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 moving to a foreign country establish a new domicile when the taxpayer retained an available Virginia home, voter registration, and driver's license?
No. Although the taxpayer and her husband established a home and employment in another country, their Virginia residence remained available, and she obtained Virginia voter registration and renewed a …
Could a registered one-way freight hauler keep the reduced weight-distance rate without records proving 45% empty miles and mileage by weight class?
No. RAC Transport's registration as a one-way hauler did not establish eligibility in each reporting period. The reduced rate required at least 45% of a vehicle's New Mexico mileage to be traveled emp…
If I use a grantor trust's swap power to trade tangible personal property I own for trust property of equal value, is that subject to NY sales or use tax?
Yes. Even though a grantor (defective) trust is ignored for income tax, the trust and the settlor are separate taxpayers for sales tax. Swapping tangible personal property to the trust in exchange for…
Is buying a commercial charter vessel subject to NY sales/use tax if it's in NY under six months a year, or if its hailing port reads 'New York, NY'?
The purchase is exempt from NY sales and use tax if the vessel is a commercial vessel used primarily in interstate or foreign commerce -- meaning 50% or more of the receipts from its activities come f…
Could an equipment painter deduct services resold by its customers when one buyer gave the wrong NTTC type and two correct certificates arrived late?
No. Skelsey-Smith's heavy-equipment painting services were resold in the customers' ordinary course of business and the resales were taxed, but the deduction still required timely Type 5 NTTCs. Romero…
Are ticket sales for a nonprofit's dining events subject to NY sales tax, and does calling the charge a 'Suggested Donation' change that?
Yes -- this organization must collect sales tax on its dining-event tickets. An otherwise-exempt organization that holds food-and-drink events with enough regularity, frequency, and continuity is trea…
Is a single-sign-on platform that consolidates and lets users search third-party research a taxable NY information service?
Yes. Although it offers single sign-on, the platform's primary function is to collect, consolidate, and present research from multiple providers -- with search, sorting, and saving tools -- which is t…
Can someone who holds only a remainder interest in a home - where a parent has a life estate and lives there - still qualify for New York's historic homeownership rehabilitation credit?
Yes, at least on two of the credit's requirements. New York held that a remainder interest is an ownership interest under EPTL § 6-5.1, satisfying Tax Law § 606(pp)(5)(A)(ii), and that residing at the…
New York Advisory Opinion TSB-A-14(1)C: Do purchased patents, prototypes and know-how qualify for the QETC facilities, operations and training credit as research and development property or as qualified research expenses?
Purchased patents, trade secrets and know-how are intangible and do not qualify as research and development property for the QETC credit; only tangible prototypes and designs used in research and deve…
Did a hotel preserve its sales-tax appeal and overstate the 90-day exemption for continuously contracted railroad room blocks?
No relief was granted. The hotel's letter arrived within 90 days but was not a complete appeal because it supplied no documentation or legal grounds, so the application was time-barred. Virginia never…
Which equipment was subject to Virginia local machinery-and-tools tax, and what factual issues did the county have to reconsider?
Virginia found the coal silo was not used in manufacturing, while fire-suppression equipment built into the kiln system was taxable machinery and tools. It sent the case back to the county to verify t…
Could a part-year resident receive Virginia's standard deduction after failing to substantiate the larger itemized deductions claimed on her federal return?
Yes. Virginia disallowed the unsupported itemized deductions, but the substantiated amount was below both the federal and Virginia standard deductions. Following the IRS approach used when reviewing f…
Could a retailer rely on a 1997 public document to avoid tax on telephone calling cards sold after Virginia changed the law in 2004?
No. Effective July 1, 2004, Virginia's statutory definition of tangible personal property expressly included telephone calling cards on their initial sale. That change displaced the exemption stated i…
Did foreign software-license revenue and related technical services qualify for Virginia's corporate foreign-source-income subtraction?
Yes. Software was intangible property for Virginia income-tax purposes, and the taxpayer's foreign contracts granted customers licenses to use proprietary software. Development, integration, training,…
Did an Illinois motor carrier have to withhold Illinois tax from nonresident truck drivers who lived and principally worked in another state but sometimes drove in Illinois?
