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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Can an aviation-services company avoid charging sales tax on airport flowage fees and its own fuel surcharge that it passes through to customers?
No, generally. Airport-imposed flowage and concession fees, and the company's own 'into plane' fuel surcharge, are business expenses that become part of taxable receipts when passed on to non-airline …
Do specialized trade and legal newsletters qualify for New York's periodical sales tax exemption, including in electronic formats?
Yes. Twenty-three specialized print newsletters covering law, business, and industry news qualify as exempt periodicals under Tax Law § 1115(a)(5) even though they aren't general-interest 'newspapers'…
Does transferring a vehicle's DMV registration to a commonly owned company, without transferring title, trigger New York sales tax?
It can. Transferring a vehicle's registration to another company, even one commonly owned by the same person and even without transferring legal title, is a transfer of possession that counts as a tax…
Are dialysis machines, artificial kidneys, and their disposable blood-line tubing exempt from sales tax when a manufacturer sells them to New York hospitals and clinics?
Yes. Dialysis machines, artificial kidneys, and the connected disposable tubing/connectors used in hemodialysis all qualify as exempt prosthetic devices under Tax Law § 1115(a)(4), because together th…
Does mailing a New Mexico gross receipts tax return and check count as timely payment when the Department never receives either one?
No — a mailed return and check that the Department never receives do not count as timely payment, so interest was mandatory and the protest was DENIED. Attorney James C. Ellis followed his normal time…
When a company provides compressors to customers along with transportation, installation, and maintenance, is that a taxable rental of equipment or a nontaxable service?
A taxable equipment RENTAL, not a nontaxable service -- based on who bears care, custody, and control. A taxpayer asked the Comptroller to review two vendors' contracts (COMPANY A and COMPANY B) to de…
Is labor to install, upgrade, repair, or maintain computer hardware taxable in Texas -- and where can a computer repair business point skeptical customers for proof?
Taxable -- and the letter points to the exact rule text a business can show disputing customers. A computer repair business asked for documentation proving that labor/service charges for warranty upgr…
For the section 1505(b) test of whether more than 95% of an insurer's premiums are annuity consideration, does 'premiums' include reinsurance premiums and all direct premiums (in and out of New York)?
Yes to both. For purposes of the section 1505(b) test -- whether more than 95% of an insurance corporation's premiums are received as consideration for annuity contracts (or for the section 1510(c)(2)…
Is cattle-management computer software and hardware bought by a farmer exempt as farm machinery and equipment?
Taxable -- it is not exempt farm machinery. Under K.S.A. 79-3606(t), the farm machinery and equipment exemption covers farm and aquaculture machinery and equipment, repair and replacement parts, and r…
Which repair items for a farmer's combine and tractor qualify for the Kansas farm machinery exemption?
It depends on the item. Under K.S.A. 79-3606(t), the Department's opinion is that bolts, nuts, washers, cotter keys, and hydraulic and motor oil used in the repair and maintenance of a combine and tra…
Could a Texas maquiladora exemption certificate be used to rent motor vehicles or trailers without motor vehicle rental tax?
No. The maquiladora exemption belonged to Chapter 151 limited sales tax, which generally covered tangible personal property other than motor vehicles. Chapter 152 governed motor vehicles and contained…
Is a motor vehicle rental tax-exempt when rented directly to a Texas agency or to a state employee on official business?
Direct rentals to a Texas state agency were exempt. STAR later superseded the letter's blanket denial for employee rentals: an employee on official business may issue an exemption certificate when the…
Is the admission fee to a children's indoor play center with climbing equipment subject to New York sales tax?
Yes. A single admission fee that lets children enter and use non-moving recreational equipment like climbing apparatus at an indoor play center is a taxable admission charge to a 'place of amusement,'…
Are dialysis machines and a dialyzer reprocessing system purchased by a dialysis clinic exempt from New York sales tax?
Dialysis machines are exempt as prosthetic devices under Tax Law § 1115(a)(4), regardless of who buys them or why -- but a dialyzer reprocessing system, which only cleans and readies the artificial ki…
For an independent distributor of prepaid 'Discount Redemption Vouchers,' does the distributor need a sales tax permit, what's the tax base on non-fundraiser sales, and are fundraiser sales through booster clubs/churches/civic groups tax-exempt?
