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 nursing assistant keep unreimbursed vehicle-expense deductions without records substantiating the business use?
No. Virginia upheld the 2007 and 2008 assessments because the taxpayer did not provide the requested records substantiating business use of her personal vehicle. The assessment was presumed correct, a…
Did prior return processing or use of Virginia-approved tax software prevent a later assessment for an overstated out-of-state tax credit?
No. Virginia upheld the additional tax and interest because earlier processing did not establish that the return was correct, and software approval tested conformity with processing requirements rathe…
Did Virginia use tax remain due on Tennessee equipment rentals when Tennessee properly taxed the continuous rental first?
No tax remained due on the contested rentals. Virginia concluded Tennessee had the first right to tax the continuous rental agreements and allowed a Va. Code § 58.1-611 credit for Tennessee sales tax.…
Could a Virginia resident defeat a 2007 nonfiler assessment by showing only that she filed a federal return?
No. Virginia did not dispute that the taxpayer filed federally, but a resident required to file a federal return generally also had to file a Virginia return. Because she did not provide the requested…
Could manufacturing lines qualify as idle machinery without advance written notice to the county?
Possibly under the separate one-year test, even though the manufacturer failed the advance-notice test. Virginia remanded because neither side had established whether there was a reasonable prospect t…
Could an interior-design company receive separate BPOL classifications for design services and its substantial furniture sales?
Potentially. Virginia found the city could classify the company as a business service based on how it held itself out, but its furniture sales appeared substantial enough to be a separate retail busin…
Is a hosted email-marketing service performed through the provider's software taxable, and are its training and consulting charges taxable?
The hosted service is taxable as prewritten software, but the optional training and consulting charges are not. Clients log into the provider's 'Hosted Offering' to build, target, and send email/messa…
Is liquor-filled candy exempt from Colorado sales tax as food, or is it taxable?
It's taxable. Liquor-filled candy does not qualify as 'food' under the federal SNAP and WIC definitions that Colorado uses for its food exemption, so it's subject to Colorado state sales and use tax (…
How did Illinois tax a vehicle lessor leasing vehicles to the U.S. government, and what exempt-entity rule could apply?
For a true lease, the lessor generally was the end user and owed Illinois Use Tax on its cost price; Illinois imposed no sales tax on the rental receipts, so the lessee incurred no sales-tax liability…
Can a Virginia taxpayer avoid assessments for incorrect itemized deductions by blaming the return preparer?
No. Virginia upheld the 2007 and 2008 assessments because taxpayers remain responsible for the accuracy of their returns, and this taxpayer knew or should have known she had not incurred the expenses …
Would an Illinois school district owe sales tax if it supplied diesel fuel to a private pupil-transportation contractor and recovered the cost?
Potentially. ST 11-0043-GIL says governmental bodies generally incur Retailers' Occupation Tax when they sell tangible personal property to the public for use or consumption, with an exception for an …
How did Illinois tax canned software, custom software, exempt software licenses, and maintenance agreements under ST 11-0042-GIL?
Canned software was taxable regardless of delivery method, while custom software prepared to special order might not be taxable. A canned-software license avoided Retailers' Occupation Tax only if it …
Were separately sold support, maintenance, and update agreements taxable when the underlying software license met Illinois's five-part license exemption?
No, under the stated assumption. ST 11-0041-GIL says that when a software license met all five criteria in 86 Ill. Adm. Code 130.1935(a)(1), charges for support, maintenance, or updates of that licens…
What documentation supported an Illinois resale exemption for in-state, out-of-state, and auction buyers under ST 11-0040-GIL?
A properly completed Certificate of Resale, signed by the purchaser and containing the seller and buyer details, item description, signature date, and the required registration, resale, or out-of-stat…
Could an Illinois pharmacy fill prescriptions tax-free when a tax-exempt health center paid for uninsured patients?
Potentially. ST 11-0039-GIL says drugs sold to an organization holding an Illinois exemption identification number could be sold free of tax; without an E number, the sale could not be tax-free. The p…
Did knives, gloves, aprons, hairnets, and similar meat-processing items qualify for Illinois's manufacturing exemption or Manufacturer's Purchase Credit?
