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 must an equipment finance company remit sales or use tax on its healthcare-equipment fair market value leases versus its conditional sales agreements?
It depends on which type of transaction it is -- under a genuine fair market value (true) lease, DVI must collect sales tax on each monthly rental payment as it's received, but under a conditional sal…
Must a funeral livery service collect New York's 5% special passenger car rental tax, in addition to ordinary sales tax, on its car-and-driver charges to funeral homes?
Yes -- Petitioner is correctly collecting both ordinary New York sales tax and the additional 5% special short-term passenger car rental tax on the fees he charges funeral homes for cars and drivers, …
Is a dual-licensed insurance adjuster and private investigator's fee income taxable as a 'detective service,' or does it depend on which license the work required?
It depends entirely on which hat Petitioner is wearing for a given assignment -- fees for work requiring his independent adjuster's license (investigating and adjusting insurance claims on an insurer'…
A financial-printing company itemizes typesetting, graphic design, proofing, alteration/correction, printing, and post-printing distribution/mailing/postage/storage services on customer bills. Which of these are taxable, and does separately stating them on the invoice change the answer?
Typesetting, graphic design, proofing, alteration/correction, and printing (items 1-5) are ALL taxable in total as charges for a printed item, whether billed as one price or separately. Mailing servic…
Is installing, monitoring, servicing, or repairing a burglar alarm/security system taxable as a security service, even if the system becomes part of a new-construction improvement to real property?
Yes. Installation of a security system is taxable if the installer is required to be licensed under the Private Investigators and Private Security Agencies Act, Sec. 13 — and the ENTIRE charge for sec…
When did RR 97-17 require a bingo promoter to hand over session proceeds, and when did the nonprofit have to deposit the proceeds and entrance fees?
The promoter had to deliver net session proceeds to the nonprofit's representative at the end of the session. The nonprofit had to deposit those proceeds and the entrance fees no later than the day af…
Could a nonprofit use the Department's share of bingo-card-charge distributions to pay bingo expenses under RR 97-16?
No. RR 97-16 said the Department's distribution from bingo-card charges had to remain separate and be used for charitable or organizational purposes. Promoter compensation and other reasonable bingo e…
A financial-document company converts customer documents into electronic format and transmits them to government regulatory agencies, and separately offers software and training so customers can format their own documents. Is the electronic formatting/transmission service taxable, does it matter if the customer is inside or outside Texas, and how is the software/training service taxed?
The electronic formatting service is taxable as data processing under Sec. 151.0035, and the transmission fee is part of its taxable sales price (Sec. 151.007(a)(2)). But Sec. 151.330(e) exempts servi…
Is an automated medication dispenser machine — leased to elderly patients with medication non-compliance problems, prescribed by their doctors — exempt from Texas sales tax?
No. The automated medication dispenser (a machine that organizes complex pill regimens, is lockable/tamper-proof, dispenses into a removable drawer, and has audio/visual reminders) is taxable — there …
Did an Arkansas seller create former Texas franchise-tax nexus when its Texas salesperson provided customer service and occasionally delivered small items?
Yes. The salesperson's Texas customer-service activity subjected the corporation to the former taxable-capital component. The salesperson's occasional deliveries went beyond protected solicitation und…
Does the sales tax base for construction materials differ depending on whether the real property contractor manufactures its own materials, buys fabricated materials from a manufacturer, or has a separate installer convert purchased materials into real property?
Yes, the tax base differs by scenario, and it can favor a contractor who self-fabricates. If a real property contractor fabricates its own construction materials AND installs/converts them to real pro…
Did buyers owe Texas vehicle tax again after a dealer closed without remitting tax it had collected?
No, for sales on or after January 1, 1996, if the buyer documented payment of the required tax to the dealer. The title application and tax receipt were to show tax paid to the closed dealer but not r…
When an employer's bankruptcy forces a nonresident's exempt SERP annuity payments to be settled as a one-time lump sum, does the lump sum keep its New York tax-exempt character?
Yes. Assuming the nonresidents' pre-bankruptcy SERP payments qualified as exempt annuities under 20 NYCRR 132.4(d)(1)-(2), and assuming the arrangement would have met the federal 'retirement income' d…
Are dues paid to a homeowners association's community center exempt from New York's club dues tax?
Yes -- Community Center of Smallwood qualifies as a homeowners association because its membership is limited to owners of homes within the defined Smallwood community and its social/athletic facilitie…
How is a Public Service Commission-regulated reseller of telephone service taxed under Article 9 before and after the 1995 telecommunications tax changes?
