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 taxpayers challenge Virginia assessments more than 90 days after they were issued while seeking IRS reconsideration?
No. The taxpayers filed their administrative appeal well after Virginia's 90-day deadline, so the Commissioner found no basis for relief. Virginia could assess from the IRS's final figures after the t…
Were electronically delivered digital certificates subject to Virginia retail sales and use tax?
No. The provider's customers registered online, received and installed the digital certificates electronically, and received no tangible personal property. Virginia treated the lump-sum certificate, a…
How is the 2011 federal alternative minimum tax recomputed to determine the Nebraska minimum tax on a 2011 individual income tax return?
Recompute the federal AMT using Nebraska's adjustments. Revenue Ruling 22-11-1 tells 2011 individual filers to recalculate the alternative minimum tax (AMT) from their federal return (Form 6251, or th…
Did a Florida county's proposed courthouse direct-purchase procedures qualify construction materials for the governmental sales-tax exemption?
No. Although the county would order and pay vendors directly and take title and risk of loss, the documents did not clearly require vendors to invoice the county directly and omitted Certificates of E…
Is a company's fee for analyzing job applicants' questionnaire answers and delivering an online probability-of-success ranking report to HR departments subject to Utah sales tax?
No. A company that runs job applicants through its own proprietary psychometric questionnaire and analysis, then gives client HR departments online access to a probability-of-success ranking report, i…
Which land-clearing and mulch-production equipment qualified for Virginia industrial-processing or forest-harvesting exemptions?
Mobile grinders, loaders, trucks, and related parts used at temporary clearing sites did not qualify for industrial processing, and grinding or chipping was not exempt forest harvesting. Equipment at …
Did regularly dispatching local contractors for Illinois retail repairs likely create income-tax nexus, and could voluntary disclosure limit prior years?
IDOR did not issue a final nexus determination because all facts would need audit review. It nevertheless said that a business built around regularly dispatching Illinois contractors for repair servic…
Did an Illinois school district owe sales tax when it sold textbooks to students and later bought them back, and could it instead structure a tax-free rental?
The described buy-sell-buyback transactions were taxable retail sales. The school district had to register, remit Retailers' Occupation Tax, and buy resale inventory using certificates rather than its…
How can taxpayers check whether an older South Carolina advisory opinion was modified or superseded (per SC IL #11-21)?
Use the citator attached to SC Information Letter #11-21. It helps you determine what effect newer South Carolina advisory opinions have on previously published ones — whether an opinion was modified,…
Could a transformed corporate parent discontinue Florida consolidated filing because separate returns better reflected its changed business?
Yes, beginning with the 2010 year, subject to four conditions. Items could not escape separate returns, the group could not reenter Florida consolidation before 2015, and federally realized but deferr…
Was a remotely hosted email-marketing platform taxable as canned software or nontaxable as an online service in Illinois?
IDOR did not decide whether this hosted platform was taxable. It said application-service-provider, hosted-software, and web-based-software treatment should be resolved through formal rulemaking rathe…
How did Illinois describe sales, nexus, local sourcing, and lease tax rules in response to a Series LLC classification survey?
IDOR did not answer the Series LLC survey yes or no or say that each series was a separate Illinois sales-tax entity. It said Illinois sales and use tax generally looked at transactions between legal …
Did a permit-required replacement wastewater pipeline and its associated structures qualify for Florida's pollution-control sales-tax exemption?
Yes. The fixed-location manufacturer used the replacement system solely to control pollution from its operations and to meet DEP permit requirements. The entire required pipeline system qualified even…
Did a company become liable for its acquisition target's unpaid gross receipts tax after buying the target's stock, assets, and key government-lab contract?
Yes. Orion was a successor because it bought WATS's stock and all assets, continued its core contract, assumed operating debts, and received its goodwill. The transferred value exceeded the tax debt, …
Could Virginia consider a consumer-use-tax appeal mailed after the 90-day assessment deadline?
No. The March 10, 2011 assessment had to be appealed by June 8, but the legible appeal was mailed July 13. Virginia strictly enforced the 90-day limit and barred consideration despite written notices …
Did GPS proof that a truck burned fuel inside an off-highway geofence automatically qualify that fuel for an Illinois Motor Fuel Tax refund?