The submitted facts were not enough for a single answer. No Illinois withholding applied if the driver regularly performed assigned motor-carrier duties in two or more states and federal law reserved …
Are a jeweler's charges for certificates of authenticity for its own pieces subject to NY sales tax?
No. Issuing a certificate of authenticity is an information service, but it falls within the exclusion for information that is personal or individual in nature and is not substantially incorporated in…
Which of an organization's four downloadable products qualify as tax-free e-books in NY, and do multiple-device use or a time-limited license change that?
Only one of the four (the study-guide curriculum) qualifies as an e-book and is therefore not taxable as an information service under Department policy -- and that stays true even though it can be rea…
When a Georgia business is reorganized into a new entity under Section 351, can its unused job tax credit carryforward be transferred to the successor entity?
Yes. Although a sale, merger, acquisition, or bankruptcy does not create new job tax credit eligibility in a successor, O.C.G.A. § 48-7-40(g) lets any unused job tax credit be transferred and continue…
Can an airline get a refund of Colorado sales tax on jet fuel it buys (and fuels up) in Colorado but burns on international flights?
No refund. Colorado sales tax applies to jet fuel sold and pumped into an aircraft's tanks in Colorado, even if the fuel is later burned on an international flight. Sales tax is a transactional tax fi…
Could taxpayers keep a $4.4 million conservation-easement valuation when Virginia's independent appraisal valued the easement at about $500,000?
No. Virginia found that the Department's independent appraisal more accurately accounted for the floodplain, creek setback, wetlands, access limits, and other development constraints. It upheld the ap…
Could a real-estate company exclude gross proceeds from selling Florida business property from its corporate-income-tax sales factor?
No. Florida required the gross proceeds in the standard sales factor because the sold commercial property was used in the taxpayer's business and located in Florida. The taxpayer did not prove materia…
Could a corporation exclude all related-party royalty and interest payments from Virginia's add-back merely because the affiliate filed income-tax returns in other states?
No. Virginia limited the exception to the portion of the payments corresponding to the portion of the affiliate's income subjected to tax in other states, as shown by the affiliate's apportionment and…
Did returning to a foreign home and job end Virginia domicile when the taxpayer kept a Virginia home, license, vehicles, voting ties, and family connections?
No. Although the taxpayer returned to a permanent home and full-time work in Country A, he kept his Virginia residence, renewed his Virginia driver's license, maintained vehicle and voting ties, and l…
Were a graphic-design firm's brochures, signs, booklets, and exhibit panels exempt professional advertising services rather than taxable property sales?
Mostly no. Virginia kept brochures, signs, booklets, spec sheets, and other jobs in the audit because the available invoices and work statements did not prove professional media-advertising services. …
When a modular-home manufacturer sells to a builder who installs the home for a homeowner, who collects the sales tax — and how is the 52% rule applied?
It depends on the builder's contract. Colorado taxes only 52% of a manufactured home's purchase price, and a later resale isn't taxed again. If the builder uses a LUMP-SUM contract it's the consumer a…
Is a custom promotional video a taxable sale of property or a non-taxable service, and what about charges for raw footage and project files?
Likely a non-taxable service. Under the 'true object' test, producing a custom promotional video is generally a non-taxable service even though some property (a DVD, thumb drive, or hard drive) change…
Does propane sold to individuals for grills, temporary residential heating, patios, or recreational vehicles qualify for Virginia's domestic-consumption exemption?
Yes, when the propane is for an individual's nonbusiness use and the dealer can substantiate that use. Virginia treated grilling, outdoor cooking, temporary heating of residential spaces or patios, an…
What happens when neither a business nor the city provides a clear record supporting a local property-tax assessment, and who controls an offer in compromise?
Virginia remanded the 2010 assessment because neither the taxpayer nor the city supplied a clear factual and documentary record, and the assessment was more than 600% above the adjusted 2011 amount. T…
Is the full price of a children's party package taxable when one charge covers amusement admission, pizza, drinks, supplies, and party coordination?
Yes. When the single party-package price included play time plus pizza, drinks, a T-shirt, invitations, and party supplies, Virginia treated the entire charge as taxable. The primary purpose being amu…
What nexus rules did Illinois describe for remote retailers in 2014, and are those physical-presence rules still current?
