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 South Carolina extend tax relief to victims of the April 2011 North Carolina storms (per SC IL #11-6)?
Yes. Following the IRS (Information Release 2011-20), the South Carolina Department of Revenue extended the same tax relief to victims of the severe storms, tornadoes, and flooding that began April 16…
Could a Virginia restaurant obtain review of an underreported-sales assessment by supplying deposit and loan records with its appeal?
Yes, the Department sent the audit back for review of the new documents, but it did not cancel the assessment immediately. Because bank deposits exceeded reported sales and adequate explanations were …
Could Virginia residents reopen the 2004 refund period after another state assessed tax on the same rental income in 2009?
No. The March 2009 amended Virginia return came after the general May 2, 2008 deadline, and none of the exceptions reopened 2004. The other state's assessment was not a Virginia assessment, a 2009 fed…
Is artwork held by a Virginia gallery on consignment inventory subject to the gallery's local merchants' capital tax, and how is purchased art valued?
No. Artwork held by a gallery on consignment remained owned by the artist and was not the gallery's inventory for merchants' capital tax. Artwork the gallery actually purchased for resale would be inv…
Which parts of South Carolina's waterworks corporate license fee applied to a utility operating entirely in a federal enclave?
The privately owned utility owed the gross-receipts portion of South Carolina's waterworks corporate license fee because the Buck Act allowed a state tax measured by gross receipts inside a federal en…
Did a beverage manufacturer's new in-house container lines qualify for Florida's expanding-business machinery exemption?
Yes, at each facility when it produced its first new container. The listed equipment and installation labor qualified after a separate temporary exemption-permit application was filed for each facilit…
What Virginia filing and payment relief applied to taxpayers affected by the April 8 and April 16, 2011 severe storms?
Virginia generally moved qualifying state return and payment deadlines falling from April 16 through May 2, 2011 to June 1, 2011 for storm-affected taxpayers whose needed records were in designated di…
How did Kansas treat restocking charges on returned vehicles and bad-debt deductions when a dealer assigned receivables to a commonly owned finance company?
For a fully rescinded vehicle sale, the dealer refunds the full price and tax; a separate fee covering the cost of returning unused goods to inventory is a nontaxable restocking fee. If use, mileage, …
How is the 2010 federal alternative minimum tax recomputed to determine the Nebraska minimum tax on a 2010 individual income tax return?
Recompute the federal AMT using Nebraska's adjustments. Revenue Ruling 22-10-4 -- a re-issued ruling that supersedes 22-10-2 -- tells 2010 individual filers to recalculate the alternative minimum tax …
Were diagnostic kits, controls, calibrators, and cell-stabilization products sold to Florida clinical laboratories exempt from sales tax?
Yes, when used by clinical laboratories to diagnose or treat human disease, illness, or injury. Required controls and calibrators qualified as diagnostic chemical compounds, and qualifying blood-colle…
Was a single-patient bone-marrow needle labeled for use only by or on a physician's order exempt from Florida sales tax?
Yes. The needle was a one-time-use medical product bearing the federally required prescription legend and was therefore exempt both before and after July 12, 2010.
Could permanently installed vehicle-wash components qualify for Illinois's enterprise-zone building-materials sales-tax exemption?
Potentially, component by component. ST 11-0031-GIL says the enterprise-zone exemption covered qualified sales of building materials physically incorporated into real estate through a covered project.…
Could a Virginia seller reduce an audit assessment by supplying valid resale certificates after the audit?
Yes, in this appeal. The seller submitted two exemption certificates after the audit, the auditor reviewed them, and Virginia revised the assessment accordingly. But certificates must be complete and …
Was a Virginia software-support agreement taxable when it mainly provided remote labor but allowed the vendor to supply loaner equipment?
Yes. Virginia treated the agreement as a parts-and-labor maintenance contract because it expressly allowed the vendor to provide loaner equipment in some circumstances. Even though loaners could requi…
Did a contractor have to charge Florida sales tax for cleaning and repairing permanently installed concrete fountain pools?
No. The fountain pools were real property, and their cleaning was outside the specifically taxed janitorial-services category. The contractor was the ultimate consumer and owed tax on materials and su…
Were spouses full-year Virginia residents for 2006 even though one did not obtain Virginia employment until October?
