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.
Is a sewage-works corporation taxed under Article 9 (sections 183/184, 186, or 186-a) or under Article 9-A?
Under Article 9-A. A sewage-works corporation organized under the Transportation Corporations Law and not regulated by the Public Service Commission is not principally engaged in a transportation or t…
Does fuel and electricity used to recap (retread) tires qualify for Utah's noncommercial-use sales tax exemption that applies to mining, agriculture, and manufacturing?
No, the tire recapping company is not entitled to the fuel and electricity exemption. Utah Admin. Rule R865-19S-35 limits the noncommercial-use exemption to mining, agriculture, and manufacturing acti…
When a gas marketer sells natural gas to New York end-users with title passing outside New York, are its receipts taxed under sections 186, 186-a, 189, or the sales/use tax?
It turns on where the sale occurs, which depends on where title, possession, and risk of loss pass -- a factual question. Under this agreement, title, risk of loss, and transportation responsibility p…
Does Utah sales tax apply to a graphic designer's charges for brochures, newsletters, business cards, and web page design?
It depends on what's actually delivered. Selling printed material like business cards, brochures, and newsletters is taxable, and any design services billed as part of that sale are taxable too — you …
If I remitted sales tax by 'backing it out' of my total ticket receipts instead of adding it on top, can I get a refund of that tax directly?
No, not directly to the seller in most cases. The Comptroller explains that if a seller calculated tax by dividing total receipts by 1.0825 and treating the difference as tax ('backing it out'), the s…
Do I have to charge sales tax on manual drafting services, or only on computer-aided (CAD) drafting?
Sales tax is due on drawings and blueprints produced by a draftsman regardless of whether they're drawn by hand (pen and pencil) or with Computer Aided Design (CAD) software. The Comptroller corrected…
Are breast prostheses and the special bras that hold them exempt from Texas sales tax?
Yes. The Comptroller ruled that silicone breast prostheses, breast forms, and breast pads that replace a missing breast are exempt from Texas sales tax as prosthetic devices under Rule 3.284(a)(10). B…
Is a Cell Tech 'Super Sun Smoothie' blue-green algae drink mix exempt from Texas sales tax as a food product if it's used as a meal replacement?
Yes, in this case. The Comptroller had previously told this seller that the Cell Tech Super 'Sun' Smoothie product was taxable, but after receiving additional information showing the product can be us…
Is renting a university recording studio, including a technician's time, subject to Texas sales tax, and what about the tapes used during the session?
No, the hourly charge for using the university's recording studio is not taxable, and the charge for the technician's time is not taxable either. However, the charge for the materials provided during …
If our company manages a jail or prison under contract with a government agency, can we buy materials and utilities tax-free using a resale certificate?
Yes, but only if set up correctly. A private company (ABC) managing prison facilities for exempt governmental entities can issue resale certificates to its vendors for materials that will pass to the …
Is a vehicle tracking/personal security monitoring service, sales of the tracking device itself, and 'extra' per-minute services (like remote unlock or directions) subject to Texas sales tax?
Yes, in part. Installing and monitoring a personal security/vehicle tracking device requires a private investigator/security license, so those monitoring charges are taxable as a Security Service unde…
If a tax-exempt agency like a Private Industry Council or the Texas Rehabilitation Commission pays for a sponsored student's books, tools, and meal tickets at our college bookstore, should we charge sales tax?
It depends on who is actually billed as the purchaser. If the exempt or governmental agency (like a PIC or the Texas Rehabilitation Commission) is invoiced directly and pays the college or bookstore i…
Five scenarios about bands playing at a club for door fees, tip-jar money, or free drinks instead of straight cash pay: which payments are taxable, and who -- the band or the club -- owes the tax?
PARTIALLY SUPERSEDED as to Scenario 1 (see note below). Five 1996 scenarios: (1) [SUPERSEDED] a band collecting and keeping its own door entry fee, with the club having no knowledge of the amount, was…
Does a state university have to collect sales tax on parking permit fees charged to its faculty, staff, and students?