No blanket approval was available. Each refund claim needed verifiable purchase and use documentation showing a nontaxable purpose and a practical calculation and itemization of the fuel amount. Gasol…
Were stand-alone prepaid wireless phone cards worth $5 or less exempt from Illinois's prepaid wireless 9-1-1 surcharge as minimal service?
No. The $5-or-less minimal-service election applied only when a minimal amount of prepaid wireless service was sold with a prepaid wireless device for one non-itemized bundled price. Stand-alone prepa…
How did Illinois tax an optometrist's government-paid and privately paid medical-appliance charges, including shipping above actual cost?
Direct Medicare or Medicaid payments could be exempt when properly documented with an active E number, but patient and private-insurance portions were taxable. IDOR said most optometrists were registe…
Could a cupcake shop with four customer tables charge Illinois's lower off-premises food rate on cupcakes sold by the dozen for later consumption?
Generally the high rate applied to all food sales because the store provided seating. The presumption could be rebutted only if the on-premises area was physically partitioned from the off-premises sa…
Did intercompany job-cost entries create taxable equipment leases when no cash or written rental agreement changed hands?
Yes. The owner's transfer of equipment possession to sister companies, combined with due-to, due-from, and job-cost entries, supplied consideration for taxable leases even without cash payments or wri…
Which sales at a university dining facility open to the public may be exempt from Illinois Retailers' Occupation Tax?
Only a narrow category. A school cafeteria confined to students and employees was exempt, but when a dining facility was open to the public, all sales were generally taxable. Illinois allowed the univ…
Did an out-of-state inventory-software company have Illinois nexus when warehouses used its program and it earned a per-pallet spread?
Unresolved. Illinois declined to make a nexus determination in a GIL or PLR, saying those facts are often best gathered by an auditor. It explained that canned software was generally taxable regardles…
Did an out-of-state internet retailer create Illinois sales-tax nexus by sharing a loyalty program with affiliated Illinois stores and accepting online returns there?
Unresolved. Illinois declined to make a nexus determination in a GIL or PLR because it said the necessary facts are often best gathered by an auditor. It instead summarized the 2011 framework: an Illi…
Does an Illinois charitable foundation with an E number avoid Retailers' Occupation Tax on continuous website and fundraising-event sales of logo merchandise to the public?
Generally no. Federal 501(c)(3) status alone does not create an Illinois sales-tax exemption, and an Illinois E number primarily exempts qualifying organizational purchases—not the organization's own …
How does Illinois tax custom printed matter transferred by graphic-arts servicemen, including registered and unregistered de minimis servicemen?
Illinois declined to issue the requested Private Letter Ruling but explained the general rules. Special-order or custom print items generally fall under Service Occupation Tax, while stock or standard…
How did Illinois distinguish a taxable conditional sale from a true equipment lease, and who owed tax in each case?
Illinois declined to rule on the requester's hypothetical contract-sale and funding arrangements, but explained the general distinction. A lease with a nominal or one-dollar purchase option, or a guar…
Are the labor to dispose of drilling dirt and the purchase of fly ash used in that disposal subject to Kansas sales tax?
The disposal service is not taxable, but the materials are. The Department ruled that the service to dispose of dirt excavated while drilling a deep disposal well is not a taxable service. However, an…
When amended corporate returns revealed 1995-1996 underpayments and 1997-1999 overpayments, did interest on the earlier tax continue until the 2008 amendments or stop as each later overpayment was applied?
Interest stopped to the extent each later overpayment was applied. After a federal audit, BNSF's amended New Mexico returns showed additional 1995-1996 tax and overpayments for 1997-1999. Section 7-1-…
Are software licenses that only grant remote access to software hosted outside Kansas subject to Kansas sales or use tax?
Not taxable. The Department ruled that purchases of software licenses and support services are not subject to Kansas Retailers' Sales Tax or Consumers' Compensating Use Tax when the licenses only gran…
Can a manufacturer claim a Colorado sales/use tax exemption on coal and shredded tires that serve as both kiln fuel and as a chemical ingredient in the finished product?
