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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Was a Section 501(c)(3) research nonprofit exempt from Virginia local BPOL tax?
Yes. Because the organization was recognized under Section 501(c)(3), qualified under the cited charitable-nonprofit rule, and reported no unrelated business taxable income, Virginia concluded that al…
Could an air-charter operator bypass local BPOL appeals by requesting a Virginia advisory opinion?
No. Virginia Tax would not decide the air-charter BPOL exemption through an advisory opinion while assessments were disputed and the taxpayer had not used the required local appeal process. The taxpay…
How could Virginia BPOL tax apply to recreation-center events, lodging packages, and sales by a nonprofit?
BPOL treatment depended on the activity. A developer's race fees were taxable gross receipts unless it proved a genuine agency relationship with the nonprofit; temporary vendors could face an itineran…
Does an RV park keep its transient-rental exemption after an ownership change, and must the new owners file a new declaration?
Yes. The exemption follows the qualifying facility, not the owner, so an ownership change alone did not end it. No new declaration was required if the prior owner filed one and the park continued to m…
When may state investors and purchasers join a Georgia low-income-housing project structure and receive Georgia housing tax credits?
A state investor may receive Georgia low-income housing credits if it joins the project partnership before that partnership's taxable year ends, satisfies all credit requirements, and is recognized as…
Which apportionment factor applies when computing the Capital Investment Tax Credit for a qualifying headquarters project?
Use an apportionment percentage based solely on the qualifying project's factors. The taxpayer could not use the overall consolidated apportionment factor of its entire affiliated group to compute the…
Is documentary stamp tax due when a developer deeds Florida property to a land trust but remains its sole beneficial owner?
No. The deed did not trigger documentary stamp tax while the developer remained the sole beneficial owner and no other person received any interest, use right, or occupancy right in the property.
Could siblings own beer-and-wine businesses on different tiers, and could one person work for both a wholesaler and retailer?
Sibling status alone did not bar one sibling from owning a beer-and-wine wholesaler while the other owned a retailer, but neither could act for or hold an ownership or financial interest in the other'…
What is South Carolina's tax interest rate for the period ending March 31, 2014 (per SC IL #13-18)?
3%. SC Information Letter #13-18 sets South Carolina's interest rate on tax underpayments and overpayments at 3% for the period October 1, 2011 through March 31, 2014. Interest is compounded daily, ex…
Could Texas residents claim the full New Mexico special-needs adopted-child credit and revive a 2007 claim based on a later National Guard deployment?
Only in part. The Department conceded that Timothy and Teresa Martin qualified for the special-needs adopted-child credit for all eight children in 2009 and 2010, not just four, and after Servicemembe…
For a city developing two separate convention-center-area hotel projects (with ancillary restaurants/shops), when can each qualify as a separate 'qualified hotel project' entitled to a 10-year 100% state and local tax rebate, and how do ancillary businesses sign up for and split that rebate?
A single, combined ruling covering two separate City of Irving hotel developments (the 'Northshore Project' and the 'City Project'). Key holdings: (1) two hotels within 1,000 feet of the same conventi…
Did a servicemember who lived in Virginia owe Virginia income tax for 2009 and 2011?
Not under the assessments as issued. Virginia treated the servicemember as a nonresident in 2009, so her military pay was protected and her nonmilitary work performed outside Virginia was not Virginia…
Can a REIT's federally disregarded subsidiary take the REIT dividends-paid deduction — or the public-REIT exclusion or exemption — when figuring its Tennessee excise tax?
No to both. This advisory ruling addresses subsidiaries of real estate investment trusts (REITs) that run sale-leaseback financing and own Tennessee real estate. Each is DISREGARDED for federal income…
Could a medical association avoid late-return penalties because it paid its gross receipts tax on time and no Department employee suggested a managed audit?
No. New Mexico Orthopedic Association paid its February, March, and April 2013 gross receipts tax on time, but its departing CEO/CFO had been responsible for filing the CRS returns and the organizatio…
May an Illinois construction contractor buy materials tax-free for incorporation into property owned by an exempt organization or government entity?
