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 selling gift codes or cards through Illinois retailers create nexus, and when was Illinois sales tax due on the gift-code transaction?
Illinois made no nexus determination for the gift-code issuer or affiliated online retailers. It did decide the transaction sequence generally: selling a card or code that only gave the buyer a right …
Could Illinois grant a one-day sales-tax return extension on request, and what items qualified for the reduced medical-appliance rate?
No. Illinois said retailers had to meet the statutory return deadlines and the Department lacked authority to grant the requested one-day extension. It also explained that a medical appliance received…
Was payroll apportionment automatically required to split a cable provider's BPOL gross receipts between two local offices?
No. Virginia treated payroll apportionment as a last-resort method used only when it is impractical or impossible to attribute service receipts under the general definite-place-of-business rules. The …
Did a military spouse abandon Virginia domicile by following her active-duty husband to another state for two years?
No. Virginia found that the spouse had established Virginia domicile in 2000 and did not abandon it during the two-year duty assignment. She kept the Virginia home where her children lived, retained a…
Did a federal employee change domicile when his paid education program moved him from Virginia to college and work assignments in two other states?
Yes. Virginia found that the employee changed domicile to the college state in August 2004. Employer records showed he lived and worked in the two other states, spent little time in Virginia, and file…
How did Virginia resolve a couple's domicile, college-savings, pension, age-deduction, and appeal-interest claims for 2006 and 2007?
Virginia reached a mixed result. The couple were Virginia domiciliaries, their pension subtraction lacked federal-return and other-state tax proof, and the wife's age deductions were unavailable under…
Did foreign and out-of-state work assignments end a taxpayer's Virginia domicile when his family, home, licenses, and registrations stayed in Virginia?
No. Employment and housing abroad and in another state did not prove abandonment of Virginia domicile. The taxpayer's spouse and children stayed in the Virginia home; he retained Virginia vehicles, a …
Did a taxpayer's statement that he lived and worked outside Virginia in 2003 justify removing the state's income-tax assessment?
Not yet. The taxpayer said he lived and worked outside Virginia in 2003, but he retained a Virginia driver's license, voter registration, vehicle registration, and a Virginia address receiving federal…
Did Virginia property, vehicles, a license, and voter registration make a taxpayer living and working abroad a Virginia domiciliary in 2006?
No. The taxpayer took several steps associated with Virginia domicile, including property ownership, registered vehicles, a driver's license, and voter registration. But he remained employed full time…
Could Virginia convert a bankrupt corporation's unpaid use and withholding taxes to its president and majority shareholder?
No, on these facts. Although the taxpayer's titles and ownership gave him authority, Virginia found that he was not under the relevant duty to pay the taxes, lacked actual knowledge before other debts…
Could a phone-system installer credit sales tax wrongly collected from customers against use tax owed on cable installed in walls?
No. Cable permanently installed in walls made the business a consuming contractor liable for tax on the cable's cost. Sales tax wrongly collected from customers could not offset that use-tax liability…
Was a cabinet fabricator a retailer when its office showed unsaleable sample cabinets and it bought primary materials for accepted jobs rather than general inventory?
No, for the installed cabinets on these facts. Unsaleable sample cabinets on office walls did not create a showroom, and materials purchased for accepted jobs did not satisfy the general inventory req…
Was a medical practice's one-time sale of imaging-center fixed assets taxable when the practice made no regular retail sales and was not required to register?
No. Virginia treated the fixed-asset transfer as an exempt occasional sale. The radiology practice did not regularly sell tangible personal property, was not required to register for retail sales tax,…
Did Virginia waive the penalty on 31 unstamped cigarette packs bought from a licensed stamping agent?
Yes. An inspection found 31 unstamped packs, but the retailer produced purchase receipts and a signed affidavit from the licensed Virginia stamping agent that sold them. Virginia accepted that evidenc…
Did a lumber manufacturer's strapping machine and reusable strapping qualify as exempt packaging materials?
No. Virginia treated the strapping as a transportation device used to bundle, restrain, and secure lumber for shipment, not material that placed the product into a protective wrapper or container. The…
Did Virginia remove use tax assessed on a manufacturer's software, checks, forklift, maintenance supplies, and other purchases?
