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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Does a public school district have to charge sales tax on medications its veterinary-program teacher sells to staff members as part of a student veterinary curriculum?
NO SALES TAX DUE. Applicant's sales of medication through its high school's veterinary curriculum are not subject to Missouri sales tax, because the program is part of the school district's educationa…
Do sandpaper and router bits that a furniture maker uses up while making furniture qualify for Missouri's manufacturing exemption?
Yes. The Missouri Department of Revenue ruled that sandpaper and router bits consumed by a furniture maker in the furniture-making process qualify as 'materials and supplies' exempt from state sales a…
As of October 1, 2022, who collects and remits Virginia sales tax and transient occupancy tax when a hotel or short-term rental is booked through Airbnb, Expedia, or a similar booking platform?
Starting October 1, 2022, the booking platform or other "accommodations intermediary" (not the hotel or property owner) is legally the one required to collect and remit Virginia sales tax and local tr…
How could a qualifying Florida project measure income and tax liability for the Capital Investment Tax Credit?
The Department approved the taxpayer's method of comparing the consolidated group's current Florida tax liability, including the project, with its five-year average historic liability. The incremental…
I retired and moved back to the state I lived in before working temporarily in Virginia -- but I still renewed my Virginia driver's license once during that time. Does that block me from proving I'm no longer a Virginia domiciliary?
Not necessarily -- even renewing a Virginia driver's license, normally strong evidence of continued Virginia domicile, can be outweighed by overwhelming and well-explained ties elsewhere. Here, a form…
I moved out of Virginia, leased a home, and eventually bought a house in another state -- but I kept renewing my Virginia driver's license and registered a new car in Virginia. Does that defeat my claim that I'm no longer a Virginia domiciliary?
Yes, it can -- repeatedly renewing a Virginia driver's license over multiple years, and registering a new vehicle in Virginia, are treated as strong, ongoing evidence that you still consider Virginia …
If Virginia abated my tax bill in a prior year after I said I'd moved out of state, can I rely on that as "written advice" to avoid a new assessment for a later year with the same facts?
No -- not unless that prior abatement came with a genuine domicile review and an explanation the taxpayer could actually rely on. Here, a taxpayer who moved through several states for work, then to "S…
Can I still claim my itemized deductions and Schedule C business expenses if I never sent the Department receipts or other proof, and can the Department just estimate them like the 'Cohan rule' allows in tax court?
No -- without receipts, cancelled checks, or similar proof, the Department will disallow itemized and business expense deductions on audit, and it isn't required to estimate an amount for you the way …
My motorcycle was garaged in another state, so I don't think the city should be able to tax it as personal property -- can I appeal that to the Virginia Department of Taxation?
No -- the Virginia Department of Taxation has no jurisdiction over a dispute about whether a personal vehicle, including a motorcycle bought for personal use, is properly subject to a city's tangible …
I paid D.C.'s Unincorporated Business Franchise Tax on gain from selling my rental property -- can I credit that against my Virginia income tax?
No -- Virginia has consistently ruled that the District of Columbia's Unincorporated Business Franchise Tax (UBFT) never qualifies for Virginia's credit for taxes paid to another state, regardless of …
My spouse and I moved to another state for a multi-year teaching job we intended to be permanent, but we stayed with family there and kept our Virginia home, license, and voter registration -- does that defeat our domicile change?
Yes -- a domicile change requires BOTH genuinely establishing a new domicile AND abandoning the old one, and here the taxpayer fell short on both. He took a 2.5-year university teaching job in another…
I lived in Virginia full-time, but my retirement income came from an account I contributed to while living in another state -- can I still subtract it from my Virginia return?
No, not without proof the contributions were already taxed by another state. Federal law (4 U.S.C. § 114) only protects a NONresident from having their retirement income taxed by a state -- it doesn't…
When can a payroll or staffing company exclude the money that flows through it as a 'disclosed agent,' and can reliance on a CPA erase a negligence penalty?
Partly each way. The Administrative Hearings Office denied the core claim but granted two smaller ones. Talbridge Corporation, which handled payroll and HR for self-employed engineers doing research w…
How did Florida tax monthly EV-charger program fees and separately billed electricity for residential and commercial customers?
Monthly residential program charges and commercial service payments for hardwired charging equipment were payments for real-property improvements, so the provider did not charge sales tax or gross rec…
When a company sells its entire business division, is the goodwill gain apportioned to Illinois, or can the company get alternative apportionment instead?
Neither. The Illinois Department of Revenue held that gain from selling an entire business segment, including the goodwill portion, must be excluded ENTIRELY from the sales factor (both numerator and …
What South Carolina tax law changes did the 2022 legislative session make, as summarized in SC Information Letter #22-15?
