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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Does New York's manufacturing exemption cover a U.S. producer's equipment, tools, and studio-rental purchases used to create English-language 'master recordings' of foreign films, TV series, and music CDs that are then licensed to U.S. distributors?
Yes, largely exempt. Creating a marketable US master recording from a foreign film, TV series, or music master — through translation, dubbing, voice/sound mixing, and editing — counts as a manufacturi…
Could a nonprofit corporation or governmental entity owning a qualified historic structure earn the Kansas historic-preservation tax credit?
Yes. The Kansas historic-preservation credit was available to owners of qualified historic structures, including individuals, nonprofit corporations, and governmental entities, if the other statutory …
For the Texas franchise tax, may an oil and gas company exclude estimated well-abandonment costs from surplus by carrying them as accumulated depletion/depreciation - and can it amend to do so?
Before FAS 143 took effect, an oil and gas company could treat estimated well-abandonment costs as either an estimated liability or an allowance for depletion, depreciation and amortization (DD&A), an…
Does a vehicle lessor owe Texas motor vehicle sales tax when buying a vehicle exclusively to lease to the American Red Cross?
No tax was due while the vehicle was purchased for lease to the American Red Cross, which the Comptroller treated as a federal instrumentality. If the vehicle stopped being leased to the Red Cross, mo…
Were federally insured student-loan notes held by a private program administrator immune or exempt from Florida intangible tax?
No. The administrator was a private corporation, not a federal agency or instrumentality; the loans used private funds and were not obligations issued or owned by the federal government. Because the r…
Could a state insurance receivership division use its parent agency's Florida sales-tax exemption certificate?
Yes. The division was an integral part of the state agency, so it could use the agency's Consumer's Certificate of Exemption for qualifying receivership transactions and its own general-use purchases,…
After 2001's House Bill 2686, can a corporation still take the enterprise-zone franchise tax deduction, and what replaced it?
It depends on when the project was designated. House Bill 2686 (2001) repealed the enterprise-zone franchise tax deductions in Texas Tax Code Secs. 171.1015 and 171.1016, but only for enterprise and d…
When does a homeowners association qualify for the Texas franchise tax exemption - and does it qualify while the developer still controls the votes?
Not yet. Under Texas Tax Code Sec. 171.082, a homeowners, residential property owners, or residential condominium association qualifies for the franchise tax exemption only if - among other requiremen…
Does a Canadian manufacturer with no New York office, warehouse, or resident sales staff have enough nexus with New York to be required to register and collect sales tax, based only on trade-show attendance and occasional sales-visit trips by its own traveling salespeople?
Yes, nexus exists. Trade-show attendance alone (two shows a year, no orders taken there) wouldn't be enough by itself. But Company X also sends its own salespeople into New York one to two times a yea…
Must a church-run ministerial alliance collect sales tax on thrift-shop sales, and are its building materials exempt?
Two answers. First, yes — a religious organization that makes retail sales (here, a thrift shop) must register for, collect, and remit Kansas retailers' sales tax on those sales. Second, materials to …
Are an RV park's charges for overnight slip rentals and utility hook-ups subject to Kansas sales tax?
No. The Department advised that charges for RV slips and hook-ups — the per-night slip rentals with electricity, water, and waste-water dump — are not subject to Kansas sales tax. They are not charges…
Are a Texas company's out-of-state salespeople - who hand out business cards with a local phone number but no local address - protected by PL 86-272, so the throwback rule applies?
Business cards that show a local telephone number but no local address do not, by themselves, establish that a corporation has an office or place of business in another state. Under Rule 3.554(d)(18),…
Is 'mylar' used and disposed of in molding fiberglass tanks exempt as property consumed in production?
Yes. The Department's opinion is that 'mylar' — placed on the mandrel to keep the fiberglass from sticking, then removed and thrown away once each tank is finished — is consumed in the production of t…
For Texas franchise tax, are a contractor's receipts apportioned as a sale of real property, a sale of goods, or a service - and when are rebilled (resold) services gross receipts?
Texas franchise tax apportionment follows the activity that generates the receipts. If a contractor buys real estate, constructs or refurbishes facilities on it, and sells the completed facilities, th…
Could a corporate group end its Florida consolidated-return election after major business growth and industry-law changes?
Yes. Neither industry-law changes nor business expansion was sufficient alone, but together they established cause to end consolidated filing. Permission was subject to four conditions covering the ef…
How did Florida require a consolidated filer to calculate project income for the Capital Investment Tax Credit?
