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.
How long does the statute of limitations run on the manufacturing phase-in exemption, and does it differ if the exemption was claimed at the time of purchase versus refunded later?
A four-year statute of limitations applies to purchases made during the last quarter of 1993, 1994, and later periods when the manufacturing phase-in exemption is claimed at the time of purchase (gove…
What former Texas franchise-tax penalties applied when a report was more than 60 days late and a tax determination remained unpaid?
A report more than 60 days late incurred a 10% penalty on unpaid tax. If the taxpayer had also received a deficiency or jeopardy determination and failed to pay it on time, the letter said an addition…
What counts as exempt 'machinery and equipment' for a Texas enterprise project, and how do the related sales tax refunds work?
The Comptroller ruled that 'machinery and equipment' for a Texas enterprise project under Section 151.429(a) covers essentially all depreciable property purchased for use in the zone -- production mac…
Does the Texas fishing bait exemption put fishermen on the same footing as hunters, and are ice and small containers of honey taxable?
The Comptroller confirmed the perishable bait exemption puts fishermen on an equal footing with the exemptions available for hunters. Separately, ice is taxable even though it is for consumption, beca…
Can a Texas manufacturer buy external packaging supplies like corrugated void-filler and air bags tax free?
Yes. The Comptroller ruled that a manufacturer may give a vendor a properly completed exemption certificate to buy external packaging supplies -- including corrugated void-filler and air bags used to …
Is a service that posts a client's website link and information to other websites' free submission forms taxable in Texas?
Not taxable. The Comptroller ruled that a business which posts a client's website link and information to free listing/submission sites around the internet is providing a service that is not taxable.
Is a foreign corporation that is the general partner of a Texas-active limited partnership subject to Texas franchise tax, and what about its shareholders and out-of-state limited partners?
The foreign corporation is subject to Texas franchise tax as the general partner of a Texas-active partnership; its individual shareholders and any out-of-state limited partners are not. A Florida S c…
Is an environmental consulting firm's installation of a petroleum-leak remediation system, its water/soil sampling, and its reports subject to New York sales tax?
It depends entirely on the capital-improvement test -- if an environmental consulting firm's installation of a petroleum-leak remediation system (and any related tank removal/replacement) satisfies al…
Is a group self-insurance workers' compensation trust taxed as an insurance company under Article 33, or under another article of the Tax Law?
Under Article 9-A, not Article 33 or the personal income tax. Because the trust is not licensed by the Superintendent of Insurance and is not regulated under the Insurance Law, it is not 'doing an ins…
Are funds a bank receives from a subsidiary's issuance of commercial paper 'deposits' includible in the bank's deposits allocation factor?
No. The deposits factor of a bank's Article 32 allocation percentage uses 'deposits' as defined in 20 NYCRR 19-7.2, which is modeled on the federal FDIC definition (12 USC 1813). Money a wholly owned …
We're buying a 127-acre parcel for commercial redevelopment. The land has one large structure that used to be a house but has been converted to office space (leased to an architecture firm and a law firm), plus five smaller ancillary structures (a couple of small houses, a vacant house, a stable/loft, and a caretaker's apartment over a garage). The main building will be demolished before or shortly after closing; some ancillary structures will also be demolished, and the rest converted to a day care center. Total consideration is over $1 million, but no single structure is worth anywhere near that. Does New York's 'mansion tax' -- the additional 1% Real Estate Transfer Tax on residential property sales of $1 million or more -- apply to this purchase?
No -- the additional ("mansion") transfer tax doesn't apply. Swiss Re America Holding Corporation was considering buying, for commercial development, a 127-acre New York parcel containing a large form…
Does a federally chartered production credit association (a farm-credit lending institution) have to pay Utah sales and use tax on its own purchases?
No. A production credit association (PCA) is a federally chartered instrumentality of the United States under the Farm Credit Act, and federal instrumentalities are constitutionally immune from state …
Two charitable lead annuity trusts, created under the same family trust instrument with identical remainder beneficiaries, are being combined into one 'Surviving Trust' by court order because their income no longer covers their required annual charitable payments. The trusts jointly own New York real property as tenants-in-common. To protect the separate remainder beneficiaries' interests despite the combination, we're setting up a bookkeeping 'Pro Forma Account' that tracks what each set of beneficiaries would have received had the trusts stayed separate, plus a 'Loan-Back Agreement' so that if a 2003 distribution from that account requires deeding out New York real property, the recipient beneficiaries can immediately loan the property interests back to the Surviving Trust instead of the trust having to sell real estate to raise cash. Does combining the trusts -- or the later Pro-Forma-driven deed-and-loan-back mechanism -- trigger New York's Real Estate Transfer Tax or Real Property Transfer Gains Tax?
