State Tax Rulings
Free state tax letter rulings and advisory opinions with plain-English summaries, full citations, and the original source on every page.
No rulings match these filters
Try a different search term or clear the filters.
A 1997 law change removed the private-investigator license requirement for obtaining public records as of September 1, 1997 -- does that also make a pre-employment background screening service tax-exempt after that date?
No. The 75th Legislature's amendment to the Private Investigators and Private Securities Agency Act (Article 4413(29bb), § 3(a)) removed the licensing requirement for obtaining information classified …
A mobile MRI provider believed its own arrangement with medical providers was a taxable equipment lease/rental -- but is furnishing a mobile MRI unit with a technician and full operational support actually a taxable lease, or a nontaxable medical service?
Contrary to what the company itself argued, this is a NONTAXABLE medical service, not a taxable equipment lease/rental. Rule 3.294(c)(2) presumes that furnishing tangible personal property WITH an ope…
When a seismic-data library company sells exempt geophysical information but separately bills for copying it onto tapes, the tapes themselves, and shipping, are those add-on charges also covered by the geophysical-services tax exemption?
Yes for the customer's price, but the provider still pays tax on its own supplies. The sale of nontaxable geophysical/seismic data under Rule 3.342(d)(2) includes the tapes in its sales price, so the …
Does a motel's hotel occupancy tax reporting (showing how many room-nights were long-term stays) have to match, or can it be used to second-guess, the motel's separate claim that over 50% of its gas/electricity usage is residential for sales tax exemption purposes?
No, the two don't have to match, because they're governed by different statutes measuring different things. Under Tex. Tax Code § 151.054(c), a utility seller is relieved of tax liability if it accept…
Can a customer who rents an aircraft in Texas and flies it out of state sign a Texas Aircraft Exemption Certificate, Out-Of-State Registration and Use, to avoid paying sales tax on the rental?
No. Tax Code § 151.328(a)(4) exempts aircraft SOLD for use and registration in another state or nation, before any use in Texas beyond flight training and transporting the aircraft out of state -- but…
If a college professor accepts a 'buyout' paying 50% of salary for three years, and separately draws periodic payments from his TIAA defined-contribution pension plan, do either of those payments qualify for New York's $20,000 pension and annuity income exclusion once he turns 59 1/2?
No for the buyout, yes (conditionally) for the TIAA pension. The buyout payments are wage/severance compensation reported on the professor's W-2, so they do not qualify for the Tax Law § 612(c)(3-a) e…
When a homeowner buys a pest/termite warranty from a warranty company, and later pays a trade fee (deductible) directly to the pest control company doing the actual work, who owes sales tax on what -- the initial warranty fee, the deductible, and the warranty company's pass-through payment to the pest control company?
It splits by who pays whom. The pest control company may accept a resale certificate from the warranty company instead of collecting tax on services it bills to the warranty company (since the warrant…
Is labor to mow, weed, edge, and trim cemetery grounds taxed the same way as ordinary residential/commercial lawn care in Texas?
No -- cemetery grounds maintenance labor is treated differently from ordinary lawn care. Building and grounds keeping, landscaping, and lawn maintenance services are generally taxable real property se…
Is a newly formed LLC that buys the assets of a former Article 9-A taxpayer a new business eligible for the refundable economic development zone investment tax credit?
Yes, on the assumed facts. An LLC treated as a corporation federally is a corporation for New York and is a new business under Tax Law section 210.12(j) -- and so eligible for the refundable economic …
Is advertising space sold in a monthly community newsletter subject to Utah sales tax?
No. Advertising space sold in the newsletter is not subject to Utah sales tax. Utah Admin. Rule R865-19S-65(C) exempts advertising space sold in newspapers, magazines, or otherwise. A monthly communit…
Can a New Mexico worker leave their wages off their state income tax return and claim a refund on the theory that wages are not taxable income?
The refund was denied. Anthony Cordova, an Intel Corporation employee who belonged to a 'law study group' that believed wages are not taxable, left his $42,144 of 1995 Intel wages off his New Mexico r…
Is installing a permanent, built-into-the-eaves insecticide spray system in a home a taxable real property service, and is the concentrate insecticide refill taxable too?
