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 propane (liquefied petroleum gas) sold to heat or cook in RVs, cabins, or tents at a campground subject to Colorado sales tax — and when does the special fuel tax or the residential-use exemption apply?
It's taxable. Propane (LPG) sold to heat or cook in RVs, cabins, or tents at a campground is subject to Colorado sales tax — these are temporary accommodations like hotels, so this is commercial consu…
Does a company that sells motor vehicles only for resale (never at retail) have to file transaction reporting returns and risk the $100 Uniform Penalty and Interest Act penalty for not filing them?
No. The Department ruled that the taxpayer is not liable for the $100 Uniform Penalty and Interest Act penalty (35 ILCS 735/3-3(a-15)) for not filing transaction reporting returns (Form ST-556 or ST-5…
The state changed its tax form but I never got the notice and kept using the old one — can I be penalized for filing late when I had to re-file on the new form?
No penalty — the taxpayer won. Mary Feldblum had filed her monthly New Mexico gross receipts tax (GRT) returns on the paper CRS-1 form for years. The Department switched most taxpayers to a new form (…
Is granola taxed at Illinois's lower grocery/food sales tax rate or its higher general-merchandise/candy rate?
It depends on the form: granola sold as a loose cereal (not in bars, drops, or pieces) is taxed at the low 1% food rate no matter what it contains, but granola sold in bar form is treated as "candy" -…
Do solar panels and related wiring, incorporated into the ground with concrete at a solar farm inside an Illinois enterprise zone, qualify as exempt 'building materials' under the enterprise zone sales tax exemption?
Possibly, but the Department would not say for sure in this GIL -- solar panels are not specifically listed in the building materials exemption regulation, but the Department noted that other equipmen…
How does Virginia decide whether a worker is an employee or an independent contractor, and what happens to a business that gets it wrong?
Virginia presumes anyone paid for services is an employee unless the worker or payer proves independent-contractor status under IRS-style behavioral/financial/relationship factors; employers who miscl…
Does an out-of-state company that leases equipment physically located in Missouri, but has no other presence in the state, have to collect Missouri use tax as a vendor?
YES, an out-of-state lessor with no other Missouri presence still creates 'physical presence' nexus simply by having its own leased equipment physically located in Missouri, so it must register and co…
Does a nonprofit marketplace platform have to collect Missouri use tax on donated-goods sales made for other charities?
NO, the sales are exempt from Missouri use tax, so the nonprofit marketplace platform does not even need to register as a marketplace facilitator. Applicant, a California-based 501(c)(3) nonprofit, ru…
Does a resort have to collect a special local district sales tax on rooms physically located just outside the taxing district's boundary?
YES -- Applicant must collect the special local district sales tax (the community improvement district and transportation development district tax) even on reservations for accommodations physically l…
Which parts of a utility-scale solar farm are exempt from Missouri sales and use tax?
The core components of a utility-scale solar photovoltaic system -- solar panels, racking and supports, combiner boxes, inverters, solar collection transformers, and the project substation/interconnec…
Does a manufacturer collect Missouri sales tax on a structure that becomes real property once installed, or does the manufacturer pay tax on its own materials instead?
IT DEPENDS entirely on WHEN legal title to the structure passes to the buyer. If title passes before the structure is installed, the sale is treated as a sale of tangible personal property: Applicant …
If a company manufactures signs, hires a third party to install them, and bills its dealers for the supply, freight, and installation, does it owe Illinois Retailers' Occupation (sales) Tax, Use Tax, or Service Occupation Tax on the sign -- and does the answer change once the sign is bolted to a concrete foundation?
It depends on whether the sign has "commercial value" to buyers generally and whether it becomes permanently affixed to real estate. A sign with commercial value (e.g., one reading generic words like …
Does an online reseller have to charge and collect Illinois sales tax on a "buyer's premium" it adds on top of the sale price of each item?
Yes. A buyer's premium is part of the seller's taxable gross receipts / selling price under the Retailers' Occupation Tax, because no deduction from gross receipts is allowed for the seller's costs of…
I moved out of Illinois partway through the year and kept working remotely for my Illinois employer, but my W-2 shows 100% Illinois wages -- how do I get Illinois to only tax the part of my income earned while I was still a resident, and get credit for tax I paid to my new state?
It depends on documentation, not just where you physically live -- Illinois sources compensation based on where the employee's service is performed or, if that's split, on the employee's 'base of oper…
I'm a New Mexico resident who pays tax to another state on out-of-state rental property — can I claim a New Mexico credit for the tax I paid that other state?
