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 tenant's reimbursement of improvement costs above the landlord's allowances taxable as commercial rent?
No. The reimbursements paid improvement costs above the landlord's allowances, and the work was optional, intended to make the space usable, not required in a minimum amount, and not rent or a substit…
Could vehicle washers deduct receipts when their truck-rental-company customer gave them a timely service-resale NTTC but withheld its customer invoices?
Yes. The taxpayers washed oversized trucks as a subcontractor for a truck-rental company that resold the washing service. They timely held a properly executed service-resale NTTC, believed the buyer c…
Are fees an S corporation collects for an ordained minister's services (weddings, funerals, sermons, counseling) subject to NY sales tax?
No. New York taxes only specific, listed services, and ministerial services -- conducting religious services, sermons and public speaking, weddings, blessings, funerals, and spiritual counseling -- ar…
How were timeshare membership, exchange, occupancy, and service fees sourced in Florida's corporate sales factor?
Membership fees followed the customer's state of residence; exchange and occupancy charges followed the location of the resort rights used or stay; and service fees were Florida sales because the inco…
Did substantial growth and changed business circumstances justify ending a group's Florida consolidated-return election?
Yes. The Department found the group's substantial growth was good cause and allowed separate filing beginning in 2012, subject to four conditions governing timing, unrecognized items, deferred gains, …
How did Florida source twelve categories of printed-product, licensing, online-data, conversion, and administration receipts?
Printed-material revenue was Florida revenue when delivered to a Florida purchaser. The other listed licensing, online, email, data-conversion, and administration receipts generally were Florida sales…
Was a safe provided with armored transportation and cash-management services taxable to the customer?
No customer sales tax applied to the bundled service. The true object was secure transportation and cash management, and the customer's use of the safe merely extended that exempt service. The armored…
Are juice chewables and nutrition bars with Nutrition Facts labels exempt from Georgia sales tax as food?
Yes for state tax, but not local tax. The juice chewables and nutrition bars were food and food ingredients for off-premises consumption, not prepared food or dietary supplements, based on the represe…
Could a manufacturer replace an unusually high nine-day Illinois sales factor with its lower prior-year factor because the short period was unrepresentative?
No on the evidence submitted. The statutory factor measured Illinois's share of the market for the particular nine-day taxable year, and an unusually high concentration of Illinois sales in that perio…
Could a corporate group deduct factoring losses from receivables sold to a related bankruptcy-remote entity?
Yes. The group proved by clear and convincing evidence that third-party lenders required the bankruptcy-remote receivables structure to obtain financing and comply with a revolving-credit covenant. Vi…
Could a Virginia manufacturer include executive pay when testing the wage requirement for single-sales-factor apportionment?
Yes. Because Virginia Employment Commission wage data included executive compensation reported by many employers, a manufacturer could include executive wages in its own average-wage calculation when …
Are a NY company's R&D services for its out-of-state parent taxable when the resulting reports or samples are delivered outside New York?
No NY sales or use tax is due. The Department didn't need to decide whether the work is a taxable information service or nontaxable research and development, because sales tax is a destination tax: th…
Does Illinois sales or service tax apply to a paid program when no tangible personal property is transferred to the customer?
Generally no. Retailers' Occupation and Use Taxes do not apply to sales of service, and Service Occupation and Service Use Taxes apply only when tangible personal property is transferred incident to t…
May an equipment lessor use a motor carrier's authority number on Illinois Form RUT-7 when the lessee operates under that carrier's authority?
Yes, when the lessee has an agreement with the interstate carrier under 49 C.F.R. Part 376 and operates under that carrier's Certificate of Authority. The purchaser-lessor may identify that carrier an…
For goods sent to an Illinois consolidator or warehouse before a final store, is tax based on the interim ship-to location or the ultimate destination?
IDOR did not determine which location controlled because the facts were insufficient. It said a registered seller must collect Illinois Use Tax on an Illinois delivery unless it documents an exemption…
In an Illinois drop shipment, may the supplier omit tax when the out-of-state reseller lacks an Illinois number but the end customer promises to self-assess?