A Public Service Commission-regulated reseller principally engaged in telephone service is taxed under section 183 of Article 9 (so it is outside Article 9-A under section 209.4). Before January 1, 19…
Does someone doing casual handyman labor — no license, no advertising, paid in cash — owe New Mexico gross receipts tax on that work?
The protest was denied. A man who supported himself with casual handyman labor — carpentry, yard work, tree trimming, tile work, painting, repairs — owed gross receipts tax on it. New Mexico defines '…
Does a retiree owe New Mexico gross receipts tax on small amounts earned from side activities like salvaging metal, babysitting, tax prep, and caretaking?
The protest was denied. A retiree who supplemented his Social Security with small side activities — salvaging metal from old appliances, babysitting, tax preparation, hauling homing pigeons, and caret…
A distributor of trade show display booths sells, rents, ships, sets up, breaks down, and stores booths that travel to trade shows around the country. Depending on where a booth is first delivered/set up (Texas or out of state) and where it's later stored, which charges are taxable?
It all depends on where the booth FIRST goes after the sale. If the customer takes delivery out of state first, the initial sale and related charges are untaxed (though the customer owes Texas use tax…
Can a for-profit retail business legally sell raffle tickets to customers, with merchandise as the prize and the proceeds going into the business — and is there a sales tax angle regardless?
The Comptroller flagged a legality problem, not just a tax one: raffles are generally understood not to be legal in Texas except for certain nonprofit groups, so a for-profit business should check wit…
In a three-party drop-shipment chain (Seller Corp. sells to out-of-state Buyer Corp., but ships directly to Buyer Corp.'s Texas customer, Other Corp.), what documentation does Seller Corp. need to avoid collecting Texas tax, can it accept Buyer Corp.'s home-state resale certificate instead of a Texas one, and does an affidavit from Other Corp. (about tax it separately paid) relieve Seller Corp. of liability?
A valid resale certificate from Buyer Corp. relieves Seller Corp. of the duty to collect Texas tax — this certificate can be a Texas resale certificate, a multi-jurisdiction certificate, or Buyer Corp…
Is a membership-based press release distribution service — which edits members' news releases, reformats them in wire-service style, and electronically transmits them to media outlets — subject to Texas sales tax, even though it uses telecommunications and data processing to do it?
No. Editing, reformatting, and distributing press releases to media is not a taxable service — Rule 3.321(a)(5) specifically exempts public relations services, media placement services, creative conce…
How did Texas treat temporary paper license plates and window-tint stickers for sales tax, and what changed in 2025?
The temporary-paper-tag analysis is obsolete: House Bill 718 replaced dealer-issued temporary buyer, dealer, and converter tags with TxDMV metal plates on July 1, 2025. Historically, transferred red-l…
If software is purchased for use on a server located in Texas, is the purchase taxed as tangible personal property (with a multistate benefit-of-service allocation available), or as a data processing service?
The software purchase is taxable as tangible personal property (TPP), not as data processing — Tex. Tax Code Sec. 151.009 defines TPP to include a computer program. Because it's TPP rather than a serv…
For a race car owner: is a full sponsorship fee (sponsor gets exclusive use/decoration of the car for a year) taxable, is a partial sponsorship fee for just a decal taxable, is parking/storing other owners' race cars taxable, and must sales tax be charged on repair labor as well as parts?
A FULL sponsorship fee (exclusive use of the car for a year) is a taxable rental of the race car. Displaying a sponsor's DECAL alone (no other use of the car) is NOT a taxable service. A PARTIAL spons…
Which South Carolina activities did RR 97-15 treat as protected or unprotected under Public Law 86-272?
RR 97-15 protected solicitation of orders for tangible personal property when orders were approved and filled from outside South Carolina, together with activities entirely ancillary to that solicitat…
Does an out-of-state company owe New Mexico gross receipts tax on goods it sells and delivers into New Mexico in its own trucks, when it has no office or resident employees in the state?
The protest was denied. An Arizona company that sold cotton gins into New Mexico owed New Mexico gross receipts tax even during the years it had no office or resident employees here, because it delive…
Did a corporation become subject to former Texas franchise tax by providing consulting services in Texas during 1994 and 1995?
Yes. Providing consulting services in Texas meant the corporation was doing business in the state under Section 171.001. If its Texas activity occurred only during 1994 and 1995, the letter said it wo…
Did PLR 97-6 impose South Carolina sales tax on mobile homes sold with the land as part of a mobile home park?
