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 a hotel lower the use-tax value of used furniture acquired with the property below the cost basis used on its books and tax returns?
Not on the existing record. The hotel had assigned $2,062,500 to the used furniture, fixtures, and equipment on its depreciation schedule and federal partnership return, so Virginia treated that amoun…
If my store charges customers a separate fee for a personal shopper to pick their groceries, and a separate fee for home delivery, are either of those service charges subject to sales tax?
It depends which service. A grocery store's separate personal shopping fee is not taxable, but its home delivery fee is taxable in full whenever the delivered order includes any taxable item or servic…
Did periodic Virginia logistics work subject an out-of-state support company to Virginia income tax or inclusion in a combined return?
No, on the stated facts. Employee logistics work in Virginia appeared to exceed protected solicitation, and the record was insufficient to decide whether the contacts were de minimis. But the company …
Did a taxpayer change Virginia domicile in June 2005 after moving to State A for a non-temporary job while retaining a Virginia driver's license?
Yes. The taxpayer stopped renting in Virginia, established a State A home, registered his car there, and accepted employment that was not shown to be temporary. Although retaining a recently renewed V…
Could Virginia residents subtract a New York state pension when their employee contributions had not been taxed by New York?
No. Virginia's subtraction applied only to the extent retirement contributions had been subject to another state's income tax after being deductible federally. The couple's prior New York returns show…
Did part-year Virginia residents have to prorate S-corporation capital gain that documentation showed arose after they moved away?
No. Virginia generally treated property or business income as earned evenly through the year unless the taxpayer documented a specific timing. On reconsideration, the couple supplied records clearly s…
How did Virginia tax S-corporation income after a couple moved away, merged the Virginia company, and performed no later Virginia work?
The original Virginia S corporation had nexus for all of 2004 because it operated in Virginia before the move and remained in existence until a September merger. Its income had to be divided between t…
Was a brick maker's separately stated minimum-load charge an exempt delivery charge or a taxable service?
It was exempt. A third-party carrier charged for a full truckload even when the shipment used less capacity, and the brick maker used the minimum-load line to recover the difference between actual fre…
Were a contractor's water-treatment materials, Maryland-taxed purchases, administrative supplies, and equipment charges exempt from Virginia use tax?
No. The contractor provided no required pollution-control certification, and municipal water-treatment authorities did not qualify for the claimed industrial manufacturing exemption. Maryland tax paid…
Was a medical-equipment service contract exempt when a resale certificate was obtained after audit and the contract named a third-party vendor as purchaser?
No. A certificate obtained after audit was subject to heightened scrutiny and did not by itself prove that the third party validly bought the contract for resale. The agreement between that vendor and…
Were a permanent structure housing a production crane and magnesium-chloride dust-control equipment exempt manufacturing property?
No. Steel, panels, fasteners, paint, tools, and rentals used to build a crane-housing structure were plant construction permanently affixed to realty, not component parts of exempt machinery. Magnesiu…
Could an unregistered interior designer avoid estimated tax and penalties after collecting sales tax, keeping it, filing no returns, and preserving no records?
No. The dealer collected sales tax but never registered, filed returns, remitted the trust funds, or preserved records. Virginia properly estimated sales from bank deposits because the dealer offered …
Which utilities used in a nursing home or assisted-living facility qualify for the residential sales-tax exemption, and which are taxable?
Only utilities used in a resident's own room or apartment (and its private bath) count as exempt "residential" use. Electricity, gas, and water consumed in a nursing home's or assisted-living facility…
If my engineering firm designs products for clients and delivers drawings, prototypes, and CAD data, which parts of my charges and which of my own material purchases are subject to New York sales tax?
Mostly untaxed. An engineering firm's product-development service charges (including transferring CAD data electronically) aren't subject to sales tax unless the firm separately sells taxable prototyp…
My design firm delivers logos, brochures, and website designs to clients either on disc or electronically — does the delivery method change whether my design charges are subject to New York sales tax?
It depends entirely on delivery method. A design firm's charges are fully taxable when the final design (logos, brochures, website HTML code) is delivered on tangible media like a disc to a client in …
My company licenses customers access to markdown-recommendation software hosted on our own server, with separate charges for implementation, support, and hosting — which of these charges are subject to New York sales tax?