Both the installation and the insecticide refills are taxable, though the installation's tax treatment depends on which framework applies. If installing the permanently-mounted insecticide spray unit …
In a janitorial cost-plus contract where the vendor buys and amortizes cleaning equipment over three years but the equipment stays at the customer's site under the customer's access and risk of loss, should the vendor pay tax on the equipment itself, or collect tax on the amortized charge to the customer?
The vendor should collect tax on its total charge (including the separately stated amortized equipment cost) to the customer, rather than paying tax itself when purchasing the equipment -- because und…
Can Utah's rental car tax be challenged as unconstitutional before the Tax Commission, and does an airport concession fee reduce the taxable rental price?
The Tax Commission won't declare Utah's new 2.5% rental car tax unconstitutional — it has no authority to invalidate a legislative enactment, which is presumed constitutional until a court says otherw…
Did a Section 332 liquidation create former Texas earned surplus or receipts for the parent or subsidiary?
No. Based on the Comptroller's understanding of Sections 332 and 337(a), the parent excluded the deferred gain from former earned surplus and receipts because it was not federal taxable income or fede…
Could a Texas corporation transfer vehicles tax-free to a newly formed LLC for only a membership interest?
Yes, if ownership did not change, the LLC continued the same business, and the corporation received only a membership interest. Sales and gift tax did not apply. Debt forgiveness, debt assumption, or …
After Texas's scrap tire recycling program was set to expire, an industry association planned to keep charging the same amount but rename it a 'disposal fee' -- would that renamed fee still be taxable as part of the price of a tire?
Yes, the renamed 'disposal fee' is still taxable as part of the sales price of the tire. Tax Code § 151.007(a)(2) defines the sales price of a taxable item as the total amount the item is sold for, wi…
Did a Texas lessee owe tax again when buying a vehicle from the lessor at the end of an operating lease?
Yes. The lessor's original purchase was the first taxable transaction, even if the lessee paid that tax for the lessor. The lessee's later operating-lease buyout was a second taxable sale, and tax app…
A semiconductor fabrication EQUIPMENT manufacturer uses various gases to test and clean its machines in a cleanroom, then packages the finished machines for shipping -- are the test/clean gases exempt, does the packaging materials exemption apply, and does the broader cleanroom exemption for semiconductor manufacturing cover this manufacturer's own cleanroom?
It splits by step. The gases used in steps 1 through 5 (vacuum leak testing, flow regulation testing, characterization testing, marathon reliability testing, and purge cleaning) -- all performed BEFOR…
When a hotel leases both the building and its furniture from its landlord, is the portion of the rent allocated to the furniture subject to New York sales tax?
Yes -- when a hotel leases a building together with beds, dressers, tables, and chairs, the portion of the lease payments reasonably allocable to that furniture is subject to New York sales and use ta…
Does a two-step corporate restructuring -- merging one subsidiary into another, then merging the survivor into a newly created holding company -- reduce or eliminate the group's Connecticut corporation business tax operating loss carry-overs?
No -- the loss carry-overs survive. Neither step of the planned restructuring reduces or eliminates the group's Connecticut corporation business tax operating loss carry-overs under Conn. Gen. Stat. §…
When a Connecticut state bank converts to a national bank, does the conversion reduce or eliminate its corporation business tax operating loss carry-overs?
No -- the loss carry-overs survive. When a Connecticut state bank converts to a national bank (a change represented to qualify as a type F tax-free reorganization), its corporation business tax operat…
Does a 10-year motorhome timeshare, where each customer gets 6 days of vehicle use per year, qualify for the 30-day exception to Utah's Tourism Tax and Motor Vehicle Rental Tax?
No, the 30-day exception doesn't apply -- both taxes are owed. Even though a motorhome timeshare customer signs a single 10-year contract committing to 60 total days of vehicle use (6 days per year fo…
Is a Pueblo member's business exempt from New Mexico gross receipts tax when it operates from tribal trust land that a federal law says is NOT 'Indian country'?
