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 Jesus Hernandez avoid gross-receipts-tax penalties because his accountant told him that income-tax filings covered all his tax obligations?
Yes, as to penalty only. Hernandez owed $2,795.14 of gross receipts tax on 2005-2006 Schedule C service income, and $1,071.33 of mandatory interest remained due. But he had fully informed a licensed a…
Did an entire spray-paint booth qualify as exempt manufacturing equipment because it controlled finishing conditions?
No, not as a complete unit. The booths created controlled temperature, humidity, drying, dust, and contaminant conditions, but ordinary walls, floors, and ceilings did not play an immediate production…
Was inbound freight from furniture manufacturers exempt when separately passed through to customers, and was a mail-based sample audit valid?
The inbound freight was taxable. Virginia's separately stated transportation exemption covered delivery from the seller to the final purchaser, not shipping from a manufacturer to the dealer or its wa…
Is firewood sold over the counter at a retail store exempt from Tennessee sales tax as residential heating fuel?
No. Even though Tennessee exempts "gas, electricity, fuel oil, coal and other energy fuels sold directly to the consumer for residential use" under Tenn. Code Ann. § 67-6-334(a), that exemption specif…
Could a Virginia National Guard captain claim combat, extended-active-duty, and Guard-pay subtractions without deducting the same income twice?
Yes, multiple military subtractions could apply, but the same income could not be subtracted twice and only compensation included in FAGI was eligible. Virginia kept the basic-pay calculations, allowe…
Was electronically downloaded software taxable in Florida, and did the seller's Florida personnel raise nexus concerns?
The download was not taxable because it contained no tangible medium or accompanying tangible property. The Department did not make a final nexus holding, but warned that Florida corporate officers an…
Were exhibitor licenses for retail concessionaires selling goods at an event on airport premises exempt from Florida real-property rental tax?
Yes. The agreement was a license rather than a lease, the exhibitors sold food, drink, or tangible goods as retail concessionaires, and the event property was within airport premises. Licenses to non-…
When is South Carolina sales tax due on layaway and partial-payment sales, and is a layaway fee taxable?
Tax is due when title or possession of the merchandise transfers, not when advance payments are received. A layaway fee becomes taxable as part of the sale if the transfer occurs, but is not taxable i…
When an event-staging company both rents out its own tables/chairs AND handles a customer's own equipment for a one-day event, which of those charges owe Tennessee sales tax?
It depends on WHOSE property is involved. When the company rents its OWN tables, chairs, or other equipment to a customer, ALL of the associated transportation and handling charges are taxable as part…
Is an SEC EDGAR filing service -- converting company financials into SEC format and transmitting them electronically -- a taxable telecommunications service in Tennessee, and does it matter that the provider's servers are out of state?
The EDGAR filing service IS a taxable "telecommunications service" under Tennessee law (Tenn. Code Ann. § 67-6-205(c)(3)), because converting customer files into SEC-compliant format and electronicall…
My temporary-staffing employees work back-to-back assignments in different states -- some inside New York's Metropolitan Commuter Transportation District, some outside. How do I figure out which of their wages count toward my MCTMT payroll expense?
Each distinct, consecutive assignment is tested separately using the four-part "covered employee" allocation test, applied in strict order: localization (are the services performed entirely, or almost…
Could a tire dealer avoid tax on disposal fees because Department staff later gave incorrect verbal and online guidance?
No. Virginia's published 1994 bulletin required sales tax on tire-disposal fees connected with tire sales, even when separately stated. The dealer had no written proof of the alleged verbal advice dur…
Were a water utility's treatment purchases exempt because they processed water or because Virginia Health required them?
Direct-use treatment items could be exempt, but a government mandate alone was not enough. After repeal of the broad public-service-corporation exemption, chemicals, machinery, tools, equipment, and s…
Were a water utility's treatment purchases exempt because they processed water or because Virginia Health required them?
Direct-use treatment items could be exempt, but a government mandate alone was not enough. After repeal of the broad public-service-corporation exemption, chemicals, machinery, tools, equipment, and s…
When a software company licenses core products, optional add-ons, and maintenance together for one lump-sum, non-itemized price, does Tennessee's $1,600 'single article' local-tax cap limit the tax on that sale?
