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 company that hosts a customer's cryptocurrency-mining machines in its facility — providing power, internet, physical security, and monitoring — providing a taxable data processing or security service under Texas law?
No, mostly. Texas ruled that hosting a customer's cryptocurrency-mining machines — providing electricity, internet, facility security, and routine monitoring — is neither a taxable data processing ser…
If an online travel company (a re-renter) books my hotel rooms, do I still owe Hotel Operators' Occupation Tax, or can I treat the sale to the re-renter as exempt?
You still owe the tax. A hotel operator who rents rooms to a re-renter of hotel rooms (such as an online travel company) still incurs Hotel Operators' Occupation Tax on the gross rental receipts it ge…
I called my county to dispute a BPOL tax audit assessment, and the county later asked if that call counted as my appeal -- can a phone call be a valid local appeal?
No -- and the Department dismissed the appeal for lack of jurisdiction because of it. A county audited a business's BPOL (business, professional, and occupational license) tax returns for 2019-2021 an…
The county rejected my manufacturer claim on my business equipment and I told them in person I disagreed -- why won't the state hear my appeal?
The Department dismissed the appeal for lack of jurisdiction -- twice over. An ice cream business was assessed county business tangible personal property (BTPP) tax for 2015-2024 after the county reje…
My telecom subsidiaries are disregarded entities owned by companies in my combined Virginia return -- do they compare their minimum tax to their own liability, or to the whole group's? And can Virginia tax our internet-access gross receipts at all?
Split decision -- the Department won on the combined-return methodology, and largely won on timing for the federal internet-tax issue too. A telecommunications company and its affiliates filed COMBINE…
My spouse works as a law clerk in the Commonwealth's Attorney's office -- can we claim Virginia's $15,000 state-employee salary subtraction on our joint return?
No -- the subtraction was properly disallowed. Virginia lets a taxpayer subtract the first $15,000 of salary for each 'state or federal employee' whose total annual salary from all employment is $15,0…
My business is on its third consecutive audit and I didn't provide records this time either -- do I still get a final chance to submit them, and does the exceptions list matter?
This ruling is a near-identical companion to the same-day P.D. 24-117 -- same period (May 2018-April 2021), same '3rd generation' repeat-audit fact pattern, same statutes, and the same outcome. A busi…
My business is being audited for the third time in a row, and this time I couldn't produce records during the audit -- can I still fix the estimated assessment by providing the paperwork now?
The estimated assessment stands for now, but the taxpayer gets one more chance. A business undergoing its third consecutive ('3rd generation') sales and use tax audit failed to provide adequate record…
My auditor denied my pollution control equipment refund because I didn't have Form ST-11A -- but I have an environmental permit from the state instead. Does that count?
Yes -- in this case, it did. A Virginia brewery sought a use tax refund on equipment it said qualified for Virginia's pollution control exemption (Va. Code § 58.1-609.3 9), which exempts equipment 'ce…
I sold IT equipment to a government contractor who said it was buying as an agent of the federal government under a cost-reimbursement contract -- is that sale exempt from Virginia sales tax?
No -- and the audit sample challenge also failed. A government IT contractor made untaxed sales of hardware, software, and consulting to another contractor ('Customer 1'), treating the sales as exempt…
A city taxed my personal car and my new travel trailer -- can I appeal either one to the Virginia Department of Taxation?
Split result, and neither part could be decided on the merits yet. An individual was assessed 2024 local tangible personal property tax on a personal vehicle and a travel trailer, both purchased that …
The IRS increased my income on audit, but I disagree -- can Virginia just accept the return I want to file instead of the IRS's adjusted numbers, and can I still claim my overpayment credits and age deduction?
No on all three points -- the assessments were upheld. The IRS audited a taxpayer's 2018 and 2019 federal returns and increased her adjusted gross income and self-employment income; because she never …
We moved to Virginia partway through the year and paid income tax to our old state, another state where a bonus was sourced, and California -- can we credit all of that tax paid against our Virginia tax?
Partly -- two of the three credits were reinstated, but the California credit was correctly denied for good. A couple moved to Virginia mid-2022 and filed a part-year resident return claiming credit f…
I ran my security-installation business as a retailer for years and charged my customers sales tax, but my auditor says I should have paid use tax as a contractor instead -- do I now owe use tax ON TOP OF the sales tax I already collected and paid over?
The underlying use tax assessment was correct, but the taxpayer may get real relief through Virginia's brand-new one-time credit. A business that sells and installs security gates, access control syst…
My HVAC company wants to offer long-term equipment leases through an affiliate -- does the installer pay tax as a contractor, does the affiliate collect sales tax on the lease payments, and is that double taxation?
