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 refinancing through a lender's subsidiary qualify for Virginia's same-lender recordation-tax exemption when the parent serviced the loan?
No. The original lender's subsidiary made the refinanced loan, while the parent merely serviced it and received the monthly payments. Because the parent and subsidiary were separate legal entities, th…
Could a Virginia resident claim all dependent exemptions but only a proportional share of joint itemized deductions with a nonresident spouse?
Yes. Claiming all dependent exemptions on the resident's separate state return showed the spouses' mutual agreement and separate accounting, so those exemptions were allowed. But the resident did not …
Did a former employer's failure to withhold New Mexico tax excuse income tax, penalty, and interest on a profit-sharing distribution?
No. The hearing officer upheld the tax, penalty, and interest because the profit-sharing distribution was taxable income, no New Mexico tax was withheld, and the taxpayer did not amend his state retur…
Was Bonnie Yearley's Navajo Nation income exempt while she lived with and cared for her father on the reservation but remained domiciled in Gallup?
Yes. Section 7-2-5.5 required that a qualifying tribal member earn income from work within tribal boundaries and live within those boundaries; it did not require the member to abandon a New Mexico dom…
What is South Carolina's tax interest rate for the period ending March 31, 2012 (per SC IL #11-20)?
3%. SC Information Letter #11-20 sets South Carolina's interest rate on tax underpayments and overpayments at 3% for the period October 1, 2011 through March 31, 2012. Interest is compounded daily, ex…
Could a qualifying industrial vacuum loader bought in 1999 still use Illinois's former pollution-control-facility exemption when the owner later sought title?
Potentially, but the GIL did not rule that this taxpayer's vehicle qualified or waive tax, penalty, or interest. Illinois said the pollution-control-facility exemption covered qualifying sales through…
Are fees for internet access to healthcare recall information, location databases, and unique database prefixes subject to Illinois sales or use tax?
Illinois declined the requested PLR because its regulations addressed the issue, then stated the general rules. Information or data transferred or downloaded electronically was not tangible personal p…
Who decides a property's actual value when Virginia deed recordation tax differs from the stated consideration?
The circuit-court clerk. Virginia recordation tax used the greater of consideration or actual property value, and assessed value carried a strong presumption but was not conclusive. The Department ask…
Could Virginia include a nonresident servicemember spouse's federally excluded combat pay when allocating joint deductions and exemptions?
No. Virginia could proportionally allocate joint deductions and exemptions when the resident and nonresident spouses did not separately account for them, but the calculation had to use federal adjuste…
Could Virginia include a nonresident servicemember spouse's federally excluded combat pay when allocating joint itemized deductions?
No. Virginia could proportionally allocate deductions when the resident and nonresident spouses did not separately account for them, but the calculation had to use federal adjusted gross income. Comba…
Did an out-of-state employer have to withhold Illinois tax from a temporary nonresident employee working entirely in Illinois?
Yes. The nonresident inspector worked for two or three months entirely at an Illinois fabrication shop. Section 304(a)(2)(B) therefore treated the wages as compensation paid in Illinois, even though t…
Did a military logistics contractor have a definite place of business at the city supply center for BPOL tax?
Yes, on the stated facts. Hundreds of employees and an on-site supervisor continuously worked in designated, segregated military space on tasks lasting at least 30 days; the contractor also used a loc…
Did Virginia's reduced food-tax rate apply to hospital meal-management fees or raw ingredients?
The general rate applied to management fees connected with prepared hot patient meals, because for-profit healthcare facilities consumed those meals as part of patient care. Raw food ingredients could…
Were furnished corporate apartments a county definite place of business with rental receipts sitused there for BPOL tax?
Yes. The provider leased apartments from owners and sublet them directly to client occupants under its own agreements. Furnishings, utilities, housekeeping, and other amenities did not change the esse…
How did South Carolina change the tax treatment of software maintenance contracts effective September 1, 2011?
Effective September 1, 2011, a software maintenance contract purchased at the same time as taxable software remained taxable, unless the software sale was exempt. A maintenance contract purchased afte…
When must a South Carolina real estate agent or listing service notify the Department about a short-term rental property (per SC IL #11-19)?