The taxpayer had to separately account for the certified project's annual taxable income in a pro forma attachment to its consolidated F-1120. The schedule had to show all project revenue, direct and …
Does New York's alternative fuels credit under Tax Law section 606(p) get reduced by nonqualified nonrecourse financing, or limited by the federal at-risk (IRC section 465) or passive activity loss (IRC section 469) rules?
No. The Department held that section 606(p) does not require the credit base to be reduced by nonqualified nonrecourse financing and contains no limitation comparable to the federal at-risk rules (IRC…
As part of a $275 million corporate acquisition, the buyer took over an office lease with below-market rent (the tenant paid about $42/sq ft while fair market rent was about $75/sq ft) plus roughly $80-105 million in leasehold improvements. For Real Estate Transfer Tax purposes, is the taxable consideration for that lease assignment (a) the present value of the below-market-rent savings PLUS the leasehold improvements' value, and (b) can I reduce that amount for hypothetical leasing commissions or for the 50% share the landlord could have claimed if it had exercised its lease-recapture right instead?
Yes to the valuation method, no to both discounts. When a tenant assigns a lease with below-market rent as part of a larger transaction, the Department confirmed the taxable consideration for Real Est…
Does a Canadian nonprofit's new internet store, selling and renting films and videotapes to U.S. customers, have to collect New York sales tax on orders delivered to New York, given that it maintains a small New York City office?
Yes. Even though its web server, inventory, and operations are based in Canada, the National Film Board's small New York City office is enough to establish nexus and make it a New York vendor. Sales a…
Is a corporate aviation subsidiary's acquisition of a temporary 'interim' aircraft and a permanent replacement aircraft, plus the third-party financing lease used to fund both purchases, exempt from New York sales and use tax?
Yes, both aircraft qualify. ABC is a separate legal entity with its own employees, payroll, bank account, and full operational control over its aircraft, using them to transport Parent's and affiliate…
Is a privately owned, for-profit public golf course's membership fee (prepaid greens fees, letting members reserve tee times a day or two early) subject to New York's social/athletic club dues tax?
No. New York's club-dues tax applies only to a genuine 'social or athletic club' — one where members have some real ownership stake or control over the organization's activities, management, or member…
Is a privately owned, for-profit public golf course's membership fee subject to New York's social/athletic club dues tax, even though residents of an adjoining housing community get a discounted rate?
No. New York's club-dues tax only applies to a genuine 'social or athletic club' — one where members have real ownership or control over the organization's management, activities, or membership decisi…
When several commonly-owned single-member LLCs each own a building and pay their own cleaning/maintenance staff through a shared managing agent, are those wages exempt from sales tax even though the LLCs are 'disregarded' for federal income tax purposes and use combined payroll-tax reporting?
Yes, the wages paid to each building's own cleaning and maintenance staff remain exempt from sales tax as employer-employee wages, even though the LLCs are treated as disregarded entities for federal …
Does an out-of-state seller lose Public Law 86-272 protection when its employees assemble machines and perform warranty service in New York?
Yes. The Illinois seller's New York employees assembled and disassembled large glass machines shipped in by common carrier and performed warranty and repair service. Those activities went beyond deliv…
Can a homeowners association get the Texas franchise tax exemption if its declaration lets it lease common property for commercial (for-profit) use?
No. The Texas Tax Code Sec. 171.082 exemption for a homeowners, residential property owners, or residential condominium association applies only to residential property. Here the association's Declara…
Which mattresses, pillows, and support products qualified for Florida's prescription-based orthopedic exemption?
The listed therapeutic mattress, neck and support pillows, transit and millennium pillows, seat wedge, travel set, mattress overlays, lumbar support, and leg spacer were exempt with a physician's pres…
If a company's bookkeeper forgets to file the monthly New Mexico CRS tax returns — or can't because of an accounting-software changeover — can the business get the late penalty and interest waived?
No. The protest was DENIED. Sarcon Construction's bookkeeper missed the January and February 2000 CRS filings during an accounting-software transition. Forgetting to file is negligence under Regulatio…
If someone runs a construction business as a sole proprietorship but also sets up a same-name corporation, can they escape personal liability for unpaid gross receipts tax by claiming the corporation was really the taxpayer — and when does unpaid tax become a 50% fraud penalty?
