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 a Florida consolidated group retroactively escape its election by asserting years later that the former parent lacked nexus when the election was made?
No. The group had repeatedly filed and benefited from consolidated returns, supplied no clear evidence disproving original nexus, and provided none of the information required for good-cause deconsoli…
Did an out-of-state recognition-products seller create Florida corporate income tax nexus when its in-state activity was limited to soliciting orders?
No, for years fully covered by Public Law 86-272. Florida representatives only solicited orders for tangible goods; approval, fulfillment, inventory, and shipment occurred outside Florida, with delive…
What documentary stamp tax applied when an individual transferred unencumbered foreclosure property to an LLC indirectly owned through the individual's revocable trust?
Only the minimum deed tax applied if no consideration was given and the taxpayer retained the same proportional beneficial ownership through the trust and LLC. The LLC became a conduit entity, so a tr…
How do Illinois Service Occupation Tax rules apply to custom-printed loyalty cards stored in Illinois and later drop-shipped nationwide?
Unresolved for the exact loyalty-card transaction. Illinois did not directly answer whether tax attached when ownership changed in Illinois, whether later drop-ship and freight fees were taxable, whet…
Does a Missouri business owe Kansas sales tax on training videos bought from a Kansas producer?
It depends on delivery. A training video delivered to a Kansas facility, or picked up in Kansas by the buyer or its agent, is subject to Kansas sales tax. Kansas tax does not apply when the Kansas sel…
Could a pass-through recipient preserve transferred conservation credits based on an easement appraisal Virginia found overstated?
No. Virginia rejected the landowner's unsupported approximately $31 million easement valuation and adopted an independent $3.9 million sales-comparison value. That reduced the total credit from about …
Did Virginia accept a conservation-easement appraisal valuing the donated interest at about $31 million?
No. The owner's discounted-cash-flow appraisal used unsupported lot assumptions and implied nearly eightfold land appreciation in about 2½ years. Virginia adopted an independent sales-comparison appra…
May an Illinois retailer exclude separately billed air freight paid to acquire goods for sale from taxable gross receipts?
No. A seller's incoming freight or transportation cost for acquiring property for sale was a cost of doing business included in taxable gross receipts. The seller could not deduct it merely because th…
Could Mary Satterla's estate recover New Mexico estate tax after abandoning a timely protective claim and filing a new claim after limitations expired?
No. The estate timely filed a $394,406 protective refund claim on June 1, 2004, but the Department did not act within 120 days and the estate did not protest or sue by December 28, 2004, the 210-day d…
Could taxpayers move a 2008 Virginia NOL deduction to 2007 because an other-state tax credit prevented a cash refund for 2006?
No. Virginia required the 2008 loss to follow the ordinary two-year federal carryback sequence after disallowing the special five-year carryback. The deduction fully reduced the taxpayers' 2006 FAGI a…
What is South Carolina's tax interest rate for the period ending December 31, 2011 (per SC IL #11-14)?
3%. SC Information Letter #11-14 sets South Carolina's interest rate on tax underpayments and overpayments at 3% for the period October 1, 2011 through December 31, 2011 — down from 4% in the prior qu…
Is a maintenance agreement covering hardware, technical support, warranty repairs, and canned-software updates taxable in Illinois?
Unresolved for the requester's embedded-software and hardware agreement because Illinois declined to issue the requested PLR and did not apply the rules to a final result. Generally, maintenance inclu…
Which building systems and production items for a meat-processing facility qualified for Illinois manufacturing relief under the 2011 rules?
Illinois did not approve every facility component requested. The manufacturing-machinery exemption applied to machinery and equipment used primarily—more than 50%—in manufacturing or assembling proper…
How did Illinois distinguish taxable canned software from custom software, qualifying licenses, and related support or training services?
Illinois gave general rules rather than a separate conclusion for every service described. Canned software was taxable tangible personal property regardless of electronic delivery. Custom software pre…
Did an out-of-state medical-device seller with an Illinois sales employee have Illinois sales-tax nexus or need to keep filing returns?
Unresolved. Illinois declined to determine the seller's nexus or remove it from filing because nexus facts were best gathered by an auditor. Under the historical 2011 framework, an agent or representa…
Was Illinois income tax properly withheld from inmate payroll, and did the inmate have to prepare Form W-2?
