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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Were catheter securements, arterial bandages, and disposable or reusable blood-pressure cuffs exempt from Florida sales tax?
Yes. The securements and arterial bandages qualified as exempt bandages or adhesive materials, and both disposable and reusable cuffs qualified as parts of blood-pressure monitors. Resale certificates…
Does a church's conversion from an unincorporated nonprofit association to a corporation sole create Colorado sales or use tax liability on the personal property it already owns?
No tax. A church's conversion from an unincorporated nonprofit association to a corporation sole does NOT create Colorado sales or use tax liability on the personal property it owns. Even assuming the…
Is a single-use medical catheter exempt from Colorado sales and use tax when the manufacturer sells it to a healthcare provider who uses it on a patient?
Taxable. A single-use catheter that a healthcare provider buys from the manufacturer and uses to treat a patient is NOT exempt from Colorado sales or use tax. The therapeutic-device exemption only app…
Could Illinois residents claim a Schedule CR credit for Wisconsin income tax paid on employee wages?
No. Illinois taxed its residents' wages, but the Illinois-Wisconsin reciprocal agreement exempted an Illinois resident's employee compensation from Wisconsin income tax. If Wisconsin tax was withheld …
Was rent paid to a city for land used solely for a cellular tower, equipment cabinets, generators, and related equipment subject to Florida sales tax?
No. The property was leased solely for a communications center providing mobile communications services, so the rent qualified for the real-property exemption in section 212.031(1)(a)5.
Is Illinois sales tax computed before or after an instant appliance rebate that a manufacturer or utility reimburses to the retailer?
Before the reimbursed rebate. If a third party reimbursed the retailer for the instant discount, that reimbursement remained part of taxable gross receipts—so the example used the full $1,000 price, n…
Can Illinois body shops buy sandpaper, masking tape, paint guns, and other repair supplies tax-free for resale?
No, not when the shop uses or consumes the item instead of physically transferring it to the customer. Sandpaper, masking tape, thinners, brushes, paint guns, wrenches, and shop tools were taxable whe…
Could an affiliated corporate group elect combined Virginia returns beginning with its first full taxable year in 2009?
Yes. The taxpayer and its Virginia affiliate became an affiliated group in May 2008, but 2009 was the first full taxable year in which the group was subject to Virginia income tax. They could elect co…
Could a corporate officer avoid personal tax liability because an accountant incorrectly advised that the dissolving corporation owed no tax?
No. The president and sole shareholder knew a final return was required, paid other creditors and himself, reserved no funds for tax, and wound up the corporation. Virginia found the nonpayment volunt…
Was a 1996 Virginia refund claim timely when the amended return was filed in 2000 but the IRS accepted the NOL carryback in 2007?
Yes, on the specific facts. The taxpayers filed the federal and Virginia amended returns in January 2000. Virginia delayed processing while the IRS reviewed the net-operating-loss carryback; the IRS u…
Could a Virginia resident claim credit for New York tax on salary earned while telecommuting from Virginia for a New York employer?
Yes. New York taxed the salary under its convenience-of-the-employer rule and did not credit Virginia tax, while Virginia law did not prohibit its own resident credit. Virginia allowed a credit for th…
Was a taxpayer domiciled in Virginia for 2005 because he had obtained a Virginia driver's license and registered to vote?
No. The taxpayer had lived abroad since 2003, his child lived and attended school there, he owned no Virginia property, and he reported self-employment income as foreign earned income using the foreig…
Did spouses establish domicile outside Virginia for 2005 despite keeping Virginia licenses, vehicle registrations, and withholding?
Yes. After their Virginia employer failed, the spouses filed bankruptcy, lost their Virginia home, rented a permanent home in another state, received financial documents there, and sought work there a…
Were dental crowns, cements, sealants, resins, and similar products exempt as prescription or nonprescription drugs?
Generally no. Virginia relied on FDA classification: items classified as medical devices did not qualify for the prescription or nonprescription drug exemptions merely because they contained drugs or …
Was a custom digital orthophotograph taxable because the completed image was delivered on a CD?
