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 surgical laser used to create LASIK flaps, and its single-use interface (a milled glass part, like the blade in the traditional method), exempt from Colorado sales or use tax?
They're taxable. Colorado exempts drugs or materials a doctor furnishes to a patient (plus corrective eyeglasses, contacts, and hearing aids), but the rule turns on whether the item leaves with the pa…
How are South Carolina counties ranked for the job tax credit for 2008, and which counties qualify for the fee-in-lieu and tax moratorium (per SC IL #08-1)?
SC Information Letter #08-1 publishes South Carolina's 2008 county rankings for the job tax credit, plus the counties that qualify for a reduced fee-in-lieu investment threshold and for the tax morato…
Under the 2008 guidance, which pass-through income qualified for South Carolina's reduced active-business income-tax rate?
Eligible individuals, estates, and trusts could elect the reduced rate for South Carolina active trade or business income from a sole proprietorship, partnership, S corporation, or qualifying LLC. Pas…
Which limited South Carolina contacts did the Department say would not, by themselves, create income-tax nexus under its 2008 guidance?
Many isolated or passive contacts did not create income-tax nexus by themselves, including in-state product sales without other activity, bank accounts, certain loans, short internal meetings, and pro…
Are Kirschner Wires (K-Wires), temporary bone-fracture implants, exempt from Tennessee sales tax, and did a 2008 law change affect the answer?
Yes, K-Wires sold individually are exempt from Tennessee sales and use tax -- but the LEGAL BASIS for the exemption changed with a January 1, 2008 statutory amendment, and the exemption is now conditi…
Did an exempt organization's direct-purchase agreement qualify its construction materials for Florida's sales-tax exemption?
No. The direct-purchase agreement was not clearly incorporated into the controlling construction contract, did not clearly make the exempt organization the purchase-order issuer, did not require direc…
Could Louisiana taxpayers deduct hurricane recovery benefits and insurance settlement proceeds that were included in federal income?
Qualifying benefits from a statutory hurricane recovery entity were deductible to the extent included in federal income. Insurance settlement proceeds did not qualify and remained in Louisiana income …
Is glass-bottled spring water sold under a physician's prescription exempt from New York sales tax as a drug, medicine, or health-preservation product?
No. New York taxes bottled water regardless of container, and a physician's prescription for chemically sensitive patients doesn't turn spring water into an exempt drug, medicine, or health-preservati…
Are purely financial 'virtual' electricity trades in the NYISO wholesale market subject to New York sales tax on electricity, and does a virtual-only trader have to register as a sales tax vendor?
No. Virtual transactions in NYISO's market are purely financial and never involve actually generating, delivering, or consuming electricity, so they aren't taxable sales of electricity or electric ser…
Are software-as-a-service (SaaS) hosting fees and network-connectivity fees subject to Colorado sales or use tax?
Apparently not. On the limited facts, the Department found that neither a SaaS hosting fee (the right to use hosted software, with no ownership transferred) nor a separately billed network-connectivit…
Does Colorado sales or use tax apply to custom software, standalone services, installation, repairs, freight, and training sold with telecommunications equipment?
Mostly no, with one big 'it depends.' Custom software, standalone services, repair labor, and training are generally not subject to Colorado sales tax. Freight/transportation is generally not taxable …
Are a private golf and country club's dues, initiation fees, and add-on charges (locker, bag storage, tournament, etc.) taxable, even though its members don't run the club or control its activities?
Yes. Requiring every homeowner in the club's surrounding community to join as a condition tied to owning a home is itself a membership restriction, which makes the club a taxable social or athletic cl…
Are a billboard-advertising company's charges to clients, its poster-printing costs, its installer's charges, and its billboard-space fee subject to New York sales tax?
The company's fee to its clients for arranging billboard advertising is exempt as an advertising service, but the company itself owes tax on its own poster-printing purchases and its installer's and b…
How does a New York S corporation figure out how much of a nonresident shareholder's income counts as New York source income?
The source of a New York S corporation's income, gain, loss, and deduction items is determined at the corporate level, using the same business allocation percentage and investment allocation percentag…
Must an employer collect sales tax on meals it sells to employees in a company cafeteria that is not open to the public?
Not required to collect from employees. Because the company cafeteria is not open to the public, the employer may elect to pay Kansas sales tax on its own food purchases rather than collect sales tax …
How can taxpayers find South Carolina advisory opinions by subject (per SC IL #07-23)?
