill. Adm. Code 130.310 -- but this GIL does not actually decide whether…
Starting in 2025, do Illinois retailers have to collect sales tax based on where a customer receives the goods, and do businesses that lease equipment now owe Retailers' Occupation Tax on lease payments?
Yes to both. Effective January 1, 2025, retailers with a physical presence in Illinois must source sales to the Illinois location where the customer takes delivery or possession (not just their own lo…
I manufacture and sell window blinds from Virginia showrooms, sometimes with installation by an outside company -- do I collect sales tax, pay use tax, or both, and how do I tell which applies?
It depends on whether a particular sale includes installation, and — for the seller's overall business — which activity (installed jobs or plain retail sales) makes up most of its gross receipts. A ma…
I sold dental prosthetics tax-exempt to a customer who checked the medical-exemption box on their certificate -- why did the state still assess me use tax on those sales?
Because the durable medical equipment exemption only applies when the seller can show, at the time of the sale, that the specific item was purchased for a particular, identifiable patient -- and this …
The IRS already adjusted my federal return for the same year Virginia is auditing -- doesn't that mean Virginia's assessment is wrong?
No — not when the IRS transcript actually confirms the same result. A husband and wife who filed a joint 2020 Virginia return couldn't substantiate business expense deductions claimed on their federal…
My representative was supposed to mail my Virginia investment-credit application but it arrived after the deadline -- can the Department make an exception?
No — this is a near-identical companion to the same-day P.D. 24-135: a taxpayer's representative filed the application for Virginia's qualified equity and subordinated debt investment credit (Va. Code…
The person who prepared our Research and Development tax credit calculations died before the deadline, delaying our application by six weeks -- can Virginia excuse the late filing?
No — even a genuinely sympathetic reason for a delay, like the death of the person responsible for preparing the credit computations, doesn't excuse a late application for Virginia's Research and Deve…
I moved out of state for work years ago and pay taxes there now, but I still have a Virginia driver's license and a house I visit regularly — does Virginia still consider me a resident?
Yes, likely -- because the taxpayer kept renewing his Virginia driver's license and returned regularly to a Virginia residence he retained, the Department found he hadn't proven he abandoned his Virgi…
I invested in a qualified small business and missed the April 1 deadline to apply for Virginia's investment tax credit because my representative mailed it late — can the deadline be excused?
No — the April 1 deadline for Virginia's qualified equity and subordinated debt investment tax credit is a hard deadline with no exceptions, even when a taxpayer's own representative was responsible f…
I believed the letters approving my business's investment as credit-eligible meant I didn't need to separately file the credit application by the deadline — can Virginia excuse the late filing?
No — Virginia's April 1 deadline for the qualified equity and subordinated debt investment credit is a hard deadline, and believing that other paperwork already covered the requirement doesn't excuse …
I withdrew money from my Thrift Savings Plan, and part of my contributions were already taxed by another state — can I subtract that portion on my Virginia return?
Yes, partially — Virginia allows a subtraction only for the portion of a retirement distribution that traces back to contributions that were both deductible for federal tax purposes AND already taxed …
The Department ruled against me on my residency dispute, and I found six other cases where taxpayers won similar arguments — can I get my case reconsidered on that basis?
No -- simply disagreeing with the result, even by pointing to six other cases where taxpayers WON similar domicile arguments, doesn't meet any of the four narrow criteria Virginia requires for reconsi…
I manufacture and install signs, including for churches -- am I taxed as a contractor consuming the materials, or as a retailer selling tangible personal property, and does selling to a church change anything?
A manufactured sign is taxed as tangible personal property sold at retail, not as a contractor's consumed materials — and selling one to a church doesn't make it tax-exempt. A Virginia sign manufactur…
Can a payment processor's fees, or the retailer's own credit card fees, be excluded from gross receipts subject to Illinois Retailers' Occupation Tax?
No. Illinois treats processing charges, credit card fees, and other costs of doing business as part of a retailer's taxable gross receipts, even if they are separately stated on the customer's bill. U…
Does Illinois Retailers' Occupation (Sales & Use) Tax apply to out-of-state retailers selling to Illinois customers, and to leases of registered trailers, starting in 2025?
Yes. Starting January 1, 2025, an out-of-state retailer that maintains a place of business in Illinois is treated as selling at retail at the Illinois delivery location and owes Illinois Retailers' Oc…
My e-filed corporate return was rejected and refiled a day late because I forgot a schedule -- does that shorten my three years to file an amended return, and do I have to add back interest on a loan I used to buy stock?