No. The mobile homes were fixtures and therefore real property because their wheels were removed, they sat on permanent foundations, they were connected to utilities, and their porches, additions, and…
Could a seller-financing dealer claim a Texas tax credit after selling a vehicle note to a bank and later repurchasing it under full recourse?
No. Selling the note to the bank made the remaining motor vehicle sales tax due. If the dealer later repurchased the note under the full-recourse agreement, the Tax Code provided no credit for that bu…
Does a Sears authorized dealer owe New Mexico gross receipts tax on the commissions Sears pays it, when Sears already pays gross receipts tax on the merchandise sold?
The protest was denied in part and granted in part. A Sears authorized dealer in Taos owed gross receipts tax on the commissions Sears paid it for selling Sears merchandise — even though Sears separat…
Is a natural gas line that fuels an underground farm irrigation system exempt from Texas sales tax as agricultural equipment?
Yes. The materials for a natural gas line used exclusively to fuel a qualifying underground irrigation system on a farm or ranch qualify for the agricultural exemption as a component part of that irri…
Could a corporation exclude accrued vacation reserves from taxable-capital surplus as debt when vacation would be paid at each employee's future pay rate?
No. Because vacation pay would be calculated at each employee's salary when the vacation was taken, the accrued amount was an estimate rather than a legally enforceable obligation measured in a certai…
Did an independent contractor living in Texas and taking sales orders create former franchise-tax nexus for a corporation with no Texas assets?
Yes. The Texas independent contractor created nexus and required franchise-tax reports even though the corporation had no Texas assets. The corporation was subject to the former taxable-capital compon…
Does a home lose Utah's primary residential property tax exemption if it's temporarily unoccupied, unfinished, or vacated around the January 1 lien date?
No, mere temporary unoccupancy on the January 1 lien date doesn't automatically disqualify a home from the primary residential exemption — what matters is whether the property is genuinely committed t…
How did a corporation apportion its share of a Texas partnership's receipts under the former taxable-capital and earned-surplus components?
For taxable capital, the corporation generally included its share of partnership net profit, although it could use its share of gross receipts if GAAP treated them as revenue. Net-method receipts were…
Could a Texas dealer charge a $50 documentary fee for handling title and registration, and when was the tax due?
Yes. The 1997 letter said a dealer could charge a $50 documentary fee when it handled the title application and registration. The dealer had to remit the tax within 20 days after the sale, and the Com…
When a single lump-sum construction contract covers both a tax-exempt city-owned building and a private, taxable hotel, how does a Texas contractor split the sales tax exemption?
The contractor owes sales tax on all purchases or rentals of tangible property and taxable services related to the privately-owned hotel, but may buy tax-free the incorporated materials, certain servi…
Is Texas sales tax due on the full price of an item, or the discounted price, when a customer redeems a manufacturer's cash-savings check at a retailer?
Sales tax is due only on the discounted price, not the full price. A $3.00 savings allowance check issued by a manufacturer and redeemed by a retailer toward a purchase is a discount coupon under Rule…
Can a contractor building an exempt government facility buy waste-hauling services tax-free when jobsite clean-up is required by the contract?
Yes. A contractor may issue an exemption certificate for waste removal services when improving realty for an exempt entity, if the contract specifically requires the contractor to remove the waste. He…
What general filing and payment-lookback limits did SC Revenue Ruling 97-14 apply to state tax refund claims?
RR 97-14 generally required a refund claim by the later of three years after a timely return was filed or two years after payment; if no timely return supported the three-year rule, the two-year payme…
Does the federal preemption on local taxes for direct-to-home satellite TV programming also cover local sales tax on the satellite equipment itself?
No. The Telecommunications Act of 1996 preempts local taxing jurisdictions from imposing sales tax on direct-to-home satellite programming itself, but that preemption does NOT extend to sales of the s…
Is a wireless subscription background-music service (like Muzak) taxable, and how does that differ from installing a security alarm system?
A wireless subscription music service (like Muzak) — where the provider installs sound equipment, transmits music by subscription, and later removes the equipment when the subscription ends — is a non…
What franchise-tax filings were required after a corporation's Texas certificate of authority was forfeited and its account became inactive?
The Comptroller returned the submitted initial report because the corporation's franchise-tax account was inactive after its certificate of authority was forfeited. If it did business in Texas after J…
Is additional Texas motor vehicle tax due when an expired operating lease is replaced by another lease of the same vehicle?
No additional motor vehicle tax arose when the same lessor re-leased the same vehicle after an operating lease expired, even to a different lessee, because no new retail sale occurred. Other parts of …
Does a company owe Utah use tax on brochures and catalogs it mails to Utah customers from out of state at no charge?