SC Information Letter #22-15 is the Department's annual round-up of the significant tax and regulatory law changes enacted during South Carolina's 2022 legislative session, organized by subject (incom…
Which tubular skylights, solar-powered attic fans, traditional skylights, and related components qualified for Florida's solar-energy sales-tax exemption?
Tubular skylights, solar-powered attic fans, and components used exclusively with those systems qualified for the solar-energy exemption in Fla. Stat. Sec. 212.08(7)(hh). Traditional skylights—includi…
Is a web-based severe-weather forecasting and alert service (for clients like offshore rigs and refineries) subject to Texas sales tax as a taxable information service?
No. A web-based weather forecasting service — including severe weather alerts, hurricane forecasting, lightning proximity alerts, and meteorologist access, built from purchased meteorological data plu…
Is Nebraska Revenue Ruling 57-08-1 on the minimum selling price of cigarettes still in effect?
No -- it has been withdrawn. Revenue Ruling 57-22-1 (issued September 2, 2022) rescinds Revenue Ruling 57-08-1, 'Minimum Selling Price of Cigarettes' (issued August 12, 2008). The Department gives a s…
How could a Florida corporate group calculate the income and tax liability generated by its qualified project for the Capital Investment Tax Credit?
The Department agreed to the corporate group's proposed method: compare its actual Florida tax liability, including the project, with a calculation that removes the project's payroll and property from…
Is federal student loan forgiveness taxable on my South Carolina income tax return?
No — to the extent it is excluded federally, it is also excluded in South Carolina. SC Information Letter #22-14 explains that South Carolina adopts Internal Revenue Code Section 108, and during the 2…
Were a dealer's retail sales of a redacted, single-use medical product to Florida hospitals subject to sales and use tax?
Yes. The redacted single-use product was taxable because it was not dispensed by prescription and was neither temporarily nor permanently incorporated into the patient. Florida classified it as taxabl…
How does Illinois answer a national state-tax survey's questions on marketplace facilitator thresholds, food-delivery sourcing, digital products, qui tam sales-tax lawsuits, car-sharing/short-term-rental platforms, and the sales/use tax statute of limitations?
Illinois counts a marketplace facilitator's and its sellers' Illinois sales/transactions TOGETHER (not separately) against the $100,000/200-transaction threshold; a seller using an exclusive marketpla…
What is South Carolina's tax interest rate for underpayments and overpayments for the period beginning October 1, 2022 (per SC IL #22-13)?
6%. SC Information Letter #22-13 sets South Carolina's interest rate on tax underpayments and overpayments at 6% for the period October 1, 2022 through December 31, 2022, up from 5% for the prior peri…
My employer rotates me through long-term temporary job assignments in different states before I return to Virginia -- does a year-long assignment in another state make me a resident there instead of Virginia?
No -- a temporary job assignment, no matter how long it lasts, doesn't by itself show you intend to make that location your new permanent home, which is what's required to establish a new domicile. He…
My spouse served on extended active duty for over 90 days AND earned separate National Guard pay in the same year -- can we claim both military subtractions on our Virginia return?
Yes -- as long as the two subtractions cover different income and don't double-count the same pay, a servicemember can claim both Virginia's subtraction for basic military pay earned during extended a…
As a military reservist, I have my drill attendance logs and mileage but no hotel receipts for most nights -- can I still deduct my full travel costs for attending drills?
Only partly -- drill attendance logs and mileage records can substantiate the mileage and meal/incidental portions of a military reservist's travel deduction (meals qualify for a simplified federal pe…
The state assessed me, abated that assessment, then assessed me again after a managed audit — is the second assessment valid, and can I refuse to pay because of the stress and confusion?
Yes, the second assessment was valid, and the couple still owed the tax. The Administrative Hearings Office denied Guy and June Hence's protest. After an IRS adjustment raised their 2014 and 2015 fede…
Is a hydro coil embolization system used to block abnormal blood flow in a blood vessel exempt from Missouri sales and use tax as medical equipment?
YES, TAXABLE: Missouri ruled that Applicant's sales of hydro embolization coils -- used to occlude abnormal blood flow in blood vessels, including intracranial aneurysms and other vascular malformatio…
My lab uses chemical reagents that qualify as drugs to run diagnostic blood and urine tests -- can I buy them exempt from sales tax the way a hospital or clinic can buy its medicines?
No -- even if a reagent otherwise meets the legal definition of a "drug," Virginia's medicines-and-drugs sales tax exemption only reaches purchases by a licensed hospital, nursing home, clinic, or a c…
If my business gets a lump-sum manufacturer rebate after buying equipment in bulk, can I lower the equipment's taxable cost basis for business personal property tax purposes?