Exempt -- combining the two trusts didn't change who beneficially owned the underlying New York real estate. Lew R. Wasserman, Jean Stein, Gerald H. Oppenheimer, and Andrew Shiva, as trustees of two c…
Is a residents' association that was specially chartered by the legislature with municipal powers, and treated by the IRS as a political subdivision, subject to Connecticut's corporation business tax?
No. A residents' association chartered by a 1931 Special Act as a body politic and corporate, exercising municipal-type powers (fire protection, streets, beaches, police, and a real-estate tax) and tr…
When restaurant/food-processing equipment like an ice machine is bought tax-free under the manufacturing exemption but later put to a different use, who owes the tax, and how much?
It depends on when the equipment was bought. A vendor who accepts an exemption certificate in good faith isn't liable for the tax -- the purchaser is. For an ice machine bought tax-free between Octobe…
Is Texas sales tax owed on direct-to-home satellite TV installation, equipment rental, and programming charges, and does local tax apply?
Yes, the tax charge was correct. Equipment rental and installation for direct broadcast satellite TV are taxable at the full state-plus-local rate (6.75% in this case), but programming charges are tax…
Is overhauling a compressor used to lift oil and maintain well pressure a taxable service in Texas, or is it exempt as manufacturing equipment repair?
Taxable. The Comptroller ruled that a compressor used to lift oil from wells and maintain pressure for recovering additional oil is production equipment, not exempt manufacturing equipment, so the ser…
Are hearing aid batteries exempt from Texas sales tax, and does a retailer need an exemption certificate to sell them tax-free?
Exempt. The Comptroller confirmed that hearing aid batteries are exempt from Texas sales tax as a supply or replacement part for hearing aids, which are themselves exempt by statute. The purchaser doe…
Were receipts from goodwill and other intangibles sold to a Florida corporation included in former Texas receipts?
No. Assuming the asset-sale income was unitary, receipts allocated to goodwill and other intangibles followed the payor's legal domicile. Because the buyer was a Florida corporation and the tangible-p…
Did holding interests in limited partnerships doing business in Texas create former franchise-tax liability for a corporation?
Not if the corporation's only activity was holding limited-partnership interests. But if it was a general partner in any partnership doing business in Texas, the corporation was subject to former Texa…
Did the former Texas throwback rule cover interstate solicitation and products sold to customers outside the United States?
For interstate sales, independent solicitation created taxable-capital nexus but was protected under Public Law 86-272 for earned surplus, so the same shipments could avoid throwback for one component…
Are concession stand food sales taxable when a school district runs the stands at sporting events instead of during the regular school day?
Yes. The Comptroller ruled that food sales from concession stands a school district operates during sporting events are taxable, because the Tax Code 151.314(d)(1) exemption for school food sales only…
Can a retailer avoid collecting and later refunding Texas sales tax on items sold for export to Mexico by routing delivery through a customs broker at the border?
Yes. A retailer can avoid collecting and then refunding sales tax on items sold for export to Mexico by shipping the item to a licensed customs broker at the border and having the broker deliver it to…
When a landlord bills a commercial tenant separately for electricity measured through the tenant's own sub-meter, is that billing a taxable sale of electricity, and can a predominant-use manufacturing study exempt it?
No. The Comptroller ruled that billing a tenant for electricity through a separate sub-meter is not a sale of electricity by the landlord -- it's just part of the rental/lease price of the real estate…
Were separately stated delivery and tank-cleaning charges subject to Texas motor vehicle rental tax?
No. The Tax Policy Division said separately stated cleaning and delivery charges were not subject to motor vehicle rental tax. The letter attributed that treatment to a recent motor vehicle administra…
Is cleaning, inspecting, and applying a protective monel coating to oilfield equipment like submersible pumps and tank batteries a taxable repair or remodeling service in Texas?
Yes. Coating and re-coating oilfield equipment such as submersible pumps and tank batteries counts as taxable maintenance, remodeling, or repair of tangible personal property under Rule 3.292, so the …
Is a package of disposable products sold to hospitals for use in a heart-lung pump during open heart surgery exempt from Texas sales tax?
Yes. The package of disposable products sold to hospitals for use in a heart-lung pump during open heart surgery is exempt from Texas sales tax, because a heart-lung pump and its accessories and attac…
Are the annual membership fees, supplier commissions, and consulting charges earned by an operator of computer-equipment buying groups subject to New York sales tax?
Mixed result -- a computer buying group operator's annual membership fees (not club dues) and supplier commissions (agency fees) are not subject to New York sales tax, and its software training or net…
Is a personal matchmaking and dating service subject to New York sales tax?
