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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How did Illinois distinguish a taxable $1-purchase-option equipment lease from a true lease with a fair-market-value buyout?
A lease with a nominal or $1 purchase option generally was a conditional sale, making all contract receipts subject to Retailers' Occupation Tax. A lease retaining a fair-market-value buyout could rem…
When may a South Carolina retailer deduct a customer's bad debt on a sales or use tax return?
A retailer may deduct the taxable sales price it previously reported and paid tax on when that receivable becomes worthless and qualifies as a bad debt for state income-tax purposes. The deduction exc…
When did Virginia accept or reject exemption-certificate support for a technology seller's audited sales?
Virginia granted partial relief. It removed Customer A sales made after a complete resale certificate was accepted in good faith and removed Customer C sales supported by a Department authorization le…
Did an active-duty service member owe Georgia use tax on a European vehicle imported under orders before the title ad valorem tax took effect?
Yes. The vehicle entered Georgia before the March 1, 2013 title-tax change, no sales or use tax had been paid elsewhere, and the service member retained a non-Georgia home of record, so the exemption …
Must a nonprofit lounge collect Georgia sales tax on food, beverages, tangible goods, and admissions sold to members or the public?
Yes. Nonprofit status did not exempt the lounge's retail sales of food, beverages, tangible personal property, or admissions. It had to collect and remit tax using Form ST-3, but it could buy inventor…
May a cash-management provider charge one nontaxable service fee when it retains title to equipment placed at customer sites?
Yes. The single charge for secure transportation and cash-management services was not taxable because the provider retained title to and intended to recover the equipment and paid tax as its consumer.…
May a dental lab sell prescribed appliances, caps, coverings, and prostheses to dentists tax-free without Form ST-5?
Yes. Dental appliances, caps, coverings, and prostheses that could be sold or used only under a dentist's prescription were exempt prosthetic devices, including related fabrication and delivery charge…
How did Georgia's 2013 TSPLOST transition apply to motor-vehicle lease payments, moves between counties, and the $5,000 cap?
Under the 2013 transition rules, TSPLOST was collected on periodic lease payments rather than fully upfront, up to $5,000 of aggregate payments, and followed the vehicle's registration county when the…
Is a Georgia gunsmith's firearm transfer fee taxable when the gun was purchased from an out-of-state seller?
No, when the Georgia gunsmith neither sold the gun nor took payment for it. The transfer fee was a nontaxable service fee because Georgia statutes did not identify it as taxable. If the gunsmith itsel…
Could a direct-sales company file and remit Illinois sales tax for its independent consultants, and where did 2013 home-party and website sales go on the return?
Yes, if IDOR accepted an RR-80 agency agreement under 86 Ill. Adm. Code 130.550. The company could then collect and remit tax on its consultants' ultimate retail sales, while consultants generally wou…
Could a taxpayer challenge a Virginia sales-tax assessment after the 90-day appeal deadline and avoid the post-amnesty penalty?
No. The assessment was dated September 6, 2012, making the complete administrative appeal due December 5, 2012, but the Department received the taxpayer's only appeal correspondence on April 16, 2013.…
Could a Virginia resident obtain out-of-state tax credits without filing Virginia returns for 2007 and 2008?
The taxpayer first had to file Virginia returns. She conceded Virginia domicile and supplied other-state returns but had filed no Virginia return for 2007 or 2008. The Department required both Virgini…
Did a Foreign Service employee change domicile from Virginia to another state before moving overseas?
Not on the evidence submitted. The employee cut Virginia ties and obtained a license, vehicle registrations, and voter registration in another state, but moved from Virginia to an overseas post withou…
Could a county tax all machinery at a plant that continued limited operation briefly after its announced shutdown?
Not on the record presented. Although the manufacturer's March 2010 shutdown notice may have been inaccurate because some equipment operated briefly into January 2010, the Department found that some o…
Was a nonqualified pension distribution taxable by Virginia when it was earned before the taxpayers moved but paid afterward?
Yes. Although the husband's lump-sum nonqualified pension was earned and payable before the couple moved to Virginia, it was actually distributed in April 2010 after they became Virginia residents. Th…
Could taxpayers obtain a Virginia refund by filing their original 2008 part-year return after the extended due date?
