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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What items and transactions qualified under Virginia's 2013 Hurricane Preparedness Sales Tax Holiday guidelines?
During the historical May 25-31 holiday, qualifying hurricane-preparedness items priced at $60 or less and portable generators priced at $1,000 or less were exempt. The guide covered discounts, layawa…
Which of these are taxable in Colorado: garden seeds and plants, glucose tablets, rehydration products, glucose/urinalysis test strips, pregnancy and ovulation test kits, and a coupon book?
A mixed bag, item by item. (1) Garden/vegetable/fruit seeds, flower seeds, fruit trees, and vegetable plants are EXEMPT only if used in a COMMERCIAL AGRICULTURAL operation (§ 39-26-716(4)(b)); bought …
Which fees on a utility bill — connection, reconnection, disconnection, late payment, returned check — are subject to Colorado sales tax?
For a TAXABLE (commercial) gas or electric account, the fees split by whether they're part of getting the service. Connection, reconnection, and disconnection fees are generally TAXABLE — they're inse…
Was a monthly server-support/maintenance fee covering free Microsoft patches and upgrades taxable under Colorado's 2010–2012 software rules?
Probably not taxable — though the Department gave only general guidance. The question covered the window from March 1, 2010 to June 30, 2012, when 'standardized' (prewritten) software was taxable no m…
Did taxpayers avoid penalty and interest for 2001-2003 because they expected refunds, later paid the principal, and no Department employee suggested a managed audit?
No. Vincent and Tesslin Vigil were required to file New Mexico returns for 2001-2003 because they were residents required to file federal returns. Their belief that they usually received refunds and t…
Could a town receive a Communications Sales and Use Tax Trust Fund share after missing the original 2006 certification deadline?
Yes. The town had missed the original certification deadline, but later law allowed a Department ruling to adjust fund distributions. Communications-provider records, town records, and bank statements…
How did Virginia tax a leased drill and equipment transferred between commonly owned businesses?
Virginia adjusted the drill assessment to include only untaxed lease payments made during the audit period because the equipment was leased, not owned. It upheld use tax on equipment bought from a sep…
Could a dental supplier remove durable medical equipment from an audit before documenting the specific patients?
No, not without records. Virginia's dental-equipment exemption required proof that each item was purchased by or on behalf of a specific patient, while bulk purchases remained taxable. Because the sel…
Which CAP-program specialty-bed leases qualified for Virginia's patient-specific medical-equipment exemption?
Leases supported by patient information qualified; three unsupported invoices did not yet. CAP pricing and supplier inventory did not defeat the exemption because physician work orders and lease recor…
Could a drilling contractor overturn a consumer use-tax sample because a new business line caused many untaxed purchases?
Not as to the sample. Virginia found the one-year purchase sample representative because the new activity's remaining exceptions were normal recurring purchases and the contractor had not supplied the…
Did a multi-year work assignment and resident return in another state end a worker's Virginia domicile?
No. Although he lived and filed as a resident in the work state, the assignment appeared temporary and he kept a Virginia home available for his use, voted in Virginia, renewed a Virginia driver's lic…
Could part-year Virginia residents claim a credit for tax paid to the state where they lived later in the same year?
No for income earned while they lived in the other state. That income was not subject to Virginia tax and therefore did not qualify for Virginia's other-state credit. The couple also failed to identif…
Which drink-packaging and bar-coding equipment counted as taxable manufacturing machinery rather than exempt logistics equipment?
Equipment forming the retail package counted as manufacturing; later shipping and logistics equipment did not. Six-packs for Drink Mix 1 and ten-packs for Drink Mix 2 met consumer product standards an…
When did certified pollution-control equipment become exempt from Virginia local business property tax?
For tax years beginning on or after January 1, 2011, properly certified pollution-control property was exempt from local taxation. Earlier years depended on the locality's ordinance; without a local e…
Could a student-loan group end its Florida consolidated-return election after federal law eliminated its former primary business?
Yes. Federal-law and business changes eliminated the group's historical core activity and sharply changed its Florida operations, establishing good cause for separate filing beginning in 2011, subject…
Did a corporation lose its Illinois net-loss carryforwards merely because it stopped doing business in Illinois before later returning?
