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 do disability-plan payments stop qualifying for Virginia's disability-income subtraction?
At mandatory retirement age. Before then, qualifying employer-plan payments for absence caused by permanent and total disability could support Virginia's disability-income subtraction, up to the statu…
Did a supplier have to collect Virginia retail sales tax on installed components included in a manufactured home's taxable sale price?
No, if the home remained tangible personal property on a temporary foundation, the components were included in its sales price subject to motor vehicle sales and use tax, and the supplier held a valid…
Were bidis cigarettes for Virginia tax purposes, and could an unlisted brand trigger the 500% contraband penalty?
Yes. Virginia found that bidis contained nicotine and functional tobacco, were burned in ordinary use, and looked and were packaged like cigarettes, so they met the cigarette-tax definition. Because t…
Could a Virginia resident exclude New York wages from Virginia income or claim credit without supplying the New York return?
The wages were not excluded. Virginia could tax all income of its resident, including New York earnings. The taxpayer could potentially claim an other-state credit, limited to the lesser of New York t…
Did a military spouse have to marry or live with the servicemember in their domicile state to receive Virginia's 2009 spouse exemption?
No. The marriage location and the fact that the couple had not lived together in their domicile state did not control. The spouse proved she shared and maintained the servicemember's State A domicile …
Are an independent real-estate consultant's services -- analysis, recommendations, and oversight for clients -- subject to NY sales tax?
No. Consulting services aren't among the enumerated services taxed under New York's sales tax. The consultant locates and analyzes properties, builds custom cash-flow projections, makes purchase recom…
New York Advisory Opinion TSB-A-12(2)C: How should an out-of-state company apportion to New York its receipts from educational travel programs, some of which are conducted in New York?
Source them to where the tours happen. A company that runs educational travel programs is selling a service, so its receipts are apportioned to New York based on where the tour is performed: tours con…
Did an Arlington County court hold that the Gardiners were entitled to Virginia's other-state income-tax credit?
Yes. The Arlington County Circuit Court granted the Gardiners' motion for summary judgment, denied the Virginia Department of Taxation's cross-motion, and declared that the Gardiners were entitled to …
Could a couple defeat a 1999 Virginia assessment by asserting that they had filed a return when the Department had no record of it?
Not without evidence. Virginia had the couple's federal transcript and Forms W-2 but no record of a 1999 Virginia return, so their assertion that they had filed did not justify abatement. The Departme…
Were a Virginia telephone cooperative and its taxable subsidiary exempt from Virginia corporate income tax?
Not on the submitted record. A Virginia-chartered telephone company operating exclusively as a local mutual association without accumulating profits or paying dividends could qualify for the statutory…
Did owning and renting residential property make a Virginia taxpayer liable for litter tax?
No. Virginia's litter tax applied to manufacturers, wholesalers, distributors, and retailers of listed products. The taxpayer only owned and rented residential property and did not produce or sell tho…
What annual cap applied to Virginia Land Preservation Income Tax Credits issued during calendar year 2012?
Virginia set the calendar-year 2012 Land Preservation Income Tax Credit cap at $111,054,000. The Department calculated that the relevant CPI-U average was about 11.05% above the 2006 base period. This…
Was a supplier's charge for a website taxable in Illinois when the work was delivered electronically?
The GIL did not classify the particular website invoice. It explained that electronically transferred information or data was not tangible personal property, and a service without a property transfer …
Could an unregistered Illinois printer buy newsprint paper tax-free, and what proof did the paper supplier need?
Potentially, through either of two paths. Paper bought by a graphic-arts producer could be a resale purchase, ordinarily documented by an active registration or resale number and certification; withou…
Did an online deal-of-the-day business owe Illinois sales tax when it sold restaurant vouchers, and what amount was taxed at redemption?
The deal-site's sale of the voucher itself was an intangible sale and was not subject to Retailers' Occupation Tax. The restaurant's later sale of food or drink at redemption was taxable. If the resta…
Is a subscription to a hosted product-data-synchronization data pool taxable as prewritten software in NY?