It depended on federal law. Illinois withholding was required only for Illinois compensation that was subject to federal income-tax withholding; federal FICA treatment alone was not enough. The GIL di…
When a NY vendor ships taxable goods by common carrier, is sales tax based on the rate where the vendor is located or where the buyer takes delivery?
The rate is the combined state and local rate in effect where the buyer takes delivery. New York sales tax is a 'destination tax': under Tax Law 1213 the vendor collects the city, county, and school-d…
Are soaps, acids, sanitizers, teat dips, and similar chemicals used by Illinois dairy farmers exempt farm chemicals?
It depends on the chemical's use. Raising dairy cows to produce milk for sale as food qualified as production agriculture. A chemical product used in that production or in the care of animals whose pr…
What were the significant South Carolina tax-law changes from the 2011 legislative session, as summarized by the Department (per SC IL #11-13)?
SC Information Letter #11-13 is the Department's brief summary of the significant tax and regulatory law changes enacted in South Carolina's 2011 legislative session, organized into five categories: (…
How is Nebraska's 5% gross receipts tax on MMA, boxing, and wrestling events calculated, including on sponsorship and complimentary tickets?
The 5% tax applies to the total face value of tickets collected at an event (minus state and federal taxes) plus, in most cases, the full amount paid for any sponsorship/advertising package that inclu…
We're building a new electric transmission line partly financed and secured by mortgages to the New York Power Authority (NYPA), a state agency. Is recording those mortgages subject to New York mortgage recording tax?
No MRT is due. A private developer built a 660-megawatt electric transmission system running from New Jersey into New York City, financed partly through the New York Power Authority (NYPA) under a 20-…
Is renting out a banquet/meeting room (not a hotel room) for weddings, business meetings, or temporary merchandise sales subject to Tennessee sales tax?
It depends entirely on WHY the room is rented, not who rents it. Renting the meeting/banquet room for a meeting, seminar, wedding reception, or similar event is NOT subject to Tennessee sales tax, reg…
How did Virginia treat a multistate maintenance contract, late exemption certificates, professional services, and post-amnesty penalties?
Virginia removed the support-contract portion covering equipment permanently outside the state but taxed the Virginia equipment portion. It rejected a late ISP certificate without proof of the full st…
Was Aurelia Shorty's 2005 Navajo Nation teaching income exempt when she worked on tribal land but lived in a Gallup apartment?
No. Shorty was an enrolled Navajo Nation member and all her 2005 teaching income came from work at a Navajo Nation school, but she did not live within the Nation's boundaries. She worked year-round, p…
Does a summer home in a cooperative community that restricts occupancy to a 5-month season and has no working heating system count as a 'permanent place of abode' for New York statutory residency purposes?
No. Because the cooperative's rules limited use of the home to summer occupancy (May 1 through September 30) and Petitioner had the heating system permanently removed around October 5, 2010, the home …
Does Illinois provide a sales-tax exemption for disabled veterans or for purchases by a county veterans association?
Illinois did not have a sales-tax exemption for disabled veterans. The Department could not decide whether the county veterans association qualified because the request did not explain its creation, o…
Which heart-assist devices, accessories, parts, and maintenance agreements qualified for Illinois's reduced medical-appliance rate?
Unresolved for the nine product and service categories because Illinois said it lacked necessary item-specific information and declined the PLR. A medical appliance had to be intended by its manufactu…
Were sales of two single-use human allergy skin-testing devices subject to Florida sales tax without individual prescriptions?
No. Based on their described diagnostic use, the devices were treated as exempt allergy test kits that use human blood to test for common allergens, an item included on Florida's nontaxable medical-it…
What resale-certificate documentation must an Illinois-registered seller keep for a drop shipment to an Illinois customer?
The Illinois-registered drop-ship seller had to charge tax or document the exemption for its Illinois delivery. To establish that its sale was for resale, it had to obtain and keep a valid Certificate…
Must an Illinois business making only wholesale sales register and file sales-tax returns, and how can it document purchases for resale?