IDOR declined to decide the affiliated companies' nexus because it required an auditor's fact-intensive investigation. The 2014 GIL described then-controlling Quill physical-presence rules, including …
How can taxpayers check whether an older South Carolina advisory opinion was modified or superseded (per SC IL #13-21)?
Use the citator attached to SC Information Letter #13-21. It helps you determine what effect newer South Carolina advisory opinions have on previously published ones — whether an opinion was modified,…
Did an acquisition create a new Virginia consolidated-return election when the buyer itself was not subject to Virginia income tax?
No new election arose. Because the buyer was not subject to Virginia income tax before or after the acquisition, the acquired group's existing consolidated election stayed in effect. The buyer's Virgi…
Could Illinois residents claim a Schedule CR credit when a reciprocal state withheld tax from deferred compensation that state was not entitled to tax?
No, if the reciprocal-state tax was withheld or paid in error. The reciprocal agreement barred that state from taxing the Illinois residents' employee compensation, so the residents had to claim a ref…
Were fuel sales to nonprofit volunteer fire departments exempt as government purchases under Virginia's 2010-2011 motor-vehicle-fuel sales tax?
No. Virginia treated the volunteer fire departments as nonprofit organizations, not governmental entities, and the nonprofit retail exemption no longer applied after the tax shifted to the wholesale l…
New York Advisory Opinion TSB-A-13(11)C: Are a broker-dealer's 'matched principal transactions' principal transactions whose income may be sourced using the production-credit allocation method?
Yes. Through its disregarded registered broker-dealer SMLLCs, the petitioner is a principal, and matched principal transactions in which it bears a risk of loss on the price spread are principal trans…
Can a company that invests $50M+ to expand its Tennessee headquarters and consolidate out-of-state operations claim Tennessee's headquarters-facility sales-and-use-tax credit — and which equipment and which jobs count?
Yes — with conditions, and not every job counts. The Department ruled that a company qualifies for Tennessee's 'qualified headquarters facility' SALES AND USE TAX CREDIT (Tenn. Code Ann. § 67-6-224(a)…
How does Tennessee's franchise & excise job tax credit apply to a company expanding its Tennessee headquarters — what investment and job thresholds apply, how much is the credit per job, and which jobs count?
Yes, with conditions — and the size of the credit depends on whether the company also hits the bigger 'additional annual credit' targets. A company expanding its qualified Tennessee headquarters facil…
Did restaurant franchise royalties qualify for Virginia's unrelated-member add-back exception when the holding company had no comparable direct third-party license?
No. Even accepting that the holding company indirectly derived substantial revenue from unrelated franchisees, the exception also required comparable rates and terms. The holding company had no direct…
Could a corporation exclude all royalties paid to an affiliate from Virginia's add-back because the affiliate reported royalty income in other states?
No. Virginia limited the subject-to-tax exception to the portion of the affiliate's royalty income actually apportioned and subjected to tax in other states. It also refused to consider the valid-busi…
Which reconstruction-contractor purchases could be removed from a Virginia use-tax audit when invoices were missing, mismatched, or showed duplicates?
Virginia removed transactions supported by adequate records and entries shown to be duplicates. It kept purchases where invoices were missing, did not match the audited item, showed no sales tax, or i…
Were gaming points cards and online console memberships subject to Virginia retail sales tax or communications sales tax under the 2013 rules?
No. Virginia treated the cards and memberships as ways to secure online access, not as sales of tangible personal property. It also found that the products were not communications services. Sales in t…
Did a country club owe use tax when employees ate leftover banquet food for free and the club recorded an internal $2 meal allowance?
No. The customers' banquet meals had already been sold and taxed, employees received leftovers without charge, and the $2 amount was only an internal accounting entry that did not affect wages. Virgin…
What are South Carolina's latest per capita income figures used to qualify for tax incentives (per SC IL #13-20)?
SC Information Letter #13-20 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 …
How are South Carolina counties ranked for the job tax credit for 2014, and which counties qualify for the fee-in-lieu and tax moratorium (per SC IL #13-19)?
SC Information Letter #13-19 publishes South Carolina's county rankings for the job tax credit for 2014, together with the counties that qualify for a reduced minimum investment under the fee in lieu …
When could gelatin embolization pledgets be sold tax-free to for-profit and nonprofit Virginia hospitals or clinics?