No. The taxpayers filed their original 2008 part-year Virginia return on May 22, 2012, after both the extended filing deadline and the three-year refund period measured from the May 1, 2009 original d…
Did a Foreign Service officer retain California domicile or abandon Virginia domicile during an overseas assignment?
No. Virginia found that the officer abandoned California domicile and established Virginia domicile after moving, buying a home, registering a vehicle, obtaining and renewing a Virginia license, and f…
Were a ready-mix concrete seller's delivery and fuel surcharges and Virginia pickup of skid-steer equipment tax-exempt?
No. Virginia upheld tax on the ready-mix seller's delivery and fuel surcharges because mixing and processing continued in the truck until the concrete reached the job site, making the charges part of …
Could an Illinois retailer refund tax after receiving a late exemption certificate and simply adjust its next return, or send the customer to IDOR?
No. After refunding the tax to its customer, the retailer could not merely adjust the next return. It had to file a claim for credit under 86 Ill. Adm. Code 130.1501. Only the person that actually pai…
Could taxpayers apply a late-filed 2008 overpayment to 2009 after Virginia's refund limitations periods expired?
No. The taxpayers filed the 2008 amended return in October 2012, after the general three-year period and every applicable statutory exception had expired. Calling the requested relief a credit against…
Did a service member's statement that the military treated another state as home prove her 2009 military pay was exempt from Virginia tax?
Not by itself. The Servicemembers Civil Relief Act protected an existing domicile from changing solely because of military orders, but the taxpayer had filed a Virginia resident return, reported civil…
Did Virginia tax a nonresident interstate truck driver's wages and sole-proprietor owner/operator service fees?
Generally no, for the compensation described. Federal law barred Virginia tax on the nonresident employee's interstate motor-carrier wages and also treated qualifying transportation-service fees paid …
Did moving abroad and qualifying for the federal foreign-earned-income exclusion end the taxpayers' Virginia domicile?
No. Although the couple lived and worked indefinitely in another country, they kept a Virginia home, vehicles, voting ties, and renewed Virginia driver's licenses, and later claimed Virginia residency…
Could a taxpayer undo her 2009 Virginia resident return without clearly documenting where she lived and established domicile?
Not on the evidence submitted. The taxpayer had some ties to another state but retained a Virginia driver's license until October 2009, filed a full-year Virginia resident return, and had Virginia tax…
Did an other-state return and surrender of a Virginia license prove that a taxpayer changed domicile before 2009?
Not by themselves. The taxpayer filed a 2009 return in another state and had surrendered her Virginia driver's license in August 2008, but she did not provide the additional records Virginia requested…
Could an out-of-state partnership use separate accounting instead of Virginia's statutory apportionment formula for 2012?
No. The partnership showed only that separate accounting produced a different result after an out-of-state real-estate sale. It supplied no clear and cogent evidence that Virginia's formula was uncons…
Were no-charge oil and filter changes under a manufacturer's scheduled-maintenance warranty subject to Virginia retail sales tax?
No. The vehicles' manufacturer package covered scheduled maintenance for two years or 25,000 miles, and customers paid nothing when oil and filters were replaced. Virginia treated the work under its w…
Could an electrical contractor rely on the wrong type of NTTC when it accepted the completed certificate on time and in good faith for otherwise deductible construction work?
Yes, for the President Homes receipts. Rio Grande Electric timely accepted a completed Type 2 NTTC in good faith for electrical work that the Department agreed would otherwise qualify for a constructi…
When did the Kansas state sales and use tax rate change to 6.15%, and how do transition rules apply?
Kansas Notice 13-08 (June 6, 2013), which revokes and replaces the erroneous Notice 13-07, explains that 2013 House Bill 2059 changed the Kansas state sales and use tax rate from 6.3% to 6.15% on July…
Could a New Mexico grain hauler deduct intrastate deliveries from a railhead to farms by assuming they were part of an interstate shipment under one contract?
No. Wesley Miller hauled grain from an Albuquerque railhead to central New Mexico farms as a subcontractor for his father. Section 7-9-56 allowed an intrastate leg only when it was part of interstate …
Must the Kansas expensing deduction be added back when figuring income for a homestead refund?
