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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Did customer meetings by employees of an out-of-state design consultant create Virginia income-tax nexus, payroll, sales-factor, and withholding duties?
The ruling could not decide corporate-income-tax nexus because the business did not describe what employees did during Virginia customer meetings or how frequent and regular any unprotected activity w…
Was a Navajo Nation member's mine income exempt from New Mexico tax when he worked on Navajo land but the evidence did not prove he lived at his Iyanbito home?
No. Edward Clah was an enrolled Navajo Nation member and earned the disputed income at the McKinley Mine on Navajo land, satisfying two statutory elements. But Section 7-2-5.5 also required him to liv…
Are design images taxable when delivered to customers only electronically as PDF files?
No. Tangible personal property -- which includes artistic items like sketches and drawings -- is taxable when delivered in tangible (paper) form. But where the design images are delivered solely elect…
What Illinois exemptions applied to manufacturing utilities, packaging, research, local taxes, and residential utility accounts?
The manufacturing machinery exemption did not cover gas, electricity, or water. Separate gas and electricity tax laws provided narrower exemptions, including specified certified businesses, enterprise…
How could an out-of-state seller document an Illinois drop shipment as a sale for resale without Illinois nexus?
The Illinois supplier had to collect tax or document the distributor's resale purchase. The preferred proof was a resale certificate with an active Illinois registration or resale number; a no-nexus o…
Did federal protection for a nonresident vessel pilot's compensation prevent Virginia tax on partnership income passed through by the pilots' association?
No. The federal rule protected compensation for piloting duties, but the association filed as a partnership and reported its fees less expenses as ordinary income. That character passed through to the…
Could a photocopy and visual-communications business rent a printer tax-free under Virginia's industrial manufacturing exemption?
No. Virginia treated photocopying and quick-copy operations as nonindustrial service activities, not industrial manufacturing. The printer also failed the separate high-speed-duplicator exemption beca…
When does a cabinet manufacturer owe Georgia tax on materials used in lump-sum furnish-and-install construction contracts?
The cabinet manufacturer was a real-property contractor and the consumer of all materials used to fulfill its Georgia furnish-and-install contracts. It owed sales tax when buying materials in Georgia,…
Did Florida's rental-car surcharge apply to a membership-based car-sharing service, and how did it apply to multiple trips in one day?
Yes. Membership and short trip duration did not change the vehicle uses into something other than rentals. Because multiple trips required no new agreement or lessor action and appeared on one daily i…
Were laptop data-card charges, regulatory cost-recovery fees, and activation or reactivation fees subject to Virginia communications sales tax?
Regulatory cost-recovery fees and activation or reactivation fees were taxable, including connection fees related to Internet service. The record did not establish whether the laptop-connect and data-…
What Virginia tax interest rates applied during the fourth quarter of 2012?
Virginia's fourth-quarter 2012 rates were 5% for tax underpayments and 5% for tax overpayments. The reduced rate for qualifying assessments under administrative appeal was 0% after the statutory nine-…
Which supermarket sales of salad-bar items, repackaged deli salads, and packaged bakery products were taxable under Florida TAA 12A-021?
Salad-bar items were taxable at stores with tables and chairs, but exempt at the store without eating facilities when packaged without utensils. Repackaged chicken, tuna, egg, and potato salads were t…
Is the safety equipment an oil-well services company buys for its employees exempt from Kansas sales tax?
Taxable. Safety equipment that an oil-well services company buys and gives to employees — hydrogen sulfide monitors, hard hats, safety glasses, ear plugs, safety lanyards and harnesses, and flame-resi…
Can a Kansas installer honor an out-of-state sign company's multi-jurisdiction exemption certificate on its installation charges?
No — the Kansas installer cannot honor the out-of-state sign company's Multi-Jurisdiction Exemption Certificate (Form ST-28M) to exempt its taxable sign-installation charges. First, Form ST-28M is onl…
Could an Illinois taxpayer subtract federally taxable Railroad Retirement Board sickness benefits, and where were they reported?