Yes. Virginia found that the couple's licenses, Virginia apartments, vehicle registration, and earlier part-year filing showed Virginia domicile throughout 2006. A later Virginia job start and one par…
When must a Colorado auctioneer collect sales tax on items it sells (including motor vehicles), and when is the owner responsible instead?
The auctioneer usually must collect. A Colorado auctioneer selling goods on an owner's behalf is treated as the retailer and must collect and remit sales tax — unless one of two exceptions applies: (1…
Did Virginia properly add back interest paid to an affiliate and reorder a corporation's net-operating-loss deductions?
Virginia reversed the interest addback because the lending affiliate held no intangible property, so the cited related-party addback did not apply. But the corporation had not filed the required state…
When a custom millwork company sells and installs cabinetry and similar products, is the sale and installation taxable -- and does it matter whether the finished product stays movable personal property or becomes permanently attached to the building?
It depends entirely on whether the finished product stays personal property or becomes part of the building -- with a separate rule for lump-sum jobs mixing both. The Department ruled: (1) when the Ta…
Could a federal IT contractor buy build-out furniture for resale tax-free and exclude that order from Virginia's projected audit sample?
No. The order's true object was a federal facility reconstruction and build-out, so the contractor consumed the furniture in a real-property contract even though the government reimbursed it or took t…
Did Barnesandnoble.com have substantial New Mexico nexus through affiliated Barnes & Noble bookstores during the 1998-2005 audit period?
No. Under the Commerce Clause nexus test applied to the 1998-2005 audit period, Barnesandnoble.com had no New Mexico property, employees, facilities, or direct in-state operations, and its products ar…
Are a golf club's member dues, its mandatory 'subvention' fee, and its non-member playing fees subject to NY sales tax?
Member dues and the subvention fee are taxable; non-member playing fees aren't. The club's members must each buy a $1,000 'subvention certificate' that gives them a proportional share of the club's as…
Are a company's customized background and investigative reports taxable as detective services or as information services in NY?
They're taxable -- the only question is under which provision. If preparing a report requires a private-investigator license under General Business Law Article 7, the report is a taxable detective ser…
Does a sculpture bought at a NYC auction qualify for the resale exclusion when the buyer loans it to a museum before reselling it?
No -- the purchase is subject to New York sales tax. First, it's a New York sale: the sculpture was shipped to Florida by a private carrier the museum (acting as the buyer's designee) hired, and New Y…
My organization administers a union health and welfare benefit plan. A prior advisory opinion said the benefits we pay out are wages subject to MCTMT but that we don't have to pay the tax on them -- has that changed?
This MODIFIED opinion replaces TSB-A-10(1)MCTMT (issued July 20, 2010) on the identical petition. It reaffirms that union health and welfare benefits funded through employer contributions negotiated i…
Could a token-pusher machine awarding toys, food, and gift cards qualify as an Illinois redemption machine or coin-operated amusement device?
Not on the limited description. ST 11-0030-GIL says a redemption machine had to involve the specified physical-object game and satisfy all five statutory conditions, including awarding only merchandis…
When did Illinois sales tax apply to layaway and partial payments, and was a nonrefundable layaway fee taxable?
When the buyer had made a binding commitment, the property was identified, and a payment was made, that payment entered the seller's taxable gross receipts when received. A nonrefundable layaway fee w…
Are sales of title abstracts taxable in NY, at what rate, and what happens when a customer never pays?
Yes -- since September 1, 2010, an abstract of title is a taxable information service under Tax Law 1105(c)(1) (a Department policy change, TSB-M-10(7)S, to match the case law). The vendor must collec…
New York Advisory Opinion TSB-A-11(7)C: From what date does interest run on a corporate franchise tax and MTA surcharge refund based on amended returns?
Interest runs from the date the amended returns and refund claims were filed. Because the company met the section 211.3 reporting requirement (it filed amended New York returns within 90 days of the a…
Are a manufacturer's computers, vehicles, furniture, and other assets automatically excluded from Virginia local machinery-and-tools tax?