Yes, if the contractor buys tangible personal property for physical incorporation into real estate owned by an exempt organization or government entity that has a valid Illinois E number. The contract…
Could a company stop filing monthly Illinois ST-1 returns because its shipments were international and its returns showed no sales-tax liability?
IDOR did not approve stopping the returns because the company's transaction details were insufficient. A registered retailer generally must file Form ST-1 monthly even without a minimum sales threshol…
Are refrigerated bagged or packaged salads exempt from Colorado sales tax as food, or are they taxable 'prepared salads'?
It turns on whether dressing (and a utensil) is included. Colorado exempts food for home consumption but statutorily EXCLUDES 'prepared salads' from the definition of food. A bagged salad of lettuce a…
Was a Navajo Nation member's college income exempt from New Mexico personal income tax when he lived and worked on Navajo land but remained domiciled in Farmington?
Yes. James Tutt was an enrolled Navajo Nation member, earned the disputed income while working for a Navajo college in Crownpoint, and lived within the Navajo Nation for most of each tax year at issue…
Are Illinois hotel receipts from qualifying Taiwan representatives exempt from Hotel Operators' Occupation Tax?
Yes. Hotel receipts from Taipei Economic and Cultural Representative Office representatives were exempt when the guest possessed an American Institute in Taiwan card stating that the holder was exempt…
When were licensed software, updates, support, training, and maintenance taxable in Illinois?
IDOR declined to decide the reseller's specific transactions. Generally, canned software was taxable regardless of delivery unless every signed-license criterion in Rule 130.1935(a)(1) was met; then t…
Was a claimed Illinois software-license exemption valid based only on the limited documents submitted?
Unresolved. Canned software was generally taxable regardless of delivery method, but a license could be nontaxable only if every requirement in 86 Ill. Adm. Code 130.1935(a)(1) was met, including a si…
Did a cloud collaboration provider owe Illinois Telecommunications Excise Tax when customers used their own internet and telecom connections?
Generally no, if customers accessed the cloud applications through internet or telecommunications connections they bought from third parties. In that situation the cloud provider was not itself provid…
Are one-time customer account setup fees subject to Illinois Telecommunications Excise Tax?
Generally yes. IDOR said one-time account setup fees were necessary for and directly related to providing telecommunications, so they were included in gross charges subject to the 7% Illinois Telecomm…
Is a purchase exempt from Illinois tax merely because the buyer takes the goods to Canada, and can the buyer claim a refund directly?
Not merely because the goods were destined for Canada. A buyer that takes possession in Illinois generally owes tax even if it immediately carries the goods out of state. A seller-delivered shipment m…
Did third-party shopping-cart servers located in Illinois create sales-tax nexus for an otherwise out-of-state online business?
IDOR did not decide the server question. It said fact-specific nexus determinations generally require an audit and supplied only 2013 guidelines based on Quill's physical-presence rule. That rule is n…
Is a Tennessee technology consultant's work taxable — setting up a temporary 'virtual lab' to test software, and backing up a customer's data — when no software is sold to the customer?
No, none of these are taxable. A Tennessee technology-consulting firm sets up new software and hardware for customers, and the Department ruled that three parts of its work are NOT subject to Tennesse…
Does operating in a Tennessee foreign trade zone exempt a contractor from Tennessee sales, use, and business tax — and how are goods imported only to re-export, or sold to and used for the federal government, taxed?
Operating in a foreign trade zone (FTZ) does NOT change a Tennessee contractor's sales, use, or business tax. FTZ status only affects AD VALOREM (property) taxes; Tennessee's sales, use, and business …
Was leasing and possibly operating a commercial tractor a Virginia BPOL contractor business?
No contractor classification applied. Leasing the commercial tractor was a BPOL business service, and operating it to haul goods would also be a business service. Virginia remanded the assessment beca…
When did revenue from a data-and-analytics company's Buy and Watch services count as Florida sales-factor receipts?
Revenue was a Florida receipt when the customer was located in Florida, because each sale of the finished service was the income-producing transaction. Direct database-access charges to Florida custom…
Could a corporation and its subsidiaries stop filing a Florida consolidated return after acquisition ended their former affiliated group?