Three separate tax obligations, not one overlapping one. An HVAC company installs equipment for Virginia homeowners and, as a consuming contractor, pays sales tax (or accrues use tax) on its own purch…
If a customer won't sign a capital improvement certificate (Form ST-124) and asks to be charged tax, must the contractor collect sales tax on the installation work?
Yes. Without a timely, properly completed Form ST-124, the contractor must collect and remit sales tax on both the installed property and the installation charges. Because the contractor already paid …
Are a concrete-pumping company's charges to contractors subject to New York sales tax when its own crew operates the pump trucks?
Not when the job is a capital improvement. Because the company keeps dominion and control of the trucks and supplies the operators, it is providing a service, not renting equipment. Pumping concrete t…
Does an out-of-state seller whose products are sold and shipped through an online marketplace (and stored at a New York fulfillment center) have to register for and collect New York sales tax?
Generally no. The seller is a 'marketplace seller.' When the marketplace provider collects and remits New York sales tax on the sales it facilitates, and publicly commits to do so, the seller need not…
When is a sale exempt from Illinois sales tax as an interstate-commerce sale or a sale for resale, and who can seek a refund if tax was charged anyway?
A sale is exempt as interstate commerce only if the seller (not the buyer) ships the goods out of Illinois for good, or if a narrow nonresident-vehicle exception applies with proper proof of non-resid…
Does Illinois charge sales or use tax on a video game's in-app purchases, like in-game currency and game extras?
Yes, for the in-app purchases, but not for the free download. Illinois treats a free download of a video game (software downloaded from an out-of-state server) as untaxed, but once a player buys in-ga…
My company sells cloud-based practice management software (billing, records, patient messaging) to healthcare providers -- do I need to charge Virginia sales tax or communications tax on subscriptions?
Exempt from both taxes. A Virginia business offering healthcare providers three cloud-based subscription applications -- billing/claims management, a records manager, and a patient messaging/portal tr…
I placed a $100,000 passenger automobile in service in 2023 and claimed 80% federal bonus depreciation, which exceeded the IRC Section 280F annual limit -- did I calculate the Illinois addition and subtraction modifications correctly?
The Department confirmed the core mechanics: because the taxpayer's 80% bonus depreciation exceeded the IRC Section 280F dollar cap ($20,200) for the auto's first year, no Illinois subtraction modific…
After a corporate 'F reorganization,' can the new successor company use the predecessor's Tennessee net operating losses and tax credits against its future franchise and excise tax?
Yes. The Department ruled that after an IRC § 368(a)(1)(F) 'F reorganization' — a mere change in a corporation's identity or form — the newly formed successor company may carry over and use the predec…
When a bank's subsidiary sells assets and is then moved from a first-tier to a second-tier position, are its sale transactions still included in the bank group's combined Tennessee franchise and excise return?
Yes — for the sales made while it was still in the group. The Department ruled that a bank-owned subsidiary's sale of two investments must be included in the bank group's combined Tennessee franchise …
Does Illinois sales tax apply at the full rate or the reduced 1% rate to dental fluoride varnish and similar medical devices sold to professionals?
It depends on how the product is classified. Illinois taxes qualifying drugs, medicines, and medical appliances at a reduced 1% rate, but the Department's GIL did not decide whether this particular fl…
Is the equipment a contractor rents for asbestos abatement and demolition exempt from sales tax when the job is a capital improvement to a New York State-owned building?
No. Equipment a contractor rents to perform asbestos abatement and demolition is a taxable purchase, even when the job is a capital improvement to a State-owned building. The equipment never becomes a…
The Department didn't contact me for 13 years and then suddenly filed a wage lien on decades-old tax debt -- is it too late for them to collect, and did interest keep piling up the whole time?
Split result. A taxpayer's Virginia income tax assessments from 1997-1999 remained legally collectible, but interest and penalty stopped accruing years before the Department's most recent collection a…
I fabricate and deliver septic tanks to job sites where my customers hook them up -- am I an installer who doesn't owe sales tax, or a retailer who does? And can prior phone advice from the Department protect me either way?
The fabricator was a retailer, not an installer, and owes the sales tax -- three separate arguments all failed. A septic tank fabricator delivered finished tanks to job sites and placed them into hole…
The IRS increased my taxable income based on money a payment app reported as business income, but it was really just reimbursements from friends and family -- can I get Virginia to ignore the IRS's number?
No -- the assessment was upheld, because Virginia simply followed the IRS's own adjusted number. The IRS increased a taxpayer's 2020 federal adjusted gross income (FAGI) after a company that operates …
I fabricate and sell steel products, and a separate contractor I hire does the rebar tying and shop drawings, billed separately on my invoice -- do I have to charge sales tax on those separately stated labor charges too?
Yes -- the labor charges are taxable, and the refund was denied. A steel and rebar fabricator forms raw materials into custom products to customer specifications, then has an independent contractor pe…
How does Illinois tax the sale of motor vehicles, including trade-ins, private-party sales, and sales to nonresidents?
