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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When a contractor builds and runs a city-owned landfill in Tennessee, can it claim the sales-tax pollution-control credit, and which of its purchases qualify for the industrial-machinery exemption?
It splits. The landfill operator gets NO pollution-control credit, but SOME of its purchases qualify for the industrial-machinery exemption. (1) The pollution-control credit (Tenn. Code Ann. § 67-6-34…
Does Georgia use tax apply when a pharmaceutical company stores prescription-drug samples in Georgia and gives them to medical providers?
No, for samples that were lawfully dispensable only by prescription for treating natural persons. The exemption covered use as well as sale, so Georgia storage and distribution of qualifying samples w…
Does leased quality-control equipment qualify for Georgia's manufacturing exemption when it is also used for research and development?
Yes. The quality-control equipment tested incoming industrial materials, work in process, or finished goods and was necessary and integral to manufacturing. Because the company represented that manufa…
When can a Louisiana nonprofit make tax-free sales at a fundraising event?
A qualifying nonprofit event could be exempt with Department approval when proceeds furthered the nonprofit purpose and no promoter profited from the event. Vendor-led or profit-sharing events remaine…
How much 2007 New Mexico income tax did Steve and Sheila Lambert owe after omitting a South Dakota retirement distribution and interest income, and did their misunderstanding remove the penalty?
The omitted income was taxable, but the assessment overstated principal by $120. As full-year New Mexico residents, the Lamberts had to report $35,975.78 withdrawn from the South Dakota retirement sys…
Were a data center's cross-connect, peering, and managed-router services subject to Florida communications services tax?
Cross-connect and peering charges were not subject to CST because the operator supplied unlit infrastructure and monitoring, not transmission. Managed routing was exempt only when bought to provide In…
Was a customized marketing package taxable because it included surveys, campaigns, website work, DVDs, CDs, booklets, and a DVD player?
No. Virginia found the athletic facility's true object was a customized strategy to attract and retain members, not the DVDs, CDs, booklets, DVD player, or other property included in the package. The …
Was an automotive company's purchase of substantially all assets from three related store operators exempt as an occasional sale?
Yes. The asset purchase agreement transferred all or substantially all assets of the sellers' automotive-store businesses, including equipment, inventory, records, customer lists, intangible rights, a…
Who owed Virginia local machinery-and-tools tax when idle recycling equipment was sold and returned to use midyear?
The buyer owed machinery-and-tools tax for the year because it owned the previously idle equipment and returned it to service in July; the equipment was taxable as though in use on tax day. The county…
Could a contractor use an exempt end user's E-number alone to buy construction materials tax-free in Illinois?
No. A contractor incorporating materials into real estate owned by an exempt organization or government entity could make a tax-free purchase only by giving the supplier the owner's active E-number an…
For Virginia machinery-and-tools tax, whose cost is the 'original total capitalized cost' after used equipment is purchased?
The original total capitalized cost is the amount capitalized by the owner that first bought the machinery new, not a later purchaser's lower acquisition cost. A locality must consider a bona fide ind…
How did Virginia's move to January 2, 2013 federal conformity affect 2012 Virginia income tax returns?
Virginia generally conformed 2012 returns to federal law through January 2, 2013, including the American Taxpayer Relief Act and enhanced federal earned-income-tax-credit rules. Taxpayers still had to…
Could an education consultant deduct services sold for resale to a Colorado contractor without an NTTC, and could penalty be removed when a Department employee had said the certificate was unnecessary?
The tax deduction was denied, but the penalty was abated. William Wanker's consulting services for Celero could potentially have qualified as services sold for resale, but Section 7-9-48 required Cele…
Could a New Mexico construction contractor defeat gross receipts tax assessments based on Schedule C mismatches by presenting purchase receipts, offering no explanation for the federal-state differences, and producing no NTTCs?
No. Donald Coleman reported $4,781 more receipts federally than to New Mexico for 2005 and $4,421 more for 2006. He presented no evidence showing whether those customer receipts were for goods or serv…
We're a free association library, a 501(c)(3) nonprofit chartered by the state, exempt from real property tax and sales tax, and primarily funded by our school district's tax levy. We took out a construction loan to renovate our historic building. Does our public-service mission and public funding make our mortgage exempt from mortgage recording tax too?
