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 2012 House Bill 2117 change the mineral severance tax new-pool exemption for oil and gas?
Revised Kansas Notice 12-02 (November 2012) explains how 2012 House Bill 2117 changed the mineral severance tax (K.S.A. 79-4217). Before July 1, 2012, the first 24 months of production of oil or gas f…
Are inmate purchases from a Georgia prison commissary exempt from sales tax when inmates use money received as gifts?
No. Georgia provided no sales-tax exemption for purchases by incarcerated individuals or for purchases paid with money received as gifts. The commissary operator had to collect tax on taxable retail s…
Are remote-desktop and IT-support web services taxable in Tennessee the same way online meeting and training/webinar platforms are?
It splits along a clean line: services that let someone view/control a SINGLE computer remotely aren't taxable, but services that LINK MULTIPLE PEOPLE in an audio/video session ARE. The Department rul…
When a manufacturer expands a factory, which of the new machinery, structural components, electrical systems, and pollution-control equipment qualify for Tennessee's industrial machinery sales tax exemption -- and which count as part of the building instead?
Mostly exempt, but the BUILDING itself is taxable. The Department ruled that nearly everything a manufacturer bought for a plant expansion — machinery, electrical distribution equipment, transport equ…
What temporary Virginia tax penalty relief did Tax Bulletin 12-7 provide to taxpayers affected by Hurricane Sandy?
Virginia waived specified late-filing and late-payment penalties for affected individuals and businesses that filed returns or made payments between October 29 and November 9, 2012. A taxpayer had to …
Could a Virginia resident claim a credit for Maryland withholding on wages protected by reciprocity, and could Virginia waive the resulting penalty and interest?
The Maryland withholding did not create a Virginia credit because the resident's wages were not subject to Maryland income tax under the reciprocity agreement. Virginia upheld the tax and mandatory in…
Is an edible gummy drinking cup exempt as food, or taxable as candy/confectionery?
It is taxable. Although NY exempts food and food products, candy and confectionery are not exempt (Tax Law 1115(a)(1)(i)). This edible gummy drinking cup is made of evaporated cane sugar and pectin an…
What NY/NYC parking taxes apply to a co-op's parking charges for members and for resident non-members?
A co-op (homeowner's association) member owes NO state or city parking tax on charges paid to the association or to the operator leasing the association's parking facility -- the homeowner's associati…
How did Illinois treat software, static-control items, and climate equipment used by an electronics manufacturer?
Software used to operate exempt manufacturing machinery was not subject to Retailers' Occupation Tax, but that software did not earn Manufacturer's Purchase Credit. General climate-control equipment q…
Did a distributor create Virginia corporate-income-tax nexus by holding title to inventory at a related Virginia manufacturer's plant for three to seven days?
Yes. Corporation B took title to finished inventory and held it at Corporation A's Virginia plant for three to seven days before common-carrier shipment. Inventory counted in the Virginia property fac…
Was an individual paid to provide foster-care services from a home necessarily engaged in a business subject to county BPOL tax?
The ruling did not decide that the individual was engaged in a taxable business. The facts showed that a tax-exempt foster-care provider paid the individual to perform services at a definite place of …
Was a 2008 amended machinery-and-tools tax return timely when the county learned of the representative's authorization only after the limitation period expired?
Yes. The taxpayer's service contract had been assigned to the representative before the representative filed the amended return on December 29, 2011. The county's later receipt of evidence proving tha…
Did living and working in another state end a taxpayer's Virginia domicile and qualify him for Virginia's credit for tax paid to that state?
No. Although the taxpayer maintained a home and worked in State A, he kept and regularly returned to a Virginia residence, received financial documents there, renewed a Virginia driver's license, and …
How did a consolidated retailer calculate income from a Florida headquarters expansion for the Capital Investment Tax Credit?
Start with the headquarters subsidiary's pro forma income, multiply it by project new-hire payroll divided by total campus payroll, apply the Florida apportionment factor, and then apply the 5.5 perce…
What is South Carolina's latest statewide per capita income figure used for tax incentives (per SC IL #12-16)?
$33,388. SC Information Letter #12-16 publishes the updated statewide per capita personal income figure for South Carolina — $33,388 — which the Department uses to test qualification for various South…
Could a Florida county use its governmental sales-tax exemption to directly purchase courthouse construction materials under an amended public-works contract?