The protest was DENIED. The New Mexico Administrative Hearings Office found the construction business actually operated as Gerald Tabet's sole proprietorship — not the never-funded 'Inc.' he pointed t…
Is a dissolved corporation that merely holds record title to New York real property as a nominee, and is otherwise inactive, subject to Article 9-A tax?
No, not after dissolution. A corporation that merely remained the record title holder of New York real property as a nominee for a partnership -- never operating, managing, or controlling the property…
Could an affiliated group end Florida consolidated filing after expanding its market and entering new business lines?
Yes. Florida concluded that neither the group's growth and new business lines nor the industry-law changes were sufficient alone, but together they established cause to deconsolidate. The approval imp…
Could a parent corporation end Florida consolidated filing after organizational growth, new business lines, and regulatory change?
Yes. Florida found sufficient cause when the parent's major growth and expanded business lines were considered together with industry-law changes. The approval imposed four conditions governing the ef…
If the New Mexico tax department takes a long time to finish an audit, can a trucking company get out of paying the interest that piled up on taxes it had underreported?
No. The protest was DENIED. Chaparral Van Lines conceded it had underreported weight distance and IFTA taxes and only fought the interest, blaming the Department's slow audit. But interest under Secti…
Which prescription-only vitreoretinal surgical products were exempt from Florida sales tax?
Retinal implants were exempt prosthetic devices. Other medical products were exempt when intended for one patient or one-time use and required to carry the federal prescription legend. Reusable microf…
When could individual shareholders exclude income flowing through from a bank organized as an S corporation and subject to Louisiana bank shares tax?
For taxable periods beginning on or after January 1, 2003, the exclusion applied to qualifying S-bank flowthrough income. For earlier periods, the bank's corporate exemption did not extend to its indi…
When a party-plan hostess or independent business owner uses sales-incentive credits to buy products, is Utah sales tax calculated before or after the credit is subtracted?
It depends what's being purchased. Under a standard multi-level marketing agreement, a hostess or IBO's incentive credit used toward the suggested retail price of products is treated as a form of paym…
Does Utah require taxpayers to add back the federal foreign earned income exclusion (IRC § 911) when computing Utah taxable income?
No. Utah taxable income starts from federal adjusted gross income (FAGI) with only the specific modifications listed in § 59-10-114, and none of them address the federal foreign earned income exclusio…
Can a partner who owns only a tiny fraction of a low-income housing project be allocated 100% of Utah's state low-income housing tax credit?
Yes. Utah's low-income housing tax credit is allocated by agreement between the taxpayer and the housing sponsor, not by ownership percentage. A partner who owns as little as 0.01% of a qualifying pro…
Did a city's direct-purchase procedure exempt construction materials for a public library from Florida sales tax?
Yes. The city was the purchaser in substance and form because it issued purchase orders with its exemption number, was invoiced and paid vendors directly, took title and liability at job-site delivery…
What Louisiana credit applied when a Louisiana domiciliary working in a Washington, D.C. office of the state's congressional delegation paid income tax to a temporary-residence state?
A nonrefundable Louisiana individual income-tax credit equaled the net income tax imposed by and paid to the temporary-residence state on income also taxed by Louisiana. The ruling was limited to the …
Were customized television and radio audience-survey reports taxable when delivered on paper or other tangible media?
No. The true object was the customized research service and data, not the delivery medium, and audience measurement was not an enumerated taxable service. Generic unmodified publications were taxable,…
Could a mortgage company exclude a reserve for possible repurchase of defaulted loans sold with recourse from Louisiana franchise-tax surplus and undivided profits?
No. The reserve depended on future borrower defaults and was not a fixed liability, depreciation, bad debt, or valuation reserve. It therefore entered surplus and undivided profits in the franchise-ta…
Did a corporation-taxed LLC create Florida income-tax nexus through an independent contractor performing in-state services?
Yes. The LLC had no Florida office or employees, but its independent contractor performed maintenance services for Florida customers on its behalf. Florida treated the contractor as the LLC's agent fo…
Could the Louisiana Department of Revenue treat electronically digitized copies of its records as originals and use them in court or administrative proceedings?
Yes. Electronic images, microfilm, and microfiche could serve as original Department records and be admitted subject to evidence requirements such as relevance and authenticity. Original source docume…
What conditions did a blind vendor have to satisfy for Louisiana's sales-tax exemption on business sales and purchases?
The owner had to meet the statutory blindness definition, operate as a sole proprietor, and keep stock on hand, equipment, or enterprise capital at no more than $2,000 at all times. A corporation, LLC…
Were tenant-improvement reimbursements taxable rent, and could a property buyer inherit the seller's unpaid Florida sales tax?