Kansas Notice 13-06 explains that the Kansas expensing deduction cannot be used to reduce 'income' for homestead property tax refund purposes. 'Income' for a homestead claim is defined in K.S.A. 79-45…
Were a psychologist's 2005-2006 contract services to a school district exempt under New Mexico's later rural-health and medical-services tax provisions?
No. Ann Lodge provided contract psychology services to the Los Lunas School District in 2005 and 2006 but filed no gross receipts tax returns. The rural-health credit and expanded medical-services ded…
Could a shuttle company treat its drivers as independent contractors without contracts, tax forms, or payment records?
No. The shuttle service supplied no contracts, Forms W-2 or 1099, employment forms, individual driver records, or payment documentation supporting independent-contractor status. Virginia therefore tre…
Could a convenience store overturn local BPOL and business-property assessments without producing complete records?
No. The store repeatedly failed to supply complete cash-register tapes and other records needed to reconcile BPOL gross receipts, and it supplied no contracts proving vendors owned assessed display ca…
Did an Acute Care Expense Limitation pricing arrangement prevent patient-specific specialty-bed leases from being exempt?
No. Although the supplier used an Acute Care Expense Limitation program and maintained a bulk inventory, physician work orders named the patients and monthly invoices tracked the beds and days of use.…
Were specialty beds leased under a flat CAP pricing program exempt when physician records identified each patient?
Yes. The supplier's flat CAP pricing and bulk inventory did not control the exemption. Licensed physicians issued work orders naming the patients, and monthly lease records tracked the beds and patien…
Did CAP pricing and supplier inventory prevent specialty-bed leases from qualifying as patient-specific exempt equipment?
No. The flat CAP pricing method and supplier-owned bulk inventory did not defeat the exemption because physician work orders and lease records tied the specialty beds to specific patients. Virginia re…
Did a hospital's specialty beds remain patient-specific exempt equipment under a flat monthly CAP pricing program?
Yes, when the hospital documented the specific patient. The supplier's flat CAP pricing and bulk inventory did not defeat the durable-medical-equipment exemption because physician work orders named pa…
When were a dental supplier's sales of durable medical equipment exempt as patient-specific purchases?
Virginia granted relief only for documented patient-specific items. Dental prosthetic devices and other qualifying durable medical equipment were exempt when purchased on behalf of a named individual,…
Did an Illinois sales-tax exemption number exempt a hotel operator from Hotel Operators' Occupation Tax on a room rented to a charity, school, or government entity?
No. The Hotel Operators' Occupation Tax was imposed on the hotel operator, not the room occupant, so an otherwise exempt charity, religious or educational group, or government entity's Illinois E-numb…
When were separately sold software and hardware maintenance agreements taxable in Illinois?
A maintenance agreement sold separately from the equipment or software generally was not a taxable sale, although the service provider owed Use Tax on parts transferred during service. An agreement in…
Did Illinois tax a $1-purchase-option equipment contract upfront or as installments, and how was a fair-market-value lease taxed?
A contract with a nominal or $1 purchase option generally was a conditional sale. The lessor-retailer owed Retailers' Occupation Tax on installment payments as it received them, and the customer owed …
Did an out-of-state winery with no Illinois location have to register and collect tax when shipping online wine orders directly to Illinois residents?
Yes. Under the law discussed in this 2013 letter, an out-of-state winery selling wine directly to Illinois residents had to obtain a Winery Shipper's License, also called a Direct Shipping Permit. If …
Were an intermodal trucker's separately stated storage, chassis, and fuel charges subject to Illinois sales or service tax?
Generally no, if the transactions involved no transfer of tangible personal property to the customer. IDOR said Retailers' Occupation, Use, Service Occupation, and Service Use Taxes generally did not …
Is domestic (non-bonded) jet fuel sold to a commercial airline for international flights exempt from Colorado tax the way fully tax-exempt bonded jet fuel is?