Three-part answer covering permits, tax base, and fundraiser exemption limits. An independent distributor purchases prepaid 'Discount Redemption Vouchers' from a direct-sales parent company (COMPANY A…
Is installing a new solid epoxy floor over an existing concrete floor a taxable service or an exempt capital improvement?
It's an exempt capital improvement, not a taxable service. A new solid epoxy floor built up in place over an existing concrete floor is 'flooring,' not 'floor covering,' so it isn't subject to New Yor…
Are the printing services and production equipment a stamp retailer buys to create 'first day cover' envelopes for resale exempt from sales tax?
Yes, mostly. Printing services a retailer buys to produce envelopes it resells to customers are exempt as purchases for resale (with a resale certificate), and the film negatives, color separations, a…
Does a licensed architect and engineer's litigation-support research, reports, and expert-witness testimony for attorneys get taxed as a service or as a sale of the drawings and reports it produces?
No, generally. Professional architectural and engineering services -- research, analysis, written reports, presentation drawings, and expert-witness testimony -- aren't among New York's enumerated tax…
Does a manufacturer of CV-joint grinding machines have to collect sales tax when it sells them to auto parts remanufacturers and repair shops?
It depends on how the buyer uses the machine. Sales to remanufacturers and parts distributors who use the grinder to produce CV joints for sale are exempt if over half the machine's use is in producti…
Was Wheeler & Sons Trucking an employee of Western Mobile whose hauling receipts were exempt from New Mexico gross receipts tax?
No — Wheeler & Sons Trucking was an independent contractor, not Western Mobile's employee, so its hauling receipts were not exempt and the protest was DENIED. Western Mobile set haul rates, expected d…
How did Texas tax an insurer-declared total-loss vehicle before repair and a later sale after the vehicle was repaired?
Before repair, a vehicle declared a total loss by an insurer was taxed under Chapter 151 limited sales tax rather than Chapter 152. After repair, later sales were again subject to motor vehicle sales …
When refinery units purchased from another company are dismantled and re-erected at a new location owned by the buyer, does incorporating them into realty count as nontaxable new construction or taxable remodeling?
New construction -- lump-sum labor charges are not taxable. A refinery operator bought refinery processing units from another company, planning to completely dismantle them, move them to a different l…
Is a yacht charter company's cruise fee taxable as an equipment rental, and are its liquor and catering charges taxable too?
The bare cruise fee is an exempt transportation service, not a taxable rental, because the company keeps full dominion and control of the yacht -- but once the company sells liquor or arranges caterin…
Does a nonprofit news cooperative owe sales tax on the information services it buys for its members, or on production equipment and utilities it provides at member newspapers?
No, mostly. Because a nonprofit news cooperative's information-service purchases (like stock quotes and weather data) are used by its member newspapers and broadcasters in the collection and dissemina…
How do the real estate transfer tax, sections 186 and 186-a, the petroleum business tax, the subsidiary capital tax, and the stock transfer tax apply to a utility's PSC-mandated restructuring into a holding-company structure?
Across five taxes, the PSC-mandated restructuring is largely tax-neutral. Real estate transfer tax: the share exchange, subsidiary spin-offs, and generation-asset transfers within the affiliated group…
When a PSC-mandated restructuring forces a utility to transfer its generating assets to a subsidiary and auction them, are the proceeds and distributions taxable under sections 186 and 186-a?
Largely not taxable under section 186. Because the New York Public Service Commission's Competitive Opportunities order forced NYSEG to restructure and auction its generating assets, the asset transfe…
Can a multi-level-marketing company let its mall-kiosk distributors buy tax-free with a resale certificate, the way a home-based distributor can't?
Yes -- distributors with a real retail outlet (a store or kiosk) can get their own sales tax permit and use a resale certificate, unlike home-based distributors. A multi-level-marketing company sellin…
Does a corporation's section 1452(d) election to stay taxable under Article 9-A survive its purchase by a bank holding company and later mergers and business transfers into it?
Yes. A corporation (B) that made the section 1452(d) grandfather election to remain under Article 9-A keeps that election after a bank holding company buys all its stock and after the three proposed s…
Is tangible personal property used to align a vehicle with a trailer, boat, or camper taxable in Kansas, and is there a safety-equipment exemption?
Yes. Under K.S.A. 79-3603(a), the retail sale of tangible personal property used to align a vehicle with a trailer, boat, or camper is subject to Kansas sales tax. The Kansas Sales Tax Act contains no…
What must a seller obtain to make tax-exempt sales of pianos, repair labor, and parts to a religious organization?