No -- a dating service that matches clients based on interviews and profiles, or lets clients browse an album of prospective dates, is not subject to New York sales tax, because bringing people togeth…
When is a staffing or subcontractor arrangement exempt as a 'temporary employee' under Texas law, versus a taxable temporary help service?
It depends on meeting all four requirements of Tex. Tax Code § 151.057: the work must normally be done by the client's own employees, the client must supply the equipment, the client must directly or …
How should an apartment complex handle sales tax refunds for electricity used in vacant apartment units that were taxed as commercial accounts, and can it still use exemption certificates for residential accounts billed at commercial rates?
When several tenants' electricity accounts are billed in the apartment complex's name, the complex itself is the buyer and can receive the tax refund directly rather than needing a separate request fr…
When a multi-level marketing company sells vouchers to its distributors that are redeemed for printed goods like trading cards, who owes sales tax on the sales to the final customer?
The company itself, not just its independent distributors, is a 'direct sales organization' responsible for sales tax on the full selling price of the vouchers and related items sold through its distr…
Is the electricity a paper mill uses to run dedicated air conditioning for rooms housing its production equipment's electrical controls exempt from New York sales tax?
Yes -- a paper mill's electricity used exclusively to run dedicated air conditioning systems that keep separate, restricted-access control rooms cool enough to prevent the electrical components (switc…
Does a school owe Utah sales tax when it sells discount cards that let students buy discounted goods and services from outside vendors?
No. When a school sells discount cards that are honored by a number of outside vendors — rather than selling the cards itself as the vendor of the underlying goods or services — the sale of the card t…
Does a company that operates a can-crushing prize machine owe sales tax on the advertising fees it charges, or on the machine and prizes it buys?
No, the advertising fee charged to companies for placing their logos on the machine is not taxable. But the machine's operator must pay sales tax on the taxable items it buys to run the promotion, inc…
Do casualty insurance agencies owe Texas sales tax on fees they charge clients for services like claims administration, risk inspections, and rate-setting when those fees are paid instead of a sales commission?
Yes. When a casualty insurance agency charges a client a fee -- instead of earning a sales commission -- for services such as claims administration, risk inspections, rate-setting, or claims/loss adju…
Can a caterer, hotel, or restaurant use a resale certificate to buy or rent tables, chairs, decorations, or audio-visual equipment used in providing food service, instead of paying tax on those items?
No. A caterer, hotel, or restaurant that buys or rents equipment (such as tables, chairs, utensils, decorations, or audio-visual equipment) to use while providing food service must pay tax on that equ…
Can a corporation and its affiliates file one combined Texas sales tax return instead of separate returns for each entity?
No. The Comptroller's office will not accept a combined sales tax return or report from a corporation and its affiliates -- Texas requires each entity to file its own separate report, and the agency d…
Are low-vision aids and devices sold to blind or visually impaired individuals exempt from Utah sales tax?
No, there is no special sales tax exemption for sales to blind or visually impaired individuals. Utah taxes tangible personal property regardless of the purchaser's physical limitations, and items tha…
Is providing equipment with an operator for oilfield lease-site work -- like restoring a wellsite, cutting a pipeline right-of-way, building or maintaining a road, or setting frac tanks -- taxable under Texas sales tax?
It depends on the specific service. Reclaiming an oil and gas lease site back to its pre-drilling condition is not taxable, but restoring other nonresidential real property improvements is taxed. Sett…
Is non-executable source code that a seller licenses to manufacturers, who must substantially re-engineer it before use, a 'completed computer program' subject to Texas sales tax?
Yes. The Comptroller ruled that the seller's non-executable source code -- even though customers must substantially re-engineer it before using it -- meets the dictionary definition of 'source code' a…
Is a biotechnology company's purchase of cell, organ, or tissue taken from a cadaver exempt from Texas sales and use tax?
Yes. The Comptroller reversed an earlier determination and ruled that cell, organ, and tissue purchased or sold by a biotechnology company are exempt from Texas sales tax to the extent they are taken …
How does New Mexico set the market value of my land for property tax, and can I challenge the state's number?
The cooperative won a substantial reduction, though not everything it asked for. Central Valley Electric Cooperative protested the Property Tax Division's $396,400 valuation ($11,325 per acre) of its …
Does a process server who files court documents and pulls certified copies of court records owe sales tax on those services?
Filing or serving legal documents like citations, subpoenas, and writs is not a taxable service, and researching court records or requesting certified copies is not taxable by itself. But sales tax is…
Does a company that locates and negotiates preferred provider network contracts for health plans owe Texas administrative services tax or sales tax on the contingent commissions it earns?