Yes. Free advertising brochures, catalogs, and pamphlets mailed to customers in Utah are subject to Utah use tax regardless of whether they're mailed from within Utah or from out of state — "use" is i…
How does Utah sales tax apply when a company sells and installs manufactured homes — in a rented trailer-park space versus permanently installed on the customer's own real property — and does the 45% manufactured-home exemption apply?
It depends on who installs the home and how. If the dealer sells AND installs a manufactured home so that it's permanently anchored per state installation standards and permanently connected to utilit…
Can an auto-detailer skip gross receipts tax on work done for car dealers by using resale certificates, and was its shop worker an employee for withholding?
The protest was denied on both counts. An auto-detailing shop couldn't deduct its receipts from detailing dealers' cars using resale-of-service certificates, because that deduction requires the buyer'…
Is a mobile chapel taxed as a mobile office or as a motor vehicle, and how does a church claim a sales tax exemption on it?
A mobile chapel meets the definition of a mobile office, not a motor vehicle, so it is taxed under the limited sales tax statute rather than motor vehicle tax. An exempt entity, like a qualifying chur…
Is wrapping/packaging material taxable when a retailer (not a manufacturer) buys it, and is sales tax due on prepaid telephone calling cards?
Both are taxable to the retailer. Tissue paper used to wrap items for sale and clear video cases are taxable purchases for a retailer — only manufacturers may claim the wrapping-and-packaging exemptio…
When an S corporation acquires a Texas limited partnership through general-partner and limited-partner LLCs, which entities owe Texas franchise tax?
Only the LLC acting as general partner owes franchise tax; the controlling S corporation and the limited-partner LLC do not. A Delaware S corporation planned to acquire a Texas mining limited partners…
Is the federal excise tax part of the Kansas sales tax base on retail sales and leases?
The Department directs that the federal excise tax imposed under Internal Revenue Code Section 4001 et seq. on the sale of passenger vehicles, heavy trucks and trailers, boats, aircraft, jewelry, and …
Could an independent Texas dealer buy a new vehicle tax-free for resale and use a resale vehicle as a trade-in?
No. The letter said only a dealer authorized for that make could acquire the new vehicle tax-free for resale. An independent dealer owed tax on the new vehicle, and trading a used vehicle acquired tax…
When a Texas software company licenses a computer program and does custom programming, is out-of-state delivery exempt, and when is software consulting taxable?
A software license and related customization services delivered to a customer IN Texas are taxable, but the same software (including upgrades) shipped by the seller to a point OUTSIDE Texas is exempt …
Is an insurance agent fee charged under Texas Insurance Code Article 21.35B subject to Texas sales tax?
No. An agent fee authorized under Texas Insurance Code Article 21.35B — charged in connection with an insurance application or policy issuance, and not in lieu of a commission — is not subject to Texa…
Is a fee for producing a microwave path feasibility analysis report subject to Texas sales tax?
No. Charges for producing microwave path feasibility analysis reports — compiled from personal observation, computer tabulations, terrain profiles, mathematical data, CAD depictions, color photos, des…
How were dividends and interest, including income from federal obligations, treated under the former Texas franchise-tax components?
Taxable capital included dividends and interest, even federally tax-exempt interest, in surplus and everywhere receipts; Texas receipts depended on the payor's legal domicile. Earned surplus included …
Does natural gas used to maintain a pilot light on a chemical plant's flare stack qualify for the Texas manufacturing exemption, and is a predominant-use study needed?
Yes, the gas qualifies for the manufacturing exemption from sales tax. Because the gas runs through its own meter and is used only to maintain the flare stack's pilot light, no predominant-use study i…
When is Kansas personal property tax due on a motor vehicle that was purchased in — or brought in from — another state?
It depends on whether the owner can prove the vehicle was kept (stored, garaged, or operated) outside Kansas. This 1997 joint memo from the Division of Vehicles and Property Valuation Division tells c…
Are shipping/handling charges and membership fees a direct-sales (multi-level marketing) company charges its independent distributors subject to Texas sales tax?
It depends on what's included. Shipping and handling charges for items sold to independent distributors for resale at the suggested retail price are not separately taxed (the cost is already baked int…
Does an oilfield waste bioremediation company owe sales tax on the treating agents, chemicals, and equipment it uses, and does it need to charge its clients sales tax?
The company does not charge its clients sales tax on the bioremediation service itself, and doesn't need a sales tax permit as a nontaxable-service provider. But the company must pay sales or use tax …
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