No. Daniel and Terezinha McGlynn, a married New Mexico couple, own rental properties in several states, including California, and claimed a credit against their New Mexico income tax for the tax they …
Are sales of native grass, forbs, and legume seeds exempt from Texas sales tax, and does a seed seller need an exemption certificate from customers or its own sales tax permit?
Sales of the seeds are exempt from Texas sales tax because seeds fall under the always-exempt agricultural-items category, and the seller doesn't need to collect an exemption certificate from customer…
Do I owe Texas sales tax when I redeem a gift certificate I won at a charity auction for full-price merchandise at a store?
Yes. Texas treats a merchandise certificate won at a charity auction as a gift certificate, not a discount coupon, because it doesn't reduce the price of anything -- it's redeemed at full price. Buyin…
Does a company that runs a service-matching marketplace app owe Retailers' Occupation Tax, Use Tax, or Service Occupation Tax on the small kits of branded items (placards, stickers, etc.) it gives to the service providers who sign up on its platform?
Only Use Tax, and only on the Department's cost price of those items. The Department ruled the marketplace-facilitation fees are for a non-taxable service, and because the company gives away only a sm…
Do 100% disabled veterans get an extra Kansas income tax personal exemption?
Yes. Kansas Notice 23-06 explains that 2022 House Bill 2239 (Section 40) added a new subsection (b) to K.S.A. 79-32,121 giving certain disabled veterans an additional Kansas income tax personal exempt…
How did Kansas change first-time home buyer savings accounts and the related income tax modification?
Kansas Notice 23-05 explains changes made by 2023 House Bill 2197 to the First-Time Home Buyer Savings Account Act and the related Kansas income tax modification, effective for tax year 2022 and after…
What is the Kansas Apprenticeship Act tax credit for employers?
Kansas Notice 23-04 explains the Kansas Apprenticeship Act, created by 2023 House Bill 2292 (Sections 1-6). Section 3 creates a nonrefundable, nontransferable Kansas income tax credit for eligible emp…
How much is the Kansas tax credit for contributions to a scholarship granting organization?
Kansas Notice 23-03 explains changes to the Tax Credit for Low Income Students Scholarship Program, made by 2023 House Substitute for Senate Bill 113. Section 13 amended K.S.A. 72-4357 so that, for ta…
How could the organization calculate and allocate Florida tax liability and Capital Investment Tax Credits between its two qualified projects?
The Department approved treating the organization's Florida adjusted federal taxable income as project income and allocating the resulting tax liability and credits between Projects 1 and 2 under its …
Does Virginia sales tax apply to books sold by a third-party vendor at a school book fair fundraiser?
No sales tax applies. A vendor's sales of books and other items at school-hosted book fair fundraisers are exempt from Virginia retail sales and use tax as long as the participating school -- a qualif…
If I move to Puerto Rico and file a Puerto Rico resident return, does that automatically end my Virginia tax residency?
No, not by itself. Filing a Puerto Rico resident income tax return and meeting Puerto Rico's own bona fide residency tests are not a substitute for actually abandoning your Virginia domicile -- and he…
Can I still prove I abandoned my Virginia domicile years ago even if I renewed my Virginia driver's license and kept vehicles registered there in the meantime?
Yes, on these facts. Even though the taxpayer renewed her Virginia driver's license and kept vehicles registered in Virginia during part of the period, her roughly 12-year absence from Virginia, her p…
If I work and file resident returns in another state but keep a Virginia driver's license and property, am I still taxed as a Virginia resident?
Yes, if you never actually abandoned Virginia. A taxpayer who lived and worked in Maryland, paid Maryland tax, and filed Maryland resident returns still remained a taxable Virginia domiciliary residen…
Can I get the Department of Taxation to reconsider a final domicile determination just by pointing to a similar case that came out differently?
No. Pointing to a different case that came out favorably for another taxpayer does not meet any of Virginia's four narrow criteria for reconsidering a final determination -- reconsideration requires m…
Does the Servicemembers Civil Relief Act exempt a military spouse from Virginia income tax if she gets a Virginia driver's license and registers to vote in Virginia?
No, not on these facts. A military spouse is only exempt from Virginia tax on the strength of the Servicemembers Civil Relief Act if she maintains sufficient connections with the service member's clai…
Is a company's charge for additional 'report credits' -- which let a wellness provider's customers keep generating nutritional-assessment reports through a software program -- taxable as tangible personal property, or is it a nontaxable license/service, under Illinois sales and use tax law?