Mostly taxable. Monthly license fees for remotely-accessed, non-downloaded markdown-recommendation software are taxable prewritten computer software because the customer gains the right to use it even…
How did Virginia's new 10% Digital Media Fee apply to separately charged in-room movies, programs, and games beginning July 1, 2009?
The fee was 10% of separately charged in-room movies, audiovisual programming, or games at lodging rented for fewer than 90 continuous days, in addition to then-applicable sales tax. It excluded inter…
Did Florida use tax apply to a foreign-owned, foreign-flagged pleasure yacht operating in Florida under a federal cruising license?
No, while the vessel complied with a valid federal cruising license and remained a noncommercial pleasure yacht. Offering it for sale or charter, or otherwise violating the license, could trigger Flor…
Are late-payment fees charged by South Carolina utilities included in taxable gross proceeds?
Usually yes for taxable cable and telephone service because a default charge was not a finance charge. But late fees on electricity or natural-gas bills were expressly excluded from tax.
Are portable-toilet rental and servicing charges subject to South Carolina sales and use tax?
Yes, but only 30% of the total was taxable under the ruling. The toilet was rented tangible property, servicing fees were part of the rental, and a statute exempted the other 70%.
Did claims of age, inefficiency, technological obsolescence, and low resale proceeds prove that a county overvalued manufacturing machinery?
No. A machinery-and-tools assessment was presumed correct, and the manufacturer supplied no appraisal or other clear evidence that the county's statutory percentage-of-original-cost method produced a …
How could a dealer not franchised for a vehicle line rebut Florida's presumption that its tax-exempt purchase became taxable use?
Resale alone was not enough. The dealer had to show the whole transaction and that it made no use beyond demonstration or display before resale; titling the vehicle did not by itself prevent rebuttal.
Did Florida use tax apply when an out-of-state yacht was used in other U.S. states for more than six months before entering Florida?
No, if it was not bought for Florida use and the owner documented six months of use under another U.S. jurisdiction and payment of any lawfully imposed tax before importation.
New York Advisory Opinion TSB-A-09(7)C/(4)I: May an LLC specially allocate the tangible-property component of the Brownfield Redevelopment Tax Credit in the same proportion as the related depreciation deductions?
Yes, if the depreciation allocation is valid. An LLC taxed as a partnership may specially allocate the tangible-property component of the Brownfield Redevelopment Tax Credit among its members in the s…
Could a licensed Virginia cigarette stamping agent hire another company to physically affix stamps to the agent's own cigarettes?
Yes, under the stated arrangement. The licensed stamping agent would buy Virginia stamps from the Department for its own cigarettes and retain title while the contractor handled and affixed them solel…
Did other-state taxation let a corporation exclude 100% of related-member factoring fees from Virginia's add-back?
No. The exception applied only to the portion of factoring fees corresponding to affiliate income actually apportioned and taxed in other states, not the entire gross amount reported there. Virginia a…
Could a corporation exclude all related-member royalties and factoring fees because affiliates reported them in other states or because the transactions had a valid business purpose?
Not on these facts. The subject-to-tax exception covered only the portion of royalties and factoring fees corresponding to affiliate income actually apportioned and taxed in other states, not 100% of …
How did Virginia source a nonresident consultant's salary and dividends from his Virginia corporation?
Virginia apportioned the consultant's salary using documented days worked in Virginia compared with days worked elsewhere, rather than attributing all salary to Virginia through a corporate equitable …
When the same lender recorded a replacement mortgage to increase a home-equity line, was recordation tax due again on the existing principal?
No. Where the existing debt had already borne recordation tax and the same lender modified or refinanced it, Va. Code § 58.1-803(D) imposed tax only on the amount above the existing secured debt. Thus…
Could a taxpayer recover a 2001 Virginia overpayment, or use it against a 2003 balance, after filing the return in January 2008?
