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 a third-party administrator that buys auto glass and bills insurers a marked-up price correctly collecting Colorado sales tax on the marked-up amount?
Yes — the method is correct. A third-party administrator of auto glass insurance claims that buys glass from local repair shops and bills the insurer a marked-up price is acting as a RESELLER, not a m…
Does an out-of-state S corporation owe Colorado tax when an employee works remotely from Colorado, even if that employee is a non-resident military spouse exempt from Colorado tax?
Yes. An out-of-state S corporation that performs services through an employee working in Colorado has Colorado-source income, because service income is apportioned to where the cost of performing the …
When an out-of-state company leases medical equipment to Colorado doctors, dentists, and vets, is sales tax collected up front at the start of the lease or on each rental payment?
When the tax is due depends on the type of lease. Colorado taxes leases of medical equipment — both 'true' leases and 'finance' leases — and the end-of-lease purchase price (nominal or fair-market) is…
Is a company that maintains a Material Safety Data Sheet (MSDS) database and prepares regulatory compliance reports, permits, and transport documents making taxable sales of tangible personal property, or providing nontaxable services?
The Department couldn't decide. A digital Material Safety Data Sheet (MSDS) is tangible personal property — like a digital reference manual — and is taxable if the customer is really just buying acces…
How did Florida tax home service contract premiums, contractor repair charges, and customer service-call fees?
Contract premiums were subject to the 2% premium tax, not sales tax. Real-property contractors owed tax on materials; personal-property repair charges to the provider were fully taxable; and the custo…
Was a monthly easement fee for access to leased parking spaces taxable along with the parking fee?
Yes. Access through the garage was an interdependent part of leasing the parking spaces, so both the monthly parking fee and the monthly access-easement fee formed the taxable total rental charge.
How can taxpayers check whether an older South Carolina advisory opinion was modified or superseded (per SC IL #13-16)?
Use the citator attached to SC Information Letter #13-16. It helps you determine what effect newer South Carolina advisory opinions have on previously published ones — whether an opinion was modified,…
What purchases qualified under Virginia's historical Energy Star and WaterSense sales-tax holiday?
Under these historical guidelines, specified Energy Star appliances and WaterSense-labeled products costing $2,500 or less per item were exempt during the four-day October holiday when bought for nonc…
Did the Paynes obtain relief for an amended 2004 Virginia tax return filed after the limitations period?
No. The Isle of Wight County Circuit Court found that Virginia properly denied Michael and Rhonda Payne's amended 2004 tax return because it was filed beyond the statute of limitations. The court ente…
Did a federal technical termination and deemed asset transfer trigger Illinois reversals of prior bonus-depreciation modifications?
Yes under the technical-termination rules applied in the 2013 GIL. When more than 50% of partnership capital and profits changed hands within 12 months, federal law deemed the old partnership to trans…
Could an independent physical therapist deduct services resold by a clinic when the clinic executed its Type 5 NTTC nine days after the audit's 60-day deadline?
No. Ravelle's Jewel's sold physical therapy services to Southwest Sport and Spine for resale, but it did not hold an NTTC when its 2006 returns were due. After the Department mailed an audit notice on…
What were the significant South Carolina tax-law changes from the 2013 legislative session, as summarized by the Department (per SC IL #13-15)?
SC Information Letter #13-15 is the Department's brief summary of the significant tax and regulatory law changes enacted in South Carolina's 2013 legislative session, organized into categories: (1) in…
Did taxpayers owe interest after New Mexico mistakenly sent unsolicited 2009 and 2010 income-tax refunds based on credits they never claimed?
No. Lawrence and Earnestine Mitchell filed and paid their 2009 and 2010 personal income taxes without claiming refunds or special-needs adopted-child credits. The Department nevertheless sent refunds,…
Did a business owe a $900 late-filing penalty when it timely mailed and paid its 2012 withholding return, then refiled electronically after learning e-filing was required?
No. Tierra Resources Intern timely mailed its 2012 withholding return and payment, then refiled electronically about a month later after the Department explained the e-filing requirement. Because the …
Could a retailer inside an Illinois business district pay the additional local retailers' occupation tax itself instead of charging customers?
Yes. A retailer in an Illinois business district must pay the additional Retailers' Occupation Tax to IDOR, but the statute does not require the retailer to reimburse itself by separately charging cus…
Were hosted canned-software license fees and mandatory maintenance fees taxable when Illinois customers accessed the system online?