Use the index attached to SC Information Letter #07-23 to find South Carolina advisory opinions. It indexes the advisory opinions issued by the Department from 1987 to December 31, 2007, and it explai…
How can taxpayers check whether an older South Carolina advisory opinion was modified or superseded (per SC IL #07-22)?
Use the citator attached to SC Information Letter #07-22. It helps you determine what effect newer South Carolina advisory opinions have on previously published ones — whether an opinion was modified,…
Was a vehicle transfer from a single-member LLC to its owner taxable when the owner registered the vehicle in Florida?
Yes. Although the LLC was disregarded for federal income-tax filing, Florida treated it as a separate legal entity for non-income-tax purposes. Transferring the LLC-owned vehicle to the sole member fo…
Could a Canadian buyer receive Florida's export exemption after taking possession of a vehicle at the dealership and driving it to Canada?
No. Taking possession at the Florida dealership broke the continuous export process, and personally driving the vehicle to Canada did not restore the exemption. The buyer's export intent and later arr…
Should a locksmith separately charge Florida sales tax for replacing and rekeying permanently installed door locks?
No separate sales-tax line should have been charged to the customer. Florida classified the replacement, rekeying, and installation described in the invoice as a time-and-materials real-property contr…
Was a chemical absorbed into manufactured concrete roof tiles subject to Florida sales and use tax?
No. Engineering materials showed that more than 99% of the E-44 chemical was absorbed into the concrete roof tiles. Florida treated the incorporated chemical as an ingredient or component of tangible …
Were photo-lab prints produced and shipped for professional photographers' online customers wholesale sales under this SC PLR?
Yes, when the photographer resold the prints and the lab documented wholesale status or obtained a valid resale certificate. Shipping, handling, and credit-card processing charged with the wholesale p…
After Nebraska repealed the tax on contractor labor in 2007, is work on telephone and cable lines still taxable?
Yes. Revenue Ruling 01-07-2 concludes that charges to install, construct, repair, replace, upgrade, or remove telephone, telegraph, mobile telecommunications, or community antenna (cable) television p…
Were long-term lease obligations tied to industrial revenue bonds borrowed capital subject to Louisiana corporation franchise tax?
No. Long-term lease obligations associated with industrial revenue bonds were not borrowed capital and were not included in the Louisiana franchise-tax base. The corresponding future lease right also …
Were sales of two model homes isolated or occasional transactions exempt from New Mexico gross receipts tax?
Only the first sale. The first model was built under an owner-builder permit as an office and sales display, used for more than a year, and sold only after a visitor asked to buy it. That sale was iso…
Did a bona fide replacement vehicle supplied under Louisiana's lemon law or a manufacturer's warranty trigger sales tax?
Not when the substitute was a bona fide equal-value replacement under the warranty or lemon law; the Department treated it as part of the original sale, not a return and new sale. Any customer payment…
If a multi-level marketing company sells through independent distributors in Colorado, is sales tax figured on the suggested retail price or on what the customer actually paid, and who is liable if a distributor fails to collect it?
Sales tax is figured on the money actually received in cash and credits, not the suggested retail price. Colorado lets the company treat its independent distributors as its agents, so the company is t…
Will Colorado accept an electronically captured exemption/resale certificate with an electronic signature as adequate audit documentation, and what due diligence must the cashier still do?
Yes, with safeguards. Colorado will accept an electronically captured exemption or resale certificate with an electronic signature as adequate audit documentation, but the cashier must still: view the…
Is market/consumer research delivered on paper or CD a taxable product or a nontaxable service in Colorado?
It depends on custom vs. repetitive. Under the 'true object' test, market or consumer research created for a single specific client is a nontaxable service, with the paper or CD treated as incidental …
Are external fixators and single-use surgical wire exempt from Colorado tax as therapeutic devices?
External fixators are exempt; the surgical wire is taxable. Colorado exempts therapeutic devices, equipment, and accessories that correct or treat a human physical disability. An adjustable external f…
Is gas, electricity, and water used in manufacturing exempt in Colorado — and how do R&D, packaging, residential use, nursing homes, and restaurants fit?
