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 yacht enter Florida without use tax solely to be offered for sale by a registered Florida broker?
Yes, under strict conditions. The yacht had to be listed with a registered Florida broker, remain under the broker's care, custody, and control, and be used in Florida solely for retail-sale activitie…
When does a deed conveying South Carolina mineral rights trigger the deed recording fee?
A deed conveying mineral rights is subject to the recording fee when the buyer will sever the oil, gas, sand, or other minerals, because the transaction transfers realty. If the seller will sever the …
Could a cabinet manufacturer prorate Florida's boiler-fuel exemption when one gas meter served production and building heat?
No. The manufacturing boiler-fuel exemption required the purchased fuel to be used exclusively in the qualifying production process. Because the same metered natural gas also heated the facility for e…
Could interest on tax from a joint return be waived because the couple divorced, the Department gave incorrect refund information, and payment caused hardship?
No. Penny Mitchell and her former husband remained jointly and severally liable for interest on $672 of underreported 2001 New Mexico income tax until final payment. Their divorce did not change liabi…
Is the sale of a house that the buyer plans to relocate subject to Kansas sales tax?
No. Even though the buyer intends to move the house to another location, the Kansas Department of Revenue treats the building as real property at the time of the sale. Because a sale of real property …
Who had to file and pay Kansas estate tax under the stand-alone law for deaths in 2007 through 2009?
For decedents dying in 2007, 2008, or 2009, Kansas's stand-alone estate-tax law required a return only when the gross estate exceeded $1 million; an estate at or below that threshold was not subject t…
How is New York source income determined for guaranteed payments a nonresident law firm partner receives, when he personally works only from an out-of-state office and serves mostly out-of-state clients?
Guaranteed payments to a nonresident partner are treated as a distributive share of partnership income, not personal compensation, so New York sourcing follows the partnership's own books and records …
When a partner's interest in a partnership is reduced after brownfield property is placed in service but within the same partnership tax year, which ownership percentage governs the partner's share of the brownfield redevelopment tax credit?
The partner's ownership percentage on the date the qualified tangible property is placed in service controls, even if that percentage is later reduced within the same partnership taxable year. Under I…
Can a corporation elect to treat its Eurodollar deposits, other time deposits, and Yankee certificates of deposit as investment capital, apportioned by its investment allocation percentage?
Yes. Eurodollar deposits, other time deposits, and Yankee CDs maturing within six months and one day are debt instruments treated as cash on hand or on deposit. Because the corporation also holds long…
As part of the Brooklyn Bridge Park redevelopment, I own land I'll sell to the park's development subsidiary for $1.00, then lease back for up to 99 years to build a mixed-use condo project, with an option to buy the fee back for $1.00 when the lease ends. I've agreed to pay any transfer taxes that ARE due. Is this $1-sale/leaseback/$1-repurchase structure a taxable RETT conveyance, or does it qualify as debt-security financing?
Exempt as a whole -- but ONLY conditionally, and several add-on transactions ARE independently taxable. A Brooklyn landowner planned to sell its property to the Brooklyn Bridge Park Development Corpor…
Does an out-of-state company selling product service contracts through in-state retailers, web referrals, or direct mail have enough nexus with New York to have to collect sales tax?
Yes, in all three sales scenarios described -- because New York retailers act as Company's designated repair centers performing warranty repairs on its behalf, that in-state activity by a representati…
Can a trash-hauling company buy its trash containers tax-exempt as purchases for resale when it separately bills customers for container rental and trash removal?
Only if the container rental is a genuinely separate transaction from the trash removal service -- meaning customers can rent a container without buying removal service and vice versa, the price is re…
Was piano tuning a taxable repair service under Louisiana sales and use tax law?
Yes. Tuning restored the piano to proper pitch, temperament, and intended sound, so it was a taxable repair rather than a mere enhancement. No part had to be replaced. The tuner collected tax on the f…
Did a city's direct-purchase procedures make construction materials exempt for a public-works project?
Yes, once the agreement and incorporated procedures were fully executed. The city issued purchase orders with its exemption information, received direct invoices, paid vendors, retained title, and car…
Could a caregiver deduct receipts for services resold by an agency without obtaining the required nontaxable transaction certificate within 60 days?
