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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Could a qualifying citrus processor use Florida's single-factor apportionment method and source product sales by ultimate destination?
Yes. The company did business inside and outside Florida, met the statutory citrus-processor definition, and could timely elect single-factor apportionment. It could source sales by ultimate destinati…
Did a Virginia investment LLC with no employees or Virginia property have to withhold tax for its nonresident member?
No. The LLC held intangible investments and royalty interests but had no employees, Virginia real estate, or tangible property. The Department found that it was not carrying on a Virginia trade or bus…
Did a Virginia investment limited partnership with no employees or Virginia property owe withholding for a nonresident owner?
No. The limited partnership held intangible investments and royalty interests but had no employees, Virginia real estate, or tangible property. The Department found that it was not carrying on a Virgi…
Could an acquiring Virginia corporate group switch from separate returns to consolidated or combined filing after a merger?
Consolidated filing was denied. The acquired group's value was below Virginia's 45% merger-of-equals threshold, and an ordinary merger was not an extraordinary circumstance justifying a change. The ac…
Were cable television converter boxes locally taxable as business tangible personal property in Virginia?
No. The Tax Commissioner held that customer converter boxes were used in the cable television business and that Virginia's 1984 statutory change classified them as intangible property rather than loca…
Did fees from foreign consulting contracts qualify for Virginia's foreign-source-income subtraction as incidental technical fees?
Not on the record provided. The sample contract primarily required consulting services and custom deliverables billed from expected fees and expenses, not a license of preexisting intellectual propert…
Was a deed of trust held by a federal land credit association exempt from Virginia state and local recordation tax?
Yes. Although no Virginia statutory exemption applied, 12 U.S.C. § 2098 exempted mortgages held by a federal land credit association from federal, state, municipal, and local taxation. The originator …
Are a commercial printer's purchases of mailing and reply envelopes subject to sales tax, or are they purchases for resale?
They are purchases for resale, not taxable. A commercial printer that prints individualized statements and stuffs them (with reply envelopes when requested) into outer mailing envelopes is making a re…
Which charges for paper and electronic medical-record copies were subject to Florida sales tax?
Electronic delivery and all associated charges were not taxable. For paper copies, most search, preparation, certification, handling, labor, and per-page charges were taxable; no-records, notary, and …
Was a capsule-form dietary supplement marketed for weight control exempt from Florida sales tax?
Yes. The product was labeled and reviewed as a dietary supplement, and Florida treated dietary, herbal, vitamin, and mineral supplements as exempt food products.
Was a liquid concentrate made from coffee, natural flavoring, and sweeteners exempt from Florida sales tax as food?
Yes. The submitted liquid coffee concentrate qualified as an exempt food product because Florida's food definition and rule include coffee and coffee substitutes.
What Virginia tax interest rates applied during the first quarter of 2013?
For January 1 through March 31, 2013, Virginia's tax underpayment and overpayment rates remained 5%. The reduced rate for a qualifying disputed assessment after nine months without a Department determ…
Does an operator of an Internet data center qualify for the NY sales-tax exemption on its equipment and related services?
Yes. A business that operates an Internet data center -- a facility specifically designed and built to provide a high-security environment for servers hosting websites, and that provides uninterrupted…
Could a 99%-owned partnership receive Virginia film credits at the entity level without putting those credits on its parent's consolidated return?
Yes, if the stated requirements were met. A partnership 99% owned by the production subsidiary could qualify as the designated credit recipient because it would file a Virginia return and be named in …
Did a partnership that invested its Illinois Lottery winnings avoid replacement tax as either a lottery pool or an investment partnership?
No. Because the entity did more than collect and distribute lottery winnings—it invested them—it remained a partnership under the Illinois Income Tax Act. And because lottery winnings made up more tha…
Did listing a room through a screened, members-only home-sharing website avoid Illinois Hotel Operators' Occupation Tax?
Not automatically. IDOR would not decide the described home-sharing rentals without transaction-specific facts. Truly exclusive rooms rented only to private-club members and not to the public were out…
Did Virginia's processing of an unauthorized 2005 combined return permit the affiliated group to change from separate filing?
