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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Is a Texas economic development corporation exempt from motor vehicle sales tax because it has other state sales-tax exemptions?
No. The economic development corporation's limited sales-tax exemption did not make it a political subdivision or exempt it from every state tax, and the motor vehicle tax chapter contained no compara…
Could a school board buy roofing materials tax-exempt under its construction contract's direct-purchase procedures?
Yes, for materials purchased under the reviewed procedures. The school board issued purchase orders with its exemption number, received vendor invoices, paid vendors directly, took title and liability…
How did the June 2008 South Carolina Supreme Court one-subject-rule decision affect the 2007 tax legislation summarized in SC IL #07-16 (per SC IL #08-12)?
SC Information Letter #08-12 reports the effect of the South Carolina Supreme Court's June 23, 2008 opinion in The South Carolina Public Interest Foundation v. Harrell (Opinion No. 26506), which revie…
How would a consolidated Florida corporation calculate income and tax attributable to its qualified headquarters project for the Capital Investment Tax Credit?
The taxpayer had to attach a separate pro forma calculation of the qualified project's annual taxable income, listing all direct and indirect revenue and expenses under GAAP and Florida law. It then a…
Was a private golf club's membership termination fee taxable when departing members could choose continued facility access?
It depended on the departing member's choice. A member who paid the fee and requested up to six more months of facility access purchased a taxable admission. A member who paid the fee but declined all…
Our Mitchell-Lama co-op board originally planned to privatize by transferring the building to a brand-new corporation -- but got private letter rulings from both the state and NYC saying that transfer would trigger about $14 million in combined transfer taxes. So instead we restructured the plan to simply AMEND OUR EXISTING CERTIFICATE OF INCORPORATION to convert from a nonprofit Mitchell-Lama entity into a for-profit private cooperative, with no separate transferee corporation at all. Does avoiding a literal transfer to a new legal entity get us out of New York's Real Estate Transfer Tax?
No -- restructuring the plan as a certificate-of-incorporation amendment (instead of a transfer to a newly formed corporation) does NOT avoid RETT; the Department taxes it the same way. East Midtown P…
Does a technology company's purchase of computers and hardware used to build and improve its own ad-serving software platform qualify for New York's sales-tax research and development exemption?
No. Building and improving software for the company's own use in delivering services -- even highly technical, years-long development work -- is not "research and development in the experimental or la…
Who counted as a classroom teacher for Louisiana's temporary $1,000 deduction under Act 351 of 2007?
A person had to meet the Department of Education's Object Code 112 definition: staff assigned professional instruction of pupils in classroom courses for which daily attendance was kept. That category…
Did Louisiana's tax exemption for Teachers' Retirement System benefits continue after the money was transferred into an IRA?
No. A disbursement from a Teachers' Retirement System of Louisiana account was exempt from Louisiana income tax under La. R.S. 11:704. After the funds moved into an IRA, later IRA payments were not be…
If a company buys a concrete pump truck solely to lease it to an affiliate, is the purchase exempt from sales tax, and are the affiliate's lease payments taxable?
The purchase itself is exempt as a purchase for resale, but the lease payments the affiliate pays are subject to sales tax unless the affiliate re-rents the truck to its own customers without retainin…
Are different types of commercial signs — monument signs, pylon signs, channel letters, backlit letters, electronic displays, banners, and window graphics — taxable installations of tangible personal property, or exempt capital improvements to real property?
It depends on the sign: a monument sign set in a concrete foundation can qualify as a tax-exempt capital improvement, but pylon signs bolted to piers, channel letters, backlit letters, electronic disp…
If a New York government agency owns a building that will have both public (school) and private (residential/retail) uses, is the developer's construction still exempt from sales tax on materials?
Yes. Because the exempt government agency keeps ownership of the whole building, materials that become a permanent part of the structure are sales-tax exempt for both the public-school and private-use…
If a company sells point-of-sale equipment and bills staging, software installation, testing, and setup as one lump-sum 'project management' line item, is the whole charge taxable, or can the software-related part be carved out as exempt?
The entire lump-sum charge is taxable, because the normally tax-exempt software installation/modification services were bundled into one line item with the taxable hardware sale and setup rather than …
When a company buys a fractional ownership interest in a private jet through a trust, and an aircraft management company keeps control over pilots, maintenance, and scheduling, is that purchase a taxable rental of the aircraft or an exempt transportation service?