No. A company that locates and negotiates contracts with preferred provider networks on behalf of health care and occupational injury plans, earning a contingent commission based on savings, owes neit…
When a tax-exempt nonprofit organization hires a for-profit carnival operator to run an event, who owes sales tax on the amusement -- the carnival operator or the exempt entity?
It depends on two things: whether the contract between the exempt entity and the carnival operator is a joint venture (sharing both profits and losses, which makes ticket sales taxable), and if not, w…
Does a front-end loader used to blend materials and support cooling during processing qualify for Texas's manufacturing equipment sales tax exemption?
No. The Comptroller ruled that a front-end loader used to blend seed and product and to support the deaeration and cooling process is treated as intraplant transportation equipment or equipment used i…
Are replacement or repair parts for exempt ski resort equipment (snowmaking equipment, grooming equipment, tramways) also exempt from Utah sales tax?
Yes, ultimately. After first advising the taxpayer to treat replacement parts as taxable pending a related manufacturing-exemption decision, the Utah State Tax Commission concluded on December 6, 1996…
How did the former Texas throwback rule source receipts from medical products shipped from Texas, including exports?
Delivery to a Texas buyer produced Texas receipts. Delivery to another state produced non-Texas receipts unless the seller was not subject to tax there, in which case the receipts threw back to Texas.…
Does an engineer hired by an insurance company to investigate a homeowner's damage claim have to charge the insurance company sales tax on the investigation?
Yes. The Comptroller ruled that an engineer's investigation of an insured's claim -- inspecting a dwelling and reporting on damage and its cause -- is a taxable 'insurance service,' so the engineer mu…
Is a machinery moving company's charge to relocate equipment within or between facilities subject to Texas sales and use tax?
No, not by itself. A machinery moving company's charge for simply relocating a machine or piece of equipment within a plant or between facilities is not taxable, but the entire charge becomes taxable …
Is selling stock in a corporation that operates a country club subject to Texas sales tax when stock ownership is required for membership?
Yes, generally -- if owning stock is required to get a special privilege, status, or membership classification in a private club that provides amusement services, the sale of that stock is taxable. Th…
When a direct-sales or multi-level-marketing company gives away free prizes or awards at a home party, who owes the tax -- the company or the person who receives the prize?
The company giving away the prize owes the tax, not the recipient. Pulling an item out of tax-free resale inventory to give away as a prize is a taxable divergent use, so the company (or the distribut…
Does metal-leveling equipment qualify for the Texas manufacturing sales tax exemption when the leveling process changes the metal's tensile and yield strength?
Yes. Because leveling increases the metal's tensile and yield strength to meet the customer's specifications, the Comptroller found the process causes a physical change and qualifies as 'processing,' …
Does an out-of-state captive equipment-finance company that leases/finances equipment used in Utah, with no Utah office or employees, have Utah income/franchise, property, and sales/use tax nexus?
It depends on the facts of each lease/finance arrangement — this ruling explains the tests rather than giving one flat answer, because whether a transaction is a true lease or a secured loan changes t…
When ranchers upgrade a privately owned power line and then transfer it to a city, is sales tax owed on the upgrade materials -- either because the operation is agricultural or because the line ends up city-owned?
Yes, sales tax applies. A group of ranchers/farmers owned a power line serving their farms and agreed to upgrade it "to code" so a city could take over ownership and maintenance. Even though the line …
Does a tobacco distributor owe Utah cigarette and tobacco tax when it sells cigarettes and cigars to the duty-free store at the Salt Lake City airport, even though the duty-free store resells them to travelers leaving the country?
Yes -- the distributor still owes the tax, unlike the sales tax treatment of the same duty-free sales. Utah's cigarette and tobacco taxes are levied on the FIRST sale, purchase, use, or storage of the…
Does a private insurance carrier owe Texas sales and use tax on crop loss adjusting services it buys, even though the underlying crop insurance is federally reinsured?
Yes. Texas sales and use tax applies to crop loss adjusting (claims appraisal) services that a private crop insurance carrier buys from an outside adjusting company, even though the underlying crop in…
If an industrial supply company runs a customer's on-site tool crib and charges a management fee plus product costs, is that management fee taxable?
Yes, in most cases. The Comptroller ruled that if the industrial supply company is a retailer of all the sales made through the tool crib (not acting as the customer's purchasing agent), then its mont…
Who owned the interest earned while a Texas county held collected motor vehicle sales tax?
The state. Based on an enclosed Attorney General opinion and related case law, Tax Policy said interest earned while the county held motor vehicle sales tax belonged to Texas and had to be remitted to…
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.