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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Could reservation residents subtract the husband's interest, dividends, and pension when the sources were outside the reservation?
No. Virginia protected income earned solely from pursuits on the reservation, not investment income from outside banks, funds, and corporations or a pension generated by off-reservation employment. Wr…
Could reservation residents subtract the wife's wages, investment income, and pension from Virginia income?
The investment and pension subtractions were denied: outside banks and investment providers produced off-reservation income, and the pension arose from off-reservation employment. The wife's temporary…
Could a Virginia reservation resident subtract interest, dividends, and a pension tied to off-reservation employment?
No. Virginia's policy protected income earned by a reservation resident solely from pursuits on that reservation, but not income from outside institutions or off-reservation employment. The taxpayer's…
Can an Empire Zone business claim QEZE sales-tax exemptions for purchases made before it got its QEZE certification?
No. Being certified as an Empire Zone business under the General Municipal Law isn't enough -- to claim the QEZE sales-tax benefits, the business must also apply for and receive a QEZE Sales Tax Certi…
Did Illinois County School Facility Occupation Tax apply to wholesale oil sales made for resale?
No, when the wholesale oil sale was a validly documented sale for resale. The County School Facility Occupation Tax incorporated the state occupation-tax exemptions, so an item exempt from state Retai…
When was a custom bridge-control system treated as special-order property subject to Service Occupation Tax rather than a taxable retail sale?
A special-order machine was treated as a service transaction only if all three tests were met: the buyer primarily hired the seller's engineering or scientific skill; the property had value only for i…
Are hosted business-collaboration and electronic-messaging subscription services subject to South Carolina sales and use tax?
Yes. The Department treated the described hosted collaboration and messaging subscriptions as taxable communications services, taxed all associated fees, and sourced them to each end user's primary bu…
When did the Fairfax County Circuit Court say a dealer acted in good faith when accepting a sales-tax exemption certificate?
The court said a dealer could establish good faith and reasonable care if the certificate facially covered a potentially exempt use, or if the dealer's actual knowledge reasonably supported the purcha…
Were spouses who moved out of Virginia in February 2007 full-year residents, and how did they report income before and after the move?
No. The couple proved they spent fewer than 183 days in Virginia and established a new domicile when they bought and moved into an out-of-state condominium in February 2007, followed by other abandonm…
Did one executive's Virginia home office create a definite place of business and BPOL-taxable receipts for a foreign online-game company?
Apparently not on the facts presented. Although an executive continuously worked from a Virginia home office, the foreign online-game company did not hold itself out as operating there, and most busin…
Could a surviving annuitant claim Virginia's disability-income subtraction when the recipient was not permanently and totally disabled?
No. Although the husband received payments reported as disability income after his disabled former spouse died, Virginia required the taxpayer claiming the subtraction to be absent from work because o…
Did Virginia's forest-products harvester exemption cover equipment and supplies used by a woodland-renovation land-clearing business?
No. Virginia's agricultural statute did not create a general exemption for farming-related work. The forest-products provision covered persons engaged in severing forest products for sale or for use i…
Did Virginia's occasional-sale exemption apply when equipment moved from a liquidated company through an owner to a successor business?
Mostly. Virginia treated the transfers as sales, but the owner's transfer of four documented pieces of equipment to the successor business qualified as an occasional sale because the owner did not use…
Was a communications provider the taxable user of customer-premises equipment even though it separately charged customers tax on equipment leases?
Yes. The customers' true object was communications service, not the equipment, so the provider was the taxable user of equipment capitalized and used to deliver that service. The separate communicatio…
New York Advisory Opinion TSB-A-10(9)C: How may a taxpayer measure whether a building (including shared conference rooms) is principally used in qualifying activities for the Article 9-A investment tax credit?
By measuring qualifying use of the space. For the investment tax credit, a building is principally used in qualifying activities if more than 50 percent of its usable business space is so used; tracki…
What happened to Illinois GIL ST 10-0039-GIL on the air-carrier fuel exemption for flights involving a United States possession?
