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 a federal refund for qualified airline payments reopen the deadline for a related Illinois refund from a closed year?
Yes, to the extent the Illinois overpayment resulted from the same reduction in federal adjusted gross income. Once the airline employee received the federal refund under the 2012 FAA law, Section 506…
What major Virginia state and local tax legislation did the Department of Taxation identify in its 2012 Legislative Summary?
This historical Department guide summarized state and local tax legislation enacted through the May 14, 2012 reconvened session. Major state changes included mandatory electronic corporate and sales-t…
Can Kansas renters still claim the homestead property tax refund after HB 2117?
Kansas Notice 12-14 explains that 2012 House Bill 2117 repealed the homestead property tax refund for renters. Kansas law provides a partial refund of property taxes paid by low-income homeowners who …
Did Kansas repeal the food sales tax refund, and what was the last year to claim it?
Kansas Notice 12-13 explains that 2012 House Bill 2117, Section 40, repealed the food sales tax refund as of January 1, 2013. The refund had provided a refund of sales tax paid on food by low-income i…
How does HB 2117 keep S corporation bank shareholders from claiming two subtraction modifications for the same income?
Kansas Notice 12-12 explains how 2012 House Bill 2117, Section 12, coordinates two subtraction modifications for shareholders of S corporations that are banks, savings and loans, or federal savings as…
How does HB 2117 exempt certain business income from Kansas tax while adding back related losses and deductions?
Kansas Notice 12-11 explains that 2012 House Bill 2117, Section 12, added five new addition modifications in K.S.A. 79-32,117(b)(xix) through (xxiii) and one new subtraction modification in (c)(xx), e…
Did 2012 House Bill 2117 change the Kansas corporate income tax rates or C-corporation modifications?
Kansas Notice 12-09 explains that despite the many changes in 2012 House Bill 2117 -- most effective beginning tax year 2013 -- the Bill did not change the corporate income tax rates or the credits av…
After HB 2117, can Kansas individuals still deduct or carry net operating losses starting in 2013?
Kansas Notice 12-08 explains that under 2012 House Bill 2117, beginning in tax year 2013 the net operating loss deduction is eliminated for individuals. Section 17 amends K.S.A. 79-32,143 to add new s…
Which Kansas income tax credits became C-corporation-only in 2013, and can individuals still carry forward old unused credits?
Kansas Notice 12-05 explains that under 2012 House Bill 2117, beginning in tax year 2013 a long list of income tax credits is available only to corporations subject to the Kansas corporate income tax …
Which Kansas income tax credits and which subtraction modification did HB 2117 repeal starting in 2013?
Kansas Notice 12-04 explains that 2012 House Bill 2117 repealed certain income tax credits beginning in tax year 2013, so after tax year 2012 they are no longer available. Section 40 of the Bill repea…
Which Kansas income tax deductions did HB 2117 limit to C corporations starting in tax year 2013?
Kansas Notice 12-03 explains that, under 2012 House Bill 2117, beginning in tax year 2013 certain deductions are available only to corporations subject to the Kansas corporate income tax (C corporatio…
Could an electroplater buy packaging materials for resale when the materials stayed with customer-owned metal returned after processing?
It depended on the electroplater's serviceman method. If it used one of the first three Service Occupation Tax methods and unequivocally transferred all ownership rights in the packaging to the custom…
Was a printing company's leased electrostatic duplicator exempt when it produced fewer than 4,000 impressions per hour?
No. Virginia's printing exemption applied only to electrostatic or other duplicators capable of at least 4,000 impressions per hour and used by a business primarily printing or photocopying products f…
Could a corporation recover the denied portion of a 2005 tax refund by filing another amended return after it missed the 90-day protest period based on Department advice?
No. St. Mary timely claimed a $39,307 corporate income tax refund, but the Department paid only $28,811 and partially denied $10,496. Instead of protesting that denial within 90 days, the company foll…
Is a kegel pelvic-floor exercise device exempt from NY sales tax as medical equipment?
No. The medical-equipment exemption under Tax Law 1115(a)(3) applies only to equipment that is primarily and customarily used for medical purposes and is not generally useful in the absence of illness…
Was Florida documentary stamp tax due when unencumbered real estate moved between sister subsidiaries through a new conduit entity and out-of-state statutory merger?