Electricity and gas (and steam, coal, fuel oil, coke, nuclear fuel, wood) used in manufacturing and industrial processes are exempt from state, special-district, and state-administered local sales/use…
Is carbon dioxide sold to a retailer to carbonate fountain drinks taxable, and is the rental of the tank system that ships and stores it taxable?
The carbon dioxide is exempt — it becomes an ingredient of the soft drink, so the supplier's sale to a retailer is an exempt sale for resale. The shipping tank is also exempt as the container for an e…
After a sale is completed, can the retailer and buyer rescind it, claim a sales-tax refund, and resell the property to a leasing company that then leases it back to the buyer?
Only if there's a genuine full refund. Sales tax is a tax on a completed transaction, and later recasting the deal — rescinding it and reselling to a leasing company that leases the property back — do…
For a commercial furniture dealer, which charges — delivery, installation, reconfiguration, repair, storage, freight-in, design — are subject to Colorado sales tax?
Services a furniture dealer provides are taxable when they're inseparable from the sale of the goods, and nontaxable when they're optional and separately stated. Resales to end users are taxable (resa…
Is a service contract bought together with rented office equipment taxable in Colorado?
It depends on whether it's a separate contract. If the equipment rental and the service contract are one bundled deal, the entire consideration is taxable unless the retailer gets Department permissio…
Are outsourced call-center / contact-center services subject to Colorado sales tax?
No. Outsourced call-center / contact-center services aren't subject to Colorado sales tax. Colorado generally doesn't tax services, and although it does tax telephone service, the call-center company …
Are CCTV consulting and project-management fees taxable in Colorado, and can a company credit sales tax it paid another state on equipment it bought to resell to its client?
Consulting and project-management fees for a video-surveillance system are not taxable if they're genuinely separable from the equipment sale and separately stated on the invoice (the Department won't…
When a night club collects all the money for a meal-and-show package sold with a separate restaurant, who reports and remits the sales tax?
It depends on the structure. If the night club is acting only as the restaurant's collecting agent, each business can report and remit sales tax on just its own portion of the package, even though the…
For short-term rentals of oilfield living quarters, water/sewer systems, generators, transportation, cleaning, and consumables, who owes Colorado tax and on what?
For rentals of three years or less, the lessor is treated as the end user: it owes sales or use tax on what it paid for the equipment (with credit for tax paid another state), rather than charging tax…
Can a retailer buy bulk gift-card stock tax-free as a sale for resale, and is a transaction-tracking service bundled with the cards taxable?
No resale exemption. A gift card is functionally a credit voucher, not something the retailer actually sells to the customer (there's no separate charge for the card itself), so a retailer's bulk purc…
Are leases of dark (unlit) fiber-optic cable, and charges for 'lit' fiber, subject to Colorado sales or use tax?
It depends on the fiber. Leasing dark (unlit) fiber-optic cable is a taxable lease of tangible personal property if the cable keeps its identity as property and can be removed without significant dama…
Is crime-scene / biohazard property remediation (chemical wipe-downs, flooring removal, odor thermo-fogging) a taxable sale of property or a nontaxable service in Colorado?
It's a nontaxable service. Under Colorado's 'true object' test, crime-scene and biohazard remediation (chemical wipe-downs, removing flooring, thermo-fogging out odors) is primarily a service, not a s…
Are energy drinks like Red Bull, and enhanced or carbonated waters, exempt 'food' or taxable in Colorado?
Energy drinks are taxable. Colorado exempts only 'food for domestic home consumption,' which it defines by what's eligible under the federal food-stamp (SNAP) and WIC programs. The USDA has determined…
When a leased vehicle is first leased and taxed in another state and then moved to Colorado, does Colorado give the lessee a credit for the tax paid to that other state?
Yes — but only if the other state's tax legally fell on the lessee. When a vehicle is first leased and taxed in another state, then moved to Colorado, the lessee owes Colorado use tax at registration …
What is South Carolina's tax interest rate for the period January 1, 2008 through March 31, 2008 (per SC IL #07-21)?
7%. SC Information Letter #07-21 sets South Carolina's interest rate on tax underpayments and overpayments at 7% for the period January 1, 2008 through March 31, 2008. Interest is compounded daily, ex…
If a compression-services company restructures into separate lease and service entities, are the compressor leases and the compression services taxable in Utah, and is transferring the compressor fleet into the new entities a taxable sale?