Yes, for purchases over $10,000 made after the TAA under the stated direct-purchase procedures. The county had to order, pay, take title, bear risk of loss, receive invoices, and issue certificates it…
What Virginia tax, filing, apportionment, and withholding duties applied when nonresident owners and their pass-through entities participated in sporting events in Virginia?
The entities had Virginia income-tax nexus because bringing owners, staff, and equipment into Virginia for competitions exceeded protected solicitation under P.L. 86-272. They had to file pass-through…
Did dissolving a corporation and distributing all its assets make its assessed Illinois income-tax debt uncollectible?
No. Dissolution under state law did not make the corporation's previously assessed Illinois income-tax liabilities uncollectible. Section 1405 allowed tax, penalties, and interest to be assessed and c…
Which equipment a produce-packing facility buys -- wash lines, chillers, sanitizers, ice machines, racking, office equipment -- qualifies for Tennessee's qualified-farmer sales tax exemption?
It splits by whether the equipment is part of actually PRODUCING the agricultural product, or just handling it afterward. The Department ruled that a produce packer/grower's Stainless Steel Wash Lines…
Was New Mexico's 2007 gross receipts tax assessment against Computer Square timely, and could the hearing officer remove interest because of an erroneous refund and a nearly five-year protest delay?
Only in part. Computer Square proved that it had originally reported and paid tax for October 2001 through September 2002, so the Department's 2007 assessment of $9,523.80 for those periods came after…
Are welding gases (acetylene, oxygen, argon, CO2) and welding equipment, attachments, and tools exempt from Colorado sales tax when sold to a manufacturer whose welding is part of its manufacturing process?
Mostly taxable, with one exemption. ACETYLENE used in a manufacturing or cutting process is EXEMPT from Colorado state sales tax as an industrial fuel ('gas') because it is an energy source — though s…
Were cable-television converter boxes taxable as city business tangible personal property for 2008 through 2010?
No. Virginia's 1984 statutory amendment removed tuners and converters from the cable-property list subject to local taxation, and contemporaneous Department guidance classified them as intangible pers…
Were cable-television converter boxes taxable as local business tangible personal property for 2008 through 2010?
No. Virginia's 1984 statutory amendment removed tuners and converters from the cable-property list subject to local taxation, and contemporaneous Department guidance classified them as intangible pers…
Do tuition payments for a dependent enrolled in a six-year pre-pharmacy/Doctor of Pharmacy program count as 'qualified college tuition expenses' under Tax Law § 606(t)(2)(C)?
No, not entirely. The Department held that the four-year Doctor of Pharmacy portion of the program is analogous to a post-baccalaureate or graduate degree program and its tuition is excluded from 'qua…
New York Advisory Opinion TSB-A-12(6)C: Does converting a certified corporation into a disregarded single-member LLC keep its Empire Zone certification, and do its EZ ITC and EIC carryover credits flow up to the parent without a carryforward limit?
Yes. Converting a certified corporation into a single-member LLC treated as a disregarded entity (via IRC sections 332, 334(b)(1), 337 and 381) does not end Empire Zone eligibility, and the EZ investm…
Are formal patent drawings taxable when delivered to attorney clients only in electronic form?
No. Sales tax applies to tangible personal property, which includes artistic items like sketches and drawings when delivered in a tangible (paper) form. But when the drawings are delivered solely elec…
Are downloadable craft patterns and project collections (eProjects) subject to NY sales tax?
No. Downloadable craft patterns (step-by-step instructions to make something) and eProjects (collections of multiple electronic patterns) are non-tangible digital files. They are not tangible personal…
Is a hotel buying (and reselling) AV services from its in-house AV provider, and is it liable for the AV sales tax it collects via master billing?
No, the hotel is not purchasing the AV services. Where the AV provider signs a separate contract directly with the hotel's guest for AV equipment and services -- the provider owns the equipment, only …
Is a computer software maintenance contract sold to a Tennessee customer taxable, and does it matter where the vendor and customer are located or where repairs are performed?
Yes, sourced by computer location, not contract-signing location. The Department ruled that whether a computer software maintenance contract is subject to Tennessee sales tax depends entirely on WHERE…
Were tire-disposal fees taxable, was the audit sample valid, and did Virginia correct overstated discount and unreported-sales adjustments?
