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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Is an agreement with required title transfer and a $1 purchase option a lease or purchase, and are separately stated interest and installation charges taxable?
The agreement was a purchase, not a lease, because it required title transfer after the payments and a $1 option. After an addendum separately identified principal, interest, and installation, sales t…
Are hand-calligraphy charges taxable when the customer supplies the envelopes, and which calligraphy materials may be bought tax-free?
Calligraphy was taxable fabrication and custom printing whether performed on customer-provided paper or paper supplied by the calligrapher, with tax on the total invoice charge. Ink, paper stock, and …
Were rentals of personal mobility scooters used by handicapped or infirm people exempt from Florida sales tax?
Yes. The Department found the described electric mobility scooters functionally equivalent to powered wheelchairs and therefore specifically exempt as mobility-assistance medical devices.
Were dairy-cow hoof-trimming receipts exempt as livestock handling or deductible as cultivation of agricultural products?
No. Enchantment Custom Hoof Care trimmed dairy cows' hooves to maintain animal health and milk production. It did not sell livestock, and its handling was not performed in anticipation of a sale expec…
Did a military spouse qualify for Virginia nonresident withholding relief by sharing the service member's domicile in another state?
Yes. The preponderance of evidence showed that the taxpayer and active-duty spouse had established and maintained domicile in the same other state. Their legal-residence certificate, vehicle registrat…
Could Virginia residents avoid a 2008 assessment based on an IRS income adjustment by arguing they had not pledged income or contracted with the Department?
No. Virginia starts with federal adjusted gross income, and the IRS reported that the couple had underreported it. They supplied no objective evidence that the federal information was wrong, and argum…
Which Nebraska sales and use tax revenue rulings were superseded by Revenue Ruling 01-14-2?
Revenue Ruling 01-14-2 (sales and use tax), issued June 4, 2014, is a housekeeping ruling that supersedes three older Nebraska sales and use tax revenue rulings the Department considers obsolete -- be…
Could a nail technician paid on Forms 1099 deduct services resold by salons when the salons issued NTTCs after the audit deadline?
No. Thu Hong Nguyen was an independent contractor because the salons paid commissions, issued Forms 1099-MISC, withheld no tax, and provided no unemployment or workers' compensation coverage. Her mani…
Was a prescribed electric-field device used to treat recurrent brain cancer exempt from Florida sales tax?
Yes. The device was designed for medical treatment of human illness and was dispensed to each patient under an individual prescription written by a licensed practitioner.
Did an automobile dealership become liable as a successor when it bought the predecessor's operating assets through a secured-creditor transaction?
Yes. Hi Country acquired the predecessor dealership's inventory, equipment, franchise agreements, goodwill, customer lists, intellectual property, and trade-name rights, then continued a Buick GMC dea…
What surface mining machinery and equipment did Kansas exempt from sales tax in 2014?
Kansas Notice 14-16 (dated June 2014) explains that 2014 House Bill 2378 added new subsection (4)(F) to K.S.A. 2013 Supp. 79-3606(kk)(4), deeming exempt all machinery and equipment used in surface min…
What agricultural construction projects qualify for the new Kansas sales tax exemption?
Kansas Notice 14-13 (dated June 2014) explains that House Substitute for Senate Bill 265 created a new sales tax exemption, K.S.A. 2014 Supp. 79-3606(hhhh), effective July 1, 2014. It exempts sales of…
Which digital fax, email, EDI, and VPN messaging charges were subject to Florida CST or sales tax?
Traditional-fax and qualifying VPN charges could be subject to CST based on Florida equipment sourcing. Email-only, nontraditional digital fax, EDI VAN, reporting, and customization services were not …
Were ceiling-track movable office partitions tangible personal property for resale, or real-property installations making the fabricator liable for use tax on materials?
They were treated as real-property installations. The partitions were attached to ceiling and floor systems, adapted to long-term office use, and not shown to be temporary. The contractor therefore co…
Could a retailer overturn an estimated Virginia sales-tax assessment without keeping sales, invoice, bank, or register records?