Yes—and the former group was required to stop. The unrelated acquisition ended the old affiliated group, and the acquired companies could not file a Florida consolidated return as a subgroup of the ne…
Can a luxury movie-theater chain with dine-in food and bar service use the reduced retail/wholesale franchise tax rate for years when most of its revenue comes from food and beverage sales, and does it have to reclassify as a "dinner theater"?
ALERT: This ruling's specific Tax Rates, Compensation Deduction Limits, No Tax Due Thresholds, and Total Revenue Thresholds may be outdated -- see STAR Accession No. 202112002L or 202308006L for curre…
Are the materials and equipment a contractor buys to build an electricity-generating plant for a Tennessee city, on city-owned land, exempt from Tennessee sales and use tax?
Yes. The Department ruled that the materials and equipment a contractor (and its suppliers and subcontractors) buys or uses to construct or install an electricity-generating facility for a Tennessee c…
Which Virginia corporate audit adjustments survived review for a group with intercompany loans and merchandise sales?
Virginia could examine and correct older net-operating-loss carryforwards when computing taxable income for open years, but most disputed intercompany adjustments had to be reversed. The documented le…
Did a Virginia historic venue owe sales tax on space rented for weddings and other events?
Yes. Because the historic plantation regularly rented rooms, facilities, and other spaces to transients for events, Virginia treated the charges as taxable accommodations. The full rental charge was t…
Did Illinois confirm that every aircraft spare sold from a manufacturer's Illinois warehouse qualified for the Class IV aircraft exemption?
No fact-specific answer was given. IDOR declined to issue the requested private letter ruling. It explained only that qualifying aircraft materials, parts, equipment, components, and furnishings are e…
May an Illinois water utility buy treatment chemicals tax-free when the chemicals remain in pipe-delivered water sold to customers?
Yes, for chemicals transferred as component parts of pipe-delivered water. Public Act 98-583 excludes that water from Illinois sales and use taxes, so the utility may buy component chemicals tax-free …
Could a Virginia corporation net a related entity's bad debts and cash discounts against its factoring-expense add-back?
Not on the return and appeal presented. Virginia treated factoring losses as related-party intangible expenses and found no exception allowing the corporation to net the related entity's bad debts and…
Could a Virginia widow subtract monthly FERS survivor-annuity death benefits from taxable income?
No. The Virginia subtraction required federally taxable death benefits from an annuity contract between a customer and an insurance company, awarded as a lump sum. The widow's 36 monthly FERS survivor…
What filing rules did Virginia Tax Bulletin 13-13 impose on same-sex married couples in 2013?
Historical only. Tax Bulletin 13-13 required same-sex spouses to file separate Virginia returns as single individuals, using pro forma federal returns and separate deductions, exemptions, credits, and…
Were a hotel's bank transfers, loans, and real-property rent all taxable BPOL gross receipts?
Not all of them. Virginia found that the hotel had sufficiently shown most disputed deposits were transfers between its own bank accounts, and its real-property rental receipts could be excluded from …
Should a Florida contractor separately charge a homeowner sales tax on plantation shutters sold and installed under a lump-sum contract?
No. The installed shutters became fixtures under a lump-sum real-property contract. The contractor owed tax on its materials and could include that cost in the contract price, but should not separatel…
How did Virginia tax mortgage-fraud-related deposits when the taxpayer documented some payments to a business partner?
Virginia removed from taxable income the deposits the taxpayer documented as later paid to her husband's business partner, but treated the undistributed balance as her income. Dismissal of criminal ch…
Did dismissal of criminal tax charges require Virginia to erase the related income-tax assessment and refund garnished amounts?
No. Dismissal of the criminal charges did not by itself invalidate the civil income-tax assessment. Because the taxpayer supplied no documentation showing how the mortgage-fraud-related bank deposits …
Was a Virginia resort's lump-sum corporate membership fee subject to sales tax?
Yes. The resort's single three-year membership charge bundled taxable lodging and accommodations with taxable golf-cart use and other benefits. Virginia required sales tax on the entire lump-sum membe…
Could a nonfiler recover penalty and interest taken by levy because he asked about 2010 tax amnesty but an employee never followed up?