Tire-disposal fees were part of the taxable sales price, and the three-month sample was properly extrapolated. But the audit overstated later unreported sales by adding back discount deductions in mon…
Do FDA-licensed blood-testing reagents used by hospitals qualify for Tennessee's prescription drug sales tax exemption when ordered by a physician?
No, they're taxable. The Department ruled that FDA-licensed in-vitro diagnostic reagents — used to test blood compatibility before transfusions — do NOT qualify for Tennessee's prescription drug exemp…
Are IT staffing/contract-employee services subject to Tennessee sales tax — including software development, help desk support, repairs, and reimbursed travel expenses?
It depends on the task. The Department ruled that when an IT staffing company's contract employees work on-site for a client, creating or programming COMPUTER SOFTWARE on the client's premises is a ta…
Did revised depreciation schedules prove that a retailer's replaced, obsolete, or allegedly disposed assets should be removed from city BTPP assessments?
Not yet. The retailer did not prove that the city's 2007-2009 fixed-asset assessments were wrong: some items remained on site or in use, disposal records were missing, and federal returns had not been…
Were a bowling alley's monthly payments to an affiliate taxable equipment lease payments or nontaxable loan reimbursements?
They were taxable lease payments. The affiliate owned the bowling equipment, retained title, and allowed the bowling alley to use it for monthly consideration equal to the affiliate's loan payment. Co…
How can taxpayers check whether an older South Carolina advisory opinion was modified or superseded (per SC IL #12-14)?
Use the citator attached to SC Information Letter #12-14. It helps you determine what effect newer South Carolina advisory opinions have on previously published ones — whether an opinion was modified,…
If a company generates a Tennessee job tax credit through a disregarded single-member LLC and then sells that LLC, can the parent company still use the leftover credit carryforward on its own future tax returns?
Yes. The Department ruled that a corporation may continue using a Tennessee job tax credit carryforward on its own franchise and excise tax returns even after selling the single-member LLC whose busin…
How did Florida require a consolidated taxpayer to compute Capital Investment Tax Credit project income for joint-venture and existing-affiliate investments?
Florida approved two separate pro forma methods: the joint venture computed project income and allocated the limited credit to its partners, while existing affiliates compared current project-related …
Did an out-of-state heavy-equipment business have Virginia sales-tax nexus through rentals, deliveries, repairs, and sales, and how far back could the audit reach?
Yes, beginning no later than December 2009. Erroneously charging North Carolina tax did not itself create Virginia nexus, but owning equipment rented to Virginia customers did, reinforced by company-v…
Did Public Law 86-272 protect an out-of-state insurance underwriter whose employee solicited policies from an Illinois home office?
No. Public Law 86-272 protects qualifying in-state solicitation only for sales of tangible personal property. The company marketed, underwrote, priced, and administered insurance, which IDOR treated a…
Could a multistate bank replace Virginia's prescribed single-property-factor method with a method that included mortgage loans?
No. Virginia had already allowed the bank an alternative single-property-factor method because the standard deposit-based formula produced an unconstitutional result for its Virginia mortgage office. …
Could new Virginia residents claim Virginia's other-state credit for California tax on a 2010 installment payment from a business interest sold before they moved?
No. California sourced the installment gain to the taxpayers' California residence at the time of the 2007 sale, while Virginia taxed the 2010 payment because they were Virginia residents when they re…
Which purchase and sales audit items had to be revised when a distributor showed duplicate invoices, sampling issues, and mixed-quality resale certificates?
Virginia ordered multiple audit revisions. Duplicate purchase invoices were removed, and the purchase sample population was expanded to include reviewed accounts with no deficiencies. Some resale cert…
Did a merchant mariner stop being a New Mexico resident in 2004 when he spent 255 workdays aboard a ship ported in Florida but kept family and legal ties in Las Cruces?
No. Tom Conway was outside New Mexico for at least 255 workdays in 2004, so the 185-day physical-presence test did not make him a resident. But his established New Mexico domicile continued because th…
Could an acquired Florida consolidated corporate-income-tax group discontinue consolidated filing after becoming part of a new parent group that filed separately in Florida?
Yes. The acquisition ended the former group and constituted a qualifying change in circumstances. Deconsolidation was allowed for the specified tax year only if the old group had no realized but unrec…
Did Florida sales tax apply during genuine rent-free periods merely because the landlord recognized straight-line rental income for accounting purposes?
