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 a section 183 utility's liquidation into its parent (or conversion to a single-member LLC) treated as paying a dividend for the section 183 franchise tax?
No. A liquidating distribution -- whether the utility is liquidated into its parent or converted into a single-member LLC and dissolved -- is not the payment of a dividend for purposes of the section …
Is a section 183 utility's liquidation into its parent (or conversion to a single-member LLC) treated as paying a dividend for the section 183 franchise tax?
No. A liquidating distribution -- whether the utility is liquidated into its parent or converted into a single-member LLC and dissolved -- is not the payment of a dividend for purposes of the section …
Is a section 183 utility's liquidation into its parent (or conversion to a single-member LLC) treated as paying a dividend for the section 183 franchise tax?
No. A liquidating distribution -- whether the utility is liquidated into its parent or converted into a single-member LLC and dissolved -- is not the payment of a dividend for purposes of the section …
Is a section 183 utility's liquidation into its parent (or conversion to a single-member LLC) treated as paying a dividend for the section 183 franchise tax?
No. A liquidating distribution -- whether the utility is liquidated into its parent or converted into a single-member LLC and dissolved -- is not the payment of a dividend for purposes of the section …
Is a section 183 utility's liquidation into its parent (or conversion to a single-member LLC) treated as paying a dividend for the section 183 franchise tax?
No. A liquidating distribution -- whether the utility is liquidated into its parent or converted into a single-member LLC and dissolved -- is not the payment of a dividend for purposes of the section …
Is a section 183 utility's liquidation into its parent (or conversion to a single-member LLC) treated as paying a dividend for the section 183 franchise tax?
No. A liquidating distribution -- whether the utility is liquidated into its parent or converted into a single-member LLC and dissolved -- is not the payment of a dividend for purposes of the section …
When a bank sells its auto-finance business to another bank before a custom software project is finished, does transferring the unfinished software contract trigger New York sales or use tax?
No. Because the custom software Citibank had contracted for was never completed, delivered, or paid in full before the business sale, it never lost its identity as exempt custom software — so Citibank…
Is a section 183 utility's liquidation into its parent (or conversion to a single-member LLC) treated as paying a dividend for the section 183 franchise tax?
No. A liquidating distribution -- whether the utility is liquidated into its parent or converted into a single-member LLC and dissolved -- is not the payment of a dividend for purposes of the section …
Must a large bank recapture part of its New York bad debt reserve under Article 32 when current-year loans or the experience ratio fall below base-year levels?
No recapture is required. When a large bank's current-year loans outstanding or experience ratio fall below base-year levels, it simply gets no section 1453(i) deduction for that year. Section 1453 co…
May a newly registered bank holding company that elects financial-holding-company status file a combined Article 32 return without the Commissioner's permission, and can the Commissioner force separate filing?
It may file combined, and the Commissioner cannot force it apart. A bank holding company that during a taxable year beginning on/after Jan. 1, 2000 and before Jan. 1, 2001 (1) does business in New Yor…
Is a section 183 utility's liquidation into its parent (or conversion to a single-member LLC) treated as paying a dividend for the section 183 franchise tax?
No. A liquidating distribution -- whether the utility is liquidated into its parent or converted into a single-member LLC and dissolved -- is not the payment of a dividend for purposes of the section …
Is a section 183 utility's liquidation into its parent (or conversion to a single-member LLC) treated as paying a dividend for the section 183 franchise tax?
No. A liquidating distribution -- whether the utility is liquidated into its parent or converted into a single-member LLC and dissolved -- is not the payment of a dividend for purposes of the section …
If a customer's business name contains the word 'Contracting' or 'Contractor,' does that alone bar a supplier from accepting a resale certificate from that customer in good faith?
No, not by itself. A business name containing 'Contracting' or 'Contractor' doesn't automatically make a resale certificate invalid, and the supplier isn't required to investigate further or demand ex…
May a corporate member of an LLC taxed as a partnership claim the investment tax credit (or empire-zone ITC) on the LLC's property, and qualify as a new business eligible for a refund?
Yes. A corporate member of an LLC treated as a partnership may claim the investment tax credit (or the empire-zone ITC) on its allocable share of qualifying property the LLC places in service, just as…
What Florida documentary stamp and intangible tax applied when a partnership-converted LLC assigned and refinanced its mortgage?