No. The retailer discarded records after a few months and could not substantiate claims about meat costs, gradual growth, a competitor's closure, invoices, deposits, or reported sales. Virginia found …
Did a Virginia seller owe Virginia sales tax when out-of-state manufacturers shipped products directly to buyers' locations outside Virginia?
No. The products never entered Virginia, and title and possession passed to the buyers outside Virginia with no use in the state. The sales therefore fell outside Virginia's retail-sales-tax jurisdict…
Did a military spouse prove she shared the service member's out-of-state domicile and qualified for Virginia withholding refunds?
Not on the record submitted. The spouse bought a Virginia home, obtained a Virginia driver's license, registered vehicles in Virginia, used a Virginia address on federal returns, and produced no evide…
Was a lump-sum nonqualified pension payment taxable by Virginia when a part-year resident received it after moving into the state?
Yes. For a part-year resident, Virginia attributed income to the state when it was received during the Virginia-resident portion of the year. The husband's earlier out-of-state employment did not chan…
Did taxpayers receive refunds after paying assessments caused by a reduced transferred Land Preservation Tax Credit?
No. Virginia treated the protective refund claim as an appeal on the merits and denied it. A separate Department determination had already upheld the lower conservation-easement valuation, so the resu…
Did Virginia cancel a 2008 assessment caused by reducing a transferred Land Preservation Tax Credit?
No. A separate Department determination had already upheld the lower conservation-easement valuation as the most accurate appraisal. Because the taxpayers' transferred credit depended on that valuatio…
Did taxpayers receive a 2008 refund after paying an assessment caused by a reduced transferred Land Preservation Tax Credit?
No. Virginia treated the protective refund claim as an appeal on the merits and denied it. A separate Department determination had already upheld the lower conservation-easement valuation, so the resu…
Did housing, subsistence, and other military compensation count when phasing out Virginia's subtraction for basic military pay?
No. Virginia's subtraction and its $15,000-to-$30,000 phaseout used only statutory military basic pay. Housing and subsistence allowances and other compensation shown on a W-2 were not basic pay. The …
What late-filing penalty policy did Virginia announce for surplus-lines brokers filing annual Form 802?
For the policy announced in 2014, Virginia capped the $50-per-day Form 802 late-filing penalty at $250 for a first offense and $500 for a second offense. A third or later offense remained subject to t…
Does hemodialysis equipment qualify for Colorado's durable medical equipment or prosthetic device exemption?
Durable medical equipment — yes (apparently); prosthetic device — doubtful. Prescribed hemodialysis equipment appears to qualify for Colorado's durable medical equipment exemption: it withstands repea…
Could a Virginia resident claim an other-state tax credit for West Virginia tax paid on slot-machine winnings?
Generally no. Slot-machine winnings were not compensation for services and therefore were not earned income. They qualified as business income only if the taxpayer proved that gambling was pursued ful…
Could Virginia decide BPOL and BTPP appeals when the county omitted the required BPOL notice and the taxpayer failed to give 30 days' direct-appeal notice?
No. The county's letter omitted the mandatory BPOL appeal language, but the taxpayer also failed to give the county 30 days' advance notice before treating the local appeal as denied. Virginia lacked …
Is a diaper bundle priced over $110 still exempt if each component, sold separately, is under the $110 clothing threshold?
Yes -- the $269.95 diaper bundle is exempt from sales and use tax. Children's diapers and their components are exempt clothing when sold for less than $110 per item. Because each of the four component…
Could a Virginia corporation exclude all related-party royalties from the add-back because its affiliate filed returns in other states?
No. The exception covered only the portion of royalty expense corresponding to the affiliate's income actually apportioned and subjected to tax in other states, not every royalty shown on those return…
Did a medical-center manager paid on Forms 1099 owe gross receipts tax when she believed she should have been an employee and had no NTTC?
Yes. Joan Dewbre was paid as an independent contractor and received Forms 1099 for management and supervisory work at a medical center. Her services were taxable even if another organization also shou…
Could a nail technician avoid gross receipts tax as an employee or through a late NTTC when the salon owner had already paid tax on his services?
No. The salon owner credibly viewed Johnny Nguyen as her worker, controlled access and scheduling, issued paychecks, and paid gross receipts tax on his services. But Nguyen said he was paid commission…
Were hosted virtual call-center subscriptions and communications charges to Florida customers subject to Florida CST?
