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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Is Texas motor vehicle sales tax due when someone barters parts for a street-legal motorcycle, and can the parts count as a trade-in?
Yes. Exchanging parts for a street-legal motorcycle was a taxable sale even though no cash changed hands. The parts were consideration, not a motor vehicle trade-in, so tax was based on their value or…
Were separately charged pumping services taxable when supplied with rented portable toilets, and did the taxpayer prove its claimed rental exemptions?
Pumping the taxpayer's rented portable toilets was taxable because it was inextricably tied to the lease, even when separately stated. Pumping campers or customer-owned toilets was not taxable. Virgin…
A Tennessee manufacturer buys design software with a bundled maintenance plan, plus a long list of welding gases, gear, and shop supplies -- which of these qualify for the sales tax industrial machinery or industrial materials exemptions?
It's a mixed bag by item. The design software (and its bundled maintenance contract) is FULLY TAXABLE -- because it's used before raw materials reach the manufacturing process, it doesn't count as "ne…
Are software 'configuration' consulting services -- setting toggles and building tables within already-installed software, without writing new code -- taxable in Tennessee, and can a vendor bill them tax-free separately from software development work?
No, software configuration services are NOT subject to Tennessee sales and use tax, as long as the consultants only set predefined toggles/switches and build tables within existing software -- without…
Could a hotel use a private attestation form and an organization's Illinois E number to exempt employee purchases and room rentals?
No blanket approval. ST 11-0051-GIL declined to approve a private attestation form. For sales and use tax, federal section 501(c)(3) status alone was not enough: an organization needed an Illinois E n…
Were replacement filters used in a heatset printing press exempt under Illinois's graphic-arts machinery exemption?
Unresolved. ST 11-0050-GIL explains that qualifying graphic-arts machinery, equipment, and repair or replacement parts could be exempt, while materials used or consumed in the process were not. But th…
Could press-packing paper qualify for Illinois's graphic-arts machinery and equipment exemption?
Potentially. ST 11-0049-GIL says the described press-packing material appeared to qualify for the graphic-arts machinery and equipment exemption, but a one-time expendable supply would not qualify und…
Did Illinois's graphic-arts machinery exemption cover donor sheets, receptors, and specially coated proofing paper?
Generally no. ST 11-0048-GIL says materials used or consumed in the graphic-arts process are outside the machinery-and-equipment exemption. Although qualifying machinery used in prepress work could be…
Did Illinois confirm a print broker's de minimis serviceman status, 50%-of-bill method, and interstate-commerce exemption for direct mail?
No. ST 11-0047-GIL declined to issue a Private Letter Ruling and did not confirm the print broker's de minimis-serviceman classification, use of 50% of the service bill as the tax base, or interstate-…
Did an unlimited monthly cellular subscription fee fall under Illinois sales tax or telecommunications excise tax?
Unresolved on the limited facts. ST 11-0046-GIL says a statutory prepaid telephone calling arrangement was tangible personal property subject to Retailers' Occupation Tax rather than Telecommunication…
Were specialized HVAC equipment and a backup generator fixtures taxed as real estate, or tangible personal property subject to local BTPP tax?
The generator and transfer switch were taxable BTPP because their stated need and primary use for the taxpayer's technical operations showed an intent to treat them as personal property. The HVAC evid…
Did buying a home and spending most of the year abroad establish a new domicile when the taxpayers kept extensive Virginia business and personal ties?
No. Although the taxpayers bought a foreign home and spent most of 2007 and 2008 there, they returned for long periods to run Virginia businesses, renewed Virginia licenses, kept registered vehicles, …
How did Florida allocate sales tax among a student-housing land lease, a separate parking lease, operating costs, and student rents?
Florida accepted 15.82% as the taxable share of the mixed-use land lease, taxed the separate parking-lot lease in full, and exempted the stated long-term full-time-student rents. Direct utilities and …
Was a prepaid phone card subject to Virginia's prepaid wireless E-911 fee when one price covered both landline and wireless calls?
Yes. The cards supplied prepaid wireless service subject to the fee and landline service not subject to it for one nonitemized charge. Under Virginia's 2010 guidelines, that combined purchase was subj…
Could a military spouse claim Virginia's 2009 exemption after obtaining Virginia licenses, vehicle registration, and voter registration?