Yes. The product is a certified data pool (CDP) that lets supply-chain trading partners upload, synchronize, request, and view standardized product data through the operator's hosted software, which r…
If a professional gambler relocated to New York and continued placing full-time, systematic bets on horse races as his sole livelihood, would that activity count as a trade or business for New York income tax purposes?
Yes. Based on the facts presented - near-daily, high-volume pari-mutuel wagering conducted with a statistical betting model as the petitioner's sole source of livelihood - the Department concluded thi…
Could an ice cream shop use Virginia's reduced food tax rate for food sold for immediate consumption?
No. Ice cream shops could use the reduced rate for eligible food for home consumption, regardless of retailer type, but food and beverages sold for immediate consumption remained fully taxable. Virgin…
Could a military spouse claim the servicemember's State A domicile when her own records showed State B domicile?
No. The spouse's State B home, homestead exemption, vehicle registrations, and prior federal and Virginia filings showed that she established State B domicile before the marriage. She did not prove St…
Was filling a scuba tank with compressed air a taxable sale of property or a nontaxable service in Virginia?
It was a taxable sale of tangible personal property. Filtering and compressing air with specialized machinery made it measurable and perceptible, and the customer's true object was obtaining compresse…
Did a floor-shotblasting company owe gross receipts tax when customers refused to reimburse the tax and the owner faced medical and financial hardship?
Yes. The company owed gross receipts tax because shotblasting and floor coating were taxable services, and the seller remained liable even when customers refused to reimburse the tax. Financial hardsh…
Was a printing broker exempt from tax because it sold custom-designed printed items as a service and subcontracted the physical printing?
No blanket exemption applied. Custom or special-order printed items were generally sales of service subject to Service Occupation Tax on the tangible property transferred. The printing broker had to u…
What is South Carolina's tax interest rate for the period ending June 30, 2012 (per SC IL #12-3)?
3%. SC Information Letter #12-3 sets South Carolina's interest rate on tax underpayments and overpayments at 3% for the period October 1, 2011 through June 30, 2012. Interest is compounded daily, exce…
Were missionaries domiciled abroad Virginia residents for 2007 because they kept Virginia ties?
No. Considering all the evidence, Virginia found the couple had established domicile in the foreign country in 1993 and had not abandoned it, despite a Virginia house, family address, voter registrati…
Did buying and using another state's transferable tax credit count as tax actually paid for Virginia's other-state credit?
No. Virginia treated both earned and purchased credits as reductions of another state's liability, not actual tax payments. Even if the transferable credit was property, its use was limited to the tax…
When were Virginia software-license renewals and electronically delivered upgrades taxable?
A renewal of prewritten software originally delivered by CD, DVD, or other tangible media was taxable. A custom-program renewal was exempt, and a prewritten-program renewal was exempt when the origina…
How does Kansas sales tax apply to brine-impacted soil remediation and disposal services, and to the materials a remediation provider buys?
The services are nontaxable, but not all the materials are. The Department ruled that soil excavation is not taxable when its charge isn't lumped into a taxable installation charge, and that disposal …
When a customer returned a used battery and received the lead-acid battery core fee back, was that a trade-in and did sales tax also have to be refunded?
Yes. Requiring the original receipt linked the used-battery return to the original sale, so the core-fee refund was a trade-in allowance and selling-price adjustment rather than a separate sale. The r…
How is a utility's outdoor 'dusk-to-dawn' area lighting service taxed for homes, farms, and businesses in Kansas?
Taxable as electric utility service — at different rates by use. A utility's outdoor 'dusk-to-dawn' Private Area Lighting Service is a charge for electricity under K.S.A. 79-3603(c). For commercial or…
Are copies of medical records taxable in Connecticut, and does it matter whether they're delivered on paper, by online access, by fax, or by email?
It depends on how the records are delivered. Paper (hard-copy) medical records sold by a records-retrieval vendor are taxable sales of tangible personal property, and giving Requesting Parties access …
Did Indian-law preemption prevent New Mexico from taxing a non-Indian contractor's receipts from an Army project on Pueblo land?
No. Indian-law preemption did not bar the tax because the non-Indian contractor contracted solely with and was paid by the Department of the Army. The Pueblo's 25% project contribution did not make it…
Is a custom 'bio-engineered' orthotic shoe insert exempt from Colorado sales and use tax as a prosthetic device or durable medical equipment?