The corporation won on both issues. First, its 2013 return had been electronically filed on the extended due date but was automatically rejected by Virginia's e-filing system for missing a required sc…
I missed electing Virginia's manufacturer's single-sales-factor apportionment method on my original corporate return -- can I still make the election on an amended return and get a refund?
Yes, under a 2023 Virginia Court of Appeals precedent — a corporation can make the manufacturer's modified (single-sales-factor) apportionment election on an amended return, not only on the original r…
What is the Kansas state sales tax rate on food starting January 1, 2025?
Kansas Notice 24-21 reminds retailers that the state sales tax rate on food and food ingredients drops to 0.0% on January 1, 2025 -- the final step of the phase-out enacted by 2022 House Bill 2106 (K.…
Starting January 1, 2025, does Illinois still charge state sales tax on leases already subject to Chicago's Personal Property Lease Transaction Tax?
No. Once Illinois' new lease tax takes effect January 1, 2025, gross receipts from a lease already subject to Chicago's Personal Property Lease Transaction Tax are exempt from the State and Department…
Can I get late-filing penalties waived if COVID disruption and unanswered calls to the tax department kept me from filing my gross receipts tax returns on time?
No — the penalties and interest stand. Two related dental-practice companies (6588 East Main Street Farmington Professional and 3501 North Butler Avenue Farmington Professional) failed to file their N…
Were revenue-share payments for kiosk space in retail stores taxable under Florida TAA 24A-019?
Yes. The payments were consideration for a license to use and occupy Florida real property. The store agreements provided kiosk locations, restricted the operator's activities, and required revenue-sh…
When did Florida TAA 24A-018 treat a real-property contract as a retail sale plus installation?
Only when every incorporated material was described, itemized, and priced before work began and the purchaser took title and risk of loss as materials were delivered. Contract A could qualify if those…
Was a palladium purchase exempt under Florida's precious-metals exemption in TAA 24A-014?
No. The exemption named gold, silver, and platinum bullion but not palladium. Because exemptions are strictly construed and palladium was a distinct metal not listed, its sale or purchase remained tax…
What are South Carolina's latest state and county per capita income figures for tax-incentive purposes (per SC IL #24-20)?
SC Information Letter #24-20 (December 3, 2024) publishes South Carolina's most recent per capita personal income figures used to test tax incentives. The state figure is $57,332. The letter also list…
My Illinois trust's only income is interest from a nonqualified annuity, distributed entirely to a nonresident beneficiary -- does the trust have to withhold Illinois pass-through tax on that distribution?
No -- because the annuity income is nonbusiness income that Illinois allocates away from the state for a nonresident beneficiary, the trust has no IITA Section 709.5(a) withholding obligation on it; i…
What aircraft parts and foreign-aircraft repairs qualified for Florida's repair exemption under TAA 24A-017?
Components of an aircraft and sets of articles or physical resources that equip it could be parts or equipment. Aircraft of foreign registry received the same repair exemption, documented with make, m…
What project-income method did Florida approve for the Capital Investment Tax Credit in TAA 24C1-004?
Florida approved a yearly jobs-change factor: project new-to-Florida jobs to date divided by the taxpayer's jobs, multiplied by the Florida portion of total net income. A separate pro forma schedule a…
What project-income method did Florida approve for the Capital Investment Tax Credit in TAA 24C1-003?
Florida approved treating the difference between the group's annual corporate income tax and a five-year average imputed tax liability as project tax. The average used a 5.5% rate on tentative apporti…
Could one purchase order with estimated delivery dates qualify for Florida's $5,000 surtax cap under TAA 24A-016?
Yes for the sample purchase orders. Their delivery timelines and completion dates documented one sale, and separately described quantities of distinct items qualified as bulk sales. Separate delivery …
What date controlled Florida's 2024 Freedom Month exemption for fitness-club membership dues under TAA 24A-015?
The payment date controlled. Dues paid from July 1 through July 31, 2024 for membership occurring through December 31, 2024 were exempt, regardless of when the invoice was created.
When a sign company makes and bolts an illuminated storefront sign to a building, is the sale and installation subject to Tennessee sales tax, or does the sign become real property?
No — the sign does not become real property. The Department ruled that an illuminated channel-letter sign bolted to a storefront remains tangible personal property, so the sign company's charge to mak…
Are the consulting, setup, and website fees a company charges to run an employee-rewards program taxable in Tennessee — and what about the transaction fees, merchandise, and gift cards?
Mostly not. The Department ruled that the consulting, startup, and website-design/configuration fees a company charges to set up and run an employee-recognition rewards program are NOT subject to Tenn…
What wage levels must a Nebraska Advantage Rural Development Act or Microenterprise Tax Credit Act applicant meet for applications filed on or after January 1, 2025?