No, mortgage recording tax IS due. The petitioner is a free association library chartered and registered by the state Education Department since 1957, founded by a 1912 deed of trust, serving all resi…
How is the federal credit for prior year minimum tax recomputed to determine the Nebraska minimum tax credit on a 2012 individual income tax return?
Recompute the federal prior-year minimum tax credit with Nebraska's adjustments, then apply a 29.6% factor. Revenue Ruling 22-12-2 tells 2012 individual filers to recalculate the federal credit for pr…
How is the federal alternative minimum tax recomputed to determine the Nebraska minimum tax on a 2012 individual income tax return?
Recompute the federal AMT using Nebraska's adjustments. Revenue Ruling 22-12-1 tells 2012 individual filers to recalculate the alternative minimum tax (AMT) from their federal return (Form 6251, or th…
Is an employee wellness program -- web portal, health education, biometric assessments, and advice -- subject to NY sales tax?
No. A company that sells employers a wellness program for their employees -- combining an online portal with health/nutrition/exercise education and tracking, annual biometric health assessments, and …
Was the purchase of all interests in a real-estate LLC subject to documentary stamp tax under Florida's conduit-entity rules?
No. The older properties were acquired before the conduit-entity law, and the later property's deed paid documentary stamp tax on full consideration. The LLC therefore was not a conduit entity when it…
Does an out-of-state gift-code issuer (or its affiliated online retailers) have to register to collect Utah sales tax just because unrelated third-party retail stores in Utah sell its gift codes to consumers?
No. The Utah State Tax Commission reaffirmed (updating its own 2010 PLR 09-024 after a 2012 change to the affiliate-nexus statute) that selling gift codes isn't a taxable sale at all — a gift code is …
Does annual attendance at a Utah film festival or trade show, without sales activity, create Utah sales tax or corporate income tax nexus for an out-of-state company or its affiliated retailers?
No, on all counts. Annual attendance at a single Utah trade show or film festival for less than two weeks, limited to networking and relationship-building with no sales negotiated or contracts execute…
Was an interactive telephone disease-management program taxable as communications or exempt as data processing in South Carolina?
No. On the stated facts, charges to healthcare providers for the interactive telephone disease-management program were nontaxable data processing, not taxable communications. Patients supplied respons…
Are tear/serum osmolarity testing modules exempt from Colorado sales tax as 'blood and urine testing kits and materials'?
No — they're taxable. Colorado exempts the sale of 'blood and urine' testing kits and materials (§ 39-26-717(d)), but the Department concluded that tear/serum osmolarity testing modules (such as TearL…
Can a Colorado special district levy its sales tax on natural gas and electricity that a business buys for industrial/manufacturing use?
No. Natural gas and electricity bought for manufacturing and other industrial processes are exempt from Colorado state sales and use tax (§ 39-26-102(21)), and the Department's special districts follo…
Are charges for renting equipment, for the on-site labor of an operator who runs it, and for chemicals used with it subject to Colorado sales or use tax?
It depends on how the deal is structured — and the Department could only give general guidance, not a determination. Colorado taxes the rental of tangible personal property (like motors and tooling), …
If a Colorado customer pays sales tax and later provides an exemption certificate, how and when can the seller refund the tax — and can the customer force the seller to do it?
Yes, with limits. A seller that collected Colorado sales tax because the buyer didn't show an exemption certificate at the time of sale may later refund the tax once the buyer provides a valid certifi…
Did IDOR classify a carrier's prepaid home-phone plans as taxable prepaid calling arrangements instead of telecommunications services?
IDOR did not decide whether the carrier's plans met the definition. It explained that qualifying prepaid telephone calling arrangements were treated as tangible personal property subject to Retailers'…
How did Illinois tax computer servers leased for 24 months with a $1 purchase option and then rented to another customer?
The upstream 24-month contract's $1 purchase option generally made it a conditional sale. The lessor-retailer owed Retailers' Occupation Tax as installment payments were received, and a buyer purchasi…
What records did an Illinois retailer need to support the enterprise-zone building-materials exemption?
The retailer needed two records: a Certificate of Eligibility for Sales Tax Exemption from the enterprise-zone administrator and a purchaser certification identifying the project, zone, materials, pur…
Did a Florida trust become a Virginia resident trust because one of two co-trustees lived in Virginia?