No. Accounting entries for unconditional rent-free periods were not taxable when the landlord received no consideration. Tax applied when rental consideration was received, including any additional co…
Were a college's iPhone apps sold through Apple's App Store taxable canned software or sales for resale?
IDOR said the apps appeared to be taxable canned computer software, even though delivered electronically, and the college's transfers to Apple appeared to be sales for resale because Apple sold the ap…
Did South Carolina extend tax filing and payment deadlines for victims of Hurricane Isaac (per SC IL #12-13)?
Yes. Following the IRS (Information Release 2012-70), the South Carolina Department of Revenue extended the same tax relief to victims of Hurricane Isaac, postponing various tax filing and payment dea…
What purchases and transaction rules qualified under Virginia's historical Energy Star and WaterSense sales-tax holiday guidelines?
Under these historical guidelines, specified Energy Star appliances and WaterSense-labeled products costing $2,500 or less per item were exempt during the four-day October holiday when bought for nonc…
Could taxpayers use the same 2008 net operating loss on their 2007 Virginia return after carrying the entire loss back to 2006 federally?
No. The taxpayers carried their entire 2008 net operating loss back to 2006 on the federal return, reducing federal adjusted gross income used by Virginia. Virginia had no independent provision allowi…
Is a returned-check (insufficient funds) fee on a utility bill subject to Kansas sales tax?
Not taxable. The Department ruled that a fee for a returned check due to insufficient funds (or a closed account) on a gas, electric, or heat utility bill is not subject to Kansas Retailers' Sales Tax…
Was a former officer personally liable for a corporation's unpaid income tax when he resigned before the asset sale, return due date, and filing?
No. The officer resigned on June 1, 2009, before the June 26 asset sale that created deferred revenue and intangible-property gain, before the October return due date, and long before the corporation …
For New York's 548-day rule, until what age is a domiciliary's child treated as a 'minor' whose New York presence counts against the 90-day limit?
A child is treated as a minor for 548-day rule purposes only until the child turns eighteen. Tax Law § 2(4) defines 'minor' as a person who has not attained age eighteen, so only days a child under 18…
New York Advisory Opinion TSB-A-12(5)C: Can a company claim the accessible-vehicle tax credit for the incremental cost it paid to buy a used van that a previous owner had already converted for wheelchair accessibility?
Maybe -- the company can claim the credit for the incremental cost it paid (the excess over a comparable van) on a used vehicle a prior owner converted for wheelchair accessibility, capped at $10,000 …
Is a service that gathers, stores, and reports a customer's own data a taxable information service in NY?
No. Gathering and mapping a customer's data, storing it in a confidential per-customer online data warehouse, and using it to create customizable reports is an information service -- but one that is p…
Did ST 12-0054-GIL validly extend Illinois's $15 family-transfer vehicle tax rate to stepchildren?
No. This letter was rescinded by ST 12-0061-GIL. ST 12-0054 said the $15 family-transfer rate extended to stepchildren, but IDOR's replacement letter corrected that statement: the statutory list cover…
Did IDOR determine whether the two redacted 'whole food' products qualified for Illinois's lower food tax rate?
The published letter does not classify the two products because their names and labels are redacted. IDOR only supplied the governing definitions: qualifying food for off-premises consumption was taxe…
Could a nonresident avoid Illinois tax on a guaranteed payment from an Illinois partnership because the partner never entered the state?
No, based on the partnership schedules submitted. A guaranteed payment is generally treated as the partner's distributive share of ordinary partnership income, not employee wages. The partnership char…
Could a trucking contractor deduct hauling and spreading receipts when it held Type 6 and 7 NTTCs but could not document where the materials originated?
No. Hank Gallegos Trucking timely held Type 6 and 7 NTTCs and had contractor licenses, but that did not prove the transactions qualified as construction services. Regulation 3.2.52.10(C) covered hauli…
Were an equipment lease, schedule, riders, and acceptance certificate subject to Florida documentary stamp tax when executed and delivered in Florida?
No, under the stated execution sequence. Although the lease documents were expressly incorporated, they created only a contingent payment obligation until equipment acceptance; the acceptance certific…
How did a corporation's federal filing extension affect its Illinois income-tax return deadline?
The Illinois return was automatically extended to one month after the extended federal deadline, provided the statutory conditions were met. Thus, a December 15 federal extended deadline produced a Ja…
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