For-profit hospitals and clinics could buy the devices exempt only when each purchase was specifically for an identified individual patient; bulk purchases did not qualify. Qualifying nonprofit hospit…
Does an employer's failure to withhold enough Virginia tax excuse an employee from filing a resident return and paying the remaining tax?
No. An employer's insufficient withholding did not reduce the employee's duty to report income, file the Virginia return, and pay the full tax. Because the assessment used the best information availab…
Could Virginia residents claim Virginia's other-state tax credit for capital-gains tax paid to India on the sale of Indian real estate?
No. Virginia's credit applied only to income tax paid to another U.S. state, not to a foreign country. The U.S.-India income tax treaty covered specified federal and Indian national taxes and did not …
Did annuity income received from insurance companies in both 2010 and 2011 qualify for Virginia's death-benefit subtraction?
No. Virginia required a federally taxable death benefit from an insurance-company annuity contract that was awarded to the beneficiary in a lump sum. Although the taxpayer's payments came from insuran…
Could an Office of Personnel Management survivor annuity qualify for Virginia's death-benefit subtraction if the beneficiary chose a lump sum?
No. The payment came from a federal retirement plan rather than an annuity contract between a customer and an insurance company. Virginia said that source disqualified the benefit even if the taxpayer…
Did a Form 1099's annuity label make periodic federal retirement survivor payments eligible for Virginia's death-benefit subtraction?
No. The payments came from a federal retirement plan, not an annuity contract between a customer and an insurance company, and they were not paid as a lump-sum death benefit. The Form 1099's annuity l…
Did monthly federal retirement survivor payments qualify for Virginia's annuity death-benefit subtraction when they were not paid as a lump sum?
No. Virginia required the qualifying death benefit to come from an annuity contract, be awarded to the beneficiary in a lump sum, and be federally taxable. The wife received continuing monthly payment…
Did Virginia's mistaken allowance of a federal retirement survivor subtraction for 2007 require the same subtraction for 2008-2010?
No. The periodic federal retirement survivor payments did not meet the annuity-contract and lump-sum requirements. Virginia also found that the earlier 2007 review did not supply binding written advic…
How did Virginia calculate the related-party royalty add-back exception, including royalties subjected to New Jersey's gross-receipts-based tax?
Virginia limited the exception to the portion of affiliate royalty income actually subjected to tax in each state, not 100% of the gross payments. For New Jersey, where the tax base was effectively gr…
Did federal income from deemed partnership sales of Virginia Land Preservation Tax Credits also increase the partner's Virginia taxable income?
No. Virginia law provided that transferring Land Preservation Tax Credits did not create gain or loss, so the partner could subtract the federal income created by the IRS's deemed-sale treatment. But …
Did assembling purchased electronic components into custom military devices qualify as manufacturing for Virginia BPOL tax?
Yes. Although many components had other uses and the process used ordinary tools, the company assembled numerous parts into integrated custom systems whose components were enclosed and not readily ide…
Are separately stated vehicle diagnostic charges exempt when the repair shop also sells and installs replacement parts?
Only standalone diagnosis was exempt. When testing identified a faulty part and the customer authorized replacement, Virginia treated the transaction's true object as the consequential sale of the par…
Which Virginia military-pay subtractions applied when extended-duty combat pay was excluded federally but later National Guard pay was taxable?
The basic-pay and combat-pay subtractions did not apply. Pay earned during extended active duty was already excluded federally as combat pay, while the taxable pay earned later was not extended-duty o…
Could a business that bought homes, hired contractors to renovate them, and resold them be classified as a BPOL contractor?
Yes, potentially. Virginia's BPOL rules included a person who regularly engaged others to perform construction work and a business improving its own real estate for resale. The county had to decide th…
What Virginia tax interest rates applied during the first quarter of 2014?
Virginia's first-quarter 2014 rates were 5% for tax underpayments and 5% for tax overpayments. The reduced rate for qualifying assessments under administrative appeal was 0%. The corresponding federal…
How should Virginia BPOL receipts be assigned when a mobile consultant works from multiple residences?
The consultant's multiple residences were each definite places of business because he maintained no separate office. Receipts should be assigned, where possible, to the residence where each engagement…
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