IDOR did not give a fact-specific yes-or-no answer. It said canned software is generally taxable even when transferred electronically, but a license is not a taxable retail sale if it satisfies all fi…
Was a company buying future receipts and making business loans a financial-services provider subject to county BPOL tax?
The company appeared to be a financial-services provider, not a buyer and seller of tangible property, because it advanced cash against future card receipts, bought receivables, and made loans. But Vi…
Did a Virginia-based employee developing consulting test methods create corporate-income-tax nexus for an out-of-state company?
Probably yes. Developing test methods in a Virginia home office for the company's consulting and training services went beyond protected sales solicitation and produced a positive Virginia payroll fac…
Could a Madoff fraud victim avoid interest when a theft-loss carryback unexpectedly increased her 2005 New Mexico income tax, even though the penalty was abated?
No. Dyanna Taylor amended her 2005 New Mexico return on her accountants' advice after suffering Madoff investment-fraud losses. For reasons she could not explain, the theft-loss carryback increased he…
What Virginia tax interest rates applied during the fourth quarter of 2013?
Virginia's fourth-quarter 2013 rates were 5% for tax underpayments and 5% for tax overpayments. The reduced rate for qualifying assessments under administrative appeal was 0% after the statutory nine-…
Was fixed interconnected VoIP service over a private managed network subject to Georgia sales tax under the provisions addressed in 2013?
No under the provisions addressed. The fixed VoIP service exchanged calls with the public telephone network but first converted and routed communications through a privately managed internet-protocol …
Was a cloud restaurant back-office system sold to franchisees taxable in Illinois when no hardware was provided?
IDOR did not determine whether the restaurant system was a nontaxable service or a software license. A service with no tangible-property transfer generally was outside Illinois sales and service taxes…
Could a service company use direct labor to situs city BPOL receipts and deduct receipts from out-of-state customers?
Potentially yes, but the city had to review the evidence. The company's contract-level direct-labor method appeared capable of situsing receipts where services were performed, so payroll apportionment…
Are a Kansas utility's late-payment fees and returned-check fees subject to sales tax?
Late fees yes; bounced-check fees no. A Kansas utility's late-payment fees ARE subject to sales tax and must be included in the tax base along with the other taxable utility charges (K.A.R. 92-19-3a(j…
Do Kansas composite returns recognize the 2012 income modifications for nonresident owners?
Kansas Notice 13-17 (September 12, 2013) addresses whether the 2012 modifications that exempt certain income from Kansas income tax are recognized on a composite return. Composite income tax returns f…
Does Tennessee charge sales or use tax on cloud-computing services — remote online data storage, virtual computing capacity, and the usage fees for moving data — when the provider's servers are all located outside Tennessee?
No, not on these facts. The Department ruled that none of this out-of-state provider's cloud-computing offerings are subject to Tennessee sales or use tax: (1) its Remote Storage Service (online data …
Could a building-products wholesaler keep a gross receipts deduction when its buyer went out of business before providing the missing NTTC?
No. Apex New Mexico Distributer obtained an NTTC supporting part of its 2009 wholesale receipts, and the Department partially abated the audit assessment. But Apex never obtained the certificate for t…
Did prepaid home-phone packages qualify as prepaid telephone calling arrangements taxed as tangible personal property rather than telecommunications?
Generally yes. A package paid in advance that enables calls through an access or authorization code and stops service when the purchased amount is consumed generally qualifies as a prepaid telephone c…
Could a corporation omit full officer Social Security numbers from Illinois sales-tax registration forms and provide only the last four digits or its FEIN?
No. Section 2a required a corporate registration applicant to provide each officer's name, title, and Social Security number, and IDOR said it had no administrative authority to waive that statutory r…
Could an LLC use its sole owner's Illinois registration number on the LLC's certificate of resale?
IDOR did not answer whether the sole owner's registration number was valid for the LLC's purchase. It explained that the seller should obtain a signed certificate of resale containing the purchaser's …
Was a web-only information service with no software download taxable as software as a service in Illinois?
IDOR did not decide whether the described web-only service was taxable. In 2013, it said application-service-provider, software-hosting, and web-software transactions varied too much for individual le…
Were charges for web-based meetings, webinars, and training subject to Illinois Telecommunications Excise Tax when users supplied their own connectivity?
