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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Are printing plates and plate-making equipment taxable to a Nebraska printer?
Yes, for the non-reusable ones. Revenue Ruling 01-06-1 concludes that charges for printing plates and printing plate materials consumed in the printing process are taxable, and purchases of machinery …
How could a hotel allocate taxable and exempt rent under a mixed-use ground lease?
Florida found a 23.25% taxable ratio reasonable on the presented facts. The numerator included ground-level land and improvements used exclusively by the hotel business, commercial spaces, non-guest a…
For a mortgage banker, how are loan-servicing receipts sourced for Texas franchise-tax apportionment?
By where the mortgaged property sits. The Comptroller advised a mortgage banker that receipts from loan-servicing activities, where the loans are secured by real property, should be sourced based on t…
Could a taxpayer receive a 1997 refund claimed after the three-year deadline because divorce-related problems delayed access to tax records?
No. Eduardo Contreras's $615 claim for a 1997 New Mexico income tax refund was filed in May 2002, after the December 31, 2001 deadline under Section 7-1-26. His former wife had taken records during th…
Could a travel agent sell lump-sum vacation packages without collecting additional tax on the package price?
Yes, on the stated conditions. Each package contained at least two travel components, including admissions and transportation, all components were purchased from third parties, tax was paid to provide…
Which portions of an automotive processor's port-authority lease qualified for the cargo exemption?
Only space used exclusively for short-term storage of cargo pending loading onto or unloading from oceangoing vessels could qualify. Car servicing, accessory, export-processing, parts, detail, body-sh…
Does a medical-products distributor have to charge sales tax on alcohol prep swabs, iodine prep swabs, and antiseptic towelettes sold to healthcare practitioners?
Alcohol prep swabs and iodine prep swabs are exempt drugs or medicines because they're used directly on patients to sterilize injection sites, but antiseptic towelettes are taxable because they're use…
Did related-party cash flow and reimbursements constitute taxable rent without a written lease?
Yes. A landlord-tenant relationship existed because the dealership occupied property owned by related landholders, even without a written lease. Payments to the parent had the qualities of rent becaus…
How could taxpayers check whether a South Carolina advisory opinion had been modified, superseded, or made obsolete as of March 31, 2006?
Use the citator attached to SC Information Letter #06-7. It covers South Carolina advisory opinions issued from 1987 through March 31, 2006 and identifies how later advisory opinions modified, superse…
Did an entity merger trigger deed tax or new mortgage documentary stamp and intangible taxes?
No. In this 2006 ruling, real property vested automatically in the surviving Florida LLC by operation of the merger statute, so no documentary stamp tax applied to the title transfer. The existing mor…
For an IT consulting firm whose employees sometimes telecommute across state lines, which computer services (development, design, installation, maintenance, consulting, training, documentation) are subject to Tennessee sales tax, and does it matter where the employee is physically sitting versus where the client's server is located?
Software development, programming, design, installation, and maintenance are taxable, based on where the client's server is located (not where the employee physically works from) — an out-of-state emp…
When a corporation's lease requires only a flat lump-sum rent payment, with the landlord separately responsible for utilities, taxes, maintenance, and repairs, can the corporation deduct anything from that rent when computing the value of rented property for Tennessee franchise tax purposes?
No. Because the lease only requires a flat $120,000 annual rent payment with no additional lessee-paid charges of any kind, the full $120,000 is the taxpayer's "net annual rent" for franchise tax purp…
Are the reusable wooden patterns a metal casting foundry uses to make sand molds exempt from Tennessee sales and use tax as industrial machinery, even though the patterns never directly touch the finished metal casting?
Yes. Even though the wooden patterns never directly touch the molten metal or finished casting, they are "necessary to and primarily for" fabricating the product — an impossible-to-skip step in making…
Was transferring motor vehicles to a newly formed Louisiana LLC taxable when the transferor received membership interests and the LLC paid the vehicles' debt?
Yes. The membership interest and payment of pre-existing vehicle debt were consideration for a retail sale. Louisiana's occasional-sale exclusion did not apply to motor vehicles, even if the transfer …
Did operating a charter boat for paying recreational anglers qualify as commercial fishing for Louisiana's vessel sales-tax exemption?
No. Charter operators sold boat access and guiding expertise for recreational fishing, not fish harvested for wholesale or retail sale, so charter activity did not qualify as commercial fishing.
Does a modular-home dealer owe sales tax on the home and its installation, and does that depend on whether the manufacturer sells the home with or without installation?