The Department could not say either way on the facts given. Computer software is generally taxable tangible personal property in Illinois, but a software license is exempt from Retailers' Occupation T…
I'm an Illinois resident who works part-time in another state and deduct student loan interest -- why does Illinois make me subtract that deduction from my out-of-state income when figuring my credit for taxes paid to that state?
Yes, the Department confirmed that Schedule CR is correct: when an Illinois resident computes the credit for taxes paid to another state, the student loan interest deduction must be subtracted from (a…
I'm an Illinois resident who pays tax to other states -- why does my whole HSA deduction get subtracted from my out-of-state income on Schedule CR instead of just a proportional share?
It depends on the deduction, not on proportional apportionment -- and for the HSA deduction, Illinois requires the full amount to be allocated against out-of-state income when figuring the Schedule CR…
Can an individual taxpayer claim Colorado's foreign source income exclusion if they claim the federal foreign tax credit?
No. Colorado's foreign source income exclusion under § 39-22-303(10), C.R.S., is available only to C corporations, not to individuals. It sits within the Colorado C Corporation Income Tax Act and is t…
How could the taxpayer calculate income generated by its qualified project for Florida's Capital Investment Tax Credit?
The Department approved adding two amounts: income tied to the project's increase in the Florida apportionment factor, plus income tied to the project's share of product sales after removing the first…
Once large equipment like a crane is permanently installed and becomes part of the real estate, who owes Virginia use tax on it -- the buyer or the installing contractor?
Once tangible personal property like a large crane is installed in a way that makes it real property under Virginia's three-part fixture test (annexation, adaptation to the realty's use, and intent to…
Do client-reimbursed travel expenses count as taxable gross receipts for Virginia's local BPOL tax, even for a one-person consulting business?
Yes. Client-reimbursed travel expenses paid to a consultant under a consulting agreement count as taxable gross receipts for Virginia's local BPOL tax, with no deduction available -- and this applies …
When a company merges mid-year and has to file a short-period return, what's the actual Virginia filing deadline?
The Virginia due date for a short-period return triggered by a merger is 30 days after the federal due date -- and because federal rules tie that short-period return's due date to the surviving parent…
Does a non-profit running blind-operated vending stands on a military base still have to collect Virginia's disposable plastic bag tax?
Yes, if the facility is a grocery store, convenience store, or drugstore. Virginia's Disposable Plastic Bag Tax applies even on federal military property, and the specific state-law exemption for blin…
Can Virginia's three-year deadline to claim a sales tax refund be extended if I missed a follow-up document request?
No. Virginia's three-year statute of limitations for a sales and use tax refund claim is a hard deadline the Department has no authority to extend, and neither an incomplete refund claim nor equitable…
Does a repair shop have to charge sales tax on parts it installs, and can it fix a lump-sum invoicing mistake that bundled labor with parts?
A repair shop must charge Virginia sales tax on parts transferred to its customers -- paying tax when it bought the parts itself doesn't excuse collecting tax again when reselling them to a customer, …
Does Illinois sales/use tax exemption for aircraft maintenance parts still require the seller or repairer to hold an FAA Air Agency Certificate and operate a Part 145 repair station?
No, not after January 1, 2024. Public Act 103-0009 removes the FAA Air Agency Certificate, Class IV Rating, and Part 145 operations requirements from the Illinois aircraft-parts exemption (35 ILCS 120…
If a car dealer sells vehicles to its own affiliate, and the affiliate rents those vehicles to the dealer's service customers as loaners, how does Illinois's Automobile Renting Tax apply, and is the sale from dealer to affiliate itself taxable?
The dealer's sale of vehicles to its affiliate is exempt from Retailers' Occupation Tax and Use Tax because the vehicles will be used exclusively for automobile renting (35 ILCS 120/2-5(5); 35 ILCS 10…
How should a construction contractor that also sells tangible personal property over-the-counter (a 'combination' or 'dual-purpose' contractor) handle Illinois sales and use tax on the materials it buys and the ST-1 return it files?
A construction contractor is treated as the end user of materials it permanently affixes to real property, so it owes Use Tax on the cost price of those materials -- but if it gave its supplier a resa…
When was South Carolina's 2023 sales tax holiday, and which purchases qualified?