No. Classification depends on how each asset is actually used, where it is located, and whether the taxpayer documents transfers or disposals. Computers and software directly used in manufacturing can…
Was a national trust bank a bank under Virginia's Bank Franchise Tax Act even though its Virginia office did not accept deposits?
Yes. The Norfolk Circuit Court held that AMG fit the Bank Franchise Tax Act's specific definition of a bank as a national banking association doing business or having an office in Virginia. The court …
Were separately stated electric-utility charges for transformers subject to Florida sales tax or gross receipts tax?
Customer-side transformer lease charges were subject to sales tax, not gross receipts tax, when separately stated. Utility-side equipment used to deliver electricity generated gross-receipts-taxable f…
Were charges for resold wireless broadband Internet access exempt from Illinois telecommunications tax under the Internet Tax Freedom Act?
Not conclusively on the stated facts. ST 11-0028-GIL says telecommunications purchased, used, or sold by a provider to enable Internet access fell within the then-current federal tax moratorium. But n…
Did a business qualify for Illinois's enterprise-zone Gas Use Tax exemption merely by being located in a certified zone, without separate job-creation certification?
Yes, under the rule described. ST 11-0027-GIL says a business enterprise needed only to be located in an enterprise zone certified by the Department of Commerce and Economic Opportunity to claim the G…
Could a taxpayer reduce a Virginia assessment without filing the 2007 resident, part-year, or nonresident return needed to calculate liability?
Not on the existing record. The taxpayer admitted some Virginia-source income but had not filed a return or supplied enough information to determine residency and liability, so the assessment remained…
What Illinois tax and rate applied when a construction contractor bought materials from an out-of-state vendor for permanent incorporation into real estate?
The contractor was the end user and owed Illinois Use Tax on the materials' cost price. If an out-of-state supplier did not collect the tax, the contractor had to self-assess and pay the historical 6.…
Could a corporation allocate stock-sale gains outside Virginia apportionable income because the investee was not part of a unitary business?
No. Although Virginia agreed the corporation and investee were not unitary, the investment served an operational rather than passive function. The corporation licensed its technology for stock, suppli…
Could a city impose consumer utility tax when an affiliate bought natural gas and caused it to be delivered through pipelines it did not own?
Yes. Virginia treated the affiliate as a pipeline distribution company because it bought the gas and caused it to be transmitted by pipeline, even without owning or operating the pipeline. The 2001-20…
Is an auctioneer's separately stated administrative fee (buyer's premium) subject to Colorado sales tax, or is it a non-taxable service charge?
It's taxable. An auctioneer's administrative fee or buyer's premium — even when stated separately on the invoice — is included in the Colorado sales tax base, because the fee is generally not optional…
Could a Florida corporate parent stop filing consolidated income-tax returns after all subsidiaries merged into it or dissolved?
Yes. Florida granted permission because the four subsidiaries no longer existed and the parent was no longer part of an affiliated group. Future subsidiaries could reactivate or require a new consolid…
Can Virginia residents calculate the other-state tax credit before subtracting a historic-rehabilitation credit granted by that state?
No. Virginia limited the credit to the tax actually paid to the other state after that state applied its historic-rehabilitation credit. The residents could not use the higher pre-credit liability, be…
Did a federal-contract joint venture create a Virginia definite place of business merely by using a member's office address for nine months?
No. Virginia advised that merely sharing a member's Virginia office address did not create a definite place of business when the joint venture had no employees, property, phone, records, signage, adve…
Did a vehicle owner have to prove Illinois sales tax was paid on the old vehicle before using it as a trade-in?
No. ST 11-0025-GIL says the trade-in rules did not require the old vehicle to have been bought or taxed in Illinois, or even titled or registered in Illinois. The original purchase's taxation did not …
Who owed Illinois tax when an out-of-state facilities manager hired Illinois construction contractors and service providers for retail stores?
Construction contractors were end users of materials permanently incorporated into Illinois real estate and owed Use Tax on their cost. When subcontractors acted as construction contractors, the gener…
How did Illinois tax media postproduction, film or videotape duplication, and electronic transmission services?