No, under the five no-consideration steps presented. The capital contributions and stock transfers were untaxed, and the merger vested the property by operation of substantially similar state law. The…
Were monthly medical-alarm monitoring fees taxable in New Mexico when the customers and company-owned alarm equipment were in New Mexico but the call center was in California?
Yes. American Medical Alarms sold New Mexico customers one integrated monitoring and emergency-response service for $24.95 per month. The company owned and maintained alarm consoles and transmitters i…
Is the fee a Tennessee car dealer charges to ship a vehicle between its own stores — so a customer can see and test-drive it before buying — subject to sales tax?
No. The Department ruled that a fee a Tennessee car dealer charges to ship a vehicle from one of its business locations to another — so that a prospective customer can see and test-drive it before dec…
Under Virginia's superseded 2012 motor-vehicle rental guidelines, which short-term rentals were taxed, what entered gross proceeds, and where was tax sourced?
Under these superseded guidelines, most passenger-vehicle rentals under 12 months bore a combined 10% charge: a 4% tax, a 4% additional tax, and a 2% fee. Vehicle type and weight could produce differe…
Were lease amounts recovered through a breach-of-contract judgment or guarantor payment subject to South Carolina sales tax?
Yes. Compensatory damages collected from a defaulting lessee and payments collected from a third-party guarantor were taxable gross proceeds because both arose from the lease agreement. The same resul…
When is South Carolina's 2012 sales tax holiday and what items are exempt (per SC IL #12-7)?
South Carolina's 2012 sales tax holiday runs from 12:01 a.m. Friday, August 3, 2012 through midnight Sunday, August 5, 2012. During that three-day weekend, the 6% state sales and use tax and any appli…
When a customer buys several vehicles from a Tennessee car dealer and trades in several others in one transaction, is the sales tax figured on the total purchase price minus the total value of all the trade-ins?
Yes. The Department ruled that when a customer buys more than one vehicle from a Tennessee car dealer in a single transaction, the taxable sales price is figured by ADDING UP the price of all the vehi…
Which of two individuals was personally liable for a corporation's unpaid consumer-use-tax assessment during its shutdown?
The acting president was liable; the minority shareholder was not. The president remained a director and company president through the shutdown, knew of the audit liability, controlled requests for av…
Could a Virginia resident claim a Virginia credit for West Virginia and Maryland tax withheld from wages covered by reciprocity?
No. Virginia's reciprocal agreements with West Virginia and Maryland exempted this Virginia resident's wages from those states' income taxes. Because he was not legally subject to their tax, he could …
Could Maryland residents recover Virginia tax withheld from Virginia wages when amended returns followed a later Maryland audit?
Yes. Under Virginia's reciprocal agreement with Maryland, the Maryland-resident spouses were not subject to Virginia income tax on their Virginia wages. Although the ordinary refund period had passed,…
Could a person who moved out of Virginia avoid adjustments to the standard deduction and personal exemption on a 2010 part-year return?
No. A part-year resident was taxable for the portion of the year spent as a Virginia resident. The standard deduction was prorated by the share of federal adjusted gross income attributable to Virgini…
Could doughnut shops keep the difference after mistakenly collecting 5% sales tax from customers but remitting only the 2.5% reduced food rate?
No. Eligible food could have been taxed at 2.5%, but the shops actually charged customers 5%. Virginia required dealers to remit every dollar collected, including erroneous or illegal overcollections,…
Could one licensed Illinois cigarette distributor buy or receive stamped cigarettes from another licensed Illinois distributor?
Yes. Informational Bulletin FY 2012-09 said stamped or unstamped cigarette packages could be sold or transferred between licensed cigarette distributors. Both the sale or transfer had to be accounted …
Were separately listed average shipping charges excluded from Illinois sales tax when the amount sometimes exceeded actual delivery cost?
Not merely because shipping appeared on a separate invoice line. The buyer and seller had to agree to delivery separately from the property price, shown best by a separate contract or by a genuine pic…
Could a retailer satisfy Illinois's unconditional-repayment requirement for an erroneous-sales-tax credit claim with a credit memorandum instead of first paying cash?