They did not qualify for the manufacturing machinery and equipment exemption when they were hand tools, supplies, or personal apparel; the regulation specifically excluded categories including gloves,…
Must a Virginia restaurant copy diplomats' exemption cards, and which contested meals, purchases, penalties, and interest remained taxable?
No card copy was required: recording each diplomat's exemption number was enough, and validated diplomat meals were removed. Church meals and unsupported restaurant purchases and assets remained in th…
Will Virginia cancel a resident income-tax assessment when the taxpayer does not provide the requested domicile evidence?
Not without evidence. Because the taxpayer did not provide the domicile information requested during the audit or appeal, Virginia found no basis to adjust the 2007 assessment. The Commissioner allowe…
Did temporary job transfers outside Virginia establish that a taxpayer abandoned his Virginia domicile for 2007?
No. Virginia held that temporary job assignments outside the state, even for years, did not prove the taxpayer intended to establish a permanent home elsewhere. His Virginia driver's license, Virginia…
Can a Virginia taxpayer avoid assessments for incorrect itemized deductions by blaming the return preparer?
No. Virginia upheld the 2007 and 2008 assessments because taxpayers remain responsible for the accuracy of their returns, and this taxpayer knew or should have known he had not incurred the expenses u…
Is labor to cut customer-furnished bricks into shapes for masonry arches taxable fabrication in Virginia?
Yes. Virginia treated cutting contractor-furnished bricks to specified shapes as taxable fabrication because it changed the bricks' form. Real-property contractors are the users and consumers of the m…
Could a university allocate its mandatory student transportation fee between taxable parking access and nontaxable uses?
Yes. The fee was taxable to the extent it paid for the privilege of parking on university property, and the university could use the ratio of available spaces to students paying the fee as a reasonabl…
Was a separately stated newspaper-delivery charge subject to Florida sales tax when subscribers could avoid it by choosing pickup or mail delivery?
No. The carrier-delivery charge was not taxable when subscribers were told at the initial subscription or renewal that they could avoid it through pickup or mail delivery and the charge was separately…
Did Illinois treat a two-ounce 5-Hour Energy dietary supplement as reduced-rate food or a full-rate soft drink?
As a soft drink under the 2011 rule. ST 11-0037-GIL points out that the product contained sucralose, which Regulation 130.310 listed as a sweetener, and that the regulation specifically listed sport o…
Did reliance on an out-of-state CPA, clerical errors, and inadequate tax software excuse a hardware store's New Mexico CRS penalties and interest?
No. Alamo True Value did not dispute the tax errors, which included unsupported gross-receipts deductions, home sales reported to the wrong county, untaxed out-of-state purchases, and inventory withdr…
Does a story-driven live show qualify as a 'live dramatic or musical arts performance' under Tax Law 1115(x), making production-property purchases potentially exempt?
The show qualifies as that kind of performance, but the Department did not decide whether the specific property purchases are exempt. Tax Law 1115(x) can exempt tangible personal property used directl…
Could a distributor allocate a mandatory delivery fuel surcharge between taxable and exempt products on the same Florida invoice?
No. On an invoice containing any taxable products, the entire mandatory fuel surcharge was taxable even though separately stated; Florida did not allow allocation between taxable and exempt items. The…
Did an Illinois sales-tax exemption number exempt a government instrumentality from hotel room tax or the hotel's reimbursement charge?
No. ST 11-0036-GIL says Illinois Hotel Operators' Occupation Tax was imposed on the hotel operator, not on the room occupant. Because the occupant had no hotel-tax liability to which its exempt status…
Is a country club's mandatory monthly service charge subject to South Carolina sales tax or admissions tax?
It is not subject to sales tax when it is charged independently of food purchases, but it is generally subject to admissions tax as part of the price for using the country club. A qualifying nonprofit…
Could a Virginia watercraft business defeat retail and watercraft tax assessments by asserting that it made no sales during the audit period?
No. Virginia upheld the assessments because sales and rental agreements, registration records, and commingled transactions showed that the business made taxable sales and rentals during the audit peri…
Does federal law (the FAAAA) preempt NY sales tax on interstate movers' storage-in-transit lasting more than 30 days?
