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 quercetin-based dietary-supplement beverages, concentrates, powders, and chews exempt from NY sales tax as dietary foods/health supplements?
Yes, they're exempt. Tax Law 1115(a)(1) exempts food, dietary foods, and health supplements sold for human consumption, and the regulation (528.2(c)) covers products that supplement or substitute for …
New York Advisory Opinion TSB-A-11(3)C: Does a parent corporation succeed to a target's investment tax credit carryover when it acquires the target's stock with a joint IRC section 338(h)(10) election?
Yes. A parent may succeed to the target's investment tax credit carryover where it acquires the target's stock with a joint IRC section 338(h)(10) election: the deemed asset sale and deemed IRC sectio…
If a surviving spouse who is not yet 59 1/2 elects to treat his late wife's IRA as his own, can he still claim New York's $20,000 pension and annuity income subtraction as her beneficiary?
No. Once the surviving spouse elects to roll over and own the IRA as his own account under IRC § 408(d), he stops being a 'beneficiary' of his late wife's IRA, so the regulation that lets a beneficiar…
What is South Carolina's tax interest rate for the period ending June 30, 2011 (per SC IL #11-3)?
4%. SC Information Letter #11-3 sets South Carolina's interest rate on tax underpayments and overpayments at 4% for the period April 1, 2011 through June 30, 2011. Interest is compounded daily, except…
How did Virginia's move to December 31, 2010 federal conformity affect 2010 Virginia income tax returns?
Virginia generally advanced its Internal Revenue Code conformity date from January 22 to December 31, 2010 for tax years beginning in 2010. Taxpayers still had to make Virginia adjustments for specifi…
Did a timely notice of intent preserve a Virginia sales-tax appeal or avoid the 20% post-amnesty penalty when no complete appeal followed?
No. A notice of intent did not satisfy or extend the 90-day deadline for a complete appeal stating the grounds and relevant facts. Because no complete appeal was filed, Virginia treated the liability …
Could an estate beneficiary transfer unused Virginia Land Preservation Tax Credits after both donor-credit holders died?
No. The donors could claim the credit on their final income tax returns, but any unused carryover was extinguished at death. Virginia read Va. Code § 58.1-513(C) to require lifetime acts by the credit…
Did a mortgage refinance qualify for Virginia's same-lender recordation-tax rule when the old lender was a limited-partnership subsidiary of the new lender?
No. The original lender was a limited-partnership subsidiary of the refinancing lender. Virginia treated the two companies as separate legal entities, so the new loan was not made by the lender then h…
Does the Kansas agricultural exemption cover oil and dyed diesel sold to an excavation company doing farm work?
No — the agricultural exemption does not cover fuel and oil bought by an excavation company, even one doing 'agricultural' excavation. Kansas's farm exemption turns on how an item is used, not on the …
Can S corporation shareholders increase their stock basis for New York tax purposes to offset the built-in gains tax that gets added back to income under Tax Law section 612(b)(18)?
No. New York's Tax Law has no provision letting shareholders increase their basis in S corporation stock to offset the section 1374 built-in gains tax add-back required by Tax Law § 612(b)(18). Becaus…
Did Virginia waive late-filing penalties for a retailer that filed omitted sales-tax returns during amnesty but could not fully pay them?
No. Filing the omitted returns eliminated the original audit assessment and left no audit penalty to waive, but returns placed on a payment agreement remained late and were properly assessed late-fili…
Did a motel operator prove that a city's business-property assessments included its parent's assets or exceeded fair market value?
Not on the existing record. The city relied on a fixed-asset list supplied by the motel's accountant, and the taxpayer did not prove that the assessment included parent-owned property or used incorrec…
Did the military-spouse income-tax exemption apply when the spouse moved to Virginia before marriage and had a different domicile from the service member?
No. Virginia found that the spouse established Virginia domicile when she moved there in June 2007, before marrying the service member in January 2009. The service member retained State A domicile. Be…
Could a Virginia seller remove assessed sales by providing exemption certificates during its appeal after the audit?
Yes for the six contested lines addressed. Although certificates obtained during or after an audit were accepted only when valid for the specific transactions, the seller's appeal certificates were co…
Is interest from a Build America Bond issued by Kansas or a Kansas political subdivision subject to Kansas individual income tax?
