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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Are scuba-tank compressed-air fill-ups taxable sales of tangible personal property in Virginia?
Yes. Virginia treated the measured, filtered, and compressed air placed into scuba tanks as tangible personal property and the compression process as fabrication. The customer's true object was the co…
Was Virginia's projected sales-and-use-tax audit sample valid when its error factor included deposit payments from outside the sample month?
No. The one-month sample's error factor included deposit payments made in earlier periods, so those transactions were not part of the sample population. Their inclusion invalidated the percentage of e…
Was a Virginia facility that assembled raw materials into prefabricated home components a manufacturer for local property-tax purposes?
Yes. The facility transformed wood, steel, insulation, concrete, and other raw materials into substantially different foundation walls, trusses, wall panels, and interior walls. Its manufacturing acti…
Could a retired partner subtract partnership payments reported federally as interest and capital gain from Illinois income?
No. IDOR said the Illinois subtraction for retirement payments to retired partners applied only to payments excluded from federal net earnings from self-employment under IRC Section 1402(a)(10) and Tr…
If my equipment lease requires me to reimburse the lessor for the personal property tax on the equipment, is that reimbursement subject to Colorado sales tax — even when it's billed separately?
Yes. When a lease requires the lessee to reimburse the lessor for the personal property tax on the leased equipment, that reimbursement is a taxable 'lease payment' and is included in the Colorado sal…
Is RBOB (reformulated gasoline blendstock for oxygenate blending) a 'motor fuel' subject to NY's excise, petroleum business, and prepaid sales taxes?
Yes. RBOB -- reformulated gasoline blendstock for oxygenate blending -- is a 'motor fuel' for purposes of the Article 12-A excise tax (and petroleum testing fee), the Article 13-A petroleum business t…
How could an Illinois resident avoid double tax if Iowa taxed Conservation Reserve Program payments from Iowa farmland?
Illinois taxed the resident's Conservation Reserve Program payments because residents allocated all base income to Illinois, regardless of whether the farmland was in Iowa or Georgia. Illinois could n…
Is a law firm's certified abstract of title (or certified continuation) a taxable information service in NY?
No -- it's not taxable. Although the sale of an ordinary abstract of title became a taxable information service on September 1, 2010, a 'guaranteed title search' is treated as an insurance product, no…
Is a certified abstract of title that guarantees the correctness of its search a taxable information service in NY?
No -- it's not taxable. The sale of an ordinary abstract of title became a taxable information service on September 1, 2010, but a 'guaranteed title search' is treated as an insurance product instead.…
Is Texas motor vehicle tax due when a taxicab owner adds the cab company to the title solely to satisfy an operating agreement?
No. Under the submitted Dual Title Agreement, the individual kept beneficial ownership and added the cab company only to satisfy operating and financial-responsibility requirements, with sole title re…
Which purchases and sales of a Virginia marketing firm qualified for advertising or out-of-state printed-material exemptions, and could it limit the audit?
Virginia removed only one purchase backed by an invoice showing shipment to Washington, D.C. It upheld tax on promotional crayons and stickers, administrative supplies, and printed materials lacking p…
Were Tindall's completed concrete prison cells taxable construction services or deductible property sold to New Mexico counties?
Mostly deductible. Tindall manufactured complete 25- to 30-ton concrete prison cells in Georgia and delivered them as single relocatable units requiring only placement, leveling, dowel rods, grout, an…
Which replacement fluids, tools, and machine parts qualified for Florida's industrial-machinery repair exemption?
Fluids incorporated into a machine's mechanical operation and replacements for original machine components qualified. Cutting or grinding fluids, quench oil, short-lived tools, wheels, brushes, and re…
Must a Colorado combined report include both financial-institution and non-financial affiliates, and how is the group's income calculated when the two use different apportionment rules?
Both, by subgroup. A Colorado combined report must include affiliated financial institutions and non-financial corporations that meet the three-of-six combination criteria in § 39-22-303(11)(a) — ther…
Did an independent truck driver owe city BPOL tax when he lived there but leased and drove his tractor for an out-of-state motor carrier?
Yes, he conducted a licensable business, and because he had no other definite place of business, Virginia treated his city residence as the business situs. The motor carrier's exemption did not automa…
When a qualified data center expands with new capital investment and new jobs, how does Tennessee's franchise and excise job tax credit treat positions temporarily filled by contract employees, multi-facility job counts, and prior-round jobs that shouldn't double-count?
