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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When partners split one real-estate partnership into several, do the deeds moving property to the new partnerships trigger Connecticut real estate conveyance tax?
No tax. When one real-estate partnership is divided into several partnerships and the same partners keep the same ownership shares, the resulting partnerships are 'continuing partnerships' under 26 U.…
A backhoe cut a natural gas pipeline at a construction company's job site. The gas company billed the construction company for the repair, separating out labor, materials, equipment, gas loss, and overhead — without charging sales tax. Should the gas company have charged sales tax on that invoice?
Yes, mostly. The charge for repairing the pipeline is taxable as a nonresidential real property repair service under Rule 3.357, and the total charges for the repair — labor, materials, equipment, and…
How does a Nebraska estate or trust recompute the 1999 federal alternative minimum tax to figure the Nebraska minimum tax?
Recompute the federal AMT on Nebraska terms. Under Revenue Ruling 23-99-1, Neb. Rev. Stat. §77-2717 requires estates and trusts to recalculate the 1999 federal alternative minimum tax (Federal Form 10…
How does a Nebraska individual recompute the 1999 federal alternative minimum tax to figure the Nebraska minimum tax?
Recompute the federal AMT on Nebraska terms. Under Revenue Ruling 22-99-1, Neb. Rev. Stat. §77-2715 requires an individual to recalculate the 1999 federal alternative minimum tax (Federal Form 6251, o…
Could a related lessor buy arena equipment tax free for lease, and were attached items still tangible personal property?
Yes, under the represented arm's-length true lease. The lessor could buy the listed arena property for resale and collect tax on rent. Freestanding, removable, machinery, equipment, and trade-fixture …
Were named laboratory controls and calibrators used with patient specimens exempt from Florida sales tax?
Yes. Florida treated Tripak (Cell-dyn), QCS controls, QBC controls, Precipath, Precinorm, and Urine Dipstick as chemical compounds used in diagnosing human disease. Regulations required laboratories t…
When did repairs to a paving contractor's dirt-and-rock mining machinery qualify for Florida's industrial machinery exemption?
Repairs qualified once machinery was committed to mining dirt or rock at land the miner owned or leased on a continuing basis. Customer site-preparation jobs were not fixed-location mining, even when …
Could a Florida school district buy construction materials tax exempt while contractors managed three school projects?
Yes, if the district was the purchaser in substance: it had to issue its own purchase orders and exemption certificate, receive direct invoices, pay vendors directly, take title and liability at deliv…
Were electrosurgical pencils, electrodes, handpieces, and generators exempt when hospitals used them in surgery?
No. Florida treated the surgical tools and equipment as taxable supplies consumed by doctors or hospitals, not products dispensed or resold to patients. A federal prescription-device warning did not c…
A non-Texas food broker with no Texas offices, employees, or agents obtains bids to supply food products (not ready-to-eat meals) to tax-exempt entities like school districts, using common carriers for delivery and sometimes a short-term rented storage facility in Texas. Does this company need a Texas sales tax permit?
The company's short-term rental of a Texas storage facility does make it "engaged in business" in Texas under Tex. Tax Code § 151.107(a)(1). However, as long as the company sells only food products no…
Were two off-balance-sheet property lease structures taxable leases or mortgage financing arrangements?
Florida treated both as mortgage financing, not taxable real-property leases. The trustee was a single-purpose financing entity, rent tracked borrowing interest and investor yield rather than market r…
What did the original TAA 99A-070 say about Florida recreational-vehicle exports, nonresident sales, fuel, and fees?
The original ruling set transaction-specific documentation rules for exports and out-of-state delivery and addressed nonresident sales, propane, tires, and batteries. The PDF expressly directs readers…
Was all electricity at an RV park exempt because more than half its spaces were treated as permanent residences for rental tax?
No. The rental-tax rule did not turn the entire park into one residential household for the utility exemption. Electricity on dedicated lines serving residents with leases longer than six months was e…
Does a school fundraising group qualify for the Kansas parent-teacher (PTA/PTO) sales tax exemption, and is it taxed on golf, home-tour, and raffle fundraisers?
On the information given, no exemption — so the fundraisers are taxable. A new nonprofit that raises money for a high school sought the K.S.A. 79-3606(yy) parent-teacher (PTA/PTO) exemption. The Depar…
Are residential service/maintenance contracts covering appliance, HVAC, plumbing, and electrical repairs exempt from Kansas sales tax?