The refund was denied. Val Tech & Associates — a private-investigation business owned by a Laguna Pueblo member, working from an office at the Indian Pueblo Cultural Center in Albuquerque — could not …
Is the fee a wood-products manufacturer charges a land-clearing contractor to remove and process cleared trees/wood taxable, and does it matter whether the land is for new residential construction or where the wood is actually processed?
Generally taxable, with a residential-construction exception. The fee a wood-products manufacturer bills a land-clearing contractor to remove trees/wood materials is taxable as a real property service…
How did a parent LLC account for an investment in a subsidiary LLC under the former Texas franchise tax?
Texas treated an LLC as a corporation for the former franchise tax. A parent LLC used the cost method for its subsidiary investment under the taxable-capital component. For earned surplus, it excluded…
Does a commissioned salesperson owe New Mexico gross receipts tax on their commissions, even though the company already pays gross receipts tax on the product sold?
The protest was denied. An independent-contractor salesman who sold adjustable beds for Craft-Matic Pacific owed gross receipts tax on the commissions he earned — even though the company itself charge…
Is an independent insurance/risk-management consultant -- who reviews clients' insurance policies for coverage adequacy and risk retention -- required to hold a sales tax permit and charge sales tax, even though the consultant doesn't think this work fits within the tax code?
Yes -- services provided by risk managers are taxable, and risk managers must apply for a sales tax permit and collect sales tax on their service charges. The taxpayer, newly self-employed reviewing c…
What rights do taxpayers have during a Kansas tax audit under the 1997 Tax Equity and Fairness Act?
Effective July 1, 1997, this directive from the Secretary of Revenue tells all Department auditors to give taxpayers three protections required by the Kansas Tax Equity and Fairness Act of 1997 (H.B. …
If you keep using old resale certificates and can't prove you paid another state's tax on out-of-state equipment, will New Mexico deny the deductions and charge use tax plus a penalty?
The protest was mostly denied. A Deming tortilla and tamale maker lost its gross receipts tax deductions on wholesale sales because it kept honoring outdated resale certificates instead of getting the…
Does a mold or die used to make wax patterns (which are then used to cast metal parts for resale) qualify for Texas's manufacturing exemption if it has a useful life longer than six months?
Yes, exempt -- and useful life is no longer the deciding factor for items purchased after January 1, 1995. Molds, dies, and patterns used by a manufacturer qualify for the manufacturing exemption rega…
Does Section 151.353's court reporting services exemption cover the transcription of depositions even when performed by someone other than the licensed court reporter who took the deposition, and is medical dictation transcription taxable?
The transcription is exempt ONLY if performed by a licensed court reporter as part of court reporting services under § 151.353(b) -- the exemption doesn't extend more broadly to transcription work per…
How are affiliated companies providing telephone answering services, paging airtime, and equipment rentals taxed under the franchise, telecommunications excise, and sales taxes?
A telephone answering service company is a general business taxed under Article 9-A, not as a telephone business. A paging common carrier is principally engaged in a telephone business taxed under sec…
Can the distortion requirement for filing a New York combined report be met when one of the corporations is a Subchapter T cooperative that generally reports no federal taxable income?
It is not precluded. The distortion requirement for a New York combined report (20 NYCRR 6-2.3) is presumed when there are substantial intercorporate transactions, and the fact that one member is a Su…
Is an out-of-state wine wholesaler exempt from the New York Article 9-A franchise tax under Public Law 86-272 when its only New York presence is a home-based sales manager who solicits orders?
Yes. Public Law 86-272 (and 20 NYCRR 1-3.4(b)(9)) exempts an out-of-state seller of tangible personal property from the Article 9-A franchise tax if its New York activities are limited to soliciting o…
When a corporation sells products to an LLC it owns that is taxed as a partnership, how are those sales treated in the receipts factor of the corporate member?
The corporate member must exclude, from both the numerator and denominator of its receipts factor, the portion of its sales to the LLC that is in effect also reflected in its distributive share of the…
If a mail-order company with no Utah presence opens retail stores in Utah, does that create nexus for its separate, out-of-state mail-order division too?