A real estate agent, broker, or listing service that handles taxable short-term (less-than-90-day) rental accommodations for an owner must notify the South Carolina Department of Revenue when the owne…
How did Kansas sales and use tax apply to an out-of-state direct-mail advertiser with Kansas sales agents and mailers sent to Kansas homes?
The advertiser had Kansas nexus because agents and employees operated in the state, so it had to register and report Kansas consumers' use tax. The taxable event was its purchase of direct-mail packet…
Are facial moisturizers and cosmetic makeup that contain an SPF of 2 or greater exempt from NY sales tax?
No. These products -- facial moisturizers and liquid/powder makeup that happen to contain a sun-protection ingredient (SPF 2+) -- are cosmetics, and cosmetics are taxable under Tax Law 1115(a)(3) even…
Are the 10-year installment payments a company makes from its nonqualified deferred compensation plan to two former employees, who are now nonresidents of New York, subject to New York personal income tax and withholding?
No. Because each employee elected to receive Plan distributions as substantially equal annual installments over a 10-year period, the payments qualify as 'retirement income' under 4 U.S.C. § 114(b)(1)…
May a Kansas pet-food manufacturer buy nonreturnable pallets and shrink wrap without sales tax?
Yes. Nonreturnable wood pallets and shrink wrap used to handle, ship, and store bagged pet food qualify as ingredient or component parts under K.S.A. 79-3602(p) and are exempt under K.S.A. 79-3606(m).…
Could Exerplay deduct playground equipment sold to governments and nonprofits when it installed the equipment permanently in concrete?
Mostly no. Playground structures, benches, tables, and poured-in-place surfacing that Exerplay permanently attached to the ground became fixtures and construction materials, so the government and 501(…
Is a fixed-price guided Segway tour a taxable rental of tangible property or an exempt tour service in NY?
It's a taxable rental. Tour services aren't an enumerated taxable service, but here the primary thing the customer buys is the right to use the Segway. The customer has physical possession of the Segw…
Was real property contributed by a corporation for a 42% LLC interest exempt from Virginia recordation tax?
No. Both combining corporations survived, the new entity was an LLC rather than the corporation required for the cited federal reorganizations, the transfer was corporation-to-LLC rather than parent-t…
What Illinois sales-tax amount applies when grocery customers redeem trading stamps for free or nominal-price cookware?
The retailer transferring the cookware owed Retailers' Occupation Tax and collected Use Tax based on the cookware's retail value, even when the customer received it for stamps or a nominal cash amount…
How did South Carolina change the tax treatment of warranty and maintenance contracts effective September 1, 2011?
Effective September 1, 2011, a warranty or maintenance contract bought at the same time as taxable tangible personal property remained taxable, unless the property sale was exempt. A contract bought a…
Were Internet-delivered call-tracking services exempt from Virginia sales tax or taxable as communications services?
Both rules applied differently. Call tracking delivered caller information through the Internet with no tangible property and was exempt from retail sales and use tax. But routing toll-free calls met …
If you move your domicile out of New York but still own your New York apartment while it's under contract for sale, and you spend more than 183 days in New York that year, are you still taxed as a New York statutory resident?
Not necessarily. New York held that a couple who changed their domicile to Connecticut did not maintain a permanent place of abode in New York because their real estate listing agreement legally barre…
Did transferring an aircraft from its owner to the owner's revocable trust before death trigger Illinois Aircraft Use Tax even without consideration?
Yes. Illinois treated the transfer from the individual owner to the revocable trust as a taxable transfer between separate legal entities, even though no money changed hands and the owner could amend …
Could a restaurant avoid Virginia tax, interest, or penalty because the employee handling sales-tax compliance was hospitalized?
No. The restaurant had collected sales tax from customers, held it in trust for Virginia, and failed to file returns or remit the money. The responsible employee's lengthy hospital stay did not change…
Is a lump-sum charge to operate and manage water and wastewater treatment facilities subject to NY sales tax?
No. The company contracts to fully operate, manage, and maintain water and wastewater treatment plants -- staffing them with state-certified, licensed operators and running the facilities in complianc…
Could a South Carolina LLC pass the former biomass energy credit through an S corporation to individual shareholders, and where did the annual cap apply?