No. The true object was the professional photogrammetric work—flight, photography, triangulation, scanning, geometric correction, and production of the digital image—not the CD used to deliver it. Vir…
Did a real-property contractor owe use tax when vendors failed to separately charge tax on materials, pumping, countertops, and government-job purchases?
Yes. A real-property contractor was the user and consumer of materials used in its contracts and had to accrue use tax when vendors did not collect it. Unsupported statements that tax was included or …
Were club equity-membership contributions and later transfers exempt from Florida admissions tax as ownership interests?
Yes. The memberships carried certificates, voting rights, transferable ownership, and proportional liquidation rights, so all five described issuances, sales, redemptions, and resales were transfers o…
Should an Illinois telecommunications carrier charge Telecommunications Excise Tax to a consular official who holds a federal diplomatic tax exemption?
No, to the extent the consular official actually enjoyed the federal exemption. Illinois said section 4 barred the tax where federal law prevented state taxation, so carriers otherwise required to col…
What enforcement rules and penalties did Virginia's 2010 cigarette-tax guidelines establish for unstamped and contraband cigarettes?
The guidelines required stamping agents to stamp cigarettes before shipping them to Virginia wholesalers or retailers and set escalating unstamped-pack penalties for agents and other persons: $2.50 pe…
Could a fiscal agent file Virginia income-tax withholding in aggregate for thousands of consumer-directed home-care employers?
Yes, conditionally. Virginia allowed the fiscal agent to file one aggregate withholding return only if it was also permitted to file aggregate federal withholding and the unified Virginia filing cover…
Did a city's owner direct-purchase manual satisfy Florida's public-works exemption for construction materials?
Yes. The city would issue purchase orders, receive invoices, pay vendors, retain title, and bear insured risk of loss. The ruling did not cover materials manufactured or fabricated by contractors.
When must an Illinois retailer report later customer payments, and when does temporary storage avoid Use Tax?
A retailer filing on the gross-receipts basis reported later payments in the period received; gross-sales filers paid upfront and had to notify the Department to change methods. Temporary-storage reli…
Can an Illinois retailer exclude used gaming hardware or software traded toward a new item?
Only if the traded item was of like kind and character to the item sold. The retailer could accept multiple trade-ins and needed sufficient records, but no special certification was required. The GIL …
Does donating medical instruments to an Illinois nonprofit hospital avoid Use Tax because a direct sale to the hospital might be exempt?
No. The donor was the end user and made a taxable use by giving the instruments away, regardless of the donee's entity type. Illinois said a donation differs from an exempt sale to an organization and…
Could taxpayers obtain refunds for long-term-care premium deductions claimed on late 2003 and 2004 amended returns and a missing 2006 return?
The 2003 and 2004 refunds were barred because the amended returns were filed after Virginia's three-year deadline, and a later policy change did not extend that period. The Department lacked authority…
Is installing window film a taxable service or a nontaxable capital improvement in NY?
It depends on whether it's part of a new/replacement window or applied to an existing one. Applying window film in connection with the original installation or complete replacement of a window is a ca…
Are a yacht-club member's mooring fees subject to NY sales tax as club dues?
Yes -- they're taxable dues. Tax Law 1105(f)(2) taxes dues paid to a social or athletic club. The yacht club is a 'club' because its members control elections, the selection of new members, and manage…
Are comic books, graphic novels, and trade paperbacks exempt from NY sales tax as periodicals?
It depends on the format. Comic books published serially under the same title at least four times a year are exempt periodicals under Tax Law 1115(a)(5). That includes back issues -- but only if the b…
When may an Illinois nonprofit with an E number hold a public fundraiser sale without Retailers' Occupation Tax?
Only within narrow exceptions for member sales, noncompetitive sales, or occasional dinners and similar activities. An Illinois E number was required, federal 501(c)(3) status alone was insufficient, …
How did Illinois treat call-tracking services that electronically delivered reports and used toll-free numbers?
