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 federal Cash for Clunkers voucher reduce the South Carolina sales-tax base for a new vehicle?
No. The dealer's federal voucher payment and the buyer's payment both entered taxable proceeds. The separate salvage value allowed for the trade-in was excluded.
What is South Carolina's tax interest rate for the period ending December 31, 2009 (per SC IL #09-15)?
4%. SC Information Letter #09-15 sets South Carolina's interest rate on tax underpayments and overpayments at 4% for the period April 1, 2009 through December 31, 2009. Interest is compounded daily, e…
Were bulk purchases of Mirena and Implanon exempt controlled drugs when used by a medical practice?
Yes. Unlike a non-drug IUD addressed in an earlier ruling, Mirena and Implanon release medication. The FDA classified them as prescription drugs, and the Virginia Board of Pharmacy treated them as Sch…
Does equipment used in a flywheel energy-storage facility that helps stabilize the electrical grid's frequency qualify for New York's sales tax exemption for machinery used to produce electricity for sale?
No. Equipment in a flywheel-based frequency-regulation facility does not qualify for New York's production exemption because it stores and returns electricity generated by others rather than generatin…
Was a propane pool heater used on a tropical fish farm exempt from Florida sales tax?
Yes. The heater qualified as power farm equipment because it depended on propane and electricity to operate and was purchased for use on the tropical fish farm. The purchaser had to provide the requir…
Is repair and maintenance work on a telecom company's permanently wired backup generators subject to Utah sales tax?
Labor is exempt, parts depend on useful life. A telecommunications carrier's backup generators — permanently wired into each site's electrical circuitry but primarily serving its telecom equipment rat…
If my cleaning company buys garbage bags and trash liners to remove trash from a customer's building, do I owe sales tax on those bags, even if I bill the customer separately for them?
Yes, for bags the cleaning company uses itself. Garbage bags and liners a cleaning company consumes while removing trash from a customer's building are taxable purchases for the cleaning company, even…
If I rent reusable shipping containers to farmers who return them after use, do I have to charge sales tax on the rental, the delivery charges, and the deposit?
Yes. Because the farmers were required to return the containers instead of keeping them, the rental didn't qualify for New York's packaging-materials exemption, so the rental fee, pallet and delivery …
Could a vehicle trade-in allowance reduce the taxable sales price under a one-pay motor-vehicle lease?
Yes. The verified $30,000 trade-in allowance was deducted from the leased vehicle's sales price before sales tax. The lessees owned the traded vehicle; otherwise the owner would have needed to be pres…
We're building a new power plant and selling all its output to the New York Power Authority (NYPA) under a 20-year Tolling Agreement. NYPA will be a co-mortgagee alongside our private lenders on the plant's mortgage, with the right to foreclose if we default. Is that mortgage exempt from recording tax?
Exempt, if specific conditions are met. The petitioner planned to build and operate a new power plant converting NYPA-owned natural gas into electricity, selling 100% of the output to the New York Pow…
If my company lets customers access software over the Internet from my own servers (a SaaS model), rather than installing it on their computers, do I still have to charge New York sales tax on it?
Yes. New York taxes a customer's Internet-based access to software hosted on the vendor's own servers the same as a sale of prewritten software, because the customer gains the right to use and control…
Are a publisher's payments to freelance editors who compile e-newsletter content subject to sales tax?
Yes. The independent-contractor editors compile and aggregate content from multiple trade publications and write headlines and summaries -- that's a taxable information service under Tax Law 1105(c)(1…
Did SRLY rules limit post-acquisition losses of a Virginia affiliate or parent losses incurred before the group had Virginia nexus?
No. Company X's post-acquisition short-year loss was not a SRLY loss because it already met the ownership requirements for group membership, even though no other group member then had Virginia nexus. …
Did disability income paid by the Virginia Retirement System qualify for Virginia's disability-income subtraction?
Yes. Virginia allowed up to the statutory $20,000 subtraction because the VRS income statement treated the payments as disability income under IRC § 72 and the supporting documents showed qualificatio…
Could a Virginia military officer subtract combat-zone pay that exceeded the federal exclusion and remained in federal adjusted gross income?
Yes, but only for the qualifying amount still included in federal adjusted gross income. Enlisted combat pay excluded federally cannot also produce a Virginia subtraction. Officers can have compensati…
Could a startup real estate business deduct losses beyond current property income when its operations showed a genuine profit motive?