No. Ceasing Illinois business did not, by itself, destroy tax attributes acquired under Section 207. If a loss otherwise carried under the statutory periods and ordering rules to a year when the corpo…
Which dues, fees, and assessments charged by a member-owned shooting club were taxable admissions?
Annual dues, tournament fees, and insurance fees were taxable admissions. Late fees, application fees that bought a genuine equity interest, and impact fees used solely for qualifying capital expendit…
Did a commercial landlord have to remit rental sales tax when its tenant paid rent but refused to pay the tax?
Yes. The landlord had to collect and remit tax when it received taxable rent. A tenant's refusal to pay or unsupported exemption claim did not eliminate the landlord's liability for uncollected tax.
Which dealers had to make Virginia's June 2013 accelerated sales-tax payment, and how was it calculated?
Dealers with at least $26 million of taxable sales or purchases during the prior July-June fiscal year generally had to pay 90% of their June 2012 sales-and-use-tax liability as an accelerated June 20…
Which surgical products sold to hospitals qualified for Florida's prescription and single-patient medical-product exemption?
Products required to be dispensed by a licensed practitioner's prescription or order and intended for one patient without reuse were exempt. Reusable identification items and brushes, plus nonprescrip…
Was a corporate vice president personally liable when the company failed to remit employee withholding taxes?
Yes. The officer knew of the unpaid withholding while the company continued operating and provided no objective evidence that he lacked authority to prevent the failure. An IRS decision not to hold hi…
Were per-program streamed and downloaded video sales subject to Virginia communications or retail sales tax?
No. Virginia treated the seller's streamed and downloaded video as digital products delivered electronically, excluded from the communications tax whether the customer received a permanent or time-lim…
Was a deed of trust securing a federal land credit association's loan exempt from Virginia recordation tax?
Yes. Federal law exempted the federally chartered land credit association and its mortgage instruments from state and local taxation other than real-property tax. Because Virginia's recordation tax is…
Can Virginia Public Document 13-57 still be used as the Department's 2013 sales-tax-change guidance?
No. Virginia's official page states that P.D. 13-57 was superseded by revised Guidelines issued as P.D. 13-103 on June 14, 2013. The revision followed legal advice that the additional 0.7% Northern Vi…
Did registering to vote in another state change domicile when the taxpayer remained physically overseas?
No. The taxpayer registered to vote in another state but spent 2008 abroad and provided no evidence that he was physically present in the claimed state during 2008 or 2009. Because a new domicile requ…
Did living in another state for 2008 end Virginia domicile, and could the taxpayer claim credit for that state's tax?
Virginia found that the taxpayer remained domiciled in Virginia because she kept stronger permanent ties here, including a Virginia vehicle and a license renewed in October 2008, even though she lived…
Who had to report door-to-door frozen-food sales, and was the company's 3% payment-processing fee taxable?
The distributors were independent contractors selling on consignment, but Virginia could still require the registered food company to report and remit tax on their door-to-door sales. The company had …
When must a remote retailer register and collect Kansas sales or use tax after the 2013 changes?
Kansas Notice 13-05 (May 2013) explains that Sections 9 and 18 of 2013 Senate Bill 83 expanded when certain remote retailers must register with the Department and collect and remit Kansas retailers' s…
Could a headquarters CITC project calculate project income with a payroll-based share of the taxpayer's Florida taxable income?
Yes. The Department accepted the proposed payroll-factor method because the headquarters functions generated income that was not readily separable, but warned that materially different current or adde…
Did checking an online box create the signed software-license agreement needed for Illinois's canned-software license exemption?
No. In this 2013 GIL, IDOR said checking a box to accept online license terms was not a written agreement signed by both licensor and customer. Canned software and updates generally were taxable unles…
How did Illinois tax dealership entrance towers or signs that were installed on concrete foundations?
If an entrance tower or sign was permanently affixed to real property, the installer was a construction contractor and the end user of the materials, owing Use Tax on cost rather than sales tax on the…
How did Illinois tax a facilities manager's fixed service fees, repair materials, construction work, and subcontracted services?