No. New York taxes the service of storing property (Tax Law 1105(c)(4)), and the Department's long-standing policy is that an interstate mover's 'storage-in-transit' is taxable for the whole period if…
When can a Virginia seller treat human allograft and porcine xenograft soft-tissue products as sales-tax exempt?
The human allograft could be sold exempt as a Schedule VI controlled substance to qualifying licensed practitioners and medical facilities, with physician or DEA documentation. The porcine xenograft c…
Did a marina's purchase of electricity qualify for Florida's residential-utility exemption when its boat slips were not separately metered?
No. The same metered electricity served boat slips used for residential and nonresidential purposes, so the entire purchase was mixed-use and failed the residential-utility exemption.
Are a Virginia tire shop's separately stated off-site road-service charges exempt repair labor when the service call results in a tire sale?
No. When an off-site call resulted in a tire sale, Virginia treated the technician's travel-based road-service charge as part of the taxable sales price, even though it was hourly and separately state…
Was a 10% shareholder who served as secretary and treasurer personally liable for the corporation's unpaid Virginia withholding tax?
No. Virginia found that the minority shareholder was not a responsible corporate officer for the unpaid withholding tax because the evidence did not show he had a duty to file or pay it, authority to …
How did Illinois treat downloaded media, downloaded canned software, and local sales-tax sourcing for online sales to Chicago customers?
Electronically downloaded music or video was not tangible personal property and was outside Illinois Retailers' Occupation and Use Tax, while canned software remained taxable even when downloaded unle…
Did an Illinois university withhold Illinois tax from employees based permanently outside the state who sometimes returned to Illinois?
Generally not under the Illinois-compensation rule. In all eight scenarios, the employee's permanent out-of-state job location was the base of operations, so the wages were not compensation paid in Il…
Would a county health department owe Illinois sales tax when reselling toothbrushes to low-income dental patients at its cost?
Likely no. ST 11-0033-GIL says Illinois governmental bodies generally incur Retailers' Occupation Tax when selling tangible personal property to the public outside the performance of a governmental fu…
Which dealers had to make Virginia's June 2011 accelerated sales-tax payment, how was it calculated, and what deadlines and waivers applied?
For June 2011, dealers and direct-payment permit holders with at least $5.4 million of taxable sales or purchases in the prior July-to-June fiscal year generally had to prepay 90% of their June 2010 s…
Could a satellite installer buy equipment for resale tax-free when it installed the equipment before transferring it to the programming provider?
No. The installer owned the equipment when purchased and made an intervening taxable use by installing it before transfer, so it owed sales or use tax on that purchase. Its later transfer to the progr…
What documentation did a Virginia IT seller need to remove claimed government, electronic-software, and installation-service sales from an audit?
The seller needed contemporaneous records proving each exemption. Virginia upheld every challenged exception because the documents did not show a direct federal sale or resale, did not reliably certif…
Does a Virginia steel contractor consume materials it fabricates and delivers under one construction contract when other contractors install them?
No. A contractor is the taxable user or consumer only of property it installs or otherwise uses in performing its real-property work. Separately priced bollards, anchor bolts, lintels, plates, and sim…
Was VSL#3 medical food exempt from Virginia sales and use tax as a prescription drug, nonprescription medicine, or reduced-rate food?
No. Virginia found that VSL#3 was food rather than a medicine or drug, its labeling did not claim to diagnose, cure, treat, or prevent disease, and the submitted facts did not show it qualified as foo…
Did an Illinois contest winner owe Use Tax on noncash prizes such as outdoor furniture and lighting?
No. ST 11-0032-GIL says the donor or contest sponsor that buys tangible personal property to give it away makes the taxable use and incurs Illinois Use Tax on its purchase price. The contest winner in…
Must Kansas farmers and ranchers collect sales tax when they sell whole livestock directly to consumers for personal slaughter or processing?
