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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How can taxpayers check whether an older South Carolina advisory opinion was modified or superseded (per SC IL #10-15)?
Use the citator attached to SC Information Letter #10-15. It helps you determine what effect newer South Carolina advisory opinions have on previously published ones — whether an opinion was modified,…
Are a utility's charges for water service and sewer service subject to NY sales tax?
Water service is exempt; sewer service is taxable. Water delivered to customers through pipes or mains is exempt from sales and use tax under Tax Law 1115(a)(2), so the water-works company's charges f…
New York Advisory Opinion TSB-A-11(1)C: How does a prepaid debit card processor source its card-sale fulfillment fees and its transaction fees for the Article 9-A receipts factor?
Source by activity. The fulfillment fees a prepaid debit card processor earns from selling cards are other business receipts (the cards are intangible rights to redeem), sourced to where the card is s…
Was a taxpayer an actual Virginia resident in 2005, making her State A retirement income taxable, when evidence indicated more than 183 Virginia days?
Yes on the existing record. Virginia concluded that the taxpayer maintained a Virginia abode for more than 183 days in 2005, making her an actual resident even if State A domicile continued. Her feder…
Could trailer buyers recover Illinois Use Tax after the seller was later assessed tax by another state?
No on the facts described. ST 10-0128-GIL says Illinois allowed a credit only when tax properly due to another state had already been paid at the time Illinois Use Tax was paid. A later assessment by …
Did Illinois classify a sweetened liquid mental-clarity supplement as food, a soft drink, or medicine?
Unresolved. ST 10-0127-GIL did not expressly say whether the referenced liquid supplement qualified for the lower rate or the general-merchandise rate. It explained that a sweetened nonalcoholic bever…
Did Illinois approve a pad-printing equipment package for the graphic-arts machinery exemption?
No specific approval was issued. ST 10-0126-GIL says the request lacked enough item-by-item purpose and use information, so the Department declined the PLR. It explained that the historical exemption …
How did Illinois tax hostess reward credits, free products, half-price items, and shipping in party-plan sales?
A hostess reward credit based on party sales entered taxable gross receipts when applied to merchandise, at the dollar amount credited. If the company instead gave merchandise away, the company owed U…
Under Virginia's original 2011 prepaid wireless E-911 guidelines, which transactions carried the fee and how did dealers collect and report it?
Beginning January 1, 2011, the historical guidelines imposed a $0.50 fee on each retail purchase of prepaid wireless calling service, including prepaid unlimited service and bundled sales containing p…
Could a county tax blue-book aircraft values when the resident claimed he owned only FAA titles for aircraft that no longer physically existed?
Not without proof of tangible aircraft. FAA records showed titles in the resident's name, but local mobile property tax applied to physical property that could be perceived and was sitused in the coun…
Were custom-printed checks and deposit tickets sold by a bank subject to Retailers' Occupation Tax or Service Occupation Tax?
Generally Service Occupation Tax for genuinely custom print items. ST 10-0124-GIL says a special-order product of general utility that performs substantially like a stock item was a taxable retail sal…
How did Illinois tax a remodeling contractor's resale of furniture and other items that remained personal property after installation?
The contractor was acting as a retailer when it sold items that remained tangible personal property rather than becoming part of the real estate. ST 10-0123-GIL says those items could be purchased for…
Were automobile-dealer direct-mail program fees subject to Illinois Retailers' Occupation Tax?
Apparently not under Retailers' Occupation Tax. ST 10-0122-GIL says there did not appear to be Retailers' Occupation Tax liability on the program fees billed by the automobile company to participating…
Were subscriptions to a hosted business-information database and web tools taxable in Illinois?
Conditionally no. ST 10-0121-GIL says a company providing access to a database of information without transferring software or other tangible personal property would incur no Illinois Retailers' Occup…
Could a manufacturer deduct related-member factoring losses under Virginia's subject-to-tax or valid-business-purpose exceptions?
Virginia did not allow a full subject-to-tax exception because only the affiliate income apportioned to and taxed by other states qualified. But it granted the valid-business-purpose exception: the le…
How did Virginia's related-member addback rules apply to pre-2004 factoring, post-2004 factoring losses, and interest on receivables financing?