No. Although Build America Bonds were federally taxable municipal bonds, Kansas treated bonds issued by Kansas or its political subdivisions like other Kansas obligations. Under K.S.A. 79-32,117(b)(i)…
New York Advisory Opinion TSB-A-11(2)C: Is an electronic OTC commodities and derivatives market operator a banking corporation under Article 32, and does pass-through income from an affiliated partnership make a corporate partner one?
No. An electronic over-the-counter commodities and derivatives market operator is not a banking corporation under Article 32, because its trading, confirmation, and data fees are not a banking busines…
Did New Mexico tax Joy Odom's Texas retirement distributions after she became a New Mexico resident?
Yes. Odom was a New Mexico resident when she received the 2005-2006 distributions, so the state could tax them regardless of where she worked, where the plan was maintained, or whether she lived in Ne…
Did the statutory transfer of assets to a surviving corporation in a merger trigger Illinois sales or use tax?
No for the merger transfer described by the Department. ST 11-0006-GIL says property, debts, liabilities, and obligations vesting in the surviving corporation by operation of 805 ILCS 5/11.50 were not…
Can a title insurance company buy a title abstract for resale, and is tax still owed if the closing is later cancelled?
No to both relief points. A title insurance company that buys a title abstract to prepare a title insurance policy cannot give the abstract vendor a resale certificate (ST-120), because the purchase d…
Did stored-value card and paper credits from game trade-ins reduce the taxable price of a later purchase in Florida?
Yes. Credits from one trade-in or a series of trade-ins reduced the taxable sales price when applied to buy a new or used article, because the retailer accepted the used items for resale.
How should an out-of-state LLC report Illinois business income and nonbusiness rental loss passed through by lower-tier partnerships?
The LLC had to preserve the character and Illinois sourcing shown on the lower-tier Schedules K-1-P. Its $2,091,233 share of business income apportioned 100% to Illinois by one partnership belonged on…
Could a corporate partner use alternative Florida apportionment because tiered partnerships did not provide property, payroll, and sales data?
No. Florida required the corporation to include its share of partnership property, payroll, and sales. Missing lower-tier data did not prove that the standard formula was arbitrary, unreasonable, or g…
Did transferring unencumbered Florida real property from a trust to an LLC with identical proportional owners trigger value-based documentary stamp tax?
No. With unchanged proportional beneficial ownership and no other consideration, only the $0.70 minimum tax applied. The LLC became a conduit entity, so a membership-interest transfer within three yea…
Were equipment-rental payments due after an out-of-state dealer removed the equipment from Florida for re-rental subject to Florida sales tax?
No, for payments attributable to the period after removal, if the dealer gave the Florida lessor a signed certificate identifying the property and removal date. Rental amounts charged or paid while th…
Did Florida documentary stamp tax apply to a promissory note signed and delivered outside Florida or to an unsigned extension notice sent into Florida?
No. The note was signed, executed, and delivered outside Florida. The extension notice renewed the maturity date but was also nontaxable because neither the borrower nor lender signed it.
Did Florida documentary stamp tax apply when a lender signed a credit confirmation in Florida but the borrower signed and delivered it outside Florida?
No. The lender's Florida signature was not the borrower's promise to pay, and the borrower signed and delivered outside Florida. An unsigned extension notice renewing the maturity date was also nontax…
Who can get a temporary beer and wine permit for a special event in South Carolina as of January 27, 2011 (per SC IL #11-2)?
As of January 27, 2011, temporary beer and wine permits for fairs and special functions are no longer limited to nonprofit organizations — individuals and entities, including businesses, may also appl…
Could estate beneficiaries subtract lump-sum survivor annuity death benefits from Virginia taxable income?
Yes. The payments qualified because each came from an annuity contract between the deceased annuitant and an insurance company, was paid to a beneficiary in a lump sum, and was subject to federal inco…
When did Kansas's environmental assurance fee on petroleum products resume in 2011?
This Kansas Department of Revenue notice (approval date January 25, 2011) advises all Kansas Environmental Assurance Fee filers that, effective March 1, 2011, the environmental assurance fee of $.01 p…
Is Build America Bond interest subject to Louisiana individual income tax?