IDOR did not classify every fee. Permanently installed materials made the provider a construction contractor owing Use Tax on material cost, with no authority to bill the customer 'sales tax.' For oth…
Could a salvage business buy stamped cigarettes from a closing smoke shop and resell them to Illinois retailers without a distributor license?
It could buy the stamped cigarettes, but it could not resell them to retailers without an Illinois cigarette distributor's license. Retailers were required to obtain cigarettes for retail sale from li…
Were a private vehicle-repossession contractor's receipts from federally chartered credit unions immune from New Mexico gross receipts tax?
No. Federally chartered credit unions are federal instrumentalities immune from direct state taxation, but West Rock was a separate for-profit repossession contractor. New Mexico's gross receipts tax …
Did Virginia reverse local property-tax assessments based on revised fixed-asset schedules?
No. Virginia found no basis to change its earlier decision because the business still had to give the city adequate records proving which assets were replaced, obsolete, or absent on each tax date. Wi…
Were vehicles taxable in Virginia when a Virginia dealer prepared them before out-of-state delivery?
No. The vehicles qualified for Virginia's interstate-commerce exemption because the manufacturer retained title under FOB-destination terms until delivery to the out-of-state hospital. The Virginia de…
When were software modifications, maintenance, upgrades, and training exempt from Virginia sales tax?
Separately stated labor to modify prewritten software was exempt even if delivered on tangible media. Maintenance and upgrades were exempt only when agreements and verifiable records established elect…
For an equipment lease, are the purchase option, insurance premiums, documentation fees, late-payment fees, and reimbursed personal property taxes subject to Colorado sales/use tax?
Mixed, and this amended (2013) letter REVERSED the original 2008 conclusion on late fees. Leases of tangible personal property are taxable (and the purchase-option price—fair-market or nominal—is taxa…
Did Illinois include tire disposal fees and statutory tire user fees in a retailer's taxable gross receipts?
The two fees were treated differently. A retailer's tire disposal fee was a cost of doing business and could not be deducted from taxable gross receipts. The statutory tire user fee was specifically e…
Do S corporations with privilege-tax subsidiaries still add back Schedule E losses in Kansas?
Kansas Notice 13-04 explains that Section 3 of 2013 House Substitute for Senate Bill 83 amended the 2012 business-loss addition modification in K.S.A. 79-32,117(b)(xix). That 2012 provision (enacted b…
Did Kansas repeal the 2012 partner and S corporation basis rules?
Kansas Notice 13-02 explains that House Substitute for Senate Bill 83 (2013), Section 19, repealed K.S.A. 79-32,117n, the basis provision enacted by Section 37 of 2012 House Bill 2117. That 2012 provi…
Could a worker claim Virginia's disability-income subtraction while performing competitive paid work?
No. Virginia denied the subtraction for 2008-2010 because the taxpayer regularly performed competitive service-industry work at minimum wage, which constituted substantial gainful activity. The fact t…
Is a single-price, integrated portfolio and risk-management support service for investment managers subject to NY sales tax?
No, the integrated service itself is not taxable. Even though several components viewed alone would be taxable (intrastate telecom, the prewritten-software web interface, and risk-analysis/calculator …
Would Illinois accept an MTC multistate resale certificate that omitted the description of items being purchased?
No, not as submitted. Illinois accepted the MTC Uniform Sales and Use Tax Certificate—Multijurisdictional as a resale certificate only when it contained all information required by 86 Ill. Adm. Code 1…
How can taxpayers check whether an older South Carolina advisory opinion was modified or superseded (per SC IL #13-10)?
Use the citator attached to SC Information Letter #13-10. It helps you determine what effect newer South Carolina advisory opinions have on previously published ones — whether an opinion was modified,…
Does a charity have to charge sales tax on dinner tickets at its annual fundraiser, and how do donations and the $25,000 limit factor in?
A charity's fundraiser sales are exempt as an 'occasional sale' only if it stays under BOTH limits — no more than 12 days of sales in the year AND no more than $25,000 in NET proceeds used for a chari…
Are sutures and IV catheters used in a hospital procedure exempt from Colorado sales tax, and does it matter whether they leave with the patient?