Partly exempt. A manufacturer may exempt the portion of its coal and shredded-tire purchases that becomes a component of its product — silica and alumina from coal ash, and iron from the tires' steel …
Are the components of a leased residential rooftop solar photovoltaic system exempt from Colorado sales and use tax under the renewable-energy components exemption?
Mostly exempt. The components of a leased residential solar photovoltaic system — modules, racks, inverter, wiring — are exempt from Colorado state and state-administered local sales and use tax under…
Could entities use separate accounting for Illinois property sales without showing how the statutory formula distorted their income?
No, not on the petition submitted. Section 304(f) allowed separate accounting only when the statutory method did not fairly represent Illinois activity. Regulation 100.3390 required clear and cogent e…
Could entities use separate accounting for Illinois property sales without showing how the statutory formula distorted their income?
No, not on the petition submitted. Section 304(f) allowed separate accounting only when the statutory method did not fairly represent Illinois activity. Regulation 100.3390 required clear and cogent e…
Are paid 'membership' dues at an owner-operated public golf course taxable as social or athletic club dues in NY?
No. Tax Law 1105(f)(2) taxes dues paid to a 'social or athletic club,' but this golf course isn't one. The owner retains sole control over the facility and all its operations; the 'members' have no ow…
Are complete-nutrition and specialized nutritional shakes exempt from Colorado sales tax as 'food,' or taxable as dietary supplements?
They're exempt food. Four nutritional shakes — a complete-nutrition shake, a specialized-nutrition shake, a diabetic shake, and a post-workout shake — all qualify as exempt 'food' because each carries…
Is a web-based subscription service for sending, receiving, and tracking large digital files subject to Colorado sales or use tax, or is it a non-taxable service?
It's a non-taxable service. A web-based subscription for sending, receiving, and tracking large digital files is a service — not a rental of software or servers — so it is not subject to Colorado sale…
Could a flooring distributor remove sampled sales using late resale certificates or customers' direct use-tax payments?
Only in part. Virginia removed sales supported by valid certificates or verified customer records, but kept sales backed by incomplete or unverified certificates. Customers' direct use-tax payments di…
Who owed Virginia communications tax when a provider billed lodging facilities in January 2007 for December 2006 services?
The January 2007 bills were subject to the new 5% communications sales and use tax even though the services were provided in December 2006. Under Virginia's transition guidance, the bill date controll…
Who owed Virginia communications tax when a provider billed lodging facilities in January 2007 for December 2006 services?
The January 2007 bills were subject to the new 5% communications sales and use tax even though the services were provided in December 2006. Under Virginia's transition guidance, the bill date controll…
Could an Illinois taxpayer subtract nonqualified long-term care insurance reimbursements that were included in federal adjusted gross income?
No. Because the nonqualified policy reimbursements were included in federal adjusted gross income, they also entered Illinois income. Section 203(h) allowed only expressly listed subtractions, and Ill…
Are Illinois's state Gas Revenue and Gas Use Taxes alternatives to a municipality's natural-gas tax, or can the local tax apply in addition?
The local tax can apply in addition. Illinois's statewide Gas Revenue Tax applied to persons distributing, supplying, furnishing, or selling gas for use or consumption and not for resale at the lower …
What Virginia tax interest rates applied during the first quarter of 2012?
Virginia's first-quarter 2012 rates were 5% for tax underpayments and 5% for overpayments. The reduced rate for qualifying assessments under administrative appeal was 0% after nine months until the De…
What Illinois rules should a wholesaler use to validate resale certificates and customers' certificates of registration?
The GIL did not answer the wholesaler's detailed questionnaire item by item. It directed the seller to 86 Ill. Adm. Code 130.1405 and Subpart N for certificates of resale and sales for resale, and to …
Which medicines, prosthetic devices, diabetic supplies, and medical equipment qualified for South Carolina sales-tax exemptions?
The ruling did not create one blanket medical exemption. Tax treatment depended on the item, buyer, prescription requirement, patient use, payment source, and seller. Prescription medicines sold by pr…
Could severe medical problems extend Virginia's deadline to claim a 2004 income-tax overpayment as a 2005 credit?