No, under the represented architecture. The package included communications services, but bridging, origination, and customer receipt occurred at data-center equipment outside Florida.
Were three tiers of leases for nursing-home and assisted-living facilities subject to Florida commercial-rent tax?
No, for the described facility areas. The first two lease tiers qualified for resale treatment, the operators used the premises for residential care rather than commercial space, and resident accommod…
Could Adecco exclude City of Albuquerque staffing receipts through a Type 9 NTTC, disclosed agency, employee leasing, or out-of-state services?
No. Adecco's timely Type 9 NTTC covered tangible personal property on its face, not staffing services, and good-faith safe harbor could not create a deduction where the City did not resell the service…
Were cable converter boxes issued to customers exempt intangible property rather than assets subject to local Virginia BTPP tax?
Yes. Virginia's 1984 legislative history expressly reclassified cable tuners and converters as intangible property. The Department rejected the city's machine classification and returned the case for …
Were cable converter boxes issued to customers exempt intangible property rather than assets subject to local Virginia BTPP tax?
Yes. Converter boxes were used in the cable-television business and Virginia's 1984 legislative history expressly reclassified tuners and converters as intangible property. The Department returned the…
Which cable-provider assets were exempt intangible property and which remained subject to local Virginia BTPP tax?
Cable converter boxes were exempt intangible property, so the city had to remove them from the 2008 BTPP assessment. The provider did not prove that headend equipment, optical electronics, modems, or …
How should someone who moved from Maryland to Virginia in November 2009 file, and could he claim credit for Maryland wage tax?
He should file 2009 Form 760PY and report only income received during the Virginia-resident period, with prorated exemptions and standard deduction. Because Virginia-Maryland reciprocity exempted a Vi…
How did Virginia apply the true-object test and resale exemptions to mixed tasks under a federal prime contract and subcontract?
Virginia applied the true-object test to each lowest-level mixed task, not the 16-task instruction as a whole. Tasks 3, 14, and 16 primarily sought tangible personal property; their services facilitat…
Did low-wage service work disqualify a disabled federal retiree from Virginia's disability-income subtraction?
No. After reconsidering the federal-annuity rules and additional evidence, Virginia found that the taxpayer's minimum-wage service work was not comparable to his prior federal-government work. He ther…
Were cellular-phone activation fees taxable communications services, and could the provider add a separate audit issue after the appeal deadline?
The phone-linked fees were not taxable communications services because they arose only with a phone purchase, were refunded with a returned phone, and were not charged when customers used their own de…
Were electronic textbooks sold or rented entirely online subject to Illinois sales or service tax?
No. IDOR treated the viewing or downloading of books and similar text over the Internet as an intangible transfer, not tangible personal property. An electronically downloaded book was outside Retaile…
Could a taxpayer challenge a 2000 Virginia assessment in 2012 by demanding that the Department first prove it was correct?
No. The assessment was issued June 6, 2003, but the taxpayer did not appeal until November 2012, long after Virginia's 90-day deadline. Department records also showed earlier notices to the same addre…
When a state university system (the exempt party) is the LANDLORD and a non-exempt LLC is the TENANT building student housing on university land -- the reverse of the usual exempt-tenant/taxable-landlord setup -- does the construction still qualify as an exempt § 151.311 contract, and who can issue the exemption certificates down the contractor chain?
Yes, exempt -- but under a different legal test than the familiar two-prong lease-term test. The Comptroller ruled that a 514-bed student-housing facility built on Texas A&M University System land und…
Under SC Revenue Ruling 14-2, were ordinary utility trailers subject to the maximum sales-tax cap?
No. The ruling said an ordinary utility trailer capable of being pulled by an automobile, minivan, or pickup truck owed the 6% state sales or use tax plus applicable local tax and did not qualify for …
How did Virginia treat unsupported affiliate classifications, corporations without Virginia nexus, and royalties paid to related companies?
Virginia removed affiliates that lacked nexus and positive apportionment factors from the audit and allowed a royalty add-back exception only for the portion tied to affiliate income taxed by other st…
Did leasing an aircraft acquired for resale stop or restart Illinois's 18-month interim-use period?