No. Processing the 2005 combined return, moving payments, and changing registration records did not constitute Tax Commissioner approval. The affiliates were treated as not having filed their required…
How did a certified division expansion calculate project income for Florida's Capital Investment Tax Credit?
The division had to keep separate books, prepare a project-only pro forma income calculation under GAAP and Florida rules, exclude other divisions' income, and apply the division's Florida apportionme…
Were utilities passed through by a tax-exempt church landlord to its for-profit tenant taxable as rent?
Yes. The utility-charge exemption required the landlord to have paid sales tax on the utilities. Because the exempt church paid none, the separately billed pass-through remained taxable rental conside…
How did Illinois tax a medical-records service that delivered records electronically or as mailed paper copies?
Electronic viewing, downloading, or transmission of medical records was not a transfer of tangible personal property. Paper medical records delivered with the service could create Service Occupation T…
If a company has advertising materials printed out of state and ships them to its own Tennessee distribution center before sending them on to retail locations across the country, does it owe Tennessee use tax on all of them, just the ones that end up in Tennessee, or none at all?
Only the materials that end up distributed within Tennessee are taxed. The Department ruled that printed advertising materials manufactured out of state and shipped to the Taxpayer's Tennessee distrib…
Did an out-of-state drug developer's Virginia personnel and clinical trials exceed P.L. 86-272's income-tax protection?
Virginia could not give a categorical no-nexus answer. Ordinary sales solicitation appeared protected, and merely seeking health-plan coverage could be ancillary. But some medical-science, regulatory,…
Were subscription access to a web portal, third-party billing, and text-messaging packages taxable in Virginia?
The portal subscription was not taxable because it provided Internet-delivered access without tangible personal property. Customer-specific third-party billing was also an exempt service even if paper…
Did South Carolina extend tax filing and payment deadlines for victims of Hurricane Sandy (per SC IL #12-17)?
Yes. Following the IRS, the South Carolina Department of Revenue extended the same tax relief to victims of Hurricane Sandy, postponing various tax filing and payment deadlines that occurred starting …
Could good-faith purchasers keep transferred Virginia land-preservation credits after the easement value was reduced?
No. The credit could be based only on the conservation easement's substantiated fair market value. After the donor and Virginia agreed to reduce the value, the Department could assess transferees who …
For a wireless carrier's points-based loyalty program, does issuing loyalty points reduce the taxable sales price of the monthly service fee, and how is tax calculated when points are redeemed for discounted phones, accessories, or other rewards?
Issuing points doesn't reduce tax, but redeeming them does — and only standalone redemptions for nontaxable items avoid tax entirely. The Department issued five rulings on a wireless carrier's points-…
When a wireless carrier replaces a customer's lost, stolen, or broken phone under a bundled replacement program, does the carrier owe Tennessee sales tax on the replacement phone — and does it matter whether the claim is handled as a warranty repair or as an insurance claim?
It depends on which half of the program covers the claim. The Department ruled that a wireless carrier's Phone Replacement Program is really two different arrangements bundled together: a warranty/ser…
Could New Mexico uphold a Weight Distance Tax assessment against Casias Trucking when its mileage audit averaged odometer data across every month, ignored seasonal slowdowns, used questionable starting readings, and rejected fuel receipts?
No. Casias Trucking kept poor records and admitted reporting only half its mileage, but it still rebutted the assessment's presumption of correctness. The Department extrapolated mileage from title an…
Were engines, parts, and equipment bought for later Florida installation on fixed-wing aircraft over 15,000 pounds exempt from sales tax?
Yes. The vendor did not have to install the parts or install them immediately. The items qualified if ultimately installed in Florida on eligible aircraft; fleet operators should document the exemptio…
Are surgical bone-graft and bone-void-filler products that get implanted in a patient's body exempt from Tennessee sales tax as prosthetic devices?
Yes — both products are exempt from Tennessee sales and use tax as prosthetic devices. The Department ruled that Product #1, a synthetic bone-graft scaffold placed in gaps between bones to promote fus…
Could Cordero Transport use New Mexico's reduced one-way-hauler Weight Distance Tax rate without vehicle-specific records proving that at least 45% of each truck's mileage was traveled empty of all load?