No. Because the software company bundles its core products, optional components, and maintenance together and charges one non-itemized lump-sum price, none of it qualifies for Tennessee's local-option…
If a Tennessee equipment-rental company charges for cartage, assembly, and disassembly along with the lease, are those service charges taxed along with the equipment rental, even if billed separately?
Yes to both. The equipment lease itself is subject to Tennessee sales and use tax under Tenn. Code Ann. § 67-6-204 because it's a rental of tangible personal property that's part of the company's regu…
Did a husband become domiciled in Virginia because he spent substantial time there caring for his ill wife?
No. He kept an out-of-state driver's license, vehicles, voting, residence, and federal-return address, while his extended Virginia stays were tied to his wife's medical treatment. Although he maintain…
Is a hotel's mandatory service charge on a banquet or meal included in taxable Illinois gross receipts?
Usually yes, unless the separately stated mandatory charge was actually turned over as tips or a substitute for tips to employees who directly prepared, served, hosted, or cleaned up that food or beve…
What are Kansas's Streamlined Sales Tax rules for how and when sales and use tax returns and payments are made?
To comply with the Streamlined Sales and Use Tax Agreement, Kansas announced that sales and compensating (use) tax remittances (K.S.A. 79-3601 et seq.) may be paid by ACH Credit or Debit; that a retur…
Must a Kansas event-production company charge sales tax when it furnishes audio, video, lighting, and other equipment with technicians who operate it?
Generally no. Equipment furnished with an operator is treated as a service rather than a rental, and the event-production services described were not among the taxable services in K.S.A. 79-3603. The …
Are a security firm's guard services, provided to a contractor working on a NYC government construction project, subject to NY sales tax?
Yes. Guard, patrol, and watchman services are taxable 'protective and detective services' under Tax Law 1105(c)(8). The security firm provides guard services as a subcontractor to a construction compa…
What deed tax applied when unencumbered property moved from a partnership through its wholly owned LLC partner to an individual and then a revocable trust?
Only minimum tax applied to the partnership and LLC deeds because proportional beneficial ownership did not change and no consideration existed. The trust deed also received minimum tax only if the re…
What did Illinois report in its 2011 multistate survey about transfer tax, discounts, gratuities, R&D, maintenance, and remote sellers?
This was a historical 2011 survey, not approval of the private publication. Illinois said real-estate transfer tax used net consideration after allowed deductions; unreimbursed discounts reduced taxab…
Could a manufacturer exempt packaging, compressor parts, gloves, oils, and pollution-control equipment under Illinois's 2011 rules?
Packaging could be purchased for resale when transferred to customers with the products and documented by a Certificate of Resale; retained, reused, or discarded containers did not qualify. Machinery …
Were a revolving-credit application, line-of-credit agreement, and bank approval letter subject to Florida documentary stamp or nonrecurring intangible tax?
No. No document contained all required elements of an unconditional promise to pay a sum certain signed by the borrower, and none expressly incorporated the others. Nonrecurring intangible tax did not…
Are motorcycle rentals covered by Illinois's Automobile Renting Tax, and is a lease to another short-term rental dealer exempt?
Motorcycles and motor-driven cycles were treated as automobiles under the Act, so a person renting them in Illinois for one year or less was subject to the Automobile Renting Occupation and Use Tax. T…
Can a foreign visitor obtain an Illinois sales-tax refund for merchandise bought and received in Illinois before taking it abroad?
No. Foreign or domestic traveler status did not exempt merchandise delivered and used in Illinois, and mere possession in Illinois counted as use. A sale remained taxable when the buyer received the p…
New York Advisory Opinion TSB-A-11(8)C: How does an internet-based futures and OTC exchange operator source its access, trade-execution, and market-data fees for the Article 9-A receipts factor?
Source them to the customer. The fees an internet-based futures and OTC market operator earns for exchange access, trade execution, and market data are other business receipts, sourced to the location…
Is calibrating a fuel meter a taxable repair service in Tennessee, and does it matter whether the meter is permanently attached to real property?
It depends on whether the fuel meter is affixed to real property. Calibrating a fuel meter is a taxable REPAIR SERVICE under Tenn. Code Ann. § 67-6-205(c)(4) when the meter is NOT affixed to realty, b…
Is a home-use physical therapy machine exempt from Tennessee sales tax when a doctor prescribes it, and does it matter whether insurance, Medicaid, or the government pays for it?
