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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When a Tennessee motor vehicle dealer separately bills a customer the $5.50 statutory fee for a temporary tag, does the dealer owe Tennessee sales tax or business tax on that charge?
No to both. The $5.50 temporary-tag fee, when separately stated on the customer's invoice and passed through dollar-for-dollar to the state, is treated as payment for the intangible right to operate t…
What did South Carolina's 2007 amendment to Regulation 117-300.6 on retail licenses and partnerships do (per SC IL #07-5)?
SC Information Letter #07-5 announces that the General Assembly approved an amendment to SC Regulation 117-300.6, which concerns 'Retail Licenses and Partnerships,' on February 1, 2007, and that the a…
Are a church's sales of below-cost food through a grocery relief program exempt from Kansas sales tax?
Taxable. The Kansas exemption for below-cost food sold by a 501(c)(3) organization, K.S.A. 79-3606(bbb), applies only when the food recipient is required to perform community service in exchange for t…
Were the submitted line-of-credit agreement, attestation, access check, and control agreement subject to Florida documentary stamp tax?
Not as submitted and unrecorded. None of the four documents contained both an unconditional promise to repay a sum certain and the borrower's signature, and none expressly incorporated another reviewe…
Are monthly fees for web-based discount and service membership clubs subject to Utah sales and use tax?
No, with a carve-out. Monthly membership fees for seven web-based discount and benefit clubs (offering things like third-party discounts, warranty protection, credit monitoring, and travel protections…
When a short-term rental broker's business office is in a different jurisdiction than the homes it rents out, which jurisdiction gets the local option sales tax -- the office's location or the property's location?
The property's location, not the business office's location. When a broker rents out short-term (under 30 days) homes, condos, and cabins located in multiple jurisdictions from a single business offic…
Did Kansas's farm-machinery sales-tax exemption cover ATVs or work-site utility vehicles, and how were interstate sales treated?
ATVs did not qualify for Kansas's farm machinery and equipment exemption, including their parts and repair labor. A defined work-site utility vehicle with a bed or cargo box could qualify — along with…
Can a 48-foot flatbed trailer with Texas token-trailer registration qualify for the interstate motor vehicle tax exemption?
Potentially yes. A token-registered flatbed trailer could qualify if used exclusively with a truck or tractor operating under IRP apportioned registration in interstate service. The claimant had to pr…
Does a bank subsidiary's one-time election to be taxed under Article 9-A instead of Article 32 carry over after it converts from one state's corporation into a Delaware corporation?
No. The bank's one-time section 1452(d) election to be taxed under Article 9-A instead of Article 32 does not carry over to the converted Delaware corporation. Because the conversion creates a new Del…
Which exemptions apply to South Carolina's local sales and use taxes collected by the Department (per SC IL #07-4)?
SC Information Letter #07-4 provides the Department's reference chart showing which exemptions apply to each type of local sales and use tax the Department collects on behalf of counties, school distr…
Does breeding horses for resale qualify for Kansas agricultural sales-tax exemptions, and must the breeder collect tax on horse sales?
Yes, generally. Breeding horses for resale qualifies as agricultural for Kansas sales-tax purposes, so the breeder's purchases of breeding stock and the feed and supplements for that breeding stock ar…
Is a monthly application-service-provider (ASP/SaaS) hosting fee, and its bundled add-on services like database setup, installation, bank reconciliation, and training, subject to Tennessee sales tax — and does the taxpayer owe use tax on the software licenses and hosting services it buys to run the ASP business?
The monthly ASP fee and related standalone services (database setup, bank reconciliation, training) are not subject to Tennessee sales tax as long as they're billed separately, but on-site installatio…
For a vacation/overnight rental property manager, which of its various charges — cleaning fees, forfeited deposits, reservation fees, pet deposits, resold show tickets, pass-through firewood charges, bundled wedding packages, and trip insurance — are subject to Tennessee sales tax?
Most are taxable: forfeited deposits, reservation fees, non-refundable pet deposits, resold show tickets, and pass-through item charges (like firewood) are all subject to sales tax, as is any bundled …
Did a county's contract procedures make construction-material purchases exempt as direct government purchases?
No. Direct payment to suppliers was the only required factor the contract clearly satisfied. It did not establish county-issued purchase orders with the exemption number, direct vendor invoices to the…
Could one related rental company subtract property taxes it reimbursed to the vehicle-owning affiliate from South Carolina rental surcharges?