IDOR did not answer either lease-timing question and only directed the dealer to Section 150.306. The GIL's official synopsis states that when aircraft or watercraft demonstration or interim use excee…
How did Illinois tax a company installing and maintaining railroad-track lubricators, including parts, labor, delivery, and travel charges?
IDOR could not classify every charge without the contracts and invoices. If the company permanently affixed property to real estate, it was a construction contractor and end user owing Use Tax on mate…
Is separately stated U.S. postage for the delivery of direct mail subject to Nebraska sales or use tax?
It depends on whether the postage is separately stated. Revenue Ruling 01-14-1 explains that, beginning April 1, 2014, Laws 2014, LB 867 amended Neb. Rev. Stat. §§ 77-2701.11 and 77-2701.35 to exempt …
How does the Kansas tax credit for the low income students scholarship program work?
Kansas Notice 14-14 (May 1, 2014) explains that Senate Substitute for House Bill 2506 (Sections 55 through 61) created the Tax Credit for Low Income Students Scholarship Program. Beginning with tax ye…
Could mobile paper-shredding and baling equipment qualify for Illinois's manufacturing machinery exemption?
Potentially. Shredders, compactors, conveyors, and balers could qualify when used primarily to make paper into a substantially different material sold at wholesale or retail or leased. IDOR did not de…
Did changing an aircraft's N-number or moving it from a corporation to an LLC trigger Illinois Aircraft Use Tax?
Changing the N-number did not trigger Aircraft Use Tax when no transfer, gift, or purchase occurred. A transfer between separate legal entities, even related ones, generally was taxable, so a corporat…
Could Virginia reduce transferred land-preservation credits when its appraisal valued a conservation easement far below the donor's appraisals?
Yes. Virginia accepted its independent appraisal's approximately $1.6 million easement value rather than the donor's approximately $9.6 million or $12.8 million values. The Department found the donor'…
Could a Virginia corporation exclude all related-party royalties from the add-back based on other-state filings or a valid business purpose?
Not on the record presented. The corporation had to provide the affiliate's out-of-state returns so the auditor could calculate the portion of royalties actually covered by the subject-to-tax exceptio…
How did Virginia sales tax apply to ATM installation, sign replacement, repairs, and delivery for financial institutions?
Virginia treated a business primarily furnishing and installing ATMs or financial-institution security property as a retailer for post-June 2011 work, requiring it to collect tax on the property rathe…
Which Virginia dealers had to make the June 2014 accelerated sales-tax payment, and how did payment, reconciliation, and hardship relief work?
For June 2014, a dealer with at least $48.5 million of taxable sales or purchases in the prior fiscal year generally had to prepay 90% of its June 2013 sales-and-use-tax liability. Payment was due Jun…
Is the sale of an infusion pump for at-home pain management subject to Colorado sales or use tax?
It's exempt — by either of two routes. An infusion pump that delivers medication is exempt from Colorado sales and use tax as a medical/disposable 'infusion' supply when dispensed pursuant to a prescr…
Does an out-of-state S corporation that does IT consulting remotely for a Colorado client have to file a Colorado income tax return?
Probably not on these facts. An S corporation's shareholders must file Colorado returns only if the company does business in Colorado—i.e., it has substantial nexus by exceeding any one threshold ($50…
Is a 'demand charge' on a commercial electricity bill subject to Colorado sales or use tax?
It's taxed the same as the electricity it's part of. A demand charge — the higher rate a utility charges for the ability to draw a large load (here ~74,600 watts) at peak times — is simply part of the…
Are an association's membership fees taxable when membership comes with both goods (a guidebook, a magazine) and services, and is tax refundable if a member cancels?
It depends on the true object. A membership fee can be a taxable sale when the member gets tangible goods (here, an instructor's guidebook, marketing material, and a magazine subscription) for the fee…
Are intrauterine devices (IUDs) subject to Colorado sales or use tax — hormonal versus copper?
Exempt, by two different routes. A hormone-releasing IUD is treated as a prescription drug, so it's exempt from Colorado sales and use tax when dispensed pursuant to a prescription by a licensed provi…
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