Yes. Federal law prohibited states from taxing sickness benefits paid under the Railroad Unemployment Insurance Act. Section 203(a)(2)(N) therefore allowed any such benefits included in federal adjust…
How does Kansas sales tax apply to discount promotions like BOGO deals and to Groupon-style deal certificates?
Tax follows what the customer actually pays — with special rules for give-aways and deal certificates. For discount promotions ('Two for the Price of One,' 'Buy One Get One Free,' 'percent off,' 'buy …
Could an Illinois online seller exclude income from products sold for medical needs from Illinois income tax?
No special income-tax exclusion applied. Income included in federal adjusted gross income carried into Illinois base income unless Section 203 provided a modification, and it contained no subtraction …
Who could claim Florida enterprise-zone credits generated by a disregarded single-member LLC: the LLC or its owner?
For corporate income tax, the disregarded LLC was not a statutory business, but its owner could claim qualifying LLC-generated jobs and property credits on the return that included the LLC. For sales …
Could a hotel master tenant give the owner a resale certificate and tax only the back-of-house portion of rent under its whole-property sublease?
Yes. Because the tenant subleased the entire hotel, it could issue a resale certificate on the master lease. For the mixed-use sublease, the Department accepted a square-footage allocation that taxed …
What is South Carolina's tax interest rate for the period ending December 31, 2012 (per SC IL #12-12)?
3%. SC Information Letter #12-12 sets South Carolina's interest rate on tax underpayments and overpayments at 3% for the period October 1, 2011 through December 31, 2012. Interest is compounded daily,…
Did IDOR determine whether two meal-replacement products and mixed supplement bundles received the lower food tax rate?
The published response did not expressly classify either product or explain bundle treatment. IDOR said qualifying food for off-premises consumption received the lower 1% state rate plus local tax, ex…
What amount was subject to Illinois sales tax when a cellular phone was sold below cost with a service contract?
IDOR did not classify the retailer's exact bundle on the limited facts. It said a sold phone was tangible personal property and Retailers' Occupation Tax was measured by the gross receipts actually re…
How should a county calculate Virginia's BPOL out-of-state deduction when payroll apportionment was used to assign a multistate company's gross receipts?
The county had to follow the three-step method in P.D. 12-89: identify interstate participation by employees at the Virginia office, directly deduct receipts that could be specifically tied to that pa…
Could Navajo Refining recover fuel taxes and loading fees that its supplier paid on imported diesel and passed through on the invoice?
No. Musket Corporation, not Navajo Refining, owned 1,240,334 gallons when they entered New Mexico and paid the required special fuel tax and loading fee. Although Musket passed the economic cost to Na…
What were the significant South Carolina tax-law changes from the 2012 legislative session, as summarized by the Department (per SC IL #12-11)?
SC Information Letter #12-11 is the Department's brief summary of the significant tax and regulatory law changes enacted in South Carolina's 2012 legislative session, organized into categories: (1) in…
Did a city have to consider an independent appraisal showing lower fair market value for business computers and peripherals?
Yes. Virginia law allowed business computers and peripherals to be valued by percentages of original cost or another method reasonably expected to determine actual fair market value. An independent pr…
Could a taxpayer appeal a city BTPP assessment to the Tax Commissioner while the city was still requesting information and had not denied the local appeal?
No. The city's request for additional information was not a final local determination because it did not deny the taxpayer's appeal in whole or in part. The appeal had also been pending for less than …
Are an expert network's oral consultations, consultant directory/software, and custom research reports subject to NY sales tax?
Generally no. Oral consultations with the firm's expert consultants are not taxable -- they are guidance, advice, and perspective from the experts' own knowledge (not drawn from any common database), …
Did a taxicab business qualify for reconsideration by claiming that Virginia's final BTPP valuation determination misstated its facts and law?
No. Virginia had upheld the city's use of a recognized pricing guide with physical-condition adjustments. On reconsideration, the Department found that any factual misstatements resulted from the taxp…
Could a Virginia manufacturer apportion income and exclude government equipment shipped overseas from its Virginia sales-factor numerator?
Conditionally. Foreign installation work and property appeared to exceed protected solicitation, but Virginia needed more facts to decide whether the activity was more than de minimis and created fore…
Could a minister deduct an amount equal to a tax-exempt housing allowance as an unreimbursed employee business expense on the Virginia return?
