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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Did an out-of-state corporation have to file a Florida corporate income tax return because it indirectly owned a Florida partnership interest?
Yes. Florida attributed the lower-tier partnerships' Florida business and income to the corporate owner, creating nexus and requiring a return that included and apportioned its partnership income.
Does Virginia's reduced recordation tax rate for 'refinancing' a deed of trust apply when a new borrower entity -- not the original borrower -- takes out the new loan to pay off the old one?
Yes, in this case. Virginia's lower recordation tax rate for refinancing deeds of trust does not require the new borrower to be the same person or entity as on the original loan -- so when an individu…
If I buy custom cabinets with installation from an out-of-state contractor who fabricates and pays tax on the materials in their own state, do I owe Virginia use tax too?
Not necessarily -- when a Virginia buyer purchased custom cabinets with installation from an out-of-state contractor (based in Pennsylvania) that fabricated the cabinets and paid sales/use tax on the …
Is a company's sale of software "credits," which let a customer generate additional reports from previously purchased hardware/software, a taxable sale of tangible personal property or a non-taxable intangible under Illinois sales tax law?
It depends on how the software is delivered and licensed. Illinois treats "canned" (prewritten) computer software as taxable tangible personal property, while custom software written to a customer's s…
If I keep my Virginia driver's license and voter registration while living out of state, have I really abandoned my Virginia domicile?
No, her Virginia domicile was not abandoned. Even though she lived and worked in another state for over a year, she kept her Virginia driver's license, vehicle registration, and voter registration -- …
Can I still be found to have successfully changed my Virginia domicile even if I kept my Virginia driver's license and car registration?
Yes -- a taxpayer who went to law school, was admitted to the bar, took a job, leased homes, and registered to vote in a new state was found to have successfully changed her domicile away from Virgini…
If I don't file an amended Virginia return after the IRS adjusts my federal income, how long does Virginia have to assess me for the difference?
There is no time limit -- Virginia's normal 3-year assessment deadline (Va. Code § 58.1-104) has a built-in exception: if a taxpayer fails to file the amended Virginia return required within one year …
What South Carolina state per capita income figure applied for economic-incentive tests in April 2023?
The Department listed South Carolina's most recently available state per capita personal income as $53,320 on April 17, 2023. The figure helped determine qualification for or the amount of incentives …
Does extracting limestone from an open-pit quarry count as "mining" for Virginia's local machinery and tools tax, even though the county calls it "quarrying"?
Yes -- the Department ruled that quarrying limestone is a form of mining under the ordinary meaning of the word (confirmed by industry classification standards and Virginia's own mine-safety statute),…
Can I skip straight to the Virginia Department of Taxation to appeal a local business tangible personal property tax dispute, or do I have to go through the locality's own appeal process first?
No -- you must complete the local appeals process first: when a county responded to a taxpayer's REFUND request (not a formal appeal) by issuing a purported "final local determination," the Department…
If I fix an incomplete exemption certificate on appeal and the Department can verify the customer, will the sale come out of my audit?
Sometimes -- of three customers whose original exemption certificates were incomplete, only one (where the appeal submission let the Department actually verify the customer's active registration in it…
If I submit exemption certificates for the first time on appeal (not during the audit itself), will they be accepted, and can I get compliance penalty waived on a repeat sales tax audit?
It's an uphill climb -- exemption certificates submitted for the first time on appeal (rather than at the time of sale) face greater scrutiny and must affirmatively prove the customer's use was valid,…
If a partnership added back bonus depreciation on Virginia returns for years before I sold my partnership interest, can I subtract the resulting basis difference when I sell?
Yes -- even though the 2017 Virginia individual income tax form instructions for the bonus-depreciation basis adjustment only mention corporations and pass-through entities (Forms 500/502), a partner …
Does a nonprofit "pay what you can" restaurant have to collect Virginia sales tax on the meals it serves?
Yes -- a nonprofit's purchase exemption certificate doesn't cover the SALES it makes, and Virginia's separate exemption for nonprofit food/meal sales only applies when those sales happen on fewer than…
Could the taxpayer use alternative apportionment because third-party-processed Florida inventory overstated its Florida business activity?
Yes. The Department approved Option 3, excluding all of the specified inventory from both the property-factor numerator and denominator because the standard formula produced exceptional distortion.
My medical staffing agency is based out of state and only recruits out of state — do I still owe New Mexico gross receipts tax on placements at New Mexico hospitals?