No. Virginia found that by 2008 she had abandoned relevant connections with the service member's home state and established Virginia domicile through her license, vehicle, voter registration, residenc…
How did Illinois treat downloaded ringtones, media, music, videos, and software for sales tax and telecommunications excise tax?
For sales tax, electronically downloaded information or data was not tangible personal property, but canned software remained taxable even when transmitted electronically; custom software might not be…
Did a taxpayer establish domicile abroad with her transferred spouse when she kept a Virginia home and commuted to an adjacent-state employer?
No. Although she sold the prior home and traveled abroad with her spouse, she owned and used a Virginia home, registered a vehicle, renewed her Virginia license, and spent more days in Virginia than a…
Did the taxpayer prove that three software purchases were electronically delivered without any taxable tangible medium?
Only in part. Two Vendor 1 items remained taxable because the records did not prove electronic delivery was the sole method: one transaction referenced a CD and ground shipment, and the other lacked a…
If a Tennessee municipality hires a construction management firm on an AIA B801 agency-CM contract, does that contract cause the municipality's own construction purchases to become taxable, or do they stay exempt as government purchases?
No. A Tennessee municipality's construction-related purchases stay exempt from sales and use tax under Tenn. Code Ann. § 67-6-329(a)(4) even when the municipality hires a construction management firm …
Is a prescription dermal filler injected by a doctor to treat facial wrinkles exempt from Tennessee sales and use tax, and does the seller need exemption certificates from the buying physicians?
Yes. The dermal filler is exempt from Tennessee sales and use tax as a prescription drug for human use under Tenn. Code Ann. § 67-6-320(a), because it meets the statutory definition of a 'drug' (it's …
Could an investment fund apportion gain from selling master limited partnership interests using the underlying partnerships' Illinois factors?
No, not on the evidence submitted. The fund asked to apportion gain from selling master limited partnership interests, including IRC Section 751 ordinary-income recapture, with the underlying partners…
Did a school board's direct-purchase procedures exempt construction materials for a public-works roofing project from Florida sales tax?
No, not as submitted. The procedures omitted the required Certificate of Entitlement. The school board could correct the program prospectively, but an amendment could not exempt purchases made before …
Were member donations for refreshments served by a Florida tax-exempt organization taxable sales?
Only if payment was required. A genuinely voluntary donation was not taxable when members could take refreshments without paying; a required 'donation' was the taxable sales price of the food or bever…
Could a corporation carry 2004-05 net operating losses forward without attaching Virginia elections, or offset later assessments after refund deadlines expired?
No. Virginia required a statement with each original loss-year return to elect out of the carryback period; later conduct did not substitute for that election. Because no statements were attached, the…
Were a manufacturer's pollution-control and recycling equipment and capitalized replacement costs properly included in local machinery-and-tools tax?
The fines bin was machinery and tools because it collected waste wood used to power and heat the plant. The pollution-control equipment could also qualify if its waste supplied plant power, but the re…
Is aviation fuel bought for aircraft used in an airline's interstate passenger or freight operations exempt from Kansas sales tax?
Yes. Aviation fuel used in aircraft that carry passengers or freight in an airline's actual interstate common-carrier operations is exempt from Kansas retailers' sales tax under K.S.A. 79-3606(f) and …
If a Tennessee limited partnership keeps doing business after the fixed termination date in its partnership certificate, does it become subject to franchise and excise tax as a general partnership, or does it stay exempt?
Once a Tennessee limited partnership formed before 1988 (still governed by the old Uniform Limited Partnership Act) passes the fixed termination date stated in its certificate, it automatically dissol…
Does Colorado sales or use tax apply to an advertising agency's separately stated charges for direct-mail materials and mailing fulfillment when the materials are printed in Colorado but mailed to recipients outside the state?
No. An advertising agency's separately stated charge for direct-mail advertising materials — printed in Colorado but mailed to the client's potential customers located outside Colorado — is not subjec…
Was a person domiciled in another state still a Virginia resident after living and working in Virginia for 190 days?
Yes. Although the taxpayer remained domiciled in another state, he lived and worked in Virginia for 190 days in 2007. Because he maintained a Virginia abode for more than 183 days, he was an actual Vi…
Did foreclosure-related loss of records excuse taxpayers from substantiating itemized and vehicle-expense deductions?
No. Virginia upheld the 2007 and 2008 assessments because the taxpayers did not provide enough support for their itemized, employee-vehicle, and business-truck deductions. Losing records during a late…
Could Virginia disregard a final IRS income adjustment because the taxpayer said the return preparer made the underlying error?