No. Ordinary and necessary employee business expenses may qualify as federal itemized deductions, but the minister's housing allowance had already been excluded from federal gross income under IRC § 1…
Did moving to another state with a military spouse end a taxpayer's Virginia domicile for 2008?
No. The taxpayer lived and worked in State A near her military spouse, but filed there as a nonresident, admitted she remained a permanent Virginia resident, kept a Virginia driver's license and vehic…
Could a calendar-year corporation use Schedule SA to tax a Section 448 adjustment at the pre-2011 Illinois corporate rate?
No. Schedule SA and Section 202.5 applied only when a taxable year began before January 1 and ended after December 31, spanning the rate change. The corporation's taxable year was January 1 through De…
If I'm domiciled in New Jersey but buy a fractional, one-eighth ownership interest in a private residential club in New York City, does that ownership alone make me a New York State statutory resident for income tax purposes?
No. Because the Petitioner's right to use his club residence was capped at a 45-day priority period plus a first-come, first-served reservation system rather than free and continuous access, the Depar…
Are an equipment-rental firm's charges to deliver rented equipment, or to tow/transport customer-owned equipment, subject to NY sales tax, and at what rate?
It depends on what is being moved. A charge to deliver equipment the firm rents to the customer is taxable -- it is part of the rental receipt whether or not the delivery charge is separately stated. …
Is selling advertising space on installed displays a taxable service in NY, and are the charges to install, repair, and supply those displays taxable?
The advertising sales are not taxable, but the related installation, repair, and materials charges are. Selling advertising space on digital, backlit, scroll, wrap, and banner displays is not one of t…
Could taxpayers reopen a 2004-2006 residency determination after the 45-day reconsideration deadline or appeal 2007-2009 assessments after 90 days?
No. The July 12, 2010 determination for 2004-2006 could be reconsidered only if a qualifying request arrived within 45 days, but the taxpayers waited until May 13, 2011. Their December 2010 assessment…
Did an out-of-state S-corporation law firm have Virginia-source income when its Virginia office provided only administration and support?
Yes. The Virginia office's property and employee created positive property and payroll factors, so the S corporation had Virginia-source income and had to apportion its total nondividend income. For e…
Was a 2011 refund of previously deducted College Illinois! contributions recaptured at the old contribution-year rate or the 2011 rate?
The 2011 rate applied. Section 203(a)(2)(D-22) required the contribution component of a nonqualified refund that had been deducted in earlier years to be added back in the year of distribution. The co…
Are the fees for a vehicle fleet Maintenance Management Program -- arranging discounts, overseeing repairs, and billing -- subject to NY sales tax?
Generally no. The firm doesn't own or run a repair shop; it negotiates discounts, has its technicians review whether repairs are necessary and fairly priced, acts as liaison with service providers, an…
Could subsidiaries in separate federal consolidated groups file one South Carolina consolidated corporate return?
Yes. Subsidiaries in separate federal consolidated groups could join one South Carolina consolidated return because the same foreign parent ultimately controlled at least 80% of their voting power. Ea…
Could an estate recover a 2005 Virginia overpayment when illness delayed the original return until December 2009?
No. The taxpayer's illness could require a fiduciary or authorized agent to file on her behalf, but Virginia law did not suspend the refund limitation period for mental or physical disability. Because…
May a Georgia flooring manufacturer use the discounted carpet-sample valuation method for laminate or other floor-covering samples?
No. The discounted fair-market-value method in O.C.G.A. § 48-8-39(b) applied only to carpet samples, not laminate flooring or other floor-covering samples. Because the provision was a partial exemptio…
Does a South Carolina coin-operated device license make it legal to operate the machine (per SC IL #12-10)?
No. SC Information Letter #12-10 makes clear that a license issued for a coin-operated machine or device under S.C. Code § 12-21-2720 or § 12-21-2730 does NOT make it legal to operate that machine or …
Did the permanent-affixation test for a construction contractor's tank depend on the property being in an enterprise zone?