The supplier must collect Illinois tax unless it documents that its sale to the out-of-state purchaser is for resale. The preferred proof is a signed certificate carrying an Illinois registration or r…
Which Illinois food-tax rate applied to ice-cream cakes, bulk novelty packages, individual bars, and drive-through prepared food?
Prepared food, drive-through food, and individual ice-cream bars were subject to the high rate described in the 2013 GIL. Ice-cream cakes and qualifying bulk packages could receive the low 1% state ra…
Could a logistics company buy automobiles from Illinois dealers tax-free for resale and later export, and what proof should it provide?
IDOR did not determine the tax result for the proposed automobile-export chain because the transaction facts were insufficient. It said the logistics company appeared to be buying the vehicles for res…
Could a corporation exclude all royalties and interest paid to an affiliate because the affiliate filed income-tax returns elsewhere?
No. Filing an affiliate's gross royalty and interest income in other states did not exempt 100% of the payments. Virginia limited the exception to the portion corresponding to the affiliate's income a…
Were an airport duty-free store's international-traveler sales exempt from county BPOL tax?
No. Federal law protected bonded duty-free merchandise from specified duties, sales taxes, and property taxes, but did not preempt a local privilege tax measured by the store's gross receipts. The cou…
Were an airport duty-free store's international-traveler sales exempt from county BPOL tax?
No. Federal law protected bonded duty-free merchandise from specified duties, sales taxes, and property taxes, but did not preempt a local privilege tax measured by the store's gross receipts. The cou…
Is the charge to install a large water slide at an amusement park a tax-exempt capital improvement, even on leased land?
Yes. The water slide is a capital improvement, so the charge to install it is exempt from sales and use tax. It substantially adds value, is permanently affixed (bolted to concrete piers, with in-grou…
Were equipment and field flags used to spread biosolids on farms exempt as agricultural production property?
No. Although spreading biosolids helped nourish farmland, the business was not a farmer, did not own the land, and did not itself produce an agricultural product for market. Virginia therefore denied …
Did Illinois's three-year deficiency period run from an early-filed partnership return's original due date when the partnership never requested an extension?
No. A return filed early was deemed filed on the last prescribed filing day, and that day included Illinois's automatic six-month partnership extension even when the taxpayer filed no extension applic…
Did an Illinois Public Water Supply Construction Permit satisfy the permit requirement for the nonprofit community-water construction exemption?
Yes. IDOR said a Public Water Supply Construction Permit issued by the Illinois EPA under Title IV counts as a valid water-supply permit for the community-water exemption. A qualifying not-for-profit …
How did Illinois generally tax records-management charges for storage, shredding, equipment, software, maintenance, delivery, and cancellation?
IDOR declined to complete the requested item-by-item matrix, but gave category rules. Pure storage, shredding, data, and other services generally were not sales-taxable when no tangible property was t…
Could a taxpayer receive Virginia's 2011 research credit after filing Form RDC more than ten months late?
No. The taxpayer claimed the 2011 Research and Development Expenses Tax Credit on its return before filing Form RDC or receiving certification, then submitted the application more than ten months afte…
Which fringe benefits and payroll charges qualified for Virginia's Motion Picture Production Tax Credit?
It depended on the expense and credit component. Paid leave and taxable meal or lodging per diems counted as wages; employer unemployment tax and employer FICA did not. Workers' compensation, pension,…
Could a nonresident alien claim Virginia's standard deduction without claiming federal itemized deductions?
Generally no. Virginia continued its policy that a nonresident alien cannot claim the Virginia standard deduction even when no federal itemized-deduction amount is reported, because federal law requir…
Was a nonprofit's amended 2008 return timely after Virginia collected part of its corporate tax assessment?
Yes. Although the ordinary three-year period had expired, Virginia's collection of part of the assessment counted as payment. The nonprofit filed its amended return shortly afterward, raised only the …
Could Virginia residents claim an out-of-state tax credit for New York's Metropolitan Commuter Transportation Mobility Tax?
No. New York's MCTMT applied only to payroll or self-employment earnings connected with the metropolitan commuter district and funded that district's transportation authority. Virginia found it was no…
Did a military spouse and servicemember remain domiciled outside Virginia for 2010 income-tax purposes?