No. The trust was created and governed in Florida, owned no Virginia property, and was administered by two co-trustees acting by majority. Although one co-trustee and beneficiary lived in Virginia, th…
Were Internet-delivered television and movie subscriptions subject to Virginia communications tax?
No. Virginia treated the online television and movie content as electronically delivered digital products rather than communications services. It refunded the tax, penalty, and interest the provider h…
Did Virginia communications tax apply to subscription-priced mobile apps, and were penalties waived for separate billing errors?
The mobile applications were exempt electronically delivered digital products and could also qualify as information services; monthly subscription pricing did not make them taxable. But Virginia uphel…
Did Virginia communications tax apply to subscription-priced mobile apps, and were penalties waived for separate billing errors?
The mobile applications were exempt electronically delivered digital products and could also qualify as information services; monthly subscription pricing did not make them taxable. But Virginia uphel…
Did Virginia communications tax apply to subscription-priced mobile apps, and were penalties waived for separate billing errors?
The mobile applications were exempt electronically delivered digital products and could also qualify as information services; monthly subscription pricing did not make them taxable. But Virginia uphel…
Did Virginia communications tax apply to subscription-priced mobile apps, and were penalties waived for separate billing errors?
The mobile applications were exempt electronically delivered digital products and could also qualify as information services; monthly subscription pricing did not make them taxable. But Virginia uphel…
What filing deadlines and payment lookback limits govern South Carolina tax refund claims under Revenue Ruling 13-1?
A South Carolina refund claim generally must be filed by the later of three years after the original return was filed or two years after the tax was paid; if no return was filed, the general deadline …
When could a Virginia seller accept an exempt organization's certificate in good faith, and whose funds had to pay?
A seller could make a tax-free sale after examining and accepting a properly completed exemption certificate with reasonable care, if the purchased property matched the certificate and the exempt orga…
What 2012 estimated-tax penalty relief did Virginia give qualifying farmers, fishermen, and merchant seamen?
Qualifying farmers, fishermen, and merchant seamen received an automatic waiver of the 2012 estimated-tax underpayment penalty if they filed their Virginia return and paid the entire tax due by April …
Which manufacturing, R&D, out-of-state, and sampled purchases had to be removed, upheld, or reexamined in a Virginia audit?
The appeal produced mixed relief. Virginia removed documented out-of-state exhibit and tie purchases, reduced a mixed software-maintenance charge by 50%, and corrected several audit lines, but upheld …
Could a 2005 Virginia assessment be overturned by arguing that IRS information was obtained unlawfully, without evidence of nonresidency?
No. Virginia held that IRC § 6103(d) authorized the Department to obtain IRS information for a resident nonfiler and that state law allowed an estimated assessment. Because the taxpayer offered no obj…
Would IDOR give yes-or-no answers to a 2013 nexus survey, and what historical guidance did it provide instead?
No. IDOR said nexus was too fact-specific for the survey's yes-or-no format. It instead summarized the law it applied as of December 31, 2012: accepting Illinois orders or filling them from Illinois i…
Can a company that runs its operations through several affiliated partnerships, LLCs, and corporations at one location combine all of their employees to meet the 250-employee threshold for Tennessee's call-center telecommunications exemption?
No. A company cannot combine its own employees with those of its affiliated entities to qualify for Tennessee's call-center exemption from sales tax on telecommunication services (Tenn. Code Ann. § 67…
Is a $1-option equipment agreement a purchase, and may unstated interest and installation costs be excluded from Georgia sales tax?
The agreement was a purchase rather than a lease because title had to transfer after the required payments and the option price was only $1. Sales tax applied to the full nonitemized payment stream wi…
Does a vehicle's net trade-in value reduce the taxable price of a standard or one-pay lease, and how may an overpayment be refunded?
Yes. Because a lease was a sale for sales-tax purposes, the net trade-in allowance reduced the taxable sales price of both standard and one-pay leases. Within three years, the dealer could refund an o…
Are prescription-only bone-graft and bone-regeneration implants sold to Georgia hospitals exempt as prosthetic devices?
The approved Class II bone-graft product was exempt because it was a prescribed prosthetic device permanently implanted in the patient. The second product also met the prosthetic-device definition, bu…
What receipts must a Louisiana electrical cooperative include when calculating inspection and supervision fees?