Yes. A farmer's or rancher's sale of a whole hog, cow, or other livestock to an individual for personal slaughter or delivery to a meat locker is a taxable retail sale to a final consumer, so a seller…
For the 548-day rule that lets a New York domiciliary working abroad avoid New York resident status, do partial days spent in a foreign country count toward the 450-day requirement, or only full days?
Both full and part days spent in a foreign country count toward the 450-day threshold under the 548-day rule of Tax Law § 605(b)(1)(A)(ii). The Department applies the same counting method used for New…
Are personalized postage stamps and a separate 'stitch file' charge for embroidery subject to NY sales tax?
Personalized stamps bought for mailing aren't taxable; the stitch-file charge depends on how it's billed. Postage stamps are treated as tangible personal property only when bought for a purpose other …
Did a nonprofit sale lose its Virginia exemption because the certificate used the customer's legal name while the invoice used its trade name?
No. Virginia confirmed through its registration system that the invoice name was the nonprofit customer's trade name, while the complete certificate used its legal name. Because the goods were shipped…
Were forfeited deposits under season-ticket and club-seat agreements subject to Florida sales tax?
No, when the deposits were merely retained after default and were not applied to admissions, license fees, or use of real property. Any portion applied to a ticket price or club-seat license fee was t…
How does a Kansas contractor-retailer handle tax on resale inventory, construction projects, taxable labor, and work for exempt entities?
A contractor-retailer may operate as both a retailer and contractor. It may buy resale inventory tax-free and collect tax on over-the-counter sales, but must accrue tax on the cost of untaxed material…
What are South Carolina's latest state and county per capita income figures used for tax incentives (per SC IL #11-8)?
$32,505 statewide. SC Information Letter #11-8 publishes the most recently available per capita personal income figures for South Carolina — $32,505 for the state, plus a figure for every county — whi…
Did South Carolina extend tax relief to victims of the spring 2011 storms across the Southeast (per SC IL #11-7)?
Yes. Following the IRS, the South Carolina Department of Revenue extended the same tax relief to victims of the spring 2011 severe storms, tornadoes, and flooding in the federally declared disaster ar…
Is a subscription for digital-certificate authentication and resolution services (secure-website certificates) subject to NY sales tax?
No. The company verifies a website operator's identity and issues a 'digital certificate' (an SSL-type certificate) so visitors' browsers can confirm the site is genuine and open an encrypted connecti…
Does a Qualified Empire Zone Enterprise's aircraft qualify for the QEZE sales-tax exemption when it's used to fly to business locations outside the zone?
No. During 2008, Tax Law 1115(z) exempted property bought by a Qualified Empire Zone Enterprise (QEZE) only if it was used 'directly and predominantly' in the Empire Zone where the enterprise is certi…
Are charges for wireless (3G) broadband internet access subject to Kansas sales tax, including when bundled with taxable services?
Not taxable. Charges for wireless (3G) broadband internet access are not subject to Kansas sales tax, because the federal Internet Tax Freedom Act bars Kansas from taxing internet access charges. Ther…
How did Florida tax fabricated stairs sold as goods, exported out of state, or installed as real-property improvements?
Uninstalled Florida sales were taxable unless continuously committed to export. Installed stairs were real-property improvements, so the fabricator owed tax on its fabricated cost rather than charging…
Are purchases of software licenses and support services taxable in Kansas when no prewritten software is received?
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 where, as the taxpayer repr…
Was separately metered natural gas used to wash, sanitize, and dry rented hospital linens exempt as boiler fuel in Florida?
Yes. The separately metered gas qualified because it was used exclusively in an industrial process that changed rented linens from soiled to sanitary condition, and a rental counted as a sale. The tax…
Did a military spouse qualify for a 2009 Virginia withholding refund when she and the service member had different domiciles before Virginia?
No. Virginia found that the spouse maintained State A domicile, but the service member had not abandoned State B domicile before the move to Virginia. Because the 2009 military-spouse protection requi…
When a customer uses a coupon, does Colorado sales tax apply to the price before or after the coupon — and does it matter whether it's a manufacturer's or a store coupon?
It depends on who funds the coupon. A manufacturer's coupon doesn't reduce the Colorado sales tax base — because the manufacturer reimburses the retailer for that part of the price, tax is calculated …
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