Yes, on the stated facts. The rental company could reimburse its vehicle-owning affiliate for a documented share of South Carolina property tax and subtract that amount from surcharge remittances. Acr…
Are ride tickets for portable funhouse amusements at a county fair subject to New York's admission-charge sales tax?
No. Ticket sales for portable funhouse amusements at a county fair are not subject to the sales tax on admission charges, because a funhouse is an amusement ride or device rather than a 'place of amus…
Are materials a developer buys to rehabilitate New York City Housing Authority buildings exempt from sales tax if the Authority takes immediate ownership under a long-term lease?
Yes. Materials purchased by a developer, its contractors, or subcontractors that become an integral component part of buildings owned by the New York City Housing Authority (a tax-exempt governmental …
Does a construction-debris recycler's rock-crushing machine qualify for New York's production-machinery sales tax exemption?
The rock crusher can qualify for the production-machinery exemption, but only if the recycler can show that more than 50% of its use processes construction debris into materials that are actually sold…
Are a party-entertainment company's charges for entertainers, equipment rentals, novelty items, and food packages subject to New York sales tax?
It depends on the offering: charges for entertainers alone (clowns, DJs, magicians) aren't taxable, but renting equipment the client operates without staff control is a taxable rental, novelty items a…
Is installing a wood, pellet, or gas burning stove, a zero-clearance fireplace, or manufactured stone veneer a tax-exempt capital improvement in New York?
Generally yes. Installing gas, wood, or pellet burning stoves that require cutting holes, installing chimney flues or liners, or reinforcing floors and walls, along with installing zero-clearance fire…
Is the gain from selling a passive interest in a lower-tier partnership that owns New York real estate treated as New York source income for a nonresident partner?
No. Because Petitioner never used its interest in the lower-tier partnership (589 Associates, LP) in a New York trade or business - it was purely a passive investment, not pledged as collateral or oth…
Could an independent contractor avoid gross receipts tax penalty and interest because she did not know her services to a nonprofit were taxable?
No. Aida Luz Gonzales's lack of knowledge did not excuse gross receipts tax on her independent-contractor services to the Boys and Girls Club. A Type 9 nontaxable transaction certificate covered quali…
How are South Carolina counties ranked for the job tax credit for 2007, and which counties qualify for the fee-in-lieu and tax moratorium (per SC IL #07-3)?
SC Information Letter #07-3 publishes South Carolina's 2007 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…
How did Louisiana's former film investor credit treat demand-note investments, the 25% base credit, 10% resident-payroll bonus, later allocations, transfers, and carryforward?
A qualifying demand note counted at original principal if fully and promptly drawable; otherwise it counted at fair value. Certified investment earned a 25% credit plus 10% for qualifying Louisiana-re…
Which South Carolina county classifications governed 2006 job credits, tax moratoriums, and reduced fee-in-lieu investment under RR 07-1?
The ruling published two historical 2006 job-credit ranking lists based on when a credit was first earned, designated Allendale, Marion, McCormick, and Williamsburg as moratorium counties, and identif…
Does Utah's throwback rule pull a Utah-based credit card issuer's out-of-state customer receipts back into Utah's tax numerator if a sister company has nexus in those states?
No throwback needed, based on the facts represented. A Utah-commercially-domiciled credit card issuer generally sources its credit card interest/fees, interchange fees, and loan interest to each cardh…
How is South Carolina treating Economic Impact Zone credit carryforwards and effective dates after the SCANA litigation (per SC IL #07-2)?
SC Information Letter #07-2 explains the Department's position after a November 14, 2006 Circuit Court order in SCANA Corporation and Subsidiaries v. South Carolina Department of Revenue (Case No. 200…
Was documentary stamp tax due when an individual transferred unencumbered property to an LLC owned by the individual's revocable trust?
No. The property was unencumbered, the LLC's sole member was the individual's revocable trust, and the individual was the trust's sole settlor and lifetime beneficiary. Florida found no change in bene…
For a company that runs on-site photocopy and fax centers under a management-fee contract, which equipment and supplies qualify for the industrial machinery sales tax exemption, and must sales tax be charged on the full contract price?
Partly exempt. Pre-press, press, binding, and stapling machinery used in the copying process can qualify for the industrial machinery exemption (with Commissioner approval), and paper and copier compo…
Was additional Florida documentary stamp tax or surtax due when a reverse-1031 accommodator deeded replacement property to the exchanger?
