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 a 50% dealer-funded discount reduce the taxable price, and were electronically delivered sales leads taxable in Florida?
Only the net price after the contemporaneous 50% dealer discount was taxable. Sales leads delivered solely by email or direct software integration were nontaxable because they transferred neither tang…
Did an amended S-corporation return and explanatory note adequately report an IRS increase to a shareholder's federal adjusted gross income?
No. The taxpayer amended the S-corporation return but did not file an amended individual return or clearly explain how the IRS adjustment changed his federal adjusted gross income. The Department foun…
What annual compliance procedures must a Nebraska county, city, or village follow to run a keno lottery?
A sponsor must complete a defined set of annual keno compliance procedures drawn from the Nebraska County and City Lottery Act and its regulations. Revenue Ruling 35-10-3 lists them: an unannounced ob…
Is Utah Private Letter Ruling PLR 08-002 still valid?
No. The Utah State Tax Commission rescinded PLR 08-002 effective December 1, 2010. The substance of the original ruling is no longer published, and the ruling cannot be relied on by anyone going forwa…
Did Florida's tax exemption for project-bond documents continue after the bonds were redeemed and the borrower's mortgage obligations were modified?
No. The exemption protected related instruments only while the bonds were outstanding. After redemption, modified mortgage and lien documents securing reimbursement- and swap-agreement obligations inc…
When a manufacturer contributes its Georgia plant to a newly formed partnership in a Section 721 transaction, does the new entity qualify as an 'existing manufacturing facility' for Georgia's investment tax credit?
Yes. The Department ruled the new partnership qualifies as an 'existing manufacturing facility' under O.C.G.A. § 48-7-40.2. Although a sale, merger, or acquisition does not by itself create new eligib…
Is e-discovery access taxable when the customer logs in and uses the vendor's software to review and organize data?
Partly. When the customer uses the vendor's proprietary online tool to classify, organize, batch, and index its uploaded data -- the Data Capturer, Data Reviewer, and Data Manager access levels -- the…
I'm buying ~66 gas stations, then immediately conveying about 60 of those properties to a financing company and leasing them back on a 15-year triple-net lease with options to eventually buy some properties back at fair market value or a premium over the financing company's cost. Which of these steps -- my initial purchase, my sale to the financing company, and the leaseback itself -- are subject to New York's Real Estate Transfer Tax, and do any exemptions (like the 'mere change of form' or 'securing a debt' exemptions) apply?
Every step is a taxable conveyance, and no exemption applies -- including, notably, the lease itself. The petitioner planned to buy ~66 gas stations (fee and leasehold interests, plus equipment/invent…
Are electronic-discovery litigation support services -- where the vendor processes a client's own documents -- subject to NY sales tax?
No. The vendor collects, processes, searches, and organizes a client's own electronic documents for litigation -- categorizing, de-duplicating, threading emails, and making them searchable -- which ad…
Was the HCG product described in the ruling exempt from Florida sales tax without a prescription?
Yes. Florida treated the product as an exempt common household remedy used for diet control, and the ruling stated that it was exempt with or without a prescription.
Are charcoal briquettes sold for outdoor home cooking exempt from Virginia sales tax as fuel used for domestic consumption?
No. Virginia's domestic-consumption exemption specifically covered artificial or propane gas, firewood, coal, and home heating oil. Although the regulation said domestic use could include cooking, it …
Did a no-consideration deed between identically owned entities trigger value-based documentary stamp tax on unencumbered Florida property?
No. With identical proportional direct or indirect ownership, no encumbrance, and no other consideration, only minimum documentary stamp tax applied. A compensated ownership-interest transfer within t…
Could an electric utility assign its refund rights to a customer instead of directly refunding allegedly overpaid Florida sales tax?
Yes. The Department could not force the utility to refund the customer directly. The utility could issue a cash refund or credit, or assign its refund right so the customer could file directly with th…
Are antibacterial hand gels, soaps, and sanitizers exempt from NY sales tax as drugs, or taxable as cosmetics/toiletries?
They're taxable. Tax Law 1115(a)(3) exempts drugs and medicines, but it expressly excludes cosmetics and toilet articles 'notwithstanding the presence of medicinal ingredients.' These antibacterial ha…
Are an IT firm's support-service charges taxable when one fee covers both software work and hardware/equipment servicing?