No. Once the IRS adjustment became final, Virginia used the resulting federal figures and would not revisit the taxpayer's claim that a preparer mishandled an education-expense deduction. Because the …
Could a restaurant use Virginia's reduced food rate for hot takeout meals after collecting the full rate from customers?
No. Hot meals and beverages sold for immediate consumption did not qualify as food for home consumption merely because customers took them away or reheated them. The restaurant collected the full 5% t…
Does a Tennessee country club have to charge sales tax on the separate fees it bills members for locker rentals and golf bag storage?
Yes. Both the locker rental fees and the golf bag storage fees a Tennessee country club charges its members are subject to Tennessee sales tax, because the club is a "membership sports and recreation …
Are an online vendor-referral website's charges -- for sales-lead referrals, used-product advertising space, phone-call tracking reports, and hosted vendor websites -- subject to Tennessee sales and use tax?
None of it is taxable. An online business runs a website where customers find vendors and submit purchase requests; it charges vendors for (1) new-product sales-lead referrals, (2) space to advertise …
Did a letter and amended pass-through return satisfy Virginia's duty to report an IRS change to an individual's income?
No. The taxpayer's letter and amended pass-through entity return did not provide enough information to recompute the individual's Virginia tax and did not replace the required amended individual retur…
Did the Servicemembers Civil Relief Act exempt a military spouse who had established her own Virginia domicile?
No. Virginia denied the refund because the spouse's conduct showed that she had abandoned her prior-state domicile and established a separate Virginia domicile. Her Virginia voter registration, Virgin…
What state and local tax legislation did Virginia's Department of Taxation summarize for the 2011 General Assembly session?
This was a broad historical guide, not a taxpayer-specific ruling. It summarized 2011 legislation through the April 6 reconvened session, including electronic filing and delivery rules, fixed-date IRC…
When did Virginia tire installers have to collect the tire recycling fee, and what rate applied after July 1, 2011?
Beginning July 1, 2011, a Virginia tire installer working under an agreement with a tire retailer that had not collected the retail sales and use tax also had to collect and remit the tire recycling f…
For an online database and a long menu of related Internet services accessed remotely over the web, which charges are subject to Tennessee sales and use tax?
Most of it is NOT taxable -- only the items the customer actually receives as tangible personal property are. The company sells an online database (with software tools, reports, and photos) plus a lon…
Could self-employed model Crystal Gonzales recover gross-receipts-tax penalty and interest because H&R Block did not tell her to file?
Only in part. Gonzales' New Mexico modeling income was subject to gross receipts tax, and mandatory interest remained due. Consulting H&R Block only to prepare income-tax returns did not establish rea…
When a direct-selling company runs a party plan with hostess discounts and advisor award certificates, is Tennessee sales tax charged on the full price or only on the discounted price actually paid?
Genuine discounts reduce the taxable amount, but a separate fee paid to unlock a discount you must use right away is itself taxable. For a direct-selling company's party plan: (1) when a Hostess buys …
Did Virginia's railway common-carrier exemption cover locomotive cab heaters and a voice event recorder?
The cab heaters were exempt because they repaired or replaced locomotive components and were indispensable and immediately used in safe transportation. The voice event recorder and its repairs were ta…
What 2011 Virginia exemptions applied to small sales of eggs and farm products at farmers markets and roadside stands?
Effective July 1, 2011, qualifying small producer sales at farmers markets and roadside stands were exempt when annual sales there did not exceed $1,000 and the product and egg-source conditions were …
Did attending college, voting, paying in-state tuition, and interning in another state end a student's Virginia domicile?
No. Virginia found that the student had not clearly abandoned his Virginia domicile. His out-of-state tuition status, voting, internship, and part-year return supported a change, but college housing a…
Could taxpayers offset a 2006 Virginia assessment with a late 2005 refund after the IRS shifted passive losses between years?
Mostly no. Because the taxpayers did not amend their 2005 and 2006 Virginia returns within one year after the final IRS change, Virginia would not offset the 2006 assessment with the otherwise related…
Are the membership dues and related fees (photo-ID activation, guest passes, towel/locker/equipment rentals, facility rentals) charged by a qualifying sports and fitness center exempt from Tennessee sales tax?