A modular-home dealer's sale-and-installation to a property owner is an exempt capital improvement once the owner provides a Certificate of Capital Improvement, but whenever the dealer buys the home f…
Does a hotel owe sales tax on free rooms it gives to convention groups, employees, vendors, and visiting travel writers?
A hotel's complimentary rooms are exempt from sales tax when given to group-contract attendees (folded into the group's taxable charge), to employees whose lodging isn't income to them, or to travel w…
I'm forming a New York LLC for a client. Does an LLC have to register with the Department and file Form MT-610.1 under the Stock Transfer Tax's registration requirement, the way a corporation that maintains an office for selling its own stock would?
Generally no -- unless the LLC is itself acting as a stock broker or dealing in others' stock. An attorney organizing a New York LLC for a client asked whether the LLC would be subject to the Stock Tr…
Will a same-sex marriage legally performed in Canada be recognized for New York State and New York City personal income tax purposes?
No. Because Tax Law §§ 607(b) and 651(b) tie New York marital and filing status to federal income tax status, and the federal Defense of Marriage Act (1 U.S.C. § 7) did not recognize same-sex marriage…
Will New York recognize a same-sex marriage performed in Canada for state personal income tax filing status purposes?
No. Because Tax Law §§ 607(b) and 651(b) tie New York marital and filing status to federal determinations, and the federal Defense of Marriage Act (1 U.S.C. § 7) did not recognize same-sex marriages f…
Are separately stated concrete-pumping charges taxable, and how does Kansas tax pumping performed as part of a mine-reclamation contract?
Separately stated concrete-pumping service was not taxable when the pumping company did not sell the concrete and merely placed it for the contractor. But a company responsible for part or all of a co…
When were graphic-design contracts taxable because signs, printed materials, or other property were delivered?
A design contract was fully taxable when the taxpayer delivered signs, printed materials, or other tangible property, directly or through a third party. A pure design-services contract was not taxable…
Could South Carolina use a nonresident servicemember's exempt military pay to reduce deductions against taxable nonmilitary income?
No. South Carolina said a nonresident servicemember no longer had to include military income that the state could not tax when completing the specified Schedule NR income line. Using that exempt pay i…
Were mandatory homeowners' association dues supporting common recreational facilities taxable admissions?
No. The dues were mandatory payments to a homeowners' association, required as a condition of ownership or occupancy, enforceable by a lien, and used to maintain recreational facilities that were comm…
Are a manufacturer's radial fatigue testing machine and the test consumables discarded after testing exempt from Kansas sales tax?
Yes, both are exempt. The radial fatigue machine used to test the quality of the finished aircraft wheels is exempt integrated-production equipment under K.S.A. 79-3606(kk)(3)(E), which covers machine…
What South Carolina tax interest rate applied from October 1, 2005 through June 30, 2006?
7%. SC Information Letter #06-6 lists South Carolina's interest rate on tax underpayments and overpayments as 7% for October 1, 2005 through June 30, 2006. Interest was compounded daily, except simple…
Did an online filing confirmation count as payment when the bank rejected the electronic check and the taxpayer did not follow up for 16 months?
No. Rexbrun's CRS-NET confirmation showed submission of its return and electronic check, but the bank rejected the $9,221.68 payment because the transmitted account number was missing a digit. After a…
I'm a licensed cigarette stamping agent that sells to Indian Nations and reservation retailers for resale on reservations. Now that Tax Law § 471-e has been enacted, has the Department changed its long-standing policy of not enforcing cigarette tax collection on reservation sales, and will it start assessing stamping agents for unstamped cigarettes sold to reservation sellers?
THIS OPINION WAS REVOKED effective February 23, 2010 -- do not rely on its enforcement conclusions. As originally issued in 2006, the Department held that the enactment of Tax Law § 471-e had not chan…
Was a deed from a land trust to a living trust taxable when the sole beneficial owner stayed the same?
No. The trustee was also the sole primary beneficiary of the land trust and transferred the unencumbered residence to a living trust to seek homestead treatment. Florida's trust rule taxed deeds only …
Did a city's proposed public-works contract terms support exempt direct purchases of construction materials?
Yes, if the proposed terms were used identically and no other contract provisions conflicted. The city issued purchase orders with its exemption certificate, vendors invoiced the city, the city paid v…
Which alcohol training programs did South Carolina recognize for penalty mitigation in SC Information Letter #06-5?