No. The exchange agreement established that the accommodator acquired and held the replacement property as the exchanger's agent and for the exchanger's benefit. Because applicable deed, mortgage, and…
How does an estate or trust recompute the 2006 federal credit for prior year minimum tax to figure the Nebraska minimum tax credit on Form 1041N?
Revenue Ruling 23-06-2 directs that the federal credit for prior year minimum tax on an estate's or trust's 2006 return (Federal Form 8801) must be recalculated for Nebraska to determine the Nebraska …
How does an estate or trust recompute the 2006 federal alternative minimum tax to figure the Nebraska minimum tax on Form 1041N?
Revenue Ruling 23-06-1 directs that the alternative minimum tax (AMT) figured on an estate's or trust's 2006 U.S. Fiduciary Income Tax Return (Federal Form 1041, Schedule I) must be recalculated for N…
How do you recompute the 2006 federal credit for prior year minimum tax to figure the Nebraska minimum tax credit on Form 1040N?
Revenue Ruling 22-06-2 directs that the federal credit for prior year minimum tax figured on a taxpayer's 2006 federal return (Federal Form 8801) must be recalculated for Nebraska to determine the Neb…
How do you recompute the 2006 federal alternative minimum tax to figure the Nebraska minimum tax on the Form 1040N?
Revenue Ruling 22-06-1 directs that the alternative minimum tax (AMT) figured on a taxpayer's 2006 federal return (Form 6251, or the AMT worksheet in the Form 1040A instructions) must be recalculated …
Can a corporation include the gross proceeds from redeeming short-term investment securities in its Kansas apportionment sales factor?
No -- the assessment was upheld. The Department excluded a corporation's gross investment proceeds (the return of principal from redeeming and rolling over short-term treasury securities) from the den…
Which exemptions apply to South Carolina's local sales and use taxes collected by the Department (per SC IL #07-1)?
SC Information Letter #07-1 provides the Department's reference chart showing which exemptions apply to each type of local sales and use tax the Department collects on behalf of counties, school distr…
Are a shopping mall landlord's unmetered electricity reimbursement, trash-removal, and CAM charges to tenants subject to New York sales tax?
No for all three: a landlord's fixed, unmetered monthly electricity reimbursement is part of the rent (not a taxable utility sale) because it isn't tied to actual usage, and flat trash-removal and CAM…
Do a railroad-debris salvage company's sorting equipment, rock crusher, tie-assembly operation, and highway trucks qualify for New York's production-machinery sales tax exemption?
It depends on the equipment and activity: merely sorting and segregating usable from unusable salvaged railroad ties and scrap steel is NOT exempt production, but assembling new railroad ties for sale…
Are a freelance fashion stylist's services and the clothing/props they provide for photo shoots subject to New York sales tax?
A fashion stylist's coordinating and styling services aren't taxable, but clothing, accessories, and props that are actually transferred (sold) to the client are taxable tangible personal property, an…
Is a graphic design studio's charge for a client's final logo or branding design subject to New York sales tax when it's delivered electronically versus on a disk?
Design charges are not taxable when the final design (logo, branding, artwork) is delivered to the client purely electronically, since that's a sale of intangible property, but the same design deliver…
If a New York State employee directly transfers funds from a New York State-sponsored IRC 403(b) plan to a different 403(b) plan, are the retirement benefits later received from that second plan still exempt from New York personal income tax?
Yes, if New York State actually contributed to the original 403(b) plan - the direct plan-to-plan transfer is not a taxable distribution, so the transferred funds and their earnings keep their exempt …
Is a non-U.S. fund whose only activity is buying and holding life-settlement policies - some originally owned by New York residents - subject to New York's insurance tax or general business franchise tax?
No. A non-U.S. fund whose sole activity is buying and holding traded life-insurance (life-settlement) policies is not 'doing an insurance business,' so it is not an insurance corporation under Article…
What Kansas E-85 tax rate applied beginning January 1, 2007, and how did Form MF-35 change for nonhighway-use refunds?
Kansas reduced the motor-vehicle fuel tax on E-85 to $0.17 per gallon effective January 1, 2007 under Senate Bill 544. The Department revised Form MF-35, Claim for Refund of Motor-Vehicle/Special Fuel…
Were single-use postoperative pain pumps purchased by a physician or clinic exempt from Florida sales tax?
Yes, when the licensed physician dispensed the single-use prescription-labeled pump to the patient, who wore it home and discarded it after use. A reusable pump remained taxable to the healthcare prov…
What timing, rematching, and valuation rules apply when a Texas rental company uses retired vehicles for fair market value deductions?