An 8-part ruling on Tennessee's franchise and excise (F&E) job tax credit (Tenn. Code Ann. Section 67-4-2109(b)) as applied to a major data center expansion. Key holdings: the company qualifies for bo…
When a qualified data center makes a large new capital investment in Tennessee, what counts toward the 'required capital investment' for the enhanced industrial machinery franchise and excise tax credit, does custom software qualify, and how much of the company's F&E tax bill can the credit offset?
A 5-part ruling on Tennessee's enhanced industrial machinery franchise and excise (F&E) tax credit (Tenn. Code Ann. Section 67-4-2009(4)(I)), which scales from 3% to 10% of qualifying purchase price d…
When a company operating a Tennessee qualified data center expands its facilities with a new round of investment, does it qualify again for the headquarters-facility sales/use tax credit, and can it keep using its existing industrial machinery exemption certificate for the expansion?
Yes to all four questions, assuming statutory requirements are met. The Department ruled that the Taxpayer's planned facility expansion will be treated as a new 'qualified headquarters facility' under…
Was a jockey agent's percentage of her clients' race purses exempt from gross receipts tax as jockey or horseman income?
No. Baldwin performed taxable services by marketing jockeys, securing mounts, negotiating purse percentages, and handling client administration. Section 7-9-40 exempted race-purse receipts of horsemen…
Must a Virginia circuit-court clerk use assessed value for deed recordation tax when an appraisal and consideration indicate a lower market value?
No. Assessed value carried a strong presumption, but the clerk could rely on clear and cogent appraisal or other reliable evidence showing it did not reflect fair market value on the transaction date.…
Did a used-car dealer owe use tax on cutoff devices installed in financed cars before transferring the devices to a sister company?
Yes. The customer contract said the device remained dealership or assignee property, and the dealer controlled and maintained it as a delinquency deterrent. Installing the device was a taxable use bef…
Did a married couple prove their interest, dividends, and pension income was exempt because the tribal-member spouse lived on a reservation?
No. Although the wife was a tribal member and the couple lived on the reservation, Virginia found no evidence that the disputed interest or dividends came from reservation pursuits or that the pension…
Did a tribal member prove that interest, dividends, and pension income were exempt because he lived on an Indian reservation?
No. Virginia said reservation residence alone did not exempt the disputed income. The taxpayer did not show that the interest or dividends came from reservation-based institutions or pursuits, or that…
Could Loranger deduct resold installation services when the buyer supplied the correct NTTC only a few days after the 60-day deadline?
No. Loranger obtained timely valid NTTCs for all 2005 receipts and part of 2006, so those assessments were abated. But for the remaining resold installation services, the buyer first supplied the wron…
New York Advisory Opinion TSB-A-11(6)C: Are receipts from selling a company's entire inventory as part of selling its whole business and ceasing operations included in the Article 9-A receipts factor?
No. Receipts from a one-time sale of the company's entire inventory as part of selling its whole business -- after which it only wound down and distributed to shareholders -- are not business receipts…
Did a registered-agent service avoid Illinois income-tax nexus when it had no employees or owned property in Illinois?
IDOR did not make a definitive nexus determination because nexus was fact-specific. It said the service's paid arrangement—providing an Illinois address and using a local law firm to receive and trans…
How did Illinois treat forklifts held for sale but temporarily rented or demonstrated before resale?
The Department did not decide the audited forklift distributor's specific transactions. It explained that a true-lease lessor was generally the end user and owed Use Tax on cost while rental receipts …
What Virginia tax interest rates applied during the second quarter of 2011?
Virginia's second-quarter 2011 rates were 6% for tax underpayments and assessments and 6% for overpayments and refunds. Calendar-year 2010 estimated-tax additions kept the first-quarter 5% rate throug…
Could Illinois individuals separately subtract prior-year net operating losses and a pass-through Section 179 expense already deducted federally?
No. An individual's Illinois base-income computation began with properly computed federal adjusted gross income, and Section 203 allowed only express modifications. The taxpayers had already deducted …
Could Promoco avoid tax and interest on airport advertising leases because of oral Department advice and years of agency delay?
No. Promoco's re-leasing of airport display boxes and kiosks was taxable leasing and advertising activity, leaving $4,294.32 of gross receipts tax due for 1995-1997. The owner's undocumented conversat…
Did a couple operate their short-lived 2007 import business for profit despite losses and closing before year-end?