Compression services taxed as a lease. The Commission ruled that the "compression services" the taxpayer's restructured entities provide to third-party customers are, in substance, a taxable lease or …
Was a service that converted, edited, proved, and electronically filed customers' SEC documents taxable as communications under this SC PLR?
No, on the stated facts. The true object was the provider's personal service of converting, editing, proving, and making the customer's documents SEC-compliant; electronic EDGAR filing was incidental.…
Does a New York LLC that is taxed as a partnership and formed only to trade securities for its own account have to pay the annual LLC filing fee under Tax Law § 658(c)(3)?
No. Because the LLC's only activity is buying and selling securities for its own account - not holding property for sale to customers - Tax Law § 631(d) means it is not carrying on a business in New Y…
Is a New York resident's distribution from an out-of-state 529 college savings plan subject to New York State personal income tax if it's used for qualified tuition expenses?
No. Because the distribution qualifies as a federal tax-free withdrawal under IRC § 529(c) and no Tax Law § 612 modification requires adding it back, the entire distribution - including earnings - pas…
Can a property owner get a New York sales tax refund on building materials used to rehabilitate a building that's part qualifying commercial space and part nonqualifying residential space in an Empire Zone?
Yes, but only for the commercial portion. The sales tax refund on building materials should be allocated between the qualifying commercial space and the nonqualifying residential space by any reasonab…
When a computer consulting firm sells hardware, prewritten software, installation, and consulting together in one deal, which pieces are taxable and which are exempt?
Hardware and prewritten software sales, and hardware installation/repair, are taxable; computer consulting and software-only services (troubleshooting, reconfiguring, custom coding) are exempt only if…
When an out-of-state company uses an unrelated fulfillment provider that leases a warehouse from the company's affiliate, is that warehouse the provider's 'premises' so the fulfillment-services exemption protects the company?
Yes for the user, no for the owner. A warehouse an affiliate leases to an unrelated third-party fulfillment provider is treated as the provider's 'premises,' so the out-of-state company using those fu…
Did New Mexico penalty and interest on tax caused by an IRS adjustment begin only when the Department later notified the taxpayers?
No. After the IRS disallowed federal itemized deductions, the Cordovas owed $709 of additional 1999 New Mexico income tax and did not amend their state return. Interest ran from the original April 200…
Who handled Florida tax when an out-of-state dealer sold through an unregistered out-of-state buyer and goods were drop-shipped to Florida?
It depended on where the goods were located when purchased. For goods shipped from a Florida facility, the registered dealer had to collect tax from the Florida customer because the unregistered buyer…
How did the former downtown historic rehabilitation credit's $5 million taxpayer cap, affiliate test, pass-through allocations, and two-sale rule apply to a syndicated project?
Pass-through entities could allocate credits disproportionately, and each ultimate taxpayer could receive up to $5 million if not affiliated under the 50% common-ownership and attribution test. An int…
Who owed South Carolina use tax on untaxed Internet, catalog, travel, and other out-of-state purchases under RR 07-5?
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 enough tax had not already been paid. Tax legally pa…
Which foods became exempt from South Carolina's state sales and use tax on November 1, 2007 under RR 07-4?
Unprepared food that could lawfully be bought with USDA food benefits became exempt from state sales and use tax, even when purchased with cash or from a retailer that did not accept benefits. Prepare…
Did 25% of a taxpayer's $1,900 of unreimbursed medical expenses create a refundable New Mexico income tax credit?
No. Joan Oller could deduct 25% of her $1,900 of unreimbursed medical expenses, and that $475 deduction helped reduce taxable income to zero. It was not a refundable credit. The senior medical credit …
How did Texas treat seller-financed vehicle accounts transferred to related finance companies before and after the 2007 law change?
Partially superseded. The 2007 law let qualifying registered related finance companies receive transfers without immediate tax acceleration, while the dealer remained responsible for tax collection an…
Could a hardware retailer rely on Type 6 and Type 9 NTTCs for tools and construction materials that the certificates did not cover?
No. Type 9 NTTCs did not cover construction materials bought by governments or nonprofits, and Type 6 NTTCs covered only items incorporated into a construction project—not drill bits, rollers, tools, …
How these rulings are useful
- See how the rule applies: A letter ruling shows how a state revenue department actually applied the tax law to a specific business and set of facts.
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