Yes, the machine is exempt from Tennessee sales and use tax as durable medical equipment when it is sold for HOME USE pursuant to a physician's prescription -- and that exemption does NOT depend on wh…
Why did historical Illinois Schedule CR put the full federal alimony deduction in the non-Illinois column when limiting the other-state tax credit?
Because Illinois had to apply the same alimony-deduction allocation principle to nonresidents and to the hypothetical other-state income used in the resident credit limit. Under Lunding, Illinois allo…
Are sales of e-books delivered electronically over the Internet subject to NY sales and use tax?
No. The company sells electronic books through an online bookstore, delivered over the Internet and stored on the customer's own device. E-books aren't tangible personal property -- they have no physi…
Are entry fees for a nationally sanctioned youth baseball tournament subject to Kansas sales tax?
Exempt. Kansas taxes fees charged for participation in sports and recreational activities under K.S.A. 79-3603(m), but that statute specifically carves out entry fees and charges for participation in …
Did ceasing operations create an exception allowing a C corporation to use a net-loss carryover during Illinois's historical suspension?
No. Historical Section 207(d) barred a C-corporation carryover deduction for taxable years ending after December 31, 2010 and before December 31, 2014. The statute contained no exception for a final t…
How can taxpayers check whether an older South Carolina advisory opinion was modified or superseded (per SC IL #11-12)?
Use the citator attached to SC Information Letter #11-12. It helps you determine what effect newer South Carolina advisory opinions have on previously published ones — whether an opinion was modified,…
Did a donee include the donor's holding period when calculating Illinois's subtraction for pre-August 1969 appreciation?
Yes, provided federal law included the donor's holding period in the donee's holding period. Illinois Section 203(f) used a holding-period fraction when the property's August 1, 1969 value was not rea…
Were payments to Economics of Dignity for managing an art-gallery LLC capital distributions rather than taxable consulting receipts?
No. Economics of Dignity managed World Wide Art Sellers' gallery and received payments reported on Forms 1099 as nonemployee compensation for consulting. Suspending an operating-agreement provision fo…
How does South Carolina's electric power tax apply when a manufacturer sells all self-generated power to Santee Cooper and separately buys its plant power from a cooperative?
The manufacturer's sale of biomass-generated power to Santee Cooper is exempt. The cooperative's separate sale of power back to the manufacturer is taxable, although the industrial-customer excess-sal…
Was an interstate trust bank exempt from Virginia corporate income tax when it was subject to the bank franchise tax but had no approved apportionment method?
Yes. The Norfolk Circuit Court held that AMG was a bank subject to Virginia's bank franchise tax and therefore exempt from corporate income tax, even if its bank-franchise-tax liability was currently …
Could a contractor buy school construction materials tax-free using the locality's exemption form and purchase-order instructions?
No. The contractor permanently installed materials into school real property and was their taxable user, not a reseller. It supplied no proof that the school system officially appointed it as purchasi…
Were separately stated labor charges for installing movable home-theatre systems subject to Virginia sales tax?
No. The home-theatre systems were taxable sales of tangible personal property, but the disputed invoice lines represented installation of that equipment. Virginia's regulation exempted separately stat…
Could invoice lines labeled shipping and handling be exempt if they actually represented only common-carrier delivery?
Potentially, but documentation was required. A lump-sum charge combining exempt transportation-out and taxable handling was generally fully taxable, while vendor or carrier records could segregate or …
Are an auctioneer's mandatory buyer administrative fees included in taxable Illinois gross receipts, and who owes the tax?
Yes when the underlying auction sale was taxable. A mandatory buyer administrative fee was part of the total selling price and could not be deducted as a service or business cost. If the auctioneer ac…
When is South Carolina's 2011 sales tax holiday and what is exempt (per SC IL #11-11)?
August 5-7, 2011. SC Information Letter #11-11 sets South Carolina's 2011 sales tax holiday for the weekend beginning Friday, August 5, 2011 at 12:01 a.m. and ending Sunday, August 7, 2011 at midnight…
Could an advertising company remove separately stated services, invalidate the audit sample, or limit review to three years after not filing returns?