No. The manufacturer did not document that disputed software, laser checks, repair items, rentals, petroleum products, or supplies were returned or used exemptly. Its forklift was used more than 80% o…
Could Virginia assess masonry contractors purchaser use tax on third-party charges for cutting their bricks?
No. Cutting the contractors' bricks changed their shape and was taxable fabrication, so Virginia could assess the fabricator sales tax on the service. But under the circuit-court decision applied here…
New York Advisory Opinion TSB-A-10(6)C: Can a business claim the QEZE real property tax credit for a period when it was decertified, if the decertification was overturned on appeal?
Yes. A business decertified from the Empire Zones Program in the 2009 reevaluation, but whose decertification was overturned on appeal and which received a retention certificate, keeps its eligibility…
Were advertising-space sales and printing costs for a free monthly community newsletter subject to Florida sales or use tax?
Advertising-space sales were not taxable because advertisers received no tangible property. Printing was exempt while the free newsletter circulated regularly, consisted primarily of advertising, and …
Did Illinois decide whether a New York maintenance contractor using Illinois subcontractors had nexus or approve its proposed prospective settlement?
No. Illinois declined to determine whether the contractor's use of in-state subcontractors created nexus, because it considered nexus too fact-specific for a letter ruling. It also did not approve the…
Did a utility-maintenance company have to collect Illinois sales tax when it occasionally sold used surplus trucks, vehicles, and equipment?
Generally no, if the company bought and used the assets in its business, later sold them because they were no longer needed, and did not hold itself out as a dealer in those items. A qualifying occasi…
Did Illinois decide whether an out-of-state CAD/CAM software reseller with visits to Illinois still had nexus after closing its Illinois office?
No. Illinois declined to determine whether the CAD/CAM software, training, and services reseller still had nexus after closing its Illinois office. It supplied the 2010 nexus framework and said physic…
Did Christopher Martin owe gross receipts tax, penalty, and interest on handyman work when neither he nor his California tax preparer knew New Mexico taxed the services?
Mostly yes. Martin's handyman and odd-job services performed in New Mexico were subject to gross receipts tax. His and his California preparer's shared ignorance was not reliance on actual tax advice …
How did Virginia's July 2010 power-of-attorney process send tax correspondence to taxpayer representatives?
Effective July 1, 2010, Virginia used Form R-7 to register representatives for an Authorized Agent number and revised Form PAR 101 to designate them for a tax matter and period. Both forms were needed…
Did an implantable vascular access port used for infusions and blood draws qualify for Illinois's reduced medical-appliance tax rate?
Illinois did not expressly classify the implantable vascular access port. It said the reduced rate applied only when the item itself directly substituted for a malfunctioning body part, and that diagn…
Did a state university still need a contractor residence certification under former IITA Section 708?
No. The contract clause referred to former IITA Section 708, which had required withholding from certain personal-service contract payments unless the contract certified that the individuals performin…
New York Advisory Opinion TSB-A-10(4)C/(23)S: Are charges to use an online virtual-call-center network (and related billing and call-handling services) subject to New York sales tax?
Partly. Charges to access the LiveXchange virtual-call-center network are taxable receipts from the sale of prewritten computer software, sourced to where the users are located. PaySource's billing an…
How did Illinois tax a medical-record retrieval service that delivered records on paper, by fax, or electronically as PDFs?
Medical-record retrieval appeared to be a service. Electronically viewing, downloading, or transmitting text and data—including PDF delivery—was not a tangible-property transfer and was outside the fo…
Could Jason Able deduct 2005 and 2006 oil-well pumping receipts when the Type 5 NTTC arrived 47 days after the audit deadline?
No. Able performed oil-well pumping services for his father's business without possessing an NTTC. After audit notice, he promptly asked his father to obtain one and followed up, but the Type 5 certif…
Were fractional interests sold under the proposed timeshare agreements taxable licenses or sales of timeshare estates, and did documentary stamp tax apply?