Illinois rescinded ST 10-0039-GIL effective July 27, 2010. The Department was reconsidering whether a United States possession counted as a location outside the United States for the air-carrier fuel …
Did retaining an unrenewed Virginia driver's license make a Foreign Service officer and spouse Virginia domiciliaries after they left the state?
No. The couple had established Virginia domicile while living and working there from 2001 to 2003, but they abandoned it when the officer transferred overseas, they gave up their apartment, the spouse…
Did spouses who established another-state domicile still owe Virginia tax on the husband's salary for days he worked in Virginia?
Yes. Virginia accepted that both spouses had changed domicile to another state for 2006 despite retaining a Virginia home, licenses, voter registrations, and one vehicle. But the husband worked in Vir…
Did valid resale exemption certificates protect a Virginia dealer from tax on paper and office-supply sales to two customers?
Yes. The dealer timely received signed resale certificates containing the information Virginia law required, and the certificates stated that purchases were for resale unless a purchase order said oth…
Were lump-sum charges for electrostatic powder coating of customer-owned products taxable fabrication in Virginia?
Yes. Virginia treated electrostatic powder coating embedded by heat as fabrication that changed the form or state of customer-owned tangible property. The full lump-sum labor-and-material charge was t…
Did plastic strapping used to secure lumber bundles for shipment qualify as exempt packaging or property bought for resale?
No. Virginia narrowly defined packaging as placing goods in a package or container. Plastic strapping merely wrapped and restrained lumber bundles for transport, making it a taxable transportation dev…
Did a microarray scanner used only to study competing technology and develop a new scanner qualify for Virginia's R&D exemption?
Yes. The manufacturer did not use the purchased scanner in manufacturing or administration. It analyzed the scanner's technology solely to help develop its own comparable product. Virginia treated tha…
Could Virginia estimate restaurant cash sales and untaxed purchases when the operators' records were missing or unverifiable?
Yes. Missing register tapes, sales logs, bank statements, and purchase records allowed Virginia to reconstruct the restaurants' liabilities from the best information available. The credit-card-based c…
Did invoice language saying tax was included relieve a flooring contractor from use tax when the vendor did not separately state or remit Virginia tax?
No. The invoices said tax was included but did not separately state a Virginia sales-tax charge, the seller was not registered to collect Virginia tax, and no evidence showed remittance. The contracto…
Are a financial-data company's charges for data feeds, online reports, application software, technical/research support, and training subject to NY sales tax?
It depends on the item. The company's data feeds are taxable information services (Tax Law 1105(c)) -- they are compilations drawn from a common database that every subscriber accesses, so the 'person…
Was an installer of athletic floor tiles and other permanently installed property a retailer or a using and consuming contractor in Virginia?
Virginia treated the installer as a using and consuming contractor. It did not maintain the retail or wholesale place of business and inventory required for retailer treatment, and it sold no products…
Did a foreign manufacturer lose P.L. 86-272 protection when it approved its distributor's customers and used an Illinois home-office salesperson?
IDOR did not make a final nexus determination. An Illinois-resident employee's in-home-office marketing to wholesalers to encourage purchases from an unrelated distributor could be protected missionar…
Were optional computer-server service plans taxable when sold with the server and related warranties?
Yes. The plans' hardware coverage, technical support, and software updates were part of the server sale and entered the taxable sales price even when optional, separately stated, and separately billed…
What is South Carolina's tax interest rate for the period ending September 30, 2010 (per SC IL #10-5)?
4%. SC Information Letter #10-5 sets South Carolina's interest rate on tax underpayments and overpayments at 4% for the period April 1, 2009 through September 30, 2010. Interest is compounded daily, e…
My organization administers a union health and welfare benefit plan funded by employer contributions under collective bargaining agreements. Are the benefits we pay out subject to MCTMT, and do we have to pay it?
SUPERSEDED -- see TSB-A-10(1.1)MCTMT, issued April 8, 2011, which explicitly replaced this opinion on the same petition and facts. This original opinion concluded that union health and welfare benefit…
Could a Virginia contractor exclude receipts earned in other localities from the BPOL tax base of the county containing its principal office?