Yes — the protest was denied in full. Vista Staffing Solutions, a Utah-based medical (locum tenens) staffing agency with no New Mexico office or employees, was assessed about $2.9 million — $2,090,515…
New Mexico levied my bank account for unpaid gross receipts tax I never protested — can I get the money back by arguing my work was really out of state?
No — the protest was denied. Darlene Krueger never protested or paid four 2007–2010 gross receipts tax assessments ($79,786.93), so she became a 'delinquent taxpayer' and the assessments became final;…
Did printed materials, an optional iPad package, and prerecorded video lessons make the online bar-course tuition subject to Florida sales or communications services tax?
Printed materials did not trigger sales tax, but the prerecorded video component made the full tuition a taxable communications service at a Florida service address; the iPad package was included in t…
Did the seller's three impact-rated rolling door and window systems qualify for Florida's 2022-2024 impact-resistant product sales-tax exemption?
Yes. Their specifications and Florida Building Code approvals showed that the redacted products were impact-rated doors or windows, so retail sales were exempt during July 1, 2022-June 30, 2024.
Can I avoid Virginia income tax by arguing I'm not a U.S. citizen, had no contract to pay tax, or that the IRS has no authority in Virginia?
No -- Virginia residency and income tax liability don't depend on U.S. citizenship, a personal contractual agreement to pay tax, or the IRS's authority to operate in the state; the Department rejected…
Can I use payroll apportionment to divide my BPOL gross receipts between two city offices, or do I have to situs receipts to wherever the service was actually performed?
Only as a last resort -- Virginia's BPOL situs rules require gross receipts to be attributed first to the definite place of business where the service was actually performed, then to wherever the serv…
Does filing a "notice of intent to appeal" a Virginia tax assessment pause or extend the 90-day appeal deadline?
No -- Virginia strictly enforces a 90-day deadline (from the assessment date) to file a COMPLETE appeal, and filing a mere "notice of intent to appeal" within that window does not pause or extend the …
Can a university sell meals tax-free to residential students who pay with 'dining dollars' from a mandatory meal plan, at dining locations that are also open to the general public?
Yes. The Department ruled that a university may make tax-free sales of meals to residential students who pay with 'Dining Dollars' purchased as part of a mandatory meal plan, even at dining locations …
Do a city's contractors owe Tennessee use tax on the equipment and materials they buy to build a municipal wastewater pilot-treatment plant and reclaimed-water pump station?
No. The Department ruled that the materials and equipment a Tennessee city's contractors buy to build a wastewater pilot-treatment facility and a reclaimed-water booster pump station are exempt from T…
How did Florida tax vehicle-consignment fees, repair and shipping charges, profit-sharing payments, and unsuccessful returns?
On successful sales, dealer charges were included in the taxable vehicle price. On failed flat-fee sales, taxable repairs and unavoidable shipping were charged to the consignor; profit-sharing returns…
What does Illinois require for a drop-shipped sale to be tax-exempt as a sale for resale, and when must a marketplace facilitator collect and remit Illinois sales tax on behalf of marketplace sellers?
For drop shipments, Illinois prefers an active registration or resale number on a Certificate of Resale, but will accept other documentation (including a certificate describing the drop-shipment scena…
Can Missouri-resident S corporation shareholders claim a resident credit for Missouri tax on income the S corporation earns in other states?
IT DEPENDS. Yes, the Taxpayers can claim the Section 143.081.3(2), RSMo, resident credit for Missouri income tax on their share of S-corp income from a state with no income tax, and also for income fr…
If my wholesaler drop ships my products directly to my customers in Missouri, do I have to collect and remit Missouri sales tax?
YES, Applicant should be collecting and remitting Missouri sales tax on these sales, because in a drop shipment title to the product passes first from the third-party supplier to Applicant and then fr…
Does emailing my city about a business tangible personal property tax assessment count as filing a local appeal, so I can then go straight to the Department?
No -- simply emailing a locality about a business tangible personal property (BTPP) tax assessment you believe is too high isn't the same as filing the formal local administrative appeal required by V…
Can I get an exception to a Virginia tax credit application deadline if my accountant forgot to file it on time?
No -- the April 1 application deadline for Virginia's capped Qualified Equity and Subordinated Debt Investments Tax Credit is strictly enforced regardless of the reason for the delay, including relian…
If I can't pinpoint the exact dates I got a new state's driver's license, vehicle registration, and voter registration, can I still prove I successfully changed my domicile away from Virginia?