No. Karen Houser's caregiving services were subject to gross receipts tax even though Angels of Assistance resold the services and paid tax on its own receipts. The agency and Houser were separate tax…
How did RR 06-9 historically tax sales and renewals of warranty, maintenance, and similar service contracts?
For transactions from October 1, 2005 until the rule changed in 2011, retail sales and renewals of contracts covering tangible personal property were generally taxable, whether sold with the property,…
Which communication and online services did South Carolina treat as taxable transmissions under RR 06-8?
RR 06-8 treated charges for access to or use of systems transmitting voice or messages as taxable, including many telephone, programming, fax, voicemail, email, and individual-website or database serv…
Is recording a deed that conveys a South Carolina easement or right of way subject to the deed recording fee?
Yes. Recording a deed that transfers an easement or right of way to another person is subject to South Carolina's deed recording fee unless a statutory exemption applies. The fee is based on the value…
Could the taxpayer claim South Carolina textile-mill revitalization income-tax credits when redevelopment required demolition?
Yes, on the taxpayer's stated facts and if every statutory requirement was met. Demolishing the deteriorated primary building did not prevent the abandoned textile site from qualifying for the income-…
Were movable floating docks tangible personal property, and could a marina buy them exempt as property held exclusively for lease?
The docks were tangible personal property, but their purchase was taxable. They were movable, anchored to removable concrete blocks, and connected by flexible wiring and plumbing. The marina licensed …
How does Kansas sales and use tax apply to an electric-sign fabricator's sales, set-up, construction, and repair charges?
A custom sign maker is treated as a fabricator and retailer. It buys sign materials for resale and collects Kansas sales (or retailers' use) tax on the full price billed for the sign, including delive…
Were early-termination charges on taxable communications-service contracts subject to Florida communications services tax?
Yes. Florida's definition of communications-services sales price expressly included charges for terminating service. The provider's fee—calculated from a fixed amount times the months remaining on the…
Was the taxpayer's early termination fee for a discounted taxable communication service subject to South Carolina sales and use tax?
Yes. The taxpayer's early termination charge was taxable because it was consideration tied to the taxable communication service and formed part of the service's gross proceeds or sales price. The fee …
How did Louisiana treat property and sales connected with a Louisiana foreign trade zone in the corporation income- and franchise-tax ratios?
Income tax treated all corporeal movable property physically in the zone as outside Louisiana; franchise tax did so only for property imported from outside the United States. Sales delivered into the …
We're the Port Authority, redeveloping the World Trade Center site after 9/11. Private lessees will borrow from outside lenders to fund redevelopment costs, and we'll be named mortgagee (alone or with the lenders) on their leasehold financing before assigning our interest to the actual lenders. Is that mortgage -- and its later assignments, splits, and modifications over the years -- exempt from mortgage recording tax?
Exempt for Port Authority-named mortgages; later increases in debt remain taxable. The Port Authority of New York and New Jersey -- created by a 1921 interstate Compact and long recognized as a govern…
Did a reverse-1031 mortgage assumption owe additional documentary stamp or nonrecurring intangible tax after tax was paid at acquisition?
No. Applicable deed, mortgage, note, and intangible taxes had been paid when the accommodator acquired the replacement property. Because the exchange agreement established that the accommodator acted …
Did a recorded collateral assignment of a note and mortgage owe documentary stamp and nonrecurring intangible tax?
Documentary stamp tax was due, but nonrecurring intangible tax was not. A mortgage assignment given as collateral for the new $12 million loan was treated as a new mortgage when recorded. The new note…
Was deed tax due when an estate transferred unencumbered property to an LLC owned equally by the will's seven beneficiaries?
No. The will gave seven children equal shares of the estate, and the personal representative transferred the unencumbered property to an LLC whose only members were those same seven beneficiaries in e…
Were bamboo plants exempt from Florida sales tax when customers intended to grow edible shoots?
Yes, when the buyer intended to use the bamboo to produce food for human consumption and gave the seller a signed exemption statement. The same plants were taxable as ornamental nursery stock when pur…
Was a semi-permanently installed mooring ball a real-property improvement or taxable tangible personal property?
Taxable tangible personal property. The mooring ball was described as semi-permanent and was not connected to or a continuation of dry land, so it did not qualify as a permanently attached real-proper…
Could Kansas distributors and retailers recover the tax difference on E-85 inventory held when the rate fell on January 1, 2007?