Only with supporting evidence. The contractor had not proved a continuous physical presence creating a definite place of business at its out-of-county worksites. It received 30 days on remand to docum…
Which car-rental charges are subject to Kansas sales tax, and how are coupons and insurance charges treated?
Almost every charge on a Kansas car-rental bill is part of the taxable rental price. The Department ruled that drop charges, child-seat and ski-rack rentals, GPS and satellite radio, additional-driver…
Why did IDOR request Forms W-2 after electronically accepting an Illinois individual return?
Electronic acceptance meant only that the return entered normal processing without a fatal transmission error. It did not verify every item or prevent later edits. IDOR could still request Forms W-2 t…
How did Virginia sales tax apply to supermarket rewards, retailer-funded discounts, nominal prices, and manufacturer-funded coupons?
Retailer-funded rewards generally reduced the taxable sales price. A free item earned through qualifying purchases was not taxed again at redemption, reward tickets and points worked like retailer cou…
Is a company that supplies MRI/CT equipment, staff, and supplies to a hospital -- billed per scan -- renting taxable equipment, or providing a nontaxable service? And are its own purchases taxable?
The company is providing a NONTAXABLE diagnostic-imaging service to the hospital, not renting medical equipment and supplies -- so its monthly per-scan fees aren't subject to sales tax. The key is tha…
Could a diversified corporate group stop filing Florida consolidated income-tax returns and switch to separate returns?
Yes, subject to four redacted-year conditions covering the effective date, intercompany and deferred items, a waiting period before reconsolidation, and recognition of deferred federal gains.
Could a permanently disabled Virginia taxpayer subtract third-party sick pay reported as wages on Form W-2?
No. Although the taxpayer was permanently and totally disabled, the insurer reported the payments as wages on Form W-2. Virginia classified them as temporary sick pay, not qualifying disability income…
Is a Texas local government corporation created under Transportation Code Chapter 431 exempt when it buys vehicles and other property?
Yes. The corporation's acquisition of property was exempt under Transportation Code § 431.102(b) and Local Government Code § 394.905, covering motor vehicles and other property. It was not a public ag…
If a retired SUNY employee rolls their Optional Retirement Program pension into an IRA, are later distributions from that IRA exempt from New York income tax?
The portion of each IRA distribution that represents a return of the rolled-over ORP pension contribution remains exempt under Tax Law § 612(c)(3)(i), since it is still attributable to state employmen…
Are sales of pumpkins by a supermarket or other business subject to NY sales tax?
It depends on the type of pumpkin. Pie pumpkins (sugar, deep red, golden cushaw and similar gourds normally used in cooking pies, cakes, breads, and cookies) are exempt food sold for human consumption…
Did a Virginia orthopaedic-implant seller owe use tax on instrument kits removed from resale inventory and provided free to hospitals?
It depended on the hospital. Instrument kits removed from resale inventory and donated to a § 501(c)(3) organization were exempt. If a hospital lacked that designation, the seller owed use tax on the …
When could a Virginia government contractor buy property tax-free as the government's purchasing agent?
Only when the contractor was officially designated to buy in the government's name and the government's credit was directly bound to vendors. The documents and actual conduct had to make the governmen…
Could individual owners claim Virginia's recyclable-materials processing equipment credit for equipment purchased by a business in 2005?
Not on the 2005 individual return. Virginia's authority for individuals to claim the credit had expired after 2003, and pass-through eligibility did not return until tax years beginning in 2008. The a…
Could Virginia attribute related-company management fees and embedded royalties directly to nonresident owners on their individual returns?
Not by the audit method used. Virginia said § 58.1-446 addresses corporate adjustments and did not support attributing the full management fees directly to the individual owners. The at-cost managemen…
Did a professional athlete abandon Virginia domicile by obtaining another state's license and voter registration while training and playing elsewhere?