Yes -- even though the taxpayer couldn't pin down the exact dates he first obtained his new state's driver's license and vehicle registration, the Department found the overall preponderance of evidenc…
How did the Washington, D.C. Emancipation Day holiday affect South Carolina's 2022 income tax filing, payment, and refund-claim deadlines?
Because of the Washington, D.C. Emancipation Day holiday, South Carolina's 2022 income tax returns and payments were due April 18, 2023 instead of April 15. Emancipation Day (April 16) fell on a Sunda…
Were boxed cookies taxable when sold warm from a warmer, chilled from a refrigerator, or at room temperature for catering?
Warm cookies held by a heat source were taxable hot prepared food. Chilled cookies and room-temperature catering cookies were exempt bakery products because they were not sold as hot prepared food.
I work in North Carolina but live in Virginia, and my employer only withheld North Carolina tax -- can I just report that as my Virginia withholding, or use my W-2 alone to claim Virginia's out-of-state tax credit?
No on both counts -- Virginia residents can't report tax another state withheld (here, North Carolina) as if it were Virginia withholding, since Virginia never actually received those payments; and a …
What does Illinois General Information Letter IT 23-0002-GIL conclude about Alternative Apportionment?
The Illinois Department of Revenue DENIED the taxpayer's petition for alternative apportionment, at least for now, because the taxpayer did not meet its burden of proving the standard single-sales-fac…
Can a farmer who pays motor fuel tax on propane used exclusively for grain drying (not for operating vehicles on public highways) get a refund of that tax?
Only in limited circumstances, and usually not for propane used to power a grain dryer. Motor fuel tax applies to fuel used to operate motor vehicles on public highways or watercraft on state waters, …
What does Illinois General Information Letter IT 23-0001-GIL conclude about Base Income; Modifications?
NO, this Medicare premium income is NOT exempt from Illinois income tax (the federal premium-tax preemption doesn't reach Illinois's general net-income tax), so no add-back question arises since the i…
If I report trucking income on a federal Schedule C, does that automatically mean I'm operating a business subject to local BPOL tax rather than working as an employee?
Reporting trucking income on a federal Schedule C creates a REBUTTABLE presumption that you're operating a business subject to local BPOL tax, but it's not automatically conclusive -- in this case, th…
Can I get a Virginia Tax Commissioner determination reconsidered just because I think the conclusion was wrong, or because a similar-sounding prior ruling came out differently?
No -- Virginia's reconsideration process requires meeting one of four specific grounds (misstated facts, a change in law, misapplied policy, or genuinely new evidence unavailable at the time of the or…
Does Virginia's current 7-year statute of limitations on tax collections apply to old assessments from the 1990s, and does a 2021 bank lien on a decades-old debt mean the Department missed its deadline?
No -- Virginia's current 7-year collection statute of limitations only applies to assessments made on or after July 1, 2016; assessments from 1994-1996 (for the 1987-1993 tax years here) were instead …
Is equipment used to remove waste from a manufacturing process covered by Virginia's manufacturing sales tax exemption, and does a customer's direct-pay permit cover a repair contractor's own equipment purchases?
No to both -- Virginia's manufacturing exemption doesn't cover equipment used to dispose of a facility's waste or pollutants (an excavator used exclusively to remove waterjet-process waste material wa…
Were a seller's Florida sales of cranial prosthetics, meaning wigs for buyers with alopecia or cancer-related hair loss, exempt without a prescription?
No. The Department concluded that the wigs were taxable tangible personal property. It found no specific exemption for cranial prosthetics and stated that the wigs did not meet the statutory definitio…
When a real estate rental partnership makes an infrequent sale of Colorado property, are the sale proceeds included as 'receipts' in its income apportionment factor?
No. Although the gain on a rental partnership's infrequent sale of Colorado real estate is apportionable income, the sale proceeds are not 'receipts' under § 39-22-303.6(1)(d) because the sale isn't i…
Are membership fees for streaming live and on-demand fitness classes subject to Tennessee sales tax?
Yes. Membership fees for streaming fitness classes are subject to Tennessee sales and use tax. The pre-recorded, on-demand classes are taxable 'specified digital products' (digital audio-visual works,…
Were charges for a digital platform's redacted suite of personalized video, audio, live-interaction, and content offerings subject to Florida communications services tax?
Yes. The Department concluded that the described offerings fell within Florida's definition of video services because they transmitted video, audio, or other programming to purchasers. Their personali…
What documentation do I need to support charitable contribution and Schedule C business expense deductions if the Virginia Department of Taxation asks for it in an audit?