Yes. The wife was a licensed realtor, the couple kept separate business records, advertised properties, held open houses, spent about 25 hours weekly on the activity, and expected appreciation. Startu…
Could an out-of-state construction affiliate join a Virginia consolidated return based on a final billing and solicitation visits in 2003?
No. The affiliate's 2003 receipt was a final billing for Virginia work completed earlier, and no Virginia performance costs occurred in 2003, so the receipt did not enter the Virginia sales-factor num…
Did farm exemption certificates protect sales of rodenticides, horse feed, and supplies, and were auction donations taxable livestock purchases?
Yes. Completed Form ST-18 certificates supported exempt farmer purchases of rodenticides, horse feed, and related agricultural supplies, and fencing had already been removed. Separate auction document…
Did Virginia use tax apply to freight-in charges on apparel bought only for resale when the freight cost entered the taxable retail price?
No. Freight-in normally becomes part of a product's taxable sales price, but these charges related only to apparel bought for resale and the retailers made no intervening use. The freight was built in…
Did an earlier penalty waiver based on accountant reliance require New Mexico to waive later penalties for unfiled and unpaid CRS taxes?
No. The Department had waived penalties for an earlier audit period after finding reasonable reliance on an accountant, but that did not establish reasonable reliance for July through October 2006. La…
Were online and telephone-assisted end-of-life planning services subject to Florida sales tax?
No. The memberships were nontaxable services, and included packets, guides, cards, stickers, and magnets were incidental items supplied without a separate charge. The provider was the consumer of thos…
New York Advisory Opinion TSB-A-09(14)C: How are royalty receipts from licensing intellectual property allocated to New York for the Article 9-A business allocation percentage?
To where the licensee sells the products. Royalty receipts from licensing copyrighted and non-copyrighted intellectual property are allocated to New York based on where the activity that generates the…
We're a bank co-financing small-business real estate projects under the SBA 504 Loan Program alongside a certified development company (CDC) organized as a section 1411 not-for-profit local development corporation. Because the CDC can't fund its share until SBA debentures sell, we plan to temporarily hold its second mortgage ourselves and later assign it back. Is any part of this structure -- the CDC's mortgage, or the assignments between us -- subject to mortgage recording tax?
Exempt for the CDC's mortgage and its assignments; the bank's own first mortgage remains taxable. In a typical SBA 504 Loan Program deal, a bank lends a small business at least 50% of project costs se…
Did replacing an existing Florida mortgage with an indenture trigger additional documentary stamp or nonrecurring intangible tax?
No, if the prior taxes were fully paid and the notes, parties, and debt remained unchanged. New obligations later secured under the indenture's dragnet clause could trigger additional tax.
How does Kansas sales tax apply when the Kansas Turnpike Authority hands out KTAG transponders to subscribers and bills them for tolls?
No sales tax is charged to the subscriber. The Kansas Turnpike Authority (KTA) is the final user or consumer of the KTAG transponders it provides — it is not reselling them — so any tax would fall on …
Did a Virginia driver's license, family mailing address, and visits establish Virginia domicile for a long-term Country A resident?
No. The taxpayer had lived in Country A since 1989, kept no Virginia home or registered vehicle, used family in Virginia to receive tax mail, and visited regularly. A Virginia license was strong contr…
Could a communications-equipment seller replace Virginia's audit sample or avoid tax because customers failed to disclose an exemption repeal?
No. Virginia found the three-month sales sample proper and declined a taxpayer-prepared detailed audit that would require extensive invoice and certificate verification. Customers were supposed to not…
Were installed audiovisual systems retail sales of tangible property, and how did Virginia tax installation labor, supplies, and wiring?
The systems were retail sales of tangible personal property, so the seller had to collect tax on the total system charge while separately stated installation was exempt. The seller owed tax on tools, …
Were a corporation's president and secretary personally liable for unpaid 2006 sales tax when another manager handled filing until December 1?
Only for November 2006. Virginia found that before December 1 the president and secretary lacked the duty, knowledge, and willful conduct required for personal liability, so March, April, May, June, a…
Could a corporation exclude all related-member royalties and interest from Virginia's add-back merely because the affiliate filed returns in other states?