No. Cordero Transport lacked the vehicle-specific mileage, route, origin, destination, and loaded-versus-empty records required to prove that any truck traveled at least 45% of its mileage empty of al…
Could a Virginia S corporation file a unified nonresident return for only the shareholders who elected to join?
No. Virginia treated unified filing as a discretionary administrative convenience subject to Department conditions. One condition required all nonresident owners without other Virginia-source income t…
How did Virginia marina dealers collect and report sales tax on dyed diesel sold for pleasure watercraft?
Under the historical 5% rules, a dealer could include sales tax in the per-unit pump price if it posted notice, or calculate and separately state 5% of the selling price. Either way, it had to remit t…
Could veterinarians use Virginia's agricultural exemption for animal-health products bought for their practices?
Generally no. Veterinarians were professional-service providers and the users or consumers of supplies bought for their practices, not farmers producing agricultural goods for market. Their special ex…
When were medicated and non-medicated suture materials exempt from Virginia sales tax?
Both medicated and non-medicated sutures were medical devices, not exempt drugs. They could be sold tax-free when specifically purchased by or for an identified individual, or to a qualifying nonprofi…
Was a separately charged safe provided only with armored-car service taxable as a rental in Virginia?
No tax applied to the customer charge under the stated facts. Customers could obtain the monitored safes only with the company's secure-transportation service, lost access after depositing valuables, …
If an out-of-state company only licenses patents to an affiliate, and the affiliate's downstream sales eventually reach Tennessee, does the patent licensor owe Tennessee franchise and excise tax?
No — the patent licensor isn't subject to Tennessee franchise and excise tax under these facts. The Department ruled that Company A, which licenses patents to an affiliate (Company B) that arranges ma…
If a chain of disregarded single-member LLCs is ultimately owned by a tax-exempt governmental pension plan, is the bottom-tier LLC subject to Tennessee franchise and excise tax?
It's a not-for-profit, generally exempt — but not completely. The Department ruled that an LLC at the bottom of a chain of single-member LLCs, all disregarded for federal income tax purposes up to a t…
Did a Virginia resident owe state income tax and interest on a sport utility vehicle won in a national contest?
Yes. The sport utility vehicle's fair market value was taxable federal prize income and therefore entered the Virginia resident's federal adjusted gross income, with no identified Virginia subtraction…
Was a reseller of related companies' mobile service a telephone company for Virginia BPOL tax?
No. The reseller lacked an SCC certificate and FCC authorization and did not operate wireless sites, towers, switching equipment, or other mobile-service facilities. Its licensed partners supplied the…
Was a reseller of related companies' mobile service a telephone company for a Virginia city BPOL tax?
No. The reseller lacked an SCC certificate and FCC authorization and did not operate wireless sites, towers, switching equipment, or other mobile-service facilities. Its licensed partners supplied the…
Were a bottle manufacturer's palletizing and wrapping equipment, transferred molds, and rebuilt machinery taxable as Virginia machinery and tools?
The palletizing and wrapping equipment was not taxable machinery and tools because the evidence showed it packaged finished bottles for shipping, not that it directly served manufacturing or product q…
Were a nonresident actor's worldwide movie residuals taxable in Illinois when the movie work was performed entirely in Illinois?
Yes. The residuals were reported on Form W-2, so Illinois treated them as compensation for personal services. Because the acting services that generated the payments were performed entirely in Illinoi…
Could a taxpayer add computational-error refund claims after its original Virginia protective claim had already closed?
No. The taxpayer added the computational-error issue after its original litigation-based protective claim had closed, so Virginia treated the submission as a new claim. The 2004 claim came after the t…
Could a taxpayer add an independent computational-error issue to a still-pending Virginia protective refund claim without amended returns?
Yes. Because the taxpayer added the computational-error issue before the original protective claim was finally resolved, Virginia treated it as timely and decided it on the merits. The April submissio…
Were charges to clean, test, package, and sterilize customer-owned used catheters taxable in Virginia?