No. The spouse established Virginia domicile after moving in 2007: she worked full time, obtained a Virginia license and vehicle registration, voted in Virginia, and bought a home with the servicememb…
Did switchgear powering a qualifying Virginia data center count as exempt enabling hardware?
Yes, in whole or in part. Switchgear that distributed power to exempt servers, routers, and related computer equipment was enabling hardware under the data-center exemption. If it also powered taxable…
Were cloud-hosting and voice-routing services subject to Virginia retail sales tax or communications tax?
The hosted cloud, add-on, and maintenance services were exempt from retail sales tax because customers received no tangible personal property. But electronically routing voice, data, or audio and prov…
Was a business officer personally liable for unremitted sales and withholding taxes despite bankruptcy and a claimed IRS lien?
Yes. The officer admitted knowing of the business's sales and withholding liabilities and having authority to pay them. Virginia treated the collected taxes as trust funds and found that filing bankru…
My co-owner and I hold a Manhattan property as tenants in common (I own 12.32%, my co-owner owns 87.68%). We're building a condominium there: I'm paying my share of construction costs for the ground-floor commercial unit, then we'll swap -- I'll give up my TIC interest in the whole property and take sole ownership of the commercial condo unit instead, while my co-owner keeps the residential units. Is any of this -- the cost reimbursement, or the final swap of interests -- subject to New York's Real Estate Transfer Tax?
Neither the construction-cost payment nor the final swap of interests triggers RETT. Two tenants-in-common (Owners, holding 12.32%, and Developer, holding 87.68%) of a Manhattan property agreed that D…
Is a license to web-hosted prewritten software taxable in NY, and what happens to bundled training and support charges?
Yes -- a license to use web-hosted prewritten software is a taxable sale of tangible personal property, sourced to where the customer uses it, even though nothing is downloaded. Bundled, nontaxable se…
Do New York State or New York City sales taxes apply to a kinesiology practitioner's wellness-counseling services in NYC?
No -- neither New York State nor New York City sales tax applies, as long as the services aren't provided in a weight-control or health salon, gym, sauna, or similar establishment listed in the NYC ta…
My company's only office is in Connecticut, but eight of my twelve employees (including my CEO) are New York residents who don't work from home. Does that make my company liable for New York's MCTMT?
No. The Metropolitan Commuter Transportation Mobility Tax (Tax Law § 801) applies only to employers "engaged in business within" the MCTD, a standard the Department analyzes the same way as the person…
Must an out-of-state internet wine retailer with a NY direct shipper's license collect NY sales tax despite having no physical presence here?
Yes. An out-of-state wine retailer that holds a New York direct shipper's license must collect New York sales tax on its New York sales, even with no employees, agents, property, or place of business …
Would the Illinois Department of Revenue verify and approve the tax and procedure content of a private vehicle title-and-registration textbook?
No. IDOR said it would not approve the accuracy of a private legal publication. It advised the publisher to rely on Illinois statutes, administrative rules, and Department publications. The Department…
Did a husband who worked and lived in another state remain a Virginia resident for 2010 and 2011?
No. The husband took an indefinite out-of-state job, established a home there, obtained that state's driver's license, registered a vehicle there, and spent no more than 183 days in Virginia in either…
Does Tennessee charge sales tax on online-gaming purchases — downloaded games, codes for games you play on a remote server, and prepaid game, points, or subscription cards?
It depends on the product — downloads are taxable, pure remote access is not, and prepaid cards are taxed only when (and if) they are redeemed for something taxable. This retailer sells five kinds of …
Were batting-cage memberships, daily use, and instructor-led baseball lessons subject to South Carolina admissions tax?
Daily fees and membership fees for customers to use indoor batting cages and pitching machines were subject to South Carolina's admissions tax. Separately charged instructor-led baseball or softball l…
Did equipment leased to a wholesale Internet-backbone provider qualify for Virginia's Internet-service equipment exemption?
No. Virginia interpreted the exemption as limited to retail online-service providers that sell end-user subscribers a paid package including Internet access, email, proprietary information, and other …
When a Tennessee manufacturer drop-ships goods for an affiliated buyer, which sales count toward its Tennessee franchise & excise tax — does title passing in Tennessee control, or the final delivery destination?