Yes to both. Monthly reimbursements for landlord-built improvements were taxable rent because the lease labeled them base rent, payment was required for occupancy, and the landlord retained the improv…
How did Louisiana phase in its former custom-software exclusion, and how were canned-software components taxed during the transition?
The custom-software exclusion rose from 25% in 2002-03 to 50% in 2003-04, 75% in 2004-05, and 100% after June 30, 2005. Canned software used in custom programs became taxable in the opposite percentag…
How much continuously outstanding debt under a multiyear master loan agreement entered Louisiana's corporation franchise-tax base?
The minimum balance outstanding at any point during the year was long-term borrowed capital because that amount financed the business continuously for more than a year. Qualifying vehicle, home, boat,…
Can a large retailer avoid the negligence penalty on underpaid New Mexico compensating (use) tax by pointing to its overall compliance, netting against overpayments, or the fact that it employs in-house CPAs?
No. Condev West, a multi-state retailer, conceded it owed the compensating (use) tax and interest and disputed only the penalty. The hearing officer upheld it. Inadvertent 'human error' in not paying …
Did Louisiana follow the former federal extraterritorial-income exclusion and the related federal disallowance of deductions for corporations and individuals?
Yes. Properly excluded federal extraterritorial income stayed excluded for Louisiana corporation and individual income tax, and federally disallowed related deductions remained disallowed. Existing Lo…
How did Louisiana conform to the 2002 federal 30% first-year depreciation deduction and five-year net-operating-loss carryback?
Both individuals and corporations followed the federal 30% first-year depreciation provision. Individuals followed the federal five-year NOL carryback for the covered 2001 and 2002 loss years, but cor…
Could a city use a construction-management direct-purchase program to buy stadium materials tax free?
Yes, conditionally. The city would select materials, issue purchase orders in its name with its exemption number, pay vendors directly, take title on receipt, and insure the materials as sole loss ben…
Is the federal excise tax on fuel included in the Kansas sales tax base when it is a separate line on the invoice?
Yes. The federal excise tax on fuel is part of the 'selling price' for Kansas sales tax purposes and is included in the sales tax base — even when it is billed as a separate line item on the invoice. …
Could Kansas historic-preservation tax credits be divided among multiple assignees and transferred more than once?
Yes. Earned or allowed Kansas historic-preservation tax credits could be transferred more than once, subject to the statute. The person earning the credit could assign portions to different people, an…
A single-member LLC is disregarded for federal tax and shares its tax-exempt owner's status - is it exempt from Texas franchise tax and sales tax too?
The LLC is exempt from the Texas franchise tax as a public interest organization under Tax Code Sec. 171.057, but Texas sales tax has no comparable exemption, so the LLC is NOT exempt from sales and u…
Are towing charges and sublet auto services like glass and dent work subject to Kansas sales tax?
It depends on the charge. Towing charges are NOT subject to Kansas sales tax if they are separately stated line items on the customer's bill. If towing is not separately stated, it is taxable when rep…
When were interior-design, procurement, and merchandise fees subject to Florida sales tax?
Procurement fees and design charges made in conjunction with furniture or other tangible-property sales were taxable, even when separately itemized, billed later, or measured by hours. Stand-alone con…
Does a Kansas fulfillment center collect sales tax on books it ships for publishers, or do the publishers?
The publishers, not the fulfillment center. A Kansas fulfillment center that only warehouses and ships books it does not own is not a 'retailer' and does not collect Kansas sales or use tax on those s…
Does a manufacturer's purchase of CAD software used for product engineering and design qualify for the Kansas manufacturing exemption?
Yes, if its primary use is engineering, R&D, or product design. The Department found that a manufacturer's purchase of canned AutoCAD software appears to qualify for the sales tax exemption under K.S.…
Which truck-rental invoice charges were subject to Kansas sales tax and the 3.5% vehicle rental excise tax?
For truck rentals of 28 days or less, Kansas sales tax and the 3.5% vehicle rental excise tax used the same gross-receipts base. Fuel, liability insurance, damage waivers, permits, cleaning, IFTA amou…
How is qualified business facility investment computed for the Kansas High Performance Incentive Program (HPIP) investment tax credit when the tax year and the certification period do not run concurrently?
This Kansas Opinion Letter is a brief transmittal note, not a substantive ruling. In response to a request about computing qualified business facility investment at an existing qualified business faci…
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