The retired vehicle had to leave service before the replacement purchase and no more than 18 months earlier. The company could rematch eligible deductions with records, but had to keep the same book v…
Were reservation, condominium-application, and optional golf-transfer fees taxable as transient-accommodation rent?
No, as transient-accommodation rental charges on the stated facts. The reservation and condominium fees paid for application processing and were never credited against rent. The golf transfer fee was …
Under RR 06-12, which pass-through income qualified for South Carolina's reduced active-business income-tax rate?
Eligible individuals, estates, and trusts could elect the phased reduced rate for South Carolina active trade or business income from a sole proprietorship, partnership, S corporation, or qualifying L…
Are reinvested mutual-fund dividends and capital-gain distributions taxable when the investor later sells the fund shares at a loss?
Yes. Manuel Vigil had to report the dividend and capital-gain distributions shown on his 2002 Form 1099 even though he directed Charles Schwab to reinvest them and later sold his mutual-fund shares at…
Was documentary stamp tax based only on the mortgage when encumbered property moved to an LLC owned by the transferor's trust?
Yes. The transfer produced no change in beneficial ownership because the LLC's sole member was the transferor's revocable trust and the transferor was its sole lifetime beneficiary. The property's fai…
Can a parent company file one combined sales and use tax return covering both itself and its wholly-owned single-member LLC leasing subsidiary, instead of the subsidiary registering and filing separately?
Yes. Because Subsidiary is a disregarded single-member LLC, the Department will treat it as a division of Parent for sales and use tax purposes -- Parent may register and pay tax owed by Subsidiary on…
Is a sale of protective safety leggings to a meat-packing company exempt under Kansas's integrated plant (manufacturing) exemption?
Yes. The sale of safety leggings to a meat-packing company is exempt under the integrated machinery and equipment (integrated plant) exemption, K.S.A. 79-3606(kk). Although K.S.A. 79-3606(kk)(5)(J) ta…
Can a central-station alarm company buy the burglar and fire alarm equipment it installs at customer sites exempt from sales tax as a purchase for resale?
Only if the alarm equipment remains fully functional on its own (usable as a stand-alone local alarm or with another provider's monitoring) and Petitioner genuinely rents it to the customer at a reaso…
Could a corporate group stop filing Florida consolidated returns after substantial growth, acquisition, and business-model changes?
Yes, conditionally. Florida found the group's substantial growth, acquisition, expanded lines of business, and changed business model were changes in circumstances sufficient to permit separate return…
Was the electricity portion of shopping-center CAM charges exempt when a year-end reconciliation identified the tenant's share?
Yes, for the electricity portion passed through without markup. The lessor paid sales tax to the utility, the year-end reconciliation listed shopping-center electricity and the tenant's pro-rata share…
Were a landlord's bundled after-hours HVAC charges taxable as commercial rent when the utility portion was not separately stated?
Yes. The charges were required additional rent and bundled electricity with other after-hours costs. Although the landlord had paid tax to the utility, its tenant invoices did not separately state the…
What Kansas oil and gas conservation-fee rates took effect December 22, 2006, and how were December reports split?
Effective December 22, 2006, Kansas increased the oil conservation assessment to 91.00 mills per barrel and the gas assessment to 12.90 mills per 1,000 cubic feet (one mcf). December 2006 production t…
Did Florida treat installed Murphy beds as real-property improvements or sales of tangible personal property?
Real-property improvements. The bed mechanism was anchored to the foundation or floor beams and the cabinet was bolted to wall studs for indefinite placement. Under a lump-sum contract, the contractor…
Did legally reprocessing and reselling single-patient Rx devices remain exempt when customers could receive equivalent devices?
Yes. Legally reprocessed devices remained exempt when they were qualifying single-patient prescription products bearing the required federal restriction. The result covered both returning the customer…
Did legally reprocessing and reselling single-patient Rx medical devices eliminate their Florida sales-tax exemption?
No. One-time-use medical devices that were legally reprocessed, remained single-patient prescription devices, and carried the required federal Rx restriction did not lose their exemption when resold. …
Are a document-processing company's charges for scanning surveys and extracting raw data into computer files subject to New York sales tax?
No, as long as the extracted data is delivered electronically -- converting scanned paper surveys into raw electronic data files is a nontaxable format-conversion service, not a taxable information se…
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