Generally no. Customers used their own internet, telephone, or conferencing services, and toll-free voice service was separate rather than included in the web-service charge. IDOR said the described o…
What is South Carolina's tax interest rate for the period ending December 31, 2013 (per SC IL #13-14)?
3%. SC Information Letter #13-14 sets South Carolina's interest rate on tax underpayments and overpayments at 3% for the period October 1, 2011 through December 31, 2013. Interest is compounded daily,…
If a New Jersey resident enrolled in a long-term disability plan while working in New York, are the disability benefits he now receives New York source income subject to New York State personal income tax?
Yes, the long-term disability benefits are New York source income because Petitioner enrolled in the plan while actively working in New York. Whether they are actually taxed depends on whether they en…
New York Advisory Opinion TSB-A-13(9)C: May the shareholders of an S corporation claim the investment tax credit for a CNC machine used to cut and shape raw stone slabs into countertops?
Yes. Because the CNC machine is principally used (over 50% of its operating time) to convert raw stone slabs into finished countertops by manufacturing or processing, it is qualified property, so the …
Is a bottled puree drink of vegetables, fruits, nuts, and seeds subject to NY sales tax, or is it exempt food?
It's exempt. A thick bottled puree of water, vegetables, nuts, fruits, seeds, and spices is exempt food and beverage under the general food exemption. It isn't one of the taxable carve-outs -- it's no…
Does an electronic-only investing journal qualify for NY's electronic periodical exemption instead of being a taxable information service?
Yes. An electronic-only investing journal qualifies for the electronic periodical exemption, so the publisher need not collect sales tax. It meets the statutory tests: its predominant purpose is prese…
Is a license to access hosted law-office practice-management software subject to NY sales tax, and how is it sourced?
Yes. A monthly license to access the developer's hosted practice-management software is a taxable sale of prewritten computer software -- taxable even though nothing is downloaded or copied to the cus…
Is a used-car dealer's standalone 'Transfer Fee' to ship a vehicle to another location for inspection subject to NY sales tax?
No. A standalone fee to transport a used vehicle to a more convenient location so the customer can inspect and test-drive it isn't taxable. Transporting property, by itself, isn't a taxable service, a…
Is an online assessment software tool taxable, and are the custom reports it generates from a customer's own data taxable?
Two different answers. Licensing the online assessment tool to third-party consultants is a taxable sale of prewritten computer software (sourced to where it's accessed), and the developer's own use o…
New York Advisory Opinion TSB-A-13(10)C: For the brownfield redevelopment tax credit, can a buyer claim the site-preparation credit after five years, and how is the tangible-property credit allocated for property partly on and off a qualified site?
No site-preparation credit is allowed because more than five years passed since the certificate of completion; the tangible-property credit runs up to ten years after the COC year, and property partly…
Were alcohol sales by an Illinois park district at its annual community festival exempt from Retailers' Occupation Tax?
No. The limited retail-sale exceptions for qualifying charitable, religious, and educational organizations did not apply to the park district because it was a governmental body. IDOR said a government…
Had Illinois decided whether each series within a series LLC would be treated as a separate sales-tax and lease-tax reporting entity?
No determination had been made. In this 2013 survey response, IDOR said Illinois had not decided whether to follow the proposed federal series-LLC rules for sales tax or whether each series would be a…
When is solar energy equipment considered 'placed in service' for New York's residential solar energy credit if the equipment is installed while a new home is still under construction?
The equipment is treated as placed in service when its installation in the new home is complete and the home is ready for occupancy as the taxpayer's principal residence - not simply when the panels a…
Can a tax-exempt PTA sell school supplies to students without collecting NY sales tax, and under what conditions?
Mostly no -- but there's a narrow exception. An exempt organization's exemption doesn't cover retail sales it makes from a 'shop or store,' meaning sales of goods from display with regularity, frequen…
Is a travel-club membership fee taxable in NY when it only covers out-of-state hotel stays and a cruise, and does the customer's NY residency matter?
No. The membership fee isn't subject to New York sales tax, and the customer's New York residency doesn't matter. New York's hotel-occupancy tax applies only to stays that occur in New York, and none …
Is a credit rating service subject to NY State sales tax or NYC sales tax, and where is it sourced?