Yes for the labor, but not the materials. The Department ruled that service/maintenance contracts sold to homeowners to repair appliances, HVAC, plumbing, and electrical wiring in their primary reside…
Did machinery for new deep-rib roof deck and composite floor deck qualify for Florida's new-business sales-tax exemption?
Yes. Florida treated production of the long-span roof deck and structural composite floor deck as a distinct economic activity from the manufacturer's existing products, so the machinery qualified und…
Does an out-of-state manufacturer that ships to Kansas customers only by common carrier, with no Kansas employees or property, have nexus to collect Kansas tax?
No. The Department ruled that a Texas candle manufacturer that sells to wholesalers and ships to Kansas customers only by common carrier (UPS or mail) — with no Kansas employees, no agents traveling i…
Does a qualifying parent-teacher organization (PTO) get the Kansas sales and compensating tax exemption, and how does it differ from a booster club?
Yes — this organization qualifies. The Department recognized the requesting group as a parent-teacher organization (PTO) exempt from Kansas retailers' sales and compensating tax under K.S.A. 79-3606(y…
A store advertises a computer at $649, but gives an instant $400 rebate at the time of purchase if the customer signs a 3-year internet provider contract — so the customer only pays $249, and the $400 never appears on the customer's bill or account. Is Texas sales tax due on the $649 advertised price or the $249 actual price paid?
Sales tax is due on the $249 discounted price actually paid, not the $649 advertised price. This follows the standing rule (from an earlier 1988 letter, 8810L0904F12) that cash discounts taken at the …
Is a nonprofit youth-development organization exempt from Kansas sales tax on its purchases and sales of tangible personal property?
Largely yes, for goods. The Department ruled that a qualifying nonprofit youth-development organization (here, a scouting 'Pack') may buy tangible personal property for its own use or resale without p…
A city owns and operates an auditorium-coliseum and has begun charging patrons to park for events. Is the parking fee taxable if the city is the sole entity charging for parking, and is it taxable if the city instead shares the net parking profit with the event promoter leasing the facility?
Yes — the parking fee is taxable either way, whether the city is the sole entity charging for parking or the city and the event share the parking profits. Rule 3.315(a) makes sales tax due on parking …
How did Florida tax a television producer's studio rent, office rent, equipment lease, purchase option, and production-equipment refund?
Studio and production space used for qualified production services was exempt, but sales and administrative space was taxable. The equipment lease payments, interest, county property tax, and purchase…
Is the service of removing scale, coke, slag, and similar deposits from flowlines, pipelines, and refineries subject to Kansas sales tax?
Yes, it is taxable. The Department ruled that the service of removing coke, iron, sulphides, scale, brine, inferior welds, and slag from flowlines, pipelines, and refineries is subject to Kansas sales…
What bingo-paper standards did South Carolina Revenue Ruling 99-13 require beginning January 1, 2000?
Beginning January 1, 2000, bingo paper had to show its face value, use controlled serial numbers, be sold in complete approved sets, and carry an approved South Carolina emblem. Color-coded paper coul…
How did 1999 Senate Bill 11 change Kansas's property tax clerical-error and grievance statutes?
1999 Senate Bill 11 (1999 Kansas Session Laws, chapter 123) amended Kansas's property tax clerical-error statutes — K.S.A. 79-1701, 79-1701a, and 79-1702 — to reinforce that clerical errors are minist…
Is mobility enhancing equipment installed on a motor vehicle — hand controls, van lifts — exempt from Nebraska sales tax?
Yes, with a prescription. Under Revenue Ruling 01-99-5 and Neb. Rev. Stat. §77-2704.09, mobility enhancing equipment installed on a motor vehicle to make it suitable for a disabled or handicapped pers…
Is mobility enhancing equipment for a Nebraska home — ramps, stair lifts, elevators — exempt from sales tax?
Yes, with a prescription and a Form 13. Under Revenue Ruling 01-99-4 and Neb. Rev. Stat. §77-2704.09, mobility enhancing equipment for use in a private residence — items like ramps, railings, stair li…
Are an internet risk-management education platform, and separate market-risk and credit-risk analysis/forecasting services sold to financial professionals, subject to New York sales tax?
No, on all three services. Interactive online educational courses in risk management aren't taxable because educational services (interactive or not) aren't among New York's enumerated taxable service…
Does a bankruptcy-claims and class-action administration company, based and printing/mailing entirely out of Oregon, owe New York sales tax on legal notices and claim forms it mails to New York creditors and claimants, even though all its work is performed out of state?
It depends on which service. Producing and mailing legal notices, claim forms, and address labels to recipients in New York is a taxable sale of tangible personal property (paper, envelopes, printing)…
Are mineral oil purchases used in the grain handling business exempt from Kansas sales tax as property consumed in production?