Yes, generally -- if a rebate genuinely reduces the price you actually paid for a fixed asset (as opposed to being something else, like a payment from an unrelated third party or an advance rather tha…
How did Florida's July 2022-June 2024 impact-resistant window and door exemption apply to contractors, integrated parts, and orders delivered later?
A real-property contractor's purchases of qualifying impact-resistant window and door systems were retail sales eligible during the July 1, 2022-June 30, 2024 exemption period. Integrated hardware inc…
My military spouse and I moved to Virginia on his orders -- do I automatically share his out-of-state domicile and avoid Virginia income tax, even though I got a Virginia driver's license and never re-established my own connections in his home state?
No -- the federal Military Spouses Residency Relief Act only exempts a military spouse from Virginia income tax if the spouse ACTUALLY shares the same domicile as the servicemember, and that requires …
I paid my New Mexico income tax months late because my spouse and I were seriously ill with COVID-19 and had no income — can the penalty and interest be waived?
The negligence penalty, yes; the interest and estimated-tax penalty, no. The Administrative Hearings Office partially granted the protest of Neal and Catherine Van Berg, a self-represented couple. The…
I paid my New Mexico income tax late because I was confused by the shifting COVID-19 deadlines — can I get the penalty and interest waived?
The penalty, yes; the interest, no. The Administrative Hearings Office partially granted the protest of Joseph and Jennifer Cervantes. They filed their 2019 New Mexico personal income tax return on ti…
Is an implantable cardiac-monitoring device exempt from Texas sales tax as a therapeutic or prosthetic device, and can the manufacturer sell it tax-free to hospitals on a resale certificate?
Split ruling. The device is a therapeutic (not prosthetic) device: it's exempt from Texas sales tax ONLY when sold directly to a patient with a prescription. When the same device is sold to a hospital…
I know I calculated my Virginia subtraction for retirement income already taxed by another state wrong -- how is it actually supposed to be computed?
Virginia uses two different approved methods depending on the type of retirement account: a pro-rata formula for accounts with changing balances (like IRAs, 401(k)s, or 403(b)s) that divides your prev…
I paid legal fees fighting for both damages from my company and to dissolve it entirely -- can I deduct all of those legal fees on my Virginia return?
Only partly -- whether litigation expenses are deductible depends on the "origin of the claim": fees tied to a claim that, if won, would have produced ordinary taxable income (like damages for wrongfu…
My spouse and I moved to Canada for work and applied for Canadian permanent residency -- does the U.S.-Canada tax treaty, or our move itself, mean Virginia can no longer tax us?
The tax treaty itself doesn't help -- the U.S.-Canada income tax convention applies only to federal taxes, not to state and local taxes like Virginia's, so it can't by itself shield you from Virginia …
Are subscriptions to print and electronic magazines, sales of advertising space in them, and access to other online publications and databases subject to Tennessee sales and use tax?
No to all three. The Department ruled that (1) subscriptions to this nonprofit's print and electronic magazines are exempt — print magazines mailed into Tennessee from out of state qualify for the pub…
The IRS told Virginia I owed tax for years I never filed a Virginia return, and I didn't appeal within 90 days -- can I still dispute the assessed amount?
No -- once you miss Virginia's strict 90-day deadline to appeal a tax assessment, the Department can no longer consider your appeal, no matter how wrong you believe the assessed amount is. A Virginia …
I'm away at college in another state -- does that make me a resident there instead of Virginia for state income tax purposes?
No -- attending college in another state doesn't, by itself, establish a new domicile there; the Department's experience is that college students rarely establish domicile where they go to school, and…
The county responded to my local BTPP/machinery-and-tools tax appeal, but its letter didn't actually address my argument -- can the Department still rule on my case?
No -- if a locality's response to your local business tax appeal doesn't actually address the specific claims you raised, and doesn't include the required written explanation of your right to a furthe…
I submitted an offer in compromise instead of a formal appeal after my sales tax audit assessment -- when the offer was rejected years later, can I still appeal the original assessment?
No -- submitting an offer in compromise instead of a formal administrative appeal doesn't stop or extend Virginia's 90-day deadline to appeal the underlying assessment, and the clock isn't restarted b…
Can a taxpayer keep using an alternative apportionment method the Department approved in an earlier ruling when it later sells the rights to its remaining contingent payments?
Yes. Illinois renewed the taxpayer's 2019 alternative apportionment ruling, permitting it to source interest income and proceeds from selling the rights to future 'Earn-Out' payments using the apporti…
Does Missouri sales tax apply to gift card purchases, and does a coffee stand owe use tax on ingredients used for free drinks given to customers, employees, or loyalty-program members?