Yes, if the instrument was unconditional. A retailer seeking credit for tax it collected and remitted in error had to show that it had unconditionally repaid the purchaser so the retailer would not be…
Did a 250,000-gallon fire-protection tank bolted to a concrete foundation remain personal property, or was the subcontractor a construction contractor owing Use Tax on materials?
IDOR did not decide whether this tank was permanently incorporated into real estate. It said the classification was highly fact-intensive and directed the subcontractor to prior letters, including a P…
Was a village-owned Illinois hotel and convention facility exempt from Telecommunications Excise Tax and entitled to recover tax it had paid?
No. The Telecommunications Excise Tax Act did not exempt Illinois local governments. Its purchaser exemptions were limited to the State and federal governments, state universities created by statute, …
Did living abroad, holding a foreign license, and paying foreign tax prove that a taxpayer abandoned Virginia domicile for 2008?
No. The taxpayer showed a residence, driver's license, vehicle, and tax return in another country, but did not provide requested voting records or a usable federal transcript. She also maintained a pe…
Was a tire-shop foreman personally liable for corporate taxes merely because he held the title of president and could sign checks?
No. The taxpayer's president title was nominal; he continued working as shop foreman while another officer exclusively handled accounting, returns, bills, and taxes. He used check authority only rarel…
Could an insurer replace Florida's direct-premiums apportionment factor for income from an IRC section 338(h)(10) deemed asset sale?
No. A different percentage and a large one-time gain did not establish gross or constitutional distortion. The insurer failed to show by clear and cogent evidence that the standard premium factor taxe…
Did an out-of-state company owe Illinois tax on receipts from renting chassis through an Illinois container terminal?
It depended on the agreement. For a true lease—generally one with no buyout or only a fair-market-value option—Illinois imposed no tax on rental receipts and the lessee owed no tax; the lessor was the…
Was an installed landfill truck scale a resale, or was the seller a consuming contractor liable for tax on its costs?
The scale was a real-property installation, not an exempt resale. The resale certificate arrived three years after the transaction, described a waste-service customer rather than a scale dealer, and c…
Was a Virginia sales-tax appeal timely when the taxpayer faxed it two days after the 90-day deadline?
No. The February 1, 2012 assessment required a complete appeal by May 1. For a fax filing, the appeal had to be dated and received by the 90th calendar day. The taxpayer transmitted and Virginia recei…
Could mobile pollution-control equipment qualify for Virginia's sales-tax exemption without being permanently attached, and who had to certify it?
Mobile tangible property could qualify even when used at multiple sites and not permanently attached. But the exemption did not apply until DEQ or the authorized pollution-control board certified that…
What documentation allowed a medical-device seller to treat prosthetic-device sales to Virginia hospitals and physicians as exempt?
For profit hospitals and physicians, the device had to be bought for a specifically identified patient, and the seller needed a signed purchaser statement tying the qualifying device to that patient's…
Are charges for renting inflatable amusement devices and equipment -- with the company's safety staff on site -- subject to NY sales tax?
Yes. Providing inflatable devices (bungee runs, slides, obstacle courses, etc.) and other amusement equipment (jousting, boxing, sumo gear, Segways) for parties is a taxable lease of tangible personal…
How did South Carolina apply sales tax, admissions tax, and alcohol licensing to nonprofit fundraising events?
Tax treatment depended on what attendees paid for and whether the nonprofit qualified for a statutory exemption. A true charitable donation could be nontaxable even with an incidental meal, while a me…
Was one bundled charge for hosted medical-practice software and claims-billing services taxable in South Carolina?
No. The entire nonitemized monthly charge for hosted practice software plus medical billing and claims services was nontaxable data processing because the billing service manipulated the medical pract…
Could a Virginia-resident spouse claim a proportional share of joint federal itemized deductions when the other spouse lived in another state?
Yes. When a Virginia resident and nonresident spouse filed separate state returns but a joint federal return, separately traceable deductions belonged to the appropriate spouse. Joint deductions that …
What did the 2012 Kansas Legislature change for motor fuel taxes and fuel-related funds?