No. Hospitals and clinics mailed their used catheters to the out-of-state provider, which cleaned, decontaminated, reconditioned, tested, packaged, labeled, and sterilized them before return. Because …
Does an out-of-state company that occasionally sends tutors to teach a corporate training course in Colorado owe Colorado sales tax or income tax?
Generally no sales tax on the teaching itself, but watch the materials and income tax. Colorado treats education and training as nontaxable services, so charges for instruction aren't subject to sales…
Does Colorado sales or use tax apply when a company leases a passenger car for more than 24 months to someone who lives outside Colorado?
Generally no. If the lessee is a Colorado nonresident when the lease is signed and immediately takes the car to another state to register and use it, the lease is exempt from Colorado sales and use ta…
When a company rents out equipment and also bills customers for reimbursable expenses like lodging, airfare, and car rentals for its on-site staff, are those reimbursed expenses subject to Colorado sales tax?
It depends on separability and the true object — the Department made no determination. When a company both rents taxable equipment (two-way radios) and provides non-taxable services (sending staff to …
Is a prescribed cold-therapy band/cuff that wraps around the body and is connected to a cooling device exempt from Colorado sales tax as durable medical equipment?
Maybe, but the Department wouldn't decide. A prescribed cold-therapy band — wrapped around an injured area and connected to a separate cooling device, used in orthopedic-surgery recovery — could be ex…
Did a closed Virginia plant show that most of its machinery was idle and excluded from 2011 machinery-and-tools tax?
The Department concluded that the affidavit and news reports showed the disputed equipment stopped operating by December 31, 2009, remained idle on January 1, 2011, and did not return to use during 20…
Could Virginia estimate a grocery store's taxable sales from two observation days when six years of returns and records were missing?
Yes. The store had filed no sales-tax returns for more than six years and could not produce register tapes, journals, ledgers, ST-9 forms, or supported accounting records. Virginia could use the best …
Which county's discretionary sales surtax applied when customers picked up rented scaffolding and used it in another county for multiple billing cycles?
Use the county where the customer received the equipment. The pickup-county rate applied to the first invoice and every later rental billing cycle; moving the scaffolding to another county did not cha…
Were airline tickets bought online subject to Illinois Retailers' Occupation Tax or Use Tax?
No. IDOR said an airline ticket was not tangible personal property, so its sale was not subject to Illinois Retailers' Occupation Tax or Use Tax. The answer did not change based on whether the online …
Would IDOR certify a private vehicle-tax reference book, and what lease-tax corrections did it suggest?
IDOR would not approve the accuracy of a private legal publication and directed the publisher to statutes, rules, and Department publications. To reduce errors, it suggested two corrections: Automobil…
Could taxpayers defeat a Virginia resident assessment by demanding proof after ignoring requests prompted by a federal return using a Virginia address?
No. Virginia lawfully used federal information showing a Virginia address, requested records to determine liability, and assessed from the information available when the taxpayers did not respond. Bec…
Did a notice of intent to protest preserve Virginia's 90-day deadline for a complete sales-tax appeal?
No. A complete appeal stating the grounds and relevant facts was due within 90 days of the June 1, 2012 assessment, by August 30. A notice of intent or incomplete appeal neither satisfied nor extended…
Did repair parts and supplies for a paint manufacturer's integrated tank power-wash system qualify for Virginia's manufacturing exemption?
No. The system cleaned production tanks after a batch ended, generally every one to three days. Although the cleaning protected the color, chemistry, and integrity of later batches, it did not occur d…
Was a federally registered interstate motor carrier exempt from county BPOL tax when its local office also arranged hauling by independent providers?
Yes. The company proved that it was a motor carrier formerly certified by the Interstate Commerce Commission and currently registered with the relevant federal transportation authority. Virginia's BPO…
Could a city impose consumer utility tax on natural gas used by a combined-cycle power plant, and did the gas supplier qualify as a pipeline distribution company?
Yes. The plant used natural gas to run combustion turbines and captured their heat to make steam for another turbine, so the gas was used to furnish heat. The supplier qualified as a pipeline distribu…
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