No. Even with a valid filing extension, the deadline for a 2001 refund claim expired November 1, 2005. The January 2008 return was too late under Va. Code § 58.1-499(D), so Virginia denied both a refu…
Did a four-corporation chain with the stated 80%-plus voting ownership qualify as a BPOL affiliated group, excluding intercompany employee-leasing receipts?
Yes. At least 80% of each subsidiary's voting interests was owned by one or more group members, and the common parent directly held at least 80% of two corporations. With no nonvoting stock, the state…
Were separately stated mileage, zone, road-service, and tire-disposal fees for on-site equipment repairs exempt from Virginia sales tax?
No. Mileage, zone, and road-service charges covered travel before and after the actual on-site repair, so they were not exempt delivery charges or repair labor; they were taxable expenses included in …
Did Kansas enforce sales tax on guided-hunt charges and game-bird sales during the 2008-2010 review period?
Kansas suspended enforcement of sales-tax collection on guided and unguided hunt participation charges and retail game-bird sales from May 7, 2008 through May 6, 2010 while reviewing its interpretatio…
Are a seller's charges for installation, troubleshooting, removal, reinstallation, and trip fees on equipment subject to Colorado sales tax?
It depends on how the labor is sold. Charges for services are generally not subject to Colorado sales tax, but a charge for maintenance or a service warranty made in connection with the sale or lease …
When a bank buys equipment-lease contracts from an affiliate that services them, who registers and files Colorado sales tax — the bank or the servicing affiliate?
The bank that owns the leases must register and file in its own name. A taxpayer can hire an agent to handle invoicing and collections, but the duty to register for a Colorado sales/use tax license, f…
Are PDF documents that customers pay for and download from the internet subject to Colorado sales or use tax?
Yes. Colorado defines taxable tangible personal property as 'corporeal' property, and the Department treats electronic data as corporeal—so the sale of documents (such as PDFs) downloaded from the int…
Does a company that sells and installs a factory-built (modular) home in Colorado owe sales tax, and is any part of the price exempt?
Yes, but only on part of the price. A modular or other factory-built home is taxable tangible personal property, and the seller must collect Colorado sales tax from the buyer—but 48% of the purchase p…
If my business has Colorado nexus but no sales tax to report for a period, do I still have to register and file a Colorado sales tax return?
Yes. Once a retailer is required to hold a Colorado sales tax license, it must file a sales tax return for every reporting period—even one with no tax due—using the Department's free 'zero file' optio…
Are custom single-use surgical instruments a manufacturer sells to hospitals and surgery centers subject to Colorado sales or use tax?
Taxable. Custom, single-use surgical instruments a manufacturer sells to hospitals and surgery centers are subject to Colorado sales/use tax. Colorado's medical exemption covers therapeutic devices an…
Is short-term lodging furnished to an out-of-state church youth group on a ski trip exempt from Colorado sales tax as a sale to a charitable organization?
Taxable. Short-term lodging (under 30 days) furnished to an out-of-state church youth group on a ski trip is subject to Colorado sales tax. Colorado taxes room accommodations rented for fewer than 30 …
When a motor-vehicle lessor sells the leased vehicle to the lessee at the end of the lease, who is responsible for collecting Colorado sales or use tax?
The lessor collects the tax. When a motor-vehicle lessor sells the leased vehicle to the lessee at the end of the lease (here, at fair market value), that's a taxable sale and the Company, as seller, …
How did Kansas sales tax apply when the State paid part or all of an eligible household's appliance purchase through the Kansas Appliance Replacement Program?
The portion paid directly by the State of Kansas was exempt, while the portion paid by the income-eligible household was taxable. The retailer's invoice and related records had to identify both Kansas…
Are soap, stain remover, and disinfectant used to launder towels for cleaning dairy cows before milking exempt as consumed in production?
No. The soap, stain remover, and disinfectant were taxable because they were used to launder towels before the actual milk-production process, not in the actual process itself. Even though the supplie…
Is equipment purchased or leased by a farmer or rancher to remove phosphorus from feedlot manure, urine, and runoff exempt from Kansas sales tax?
Yes. The Department concluded that the described equipment, called 'Phred,' qualified as exempt farm and ranch equipment under K.S.A. 79-3606(t) when purchased or leased by a farmer or rancher for exc…
Could a corporate group abandon Florida's consolidated apportionment result in favor of separate accounting because the outcomes differed substantially?