Yes. A sports and fitness center that meets the five statutory tests in Tenn. Code Ann. Section 67-6-330(a)(17) has its membership dues -- which would otherwise be taxed as recreation-club/health-spa …
What dealer discount applied to Virginia Tobacco Products Tax returns beginning with the June 2011 return?
Virginia reinstated the 2% dealer discount for accounting for and remitting the Tobacco Products Tax, beginning with the June 2011 monthly Form TT-8 return due July 20, 2011. The bulletin updated the …
When did Virginia treat a tax return or payment sent by commercial delivery service as timely filed?
Effective July 1, 2011, Virginia treated state and local tax returns and payments sent by a recognized commercial delivery service like U.S. mail when they were in a sealed envelope or container beari…
Could a city split a multioffice service business's BPOL receipts 50/50 with a county when the taxpayer's records did not verify situs?
Not on the record presented. Virginia remanded the case because neither the business nor the city conclusively established where the service receipts belonged, the corporate income-tax sales factor wa…
What Virginia tax interest rates applied during the third quarter of 2011?
Virginia's third-quarter 2011 rates were 6% for tax underpayments and 6% for overpayments, reflecting corresponding 4% federal rates plus two percentage points. Taxpayers with a June 30, 2011 year-end…
What sales tax law changes did the 2011 Kansas Legislature make to refund deadlines and game bird sales?
Kansas Notice 11-01 summarizes two 2011 sales tax changes. First, Section 6 of 2011 Senate Bill 10 amended K.S.A. 79-3609(b) so that, for any sales tax refund claim filed after July 1, 2011, the claim…
Is a prescribed, at-home ophthalmic monitoring device — and the monitoring, data-processing, and call-center services that go with it — subject to Colorado sales tax?
No on both. A prescribed ophthalmic device a patient uses at home to monitor for eye disease appears to qualify as exempt durable medical equipment (it withstands repeated use, serves a medical purpos…
When a company expands its Tennessee headquarters with more than $10 million invested and 100+ new high-wage headquarters jobs, can it claim the enhanced $5,000-per-job tax credit, what jobs count, and how much of its franchise and excise tax can it wipe out?
Yes -- a headquarters expansion that invests more than $10 million and creates at least 100 qualified jobs that are 'headquarters staff employees' paying at least 150% of Tennessee's average occupatio…
When a company expands and remodels its existing Tennessee headquarters, what counts toward the minimum investment threshold for the sales/use tax credit, when does the investment period start and end, and do aesthetic-only renovations like paint and carpet qualify?
A 7-part ruling clarifying the mechanics of Tennessee's qualified headquarters facility sales/use tax credit (Tenn. Code Ann. Section 67-6-224) as applied to an existing-headquarters expansion and rem…
Is the sale of customized shop drawings used by contractors to fabricate items taxable in Tennessee, and does it matter whether they're delivered as a printed booklet versus purely electronically?
It depends entirely on the delivery medium. The Department ruled that the Taxpayer's customized shop drawings are subject to Tennessee sales and use tax when transferred to the customer in a TANGIBLE …
Could a taxpayer deduct mortgage interest when the deed, mortgage records, and Form 1098 did not clearly distinguish him from his identically named father?
Not on the evidence submitted. Because the taxpayer and his father had the same name, the deed and payment records did not establish which man owned the home or owed the mortgages, while Form 1098 use…
Could Behr Trucking deduct 2006 construction-hauling receipts without obtaining the buyer's NTTC within the 60-day deadline?
No. Whether Behr's construction hauling could otherwise qualify for a deduction was immaterial because it did not obtain the required NTTC within 60 days of the Department's notice. The buyer's closur…
Could Virginia residents claim the out-of-state tax credit for D.C. unincorporated business franchise tax paid by a single-member consulting LLC?
No. Virginia reaffirmed its longstanding position that the District of Columbia unincorporated business franchise tax did not qualify for the Va. Code § 58.1-332 credit. The Tax Commissioner declined …
Could a vertically integrated manufacturer obtain a Virginia BPOL exemption and a prorated refund after transferring its local operations?
Potentially, but more proof was required. Virginia held that the appeal was timely and that a vertically integrated business can qualify as one manufacturing business when its manufacturing is substan…
Did a military spouse preserve her out-of-state domicile and qualify for a refund of 2009 Virginia wage withholding?
Yes. Although the spouse moved to Virginia and began working before her marriage, Virginia found that the full facts showed she maintained State A domicile, shared that domicile with her service-membe…
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