Louisiana-issued state or local Build America Bond interest and credit income was exempt. Interest and credit income from Build America Bonds issued by other states or their local governments was taxa…
Must an out-of-state oil-well service company register for Kansas sales and withholding taxes when its employees perform work at Kansas wells?
Yes. Sending employees into Kansas to service oil and gas wells creates physical presence and Kansas tax nexus, so the company must register as a retailer and for the taxes identified through the Kans…
What does a film or TV production company have to do -- in terms of headquarters status, spending thresholds, and documentation -- to claim Tennessee's 15% production incentive credit, and does the $1 million spending threshold apply once or to every production?
A 7-part ruling walking through the full eligibility framework. The Department confirmed the Taxpayer qualifies as a Tennessee 'headquarters facility' for purposes of the 15% movie/episodic-TV product…
Did a Virginia longarm quilter have to collect sales tax on labor when customers supplied the quilt top, backing, and batting?
Yes. Joining and quilting the customer-supplied layers changed tangible personal property and therefore constituted fabrication. Virginia required the quilter to collect sales tax on the full sales pr…
Could a multistate service company using payroll apportionment claim Virginia's BPOL deduction for gross receipts from business conducted in other states?
Potentially. The company had to situs total receipts to the local definite place of business first, using payroll apportionment because specific situs was impractical. It could then deduct an apportio…
Did federal protection for multistate vessel pilots prevent Virginia tax on a nonresident pilot's partnership income from work in Virginia waters?
No. The federal rule protected compensation for piloting duties from tax outside the pilot's residence state, but the pilot association reported its fees less expenses as partnership ordinary income. …
Did Virginia's manufacturing exemption cover a food processor's renovation forklifts, floor scrubbers, storage racks, furniture, and maintenance purchases?
No on the remaining contested items. Virginia upheld tax because the forklifts were first used for building renovation, floor scrubbers and maintenance items were ancillary rather than directly used i…
Which subcontracted hosting, maintenance, and exhibit costs could a Virginia government contractor remove from its use-tax audit?
Virginia removed both groups at issue. Hosting and maintenance were nontaxable because the subcontractor kept the application on its server and delivered no tangible property. The exhibits were tangib…
Could S corporation shareholders subtract dividends from an IC-DISC that operated from an Illinois enterprise-zone address but had no payroll or property there?
No, based on the facts submitted. The IC-DISC was a Section 304(a) corporation, so the applicable enterprise-zone test used its property and payroll factors—not its sales or commission income. The req…
Which sales, purchases, exemptions, and credits did Virginia allow or reject in a quarry's multi-issue 2004-2007 tax audit appeal?
Virginia ordered several specific sales and purchase adjustments, made others conditional on verification, and rejected many claims that lacked invoices, valid exemption certificates, use records, DEQ…
Were antibacterial hand soaps, gels, sprays, lotions, wipes, sanitizers, and foams exempt Virginia nonprescription drugs?
No. Virginia classified the labeled products as cosmetics or toiletry articles because their primary purposes were cleansing, grooming, softening, or promoting attractiveness. Alcohol or triclosan use…
When does a Kansas retailer report sales tax on layaway and partial-payment purchases, and are retained layaway fees taxable?
Tax is due when the goods are delivered, not when layaway deposits or periodic payments are received. For a standard layaway, the retailer reports tax on the total selling price when the final payment…
Were F.O.B.-origin sales from a Virginia concrete plant exempt because the buyer's interstate carrier delivered the products to North Carolina?
No. The sales terms made the buyer responsible for shipping and ended the seller's delivery obligations after loading and approval at the Virginia plant. The buyer's carrier appeared to act as a contr…
Were video-production and editing services subject to Florida sales tax when the finished video was delivered electronically?
No, when delivery occurred only by file-transfer protocol or email. Delivery on a hard drive, CD, flash drive, DVD, or other physical medium was taxable because tangible personal property was transfer…
What does a company have to show to qualify as a 'bona fide Tennessee advertising agency' so that a film or TV production company's payments to it count toward Tennessee's 15% movie/TV production tax incentive?
Yes, the venture qualifies — and the Department laid out the test for any similar agency. Payments by a qualified film/TV production company to a Tennessee advertising agency count as 'qualified expen…
Were separately stated optional and mandatory maintenance charges taxable when tied to a qualifying software license?