A seller making tax-exempt sales to a religious organization — including selling a piano, labor to repair and maintain pianos, and repair or replacement parts — must obtain a properly completed exempt…
Is a Kansas sale exempt when the buyer's affiliated common carrier picks up the goods and hauls them out of state?
The sale is not subject to Kansas sales tax if it meets the conditions of K.A.R. 92-19-29. A manufacturer sold goods to Corporation A (a member of an affiliated group, not a common carrier), which dir…
Does Texas sales tax apply to a sale-leaseback financing of pipeline separators and meters that stay attached to an existing pipeline?
No -- because the separators and meters are attached to and part of a transmission pipeline that Texas treats as real property, the sale-leaseback of them is a real-property transaction, not a taxable…
Could a closely held corporation avoid negligence penalty when its treasurer secretly failed to file and pay CRS taxes while telling the other officers everything was current?
No — the treasurer acted in a managerial capacity, so his negligent nonfiling and nonpayment were acts of Fluorescent Technology International itself, and the protest was DENIED. Treasurer John McEown…
Could a counselor deduct services actually resold by a treatment center without obtaining that buyer's NTTC within New Mexico's 60-day audit deadline?
No — proof that Desert Hills resold Eileen Cahoon's counseling services did not replace the buyer's required NTTC, so the tax and interest stood; only the $98.50 penalty was abated. Section 7-9-48 req…
Does a Texas Water Control and Improvement District need a sales tax permit or number to buy things tax-free?
No -- a Water Control and Improvement District is exempt from Texas sales tax on its purchases as a political subdivision of the state, and it does not need a sales tax number to use an exemption cert…
My underreporting was an honest blunder and I can't afford to pay more. Can the state forgive the penalty and interest on my back gross receipts tax?
No — interest is mandatory and the negligence penalty was upheld because sloppy records and a misunderstanding of the rules are negligence, even without any intent to cheat, so both protests were DENI…
The state gave me 60 days to produce exemption certificates but assessed the tax before the 60 days ran out — right before the statute of limitations expired. Was that allowed?
Yes — the Department may issue an assessment before the 60-day certificate window closes (here, to beat the statute of limitations), and doing so does not strip the taxpayer of the right to still subm…
Can I buy a mattress tax-free in Texas just by getting a doctor's prescription for it?
No -- a doctor's prescription alone doesn't make a mattress tax-exempt; the mattress itself must be specifically designed to alleviate pain or treat a medical condition, not just an ordinary mattress.…
How did the former Texas throwback rules treat out-of-state delivery to a Texas buyer, independent solicitation, and foreign-country sales?
Delivery to another state was non-Texas unless throwback applied, and the buyer's Texas incorporation did not change that. Independent solicitation in the destination state created taxable-capital nex…
Did RR 98-17 allow state reimbursement for extra depreciation on manufacturers' machinery in joint industrial parks or fee-in-lieu arrangements?
Yes. RR 98-17 said machinery and equipment in a joint industrial or business park, or under a negotiated fee-in-lieu arrangement, qualified for state reimbursement tied to depreciation above 80 percen…
How did RR 98-16 apply South Carolina sales tax, admissions tax, and alcohol rules to nonprofit fundraising dinners, shows, festivals, and auctions?
Treatment depended on what attendees were paying for, whether a statutory nonprofit exemption applied, who made the sale, and whether alcohol was sold or provided for consideration. A genuine donation…
Under the now-superseded RR 98-15, how did coupons and discount cards change South Carolina's taxable sales price?
Tax was based on what the retailer received from the customer plus any reimbursement tied to that sale. Store-funded coupons and purchase-based supplier allowances reduced the taxable price; manufactu…
Can a company avoid Utah's private rail car property tax on a rail car it uses free of charge as a mobile safety-training classroom for emergency responders?
No. The Utah State Tax Commission ruled that a company's private rail car, used as a free mobile classroom to train emergency responders, is still subject to Utah's private rail car property tax. The …
Is engineering and design work for a piping-system prototype a taxable sale of tangible personal property, or a nontaxable professional service, in Texas?
Nontaxable services -- the design, engineering, and management charges are not taxable, though the company still owes tax on the materials and equipment it uses to build the prototype itself. An engin…
Is HVAC remodeling work on a leased Texas airport terminal exempt from sales tax, and does it matter who pays for it or whether the space is used by the public?