No. The audited invoices did not prove exempt advertising for specific media campaigns; several sample invoices were not in the exceptions, and the disputed ones involved taxable tangible property or …
Could Virginia Taxation hear a business's direct BPOL and BTPP appeal when no complete final local appeal covered the disputed years?
Not yet. The business's 2011 correspondence did not identify specific BTPP years and amounts and no final county determination existed, while the 2010 BPOL protest remained locally pending and the cou…
Did an out-of-state employer owe Virginia withholding for employees working in Virginia, and could a self-created document pay the assessment?
Yes, withholding was required because employees performed services for wages in Virginia, regardless of the employer's out-of-state location. After the proprietor filed no returns and refused record a…
Is the rental of a swab tank used at a well subject to Kansas sales tax?
Taxable. Renting a swab tank — a portable holding tank used at wells — is subject to Kansas sales tax. Rentals of tangible personal property are taxable because a rental transfers property to someone …
How does the Kansas Rural Opportunity Zone income tax credit work for people who move to a designated county?
Kansas Notice 11-03 explains the Rural Opportunity Zone (ROZ) program created by 2011 Senate Bill 198, which designates 50 Kansas counties as ROZ and effectively provides an income tax exemption to ce…
Was cloud-streamed dental patient-education video subject to Illinois sales and use tax when customers received no property or software?
Generally no, if the customer only received online access and no software or other tangible personal property. ST 11-0052-GIL says a company providing access to a database of information without trans…
What is South Carolina's tax interest rate for the period ending September 30, 2011 (per SC IL #11-10)?
4%. SC Information Letter #11-10 sets South Carolina's interest rate on tax underpayments and overpayments at 4% for the period April 1, 2011 through September 30, 2011. Interest is compounded daily, …
Could a full-year Virginia resident and part-year-resident spouse claim a credit for tax paid on wages earned in another state?
Yes. The couple supplied the other-state return, and wages or business income taxed by both states could qualify. The credit was limited to the lesser of the other-state tax actually paid or Virginia …
Did attending college, working part time, and filing a resident return in another state end a student's Virginia domicile?
No. The student attended college, worked part time, received statements, and filed a resident return in the other state, but excluded investment income from that return in a way that raised doubt abou…
Did employment and utility bills in another state prove domicile there while the taxpayer kept Virginia licenses, vehicles, and a home under construction?
No. Employment and utility bills supported presence in the other state, but the address had been reported as rental property, no 2007 federal return established a permanent abode there, and the Virgin…
As an out-of-state lessor of equipment used in Colorado, do I collect from lessees both the sales tax I paid when I bought the property and use tax on their lease payments?
No — you choose one method, not both. For a true lease of 36 months or less, the default is the lessor pays sales/use tax up front when it buys the property and does NOT collect tax from lessees (it c…
What must an out-of-state or online seller do to ship cigarettes or smokeless tobacco to South Carolina consumers under the PACT Act (per SC IL #11-9)?
A remote or online seller that ships cigarettes or smokeless tobacco to South Carolina consumers (a 'delivery seller') must pay the South Carolina and any local excise tax IN ADVANCE of shipping, and …
Could an Illinois taxpayer claim a claim-of-right subtraction when repaying Social Security benefits that had already been subtracted when received?
No. Illinois had already allowed the federally taxable Social Security benefits to be subtracted in the years received under Section 203(a)(2)(L). Although the 2010 repayment supported a federal Secti…
Are a retailer's sales of municipally-mandated garbage bags and town-endorsed leaf bags subject to NY sales tax?
It depends on the bag. The town-mandated household garbage bags are exempt; the optional leaf bags are taxable. The mandated bags are embossed with the town's name and logo, must be bought and used to…
Could a military spouse claim the 2009 Virginia exemption when both spouses had established Virginia domicile before moving back to another state?
No. Both spouses had established Virginia domicile through their condominium, licenses, voter registrations, and vehicle ties, and no evidence showed another domicile before December 2009. The refund …
What did the 2011 Kansas Legislature change for biodiesel and ethanol fuel producer incentives?
Kansas Notice 11-02 (June 24, 2011) summarizes two 2011 motor fuel bills. House Bill 2014 (effective June 9, 2011) directed a transfer of $124,265 from the Kansas qualified biodiesel fuel producer inc…
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