Yes. The Department ruled that mineral oil purchases fall within the K.S.A. 79-3606(n) exemption for tangible personal property consumed in the production, manufacture, processing, or compounding of t…
Are chemical sanitizers used to clean food-processing equipment and processing-area floors/walls exempt from Texas sales tax?
Yes. Chemical sanitizers that state or federal law requires a food-processing facility to use, applied to processing equipment or used within the actual manufacturing/processing area (including proces…
Was a 30-year right to use a timeshare suite one week per year a nontaxable real-property interest or a taxable license?
It was a taxable timeshare license, not a sale of real property. The documents conveyed no freehold or future interest, and the one-week annual or biennial use right did not allow continuous residence…
When an out-of-state manufacturer fabricates kitchen cabinets or similar built-ins and installs them in New York as a capital improvement, does it have to charge its customer sales tax, and does it instead owe New York use tax on the materials?
The fabricator does not collect sales tax from its customer, since installing cabinets or similar products as a capital improvement is not a taxable service. But the fabricator itself owes New York co…
Could a boat yard refund tax on repairs to a commercial vessel using the captain's interstate-commerce affidavit and invoices?
Yes, but only for detailed parts and repairs appropriate to the vessel's exempt interstate or foreign-commerce use. Undetailed marine-store purchases, jet-ski repairs, telephone, fax, and residential …
When a building job mixes new construction, residential remodeling, and nonresidential remodeling, how is Texas sales tax calculated on the combined contract?
It depends on category and billing method: new construction and residential repair/remodeling are both taxed the same way (materials taxable, labor exempt; lump-sum billing makes the CONTRACTOR the ta…
Are conveyors, piping, and water-treatment equipment in a rock-crushing plant exempt from Texas sales tax as manufacturing equipment?
Split ruling: the shakers, log washers, sand screws, and high-pressure water machine in a rock-crushing operation qualify for the manufacturing exemption because they each make a chemical or physical …
Is a company's fee for designing and running a retail sweepstakes subject to New York sales tax, and can it buy the prizes and promotional materials tax-free for resale?
The design/running fee itself is not taxable, since it's a service New York doesn't specifically enumerate for sales tax. But the company owes sales or use tax on the prizes and tickets it buys to giv…
Does a bed and breakfast owe sales tax when it buys soap, shampoo, wine, jam, and jelly that it gives to guests for free?
Mostly yes. A bed and breakfast owes sales tax when it buys soap, shampoo, and wine that it gives to guests for free, because those purchases aren't for resale. Jam and jelly are the exception -- they…
Are a licensed engineering firm's design services, the drilling/testing/lab work it subcontracts, and its construction-management and post-construction-monitoring work subject to New York sales tax?
Professional engineering services themselves -- including the written reports, plans, and specifications that go with them -- are not subject to New York sales tax, and neither are analytical or geote…
When a fuel terminal sells small, emergency amounts of untaxed No. 2 fuel oil to a commonly controlled affiliate through a pump nozzle that could fuel a vehicle, filling five-gallon cans, is that sale subject to New York's diesel fuel and petroleum business taxes?
Yes. Because the fuel is dispensed through a metered nozzle suitable for fueling a motor vehicle into five-gallon cans (a repository from which fuel could be put into a vehicle's tank), the sale does …
Was Florida sales tax computed before or after a grocery chain's loyalty-card shelf-price discount?
After the discount. Florida treated the card reduction like a retailer or store coupon because vendor allowances were not tied to individual discounted sales. If a vendor later reimbursed the retailer…
Was a thoroughbred sold at a Florida auction taxable when the auctioneer delivered the horse by common carrier to another state?
No, if the sales contract required the Florida auctioneer to deliver the horse to a common carrier for final delivery outside Florida and the export documentation was retained. If the purchaser took p…
Are thermometers and timers used in food processing exempt from Texas sales tax as manufacturing/quality-control equipment?
Yes, for quality-control uses: hand-held probe thermometers used to check food temperature during processing, shelf-type oven thermometers used to monitor cooking temperature, and timers used in food …
When a Texas-permitted seller drop-ships to a Texas customer on behalf of an out-of-state retailer, can it accept the out-of-state retailer's resale certificate instead of collecting sales tax?
Yes. A seller holding a Texas sales tax permit that drop-ships items to a Texas 'ship to' address on behalf of an out-of-state retailer may accept a properly completed resale certificate from that out…
Is an advertising company's electronic transmission of a recorded phone message to a radio station's listeners a taxable telecommunications service?