No. Virginia found that the couple remained domiciliary residents for 2004-2006. The husband's other-state driver's license, voter registration, training, and four-month lease did not outweigh the Vir…
Was a corporation's president and sole owner personally liable as a responsible officer for unpaid Virginia corporate income tax?
Yes. Virginia found that the president and sole owner had authority over tax filings and payments, knew the 2006 tax was due, and did not prove that funds or control were unavailable. Her history of s…
Was an out-of-state company that furnished and installed fences in Virginia a retailer required to collect Virginia sales tax?
Yes. The company met Virginia's retailer criteria for fence sellers and had enough Virginia activity to register and collect tax. Its other-state contractor theory and tax-credit claim lacked proof. T…
Was a parts-and-labor maintenance contract for machinery used directly in manufacturing exempt from Virginia sales tax despite a late exemption certificate?
Yes. The exemption certificate obtained after the contract sale was not valid for that transaction, but Virginia independently confirmed that the contract serviced exempt machinery used directly in ma…
Did a Virginia property owner receive recordation-tax refunds when a deed to a relative was followed by foreclosure the next day?
Only in part. The deed validly conveyed valuable rights when recorded, so the state and local tax based on property value was not refundable merely because foreclosure followed the next day. But Virgi…
Does a late amended Louisiana motor-fuel return eliminate the administrative discount earned on the original return?
No. A timely original return and payment kept their administrative discount. But additional tax reported on an amended return after the original deadline received no discount.
Could an ice cream parlor keep the difference after collecting Virginia's general sales tax rate but filing returns at the reduced food rate?
No. Although an ice cream parlor could charge the reduced rate on eligible food packaged for home consumption, this business actually collected the general rate and remitted only the reduced-rate amou…
Could a full-time worker subtract Civil Service Retirement System disability payments on a Virginia return?
No. A claimant had to receive disability income and be absent from work because of permanent and total disability. The taxpayer worked full time in competitive retail-food employment, performed ordina…
Could taxpayers deduct Schedule C expenses for an information technology activity that won no contracts, kept no separate books, and included personal purchases?
No. Virginia upheld the assessments because the taxpayers did not operate the information technology activity in a businesslike manner and claimed personal expenses as business deductions. They won no…
Could taxpayers deduct both the expenses of a construction business and the cost of renovating and landscaping their personal home?
Only in part. Virginia found that the wife's construction company was operated for profit, so eligible business expenses could be claimed. But renovation and landscaping costs for the taxpayers' perso…
Which subcontractor-furnished landscaping, concrete, and refrigeration items remained taxable in a Virginia general contractor's audit?
Virginia partly revised the audit. Landscaping subcontractors performing real-property work were the taxable users of installed plant and irrigation materials, so those items were removed. Concrete en…
Did a parent's purchase and accounting transfer of equipment to its subsidiary count as one Virginia sales-tax transaction?
No. The vendor sale to the parent and the parent's transfer to its subsidiary were separate transactions because intercompany accounting entries were consideration. The parent could buy the equipment …
Did a taxpayer establish a new domicile outside Virginia despite retaining a Virginia home, license, vehicles, and voter registration?
Yes. Although the taxpayer retained several Virginia ties, he lived and worked in the other state with his wife, used that address for federal tax and financial records, claimed it for withholding, jo…
Could a Virginia contractor use its mining customers' exemption certificates for equipment used at mine, gas-well, and reclamation projects?
Not on the record provided. The contractor did not prove that the audited equipment was used directly in qualifying mining, gas, or legally required well-area reclamation activities. It also could not…
Are receipts from a call-tracking service sold to car dealerships subject to NY sales tax?
No. The call-tracking service -- which routes toll-free advertising calls, records the conversations, runs exit surveys, and measures advertising performance for each dealer -- is not taxable. It is N…
Is a transfer of prewritten software taxable in NY, and how is the sale sourced when the code sits out of state but is used here?
Yes, it's taxable, and it's sourced to where the software is used in New York. Prewritten computer software is tangible personal property regardless of how it's conveyed (Tax Law 1101(b)(6)), so the c…
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