They were timeshare licenses. Payments were taxable transient-rental charges under Florida sales-tax law, but the licenses were not transfers of real-property interests and therefore did not trigger d…
When did Kansas stop collecting the environmental assurance fee in 2010?
The Kansas Environmental Assurance Fee of $0.01 per gallon on all petroleum products ceased effective July 1, 2010, and was to remain off until further notice. The notice was directed to all Kansas En…
Did portable IV infusion pumps used to deliver chemotherapy qualify for Illinois's reduced medical-appliance tax rate?
Generally no. Illinois said infusion pumps normally administer drugs and function as medical treatment tools rather than directly substituting for a malfunctioning body part, so drug-delivery systems …
Are sales of low-vision equipment (magnifiers, telescopes, filters, video magnifiers) to and by vision care professionals subject to NY sales tax?
No -- when sold for use by people with low vision, this equipment is exempt. The hand-held, stand, and spectacle magnifiers, video magnifiers and closed-circuit TVs, monocular telescopes, and absorpti…
Did an Illinois governmental body have to renew its sales-tax exemption number, and how did a seller document exempt purchases?
The governmental body did not have to apply for renewal because Illinois automatically renewed governmental exemptions. But a seller could treat only purchases by the governmental entity holding an ac…
Were guaranteed manufacturer holdback payments taxable gross receipts when a vehicle's retail sale affected only when the dealer was paid?
No. The Department said the described 3% manufacturer holdback fit the regulation's nontaxable example because the dealer was guaranteed payment even if the vehicle was not sold. A retail sale acceler…
How did South Carolina's 2010 guidance apply the August sales tax holiday to online orders, delivery, alterations, exchanges, rain checks, and layaway?
Qualifying orders accepted and paid during the holiday for immediate shipment could be exempt even if delivered later. Related delivery and alteration charges were exempt, but layaway purchases were n…
Which items did South Carolina list as exempt or taxable during its annual August sales tax holiday in the 2010 guidance?
The 2010 list exempted qualifying clothing, footwear, school supplies, computers, printers, software, and specified bedding and bath items. It excluded business-use items, layaway sales, rentals, jewe…
Did a couple establish domicile outside Virginia despite keeping a historic Virginia home, mail address, and old driver's licenses?
Yes. The couple kept a historic Virginia home, received mail there, visited regularly, and had renewed Virginia licenses in 2003. But the husband began working in the other state in 2002, they bought …
Did years of losses make a professional bass-fishing operation a nonbusiness hobby for Virginia income-tax purposes?
No. The operation had not made a profit since starting in 2002, and both spouses had substantial full-time employment, but the full record showed a profit objective. The husband brought decades of tou…
Did stacks of statements, education records, and mileage logs substantiate a taxpayer's deductions without a reconciliation to the return?
Not yet. Credit-card and bank statements, education printouts, curricula, and mileage logs did not clearly identify which transactions supported each claimed deduction, and the taxpayer supplied no re…
How did Virginia resolve seven years of delinquent returns after comparing the taxpayers' filings with IRS records?
Virginia reached a split result. IRS return information matched the taxpayers' Virginia filings for 1999 through 2003, so those state returns were accepted and the assessments adjusted. Their 2004 and…
Did Virginia federal conformity let a qualified funeral trust use the lowest state income-tax rate regardless of its income?
No. Federal qualified-funeral-trust treatment required a Virginia fiduciary return, but conformity did not import a federal lowest-rate rule that contradicted Virginia statutes. Sections 58.1-360 and …
Could a landowner increase transferred conservation credits by reappraising an easement as if a litigated downzoning had never existed?
Not on the second appraisal submitted. Although the downzoning was later held void from the beginning, a hypothetical buyer on the 2003 donation date would have known only that litigation was pending,…
Did three appraisals and an aborted asset sale prove a county's 2008-2009 machinery-and-tools values exceeded fair market value?
No. The county uniformly valued machinery using a percentage of capitalized cost. Two appraisals valued the whole company rather than only machinery and tools; the county considered a third equipment-…
Did a Virginia direct-mail advertiser owe use tax on postcards printed outside Virginia and mailed without its possession or use in the state?