No -- per this 1996 letter, a state university does not have to collect sales tax on parking permit fees charged to its own faculty, staff, and students, extending a previously issued policy that cove…
Does a nonprofit club that operates concession stands under a license from a school district have to collect sales tax on its concession sales?
Yes. Even though the club is an exempt organization, sales of taxable items it makes -- like concession stand food and drinks -- are still subject to sales tax. Per Rule 3.322(g)(1), the club can buy …
Can a county assessor require payment of the fee-in-lieu of property tax before issuing a salvage title on a damaged vehicle?
This request was WITHDRAWN by the Commission before it reached a substantive answer. Internal Commission staff raised the question on behalf of county assessors — who were split, with some counties re…
Can a Utah resident get credit on their Utah income tax return for income tax they also paid to another state on the same income?
Yes, within limits. A Utah resident who pays income tax to another state on income that is also reportable to Utah (for example, wages earned for services performed in that state, or business income a…
New York Advisory Opinion TSB-A-96(28)S: Is a 1,000-capacity concert hall a taxable "cabaret" because it also sells drinks at a bar during shows, or is admission exempt as a musical performance because the drink sales are merely incidental to the concerts?
It's not a taxable "cabaret," so admission is exempt. The Water Street Music Hall is a 1,000-capacity concert venue with no seating, no tables, and no food, that hosts touring musicians and runs a cas…
New York Advisory Opinion TSB-A-96(27)S: Does a banking-software license and maintenance contract signed in 1988 -- before a 1991 New York law change made pre-written software taxable -- still get the OLD exempt treatment for its ongoing annual maintenance fees, or does the new tax apply going forward regardless of when the contract was signed?
The new tax applies to charges from September 1, 1991 forward, even under a contract signed years earlier -- there's no grandfathering here. ALLTEL Financial Information Services, Inc. (formerly Syste…
New York Advisory Opinion TSB-A-96(26)S: When a commercial landlord bills a tenant "additional rent" for building services beyond the basic lease package -- overtime elevator/porter/heat, plus separate categories like extra cleaning, mechanical maintenance, and rubbish removal -- which of those charges are subject to sales tax?
It splits by service type, regardless of the "additional rent" label. Midtown Realty Company's lease bundles basic cleaning, elevator, porter, and heat/AC service into base rent during normal business…
New York Advisory Opinion TSB-A-96(25)S: A driving school that switches from renting road-test cars to buying its own vehicles asks whether it now owes sales tax on those purchases (and on repair parts), and whether it can get a credit for the 25% of its student fee that's allocated to "providing the car."
Yes, both are taxable, and no, there's no credit. Model Auto Driving School, Inc. charges students a fee split 75%/25% between driving instruction and providing a car for the practical road test -- th…
After a corporation claims the investment tax credit and spins the property off to an LLC in a tax-free section 721 exchange, who keeps the credit and is it recaptured?
The corporate taxpayer that claimed the credit keeps it, with no recapture. A film company bought qualifying ITC equipment, claimed the credit in the first qualified-use year, then contributed the vid…
Is sales tax owed on cleaning, polishing, and restoring granite, marble, and terrazzo floors, walls, vanities, and tabletops?
It depends on what kind of work is done and on what type of property. Cleaning, polishing, waxing, and sealing natural stone surfaces (residential or nonresidential, or on furniture) is always a taxab…
Are specialized therapeutic beds and mattress overlays that a company rents out exempt from Texas sales tax as hospital beds?
Mostly yes: the Comptroller found that most of the specialized beds and pressure-relieving mattress/flotation systems the company rents out qualify for Texas's hospital bed exemption under Tax Code § …
Can a corporation deduct its gross receipts for administrative services it performs for an affiliated limited partnership under the affiliated-corporation deduction?
No. The Section 7-9-69 deduction covers only administrative services performed for an affiliated *corporation*, and a limited partnership is not a corporation. Sprint/United Management Company (SUMC) …
Is a pay-per-view order-verification and database service that a company runs for cable operators taxable as a Texas 'data processing service'?