It's an exempt transportation service, not a taxable purchase or rental of tangible personal property, because the aircraft management company -- not the fractional owner -- retains dominion and contr…
Which South Carolina Department of Revenue regulations did the General Assembly approve in June 2008 (per SC IL #08-10)?
SC Information Letter #08-10 announces the Department of Revenue regulations the General Assembly approved on June 4, 2008, which became official upon publication in the State Register on June 27, 200…
What is South Carolina's tax interest rate for the period July 1, 2008 through September 30, 2008 (per SC IL #08-9)?
5%. SC Information Letter #08-9 sets South Carolina's interest rate on tax underpayments and overpayments at 5% for the period July 1, 2008 through September 30, 2008. Interest is compounded daily, ex…
Would Florida use tax apply when a yacht was bought and titled outside Florida, then used in other states for more than six months before entering Florida?
No, under the represented facts. The purchase and title transfer occurred outside Florida, and the yacht would be used under other states' taxing jurisdiction for more than six months before entering …
Did 22 work areas in a cement-plant expansion qualify for Florida sales-tax exemptions, and could the manufacturer recover $50,000 paid early?
Yes, based on the submitted documentation and stated conditions. The 22 work areas qualified as expanding-business machinery and equipment, pollution-control property, or nontaxable professional servi…
How did Florida tax peering, cross-connect, managed-router, colocation, equipment, and managed-maintenance services?
Peering, cross-connect, and managed-router services were not subject to Chapter 212 sales and use tax because they only transmitted data and did not sell or rent property. They were, however, communic…
What happened to Kansas inheritance-tax liability for pre-July 1998 estates that had not filed a return by July 1, 2008?
Kansas inheritance tax ended July 1, 2008, except for matters already pending before the Department. For an estate of a person who died before July 1, 1998, if no inheritance-tax return had been filed…
What tax base applied when $29 million of out-of-state notes were secured by a Florida mortgage that capped recovery at $6.125 million?
Florida documentary stamp and nonrecurring intangible tax were due once on $6.125 million, the mortgage's express maximum recovery amount, rather than the full $29 million debt. The notes were execute…
Did deeds for hotel-condominium units owe Florida's documentary stamp discretionary surtax when the units could only be rented to transients?
No. The prospectus classified each condominium as a single residence unit, so each deed qualified for the single-family-residence exemption from the discretionary surtax. The result applied even thoug…
What are South Carolina's latest state and county per capita income figures used for tax incentives (per SC IL #08-8)?
$31,013 statewide. SC Information Letter #08-8 publishes the most recently available per capita personal income figures for South Carolina — $31,013 for the state, plus a figure for every county — whi…
Under South Carolina's 2008 guidance, who owed use tax on untaxed out-of-state purchases brought into the state?
The South Carolina purchaser owed use tax when taxable property bought from an out-of-state retailer was used, stored, or consumed in the state and sufficient tax had not already been paid. Tax paid t…
Is downloading a video from a website, whether paid or free, subject to New York sales tax?
No. Videos downloaded electronically over the Internet to a customer's computer or device are intangible property, not taxable prewritten software or a taxable information/entertainment service, so th…
Did a city's public-works direct-purchase procedure qualify for exemption when the contract did not require vendors to invoice the city directly?
No. Although the city issued purchase orders, paid vendors, retained title, and insured the materials, the controlling contract documents did not require vendors to invoice the city directly and inste…
Did leasing a small Texas apartment for work make a New Mexico homeowner a Texas resident whose wages escaped New Mexico income tax?
No. Joseph Mailander kept his permanent Las Cruces home, where his wife lived and operated a business, along with his New Mexico driver's license, voter registration, and vehicle registrations. His El…
Under a lump-sum sale-and-installation contract, were plantation shutters taxable to the customer as tangible property or to the installer as real-property materials?
The installer was the taxable consumer. Plantation-shutter frames were permanently screwed or bolted to the wall or window jamb, so a lump-sum furnishing-and-installation contract improved real proper…
If a Florida sign manufacturer pays Florida use tax on materials it later installs as a capital improvement in New York, can it get a credit against the New York use tax it owes on the same materials?
Yes, but only for materials installed as an actual New York capital improvement, only if the tax was legally due and actually paid to Florida (not merely assessed), and only up to the amount of New Yo…
Is a foreign life insurance corporation with no New York premiums subject to New York tax because it holds a limited partnership interest with a basis over $1 million in a partnership doing business in New York?