No. Applying an overpayment to the next year was subject to the same three-year limit as a refund. The taxpayer's missed extended filing date made the extension invalid, and the September 2008 return …
Did using an Illinois third-party marketing company create Illinois sales-tax nexus for an out-of-state e-commerce service provider or its clients?
Unresolved. Illinois declined to determine nexus through a GIL or PLR because it said the relevant facts are often best gathered by an auditor. The company managed websites, warehousing, fulfillment, …
Was an unused railroad line still operating property for Virginia local property tax before formal abandonment?
Yes. Although the line was unused and parts were paved over, the railroad retained an easement allowing freight service and did not permanently withdraw the property until its September 2010 abandonme…
Where were an interstate motor carrier's tractors and trailers subject to Virginia local tangible-property tax?
The city could not assess additional 2007 tax because its assessment period had expired. For 2008-2010, however, situs depended on where tractors and trailers were normally garaged or parked, consider…
How does Illinois tax fabricated structural steel sold without installation, incorporated under a construction contract, or shipped out of state?
It depends on the product, design work, contract, and delivery. A fabricated item substantially similar to stock or standard property produced Retailers' Occupation Tax on the full selling price witho…
Does an Illinois aircraft dealer owe Use Tax when an inventory aircraft is used for demonstrations and remains unsold for more than 18 months?
Yes. Demonstration or interim use by a retailer was exempt while the aircraft remained inventory and available for sale, but the 18-month period began when the aircraft was purchased. If it was not so…
How did Illinois treat an out-of-state repair manager that hired local contractors for plumbing, electrical, painting, and building repairs?
Illinois did not expressly decide the repair manager's nexus or final tax liability. It explained that contractors permanently incorporating property into real estate were end users owing Use Tax on c…
Could subsidiaries with no positive Virginia apportionment factor join a consolidated return, and could the parent use a liquidated subsidiary's NOL?
The subsidiaries could not join the 2006-2007 Virginia consolidated returns because neither had a positive Virginia apportionment factor or Virginia-source income. Incorporation, Virginia-based direct…
Are a laser-surgery treatment-card fee and a per-procedure patent-license fee subject to NY sales tax?
Yes, both are taxable. The $10 plastic treatment card that must be inserted to operate the laser is itself tangible personal property with real utility (it activates the equipment), not a mere token o…
Do Illinois bulk-sales notice and withholding rules apply when a lender merely repossesses or forecloses on property securing a defaulted loan?
Generally no when the successor does no more than repossess or foreclose on property covered by the note, mortgage, or security interest. Illinois said no statutory 'sale or transfer' then occurs, so …
Could the Virginia Tax Commissioner decide whether a county should value a used recreational vehicle at purchase price or NADA value?
No. Although the Department can hear certain local-tax appeals, Virginia law expressly bars the Tax Commissioner from determining the value of property subject to local mobile property tax. The Depart…
Must a private fixed-base operator on a federal installation collect Kansas sales tax on aviation fuel, and may its supplier accept a resale exemption?
Yes. A private fixed-base operator on a federal military base or other federal land must register and collect Kansas sales tax on taxable aviation-fuel sales; its location does not create an exemption…
Did joint-bank records prove that a Virginia resident separately paid all itemized deductions from a nonresident spouse?
Not yet. The resident's payroll entered the joint account used for mortgage and real-estate-tax payments, but nine unexplained transfers also entered that account. Without proof that the transferred f…
Could Virginia include a nonresident servicemember spouse's federally excluded combat pay when allocating joint itemized deductions?
No. Virginia could proportionally allocate joint deductions and exemptions between the resident taxpayer and nonresident spouse when the items were not separately accounted for. But the ratio had to u…
Are charges to assemble a manufactured product, such as an office chair, subject to Kansas sales tax?
Yes. Charges to assemble a manufactured product from component parts are subject to Kansas sales tax. A retailer's assembly charge is part of the taxable selling price, including when separately state…
How did Virginia tax pond fountains, aeration equipment, weed-control services, fish, plants, and installation?
Fountain and aeration treatment depended on whether installation made the equipment part of the realty: a contractor paid tax on permanent fixtures, while equipment remaining tangible was a taxable re…
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