It depends on how the bill is written. Services performed on computer software (maintaining, monitoring, debugging, adjusting settings) are exempt under Tax Law 1115(o), but services to hardware and e…
Which of a business's various revenue streams — journal sales, software, licensing, staffing, and document services — are subject to Kansas sales tax?
It varies by revenue stream. Taxable: sales of journal/medical articles and any related transaction, copyright, or customization fees; reprint sales; and prewritten 'document transmission' software (w…
What annual cap applied to Virginia Land Preservation Income Tax Credits issued during calendar year 2011?
Virginia set the calendar-year 2011 Land Preservation Income Tax Credit cap at $108,424,000. Under the statutory CPI-U formula, the Department calculated that the relevant 12-month average had risen a…
Did a one-year job, rented housing, and bar admission in another state establish that an individual had abandoned his Virginia domicile for 2006?
No. The taxpayer's one-year employment, temporary living arrangements, retained Virginia driver's license and vehicle registration, use of a Virginia address on tax returns, and return to Virginia sho…
Was an individual still domiciled in Virginia for 2007 when he had moved to another state and only a Virginia address on federal information statements linked him to Virginia?
No. The taxpayer had moved back to State A before 2007, established a permanent home and driver's license there, kept his business interests there, and spent most of the year there. Because the only 2…
Are custom-fitted sports mouth guards exempt from Virginia sales tax as dental services, durable medical equipment, or prosthetic devices?
No. The sports mouth guards were taxable tangible personal property, not exempt durable medical equipment or prosthetic devices. The dental-supply retailer could sell them to dentists tax-free for res…
Are an FBO's charges for aircraft community-hangar space and tie-downs subject to NY sales tax as a storage service?
No. Tax Law 1105(c)(4) taxes the service of storing tangible personal property, but the Department treats hangaring and tie-downs of aircraft as nontaxable when the owner or lessee has regular or imme…
Could a Virginia town obtain a Communications Sales and Use Tax Trust Fund share for qualifying 2006 revenue that it had not timely reported?
Yes. The town proved through an independent CPA's verification and town-treasurer records that it had collected qualifying telecommunications or cable revenue in fiscal year 2006. Under the adjustment…
Did Virginia repair and maintenance work performed by third-party providers create corporate income-tax nexus for an out-of-state coordinator?
It depended on each provider's relationship with the taxpayer. Purchasing Virginia services from an unrelated independent contractor and reselling them would not itself create nexus for a corporation …
How should a hotel calculate Virginia's continuous-occupancy exemption when an airline rents a changing number of rooms each day?
The hotel had to apply a rolling daily count rather than start each 90-day measurement period on the first of the month. Each day began a new continuous-occupancy period. Using that approach, the airl…
How did Louisiana tax hydraulic-fracturing labor and sand proppant used in oil and gas wells?
Separately stated well-completion and fracturing labor was not taxable because the well was immovable property. Sand proppant was taxable tangible personal property, and combining the charges made the…
Does the Kansas tire excise tax apply to racing tires sold for off-highway race cars?
Exempt from the tire excise tax. The Department ruled that racing tires sold for cars used exclusively on oval tracks or drag strips — tires marked 'Not Intended for Highway Use' and not street legal …
Were reprocessed medical devices labeled for physician-order and single use exempt from Florida sales tax?
Yes. The products met the exemption because federal law restricted them to sale by or on a physician's order and the FDA-approved label identified them as reprocessed devices for single use. The selle…
Did a prescription polidocanol injection used to treat varicose veins qualify for Illinois's lower drug tax rate?
The GIL did not expressly issue a product-specific conclusion, but its general rule treated prescription drugs and medicines bearing medicinal claims as eligible for the lower State rate described in …
Did a six-month filing extension move the three-year Virginia refund deadline when the taxpayer did not file by the extended due date?
No. Under the rules applicable to the 2004 return, the extension became void when the taxpayer failed to file by November 1, 2005. The three-year refund period therefore ran from the original statutor…
Did spending more than 183 days in another state, claiming its homestead exemption, and registering to vote there end a couple's Virginia domicile?