If no tangible property was transferred, the service produced no Retailers' Occupation or Use Tax under the general rule, and electronic data was not tangible property. A provider using—but not resell…
Did Illinois decide whether an out-of-state seller of prostate immobilization devices had to register and collect tax, or whether the devices qualified for the medical-appliance rate?
No specific determination was made. Illinois declined to decide the seller's nexus and only outlined the 2010 nexus rules. It also explained that a medical appliance received the reduced rate only whe…
When did Illinois treat electronically delivered canned software, software licenses, and maintenance agreements as taxable?
Electronically delivered canned software was generally taxable, but a software license and its updates were not taxable if the license met every requirement in 86 Ill. Adm. Code 130.1935(a)(1), includ…
When should an Illinois appliance or home-theater installer collect sales tax from the customer, and when is it a construction contractor owing Use Tax on cost?
A retail sale of an appliance or other item remained taxable when installation was separately contracted; the separate installation charge was not subject to Retailers' Occupation Tax. A single contra…
Did retired spouses establish domicile outside Virginia despite lengthy return visits and a Virginia-registered automobile?
Yes. The spouses sold their Virginia home, established a permanent home in another state, registered and voted there, moved or disposed of their vehicles, obtained that state's driver's licenses, and …
Could Virginia proportionally allocate deductions and a dependent exemption between a resident spouse and a nonresident servicemember?
Virginia had to restore the dependent exemption because the spouses had mutually assigned it to the resident spouse, so it was separately accounted for. But Virginia correctly allocated untraced itemi…
Did a taxpayer establish foreign domicile by 2006 despite retaining an unrenewed Virginia driver's license and automobile?
Yes. The taxpayer moved abroad in 2002, pursued an advanced degree as part of obtaining permanent status, secured permanent employment, leased a home, bought a local car, sold her Virginia rental prop…
Did a taxpayer remain domiciled in Virginia while living abroad on a renewable temporary work permit during 2006?
No. The taxpayer sold his Virginia home and cars, moved his family and property abroad, held a renewed apartment lease and work permit, obtained foreign licenses and a vehicle, joined local organizati…
Did nonresident partners have Virginia-source income from a Virginia limited partnership, and could prior losses offset the 2005 income?
Yes, the husband had Virginia-source pass-through income because the limited partnership held assets and conducted business in Virginia, and partnership items retained their source and character when …
Were a nonprofit children's museum's birthday-party packages taxable sales of property or exempt service transactions?
They were exempt service transactions. Under the true-object test, customers bought the facilitated museum birthday experience, not the decorations, craft supplies, goodie bags, or other property incl…
Could a sheet-metal contractor overturn an audit sample, obtain credits, or limit the audit period based on alleged Department advice?
No. The contractor did not prove that the audit sample was unrepresentative, that it was entitled to credits for tax paid on items later sold, or that it had received qualifying erroneous written advi…
Did a communications-equipment seller prove that Virginia's three-month audit sample was flawed or that a detailed audit and more customer-use-tax credits were required?
No. The taxpayer selected a block sample instead of the Department's broader Invoice Capture Tool procedure and did not prove that the three-month sample was unrepresentative or flawed. A detailed aud…
Could Virginia recover a refund created when federal refund offsets were credited to a taxpayer and later reversed?
Yes. Federal refund offsets were temporarily credited to the taxpayer after his older Virginia assessments had been abated, producing refund checks that he cashed. The federal government later reverse…
Did affiliated bankruptcy-remote receivables companies have Virginia corporate-income-tax nexus or Virginia-source income?
On the stated facts, the bankruptcy-remote receivables companies did not appear to have Virginia nexus. Under Virginia's regulatory cost-of-performance method, they also had no Virginia property, payr…
Was a computer fee taxable when computers were supplied with online tutorial services, and who owed tax on the computers?
The fee charged to educational institutions was not taxable because the true object was online tutorial service and students could use another computer. But the provider was the taxable user and consu…
Did Virginia tax apply when vendors shipped goods directly to a company's franchisees outside Virginia under out-of-state delivery contracts?
No. The contracts required delivery to recipients outside Virginia, and the transactions were not completed until the goods were physically delivered there. Virginia agreed that those sales qualified …
Were exemption certificates alone enough to support a retailer's exempt sales, and were cardboard roof protectors exempt packaging?