Yes, taxable -- and the taxpayer's own prior informal advice (that it would be exempt telemarketing) was corrected in writing. A charge for electronically transmitting a recorded message via telephone…
Is propane (LP gas) sold for residential or commercial use subject to Texas sales tax?
ALERT (see note below): propane (LP gas) is exempt from both state and local sales and use tax under Tex. Tax Code § 151.308(a)(3) and § 321.003, regardless of whether it's used residentially or comme…
For a historic-theater sales tax increment, does retail space in adjacent property count, and do a tenant's off-site ticket sales count?
Two answers. For the historic-theater sales tax increment under K.S.A. 12-1770 et seq. (1999 Senate Bill 76), retail space in adjacent/ancillary property counts only if that building was originally pa…
Does equipment used to inspect, repair, rebuild and repaint used shipping pallets qualify for the production-machinery sales tax exemption or the investment tax credit as manufacturing?
No. A pallet-pooling company's automated inspection, repair/rebuild and painting/stenciling of used industry-standard pallets is repairing and reconditioning previously manufactured pallets, not the p…
What documentary stamp tax applied to a deed recording a foreign partnership's domestication in Florida?
Only the 70-cent minimum tax, if Chapter 607's domestication requirements were met. Florida treated the domesticated partnership as the same entity that existed before domestication, so the deed merel…
Why did Kansas declare the 'Take-A-Spin' pull-tab game illegal in Notice 99-13?
Notice 99-13 declares the pull-tab game 'Take-A-Spin' (and similar games) illegal. The game uses conventional pull-tab tickets, but some tickets show 'Spin' or a similar designation under a tab that g…
Is artwork design and printing for a manufacturer's shipping containers exempt from Texas sales tax, including when the container doubles as an in-store display?
Split answer. A manufacturer can use a manufacturer's exemption certificate to buy, tax-free, artwork design and printing for a shipping container -- even if that same container later doubles as a pro…
Is copying seismic data onto tape taxable, even when it's outsourced to a related company or billed directly to the end client?
No exemption in any of the three billing arrangements tested. A seismic-data company's tape-copying charges are taxable whether (1) the data owner invoices the client and pays a related tape-copying c…
Were supplier allowances funding XYZ's discount-card prices included in taxable gross proceeds?
No. Supplier allowances based on XYZ's past purchases, negotiations, market share, or similar factors were not taxable gross proceeds because they were not earned from particular customer sales. Sales…
Does a school owe Kansas sales tax on tickets to school dances and on t-shirts it sells to athletes, and are dinner-theatre group purchases taxable?
Yes to all three. The Department ruled that a school must collect Kansas sales tax on tickets to school dances, because the tickets are admissions to a place providing amusement/entertainment/recreati…
After a corporate merger, can the surviving company take a sales-tax credit for taxes the non-surviving predecessor paid in error before the merger?
Yes. Where a Texas corporation was merged into a Delaware corporation (a tax-free reorganization under IRC § 368(a)(1)(F), keeping the same federal ID), the surviving corporation -- as the entity now …
Which parts of a bulk mailing/fulfillment business's services (data processing, collating, printing, postage, labels, set-up fees) are subject to Texas sales tax?
It depends item-by-item on what's actually done, per the Comptroller's category-by-category breakdown: data services (database design, de-duplication, CASS certification) are nontaxable when they rela…
Are a Nebraska Natural Resource District's purchases exempt from sales and use tax?
Yes, starting October 1, 1999. Under Laws 1999, LB 232, purchases by a Nebraska Natural Resource District are exempt from sales and use taxes. To buy tax-free on and after October 1, 1999, the Distric…
Can a retail company buy paper, ink, photography, and printing/mailing services tax-free when they're used to produce free promotional mailers sent to customers inside and outside New York?
Yes. The materials Corporation X buys and supplies to its printers, and the photography, modeling, and mailing services it purchases, are exempt from New York sales and use tax to the extent the finis…
Did federal tax deferral for an I.R.C. Section 1031 exchange also defer the exchange gain in the earned-surplus component of the former Texas franchise tax?
Yes, for the earned-surplus component described. Because that component began with federal net taxable income, a corporation's federal Section 1031 tax deferral was reflected in taxable earned surplus…
Did federal tax deferral for an I.R.C. Section 1031 exchange also defer the exchange gain in the earned-surplus component of the former Texas franchise tax?
Yes, for the earned-surplus component described. Because that component began with federal net taxable income, a corporation's federal Section 1031 tax deferral was reflected in taxable earned surplus…
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