A person making exclusively wholesale sales was not required to register, file Retailers' Occupation Tax returns, or remit that tax. The business could nevertheless obtain an Illinois resale number so…
How did Virginia tax an internet cafe's phone-access cards, complimentary food, estimated assets, and equipment or software fees?
Virginia taxed access cards advertised for both telephone and Internet use because telephone calling cards were tangible personal property and the cafe did not prove Internet-only sales. Complimentary…
When did a Florida UCC-1 filing, security agreement, or variable trade-credit invoice trigger documentary stamp tax?
A UCC-1 alone was not taxable if the security agreement was not filed. The agreement itself lacked a sum certain, but filing or recording its security interest made it taxable on the secured balance. …
Did outstanding non-delinquent ad valorem taxes or special-assessment liens remaining on transferred property count as deed consideration?
No. Unlike mortgage debt arising from a contractual obligation, those public-charge liens ran with the property and could not become a personal judgment against the owner. Their present or future valu…
How did Florida sales tax apply to a gaming ship's vessel costs, gaming, food sales, boarding fees, and port berth?
Florida gave mixed answers. The ship, retrofit, equipment, fuel, and other property qualified for the vessel partial exemption; gaming receipts were outside Chapter 212; food and drinks were taxable i…
Are weed-control chemicals used on prairie-grass fields enrolled in wildlife conservation programs exempt Illinois farm chemicals?
The Department did not grant the farmer a specific exemption. It explained that farm chemicals used in production agriculture can be exempt when the resulting crops or animal products are to be sold. …
Could an Illinois construction contractor claim the expanded enterprise-zone exemptions for manufacturing or pollution-control property?
No. Illinois revoked ST 10-0101-GIL and clarified that the expanded enterprise-zone exemptions for property used in manufacturing or assembling and for property used in pollution-control facilities we…
Must a corporation add back Kentucky's Limited Liability Entity Tax when computing Virginia taxable income?
No. Kentucky's Limited Liability Entity Tax was measured by gross receipts or gross profits and excluded most ordinary business expenses, so Virginia did not treat it as a tax based on or measured by …
Could a vendor exempt sales to federal prime contractors without timely certificates, contract statements of work, or reviewable classified records?
Not on assumptions alone. Thirty-one unclassified-contract sales lacked resale certificates and remained taxable unless the vendor used a final 120-day evidence period to prove resale or another exemp…
Which healthcare affiliates had Virginia BPOL filing duties, and where were their service receipts sitused?
Each Virginia affiliate with office space, property, records, phone, mail, and public business presence had a definite place of business and would file if its locality taxed the activity. Affiliates w…
Was a separated spouse liable for a joint Virginia return her spouse electronically filed without her agreement?
No. Virginia did not generally adopt the federal innocent-spouse provision, and spouses who actually file jointly are each liable for the full return. But the evidence showed that this taxpayer never …
Which 2011 tax rate applied to setup components sold with a manufactured home versus sold later?
Setup components attached to or bought at the manufactured home's initial sale, becoming an integral part and included in its sales price, used the then-3% motor-vehicle sales-and-use-tax rate. Compon…
Were machines testing raw pouch film and completed sanitary products exempt production-line quality-control equipment?
Yes. Testing raw film after plant-site storage counted as handling raw material within production, even though the tensile tester stood behind the main machine. Testing bagged sanitary products for me…
Is Nebraska sales and use tax due on digital music, movies, TV shows, e-books, and digital codes delivered electronically?
Yes -- since October 1, 2008, electronically delivered digital audio works (music), digital audio-visual works (movies, TV shows, music videos), digital books, and the digital codes that unlock them a…
Are receipts from a patent draftsman's formal drawings, delivered solely electronically as PDFs, subject to NY sales tax?
No. The draftsman creates formal patent drawings and delivers them solely electronically, as PDF files emailed to patent-attorney customers, with no paper copy. Sales tax applies to sales of tangible …
How did Florida tax supplies consumed in cleaning services versus items separately provided to cleaning customers?
The provider owed tax on cleaning supplies it consumed, but could buy customer resale items with a resale certificate and collect tax when selling them. Because both the cleaning service and resale it…
Were breast implants used for augmentation exempt as prosthetic or durable medical devices?