No documentary stamp or nonrecurring intangible tax applied to assigning the original mortgage to the new lender. If the original mortgage remained unsatisfied and section 201.09's conditions were met…
Which documents in a bank's open-end line-of-credit program were subject to Florida documentary stamp tax?
The acceptance letter and waiver were not taxable, and an unrecorded line agreement lacked a taxable sum-certain obligation. A modification was also untaxed unless recorded. If the line agreement or m…
Were charges for designing, hosting, and maintaining funeral-home and memorial websites subject to Florida sales tax?
No. Charges for designing, building, hosting, and maintaining funeral-home websites were not subject to Florida sales tax. The same result applied to a single fee for a two-year memorial website and l…
Could a public sports authority buy furnishings and equipment tax-free for a facility leased to a professional team?
Yes, when the authority used public funds and was the actual purchaser: it issued purchase orders, was invoiced, paid vendors, took title at delivery, and bore the insured risk of loss. The items were…
Could a Florida county buy airport access-road materials tax-free while its design-build contractor handled procurement tasks?
Yes, if the controlling documents and actual purchases followed the stated safeguards. The county had to issue and approve its own purchase orders, give vendors its exemption certificate, receive invo…
Did an out-of-state catalog seller's limited Florida employee and trade-show visits create sales-tax nexus under this 2001 ruling?
Not conclusively. The Department said the seller lacked nexus only if it had none of the listed Florida contacts, including representatives who solicited or handled orders, in-state property or office…
Is leasing a railcar to ship a company's own product exempt from Texas sales tax?
Yes. Leasing a railcar for the purpose of shipping a company's own product is exempt from Texas sales tax as rolling stock, under Comptroller Rule 3.297 and Tax Code § 151.331.
Is demolishing an old building and constructing a separate new one, with no shared wall, taxed as new construction, and can tax mistakenly paid on the demolition be recovered?
Constructing a new two-story building that is a genuinely separate structure — not sharing a common wall with an existing building — qualifies as new construction, so tax is due on incorporated materi…
Was electricity used in restricted residential-condominium common areas exempt from Florida sales tax?
Yes. Electricity for the cooling tower, hallways, elevators, laundry machines, vending machines, and game machines qualified while those common areas were restricted to owners, tenants, and guests and…
Do bolted-down control panels for water treatment facilities stay tangible personal property after installation, or do they become part of the real property — and who owes the sales tax?
The control panels remain tangible personal property after installation, not real property, so the sale is taxable to the final purchaser (not to the installing contractor). The Commission based this …
Are Kansas Department of Revenue notices, guidelines, information guides, revenue rulings, and letters legally binding regulations?
Generally no. Department guidelines, instructions, memoranda, booklets, guides, notices, revenue rulings, and letters were informational and instructive rather than administrative rules or regulations…
When a city airport board hires a manager and contractors to build and operate a terminal hotel, who can buy supplies, equipment, and construction materials tax-free, and under what conditions?
An airport board is exempt from Texas sales tax as a local government entity under § 151.309(5), so its own purchases (including hotel tangible personal property) aren't taxed; its authorized purchasi…
Was Florida documentary stamp tax due on both deeds in a reverse section 1031 exchange using an accommodation titleholder?
No. When the accommodation titleholder acted only as the exchanger's agent in the qualifying reverse exchange, documentary stamp tax was due on either the seller-to-accommodator deed or the accommodat…
Could a qualifying Florida youth nonprofit lease donated boats and other property without collecting sales tax?
Yes. The qualifying nonprofit's leases of property donated for less than 50% of fair market value were exempt, and it could not pass tax to lessees. It should document leases with the lease and ruling…
How does a Nebraska estate or trust figure the 2000 credit for prior year minimum tax on the Nebraska return?
Recompute the federal credit for Nebraska. Under Revenue Ruling 23-00-2, Neb. Rev. Stat. §77-2717 requires an estate or trust to recalculate the federal credit for prior year minimum tax (Federal Form…
How does a Nebraska estate or trust recompute the 2000 federal alternative minimum tax to figure the Nebraska minimum tax?
Recompute the federal AMT on Nebraska terms. Under Revenue Ruling 23-00-1, Neb. Rev. Stat. §77-2717 requires estates and trusts to recalculate the 2000 federal alternative minimum tax (Federal Form 10…
How does a Nebraska individual figure the 2000 credit for prior year minimum tax on the Nebraska return?