No. Although the couple spent most of each year in State A, claimed its homestead exemption, registered to vote there, and obtained State A identification cards, they kept Virginia driver's licenses, …
Can a Virginia dealer offset an audit assessment by claiming its customers paid use tax on the same untaxed sales?
Only with verification. The dealer remained liable because it had no exemption certificates or direct-payment permits and did not prove that its customers correctly paid use tax on the same sales. A c…
Is a copper-bearing IUD an exempt drug, or medical equipment, for NY sales tax?
It's medical equipment, not a drug. Tax Law 1115(a)(3) exempts drugs and medicines, and also exempts medical equipment -- but medical equipment is exempt only when bought by patients and is taxable wh…
If an association buys information services it both uses itself and resells to its members, how is NY sales tax applied?
Both ways. The geographic, demographic, and mapping data the association buys are taxable information services under Tax Law 1105(c)(1). The association is the end user as to data it uses in its own b…
Could a telecommunications provider use Illinois's manufacturing machinery exemption for equipment used to build its network?
No. ST 10-0105-GIL says Illinois did not allow the manufacturing machinery and equipment exemption for telecommunications equipment, even though another state might. The purchaser therefore had to pay…
How did Illinois tax short-term motorized RV rentals, equipment rentals, and related fees?
Motorized RV rentals of one year or less fell under the Automobile Renting Occupation and Use Tax described in ST 10-0104-GIL, while a minimum term over 365 days was outside that Act. Other equipment …
Did Illinois decide whether a New York provider's web-based software and training were taxable or created Illinois collection duties?
Unresolved for the described web-based provider. The Department declined to determine nexus and said ASP, hosting, and web-software guidance belonged in rulemaking. Under the 2010 rules it described, …
My business partner and I run a traveling antiques business with no office, storing merchandise at our home in the MCTD and selling at shows across the country. Do we owe MCTMT, and does it cover our out-of-state show income too?
Yes, but only on the portion of earnings allocated to the MCTD. A partnership's individual partners are subject to MCTMT as self-employed individuals if their net earnings from self-employment allocat…
If a personal income tax refund from a net operating loss carryback isn't paid within 45 days of the claim, does interest run from the loss year return's original April 15 due date or from the later, extended filing date?
It runs from April 15. Under Tax Law § 688(d), once a carryback refund isn't paid within 45 days of the claim, interest accrues from the due date of the loss year return determined without regard to e…
How could an Illinois restaurant document tax-free purchases of products it planned to resell?
A restaurant buying products that it would resell should document the exemption by giving its supplier a certificate of resale. The 2010 GIL directed the owners to 86 Ill. Adm. Code 130.1405 and enclo…
Must a Virginia auctioneer collect sales tax on storage-unit lien auctions, and did later Live Chat advice cancel the audit liability?
Yes. An auctioneer generally must collect Virginia sales tax on taxable property sold at storage-unit lien auctions; those sales were not exempt occasional sales. Alleged oral advice was undocumented,…
Could a construction contractor claim an Illinois enterprise-zone exemption for tools, safety items, rentals, temporary facilities, and other project purchases?
Not categorically. Each enterprise-zone exemption covered different property and required its own certification and use tests. Building materials generally had to be physically incorporated into enter…
How did Illinois treat retail and private vehicle transfers, military purchases, trade-ins, and long-term motor-vehicle leases?
Under the 2010 rules surveyed, retail sales of automobiles, trucks, motor homes, mobile homes, trailers, boats, motorcycles, and off-road vehicles were taxable. Private transfers could face separate v…
What proof did Illinois require for a sale-for-resale exemption, and could a seller recover tax remitted before receiving that proof?
A seller could document resale with a proper certificate containing the parties, items, signature, date, and an active registration or resale number. Missing documentation created a rebuttable presump…
What firearms and transaction charges were exempt during South Carolina's one-time Second Amendment sales tax holiday in November 2010?
Only qualifying handguns, rifles, and shotguns were exempt during November 26-27, 2010. Associated delivery or engraving could be exempt, but ammunition and separately sold parts, accessories, and sup…
Were consumable items bought by a residential-service provider exempt merely because Medicaid recipients used them?