Pre-2004 factoring and loan transactions were not subject to addback because the statutes were not yet effective. For 2004 and later, factoring losses were intangible expenses subject to addback unles…
How did Virginia tax a glass contractor's government sales when glass was sold alone versus furnished and installed in real property?
Glass sold without installation to a federal, Virginia, or Virginia local government was exempt when bought on an official purchase order and paid directly from public funds. But when the contractor f…
Did an out-of-state parent owe Virginia corporate income tax from licensing intangibles to a related seller whose Virginia activity was solicitation?
No Virginia income tax was due on the stated facts. The related seller's two Virginia employees only solicited orders, and the other subsidiaries had no Virginia factors. The parent's intangible licen…
Did a government contractor's staffed trailer on a military base create a definite place of business and situs for BPOL service receipts?
Yes. Although the trailer had no public sign, mail, solicitation, or advertised phone number, the contractor maintained a continuous presence, furniture, computers, a phone, meetings, and administrati…
Did Illinois's rolling-stock exemption cover cellular data charges for GPS tracking on interstate trucks?
No. ST 10-0120-GIL says the rolling-stock exemption was available only under Illinois sales, use, service occupation, and service use taxes—not the Telecommunications Excise Tax. The Department could …
Was propane used in forklifts exempt as manufacturing machinery or eligible for Illinois Manufacturer's Purchase Credit?
Propane and other fuel did not qualify for the manufacturing machinery and equipment exemption itself. Under the historical Manufacturer's Purchase Credit rules described in ST 10-0119-GIL, a qualifyi…
Under Virginia's superseded 2010 motion-picture-credit guidelines, which productions and expenses qualified and how was the refundable credit claimed?
Under these superseded guidelines, qualifying productions spending at least $250,000 in Virginia could receive a 15% base refundable credit, a 5% distressed-area bonus, resident-payroll credits of 10%…
Did a government contractor's staffed trailer on a military base create a definite place of business and situs for BPOL service receipts?
Yes. Although the trailer had no public sign, mail, solicitation, or advertised phone number, the contractor maintained a continuous presence, furniture, computers, a phone, meetings, and administrati…
Does the 2009 law (Part N-1) narrowing NY's aircraft exemptions apply to an aircraft bought out-of-state before the law's effective date but first used in NY afterward?
No. Part N-1 of Chapter 57 of the Laws of 2009, which narrowed both the nonresident use-tax exemption and the commercial-aircraft exemption, applies only to sales made and uses occurring after its Jun…
How did Illinois tax prescription eyeglasses and contact lenses transferred by an optometrist?
Prescription eyeglasses and contact lenses were medical appliances eligible for the lower State rate described in the 2010 GIL. An optometrist rendering professional services did not owe Retailers' Oc…
Did Sipapu owe civil penalties when a previously reliable bookkeeper concealed seven missed 2008 gross receipts tax filings and payments?
No. Sipapu had timely filed and paid 86 reporting periods before a trusted bookkeeper concealed seven missed 2008 gross receipts tax filings and payments through false assurances, altered statements, …
Are a firm's three financial-pricing 'advice services' taxable information services or nontaxable consulting in NY?
It depends on the service. Advice Service P -- automated derivative-pricing advice generated by applying the firm's proprietary formulas to its common, internally-built database -- is a taxable inform…
Under Virginia's historical 2011 tobacco-products-tax guidelines, what rates, licensing, filing, invoice, and reporting rules applied?
Under these historical guidelines, Virginia taxed moist snuff at $0.18 per ounce, loose-leaf tobacco at package-based rates from $0.21 to $0.70 for units up to 24 ounces with a formula above that weig…
Did a contractor's vehicle-storage facility create a city definite place of business, and where were its receipts and trucks taxed?
The city storage facility was not a definite place of business because storage, daily employee meetings, assignments, and truck loading did not establish the required regular and continuous business a…
Could an individual Virginia S-corporation shareholder subtract DISC dividends passed through from the S corporation?