South Carolina's 2023 sales tax holiday ran from 12:01 a.m. Friday, August 4 through midnight Sunday, August 6. Eligible new or used items of any price included clothing and accessories, footwear, sch…
What is the minimum age to buy tobacco products in Kansas, and what must retailers do?
Kansas Notice 23-01 tells tobacco retailers that, under 2023 House Bill 2269, the minimum age to purchase tobacco products in Kansas changed to 21 years of age, effective July 1, 2023. This is a retai…
Where can taxpayers find South Carolina Department of Revenue advisory opinions by tax topic through June 30, 2023?
Use the subject index attached to SC Information Letter #23-9. It organizes South Carolina Department of Revenue advisory opinions issued from 1987 through June 30, 2023 under administrative, alcoholi…
How can taxpayers check whether a South Carolina Department of Revenue advisory opinion had been modified, superseded, or made obsolete through June 30, 2023?
Use the citator attached to SC Information Letter #23-8. It lists South Carolina Department of Revenue advisory opinions from 1987 through June 30, 2023 that the Department identifies as modified, mod…
Are the fees a staffing app charges to connect businesses with short-term workers and process their pay subject to Tennessee sales tax?
No. The Department ruled that the fees an online platform charges to match businesses with short-term workers (staff augmentation) and to process the workers' pay are NOT subject to Tennessee sales an…
Does New Mexico gross receipts tax apply to loan proceeds, a refunded investment, and affiliate credit-card reimbursements that a management company receives?
Partly. Warriors Management LLC, which provides shared services to a family's assisted-living facilities, was assessed New Mexico gross receipts tax on three categories of money it received, and the A…
Does Missouri charge sales tax on waste removal or dumpster/roll-off container services?
NO, Applicant does not need to collect Missouri sales tax on its waste removal service charges. Applicant provides waste removal services to residential and commercial customers who fill a roll-off co…
Does Missouri charge sales tax on Software as a Service (SAAS) subscriptions?
NO, Missouri regulation 12 CSR 10-109.050(2)(I) specifically provides that the sale of software as a service is not subject to tax. Applicant is a Software as a Service (SAAS) company located outside …
Does Missouri charge sales tax on digital music or e-signature subscription services?
NO, both digital music subscriptions and digital signature (e-signature) subscriptions are excluded from Missouri sales and use tax. Section 144.020.1(4), RSMo, excludes amounts paid for access to 'in…
Is a saw used to cut steel to length for customers exempt from Missouri sales tax as manufacturing equipment?
NO, the saw itself is not exempt -- it is fully taxable, because merely cutting purchased steel or aluminum to a shorter length is not 'fabrication' or 'manufacturing' under Missouri law. Installation…
Could the consolidated taxpayer use a separate-entity pro forma return and project-specific apportionment to calculate qualified-project income?
Yes. The approved method used project profit-and-loss records, book-to-tax adjustments, 100% project property and payroll factors, and the standard sales-factor sourcing rules.
How could the taxpayer isolate taxable income from its certified project while filing consolidated Florida and federal returns?
The Department approved a project-location pro forma return that separated revenues, costs, and tax adjustments, then applied the project's Florida apportionment factor to calculate tax and the availa…
How could the consolidated taxpayer compute income generated by its certified facility project for the Capital Investment Tax Credit?
The Department approved a location-level pro forma return accounting for project revenues, direct and indirect costs, tax adjustments, and Florida apportionment to calculate project income, tax, and c…
Was all property covered by the condominium ground lease exempt from Florida commercial-rent tax as dwelling units or common elements?
No. Lease payments for qualifying dwelling areas and condominium common elements were excluded, but other property in the ground lease was taxable and had to be included in a reasonable allocation.
Does a wedding venue owe sales tax on its whole rental fee if tables and chairs are included, even if the customer doesn't stay overnight?
Yes, the whole lump-sum fee is taxable -- not because of overnight lodging (there was none), but because the venue's rental fee included tangible personal property (tables and chairs), and Virginia ta…
Does an event venue that rents space, tables, and chairs (but no overnight lodging) owe Virginia sales tax on its bookings, and can an auditor extend the audit period past the signed waiver?
An event venue's charge for the space itself isn't subject to Virginia sales tax unless it includes an overnight stay, but tangible personal property the venue rents along with the space -- tables, ch…
Does an extended overseas government assignment -- even one repeatedly extended for years -- establish a new foreign domicile that ends Virginia tax residency?
No, not on these facts. A Department of Defense civilian employee's overseas assignment -- even after being extended twice, ultimately spanning about five years -- remained a temporary, non-permanent …
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