No, not for the augmentation uses assessed. Virginia had already excluded implants purchased for qualifying reconstructive surgery. The contested implants enlarged underdeveloped breasts, restored vol…
Which mortgage, charitable, mileage, uniform, and professional-dues deductions survived Virginia's documentation review?
Virginia adjusted second-mortgage interest to the documented amount and allowed donated furniture, books, tools, electronics, and other items individually worth $500 or less with proper receipts. It d…
Did two employees living in Virginia create corporate income-tax nexus when they performed all work under an out-of-state contract?
No. The corporation had two Virginia-resident employees and registered for wage withholding, but it had no Virginia property, sales, service contracts, or employee activity. Both employees performed t…
Was AMG National Trust Bank subject to Virginia bank franchise tax rather than corporate income tax?
Yes. The Norfolk Circuit Court held that AMG was a bank under the Virginia Bank Franchise Tax Act, subject to bank franchise tax and exempt from corporate income tax. It ordered refunds of all corpora…
How did installment payments from a July 2010 business sale split across Illinois's 2011 rate change, and could the corporation use its 2010 loss?
Under a specific-accounting election, installment gain belonged to the pre-2011 portion only to the extent federal accounting recognized gain from payments received before January 1, 2011. Gain tied t…
Did Paragon's earlier gross-receipts-tax refund prevent the Department from assessing its later zero-liability returns?
No. Paragon provided taxable services in New Mexico but reported zero gross receipts tax from January 2004 through October 2009, understating liability by more than 25%. The resulting $158,298.78 tax …
Is electronic access to Illinois county title records, delivered entirely online to an out-of-state customer, subject to Illinois sales tax?
The GIL did not issue a definitive transaction ruling, but said electronically transferred or downloaded information and data were not tangible personal property. Based on the limited facts, if the co…
Are room charges at privatized DoD temporary military housing subject to the Kansas Transient Guest Tax or Retailers' Sales Tax?
Neither tax applies. The Department ruled that room charges at privatized U.S. Department of Defense temporary housing — open only to military 'official travelers' on temporary duty, a change of stati…
If a company sells compressed air (not the compressor itself) to a manufacturer under a long-term service contract, does the sale qualify for Tennessee's industrial machinery sales tax exemption?
No. Selling compressed air under a "compressed air as a service" contract does NOT qualify for Tennessee's industrial machinery exemption, for two independent reasons: (1) the customer never buys, lea…
Is a document-management/e-discovery service -- collecting, processing, hosting, and storing client data, plus consulting and file delivery -- taxable in Tennessee, and does it matter whether the finished files are delivered electronically or on a hard drive?
Mostly not taxable, with one key exception. The provider's data collection ("Data Service"), hosting, storage, and hourly project-management consulting are all NOT subject to Tennessee sales and use t…
Could a multistate partnership use separate accounting for Virginia real-estate investments instead of the statutory apportionment formula?
No. A different result under separate accounting did not prove that Virginia's statutory formula was unconstitutional or inequitable. The partnership supplied no clear and cogent evidence of gross dis…
Which graphic-printing audit items did Virginia remove after reviewing late certificates, invoices, shipment records, and customer facts?
Virginia removed line items 2, 5, and 6 because records showed out-of-state shipments or an art charge tied to those shipments, and removed items 35 and 43 because customer information supported resal…
Could active-duty service members claim the Illinois property-tax credit when their Illinois home was the principal residence but legal domicile changed later?
Yes. Although the couple did not change legal residence to Illinois until retiring from active duty in 2010, they had owned and physically used the Illinois home as their principal residence since 200…
Are irrevocable trusts created by New York grantors exempt from filing New York State income tax returns once all their trustees live outside New York?
The Trusts stopped owing New York income tax on their New York-resident portions once the New York co-trustee resigned, leaving a Connecticut resident as sole trustee, satisfying all three conditions …
Could a taxpayer overturn years of Virginia assessments by claiming he had no federal adjusted gross income under his reading of federal law?
No. Appeals for 1995, 1996, 1998-2001, and 2005 were filed after Virginia's 90-day deadline and were barred. The 2007 appeal was timely, but the taxpayer admitted receiving income and supplied no obje…
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