No. IDOR said the permanent-affixation analysis it had quoted from ST 08-0003-PLR remained applicable even though the facility was not in an enterprise zone. When a construction contractor permanently…
Were subscriber line charges and primary interexchange carrier charges subject to Illinois Telecommunications Excise Tax?
Yes. Subscriber line charges were included in taxable telecommunications gross charges because they recovered the local exchange company's cost of providing service. Primary interexchange carrier char…
What did the Warren County Circuit Court order in Early A. Caudle's case against the Virginia Department of Taxation?
The court sustained the Department's demurrer because the plaintiff did not object and dismissed the case with prejudice. The short published order does not describe the underlying tax dispute or stat…
Did a professional athlete become domiciled in Virginia during a brief visit before moving to a permanent job abroad?
No. The athlete had abandoned Virginia for State A in 2004 and moved to Country A for a permanent professional-sports job in January 2008. Although he obtained a Virginia driver's license, registered …
Could a developer recover recordation tax on a released portion of a deed-of-trust loan when it filed the refund claim more than three years later?
No. Paying recordation tax when the deed of trust was recorded counted as an assessment, so the taxpayer had three years from that date to file its protective refund claim. The deed was recorded in Ja…
Could taxpayers claim Virginia's disability-income subtraction for police-retirement benefits already excluded from federal adjusted gross income?
No. The District of Columbia police-retirement disability benefits were treated as excluded from federal income and did not enter the taxpayers' federal adjusted gross income. Virginia's subtraction c…
Was Virginia's two-sample sales audit of a metal fabricator flawed, and should customer-paid use tax remove a sale from the sample?
The sampling method was valid. Virginia used separate three-month samples before and after a substantial increase in retail sales, and the fabricator offered no evidence disproving the sampled transac…
Could a unitary group separately account for two business lines because the statutory sales factor produced much more Illinois income?
Not on the evidence submitted. A different or lower Illinois result from separate accounting did not establish that the statutory sales factor was grossly distorted. The group omitted details about in…
Could a purchaser relieve a Florida printer from collecting tax on advertising mailers sent both inside and outside Florida, and credit earlier tax payments on its return?
A proper certificate could relieve the printer when more than an unsubstantial part of the order was mailed outside Florida, but the purchaser then owed tax directly on Florida-mailed materials. Prior…
Are interior lights and exhaust fans (and the electricity they use) at a manufacturing plant exempt under Kansas's integrated-production exemption?
Taxable. The Department ruled that a manufacturer's purchase and installation of metal-halide interior lights and air-exhaust fans for its Kansas plant and warehouse — and the electricity those lights…
Could a contractor treat separately priced water lilies and installation as a retail sale plus installation for public works or exempt-organization jobs?
Only a non-public-works contract itemizing every incorporated material could potentially qualify. The sample failed if pots, soil, fertilizer, or other materials were omitted; public-works contracts c…
How much of a multistate employee's wages should an employer report as Illinois wages on Form W-2?
Report the amount treated as compensation paid in Illinois under Section 304(a)(2)(B), not an amount determined by whether another state also taxes or withholds from the wages. The GIL could not decid…
Could in-home child-care providers keep their claimed business deductions when their records commingled business and personal expenses?
No. Virginia conforms to the federal starting point but may adjust federal adjusted gross income when reported deductions are inconsistent with federal law. The providers supplied invoices, bank state…
Could a development holding company combine its LLCs in one Virginia use-tax audit, and were sign posts and a carpet runner taxable?
The LLCs had to be treated as separate legal entities. Virginia returned the audit so each LLC could be registered and, if warranted, separately audited and assessed within the limitations period. The…
Did IDOR decide whether gelatin embolization pledgets qualified for Illinois's reduced medical-appliance tax rate?
No product-specific determination appears in the published response. IDOR said the reduced rate applied to an item intended by its manufacturer to directly substitute for a malfunctioning body part. A…
Were stage-equipment rentals exempt because a naval air station or nonprofit event organizer paid for them, and was the purchase sample invalid?
No. The company was the taxable user and consumer of stage equipment used to provide entertainment and production services. It did not prove a government purchase made through official purchase orders…
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