The Department wouldn't decide, and it signaled skepticism. A custom 'bio-engineered' orthotic shoe insert might be exempt as a prosthetic device — an artificial device that aids or replaces a bodily …
Were penalty and interest due when a business proved it mailed its gross-receipts and withholding returns and payments before the deadline?
No. The hearing officer abated all penalty and interest because the business proved it properly mailed the returns and full payment before the due date, and the Department offered no evidence that the…
Could a postal-services business reduce its gross receipts tax with NTTCs it still had not produced years after the audit?
No. The claimed NTTC deductions were denied because the certificates were never produced within the statutory deadline and, even if obtained, the described Type 9 certificates would cover tangible pro…
Is Synvisc (hylan G-F 20), a knee-osteoarthritis injection, exempt from NY sales tax?
Yes. Synvisc (hylan G-F 20) is a hyaluronan-based fluid a physician injects into an osteoarthritic knee, where it supplements the joint's natural synovial fluid, relieves pain, and restores the knee's…
New York Advisory Opinion TSB-A-12(1)C / 12(2)S: Is a cash payment-processing service subject to sales tax, and does using it make merchants vendors or give them New York franchise-tax nexus?
No on both. A cash payment-processing service that lets customers pay online purchases or bills with cash at a local store is not an enumerated taxable service, so it is not subject to sales and use t…
Were design and printing charges for labels affixed to a seller's packaged food products subject to Florida sales tax?
No. The labels accompanied food products, were used once as packaging, remained affixed to the products or containers, and supplied product information. The seller could give both the designer and pri…
Were membership dues paid to a private equity country club exempt as mandatory homeowners-association payments?
No. The country club was a separate private membership club, not the homeowners association, and its facilities were not the community's common areas or elements. The dues paid for use of the club fac…
How did Virginia's advance to December 31, 2011 federal conformity affect 2011 income tax returns?
Virginia advanced its fixed conformity date from December 31, 2010 to December 31, 2011 for tax years beginning in 2011. It still required specified adjustments for bonus depreciation, five-year NOL c…
Is a pharmacy's charge for a pharmacist's comprehensive review of a patient's medication records subject to Colorado sales tax, even though the patient may receive a printed report or medication chart?
Likely not taxable. A pharmacist's comprehensive medication-record review and face-to-face consultation looks like a non-taxable professional SERVICE — like advice from a doctor or accountant — even i…
How did same-sex civil-union partners adjust employer health-coverage wages on Illinois's historical federal 'as-if-married' return?
Under the historical 2012 procedure, partners completed a pro-forma federal return as if federal law recognized their civil union as a marriage. They excluded from pro-forma taxable wages any employee…
Does Kansas sales tax apply to charges for hosted software, SaaS, or application service provider (ASP) services?
No. Charges for hosted software, software as a service (SaaS), or application service provider (ASP) services are not subject to Kansas sales tax. None of the services taxed under K.S.A. 79-3603 cover…
Were a manufacturer's wholesale sales of affiliate-made chemicals a separate BPOL-taxable business, and could out-of-state receipts be deducted?
Yes. Sales of chemicals made by affiliates outside the city were a significant wholesale activity, not merely ancillary to manufacturing at the city plant, so a wholesale BPOL license was required. Re…
How did Florida require a qualifying business to compute project income for a Capital Investment Tax Credit project held in a separate corporation?
The project corporation had to prepare a separate-company pro forma federal return, compute Florida taxable income under GAAP and Chapter 220, and apportion using only its own property, payroll, and s…
Could a multinational franchisor stop filing Florida consolidated returns after disproportionate international growth and major changes in business lines?
Yes. The changes made continued consolidated filing impractical, subject to four conditions: a specified effective date, no items escaping separate returns, no reentry into a Florida consolidated grou…
Could an acquired Florida parent-subsidiary group stop filing consolidated returns after joining a new affiliated group with no Florida consolidated election?
Yes. The ownership change ended the old affiliated group, and the acquired taxpayer became bound by the purchaser group's filing election. Permission applied from the specified tax year and required t…
If a QEZE partnership restructures by inserting two single-member LLCs between itself and its existing owners, without changing who ultimately controls it, will it lose its empire zone tax benefits - and would a later change in the Department's position apply retroactively?