IT DEPENDS ON WHICH ISSUE: Selling a gift card or gift certificate is NOT subject to Missouri sales tax, because a gift card itself is not tangible personal property or a taxable service (though the l…
If an out-of-state design firm buys furniture from an out-of-state supplier and has it delivered straight to its client's Missouri location, is that furniture subject to Missouri sales tax?
Yes. Because the furniture company delivered the furniture to the Client's location in Missouri, title to the furniture transferred to Applicant and then to Client while the furniture was in Missouri …
Are 'platform credits' that viewers buy on a live-streaming site and send to streamers — the kind that emphasize a chat message or unlock badges and overlays — subject to Colorado sales tax when bought or when redeemed?
No, on both counts. Selling 'platform credits' (viewer-purchased tokens on a streaming site) is NOT subject to Colorado sales tax — the credits work like gift cards, an intangible right with no intrin…
Are winter-storm rate-relief-bond charges on a Texas gas utility's bills subject to sales tax and Miscellaneous Gross Receipts Tax, and does the new public-school electricity tax break apply to natural gas too?
The bond-related charges are exempt: initial bond funding proceeds and the customer rate relief charges gas utilities bill to repay winter-storm-Uri recovery bonds are excluded from both sales tax and…
After my county issued a final determination on my BTPP tax appeal, I missed the 90-day deadline to appeal to the Department because we were still negotiating a settlement -- does that give the Department jurisdiction anyway?
No -- neither an unresolved side issue nor post-determination settlement talks with the county extends or restarts the 90-day deadline to appeal a local business tax final determination to the Departm…
I moved out of Virginia years ago but kept my old Virginia driver's license, vehicle registration, and voter registration out of convenience -- does that mean I never actually changed my domicile?
Not necessarily -- retaining a Virginia driver's license, vehicle registration, and voter registration purely out of convenience didn't defeat this taxpayer's domicile change, because the stronger evi…
Some of our pass-through entity's nonresident owners hold their interest through an IRA -- do we still have to withhold Virginia tax on the income allocated to those IRA-held interests?
It depends on a federal tax question the Department itself can't answer for you. A pass-through entity that sold rental real estate in Virginia asked whether it had to withhold Virginia tax from nonre…
My company licenses software to dealers who resell services to customers, and we also do business in states with no income tax -- do we qualify for Virginia's BPOL software exclusion and the out-of-state gross receipts deduction?
No, on both points, for this taxpayer. A smart-home security and automation software company argued its Business, Professional and Occupational License (BPOL) tax receipts should be excluded as revenu…
Does Illinois sales or use tax apply when a contractor sells and plants trees and tree shelters for a landowner under a government-sponsored conservation program?
Yes, generally. There is no Illinois sales tax exemption for tangible personal property used for conservation purposes, so trees and tree shelters sold to a customer are taxable unless a different exe…
What did Illinois tell a nationwide state-tax survey about its corporate income tax rules on bonus depreciation and net-operating-loss carryforwards?
This is not a ruling on one taxpayer's facts. It's the Illinois Department of Revenue's answers to an outside publisher's annual, roughly 90-question survey of every state's corporate income tax rules…
Must a peer-to-peer car-sharing platform collect Texas motor vehicle gross rental receipts tax on vehicles owned by its hosts?
No. Because the platform did not own or hold title to the listed vehicles, it did not have to collect Texas gross rental receipts tax. Each vehicle-owning host had to obtain a Texas Motor Vehicle Rent…
Is a trust a Colorado 'resident trust' subject to Colorado income tax when its beneficiary lives in Colorado but the trust is administered by an out-of-state trustee?
No. A trust is a Colorado 'resident trust' only if it is administered in Colorado. Here the corporate trustee handles all day-to-day administration, books, and records from Delaware, so the trust is a…
Is a trust a Colorado 'resident trust' subject to Colorado income tax when its beneficiary lives in Colorado but the trust is administered by an out-of-state trustee?
No. A trust is a Colorado 'resident trust' only if it is administered in Colorado. Here the corporate trustee handles all day-to-day administration, books, and records from Delaware, so the trust is a…
Is a trust a Colorado 'resident trust' subject to Colorado income tax when its beneficiary lives in Colorado but the trust is administered by an out-of-state trustee?
No. A trust is a Colorado 'resident trust' only if it is administered in Colorado. Here the corporate trustee handles all day-to-day administration, books, and records from Delaware, so the trust is a…
If the state assesses gross receipts tax years late, and I had a bad accountant, can I at least get the penalty and interest waived?
No. The Administrative Hearings Office denied On-Site Case Management's protest. The owner, a case-management provider, had charged customers '7% sales tax' but never filed or paid New Mexico gross re…
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