It depends entirely on where the goods are ultimately delivered — not on where title passes or who the buyer is. This Tennessee manufacturer sells products to an affiliated sales company ('SalesCo') t…
In a Section 351 restructuring of a Georgia manufacturer, do the successor entities qualify as existing manufacturing facilities for the investment tax credit, and can the credit be assigned to an affiliate?
Successor entities that receive a long-operating Georgia plant in Section 351 contributions qualify as 'existing manufacturing facilities' for the investment tax credit -- the historic operations cont…
Was a taxpayer who moved for work in 2009 still a Virginia resident required to file for 2010?
No. The taxpayer moved for an indefinite job, established a home in the other state, surrendered his Virginia driver's license, obtained the other state's license, and registered to vote and registere…
How did Virginia tax installed countertops, sinks, and vanity bowls after the July 2010 law change?
Installed countertops sold on or after July 1, 2010 were taxable retail sales, with separately stated installation exempt, and the prior auditor's contractor guidance for earlier periods was not erron…
Was a prison warden exempt from 2003 New Mexico income tax because he worked and lived most of the year in Texas but kept a New Mexico home, license, and voter registration?
No. Rodolfo Franco was not physically present in New Mexico for 185 days in 2003, but that was only one route to residency. He remained domiciled in New Mexico: he owned a larger home and farmland in …
What identity-theft protection, tax deductions, and reimbursement did South Carolina create after the 2012 Department of Revenue data breach (per SC IL #13-17)?
SC Information Letter #13-17 summarizes new South Carolina laws enacted after the Department of Revenue's 2012 security breach to help people affected by identity theft or state-agency data breaches. …
Was contaminated or mixed liquid recovered from vehicle fuel tanks outside Illinois motor-fuel tax, and could a broker sell it for resale?
IDOR did not determine whether the recovered tank liquid was legally “motor fuel” because it lacked enough information about the product. Regardless of motor-fuel classification, the broker's Illinois…
Was a federal-base ground lease under the Military Housing Privatization Initiative subject to Florida's governmental leasehold intangible tax?
No. Congress had not consented to state taxation of leases under the Military Housing Privatization Initiative, so Florida could not impose its governmental leasehold intangible personal property tax …
How does Illinois tax a manufacturer's sales of window and door frames, including sales to construction contractors?
A manufacturer that sells window or door frames without installing them sells tangible personal property and owes Retailers' Occupation Tax unless an exemption, such as resale, applies. When a constru…
Are leases of reusable pallets exempt when manufacturers use them to package and ship finished goods, and what certificate protects the lessor?
Reusable pallets generally failed the ordinary packaging exemption, which excluded items bought for reuse, but the 2013 manufacturer exemption expressly included pallets and did not distinguish reusab…
A not-for-profit local development corporation will be the named mortgagee on our project financing, then immediately assign all its rights to our actual bank lenders. Does mortgage recording tax apply when the LDC records the mortgage, or when it later assigns the mortgage to our lenders?
Both steps are exempt from mortgage recording tax. New York Not-for-Profit Corporation Law section 1411(f) exempts the income and operations of a local development corporation (LDC) organized under th…
My organization is a municipal urban renewal agency. If we make and record a purchase money mortgage to help finance a low-income housing buyer's purchase of our land, do we owe mortgage recording tax on that mortgage?
Yes, exempt. Tax Law § 252 generally bars exemptions from mortgage recording tax based on other statutes, but the courts and the Department recognize that state agencies, instrumentalities, and politi…
Was a hospital-owned nonprofit laundry cooperative exempt from city BPOL and business-property taxes?
No. The cooperative was a separate legal entity with its own employees, management, laundry operations, charges, and economic benefit to its hospital owners. It did not qualify as an IRC § 501 nonprof…
Could a storage company recover gross receipts tax paid from 1999 through 2008 when it filed refund claims in 2013 after learning its receipts might have been deductible?
No. Mountain Moving & Storage filed all of its refund claims in March 2013, but New Mexico required each claim within three years after the end of the calendar year in which the payment was due. Even …
For Colorado income tax apportionment, is digital imagery delivered electronically tangible personal property, and how is it sourced?
It's tangible personal property, sourced to where it's delivered. For Colorado income tax apportionment, a static digital image delivered electronically is treated as a sale of tangible personal prope…
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