Pure services without a transfer of tangible personal property were outside Retailers' Occupation, Use, Service Occupation, and Service Use Tax. When film, videotape, or other tangible media was trans…
How did Illinois tax equipment placed in a rental fleet, property bought for resale, and vehicles brought into Illinois?
For a true lease, the lessor generally was the end user and owed Use Tax on the equipment's cost price; Illinois imposed no sales tax on the rental receipts. A conditional sale was different, and all …
How did Illinois treat repair parts for material-handling equipment, dyed diesel used off highway, and an excavator leased for manufacturing work?
Repair or replacement parts incorporated into exempt manufacturing machinery could qualify when the machinery was used primarily—more than 50%—in manufacturing, but equipment used mainly before or aft…
How did Illinois tax a separately billed wireless phone-replacement program, replacement phones, and customer deductibles?
The Department said the described phone-replacement program appeared to be sold separately from the phone. A separately sold maintenance agreement was not itself a taxable transaction, and the custome…
Did unreimbursed loyalty-point and coupon discounts reduce Illinois taxable receipts for retail goods and wireless telecommunications?
Generally yes. ST 11-0019-GIL says an unreimbursed retailer discount reduced taxable gross receipts to the amount actually received. If a manufacturer, distributor, or other source reimbursed the disc…
How can taxpayers check whether an older South Carolina advisory opinion was modified or superseded (per SC IL #11-5)?
Use the citator attached to SC Information Letter #11-5. It helps you determine what effect newer South Carolina advisory opinions have on previously published ones — whether an opinion was modified, …
After moving away, would sellers owe Virginia tax on contingent payments from an S-corporation sale and installments from their Virginia home?
It depended on the federal character of each payment. Gain or interest from selling S-corporation stock as an intangible not used in a Virginia business generally would not be Virginia-source after th…
Did nonmedicated Breathe Right nasal strips qualify as medical appliances for Illinois's reduced tax rate?
Generally no. ST 11-0018-GIL says an Illinois medical appliance had to be intended by its manufacturer to directly substitute for a malfunctioning part of the human body. Products that simply improved…
Did an Illinois seller that drop-shipped air purifiers from Canada have to collect Illinois tax when it kept no inventory or storefront?
Unresolved. ST 11-0017-GIL says the Department did not make nexus determinations in PLRs or GILs because an auditor was better positioned to gather the necessary facts. It gave general 2011 rules for …
When may an Illinois contractor buy materials tax-free for work performed under a contract with an exempt organization?
Conditionally. ST 11-0016-GIL says an Illinois construction contractor normally is the end user and owes Use Tax on materials incorporated into real estate. The contractor may buy materials tax-free w…
Were subscription digital certificates and authentication services taxable as computer software in Illinois?
Generally no for the digital certificate, authentication, and resolution services themselves. ST 11-0015-GIL says a digital signature or identification was not computer software and electronically tra…
Did Illinois classify a trade-show company's service, lease, telecom, and catering revenue items as taxable or nontaxable?
Not item by item. ST 11-0014-GIL declined the requested taxable-or-nontaxable classifications and supplied general rules. Pure services without transferred tangible property were outside Service Occup…
Would Illinois approve a private handbook's description of tax exemptions for nonprofit and governmental organizations?
No. ST 11-0013-GIL says the Department does not approve the accuracy of private legal publications. Instead of validating the handbook excerpt, it directed the publisher to Illinois statutes, administ…
Did Illinois decide whether a satellite-TV installation company owed sales or use tax on equipment reimbursed by the service provider?
No. ST 11-0012-GIL says the Department could not determine the exact arrangement between the installation company and satellite service provider, so it gave no specific sales-tax, use-tax, or registra…
Did liquor filling change Illinois's 2011 State tax rate for a product that otherwise qualified as candy?
No. ST 11-0011-GIL says the law that moved candy to the 6.25% State general-merchandise rate did not distinguish between candy with liquor filling and candy without it. Under the definition quoted, a …
Were a restaurant tenant's permanently attached leasehold improvements real property rather than taxable business tangible personal property?
Yes. Concrete, masonry, doors, windows, plumbing, HVAC, electrical work, trim, and built-in furnishings were annexed and adapted to the premises, and the lease showed attached improvements became the …
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