Assuming the software license met every condition in 86 Ill. Adm. Code 130.1935(a)(1), the GIL says charges for support, maintenance, and updates under the qualified license were not subject to Retail…
Were software-maintenance charges taxable when separately invoiced but governed by the same contract as a qualifying software license?
Assuming the software license met every condition in 86 Ill. Adm. Code 130.1935(a)(1), the GIL says support, maintenance, and update charges provided under that qualified license were not subject to R…
Did an employee abandon Virginia domicile by moving to another state for work while keeping a Virginia home, vehicles, and driver's license?
No. Although the taxpayer moved and rented an apartment in State A, he kept his Virginia house and vehicle registrations and renewed a Virginia driver's license in 2007. Virginia found that he had not…
How much documentary stamp tax applied when a $100 foreclosure bid was split among three certificates of title for three parcels?
Each certificate owed $0.70, for $2.10 total, because each parcel's allocated share of the $100 bid was below $100. With no other consideration, the court-approved bifurcation was not a taxable assign…
Did an Illinois restaurant charge tax on the menu price before an unreimbursed discount or voucher?
No for an unreimbursed discount. ST 11-0003-GIL says only the discounted amount actually received by the restaurant was taxable when no supplier or other party reimbursed the discount. If the seller r…
Did a Florida city's direct-purchase procedures exempt equipment and materials for an energy-efficiency public-works project?
Yes, if the city followed its agreement and purchase-order procedures: direct order, invoice, public-fund payment, title, and risk of loss. The city also had to issue Certificates of Entitlement to ve…
When could refrigerated trailers leased for interstate commerce qualify for Illinois's rolling-stock exemption?
Qualification depended on use, not merely on the item being a trailer. ST 11-0002-GIL says the rolling-stock exemption could cover property sold to an interstate carrier for hire, or to a lessor under…
Which separately stated charges could be excluded from Illinois automobile-rental gross receipts?
The GIL did not classify every listed rental-car fee without reviewing the contracts. Under the 2011 rules, all consideration for an automobile rental of one year or less entered gross receipts unless…
Could a Virginia county impose BPOL tax on real-property lessors operating inside a town that could not itself tax those lessors?
Only with the town's permission. The county's pre-1974 tax history allowed it to tax real-property lessors generally, while the town's history did not. But a county BPOL tax ordinarily does not apply …
Could a Virginia county impose BPOL tax on real-property lessors operating inside a town that could not itself tax those lessors?
Only with the town's permission. The county's pre-1974 tax history allowed it to tax real-property lessors generally, while the town's history did not. But a county BPOL tax ordinarily does not apply …
Are third-party laboratory testing services for pharmaceutical development subject to Kansas sales tax, and does the customer need an exemption certificate?
No. Laboratory testing is not one of the services enumerated as taxable under the Kansas retailers' sales tax act, so the testing charge is not subject to tax and the customer does not need an exempti…
Did Edward Marshall owe negligence penalty and interest after failing to report New Mexico gross receipts from his 2006 services?
Partly. Marshall was negligent because he failed to report about $26,000 earned from New Mexico services, and Department employees were not required to identify a separate gross receipts tax issue dur…
Did four 15-ton refrigeration units installed at a warehouse become real-property fixtures or remain business tangible personal property?
Virginia did not make a final fixture classification. The city erred by focusing on the seasonal tenant's production use rather than the owner's intent, but the owner had not supplied objective eviden…
Were furniture and equipment purchased under a Department of Defense dormitory contract exempt as qualifying federal-contract property?
Yes, for the separate furnish-and-install scope where the items were direct contract costs and title vested in the federal government. The real-property construction contract itself was not a qualifyi…
Could a Virginia county tax all BPOL gross receipts of a tree-service and construction company whose county office performed only administration?
No. The company had definite places of business in both the city and county, but its county office performed only ancillary recordkeeping and administration. Services were directed and controlled from…
Could an Illinois individual subtract current-year federal itemized deductions on the Illinois income tax return?
No. Illinois individual income tax began with federal adjusted gross income, which was computed before itemized deductions, and Section 203 allowed only express modifications. Section 203(a)(2)(I) all…
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