Recompute the federal credit for Nebraska. Under Revenue Ruling 22-00-2, Neb. Rev. Stat. §77-2715(2) requires an individual to recalculate the federal credit for prior year minimum tax (Federal Form 8…
How does a Nebraska individual recompute the 2000 federal alternative minimum tax to figure the Nebraska minimum tax?
Recompute the federal AMT on Nebraska terms. Under Revenue Ruling 22-00-1, Neb. Rev. Stat. §77-2715 requires a Nebraska individual to recalculate the 2000 federal alternative minimum tax (Federal Form…
Is an infant incubator exempt from Texas sales tax, and what about a transport device, surgical gloves, or a motility measurement system sold to hospitals?
An infant incubator is exempt from Texas sales tax because it qualifies as a prosthetic device under Comptroller Rule 3.284 — it maintains an oxygenation, humidity, and temperature environment that su…
Could an affiliated group stop filing Florida consolidated returns after substantial changes in its organization and business?
Yes. Although no adverse tax-law change was shown, the Department found that the affiliated group's size, market, and activities had changed enough to justify separate filing. Approval was subject to …
How did Florida apportion taxable rent under a mixed-use hotel land lease?
Florida required a square-footage method, not a room-revenue percentage. Tax applied to the fraction of total rent represented by business-only and non-guest space over the total leased land and impro…
Could government and qualifying nonprofit owners directly buy project materials tax-free?
Yes. Government and qualifying nonprofit owners could buy project materials tax-free when they issued purchase orders, paid vendors directly, took title and liability, and bore insured risk of loss. C…
How is a graphic arts business taxed on its sales of negatives and color proofs, and can it buy its film, paper, and chemicals tax-free?
Tax the sale, buy inputs exempt. The Department ruled that a graphic arts business must collect Kansas sales tax on the full amount it invoices clients for negatives and color proofs - including mater…
Can a Nebraska nonprofit run a 'duck race' lottery or raffle, and when does it need a license and permit?
Yes, with conditions. Under LB 248 (effective June 6, 1997) and LB 1086 (effective July 13, 2000), a Nebraska nonprofit may conduct a lottery or raffle that uses a race of inanimate buoyant objects (a…
Does Texas's semiconductor-manufacturing exemption cover cleanroom printer supplies, laundering exempt cleanroom gowns, a failure-analysis lab that supports the fab, and cleanroom partition repairs?
Texas's semiconductor fabrication cleanroom exemption (Tax Code § 151.318(b)(2), (q)) reaches well beyond the cleanroom's core machinery: printer toner and special cleanroom paper used for lot-trackin…
How did Kansas source local tax on telephone service and handle a sales-tax rate change occurring during a customer billing cycle?
Under the 2000 rules, state and local sales tax generally applied to intrastate and interstate telephone charges for residential and commercial customers. Local tax was sourced to the billed subscribe…
Can an out-of-state buyer of used Texas manufacturing equipment issue a Texas manufacturing exemption certificate, even though the equipment will be shipped out of state and used at a California plant instead of in Texas?
Yes. There is no requirement in the Tax Code or administrative rules that manufacturing equipment purchased under the Section 151.318(a) exemption actually be used in Texas — so a California corporati…
Can a Texas manufacturer buy wrapping and packaging equipment (and its repairs) tax-free, and does that exemption survive if the wrapping/packaging step is subcontracted out to another company?
Yes. A Texas manufacturer may buy stretch wrappers, strappers, and shrink wrappers — plus their repair parts and repair labor — tax-free under Tax Code § 151.318(a)(2), because packaging the finished …
Does software that links a manufacturer's computer to its production machines qualify for the Texas manufacturing exemption, even when the same software also tracks orders and calculates scrap?
Partly. Software that downloads pattern data directly into production machines and has a direct effect on the product being manufactured qualifies as exempt manufacturing equipment. But the same syste…
Are subscription receipts for newspapers, magazines, and periodicals mailed to Kansas subscribers subject to Kansas sales or use tax?
Taxable. The Department ruled that subscription receipts for newspapers, magazines, periodicals, trade journals, and other publications are subject to Kansas sales or use tax when the subscription is …
When a private developer redevelops a city-owned historic building into an entertainment venue under a long-term ground lease, are the donated construction materials, consumables, design services, and historic-building renovation labor exempt from Texas sales tax?