Yes. Once a company opens retail stores in Utah, it has nexus for ALL of its sales into Utah -- including mail order sales handled entirely by a separate division that keeps its own employees, invento…
Does a tax-exempt historical society have to collect sales tax on items it sells through a local store, a card table, and word-of-mouth from members' homes?
It splits by sales channel -- a tax-exempt organization's regular, ongoing sales of merchandise through a fixed "candy store" and thrift shop display are taxable because those count as a "shop or stor…
Is an early Internet "presence provider"'s web page development service subject to New York sales tax?
No -- receipts from an Internet "presence provider"'s Web page development services, including passed-through hosting fees, aren't subject to New York sales tax, both because web page development isn'…
Does a New Jersey company owe New York compensating use tax on free advertising cash-register tapes it manufactures in New Jersey and gives away to New York supermarkets?
Yes -- Cadett Register Tapes owes New York compensating use tax on the free, advertising-printed cash register tapes it distributes to New York supermarkets, because giving away promotional materials …
Which interstate trucks and trailers qualified for Texas motor vehicle tax exemption beginning September 1, 1997?
Beginning September 1, 1997, qualifying interstate trucks and trailers of the size and weight eligible for International Registration Plan plates were exempt. A Texas-plated tractor or truck needed ap…
A joint venture bills an insurance company a single charge covering many different accounting/administrative functions -- some classified as taxable insurance services, others as taxable data processing, and some seemingly nontaxable -- does the 5% threshold for taxing an entire bundled charge apply function-by-function, or to the whole contract?
The 5% guideline applies to the AGGREGATE of all taxable services performed under the contract, not separately to each type of taxable service. Citing Hearing 30,261, the Comptroller classified severa…
Does a Utah motel owe sales tax on soap, shampoo, and continental-breakfast items it gives free to guests?
Yes. The motel — not the guest — is the taxable consumer of soap, shampoo, coffee, toilet paper, and complimentary breakfast items it buys and gives away with the room, because there's no separate sal…
If a company guts a previously-occupied shopping center down to a shell and does finish-out work to prepare it for new tenants, is that finish-out taxed as nontaxable new construction (like a brand-new building's initial finish-out), or as taxable remodeling?
It's taxable remodeling, not exempt new construction. Rule 3.357(a)(5)'s definition of "new construction" includes the INITIAL finish-out work of a structure -- but that exemption applies only to a st…
Which South Carolina tax benefits did PLR 97-2 approve for an integrated expansion of a certified qualified recycling facility?
The Department approved the integrated, recertified addition for the 30% recycling-property investment credit, conditional fee-in-lieu treatment, the taxpayer's existing separate-accounting method, an…
Are ATM transaction fees, home banking service fees, pay-by-phone charges, and free software given to bank customers taxable in Texas -- for both a bank's own customers and non-customers using its ATMs?
None of these banking fees are taxable to the customer -- because Tax Code § 151.0101 lists only fifteen specific taxable services, and "banking services" is not one of them. This covers: (1) free sof…
How did Texas treat a Nevada loan-participation subsidiary, its Texas nexus, and dividends paid to a Texas bank?
On the original facts, Texas found the Nevada subsidiary had nexus because the Texas bank and other Texas servicers performed services for it. Dividends formally declared from earnings were respected;…
Does a private trucking company hauling U.S. mail owe New Mexico's petroleum products loading fee on all the fuel it pumps into its trucks in New Mexico, or only the fuel actually burned in-state?
The protest was denied. A private trucking company that hauls mail for the U.S. Postal Service owed New Mexico's petroleum products loading fee on the full amount of special fuel it pumped into its tr…
A contractor building a new manufacturing plant under a lump-sum contract asked a comprehensive set of questions: who can issue manufacturing exemption certificates, how lump-sum vs. separated contracts are taxed differently, what a direct payment permit is, and what Texas's sales tax rate and permit procedures are -- what's the full picture?
This letter is a comprehensive contractor tax primer. (1) Only the MANUFACTURER itself -- never a contractor or subcontractor -- may issue an exemption certificate for qualifying manufacturing machine…
A GPS vehicle-tracking company runs a test program with an insurance company, paying the cellular carrier directly and then allocating/re-billing the charges to the insurer and individual drivers at cost with no markup -- is this a nontaxable reimbursement, or does it make the tracking company a taxable cellular service reseller subject to security-service tax and the Telecommunications Infrastructure Fund (TIF) assessment?