Illinois taxes most motor vehicle sales under the Retailers' Occupation (sales) Tax or Use Tax, and generally allows a trade-in credit against the taxable price when a like-kind vehicle is traded in. …
Does the owner of a single-family vacation rental have to charge New York sales tax on the rent when he provides no housekeeping or linen service during the stay?
No. New York taxes occupancy only in a 'hotel,' and a building is a hotel only if it provides housekeeping, linen, or other customary hotel services. Because this owner offered none of those during a …
When a driver-education company rents racetrack garage spaces to event registrants — some used to park cars, others used as hospitality tents or meeting space — does Texas sales tax apply to the full lump-sum garage rental fee?
Mostly yes. Texas ruled that garage spaces a driver-education company rents to event registrants are taxable motor vehicle parking (not exempt real property rental) whenever the space is available for…
Are the weekly per-employee fees a company charges to train, supervise, and run payroll for a hotel's own housekeeping staff subject to New York sales tax?
No. Because the hotel's own employees perform the cleaning and the company only supervises them and handles payroll as the hotel's agent, the company is not performing a taxable cleaning or maintenanc…
Does New York sales tax apply to the 'buyer's premium' (the commission an auction house charges the winning bidder) on top of the hammer price?
Yes. New York treats the buyer's premium as part of the sales price of the auctioned property, so the whole charge, hammer price plus commission, is a taxable receipt. A vendor cannot deduct its own s…
Can a manufacturer sell uninstalled building panels (materials) tax-free if the customer hands over a Form ST-124 Certificate of Capital Improvement?
No. A sale of uninstalled panels is a taxable retail sale of tangible personal property under Tax Law § 1105(a), and a Form ST-124 (Certificate of Capital Improvement) cannot be used to buy building m…
How does Illinois tax a construction contractor who also manufactures the modular components it installs into a building?
The contractor owes Illinois Use Tax as the end user of the materials, and when the contractor is also the manufacturer of the modular components it installs, the tax base is only what it paid for the…
Are the fees from a web-based job search and posting platform taxable as software, information services, or are they exempt advertising?
Not taxable. The platform is free to the customers who embed it (no consideration = no taxable sale of software), and the pay-per-click and job-posting fees the operator earns are charges for an adver…
Does an out-of-state online retailer become a New York sales-tax vendor just by storing inventory at, and buying fulfillment services from, an unaffiliated fulfillment company in New York?
No. If the retailer isn't otherwise a vendor, buying fulfillment services from an unaffiliated provider and storing inventory at that provider's New York warehouses does NOT make it a vendor required …
What does Illinois General Information Letter ST 24-0031-GIL say about how the state's sales, use, and hotel taxes apply to prepayments, refunds, marketplace nexus, tax appeals, and specific products and services?
This isn't a ruling on one issue -- it's the Illinois Department of Revenue's response to an annual multistate tax survey, touching on several separate sales/use and hotel tax topics: businesses owing…
As a military servicemember or military spouse connected to South Carolina, which state taxes my income — and can we choose?
You often get to choose. Under the federal Veterans Auto and Education Improvement Act (VAEIA, effective for 2023 and later), a military servicemember and spouse may ELECT, for state income tax, to us…
Is a company that runs a POS platform and mobile app connecting restaurants to workplace food events (popup counters, delivery, catering) a marketplace provider, and are the fees it charges restaurants taxable data processing services?
Yes to both. Texas ruled the company is a marketplace provider that must collect and remit sales tax on the restaurants' food sales, and separately that its Popup, Order Total, and Delivery fees (plus…
Does Illinois charge sales tax on software accessed only through the cloud, like a SaaS subscription or an app membership?
No. Illinois does not tax computer software delivered through a cloud-based system where the software is never downloaded to the customer's device and is only accessed remotely, including software-as-…
I overpaid New Mexico gross receipts tax because a marketplace provider also remitted it on my short-term rentals — can I still get a refund years later?
No — those refund claims are time-barred. Inn of the Laughing Llama, a Santa Fe short-term rental, paid gross receipts tax on bookings that its third-party marketplace providers were also required to …
Does a restaurant owe Texas sales tax on the disposable collars it uses to temporarily extend soft-serve ice cream cups while blending toppings?
Yes, tax applies. The Comptroller ruled that disposable collars a restaurant uses to temporarily extend soft-serve cups during blending are taxable "hand tools" excluded from Texas's manufacturing exe…
For an event planner, which purchases can be bought tax-free for resale, when does providing food make the whole event a taxable catering charge, and what happens if it arranges catering as the customer's agent?
It depends on food and agency. At no-food events, the planner can buy/rent TPP and taxable services for resale (with Form ST-120) when separately stated and proportionate, and collect tax on the resal…
Are hosted, web-accessed investment, trade, and compliance management platforms taxable as prewritten software, or nontaxable information services?