No. The group had elected consolidated filing and did not prove the standard formula was arbitrary, grossly distorted, or taxed extraterritorial values. A less favorable result than separate accountin…
What Florida severance-tax rate applied to oil produced through the taxpayer's certified tertiary-recovery project?
Five percent of gross value at the point of production. The Department treated the certified project output as tertiary oil rather than other oil taxed at the higher rate stated in the 2009 ruling.
Were dust-and-debris cleaning services performed during building construction subject to Florida sales tax?
No. Installing and later removing temporary plastic sheeting, disposing of trapped debris, and cleaning the surrounding construction area were classified as construction work rather than taxable nonre…
What were Virginia's Land Preservation Income Tax Credit cap and taxpayer claim limits for 2009?
The inflation-adjusted statewide issuance cap was $106,647,000 for calendar year 2009. Separate 2009 legislation reduced the amount claimable on returns for taxable years 2009 and 2010 to $50,000 per …
Was a cabinet seller-installer a retailer when it took orders at a business location and appeared to keep bulk cabinet materials?
Yes, based on the available evidence. A showroom was unnecessary because the business took and accepted orders at its Virginia location. The auditor reasonably found inventory where materials appeared…
Which federal modular-building transactions were exempt leases of tangible property rather than taxable real-property construction?
Virginia removed line items where contracts showed temporary or relocatable buildings leased directly to the federal government and intended for removal, making them exempt tangible-personal-property …
How should a multinational service firm apply BPOL payroll apportionment and the deduction for business conducted outside Virginia?
Virginia upheld the county's use of total worldwide receipts multiplied by county payroll over total payroll because the firm had definite places of business inside and outside Virginia. The firm coul…
Must a Virginia pass-through entity withhold for a nonresident owner whose other-state tax credit eliminates the Virginia liability?
No withholding was required for a nonresident owner whose allowable credit for taxes paid to the owner's state of residence was sufficient to offset all Virginia income tax attributable to the pass-th…
Could a company claim Virginia's coal incentive credit when it bought and consumed Virginia coal but did not own the electric generator?
No. Va. Code § 58.1-433.1 required the electricity generator to purchase and consume Virginia-mined coal and actually produce electricity. Virginia interpreted that to require ownership of the electri…
Is a separately stated market-development fee taxable when a vendor passes it through with a sale of materials?
Yes. Virginia treated the market-development fee as part of the taxable sales price because the vendor passed its representative's service cost through in connection with the material sale. Separately…
Which separately stated charges on a Virginia party-tent rental invoice were taxable?
Virginia taxed the tent rental and late fees. Separately stated installation and delivery charges were exempt. A separately stated fuel surcharge was exempt only when directly calculated and attributa…
Did a federal research-and-development subcontractor qualify for Virginia's reduced BPOL rate for principal or prime contractors?
No. Virginia upheld business-service classification at the ordinary rate because the contract designated the taxpayer as a subcontractor, not a principal or prime contractor, and Corporation A rather …
When could a Virginia federal contractor treat purchases as exempt resale property instead of taxable contract-use property?
Virginia applied the true-object test at the TDL, task-order, delivery-order, or work-order level where the contracts did not identify the later mix of goods and services. It removed documented proper…
Was a sign fabricator a retailer or real property contractor during 2003-2004, and was its full audit timely?
For this 2003-2004 audit, Virginia treated attached signs as real property and the fabricator-installer as the consuming contractor, so resale and manufacturing exemptions did not apply. The September…
Can a Texas county issue vehicle title without collecting tax again when a closed dealer took the buyer's tax but failed to remit it?
Yes. The county could accept the title application without collecting tax again if the buyer documented payment to a licensed Texas dealer and the county notified the Comptroller in writing by the 31s…
My company sells subscription reports built from a shared database of evaluator input about my customers — are those subscription fees a taxable information service in New York?
Taxable. A web-based subscription service's fees for evaluation reports on investment broker dealers are a taxable information service under Tax Law §1105(c)(1), because the reports are built from a c…
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