Yes. The Comptroller ruled that a company operating a National Transaction Center to verify and route cable pay-per-view orders -- identifying callers via ANI, checking eligibility, compiling transact…
Is a university's alumni newsletter subscription fee, its $50 alumni placement-office registration fee, and its $100 lump-sum career-fair fee to companies subject to Texas sales tax?
Mixed answer for a university with three separate fees. (1) Charges for alumni/general-public newsletters -- whether sold by single copy or by subscription -- are taxable. (2) The $50 fee alumni pay t…
Is a BiPAP breathing machine (face mask, head strap, and air-compressing pump) exempt from Texas sales tax as a prosthetic device?
No -- the Comptroller ruled that a BiPAP STD breathing unit (a face mask with a head strap connected by hose to an air-compressing pump) does not qualify for Texas sales tax exemption as a prosthetic …
Does a company that builds a federal hospital on an Indian reservation have to pay New Mexico gross receipts tax, or is the tax preempted by federal law?
Yes — the contractor owes New Mexico gross receipts tax, and the tax is not preempted. Centex Bateson built the 75-bed Shiprock Comprehensive Health Care Facility, an Indian Health Service hospital lo…
New York Advisory Opinion TSB-A-96(24)S: Is a company that supplies custom decorative table linens for one-time special events (weddings, parties) performing an exempt "laundering" service, or is it making a taxable rental of tangible personal property?
It's a taxable rental of tangible personal property, not an exempt laundering service. Table Wraps, Ltd. supplies custom-made decorative table linens for one-time events like weddings and parties unde…
When a 1995 rate increase to Utah's utility gross receipts tax has a January 1, 1995 effective date, how does that apply to a taxpayer whose fiscal tax year doesn't start on January 1?
The increased rate applies starting with the taxpayer's first taxable year BEGINNING on or after January 1, 1995 — not to any taxable year merely ending after that date, and not by splitting a single …
If my company moves, disassembles, and reassembles office furniture, and also sells, delivers, or repairs furniture, which of these charges are taxable in Texas?
A pure moving service -- relocating a customer's modular furniture, even if you must disassemble and reassemble it to do so -- is not taxable in Texas. But if you are selling, renting, repairing, or r…
If I store business forms I sold to a customer in my warehouse and later ship them out one box at a time, do I owe sales tax on the freight and handling charges billed separately later?
Yes. Because the seller stored the pre-purchased business forms in its own Texas warehouse rather than shipping them directly to the customer under the sales contract, the sale was already taxable in …
Can I use taxes I overpaid in earlier years to offset a later assessment if my refund claim for those years is now too late?
No. A refund of overpaid tax can only offset a later bill if the refund claim was filed within the three-year deadline — and here it wasn't. Wilson and Frances Lundy, New Mexico residents, had paid ta…
New York Advisory Opinion TSB-A-96(23)S: When an out-of-state industrial auctioneer sells equipment at a New York auction site "as is, where is" to a buyer who arranges common-carrier shipment to an out-of-state destination, is the sale taxable in New York, and what records must the auctioneer keep to prove it isn't?
Not taxable in New York -- as long as the buyer never takes physical possession within the state. Norman Levy Associates, a Michigan-based industrial auctioneer and appraiser, conducts public auction …
I paid gross receipts tax and only later got the nontaxable transaction certificate — can I still get a refund by claiming the deduction now?
No. A nontaxable transaction certificate (NTTC) must be in the seller's possession at the time the gross receipts tax return is due — not merely by the time the deduction is later claimed. Basin Elect…
New York Advisory Opinion TSB-A-96(22)S: Are a merchant-services company's charges for its "check guarantee" service -- where it agrees, for a fee, to buy a dishonored check from a subscribing merchant at face value -- subject to New York sales tax?
No, not taxable. TeleCheck Services offers retail merchants a check "guarantee" service: before accepting a customer's check, a subscribing merchant contacts TeleCheck electronically (via a point-of-s…
If a Texas remodeling contractor isn't registered to collect sales tax and doesn't collect it on a lump-sum job, can the customer be assessed the tax instead?