No. The exception covered only the portion of the payments corresponding to the affiliate's income or capital actually apportioned and subjected to tax in another state, not the gross amount shown on …
If a NYS Police and Firefighters Retirement System member rolls over a lump-sum distribution into an IRA, 457 Plan, or Roth IRA, how are later distributions from that account taxed for New York income tax purposes?
The rollover itself is not taxed. For a non-Roth IRA or 457 Plan, later distributions are exempt under Tax Law § 612(c)(3)(i) only to the extent they represent a return of the NYSPFRS contribution (tr…
If I resell a product that arrives partly cooled or degraded and I use fuel and electricity to restore it to a saleable condition before delivery, do those utility purchases qualify for New York's production exemption?
No. Fuel oil and electricity used to reheat previously-manufactured liquid asphalt so it can be stored and delivered are taxable, because reheating for storage and delivery is a post-production, distr…
When and on what cost did a Florida public-works contractor owe use tax on self-fabricated resin-impregnated pipe?
Tax was due when resin impregnation completed the pipe. The taxable fabricated cost included materials, production labor and burdens, and allocated services, but excluded delivery to the job site.
If my business buys produce from farmers on consignment and then cleans, sorts, packages, and stores it for sale to retail stores, do my equipment and utility purchases qualify for New York's farm production sales tax exemption?
No. A distributor that obtains fruit from farmers on consignment and then cleans, sorts, packages, and stores it for resale is not itself engaged in exempt farm production, so its purchases of equipme…
New York Advisory Opinion TSB-A-09(13)C/(8)I: Does a long-existing corporation reopening operations in an Empire Zone pass the section 14 'new business' test?
Yes for QEZE, no for the wage/investment credits. A corporation taxable under Article 9-A since 1993 that reopens at a new Empire Zone plant passes the section 14(j) 'new business' test, because that …
Did stored trade-in credits on cards or paper vouchers reduce the taxable price of a later retail purchase?
No. The stored credits were cash equivalents from a separate transaction, so tax applied to the later item's full sales price when the customer redeemed them.
Which federally deducted taxes had to be added back when computing South Carolina taxable income under the 2009 guidance?
State and local income taxes, income-based franchise taxes, and other taxes measured by or with respect to net income were not deductible for South Carolina purposes and had to be added back.
What were the significant South Carolina tax-law changes from the 2009 legislative session, as summarized by the Department (per SC IL #09-14)?
SC Information Letter #09-14 is the Department's brief summary of the significant tax and regulatory law changes enacted in South Carolina's 2009 legislative session, organized into categories: (1) in…
Could a hotel-room content provider register once and remit Virginia's 10% Digital Media Fee for participating lodging facilities?
Yes, subject to detailed conditions and possible revocation. The content provider could register once, list each participating lodging facility as a business location, file one monthly Form DM-1, and …
Could a truss seller remove delivery and design charges from its Virginia audit and receive credit for tax paid to vendors?
Only in part. The seller received 45 days to prove a reasonable delivery amount for this audit, but future exempt delivery charges had to be separately stated. Truss design services remained taxable e…
Was a 1997 Virginia amended return timely for a credit after another state finally taxed part of a retirement lump sum?
Yes. Virginia followed the IRS closing agreement treating the 1997 lump sum as capital gain, a category eligible for the other-state tax credit. The other state's audit became final on October 25, 200…
Did a taxpayer abandon Virginia domicile in July 2005 despite retaining a Virginia home and some vehicle registrations?
Yes. The taxpayer moved into a State A residence in July 2005 and declared that date on his Virginia part-year return. Later actions—including surrendering his Virginia driver's license, obtaining a S…
Could a couple choose the federal home-sale gain exclusion for their former Virginia residence when another home also qualified?
Yes. The couple had used both the Virginia and State A homes as principal residences for at least two years within the relevant five-year periods. IRC § 121(f) allowed them to elect which qualifying s…
If a customer returns merchandise late and only gets a partial refund under our store's return policy, do we refund all the sales tax collected, or only the tax on the amount we actually refund?
Only a partial refund of sales tax is due. Because New York sales tax is a transaction tax based on the original purchase price, a customer is entitled to a tax refund only in proportion to the percen…
Did a governmental authority's proposed direct-purchase procedure exempt construction materials used in a public-works project?
Not as written. The authority met most direct-purchase conditions, but conflicting invoice provisions failed to clearly require vendors to invoice the authority directly.