No. Virginia's corporate statute allowed a qualifying DISC-dividend subtraction in computing corporate taxable income, but the pass-through rule limited an individual owner to modifications authorized…
Could a Virginia resident filing separately claim dependent exemptions allocated by agreement with a nonresident servicemember spouse?
Yes. Although the couple filed a joint federal return, Virginia law allowed them to allocate federal dependent exemptions between their separate Virginia returns as they mutually agreed. Because they …
Did Virginia allow a 2006 college-savings deduction when checks were mailed in December 2006 but posted to the accounts in January 2007?
Yes. The checks were mailed on December 29, 2006 for unconditional delivery to the institution administering the children's Virginia college savings accounts, although they posted January 3, 2007. The…
Could Virginia refund a federal-refund offset after the taxpayer proved she was not a 2002 Virginia resident but filed after every refund deadline?
No. Virginia accepted that the taxpayer was domiciled elsewhere in 2002 and abated the unpaid balance, but her May 2010 refund request came more than two years after the February 2008 offset payment a…
Was a legally separated husband an actual or domiciliary Virginia resident in 2006 and 2007 despite a Virginia business, license, vehicles, and family home?
No. Evidence rebutted the auditor's credit-card-based day count and showed the husband spent only 68 days in Virginia in 2006 and 72 in 2007, so he was not an actual resident. The full circumstances a…
Did an occupational healthcare provider have to charge Virginia sales tax on its medical services, and how were its supplies treated?
The provider did not have to charge sales tax on the described professional medical services. But as a practitioner and service provider, it was the consumer of tangible personal property used to perf…
Under Virginia's 2010 rules, how were manufactured homes, modular homes, setup materials, installation contracts, and resale certificates taxed?
The historical treatment depended on the home and transaction. Manufactured homes generally entered the motor-vehicle tax system, with qualifying setup components included in that taxable sales price.…
Was injectable tuberculin antigen exempt from Virginia sales and use tax when a licensed medical practice bought it for professional use?
Yes. The Department treated the injectable tuberculin antigen as a prescription drug and Schedule VI controlled substance, distinct from the taxable TB tine testing device addressed in an earlier ruli…
What records did an Illinois retailer need when an authorized person bought property for an exempt organization?
The retailer had to retain the Department letter showing the organization's active Illinois E number and detailed transaction records. A purchaser paying by another method than the organization's chec…
Were separately stated shipping-and-handling charges taxable when party-plan merchandise went to a hostess for customer distribution?
Generally yes. ST 10-0115-GIL says shipping and handling was part of the retailer's taxable cost of doing business when merchandise was sent to a party hostess or distributor who then delivered it to …
Were sales-based 'hostess dollars' excluded from taxable receipts as an unreimbursed discount?
No. ST 10-0114-GIL says credits awarded to a party hostess based on sales generated at the party were included in taxable gross receipts when applied to merchandise. The taxable value equaled the doll…
Did a real-property transfer into a combined business entity qualify for Virginia's merger, parent-subsidiary, or partnership recordation-tax exemptions?
The Department could not approve the claimed exemptions because the entity did not provide enough documents to prove that the transfer met the statutory merger, parent-subsidiary, or partnership condi…
Was a husband working and living overseas a Virginia domiciliary resident in 2006 because his family, home, and driver's license were in Virginia?
No. Although the husband had a Virginia home used by his family and had obtained and renewed a Virginia driver's license, the Department found he had established domicile in the foreign country and ha…
Were subscriptions to an online commercial-information database, upgraded data packages, and web workflow tools taxable in Virginia?
No. The core online database, upgraded electronic data packages, and web-based workflow add-ons were nontaxable service transactions because customers received no tangible personal property or softwar…
Could a federal IT contractor invalidate Virginia's audit sample or claim resale treatment for hardware tied to government contracts?
Not on the record presented. Virginia upheld the audit sample because recurring computer-hardware purchases made the large transaction representative rather than isolated. The taxpayer also had not co…
How did Illinois treat access codes, points cards, stored-value cards, virtual goods, and downloadable video-game software?
The GIL did not conclusively classify every product. A card or coupon redeemable for tangible personal property was an intangible when sold; tax arose when a retailer later transferred the property. E…
Did an unreimbursed program-funding discount reduce Illinois taxable gross receipts on promotional products?