It depends on who's paying and who benefits: HVAC remodeling work in areas the public actually uses for air travel is exempt as repair/remodeling of public-use property, but work benefiting only priva…
Were a New Mexico broker-dealer's mutual-fund dealer concessions and 12b-1 trail fees taxable even though receipts from selling securities were exempt?
Yes — both revenue streams were taxable gross receipts, so Rauscher, Pierce, Refnes's protest was DENIED. The mutual-fund shares themselves were exempt securities, but the dealer concessions were comm…
Could a corporation amend its 1994 franchise-tax report to claim the temporary credit for sales tax paid on qualifying manufacturing equipment?
Yes, assuming the equipment qualified and the corporation had a valid filing extension. An amended report claiming the temporary credit could be filed within four years of the report due date, includi…
Did a domestic nonprofit corporation have to file and pay Texas franchise tax before the Comptroller approved its exemption?
Yes. Nonprofit formation alone did not create franchise-tax exemption. Sections 171.001 and 171.051, with Rule 3.541, required a domestic nonprofit corporation to apply and provide evidence of qualifi…
May a subsidiary's unused investment tax credit carryover survive after its parent is bought by an unrelated corporation and the subsidiary is later merged into the acquirer?
Yes. When Miles bought all the stock of Diagnostics, the 'target corporation' under section 208.15 was Diagnostics, not its subsidiary Instruments -- so Instruments' unused investment tax credit carry…
Can a construction contractor buy materials tax-free using a customer's Direct Payment Permit?
No. A contractor must still pay sales tax on all materials it buys for repair or capital-improvement work, even when the customer holds a Direct Payment Permit -- the permit only excuses the contracto…
Does New York sales tax apply when an artist sells or licenses a design rendering to an architect, interior designer, fashion house, or manufacturer?
It depends on what's actually transferred: selling an original rendering, or letting a client alter or keep it, is a taxable sale of tangible personal property, but temporarily loaning a rendering sol…
Are health club membership and initiation fees subject to New York State and City sales tax?
No. A fitness chain's membership and initiation fees are exempt from New York State and City sales tax because its members don't control the club's activities or management (so it isn't a taxable "ath…
Does sales tax apply to a mobile-MRI company's tractor-trailers and to its imaging-equipment leases to hospitals?
The heavy tractor-trailer combinations that haul a company's mobile MRI units are exempt from sales tax under Tax Law § 1115(a)(26), but the MRI equipment installed on the trailer is not covered by th…
Is a college-operated teaching hotel's room rent exempt from New York sales tax?
Yes. Room rent at a hotel operated by a tax-exempt college as part of its educational program is exempt from New York sales tax under Tax Law § 1116(c) as long as the hotel offers fewer than 100 rooms…
Does the exemption for promotional materials cover a grocery chain's blank membership/discount cards?
No. Blank plastic membership cards a grocery chain buys and then personalizes with a customer's name and magnetic ID strip don't qualify for the promotional-materials exemption, because they're used t…
Can a New York fuel dealer import 'high sulfur diesel' from Canada and sell it for residential heating without New York fuel and sales taxes, and is any tax owed when it is imported?
No tax is due merely on importing the fuel; tax attaches at the first non-exempt sale or use in New York, and residential heating sales can be made exempt. The product — labeled 'high sulfur diesel,' …
Does Utah require state income tax withholding from sick pay benefits when federal withholding is voluntary versus mandatory?
It tracks the federal rule. Utah does not require state withholding on third-party sick pay when federal withholding on it is only voluntary, but Utah does allow voluntary state withholding in that si…
Are transportation charges taxable when billed as part of a taxable repair service, and when are they exempt?
It depends on the primary service. If a roustabout is performing a taxable repair service, all charges tied to it — including transportation charges, whether separately stated or lumped in — are taxab…
What mineral severance tax exemptions and abandoned-well credit did Kansas add in 1998?
This 1998 legislative update summarizes new Kansas mineral (severance) tax exemptions effective July 1, 1998, plus a new income tax credit. Gas severed from a well whose average daily production has a…
How are Kansas broadcasters, cable, and subscriber and satellite TV/radio services taxed after the 1998 exemption?
Effective July 1, 1998, Senate Bill 493 added a sales tax exemption for over-the-air, free-access radio and television stations, and this notice explains four related provisions. Subscriber radio and …
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