SC Information Letter #06-5 recognized five alcohol-training programs for purposes of mitigating penalties when the employee who committed the violation had completed qualifying training: TIPS; ServSa…
When a corporation indirectly owns an interest in a Tennessee-nexus limited partnership through a chain of tiered limited partnerships, does its share of that partnership's income get taxed twice for Tennessee excise tax purposes — once at the partnership level and again when it flows up to the corporation?
No double taxation. Income that has already been subjected to Tennessee excise tax in the hands of a Tennessee-nexus lower-tier partnership must be subtracted from the parent corporation's federal tax…
Is a publisher's weekly newsprint publication exempt from Tennessee sales and use tax, and is its separate free annual publication also exempt?
Split result. The weekly publication is exempt from Tennessee sales and use tax because it's printed entirely on newsprint and distributed at least every 14 days, but the annual publication is taxable…
Does a company owe sales tax on a 'shipping and handling' fee it charges for an otherwise free trial-size product, and does it owe use tax on the free product itself?
A shipping-and-handling charge for a free trial product isn't a taxable sale as long as the fee genuinely reflects actual shipping and handling costs, but the company owes sales or use tax on the tria…
Does installing custom-fitted closet and storage systems (with shelving and mirrors) in a new or existing home or office qualify as a tax-exempt capital improvement?
Yes -- installing custom-fitted closet storage systems and mirrors that are permanently, damage-causing-to-remove attached to the wall qualifies as a tax-exempt capital improvement in both new constru…
Is an aircraft owned by a single-purpose affiliate that flies its parent companies' employees and guests for a fee an exempt commercial aircraft?
Yes -- because the aircraft-owning affiliate is a genuine separate legal entity, retains full operational control, and uses the aircraft at least 50% of the time to provide transportation for hire (bi…
Is a permanently implanted Vena Cava Filter — sold as one unit price with its disposable introducer system, sheath/dilator, and guide wire — exempt from Tennessee sales and use tax as a prosthetic device?
Yes. The Vena Cava Filter augments the pulmonary veins' function by trapping blood clots and keeping the veins open, qualifying it as an exempt prosthetic device, and because the disposable introducer…
Does a law firm owe sales tax on a record-retrieval service's fees for obtaining its clients' own confidential medical and financial records?
A record-retrieval service's fees for obtaining copies of a specific client's own confidential medical, psychological, or financial records aren't taxable information or detective services, because th…
Is the federal gain a nonresident partner recognizes under IRC sections 731 and 752, when a New York investment partnership pays down its liabilities, treated as New York source income?
No. Because federal law treats the decrease in the partner's share of partnership liabilities as a deemed distribution that produces gain from the sale or exchange of the partnership interest, and gai…
Does a New York corporation have to apply a backup withholding tax on interest it pays to its foreign parent corporation?
No. New York's Tax Law does not impose any backup withholding tax on a corporation for interest it pays to a foreign affiliate. So a New York subsidiary owes no backup withholding on interest paid to …
What South Carolina tax relief applied to taxpayers affected by Hurricane Katrina under SC Information Letter #06-4?
South Carolina matched the extended federal Hurricane Katrina relief described in IRS Notice 2006-20. The relief ran through August 28, 2006 for covered returns, tax payments, and tax deposits whose o…
Does a for-profit school owe sales tax on at-home course software, and are electronic textbook readers exempt as college textbooks?
A school (not its students) owes sales tax on prewritten course software it purchases, because its own charge to students is for a nontaxable educational service; a standalone textbook reader device i…
Which South Carolina tax regulations became effective on February 24, 2006 after General Assembly approval?
SC Information Letter #06-3 announces six regulation actions approved by the General Assembly on January 17, 2006 and effective when published in the State Register on February 24, 2006. They amended …
How does Kansas sales tax apply to a nonprofit youth-development organization's fundraising events, sponsorships, and auctions?
It depends on what is sold. Because the organization holds a Kansas exemption as a nonsectarian comprehensive multidiscipline youth-development program under K.S.A. 79-3606(ii), its purchases for the …
Could a Florida consolidated group stop filing after acquisition by a new affiliated group?
Yes, subject to three conditions. A new company acquired the taxpayer and affiliates, the original Florida affiliated group ceased to exist, and the taxpayer became part of a group that did not file a…
Can a retail store buy cardboard compacting and baling equipment exempt from Kansas sales tax as manufacturing equipment?