Yes. ST 10-0112-GIL says a discretionary discount funded entirely by the seller reduced taxable gross receipts to the consideration actually received. Full or partial reimbursement from a manufacturer…
Did reselling access to an online employability assessment create Illinois sales or service tax when no property was transferred?
Generally no under the facts stated. ST 10-0111-GIL says a transaction with no transfer of tangible personal property created neither Retailers' Occupation Tax, Use Tax, Service Occupation Tax, nor re…
Were wastewater-treatment chemicals exempt as pollution-control property, and did customer direct-payment permits protect prior sales?
The wastewater chemicals remained taxable because the company had not shown that its wastewater system was certified pollution-control equipment. But direct-payment permits from two customers were val…
What Virginia tax underpayment and overpayment interest rates applied in the first quarter of 2011?
Virginia's state tax underpayment and overpayment rates were both 5% for the first quarter of 2011, two percentage points above the corresponding 3% federal rates. The 5% underpayment rate also applie…
Was a 42-month equipment 'lease intended as security' a conditional sale, sale-leaseback, or nontaxable financing?
Unresolved. ST 10-0110-GIL found the documents internally unclear: one provision appeared to transfer ownership to the lessor, while another said the arrangement created only a security interest. A gu…
Who owed Illinois Use Tax when custom countertops were sold and installed as part of one construction contract?
The construction contractor that purchased the countertops for permanent incorporation into the home was the end user and owed Use Tax on its cost. Under ST 10-0109-GIL, the customer did not owe Use T…
Could an out-of-state direct seller collect and remit Illinois tax for its independent distributors under one filing arrangement?
Potentially, but only through a Department-approved agency agreement. ST 10-0108-GIL says a manufacturer, importer, or wholesaler could use Form RR-80 to assume registration, return, and Retailers' Oc…
Were seed sales to farmers exempt as sales for resale, and did a seed seller have to register and file Illinois returns?
Seed sold to a farmer for raising crops that would be sold was a nontaxable sale for resale under ST 10-0107-GIL. Seed used to raise grass, crops, or other plants that the purchaser would use rather t…
What is South Carolina's tax interest rate for the period ending March 31, 2011 (per SC IL #10-14)?
3%. SC Information Letter #10-14 sets South Carolina's interest rate on tax underpayments and overpayments at 3% for the period January 1, 2011 through March 31, 2011. Interest is compounded daily, ex…
Could a multistate service partnership avoid Illinois's throwout rule and source exam fees by where the examinations occurred?
No, not on the petition submitted. The partnership treated states without partnership filing requirements as states where it was not taxable, but Section 303(f)(2) also treated it as taxable wherever …
Must a printer charge Colorado sales tax to print a bi-weekly newspaper that the owner distributes free to the public?
Yes. A bi-weekly newspaper does not qualify as a tax-exempt 'legal publication' under § 24-70-102 (that exemption is keyed to publishing frequency, such as daily), so it is taxable tangible personal p…
How did Florida tax a vehicle protection plan and a dealer's discretionary electronic tag-and-title processing fee?
The protection plan was taxed separately as a service warranty, not as part of the vehicle price. The dealer's optional $68 electronic filing charge was taxable as part of the vehicle sales price beca…
Could parents claim the Illinois education expense credit for dependent children who had no Social Security numbers because of a religious exemption?
Yes. After reviewing the federal return and the statement concerning the approved IRS Form 4029 religious exemption, IDOR corrected the Illinois return to allow a $313 education expense credit and sai…
Did the Capeharts owe a 20% negligence penalty and interest after failing to report gross receipts tax on $56,938 of 2006 consulting fees?
Only partly. The Capeharts negligently failed to report gross receipts tax on $56,938 of 2006 consulting fees, and statutory interest remained due despite their prompt payment after notice. But their …
Are monthly dues paid to a nonprofit homeowners association subject to Kansas sales tax?
Property owners' dues are exempt; associate members' dues are taxable. Monthly dues and assessments paid by Foundation Members (the property owners) to a nonprofit homeowners association — here, one w…
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