The Department wouldn't decide. Domestic (non-bonded) jet fuel used only for international flights might qualify for Colorado's fuel excise tax exemption, but only if the federal government exempts no…
Can a commercial dog breeder buy dog food tax-free for its breeding dogs and puppies as a production or farming input?
No. Dog food a commercial breeder feeds its breeding dogs and their puppies (later sold at retail and wholesale) is subject to sales tax. The production exemption in Tax Law 1105-B covers only supplie…
Do installment payments from a nonqualified supplemental retirement plan, received after age 59 1/2 and after retiring, qualify as 'pensions and annuities' for New York's $20,000 income subtraction?
Yes. Because the installments were paid after the petitioner separated from employment and after he turned 59½, and were attributable to personal services he performed for his former employer before r…
Was an LLC that bought one house and hired a contractor to renovate it engaged in a county-licensable BPOL business?
Yes as to doing business, but contractor classification required another review. Forming the LLC, seeking profitable investments, buying a house, obtaining a permit, and hiring a renovator required en…
What annual caps applied to Virginia's Qualified Equity and Subordinated Debt Investments Tax Credit in 2013 and 2014?
The annual cap was $4.5 million for taxable year 2013 and $5 million for 2014. The statute generally capped the credit at $5 million, but budget actions had imposed lower limits in several years. Tax …
What was Virginia's Land Preservation Tax Credit cap for calendar year 2013 after House Bill 1398?
The cap was $100 million. House Bill 1398 removed the inflation adjustment beginning in 2013, reducing the previously announced 2013 cap of $113,909,000. The law also stopped adding reissued credits t…
When were television-content licensing fees and advertising receipts included in Florida's corporate-income-tax sales factor?
License fees were Florida sales when the cable operator customer was located in Florida, and advertising receipts were Florida sales when the advertiser customer was located in Florida.
When does South Carolina's sales-tax exemption cover material-handling systems and equipment?
Material-handling systems and equipment used in a South Carolina manufacturing or distribution facility can qualify for the sales-and-use-tax exemption if the same taxpayer gives advance notice and in…
Could a federal firearms-training contractor buy weapons and ammunition tax-free because title passed to the government?
Generally no. The true object of each instructors-and-equipment line item was firearms training, not government acquisition of weapons, so the contractor was the taxable consumer even when title passe…
New York Advisory Opinion TSB-A-13(7)C / (6)I: Do payments by members who fund a QETC's research and development qualify for the qualified emerging technology company capital tax credit?
No. The members who funded the company's research and development cannot claim the QETC capital tax credit, because they were owners of the company from inception, holding more than a 10% interest, an…
Are monthly fees for litigation-support and e-discovery hosting of a client's own documents subject to NY sales tax?
No. A provider that collects, processes, organizes, and hosts a client's own documents on a web platform -- letting the client retrieve, view, tag, redact, highlight, and annotate them -- is providing…
Could a home-inspection subcontractor deduct services resold by WIN when WIN issued the Type 5 NTTC after the audit's 60-day deadline and said it had paid tax?
No. Alan Moya performed home inspections solely as an independent subcontractor for WIN, which resold the services. Moya had no NTTC when his 2008 and 2009 returns were due and did not obtain one by t…
Could part-year Virginia residents claim a prorated state standard deduction after itemizing on their federal return?
No. Because the couple elected to itemize deductions on their 2010 federal return, Virginia law required them to itemize on their Virginia part-year return too. They could not use a prorated Virginia …
Were the initial sale and later reissuance of true equity memberships in a recreational club taxable as admissions?
No. The membership contributions bought equitable ownership interests rather than dues or admission rights because members received ownership certificates, voting rights, and rights to club assets on …
Are the various per-record fees a medical-records company charges (copying, retrieval, certification, postage, etc.) subject to Colorado sales tax?
None of them are taxable. The Department ruled that every enumerated fee a medical-records release-of-information company charges — basic, retrieval, certification, photo/per-page, handling, postage, …
Could an independent case manager use a timely Type 2 NTTC accepted in good faith to support a service-resale deduction that normally required a Type 5 NTTC?
Yes, for 2008. Teresa Maestas provided case-management services as an independent contractor to Visions, which resold them to the Department of Health and paid gross receipts tax. Visions mistakenly i…
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