For applications filed on or after January 1, 2025, the Nebraska Advantage Rural Development Act required wage level is $19.29 per hour, and the Nebraska Advantage Microenterprise Tax Credit Act wage …
Does a Georgia business owe Georgia sales tax on prewritten (canned) software delivered on USB keys it picks up in Georgia, even if the software is later distributed to employees outside Georgia?
Yes. Prewritten (canned) software sold on a tangible medium such as USB keys is taxable personal property in Georgia. Because the customer takes possession at the seller's Georgia location, the sale i…
Can a SaaS logistics company buy the cloud hosting services it uses to run its software tax-free under Texas's resale exemption, since it charges customers a monthly access fee?
No. Texas ruled that a logistics-software company's purchases of cloud hosting services don't qualify for the resale exemption, because the company uses the cloud services itself to run its software a…
Does Illinois sales tax apply to locally installed software licenses, and what has to be in the license agreement for the sale to be exempt?
Generally yes. Illinois taxes sales or licenses of canned (prewritten) computer software unless the license agreement meets all five criteria in 86 Ill. Adm. Code 130.1935(a)(1) — including a written …
If New Mexico's tax department appeals my protest win and loses, can I recover my attorney fees — and how are they calculated?
Yes. After Process Equipment & Service Company won its underlying tax protest and the Court of Appeals affirmed, New Mexico law (NMSA 1978, Section 7-1-25(D)) entitled it to reasonable attorney fees f…
If I sell my used car myself and buy another, how is Kansas sales tax figured?
Kansas Notice 24-19 explains 2024 House Bill 2098, which, for transactions on and after January 1, 2025, gives an individual a trade-in-style tax break even when they sell a used motor vehicle themsel…
How much is the Kansas adoption tax credit for 2024 and later?
Kansas Notice 24-20 explains how 2024 House Bill 2465 changed the Kansas adoption income tax credit under K.S.A. 79-32,202a. For tax years 2014 through 2023, the earlier credit rules still apply. Begi…
What South Carolina tax interest rate applies for January 1 through March 31, 2025, and what rate is paid on eligible refunds?
The listed South Carolina interest rate for tax underpayments and overpayments drops to 7% for the period January 1 through March 31, 2025 (down from 8% for the prior period ending December 31, 2024).…
My solar company's sales tax assessment includes sales I say were shipped to out-of-state customers, but I couldn't produce the invoices during the audit -- can I still get the assessment corrected if I find the paperwork now?
The assessment stands for now, but the taxpayer gets one final 30-day opportunity to prove its case. A solar power systems company was audited and assessed sales and use tax on sales, purchases, and a…
My company pays royalties to an affiliate that in turn pays a related company for research services -- can I reduce my Virginia royalty add-back for the R&D portion, and how much of a 'subject to tax' exception do I get if the affiliate paid tax on that income elsewhere?
A mixed result on three separate issues. A corporation paid royalties to an affiliate (Affiliate A) under a contract based purely on a percentage of revenue, with no research-and-development provision…
I'm listed as a corporate officer and minority shareholder of a restaurant, but I only ever worked in the kitchen -- can the state make me personally pay the restaurant's unpaid taxes?
No — because his actual role never touched the corporations' finances or tax obligations at all. Two affiliated restaurants were assessed delinquent litter tax, withholding tax, and retail sales and u…
I run a flooring company that sells and installs floor coverings, and treated every sale as a taxable retail sale -- now I owe use tax too. If I later resell inventory I already paid tax on, how do I avoid paying tax on it twice?
A retail flooring company that sold and installed floor coverings, treating every transaction as a taxable retail sale, was correctly assessed use tax because it was actually a 'dual operator' under 2…
I missed the 90-day deadline to appeal my corporate tax assessment because we'd just been acquired, moved offices, and then hit a pandemic shutdown -- can Virginia still hear my appeal?
No — Virginia's 90-day deadline to appeal an assessment is measured from the date the assessment is MAILED to the taxpayer's last known address, and it doesn't bend for good-faith administrative disru…
I paid use tax on my company plane when we moved to Virginia, then years later got charged a separate aircraft tax to license it -- can I get the earlier payment refunded as a double payment?
No — even though the Department, on reconsideration, agreed its earlier ruling had wrongly found the refund request untimely, the taxpayer still couldn't prove it was entitled to a refund on the merit…
My client, a farmer, died in the same year they claimed 100% federal bonus depreciation on a farm building -- can the estate take Illinois's offsetting Line 18 subtraction on Form IL-4562 to reverse that addition?
No -- the Department concluded that a taxpayer's death does not count as a 'transfer or disposition' of the property under IITA Section 203(a)(2)(AA), so the Line 18 subtraction that would otherwise r…
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