Yes. When Kansas reduced the E-85 motor-fuel tax from $0.24 to $0.17 per gallon on January 1, 2007, it allowed a $0.07-per-gallon credit or refund for E-85 inventory on hand that day on which the $0.2…
Could an independent medical provider recover gross receipts tax because the clinic also billed patients and paid tax, but gave her no NTTC?
No. Carole Ann Kirby was independently engaged in business when she provided medical services to a clinic for a commission, so her receipts were taxable even though the clinic separately billed patien…
Could an acquired Florida consolidated group stop consolidated filing after joining an unrelated buyer's affiliated group?
Yes, conditionally. An unrelated company acquired the parent, the original affiliated group ceased to exist, and the acquired companies joined the buyer's group, which did not file Florida consolidate…
Were eight attraction photography agreements taxable real-property licenses or nontaxable management arrangements?
Six of the eight agreements were taxable licenses to use real property. One theater-event concession qualified for the percentage-of-sales exception, and one agreement was a true nontaxable management…
Could a group stop filing Florida consolidated returns after exiting most former business lines and reshaping its operations?
Yes, conditionally. Florida found the group's extensive divestitures, exits from major lines, acquisitions, international expansion, and concentration in its remaining core business were changes in ci…
Under Florida's 2006 physical-presence analysis, did hiring Florida printers for drop shipments create sales-tax nexus?
No, under the ruling's 2006 facts and legal framework. The out-of-state seller had no Florida office, staff, representatives, or other property beyond goods being printed, and Florida law said a print…
Can a charitable nonprofit that provides paramedic services (but doesn't transport patients) get New York's motor fuel, petroleum business, and sales taxes refunded on the fuel for its response vehicles?
Only partly — it can recover the sales tax but not the motor fuel or petroleum business tax. Greene County Emergency Medical Services is a 501(c)(3) charity exempt under Tax Law § 1116(a)(4), but it i…
Is New York sales or use tax due on an art collector's overseas-delivered artwork, its bequest to his children, transferred company shares, or a nonresident's artwork brought into New York upon relocating?
No New York sales or use tax is due in any of these situations: artwork delivered and titled outside New York escapes sales tax under the destination rule, an estate's no-consideration bequest of artw…
Is cable sold to a wind farm developer exempt from New York sales tax as production machinery, or taxable as a contractor purchase?
Taxable. Because production of electricity ends at the generator, cable that carries the electricity from wind turbines to a substation is used in distribution rather than production, so it doesn't qu…
In a long-term car lease where the dealer sells and assigns the lease to a leasing company, who is responsible for collecting New York sales tax -- the dealer or the leasing company?
The motor vehicle dealer is the original lessor and is responsible for collecting and remitting the full upfront sales tax on a long-term vehicle lease at the time of the first lease payment, even tho…
Did retirees remain New Jersey domiciliaries after selling their home, buying their only residence in New Mexico, and planning to return years later?
No. Edward and Rebecca McNair abandoned their New Jersey domicile and established New Mexico domicile when they sold their New Jersey home, bought their only residence in New Mexico, and moved there i…
How does Louisiana's Motion Picture Investor Tax Credit work — who can earn it, can it be transferred and sold, and how is it applied to a tax bill?
It answers common questions about the film Investor Tax Credit under La. R.S. 47:6007: any investor that is not itself a production company (even a tax-exempt one) can earn it, the credit is freely tr…
Do computer hardware, software, and telecommunications systems installed during a corporate headquarters relocation/expansion count toward Tennessee's $50 million qualified headquarters facility sales and use tax credit?
Yes. Computer hardware, software, and telecommunications systems installed at a qualifying headquarters facility during the investment period count as "qualified tangible personal property" (equipment…
Did a multi-program design college qualify as an entity primarily teaching qualified motion-picture production services?
No. The school met the fixed-Florida-location, Chapter 1005 license, and 500-student requirements, but its broad programs in graphics, marketing, fashion, interiors, multimedia, and game design were n…
How did Florida's $5,000 surtax limitation apply to bulk building-product orders shipped on one or several invoices?
A complete bulk order shipped and billed on one invoice received one $5,000 surtax limitation for the invoice. A purchase order filled through partial shipments failed the single-sale test when it lac…
What transactions were covered by South Carolina's one-time Thanksgiving sales-tax holiday on November 24–25, 2006?