Yes. Virginia found the couple organized and operated a new import business with registrations, online sales accounts, supplier and reseller agreements, relevant experience, and a website. Unexpected …
Did Virginia's manufacturing exemption cover machinery used to fabricate custom countertops that the business also installed in real property?
No for the 2003-June 2009 audit period. Virginia treated the taxpayer's primary business as fabricating and installing countertops as a real-property contractor, not industrial manufacturing, so its m…
Could City 1 impose 2009 BTPP tax on a business aircraft that used its hangar more than any other location but stayed there less than six months?
No. Although the aircraft was registered and based at City 1's airport and spent more time there than anywhere else, it was hangared there for less than six months in 2009. Virginia found it was not n…
Did Florida documentary stamp tax apply to interest that a borrower could not avoid during a loan's first 36 months?
Yes. Tax was measured on principal plus the first 36 months of required interest because the borrower had no prepayment right during that period, making the interest a fixed sum certain rather than a …
Could a bookseller use its customer's billing address to source tax when the books' delivery locations were unknown at invoicing?
The GIL did not approve billing address as a general substitute for an unknown delivery address. It said that when a retailer sells property to someone in Illinois and does not know where it will be d…
Could buyers of devalued Virginia land-preservation tax credits claim additional credits that the sellers had retained instead of transferring?
No. Virginia held that only taxpayers who earn or purchase land-preservation credits may claim them. The buyers could claim only the devalued amount of the credits actually transferred in 2005 and 200…
Could recipients claim Virginia's disability-income subtraction when neither spouse was the permanently disabled individual for whom the payments were approved?
No. Virginia did not dispute that the payments were disability income under the cited federal definition, but the state subtraction also required the claimant to be absent from work because of permane…
Could an Illinois S corporation redirect its 2009 overpayment to its 2010 estimated tax after not making the election on its original return?
No. Under the cited regulation, a taxpayer could elect on a timely original return to apply an overpayment to estimated tax for the immediately following taxable year, and that election was irrevocabl…
Were conference-bridging services run on equipment outside Florida subject to state or local communications services tax?
No, if the bridging service neither originated and terminated in Florida nor originated or terminated in Florida and was charged to a Florida service address. The provider represented that its bridge …
New York Advisory Opinion TSB-A-11(4)C: After the Empire Zone program sunset, can a certified business claim EZ credits for operations in a newly acquired building that can no longer be added to its Certificate of Eligibility?
Yes. A business certified before the Empire Zone program sunset stays deemed-certified through its benefit period and may claim EZ credits for qualifying operations in both its existing and a newly ac…
Did Illinois's enterprise-zone pollution-control exemption cover the pollution-control facility itself and its repair parts?
No under the Section 1e interpretation in ST 11-0008-GIL. The exemption was limited to tangible personal property used or consumed in operating a pollution-control facility within an enterprise zone. …
How did Illinois classify baking sprinkles, flour-containing salad toppings, and nicotine-treatment gum for the food tax rate?
Under the 2011 rules described, baking sprinkles were candy and used the general-merchandise State rate; a preparation containing flour was not candy; and gum intended by its manufacturer to treat nic…
What did the Frederick County final order published as P.D. 11-55 decide about the corporation-income-tax case?
The court recorded that the company and the Virginia Department of Taxation had settled, dismissed the action with prejudice, and ordered it removed from the active docket. The published order does no…
Did notices of intent and information requests preserve appeals of Virginia nonfiler assessments without complete appeals filed within 90 days?
No. Virginia had not received complete appeals stating the taxpayer's grounds and relevant facts within 90 days of either assessment, so both appeals were barred. The taxpayer also provided no objecti…
Could a late Virginia appeal defeat assessments by arguing that wages were not taxable and no federal return meant no federal adjusted gross income?
No. The appeal was filed after the 90-day deadline, and Virginia also rejected the wage-tax and no-return arguments as having no basis in fact or state law. The 2002-2006 assessments remained due. The…
Could Virginia assess additional 2005 and 2006 income tax after the ordinary three-year period when taxpayers did not report IRS changes?
Yes. Virginia's ordinary three-year assessment limit did not protect the taxpayers because they failed to file amended Virginia returns within one year after the IRS made final changes. Under Va. Code…
Could a taxpayer reverse a paid Virginia assessment without providing records substantiating the itemized deductions claimed?