Yes, on these facts. A developer redeveloping city-owned historic sites into an entertainment venue under a 40-year ground lease may issue an exemption certificate to its contractor for materials and …
When a private company builds a city-owned entertainment venue on land it will later sell to the city, can materials the company donates to the city before installation be purchased tax-free?
Yes. Where a private company builds a facility that a city will own and lease back to the company, and the company donates specified materials to the city — with title passing up the contractor chain …
Were customized software, hardware, support services, and warranties taxable when sold together?
Generally yes on these facts. Hardware, customized software, enhancements, and support were taxable when part of the same transaction and intertwined with tangible property. A warranty solely on custo…
How did Kansas tax internet skin-care sales when an out-of-state multilevel distributor had dependent agents operating in Kansas?
Under the 2000 rules, dependent agents operating in Kansas gave the out-of-state distributor Kansas sales-and-use-tax nexus even if the website and inventory were elsewhere. Internet orders shipped di…
If an embezzling bookkeeper caused my company's taxes to go unpaid, can New Mexico waive the interest?
No — the protest was DENIED. Santa Fe Stone Corporation hired a bookkeeper in 1996 who prepared reports making it look as though the company's gross receipts taxes were being paid, but pocketed the mo…
Must a Kansas retailer charge sales tax on sales made at a craft show on a military base such as McConnell Air Force Base?
Taxable. The Department ruled that a registered Kansas retailer selling homemade baskets at a craft show on McConnell Air Force Base must charge both state and applicable local sales tax. Kansas retai…
What happens if an accountant stops filing his own gross receipts tax returns while telling clients they must file theirs?
The penalty stood — the protest was DENIED. Robert Pineda, a certified public accountant, stopped filing his own gross receipts tax returns in August 1995 even as he continued practicing and advised a…
If a company keeps legal title but transfers the beneficial (equitable) ownership of its assets to limited partnerships, who owes Texas franchise tax on the income?
The income follows the beneficial owner, and only the corporate general partner owes the tax. A company kept legal title to its assets but transferred the equitable interest to two limited partnership…
When gas service is unbundled -- one company sells the gas and the local utility only transports it -- are the utility's transportation charges subject to Connecticut sales tax?
It depends on who is the retailer of the gas. Taxable 'delivery' charges (Conn. Gen. Stat. § 12-407(8)/(9)) are only those charged BY the retailer of the property. So when a gas marketer sells the gas…
When natural-gas service is unbundled, how much of the gas-marketer's and the local utility's charges count as taxable gross earnings under Connecticut's utility company gross earnings tax?
Each company is taxed on its own slice, with no overlap. Under Conn. Gen. Stat. § 12-264(a), a local distribution company (LDC) counts its transportation revenue (income classified as operating revenu…
Is renting miniature racecars and a racetrack to a customer for its employees to drive taxed the same way as operating those same racecars yourself as part of an advertising campaign?
No — the same equipment is taxed differently depending on who controls it. Renting miniature racecars and a racetrack to a customer so its own employees or customers can drive them is a taxable rental…
If an out-of-state company ships goods to New Mexico buyers with title passing at its out-of-state warehouse, are those sales still subject to New Mexico gross receipts tax?
Yes, mostly — the protest was GRANTED IN PART and DENIED IN PART. Apple Computer shipped computers to New Mexico customers from out-of-state warehouses, and its contracts said title passed at the out-…
How does the $150,000 franchise-tax gross-receipts threshold work, and how are 'gross receipts everywhere' computed for each component of the tax?
The $150,000 figure is an all-or-nothing threshold, not a deduction. For franchise-tax reports originally due on or after January 1, 2000, a corporation owes no franchise tax if its gross receipts fro…
Were letter-of-credit and mortgage documents securing industrial revenue bonds taxable?
No, if the documents arose from or secured repayment of bonds for a project financed under Part III of Chapter 159. That condition covered the reimbursement agreement, mortgage, assignment of rents, s…
Did a single-member LLC and its Florida member both have intangible-tax filing duties?
Yes under the 2000 law applied. The LLC had to file and report its nonexempt intangible property with Florida situs, and the member had to file and report the LLC interest. Chapter 199 provided no exe…
Could a Florida school board directly buy school-construction materials without sales tax?
Yes. The school board's material purchases were exempt when it issued its own purchase orders with its exemption number, was invoiced and paid directly, held title and liability, and bore insured risk…
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