No. Advertising status made the company the consumer of property it used in Virginia, but it did not possess, take title to, or exercise rights over these postcards in the Commonwealth. The out-of-sta…
Did a Virginia advertiser use postcards in the state when an out-of-state printer sent them directly into the mail?
No. The Virginia advertiser supplied designs and mailing lists, but an out-of-state printer produced and prepared the postcards for mailing. The advertiser did not take possession or title or exercise…
Which Virginia dealer discounts were reduced or suspended beginning with returns filed in mid-2010?
Beginning mainly with the June 2010 return due July 20, mandatory-EFT sales-tax dealers lost their discount, while other sales, vending, and digital-media filers moved to lower tiered discounts. Disco…
How did Illinois treat service fees, document delivery, electronic data, and computer software for sales and service taxes?
Illinois said a service transaction with no transfer of tangible personal property generally was not subject to Retailers' Occupation, Use, Service Occupation, or Service Use Tax. Transferred copies o…
Did Illinois classify the listed airway, infusion, insulin-pump, TENS, CPAP, suction, and restraint products for the reduced medical rate?
No. The Department did not classify the listed products individually. It said the reduced medical-appliance rate applied only to an item intended by its manufacturer to directly substitute for a malfu…
Did Illinois classify the requester's supplement-labeled drinks and protein powder as soft drinks for sales-tax purposes?
No. The Department did not classify the five products individually. It explained that, beginning September 1, 2009, a sweetened nonalcoholic beverage was a soft drink unless it contained milk or a sim…
Did a Florida direct-mail marketer have to collect sales tax on printed materials delivered to recipients in Florida?
Yes. The marketer bought printed materials for resale and was not the printer, so it had to register and collect tax on materials delivered in Florida. Documented, continuous delivery outside Florida …
Will a marriage to a same-sex partner be recognized for New York State personal income tax purposes?
No, according to this May 2010 opinion. Tax Law §§ 607(b) and 651(b) tie an individual's marital status and filing status for New York personal income tax purposes to the individual's federal marital …
Were materials used to build a specialized process building and boiler building exempt as industrial machinery and equipment for a new Florida manufacturer?
Yes. The structures were so closely related to the manufacturing machinery they housed and supported that Florida treated them as part of the exempt equipment. The temporary exemption permit could be …
Were unmanned cardlock fuel sales to commercial, institutional, and government fleets wholesale sales for Virginia BPOL tax?
Yes. The cardlock sites served institutional, governmental, and commercial customers rather than the public, supported oversized fleet vehicles and high-speed fueling, and used wholesale-style market …
Were unmanned cardlock petroleum terminals definite places of business for Virginia local BPOL tax?
Yes. The terminals lacked offices, mail, records, and continuously stationed employees, but the operator owned or leased each site, installed and ran the automated pumps, maintained and inspected them…
Could Virginia residents claim all partnership tax paid through unified returns in five states as one out-of-state credit?
No. Virginia's resident credit was the lesser of the tax actually paid to a state or the Virginia tax attributable to that state's income. When a partnership filed unified returns in five states, the …
Did a county have to reconsider machinery values and earlier-year asset classifications after a manufacturer supplied appraisals and evidence?
Yes, in part. Virginia remanded the 2007 valuation because § 58.1-3507(B) required the county to consider the manufacturer's bona fide independent appraisals, including a new exchange-value appraisal.…
Could a separated spouse claim half of a conservation credit when Department transfer forms named only her husband?
No. The prescribed transfer notification and Department records named the husband as the sole transferee, so Virginia properly allowed him the full credit on his separate 2006 return. The Department c…
Did a Virginia steamship agent owe sales tax on commission income and a per-diem invoice involving shipping containers?
Not on the limited record. An invoice showed a fixed daily per-diem charge for a 'unit,' but Virginia could not determine that the charge involved tangible personal property. Nothing showed that the a…
Were beauty-store loyalty memberships taxable when members received discounts and became entitled to free gifts?
Yes. The retailer argued that its program terms were misleading and that memberships did not include free property, but its operations manual said members received a $10 birthday discount and free gif…
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