Not yet. Virginia upheld the assessment because the taxpayer supplied no records supporting the itemized deductions despite repeated requests, and the assessment was presumed correct. The Department a…
For Virginia BPOL purposes, did converting a sole proprietorship into a single-member LLC create a new business owing a full-year license fee?
Yes. Virginia treated the single-member LLC as a legal entity different from the owner's former sole proprietorship, so it was a new business for 2009 and the city properly charged the license fee. Th…
What Virginia tax rate applied when a grocery store removed food from resale inventory and gave it away as customer samples?
Eligible food products used as samples were subject to Virginia's reduced food tax rate regardless of whether they were served as-is, needed utensils, were heated, or were combined with other foods. I…
Did a letter filed on the adjusted 90th-day deadline preserve a Virginia sales-tax appeal when it omitted the grounds and relevant facts?
No. Although February 7, 2011 was the adjusted deadline, the taxpayer's letter did not constitute a complete appeal because it omitted the grounds and relevant facts required by Va. Code § 58.1-1821. …
Did Virginia treat a children's birthday-party package as a taxable sale of property or an exempt service?
Historically, Virginia treated the package as an exempt service because the party experience was the true object, so the taxpayer did not collect sales tax on the package price but owed tax or use tax…
What proof did a Virginia homeowner need to claim same-lender recordation-tax treatment on a mortgage refinance?
The homeowner had to show that the refinancing lender was the mortgage company then holding the existing deed-of-trust debt. Because she had not supplied the original and refinanced deeds of trust, Vi…
Are lifeguard services and pool maintenance services subject to NY sales tax, including when bundled as a 'total pool service'?
Yes, both are taxable. Lifeguard services are protective services subject to tax under Tax Law 1105(c)(8): a lifeguard's job is to monitor the pool to keep swimmers safe and rescue anyone in trouble, …
New York Advisory Opinion TSB-A-11(5)C: Could a foreign corporation that is a general partner (with an indirect interest in a New York LLC) make the foreign corporate limited-partner separate-accounting election?
No. The foreign corporation could not make the limited-partner separate-accounting election, because it was not subject to New York tax solely as a result of the limited-partner provision (20 NYCRR 1-…
Two separately-owned residential housing cooperative corporations, each owning one tower of a two-tower building complex, want to legally merge under the Business Corporation Law so they can make joint decisions. After the merger, shareholders of the dissolving co-op will get equivalent new shares in the surviving co-op and keep occupying the same apartments under the same proprietary leases. Does this merger, or the resulting stock conveyance to the dissolving co-op's shareholders, trigger New York's Real Estate Transfer Tax?
Yes, RETT applies -- potentially twice, though a credit limits the overlap. Two residential housing cooperative corporations, each owning one of two interdependent apartment towers built on a shared s…
How are South Carolina counties ranked for the job tax credit for 2011, and which counties qualify for the fee-in-lieu and tax moratorium (per SC IL #11-4)?
SC Information Letter #11-4 publishes South Carolina's county rankings for the job tax credit for 2011, together with the counties that qualify for a reduced minimum investment under the fee in lieu o…
On a layaway or partial-payment plan, when is Colorado sales tax due — as each installment is paid, or only when the customer finishes paying and takes the item?
Sales tax is due only at the final payment. Because Colorado taxes a 'sale' — the transfer of title or possession of goods — and on both layaway and partial-payment plans the store keeps title and pos…
How is the 2010 federal credit for prior year minimum tax recomputed to determine the Nebraska minimum tax credit on a 2010 estate or trust (fiduciary) return?
Recompute the federal prior-year minimum tax credit for Nebraska, then take 29.6% of it. Revenue Ruling 23-10-2 tells 2010 estate and trust (fiduciary) filers to recalculate the federal credit for pri…
How is the 2010 federal alternative minimum tax for an estate or trust recomputed to determine the Nebraska minimum tax on a 2010 fiduciary return?
Recompute the federal fiduciary AMT using Nebraska's adjustments. Revenue Ruling 23-10-1 tells 2010 estate and trust (fiduciary) filers to recalculate the alternative minimum tax from Schedule I of th…
How is the 2010 federal credit for prior year minimum tax recomputed to determine the Nebraska minimum tax credit on a 2010 individual income tax return?
Recompute the federal prior-year minimum tax credit for Nebraska, then take 29.6% of it. Revenue Ruling 22-10-3 tells 2010 individual filers to recalculate the federal credit for prior year minimum ta…
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