All revenue from the utility's Louisiana intrastate business, including non-jurisdictional business, entered the fee base. The ordinary three-year prescriptive period also applied.
Could an Illinois tire retailer deduct a tire-disposal fee or the statutory tire user fee from taxable gross receipts?
A retailer's tire-disposal fee was a cost of doing business and could not be deducted from taxable gross receipts. This letter originally said the statutory tire user fee received similar treatment, b…
What Land Preservation Income Tax Credit cap did Virginia Tax Bulletin 13-1 originally announce for 2013?
Tax Bulletin 13-1 originally announced a $113,909,000 statewide cap for calendar year 2013. It applied the statutory CPI-U formula and measured a 13.91% increase over the 2006 base period. This guidan…
Is an irrevocable equipment lease ending in a $1 buyout a true lease or an outright sale for NY sales tax?
It is an outright sale. Under either of the lessor's termination provisions -- the lessee may buy the equipment for $1 or return it, OR the lessee must buy it for $1 -- the standard lease is a securit…
Were separate closed-end loan disclosure and loan-agreement forms subject to documentary stamp tax when neither contained every required element?
No. The disclosure statement had the amount but no signed promise, while the loan agreement had a signed promise but no sum certain. A reference between them was not express incorporation, so their el…
Can a financial institution use an alternative, deposits-based apportionment instead of the financial-institution rule that sources investment income to where decisions are made?
Yes. The financial-institution special regulation (Special Regulation 7A) sources receipts from investment and trading assets to the location of the day-to-day decisions—a cost-of-performance approach…
Can a Colorado retailer sell items at an even, tax-included price instead of adding sales tax separately at the register?
Generally no — not silently. Colorado law makes it unlawful for a retailer to advertise or hold out that it will absorb the sales tax or won't add it to the selling price, and the regulation requires …
Could a federal IT contractor pursue sales-tax refunds after missing Virginia's appeal and reconsideration deadlines?
Not through another appeal or reconsideration request: both deadlines had expired. But because the taxpayer paid the assessment on February 16, 2012, Va. Code § 58.1-1823(A)(iv) still allowed amended …
Could Unique Dental Laboratory recover gross receipts tax it said it overpaid when it did not respond to the Department's request for invoices, did not protest or sue after 120 days of inaction, and filed a new refund claim after the three-year limit?
No. Unique Dental Laboratory filed a February 2008 claim it described as seeking $31,525.38 but did not supply the requested invoices. When the Department took no action within 120 days, the laborator…
Did a captive support subsidiary owe communications and gross-receipts tax on services used only to support its affiliated communications group?
No. The subsidiary used the purchased communications only to provide accounting, tax, audit, legal, and similar support for its affiliated communications dealers, so the purchases qualified as the gro…
Did Illinois sales tax apply to application-monitoring and consulting services delivered without tangible property?
Pure professional or consulting services without a transfer of tangible personal property did not create Service Occupation Tax or Use Tax liability. Electronically transferred information or data was…
Did diesel exhaust fluid qualify for Illinois's rolling-stock sales-tax exemption?
No, based on the facts provided. IDOR said diesel exhaust fluid was a consumable that did not become a physical component of qualifying rolling stock, so it did not qualify for the exemption. The exem…
Did Kansas waive the estimated tax penalty for farmers and fishers who filed by April 15, 2013?
Kansas Notice 13-01 explains that, because the IRS moved the March 1 filing deadline for farmers who do not pay estimated taxes back to April 15 for the 2012 return (IRS Announcement IR 2013-7, made J…
Could multiple colors of paint on one invoice be aggregated so Florida's $5,000 discretionary surtax cap applied once to the whole invoice?
No. Different paint colors bought for inventory were separate items, not a single bulk item or integrated working unit. The $5,000 discretionary sales surtax limitation applied separately to each invo…
Does Tennessee sales and use tax apply to an out-of-state company's online banner ads, database advertising subscriptions, separately stated photography and set-up fees, hosted (ASP) database access, and wholesale reseller receipts?
No to all five — none of the company's charges are subject to Tennessee sales and use tax on these facts. Tennessee taxes retail sales of tangible personal property (including prewritten software) and…
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