Yes, with an exception. A foreign life insurer with no New York premiums is subject to Article 33 tax because its limited-partner basis in a New York partnership exceeded $1 million (deeming it to par…
If a company leases an aircraft and uses it mostly for charter flights to the public and its owners, with the rest for its own affiliates' business travel, does the lease qualify for New York's commercial aircraft sales-tax exemption?
Yes -- because at least 50% of the aircraft's use is transporting people for compensation at market-reflective rates, it qualifies as a commercial aircraft, so the lease payments, related maintenance …
My bank offers a specialized real estate financing product: the seller deeds the property directly to us (not the client), we lease the property back to the client at payments equivalent to mortgage principal and interest, and we deed the property to the client once the loan is paid off. Is real estate transfer tax due only once -- on the seller-to-bank deed -- or does it also apply to the lease and to our later deed back to the client at the end of the financing term?
RETT is due only once, on the initial seller-to-bank conveyance -- not on the lease or the bank's later deed back to the client. A UK bank offered specialized real estate financing: a client contracts…
Is a private investigation firm's charges for detective and surveillance work taxable, whether billed to an individual, directly to an insurance company, or to an insurance adjusting company?
Yes in all three scenarios -- charges for licensed private-investigator detective and surveillance services are taxable whether billed to an individual, directly to an insurance company, or to an insu…
Did permanently installed conveyors and automated handling equipment in a food distribution center become tax-treated real-property improvements?
No. The conveyors, cranes, lifts, caddy picks, racking, and related handling system remained machinery and equipment because they moved or handled goods for commercial use and retained their identity.…
How did South Carolina's one-percentage-point state sales-tax reduction work for purchasers age 85 or older under the 2008 guidance?
A purchaser age 85 or older could receive a one-percentage-point reduction in the state tax on qualifying personal-use purchases by buying the item personally, requesting the reduction at the sale, an…
Did a city's direct-purchase documents make construction materials for a fire-station project exempt from Florida sales tax?
No. The controlling contract established only that the city would issue its own purchase orders. Its insurance ended when materials reached the jobsite, and the contract did not establish direct invoi…
Did a city's direct-purchase documents make construction materials for a road-extension project exempt from Florida sales tax?
No. The controlling contract established only that the city would issue its own purchase orders. Its insurance ended when materials reached the jobsite, and the contract did not establish direct invoi…
When a customer uses a $40 federal government coupon toward a converter box, is Colorado sales tax computed on the full price or on the reduced price the customer actually pays?
Tax is computed on the full price, not the discounted price. A $40 federal coupon used toward a $49.99 converter box means the customer pays $9.99, but Colorado sales tax still applies to the full $49…
Was a fixed-fee plan for receiving unlimited calls from the Dominican Republic subject to Florida communications services tax?
Yes, for Florida customers. The plan routed calls from the Dominican Republic through the provider's switches to customers in the United States, so it was a communications service. Sales were taxable …
Is the 2008 federal economic stimulus rebate taxable in South Carolina, and does receiving it require a South Carolina return (per SC IL #08-7)?
Not taxable, and it does not by itself trigger a South Carolina return. SC Information Letter #08-7 explains that the 2008 federal economic stimulus rebate is not subject to South Carolina income tax …
Do out-of-state for-hire trucking companies that use Nebraska roads owe Nebraska corporate income tax?
Yes -- with a de minimis exception. Revenue Ruling 24-08-1 concludes that trucking companies transporting goods for hire over Nebraska roads are subject to Nebraska corporate income tax because their …
Could a parent and its subsidiaries stop filing consolidated Florida corporate income tax returns when the parent lacked Florida nexus?
Yes. Florida permitted the group to discontinue consolidated corporate income tax filing because the parent had no Florida nexus and was not eligible to file a Florida return. The approval required de…
How can taxpayers find South Carolina advisory opinions by subject (per SC IL #08-6)?
Use the index attached to SC Information Letter #08-6 to find South Carolina advisory opinions. It indexes the advisory opinions issued by the Department from 1987 to March 31, 2008, and it explains t…
How can taxpayers check whether an older South Carolina advisory opinion was modified or superseded (per SC IL #08-5)?
Use the citator attached to SC Information Letter #08-5. It helps you determine what effect newer South Carolina advisory opinions have on previously published ones — whether an opinion was modified, …
Did a federal television-converter-box coupon reduce the South Carolina sales or use tax base under the 2008 ruling?
No. The retailer had to include both the customer's payment and the federal reimbursement in gross proceeds or sales price. The coupon did not make the transaction an exempt sale to the federal govern…
Could a multistate company use one cost-of-performance method to source its service and software receipts for Florida's corporate income tax sales factor?