Yes. The former biomass credit could pass from the LLC to its S-corporation member and then to individual shareholders. The $650,000 annual cap applied at the LLC level, and allocations had to follow …
Was an out-of-state national bank with only a Virginia mortgage-loan office subject to bank franchise tax and exempt from BPOL tax?
Yes. After a circuit-court decision, Virginia reversed its earlier policy and treated the national bank's mortgage office as sufficient for bank franchise tax even without Virginia deposits. The bank …
New York Advisory Opinion TSB-A-11(10)C: Is an out-of-state seller of tangible gifts protected from corporate franchise tax by Public Law 86-272 when some orders are filled by unaffiliated New York third-party vendors?
No, it is not subject to franchise tax. A North Carolina company that sells only tangible gifts and awards into New York -- some shipped by unaffiliated New York third-party vendors it never takes tit…
How did Florida apply the new- and expanding-business machinery exemption to three beverage production lines?
Line 1 was a new business because the new beverage was a distinct economic activity. Lines 2 and 3 could qualify as expansions after separate DR-1214 filings and proof of at least 10% greater output. …
Could a federal consolidated-group member claim its allocated IRC § 199 deduction on a separate Virginia return?
Yes. The expanded affiliated group computed one IRC § 199 deduction and allocated it among members in proportion to qualified production activities income. That member-level share was the same whether…
Could a Virginia resident claim all dependent exemptions and itemized deductions from a joint federal return with a nonresident spouse?
The resident could claim all dependent exemptions because the nonresident spouse did not claim them on the other state return, showing separate accounting and mutual agreement. The resident had not do…
New York Advisory Opinion TSB-A-11(9)C: Can the brownfield redevelopment tax credit be claimed for improvements placed in service before the certificate of completion is issued, if the certificate issues in the same taxable year?
Yes. Under the brownfield redevelopment tax credit (Tax Law section 21), the tangible-property credit can be claimed for improvements placed in service before the certificate of completion is issued, …
Did marketing corn and beans for patrons make a grain elevator a retailer eligible for the replacement-tax investment credit?
The GIL did not decide. Marketing farm products could be a retailing operation, but IDOR needed to know whether the company sold taxable services, sold tangible personal property at retail, and what o…
Are judgment or guarantor payments recovered after a defaulted equipment lease subject to Illinois sales or use tax?
The GIL did not directly decide whether the proposed judgment or guarantor recoveries were taxable. It declined the PLR because regulations addressed the subject and explained that classification cont…
Could tenant or contractor jobs count toward Virginia's historical data-center exemption, and who could claim it?
Yes, if the VEDP memorandum allowed it and the jobs were located at and associated with operating or maintaining the data center. But only the single entity that owned the qualifying center, met the i…
Was airline pilot William Kellerman a Texas resident for 2003-2006, and could New Mexico apply its later 20% penalty cap?
Kellerman remained a New Mexico resident. Although he had a shared Texas condominium, driver's license, voter registration, and vehicle registration, his Albuquerque home, spouse, belongings, day-to-d…
Could an employed taxpayer subtract disability payments from Virginia income because the injury arose during combat-zone training?
No Virginia subtraction was allowed on the returns as filed. The state subtraction required qualifying disability income for a period when the individual was absent from work because of permanent and …
Could a taxpayer overturn a Virginia income-tax assessment with an appeal that identified no error, relevant facts, or supporting authority?
No. A Virginia assessment was presumed correct, and the taxpayer bore the burden of showing error. His letter did not identify an alleged error, give relevant facts, state grounds for relief, cite con…
Could a liquidating C corporation use its Illinois net-loss carryover on a final return during the historical suspension period?
No. The historical Section 207(d) suspension barred a C-corporation net-loss deduction for taxable years ending after December 31, 2010 and before December 31, 2014, with no exception for a final retu…
Were out-of-state domiciliaries who stayed in their Virginia home more than 183 days for medical reasons Virginia residents?
Yes, for the part of each year they lived in Virginia. Their medical reason and lack of intent to restore Virginia domicile did not prevent actual residency after they maintained a Virginia abode and …
What training and testing does Nebraska require to be licensed as an amateur or professional MMA judge or referee?