Neither "reimbursement" nor "resale" was quite the right frame -- the underlying service itself is taxable. The company's core offering (GPS tracking with electronic tracking of a vehicle's location, …
Does a country club housed in a building bearing a Texas Historical Commission marker qualify for the sales tax exemption on amusement services (dues/initiation fees) available to a Recorded Texas Historic Landmark?
No -- the club's building does not qualify. Rule 3.298(g)(1)(F) exempts amusement services (like a country club's dues and initiation fees) only when provided exclusively in a place designated as a "R…
When one lump-sum contract adds new square footage onto two existing, partially-demolished buildings while also redoing their remaining structures, how should the new-addition work be split from the remodeling work for sales tax purposes?
The contract must clearly separate the two categories, because they're taxed differently. Work on the existing building slabs -- including new siding, new fronts, and the plumbing/electrical/HVAC serv…
Are traffic-control electronics (cameras, radios, controllers, message signs) for a highway reconstruction project taxable 'construction materials,' and can a contractor buy them tax-free as the government's purchasing agent?
The traffic-control electronics themselves (CCTV cameras, radios, controllers, message signs, and cabinet components) remain tangible personal property even when mounted on poles or structures -- they…
If you didn't pay New Mexico income tax because you genuinely believed you were exempt, can the interest on the unpaid tax be waived?
The protest was denied. A taxpayer who paid no New Mexico income tax for several years — because, as a tribal member living and working on the Navajo Reservation, he genuinely believed his income was …
If a paid tax preparer's mistake caused you to underpay New Mexico income tax, can the interest on the unpaid tax be waived?
The protest was denied. A couple whose paid tax preparer accidentally left $18,491 of wages off their 1992 return had to pay interest on the resulting underpaid New Mexico income tax — even though the…
How did Texas tax a vehicle brought into the state by a new resident in 1997?
Historically, Texas generally charged a new resident a flat $15 instead of the 6.25% sales or use tax if the vehicle had first been registered to that resident elsewhere. New and used vehicles otherwi…
Are the temporary signs, barrels, and cones a highway-materials supplier sells to road contractors an 'ingredient or component part' of the road, so the sale can be deducted from gross receipts on an NTTC?
The protest was denied. Highway Supply sold traffic-control devices — signs, barrels, cones, barricades — to road contractors and to government agencies, and claimed gross-receipts-tax deductions on t…
Are crew uniforms and their monthly cleaning exempt from Texas sales tax when purchased for the crew of a ship operating in interstate coastal commerce?
No. Crew uniforms and the monthly cleaning of those uniforms do not qualify for the Tax Code § 151.329 exemption for machinery, equipment, and consumable items used to operate certain ships and vessel…
When a Texas printer/fulfillment house mails direct-mail advertising for an out-of-state customer to addresses both inside and outside Texas, how much of the charge is subject to Texas sales tax?
Only the pieces mailed to Texas addresses are subject to Texas tax; pieces mailed by the third-party mailer to addresses outside Texas are not taxed, even though the seller (a Texas business) billed a…
Is transferring a company's delivery vehicles into a newly created, wholly-owned subsidiary (to limit liability) exempt from Utah sales tax as an isolated or occasional sale?
Yes. Transfers of titled/registered motor vehicles are normally NOT exempt as isolated or occasional sales under Rule R865-19S-38C, but that rule carves out an exception for vehicle transfers made as …
How these rulings are useful
- See how the rule applies: A letter ruling shows how a state revenue department actually applied the tax law to a specific business and set of facts.
- Plan with confidence: Find a ruling with facts close to yours before you charge, remit, or claim an exemption.
- Binding only on the requester: A ruling is binding on the department only for the taxpayer who asked. It is persuasive, not a substitute for your own ruling or professional advice.
- Research across states: Compare how different states treat the same issue, from SaaS and food exemptions to nexus and contractor purchases.