No. A retail store's purchase of compacting and baling equipment is taxable. Under K.S.A. 79-3606(kk), only businesses that operate what the public regards as an industrial production operation qualif…
Is a separately stated premium for Guaranteed Auto Protection insurance subject to Kansas sales tax?
No. Kansas treated Guaranteed Auto Protection coverage as insurance rather than a taxable sale. A GAP premium charged to a vehicle buyer or lessor was not subject to Kansas sales tax when the charge w…
Were retained copyrights, approval rights, royalty rights, and similar intellectual property annually taxable?
No. In this 2006 ruling, retained copyrights, subsidiary approval and exploitation rights, royalty rights, patents, trademarks, trade secrets, trade names, service marks, and similar intellectual-prop…
Does an out-of-state online retailer create Utah nexus by paying commissions to Utah-based affiliate websites that link customers to its checkout page?
Split answer. For SALES TAX, yes — Utah-based 'Affiliate Partners' who maintain their own Utah servers and link visitors to the retailer's checkout page are acting as the retailer's agents regularly s…
Were a taxpayer's DVD rentals and sales made exclusively through automated vending machines subject to South Carolina sales tax?
No, on the taxpayer's specific facts. Customer rentals or sales made exclusively through automated DVD vending machines were not retail sales subject to sales tax. Instead, the vending-machine operato…
What CPI increase did South Carolina use to limit local general-operating millage increases in 2006?
3.4%. SC Information Letter #06-2 says the average Consumer Price Index for All Urban Consumers increased 3.4% during calendar year 2005. Under § 6-1-320(A), a local governing body's 2006 millage rate…
Which of a for-profit online executive-education company's Internet courses, CD-ROM materials, digitized collections, demo videos, and derivative products are subject to New York sales tax?
A for-profit online certificate program delivered purely through the Internet (even with free welcome packages, academic support, or incidental CD-ROM/textbook materials) isn't subject to sales tax as…
We refine raw sugar into crystal sugar and liquid sucrose, using an on-site power plant fueled by heating oil to generate steam and electricity for the process. Are we a 'petroleum business' subject to New York's Petroleum Business Tax just by using heating oil, and does that heating oil qualify as tax-favored 'manufacturing gallonage'?
Not a petroleum business, but partly liable for the tax anyway on non-production fuel use. American Sugar Holdings, Inc. produces crystal sugar and liquid sucrose from raw sugar at its Yonkers facilit…
Could a fuel center defeat a negligence penalty using only stipulated dates and amounts, without admissible evidence explaining its tax underpayment?
No. Albertson's Fuel Center challenged only the negligence penalty on $315,943.28 of remaining gross receipts and compensating tax, but the parties' stipulated facts merely listed assessment amounts a…
Were a bankruptcy-plan deed and related security documents subject to Florida stamp and intangible taxes?
No. The bankruptcy court approved the asset sale in connection with or contemplation of a section 1129 reorganization plan and expressly invoked the federal section 1146(c) stamp-tax exemption. Florid…
Was unencumbered property transferred from a trust to its wholly owned LLCs subject to deed tax?
Only the minimum documentary stamp tax applied. The special trustee transferred unencumbered joint-venture property to LLCs wholly owned by the trust, no consideration passed to the title holders or b…
How does an estate or trust recompute the 2005 federal credit for prior year minimum tax (Form 8801) to figure the Nebraska fiduciary minimum tax credit?
Revenue Ruling 23-05-2 directs that the federal credit for prior year minimum tax figured on an estate or trust's 2005 Federal Form 8801 be recalculated for Nebraska fiduciary income tax purposes to d…
How do you recompute the 2005 federal credit for prior year minimum tax to figure the Nebraska minimum tax credit on Form 1040N?
Revenue Ruling 22-05-2 directs that the federal credit for prior year minimum tax figured on a taxpayer's 2005 federal return (Federal Form 8801) must be recalculated for Nebraska to determine the Neb…
Did taxpayers owe New Mexico tax on income earned after moving to Washington when they had already spent more than 185 days in New Mexico that year?
Yes. Frank and Carol Wagener lived in New Mexico from January 1 through October 3, 2003, so they were statutory residents under the new 185-day rule even though they then moved permanently to Washingt…
Does a for-profit school owe sales tax on course materials and textbooks it buys and gives to students as part of one all-inclusive tuition fee?
The school owes sales tax on its own purchase of course materials and textbooks that it bundles into one all-inclusive tuition fee (they aren't purchased tax-free for resale, since they're incidental …
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