It's not a State-taxable information service, but it is taxable under New York City's credit-rating-services tax. Because the firm rates the client's own financial products rather than furnishing info…
Are synthetic bone-graft drug-device products exempt in NY as prosthetic aids or as products for the preservation of health?
They're exempt -- but as preservation-of-health products, not prosthetic aids. Two synthetic bone-graft products that promote bone regeneration after surgery don't qualify as prosthetic aids because t…
Are incidental repairs during a capital improvement taxable, and does a good-faith capital improvement certificate protect the contractor?
It depends on whether the repair is integral to the capital improvement. Repairs that are part of the improvement -- fixing masonry so a new facade attaches, prepping a subfloor for new flooring, or r…
Is a service that processes and submits a medical provider's own Medicare quality-reporting data to CMS a taxable NY information service?
No. Validating, analyzing, and submitting a provider's own Medicare quality-reporting data to CMS is an information service, but it's excluded from sales tax because it's personal or individual in nat…
When does a NYC livery company collect sales tax -- on its own affiliated-livery trips or when it refers a job to a black car?
A livery base doesn't collect sales tax on trips its own affiliated livery vehicles provide in New York City -- those are excluded from taxable transportation service, even if the base was formerly a …
Did small Virginia limited-partnership interests create apportionment or income-tax consequences for a corporation and pension trust?
The corporation's interests met Virginia's four-part standard for avoiding attribution of the partnerships' property, payroll, and sales factors because the interests were 10% or less, general partner…
Are admissions to a nonprofit university's basketball games, held at a rented venue, exempt from Connecticut admissions tax?
Exempt. Admissions to a 501(c)(3) university's basketball games, held at a rented venue, are exempt from Connecticut's admissions tax under Conn. Gen. Stat. § 12-541(a)(3), because all of the event pr…
New York Advisory Opinion TSB-A-13(8)C: Must a taxpayer forfeit Empire Zone tax credits it already earned and is carrying forward if it enters the Excelsior Jobs Program?
No. The taxpayer may continue to carry forward and claim the Empire Zone tax credits it earned before entering the Excelsior Jobs Program, because the program's disqualification rule only prevents rec…
I'm the sponsor of a luxury Manhattan condo-hotel, where buyers own their units in fee simple but are legally restricted (by NYC zoning and a Restrictive Declaration) to using them as transient hotel rooms for no more than 120 days a year, with the hotel operator controlling access, furnishing, and rental the rest of the time. When I sell a unit for $1 million or more, does New York's additional 'Mansion Tax' apply, the way it would to an ordinary condo?
No, the Mansion Tax does not apply to these units. New York's additional 'Mansion Tax' (Tax Law §1402-a) applies on top of the basic Real Estate Transfer Tax when a conveyance of 'residential real pro…
Should a monument company charge a customer sales tax on a cemetery monument installed at the designated gravesite?
No. The installed monument was exempt at the customer level. The monument or burial-service provider instead had to pay tax when purchasing the items used to provide the service or install the monumen…
Were a telecommunications company's 2004 and 2005 protective refund claims timely filed or eligible for reconsideration?
No. Virginia had denied the original protective claims on May 4, 2009, so an addendum filed seven days later was a new claim, not an amendment to a pending one, and it met none of the reconsideration …
Were mandatory dealer advertising and training fees taxable as part of an HVAC manufacturer's product sales price?
Yes. The 2% marketing-group fees were mandatory until each dealer reached a $10,000 annual cap, were calculated from product sales, shared invoice discounts, and funded advertising and training that p…
When an auto dealer gets a factory-to-dealer incentive payment from the manufacturer to discount a car for an eligible buyer, is that payment part of the taxable sales price — and does the buyer end up paying sales tax on it?
Both: the incentive payment is included in the taxable sales price, but a special credit cancels the tax on it, so the buyer effectively pays no sales tax on the incentive amount. When a dealer discou…
At an FDA-regulated manufacturing plant, which process items — water-treatment, HVAC, boiler, pigging, RF guns, antifoam, labels, printers — are exempt as industrial machinery, and which are taxable?
It varies item by item. At this FDA-regulated manufacturing plant, the Water Treatment System, HVAC System, Boiler System, Pigging System, RF Guns, and Antifoam Treatment are all EXEMPT from Tennessee…
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