It depends on whether the item leaves with the patient. Colorado exempts nonprescription drugs or materials furnished by a licensed provider as part of professional services to a patient (§ 39-26-717(…
Is a plumber doing sewer inspection, clean-out, and thawing a taxable contractor, does itemizing equipment make it a taxable rental, and when are local taxes due?
Mostly not — but only general guidance was given. (1) A plumber is a 'contractor' (with lump-sum vs. time-and-material tax rules, SR-10) only when incorporating tangible personal property INTO real pr…
If an event company rents equipment from a lessor and hires its own contractors to operate it, can it buy the rental tax-free for resale — or does it owe tax as the user?
It turns on who operates the equipment. A production-event company rents stage/sound/lighting gear from a lessor and either hires its own third-party contractors to run it or lets the client's employe…
Does an out-of-state C corporation that only solicits sales orders for manufacturers — a service — have to file a Colorado corporate income tax return if it has a Colorado employee?
Likely yes, if it has Colorado nexus. An out-of-state C corporation must file a Colorado corporate income tax return if it has substantial nexus — property over $50,000, payroll over $50,000, sales ov…
Are a supplier's implementation, web-hosting, management, and payment-processing fees for on-site vending machines taxable as part of the product sales?
Likely taxable — the Department's general view is that these 'service' fees are inseparable from the taxable product sales and ride into the tax base. A supplier of fasteners and industrial goods put …
In a Colorado drop-shipment, can the seller accept an out-of-state resale or exemption certificate, whose certificate counts, and what form is used?
Yes — Colorado accepts out-of-state documentation in drop shipments, with conditions. A wholesaler may accept a buyer's sales tax license issued by another state to document a resale exemption (using …
What historical rules did SC Revenue Ruling 13-2 give for purchases by government employees, diplomats, and nonprofit employees?
Under this superseded ruling, federal purchases were exempt when the federal government was directly billed, used a centrally billed card, or paid by federal check; an employee-billed purchase remaine…
Were a hospital patient-monitoring and communications system's equipment-and-service charges taxable in South Carolina?
Yes. The Department treated the bundled hospital monitoring and communications system as a taxable retail lease of tangible personal property because the equipment was the transaction's true object. T…
Could Virginia collect a corporation's unpaid income tax personally from its president after an asset sale?
Yes. Virginia upheld the converted assessment against the corporation's president because he knew the asset sale would produce a substantial taxable gain, had authority over the transaction, and faile…
Which solar-farm equipment, installation, and warranties are exempt from NY sales tax when the facility generates electricity for sale?
Equipment used directly and predominantly to generate electricity for sale is exempt under Tax Law 1115(a)(12)/1105-B, and the production process ends at the inverter. Exempt: solar panels, racks, com…
New York Advisory Opinion TSB-A-13(6)C: Was an out-of-state remote seller whose employees made limited-purpose trips to New York (inspirational shopping, trade shows, vendor meetings) doing business and subject to Article 9-A franchise tax?
No. On the stated facts, the out-of-state catalog and Internet seller was not doing business in New York, because its employees' limited-purpose trips for 'inspirational shopping,' attending trade sho…
Does a scaffolding company charge sales tax on a lump-sum to install, rent, and dismantle temporary pedestrian walkways used with a capital improvement?
It depends on whether the walkway is a 'temporary facility' at a construction site that is a necessary prerequisite to constructing a capital improvement to real property. If it is, the lump-sum charg…
If someone finances another business's purchases with his credit card, is he a person required to collect NY sales tax on those purchases?
No. A person who merely finances another business's purchases -- by letting it use his credit card, with the business signing a promissory note to repay him with interest -- is acting as a lender, not…
My nonprofit runs a licensed special-education school as one part of a larger chapter that also does other developmental-disability work. Is the whole chapter exempt from MCTMT, or just the school employees?
Only partially exempt -- the exemption applies per-employee, not per-entity. Effective for calendar quarters beginning April 1, 2012, Tax Law § 800(b)(4) exempts "eligible educational institutions" fr…
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