You must complete a judge or referee training program and pass a written exam, then submit an application for the Commissioner's approval. Nebraska Athletic Commission Ruling 2011-3 explains that to b…
What penalty does the Nebraska State Athletic Commissioner impose on a licensee or applicant who competes in a non-sanctioned fight?
A minimum 45-day ban -- or 60 days plus mandatory blood tests if the fight ended by knockout/TKO/RSC strike. Nebraska Athletic Commission Ruling 2011-2 provides that any licensee or license applicant …
Should a vehicle marketer charge Virginia sales tax on a direct-mail program's list price or the 50% discounted price actually billed?
Tax applied to the discounted price actually charged to the dealerships because the marketer absorbed the 50% discount and received no third-party reimbursement. The marketer could recover tax previou…
Could a senior claim the Illinois property-tax credit in a year when the state paid the bill under the tax-deferral program?
No. Section 208 allowed the credit only for real property taxes paid by the taxpayer during the taxable year. Under the Senior Citizens Real Estate Tax Deferral Program, the Illinois Department of Rev…
How did Florida treat an aircraft-transportation and repair subsidiary's apportionment, tax-proration election, and aircraft-parts exemptions?
The subsidiary could apportion all income by revenue miles and elect sales-and-use-tax proration. Parts for qualifying heavy aircraft, foreign-registered aircraft leaving the United States, and FAA-ST…
Which purchases by a commercial Kansas wind farm qualify for the integrated-production sales-tax exemption, and which remain taxable?
Some purchases are exempt. Kansas treats a commercial wind farm as a manufacturing facility with an integrated production operation, so turbines, towers, transformers, intra-farm collection wiring, pr…
Could Brewer Oil recover a September 2006 fuel-tax overpayment after filing its refund claim in July 2010?
No. The September 2006 fuel-excise-tax overpayment had to be claimed by December 31, 2009—three years after the end of the calendar year in which payment was originally due. Brewer Oil did not submit …
Could ADC deduct receipts for security and clerical support without a timely NTTC, or defeat the assessment because the Department waited years to request a hearing?
No. ADC did not obtain the required NTTC for its PSST/Comforce receipts within 60 days of the Department's notice, and its Type 6 and Type 7 certificates did not cover security and clerical support be…
Are a commercial landlord's charges to a tenant for 'condenser water' used to cool the tenant's leased space subject to NY sales tax?
No. The condenser water is chilled water the landlord pipes to the tenant's own air-conditioning system to cool the space the tenant leases. Because the water is delivered through pipes, the sale of t…
When a hotel's in-house AV provider contracts directly with guests, is the hotel purchasing those AV services -- and is it liable for the sales tax?
No to purchasing, but yes to liability when the hotel collects the money. Each hotel lets an in-house AV provider rent audiovisual equipment and related services directly to the hotel's guests, who si…
May an Illinois licensed cigarette distributor also sell stamped cigarettes directly to retail customers?
Yes for a distributor within the first statutory definition of 'distributor' that held a license under Section 4 of the Cigarette Tax Act. A retail location could not have unstamped cigarette packages…
What is South Carolina's latest statewide per capita income figure used for tax incentives (per SC IL #11-17)?
$32,460. SC Information Letter #11-17 publishes the updated statewide per capita personal income figure for South Carolina — $32,460 — which the Department uses to test qualification for various South…
Did Virginia exempt an egg processor's tray washer, wastewater wagon, or chicken-house pit fans from sales and use tax?
Only the pit fans were exempt. The plastic tray washer performed general maintenance rather than direct egg processing, and the honey wagon disposed of wastewater after production rather than acting i…
If I'm a Florida domiciliary and I buy a studio apartment in New York City that I'll only use occasionally, will that make me a New York State or City resident who owes New York income tax?
No, not from ownership alone. If Petitioner remains a Florida domiciliary, merely owning a New York City studio apartment does not by itself make him a New York State or City resident. But if the apar…
How does NY sales tax apply to a security company's monitoring services, alarm/CCTV equipment, installation, repairs, and its own purchases?
It depends on the service. Monitoring (and other alarm/protective) services are always taxable as 'protective and detective services' under Tax Law 1105(c)(8). For equipment and its installation: if t…
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