No. Florida required the company to source each separate income-producing activity under the rule that specifically governed it. Florida operations and services performed in Florida entered the numera…
Were an automobile lender's separate approval, check, agreement, disclosure, instruction, and thank-you documents subject to Florida documentary stamp tax?
No, for the documents reviewed. No single document—and no expressly incorporated group—contained all three required elements: an unconditional promise to pay, a sum certain, and the borrower's signatu…
Which purchases and sellers qualified for Louisiana's 2008 hurricane-preparedness sales tax holiday under Revenue Ruling 08-006?
The first $1,500 of each listed hurricane-preparedness item qualified for exemption from Louisiana's 4% state sales tax during the May 24-25, 2008 holiday, but the holiday did not exempt political-sub…
Does New York sales tax apply to an expert-network company's subscription charges for one-on-one phone consultations with industry experts, custom written research reports, and invitation-only seminars?
No, as long as the oral consultations and written reports are based on each consultant's own personal knowledge and experience rather than a shared database or recycled prior reports -- these are nont…
Does Tennessee sales and use tax apply to a carrier's DSL Internet-access sales to end users, its Layer 2 data-link sales to non-ISP customers with their own point of presence, and the telecommunications services it buys to build its own DSL network?
Mixed. DSL Internet access sold directly to end users is exempt under the federal Internet Tax Freedom Act; Layer 2 data-link transmission service sold to a non-Internet-service-provider that owns its…
Will a nonresident property owner become a New York domiciliary for personal income tax purposes just by registering to vote in a New York town?
Not automatically. Voter registration is only a secondary factor in a domicile analysis, considered only if the primary factors - business involvement, time spent at the residence, personal effects ke…
Do jobs created for an Empire Zone location but temporarily worked at a non-Empire-Zone facility qualify for the Empire Zone wage tax credit, and for how many years?
Only inside the zone. Jobs at the Empire Zone building qualify for the wage tax credit; the same jobs temporarily worked at a non-zone facility do not qualify until the employees move into the zone, a…
Are the coin-operated fees a laundromat charges customers to wash their own dogs in a self-service dog-wash machine subject to New York sales tax?
Yes. Because New York's sales tax regulations classify animals as tangible personal property, washing a dog in a coin-operated machine is a taxable service of maintaining tangible personal property, s…
Are bottled coffee drinks like Starbucks Frappuccino and chocolate drinks like Yoo-Hoo exempt from New York sales tax as food and beverages, or taxable as soft drinks?
Bottled Starbucks Frappuccino coffee drink is exempt from sales tax because it's essentially flavored cold coffee, but Yoo-Hoo chocolate drink is taxable because it's treated as a noncarbonated, flavo…
Is replacing a corroded metal chimney chase cover with a new stainless steel one a taxable repair, or does it qualify as an exempt capital improvement to real property?
It's a taxable repair or maintenance service, not an exempt capital improvement, because replacing a worn-out chase cover simply restores the chimney chase to good condition rather than adding new val…
Is a daily investment-analysis newsletter about corporate bonds, delivered by email, fax, or hard copy on a subscription basis, exempt from sales tax as a periodical?
Yes. The daily fixed-income-market newsletter qualifies as an exempt periodical because it's published regularly with varied bylined articles and is available to the public by subscription, and its el…
Did a city's proposed direct-purchase procedure exempt materials for an advanced wastewater-improvement project from Florida sales tax?
No. The documents addressed city purchase orders, direct payment, title, and insurance but did not require vendors to invoice the city directly. The agreement was also unexecuted, and any conclusion w…
How does Kansas sales tax apply to a farm special-events business — barn rental, tables and chairs, catering, and horse-drawn carriage rides?
It depends on the charge. Renting the barn (a meeting/reception space) is not taxable, and tables and chairs bundled into that rental at no separate charge are not taxed either — the operator pays tax…
Are frozen, pre-made dinners sold by a dietician from a retail freezer case -- with no seating or on-site heating -- subject to New York sales tax?
No. Because the frozen dinners are sold cold, pre-made rather than made-to-order, with no seating or on-site heating facilities -- the same way frozen dinners are commonly sold in ordinary food stores…
Did a federally funded $40 converter-box coupon reduce the amount subject to Kansas sales tax when the government reimbursed the retailer?
No. The federal $40 coupon did not reduce the taxable selling price because the retailer was reimbursed by the National Telecommunications and Information Administration. Kansas sales tax applied to b…
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