For 48 hours on November 24–25, 2006, South Carolina suspended state sales, use, and casual excise taxes on otherwise taxable events, except accommodations and additional guest charges. The holiday al…
Did Louisiana grant military and support personnel the same individual income-tax deadline relief that the IRS granted for combat-zone service?
Yes. For tax years beginning on or after January 1, 2001, qualifying federal combat-zone relief also extended Louisiana filing, payment, collection, and assessment deadlines.
Which foods qualified for South Carolina's reduced 3% state sales-tax rate beginning October 1, 2006?
Unprepared food that could lawfully be purchased with USDA food benefits qualified for the historical 3% state rate, whether or not benefits were actually used and whether or not the retailer accepted…
Can a restaurant company deduct, for Tennessee franchise and excise tax purposes, the royalty payments it makes to its own wholly-owned trademark-holding subsidiary?
Yes, the Taxpayer may deduct the royalty payments it makes to its affiliated trademark-holding subsidiary as ordinary business expenses, provided that all outstanding loans from the subsidiary to the …
Does a family-owned Tennessee LLC that licenses intellectual property, but also provides active services to its licensees, qualify for the franchise and excise tax exemption for family-owned entities earning passive investment income?
Not automatically. The Taxpayer is family-owned and can be a qualifying non-corporate entity, but it is exempt from Tennessee franchise and excise tax only if it demonstrates that at least 66.67% of i…
Could varied HVAC parts on one invoice be aggregated for Florida's $5,000 discretionary sales surtax limitation?
Not merely because the invoice exceeded $5,000. Assorted parts were not multiple quantities of one item and were not shown to form one complete or integrated system, so they failed the bulk/working-un…
Does a utility-scale Kansas wind farm qualify for the manufacturing machinery and equipment sales-tax exemption?
Yes, for the generating equipment. A utility-scale turbine wind farm qualifies as a manufacturing plant or facility under K.S.A. 79-3606(kk), so the generators, blades, support towers, the power lines…
Did Louisiana's maritime sales-tax exemption cover fuel, supplies, repairs, and services for drilling ships or barges working in Louisiana waters?
No. Although the statute was expanded to include barges and drilling ships, purchases for mineral exploration, drilling, or production in Louisiana waters did not qualify because the vessels were not …
Were per-procedure patent and technology license fees required to operate an eye-surgery machine subject to Louisiana sales tax?
Yes. The patented technology was inseparable from the surgical machine's intended use, so separately charged license fees were taxable as part of the amount paid for the equipment rights.
How did Louisiana tax temporary portable-toilet rentals, cleaning and sanitation, and separately stated delivery and pickup charges?
The portable-toilet transaction was a taxable rental. Cleaning and sanitation were included in the taxable base even when separately stated, while separately stated delivery and pickup charges were ex…
Which industrial and medical gases sold by a specialty gas distributor — oxygen, acetylene, nitrogen, argon, propane, and mixtures used in welding — are exempt from Tennessee's local sales and use tax as "natural or artificial gas"?
It depends on whether the gas is used as combustible energy fuel: oxygen, acetylene, nitrogen (when used as fuel), and propane used to power equipment are exempt from local sales and use tax, but iner…
Is access to an online business-data platform — where customers build contact lists, send communications, review keyword impressions, and generate reports — subject to Tennessee sales and use tax?
No. Access to the database, including compiling contact lists, sending communications, reviewing keyword-impression data, and generating printed or electronic reports, is a non-taxable information ser…
Did a government owner's sales-tax recovery agreement support exempt direct purchases for a design-build project?
Yes, if no other contract term overrode the submitted arrangement. The exempt owner issued purchase orders, received vendor invoices, paid suppliers directly, retained legal and equitable title, and m…
Could a restaurant partnership recover a negligence penalty when an autonomous regional office stopped paying tax and an employee said abatement was likely?
No. Redrock Foods was liable for a $98,696.04 negligence penalty after a management breakdown in its autonomous Durango office caused 15 months of New Mexico gross receipts tax to go unpaid. The partn…
Did interest stop while a taxpayer disputed an other-state tax credit that exceeded the tax she actually paid to Arizona?
No. Linda Lombardo could claim no more than the $1,953 of income tax she actually paid Arizona, not a $4,335 credit generated by her accountant's worksheet errors. After the Department reduced the New…
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