If I sell a product from a New York terminal to out-of-state customers who arrange their own pickup, do I have to charge New York sales tax, and does it matter whether a common carrier or the customer's own truck picks it up?
It depends on who takes physical delivery in New York. Sales are taxable when the customer (or the customer's own hired carrier) picks up the asphalt in New York, even if it's headed out of state — bu…
Does Nebraska follow the federal ARRA 2009 extended NOL carryback election for 2008 losses, for individual, fiduciary, and corporate taxpayers?
Individual and fiduciary filers follow the federal extended carryback; corporate filers do not. The American Recovery and Reinvestment Act of 2009 let eligible small businesses elect a three-, four-, …
If I roll over my Federal Reserve Bank of New York 401K Thrift Plan (which is exempt from New York tax) into an IRA, will distributions from the IRA still be exempt from New York personal income tax?
Yes, but only in part. The portion of an IRA distribution that represents a return of the rolled-over FRBNY 401K Thrift Plan contribution stays exempt under Tax Law § 612(c)(3)(ii). Any gain or income…
If I rent construction equipment to a subcontractor working on a government project like the Freedom Tower, do I have to charge sales tax, or is the rental exempt because the ultimate owner is a tax-exempt government entity?
Yes, tax was due. New York's governmental-purchase exemption didn't cover this crane rental because the subcontractor renting the cranes was never named as an appointed agent of the Port Authority on …
Were booth rentals at hybrid public-and-trade art and antique shows exempt from Florida commercial-rent tax?
Yes. The events qualified as industry trade shows, so exhibitor booth subleases were exempt when held in qualifying halls and the organizer paid tax on the prime lease.
Are over-the-counter retail sales of propane and firewood subject to Colorado sales and use tax?
Exempt for residential use, but presumed taxable. Propane and firewood sold to residents to heat/power their homes are exempt from Colorado sales/use tax (a non-commercial RV counts as a 'residence').…
May a retailer calculate Colorado sales tax by multiplying the sale by the tax rate percentage instead of using sales tax charts?
Yes—compute by percentage. A retailer may (and should) calculate Colorado sales tax by multiplying the taxable sales amount by the tax rate (the state rate is currently 2.9%); the Department does NOT …
Are sales of dietary supplements subject to Colorado sales tax, or do they qualify for the food exemption?
Taxable. Dietary supplements are subject to Colorado sales tax—they don't qualify as exempt 'food.' Colorado exempts food for home consumption only if it meets the federal SNAP/Food Stamp definition (…
Does a 'third-party intermediary' that arranges and marks up repair/maintenance work for retailers have Colorado sales tax liability on its markup?
Undetermined—the Department declined to decide. A company acts as a 'third-party intermediary': retailers call it for repair/maintenance work, it hires a local contractor, pays the contractor (includi…
Does an out-of-state manufacturer that stores inventory in a Colorado warehouse have Colorado income-tax nexus, or is it protected by Public Law 86-272?
Yes — the warehouse creates nexus. Public Law 86-272 only shields a company whose Colorado activity is mere solicitation of orders shipped from outside the state. Maintaining a warehouse and inventory…
Were software support and required postal updates for mail-sorting production equipment exempt from Florida sales tax?
Yes. Florida treated the support as exempt repair charges for qualifying equipment used at a fixed Florida location to prepare printed material for shipping.
How did Florida tax commercial-refrigeration installation and maintenance contracts covering both fixed and movable equipment?
Installation was a nontaxable real-property improvement, with tax paid on equipment and incorporated materials. An unallocated maintenance charge covering both real and tangible property was fully tax…
Could a federal contractor buy tangible property tax-free when the contract charged it directly and vested title in the government?
Yes, if the property was used under a qualifying DOD or NASA contract, charged as a direct contract cost, and titled to the government. Allocated overhead materials could also qualify to the extent ti…
What share of a mixed-use port-authority ground lease was subject to Florida commercial-rent tax?
92.9% was taxable on the stated figures. Only the 0.86-acre operating cement dome was then used exclusively for vessel unloading; future facilities could become exempt once operational and exclusively…
How can taxpayers find South Carolina advisory opinions by subject (per SC IL #09-13)?
Use the index attached to SC Information Letter #09-13 to find South Carolina advisory opinions. It indexes the advisory opinions issued by the Department from 1987 through June 2009, and it explains …
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