No blanket exemption applied merely because Medicaid recipients consumed the items. Direct Medicare or Medicaid payments could be exempt as governmental purchases when supported by an active E-number,…
Did Illinois tax dark chocolate at the lower food rate because of claimed health benefits?
No. Illinois's 2010 candy rule did not distinguish dark chocolate from other candy because of claimed health benefits. Candy—sweetener combined with chocolate, fruit, nuts, or flavorings in bars, drop…
Is customer-owned excess renewable electricity taxable when it is banked under a net-metering plan and later offsets the customer's utility usage?
No. When the customer retained ownership of excess renewable electricity and banked it with the utility, later use of that electricity was not a utility sale or customer consideration, so its value wa…
Was a privately held REIT a Virginia captive REIT when no partner owned more than 50% and the general partner lacked majority voting or value control?
No. Although the REIT was not publicly traded and received more than 25% of its income from real-property rents, no single partner owned more than 50% of the fund, and the general partner's decision-m…
Could a construction subcontractor use separate accounting because its only Illinois contract produced a loss?
No. The petition was not filed 120 days before the extended due date, and the company had used separate accounting on its original return instead of filing and paying under the statutory method. IDOR …
Could spouses filing a joint Illinois return claim the property-tax credit for two separately owned principal residences?
Yes. IDOR recognized that married couples could have two principal residences during a tax year and said they could claim the tax paid on both when computing the residential property-tax credit. They …
Can Nebraska certify multiple independent laboratories to test bingo and keno equipment, and what must a lab do to be certified?
Yes -- the Department may certify independent testing laboratories (rather than contract with a single lab) to test and examine bingo and keno equipment, and may require manufacturers to use a certifi…
Were purging compounds used to clean plastic injection lines between production runs exempt from Virginia use tax as manufacturing supplies?
No. The compounds cleaned injection lines only after production stopped and before the next run, generally every one to four days. Virginia treated that activity as general maintenance rather than an …
Were injectable dermal fillers used for HIV-treatment-related facial lipoatrophy exempt from Virginia sales and use tax as prosthetic devices?
No. Virginia found that the temporary dermal filler restored facial volume and improved appearance but did not replace a missing body part or bodily function. It therefore remained a cosmetic treatmen…
New York Advisory Opinion TSB-A-10(12)C: Are a parent's disregarded subsidiaries treated as one taxpayer for the QEZE real property tax credit, and does the group pass the employment test as a new business?
Treated as one taxpayer. A petitioner and its disregarded subsidiary and NewCo are a single Article 9-A taxpayer for the QEZE real property tax credit, with the certification imputed to the group; the…
Did member, employee-member, training, maintenance, refueling, relocation, and demonstration use preserve a boat club's exclusive-rental treatment?
Yes. Member use occurred under bareboat rental agreements, and the stated staff uses were reasonably designed to further the rental business. Any unrelated owner use or removal from rental inventory c…
Did the physician in Louisiana PLR 10-023 qualify for the small town doctor income tax credit?
Yes. The physician had the required Louisiana license, qualifying office and hospital locations, relocation history, three-year practice commitment, and acceptance of Medicaid and Medicare.
Did Rose Ann Mathews owe gross receipts tax, penalty, and interest on counseling services performed in Valencia County in 2005 and 2006?
Partly. Mathews owed gross receipts tax, negligence penalty, and interest because counseling services performed in New Mexico were taxable and lack of knowledge did not excuse two years of nonfiling. …
If I file a joint New York State income tax return with my spouse, will my separate assets become subject to the liens from tax warrants that were filed and docketed against my spouse before we married?
No. Filing a joint New York income tax return does not subject a spouse's separate assets to liens from warrants docketed against the other spouse before the marriage, and does not make that spouse li…
How does a customer's trade-in reduce the NY sales tax on a long-term motor vehicle lease?
The trade-in credit must be applied against the capitalized cost (the lease's 'sale price'), which lowers the monthly payments and therefore the taxable amount -- it can't be taken a second time off t…
Which of a railroad IT provider's hosted products are taxable, and how are they sourced for NY sales tax?
They split three ways. Products where the customer uses the provider's hosted software to manipulate its own data are sales of prewritten software (taxable, Tax Law 1101(b)(6)) -- Transportation Manag…
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