Taxable. The firm's three hosted investment-management products are taxable prewritten software: clients pay annual fees for the right to use, control, and direct software platforms for risk analysis,…
For a multi-level-marketing company, is a distributor's annual 'active status' renewal fee taxable, and what about fees for a mobile app sold alone or bundled with a dashboard and website?
The $25 annual renewal fee for 'active' distributor status is NOT taxable — it buys the right to keep distributing products and earn a discount, not taxable property or services. But the mobile app fe…
What are the major South Carolina tax law changes from the 2024 legislative session?
SC Information Letter 24-16 summarizes the major South Carolina tax changes enacted in the 2024 legislative session. Highlights: South Carolina conformed its income tax to the Internal Revenue Code as…
I run two wood-pellet fuel production plants in Virginia -- which of my machinery, conveyors, storage domes, and pollution-control equipment qualify for the sales tax manufacturing exemption?
Mostly exempt, with specific carve-outs -- this advance ruling walks through a wood-pellet fuel producer's equipment at two Virginia plants, item by item, under the industrial manufacturing exemption …
When an equipment manufacturer's finance arm sells extended-warranty service contracts (CVAs) through independent equipment dealers, is the dealer responsible for collecting Texas sales tax on those contracts?
Yes. Texas ruled that the extended-warranty equipment protection plans (CVAs) sold by a manufacturer's finance subsidiary are taxable extended warranty contracts, and a dealer that invoices and collec…
I charge customers one lump sum for delivering and setting up furniture in their home -- can I treat that as exempt installation and delivery, or is it taxable because I combined two charges into one?
The assessment was upheld -- the retailer lost on both arguments it raised. A home furnishings retailer invoiced customers a single lump-sum fee covering delivery and setting up furniture in their hom…
My auditor included a one-off equipment lease I don't normally enter into in my sample exceptions, which then got extrapolated across my whole audit -- can I get that specific transaction excluded as unusual?
No -- the transaction stayed in the sample, and the assessment (already paid) was upheld. A Virginia furniture retailer leased product-imaging (photography) equipment from a vendor to photograph its p…
I rent portable toilets and provide waste removal service with them -- is the whole charge taxable, and can I still get credit for government sales, out-of-state sales, and taxes I already paid, even though I didn't have the paperwork ready during the audit?
Mixed result. A portable toilet rental and service company was audited and challenged its assessment on five separate fronts. FIRST -- and the one issue fully decided against the taxpayer -- the Depar…
The Department refunded my overpaid sales tax but wouldn't pay me the interest because I couldn't show I'd passed it on to my customer -- but my company merged with that customer, so there's no longer a separate customer to refund. Do I still get the interest?
Yes -- the taxpayer wins. Virginia normally won't pay interest on a sales tax refund to a DEALER unless the dealer agrees to pass that interest on to the PURCHASER who actually bore the tax (Va. Code …
My customer arranges and pays a common carrier to pick up goods at my Virginia warehouse and ship them out of state — is that sale exempt as interstate commerce, or does it depend on who arranged the pickup and where title transfers?
It depends entirely on WHERE title to the goods transfers, not merely on the fact that a common carrier is involved. A Virginia manufacturer/dealer asked about two scenarios where its customers pay a …
I overpaid my New Mexico gross receipts tax — how long do I have to claim a refund before it's too late?
No — the refund is time-barred. Battery Systems paid its 2019 gross receipts tax on time, then later realized some sales were exempt and filed a refund claim in 2023. The Department refunded the perio…
Were the clinical-laboratory products reviewed in Florida TAA 24A-013 exempt from sales tax?
Yes. Florida concluded that all 86 test kits, controls, and calibrators sold to clinical laboratories were exempt because they were dispensed under prescriptions from practitioners authorized to presc…
Are fees for outdoor adult and children's health and nature classes held in New York City public parks subject to sales tax?
No. Outdoor health and nature classes taught in public parks are not subject to New York State sales tax (teaching such classes is not an enumerated taxable service), and they are not subject to New Y…
Where can taxpayers find South Carolina Department of Revenue advisory opinions by tax topic through September 30, 2024?
Use the subject index attached to SC Information Letter #24-15. It organizes South Carolina Department of Revenue advisory opinions issued from 1987 through September 30, 2024 under administrative, al…
How these rulings are useful
- See how the rule applies: A letter ruling shows how a state revenue department actually applied the tax law to a specific business and set of facts.
- Plan with confidence: Find a ruling with facts close to yours before you charge, remit, or claim an exemption.
- Binding only on the requester: A ruling is binding on the department only for the taxpayer who asked. It is persuasive, not a substitute for your own ruling or professional advice.
- Research across states: Compare how different states treat the same issue, from SaaS and food exemptions to nexus and contractor purchases.