No on both issues. Properly completed exemption certificates did not eliminate the retailer's duty to provide transaction records showing that the purchases qualified, including whether exempt-organiz…
Were hotel free-to-guest and pay-per-view programs delivered by satellite taxed as direct-to-home satellite service?
Yes. Both services used the direct-to-home satellite rates—then 10.8% state plus 2.37% gross receipts, with no local rate. The TAA could not certify the provider's database, but a 0.75% collection all…
How did Illinois tax a truck-stop service package combining climate control, television, internet access, electricity, and a separately sold window adapter?
Services with no transfer of tangible property, including television programming, were not subject to Illinois sales and service occupation taxes under the stated rules, while the separately sold plas…
Does an Illinois seller avoid tax when an out-of-state buyer or its representative picks up goods in Illinois for immediate removal, or when the buyer claims resale?
No interstate-commerce exemption applied when the buyer or its agent took possession in Illinois, even if the goods were immediately carried out of state. The Illinois seller therefore owed tax unless…
Did an Illinois public university owe Retailers' Occupation Tax when it sold its own educational publications to the public?
Illinois gave no specific determination. It said the university's sale of the submitted educational materials appeared likely to further its governmental function and therefore would not incur Retaile…
Could an out-of-state administrative-services company have Illinois income-tax nexus through an affiliate's Illinois employees?
IDOR did not decide nexus because the determination was fact-specific. It explained that a taxpayer generally had Illinois nexus when its agents were physically present in the state providing services…
Was the complete prescription catheter-and-clip system used in a mitral-valve repair procedure exempt from Florida sales tax?
Yes. The interdependent catheter and clip-delivery components were sold for one procedure and were prescribed medical devices temporarily or permanently incorporated into a patient by a licensed pract…
What 2010 Illinois tax rules did the Department give for cloud computing, travel charges, scaffolding rentals, and fuel, tobacco, and alcohol excise taxes?
There was no single yes-or-no answer. Illinois said cloud transactions with no canned software or tangible property transferred incurred no Retailers' Occupation or Use Tax, but said ASP and software-…
How can a landlord allocate a lump-sum lease between taxable equipment and nontaxable real property for NY sales tax?
Only with a reasonable, documented allocation -- otherwise the whole rent is taxable. When real property and taxable tangible personal property (here a hotel's furniture, fixtures, and equipment) are …
Did Illinois approve a service-company tax matrix, and how did it explain tax on property transferred with services, electronic data, software, and equipment leases?
No. Illinois would not approve the private tax matrix. It explained that services with no tangible-property transfer generally produced no Retailers' Occupation or Use Tax, while property transferred …
Did Illinois approve a seller's export affidavit, and what documents supported exemptions for foreign shipments through freight forwarders or sales for resale?
Illinois did not approve the proposed Statement of Goods for Export. It said an interstate or foreign-commerce exemption could apply when the seller was obligated to deliver the property out of state …
Could Illinois municipalities tax satellite television, and did satellite programming trigger Illinois Telecommunications Excise Tax?
Satellite television programming was generally not subject to Illinois Telecommunications Excise Tax, although retail software sold to access the service could incur Retailers' Occupation Tax. The Dep…
Which purchases qualified for Virginia's manufacturing exemption in a furniture manufacturer's use-tax audit?
Virginia granted limited adjustments but upheld most contested tax. Items merely essential, facilitative, used for maintenance, or used after production were not directly used in manufacturing; in-hou…
Did a Section 501(c)(3) dog-rescue charity funded only by contributions have to file Illinois Form IL-990-T?
No, on the facts stated. For a federally exempt organization, Illinois base income was unrelated business taxable income determined under IRC Section 512, without deducting Illinois income tax. The ch…
When did Illinois exempt farm machinery and equipment, and how were farm real-estate improvements taxed?
Machinery, equipment, and replacement parts used primarily in production agriculture could be exempt when the purchaser certified the qualifying use. Ordinary real-estate improvements such as fences, …
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