You need real substantiation, not just copies of your federal schedules -- for noncash charitable donations, at minimum a donee receipt (and above $500, a written record of acquisition and cost basis,…
If my tax credit application envelope gets returned by the post office for insufficient postage and I resend it after the deadline, does the original postmark still count?
No -- when an application envelope was postmarked before the April 1 deadline but was returned by the post office for insufficient postage and not actually resubmitted (and received by the Department)…
Can a medical diagnostic laboratory buy reagents used to test blood and urine samples exempt from Virginia sales tax under the medicines-and-drugs exemption for hospitals and clinics?
No -- even though the reagents may meet the Drug Control Act's definition of a drug, the medicines-and-drugs exemption under Va. Code § 58.1-609.10(9) only covers purchases by a hospital, nursing home…
If I move out of Virginia but keep my Virginia driver's license and vehicle registrations, will Virginia still treat me as a domiciliary resident for income tax?
No, not automatically -- the Department found the taxpayer had genuinely established domicile in another state (leasing homes there, filing that state's tax returns, and voting there) even though he k…
If I didn't respond to an auditor's records request during a cigarette sales tax audit but later provide documentation on appeal showing the estimate was too high, will it be considered?
Yes, at least in part -- a gas station operator who didn't respond to an auditor's document request during a wholesaler-data-driven cigarette compliance audit still got some relief on appeal: document…
Could a county buy materials, supplies, and equipment tax-free for a county-owned Supervisor of Elections facility by using Florida's public-works direct-purchase procedure?
Yes. The planned purchases qualified because the county would issue purchase orders, receive invoices, pay vendors with public funds, take title, assume the risk of loss, and provide Certificates of E…
Is a fuel additive like cold flow improver (CFI) subject to Missouri sales tax when the terminal operator only charges customers an injection fee, not for the additive itself?
YES, the fuel terminal's purchases of cold flow improver (CFI) are subject to Missouri sales tax. Because Applicant only charges customers an injection fee for the service and does not separately char…
Can a property-holding subsidiary use its parent company's Texas R&D sales tax exemption registration when the subsidiary purchases items that the parent actually uses in research?
No. The Texas research and development sales tax exemption only protects the entity that actually purchases the property AND performs the qualified research itself -- a subsidiary that buys equipment …
If I collect sales tax from a customer by mistake, can I keep it instead of remitting it to Virginia, since I'm a contractor who normally shouldn't charge tax?
No -- Virginia law requires any dealer who collects sales tax from a customer to remit it to the Department, even if it was erroneously or illegally collected, and a contractor's later claim of 'cleri…
If a vendor mistakenly charges another state's sales tax on a purchase used in Virginia, does that satisfy my Virginia use tax obligation?
No -- Virginia's credit for tax paid to another state only covers tax legitimately owed to that state because of a taxable use there before the property was delivered into Virginia; it doesn't apply w…
Does Virginia sales tax apply to a credit card processing fee a seller charges a customer buying tangible personal property?
Yes -- a credit card processing fee charged in connection with the sale of tangible personal property is part of the taxable sales price under Va. Code § 58.1-602, and it doesn't matter that the fee i…
What South Carolina tax interest rate applied from January 1 through June 30, 2023, including eligible refund interest?
The listed rate for South Carolina tax underpayments and overpayments from January 1 through June 30, 2023 was 7%. Interest generally compounded daily, while estimated-tax underpayments used simple in…
Does a not-for-profit organization owe Illinois sales tax or use tax on food it buys and serves at fundraisers, member dinners, or donation-based events?
It depends on whether the food is sold, donated-for, or given away free, and whether the organization holds an Illinois exemption ('E') number. If the organization pays Illinois use tax on the food wh…
Are a nonprofit medical association's journal subscriptions, self-study learning materials, and membership dues subject to Texas sales tax?
No, all three are exempt from Texas sales tax. The nonprofit's peer-reviewed medical journal and its exam-prep Learning System (print, digital, or complete) qualify as exempt publications of a scienti…
Are gross receipts from renting hotel rooms to a 'permanent resident' (someone who stays or has the right to stay at least 30 consecutive days) subject to Illinois Hotel Operators' Occupation Tax, and can the guest get a refund of tax already collected?
No. Gross receipts from renting rooms to a 'permanent resident' -- anyone who has occupied or has the right to occupy a room (not necessarily the same room) for at least 30 consecutive days -- are exc…
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