Kansas Notice 12-01 (June 11, 2012) summarizes three 2012 motor fuel bills. Senate Bill 294 (effective June 7, 2012) set quarterly $50,000 deposits into the Kansas Qualified Biodiesel Fuel Producer in…
Was Club 33's tax protest untimely when it was mailed 91 days after the notices' printed assessment date but the Department could not prove when or where it mailed them?
No. The 90-day protest period ran from the Department's mailing of the assessments, not merely the printed assessment date. The Department produced no mailing log, postmarked envelope, witness testimo…
Could a taxpayer shift a 2007 Virginia assessment to the preparer who completed the return, and could later deduction records still reduce it?
The assessment could not be transferred to the preparer. Virginia's self-assessment system made the taxpayer responsible for return accuracy, with any claim against a negligent preparer pursued separa…
Which dealers owed Virginia's historical June 2012 accelerated sales-tax payment, how was it calculated, and when could hardship relief apply?
For June 2012, a dealer or direct-payment permit holder with at least $26 million in taxable sales and purchases during the prior July-June fiscal year had to prepay 90% of its June 2011 sales-and-use…
Did a corporation need Virginia permission to switch from a consolidated return after all affiliates became disregarded single-member LLCs?
No permission was needed because separate filing was mandatory. After the four corporate affiliates became wholly owned single-member LLCs treated as disregarded entities and transferred their operati…
Could a long-term truck lessor buy later repair parts for resale, and was federal tire excise tax included in Virginia consumer use tax?
No resale exemption applied. The lessor installed parts during one-year truck leases but showed no Virginia motor-vehicle or retail tax charged on lease receipts or the repairs, and the parts were not…
How should a Virginia locality calculate the BPOL out-of-state gross-receipts deduction when receipts are sitused by payroll apportionment?
The county's excess-only method was wrong. When payroll apportionment assigns receipts to the Virginia definite place of business, the taxpayer first identifies Virginia employees' interstate particip…
How should a city calculate the BPOL out-of-state gross-receipts deduction when receipts are sitused by payroll apportionment?
The city's excess-only method was wrong. When payroll apportionment assigns receipts to the Virginia definite place of business, the taxpayer first identifies Virginia employees' interstate participat…
Is a call-tracking service — toll-free numbers that route and record sales calls so a retailer can measure its advertising and capture customer data — taxable in Tennessee as a telecommunications service?
No. The Department ruled that 'Call Tracking Services' are NOT subject to Tennessee sales and use tax. The provider sells retailers a package built around custom toll-free 'vanity' numbers (supplied t…
Could a wholesaler buy heat-treated export pallets for resale when it used them once to deliver federal commissary supplies to the port?
Yes. The wholesaler separately itemized the pallets, bought them only to fill export orders, applied customer-required heat treatment, and transferred title when the federal agency accepted the loaded…
Did new evidence about an out-of-state home and Virginia mailing arrangements prove that a taxpayer abandoned Virginia domicile for 2007?
No. On reconsideration, Virginia again found that the taxpayer had not abandoned her Virginia domicile. She kept and renewed a Virginia driver's license, registered vehicles in Virginia, was construct…
What Virginia tax interest rates applied during the third quarter of 2012?
Virginia's third-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-m…
When must a Louisiana veterinarian pay or collect sales tax on drugs, devices, and pet merchandise?
Veterinary professional services were not taxable. The veterinarian generally paid tax as the consumer of administered drugs and devices, but collected sales tax on items transferred to animal owners.
How did Louisiana tax first-time coating, wrapping, or galvanizing compared with redoing the same treatment?
First-time coating, wrapping, or galvanizing was taxable fabrication. Recoating, rewrapping, or regalvanizing was a taxable repair, including materials and labor, subject to stated exemptions.
Could an Illinois resident subtract Italian social-security benefits and an Italian employer pension from Illinois income?
No. The private Italian employer pension did not fall within the federal retirement provisions listed in Section 203(a)(2)(F), and the separate Social Security subtraction in Section 203(a)(2)(L) cove…
Did a timely extension payment preserve a 2006 Virginia refund when the taxpayer did not prove the return was filed within the extension period?
No. Paying with an extension was only one condition; the taxpayer also had to file the return by the extended November 1, 2007 deadline. Virginia had no record or objective proof of the claimed Octobe…
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