No. Alan Uffenheimer's mistaken belief that no additional gross receipts tax was due counted as negligence, and interest was mandatory on the unpaid tax. He also never applied for the 2010 New Mexico …
Could a nonprofit recover an electronic-filing penalty because its finance director ignored notices and kept submitting paper monthly returns?
No. Easter Seals El Mirador was required to file monthly returns electronically beginning in 2011, received several notices and a grace period, but continued filing paper returns through about Septemb…
Under the 2013 Illinois rules, could a resident include nonprofessional gambling winnings in Schedule CR's out-of-state-income column?
No under the law described in the 2013 GIL. Illinois limited the resident credit using income that would be sourced outside Illinois if every state used Illinois rules. Nonprofessional gambling winnin…
How did Illinois source receipts from online counseling, eBooks, and audio or DVD courses sold by an out-of-state internet business?
The receipt type controlled. Online counseling followed the service rule based on where the service was received. eBook receipts followed the intangible-property rule based on the taxpayer's income-pr…
Could a welder deduct services resold by his customer when the correct Type 5 NTTC was executed more than three months after the extended deadline?
No. Madron Services resold K and N Welding's services and taxed the resale, and the certificate eventually obtained was the correct Type 5 NTTC. But K and N did not possess it by the Department's exte…
Did a governmental owner's contract qualify direct material purchases for an infrastructure public-works project for sales-tax exemption?
Yes. The owner could purchase materials tax-exempt because it would order directly, receive invoices, pay suppliers from public funds, take title and risk at delivery, insure the materials, and issue …
Was a company that sold and permanently installed made-to-order shelving and cabinets a retailer or a contractor?
It was a contractor. Temporarily storing made-to-order shelving and cabinets for particular jobs did not constitute retail inventory, and a small supply of trim and modification parts did not contain …
Did one employee providing legal services from a Virginia home create withholding and corporate-income-tax duties?
Yes on the presented facts. The out-of-state employer had to withhold Virginia income tax because its employee worked in Virginia. Her legal services also appeared to exceed Public Law 86-272's solici…
Could a Navy contractor buy office equipment tax-free for task orders whose true object was renting temporary office facilities?
Yes. The task orders principally rented temporary office trailers, furnishings, and equipment to the Navy. Janitorial, sewage, utility, maintenance, and a minor administrative-assistant service made t…
Did Virginia decide whether a former CEO met the responsible-officer test for a company's unpaid meal tax?
No responsible-officer ruling was necessary. The company, its former CEO, the bankruptcy trustee, Virginia, and other parties entered a court-approved settlement releasing pre-agreement claims once th…
Was a restaurant LLC member personally liable for the companies' unpaid Virginia sales and withholding taxes?
Yes. Virginia found the taxpayer signed checks and tax returns, identified himself as president and managing owner, had authority over tax payment, and later operated the restaurant. He did not prove …
Did removing one floor-repair transaction from a Virginia restaurant audit eliminate the whole sales-tax assessment?
No. Virginia had already removed the floor-repair service because the contractor, not the restaurant, was the consumer of the repair materials. The Department issued the tax-and-interest refund for th…
Which Virginia audit items and penalties were removed for a meal-service provider?
Virginia removed four documented sales to exempt clients. That revision raised the fifth-audit sales-tax compliance ratio from 62% to 99.9%, so the ordinary sales-tax audit penalty was waived. The wai…
Did a subcontract stating that the subcontractor would pay tax prove Virginia tax was paid on a contractor's purchases?
No. A quote and subcontract assigning tax responsibility did not prove the tax was actually paid. The contractor could not reconcile tax amounts to the purchases and supplied no original invoices. Bec…
Could a taxpayer obtain a 2006 personal-income-tax refund when her claim was filed in May 2011, after the December 31, 2010 statutory deadline?
No. The 2006 tax payment was due April 15, 2007, so Section 7-1-26 required a refund claim by December 31, 2010. Yvonne Gomez filed in May 2011—five months late. The hearing officer recognized her arg…
Could a tent-rental company estimate that 5% to 10% of government and nonprofit receipts were deductible sales of direct, damaged, or lost property?
Only for one documented sale. Albuquerque Tents had timely Type 9 NTTCs, but government and 501(c)(3) deductions covered sales of tangible property—not its ordinary tent and event-equipment leases. Th…
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