No, the QEZE certification and EZ tax benefits survive. Because inserting two disregarded-entity SMLLCs as intermediate owners doesn't change who ultimately owns, controls, or benefits from the petiti…
Were a retailer's nonrefundable layaway service fee and fee charged only when the customer canceled subject to Illinois sales tax?
The nonrefundable layaway service fee was taxable. IDOR treated it like a handling charge and a cost of doing business passed to the customer, so it remained in taxable gross receipts. A cancellation …
How was base employment calculated for the additional replacement-tax investment credit when the prior taxable year had only nine months?
Use the nine months and divide by nine, if that short period was the taxpayer's taxable year. Regulation 100.2101 defined base employment as the average monthly Illinois employment during the taxable …
Did a federally chartered relief organization and its local units have to collect Florida sales tax on their sales of goods and services?
No. As federal instrumentalities, the organization and its local units were immune from Florida's collection obligation. That immunity did not exempt the items themselves, so customers owed Florida us…
Did Illinois's municipal gas occupation tax apply to alternative gas suppliers or only public utilities?
IDOR did not answer the classification question. Taxes authorized by 65 ILCS 5/8-11-2 were administered by municipalities that elected to impose them, not by the Illinois Department of Revenue. IDOR t…
Is a nonresident professional athlete's signing bonus allocated to Utah using the same duty-day formula as salary, and will Utah accept an athlete's own duty-day calculation?
It depends on how the bonus is structured, but usually yes. Under Utah Admin. Code R865-9I-44 ("Rule 44"), a nonresident professional athlete's signing bonus is allocated to Utah using the same duty-d…
How is the 2011 federal credit for prior year minimum tax recomputed to determine the Nebraska minimum tax credit on a 2011 estate or trust (fiduciary) return?
Recompute the federal prior-year minimum tax credit for Nebraska, then take 29.6% of it. Revenue Ruling 23-11-2 tells 2011 estate and trust (fiduciary) filers to recalculate the federal credit for pri…
How is the federal alternative minimum tax recomputed to determine the Nebraska minimum tax on a 2011 fiduciary (estate or trust) income tax return?
Recompute the federal fiduciary AMT using Nebraska's adjustments. Revenue Ruling 23-11-1 tells estates and trusts filing a 2011 Nebraska Fiduciary Income Tax Return (Form 1041N) to recalculate the alt…
Did a secondhand dealer need registration in the county where it appraised gold collateral for a third-party lender when acquisition occurred after default elsewhere?
No. The dealer did not purchase the necklace when it was pledged in County A. It held the collateral at its registered County B store and acquired it only upon borrower default there, so County B was …
How is the 2011 federal credit for prior year minimum tax recomputed to determine the Nebraska minimum tax credit on a 2011 individual income tax return?
Recompute the federal prior-year minimum tax credit for Nebraska, then take 29.6% of it. Revenue Ruling 22-11-2 tells 2011 individual filers to recalculate the federal credit for prior year minimum ta…
Were mandatory country-club membership fees paid through homeowners associations exempt from Florida admissions tax?
No. The club, not a homeowners association, owned and controlled the golf, tennis, clubhouse, and related facilities, and the property was not association common area. Mandatory membership did not cha…
Were college textbook rental fees taxable when the bookstore allowed a student to buy the book during or after the rental?
IDOR did not classify the bookstore's rental agreement or specifically decide its late and nonreturn charges. A true lease generally had no buyout or only a fair-market-value option; Illinois did not …
How could an Illinois-registered drop shipper document a resale sale to an out-of-state purchaser that lacked Illinois nexus and registration?
The Illinois-registered seller had to collect tax or document an exemption for its Illinois delivery. To treat the sale to the out-of-state purchaser as resale, it needed a valid resale certificate co…
Does a nonprofit charitable hospital that runs a hotel owe Connecticut room occupancy tax on the rooms it rents?
It depends on the guest. A nonprofit charitable hospital operating a hotel owes Connecticut room occupancy tax on rent from the general public, but not on rent from 'Priority Guests' — patients, their…
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