Yes. Once Texas began taxing remodeling services directly, the old rule that only the contractor owed tax on a lump-sum job (based on its material costs) no longer applied. Remodeling services are now…
Is labor to replace a failed electrical ballast in a light fixture taxable in Texas, and does it matter whether the building is a residence or a commercial building?
Labor to replace a failed or failing electrical ballast in a commercial building is taxable as real property repair, because ballast replacement normally requires a licensed electrician. The same labo…
My company does most of the work for its service out of state — are my receipts from New Mexico customers still subject to gross receipts tax?
Yes — the receipts are taxable, because the service is performed where the customer receives its benefit, not where the company does its back-office work. Entertainment Publications, a Michigan compan…
My form-work company buys plywood that's used up on jobsites for exempt organizations -- can I buy those materials tax free or get a refund of the tax I paid?
No. The Comptroller ruled that a company doing form work (erecting and removing concrete forms and centering materials without incorporating any tangible personal property into the realty) is a nontax…
Do I owe Texas sales tax on sports cards sold through vending machines, including the chance cards redeemable for an autograph?
Yes -- receipts from sports card vending machines are subject to Texas sales tax because the cards are tangible personal property, not an amusement activity. These machines are not treated as skill-or…
Does Texas sales tax apply to charges for computer consulting, hardware setup, software installation, training, and computer repair/maintenance?
It depends on the specific service. Business/computer consulting, evaluating a client's computer setup, installing software or peripherals you didn't sell, and training employees are NOT taxable. But …
Can a city that has adopted a Municipal Crime Control District sales tax repeal the Section 323.208 exemption for telecommunications services and tax them under that local tax?
A qualified yes. A city that has adopted a Municipal Crime Control District sales tax may repeal the Section 323.208 Tax Code exemption for telecommunications services and tax those services under the…
Do we have to charge sales tax on commercial wastewater treatment services, and on the hauling charges when we pick up the water ourselves?
No -- treating a customer's wastewater to remove oil and contaminants before it's discharged to a municipal sewer system is not a taxable service, because water itself is exempt from Texas sales tax a…
What crude oil severance tax exemption levels applied in Kansas from May 1996 through April 1997?
For the fiscal period May 1, 1996 through April 30, 1997, the Kansas crude oil severance tax exemption levels were set using a determined average oil price of $15.81 per barrel. Because that price is …
If a Texas seller with Texas nexus sells to an out-of-state buyer who has no Texas nexus, and the buyer resells to a third party, does the Texas seller need to collect Texas tax, and what documentation does it need from the buyer?
A Texas seller does not have to collect Texas tax on a sale to an out-of-state buyer if the buyer gives the seller a valid Texas resale certificate showing the buyer is a bona fide retailer reselling …
If I'm a developer building streets, roads, or sewer/water lines in a subdivision that I plan to donate to the county, can my contractor buy materials tax-free?
Yes, but only if the dedication and government acceptance happen before construction starts. A developer donating subdivision infrastructure (streets, roads, sewer/water lines, etc.) to a governmental…
If our pharmaceutical company gives free prescription and nonprescription drug samples to physicians and hospitals in Texas, do we owe sales or use tax on them?
It depends on who receives the sample and whether it's prescription or nonprescription. Prescription and nonprescription drug samples given free to physicians (to be dispensed to patients) are exempt …
If my appliance repair customer pays only for an estimate and decides not to go ahead with the repair, do I have to charge sales tax on that estimate/service call fee?
No -- if a customer only pays for a service call or estimating fee and decides not to have the appliance repaired, that fee is not taxable because no repair (a taxable service) actually took place. Bu…
Will the Utah State Tax Commission accept a membership-club retailer's proposed member exemption-certificate and non-taxable sales log system as sufficient for its resale/exempt-purchase tax exemption recordkeeping?
The Commission won't sign a formal contractual agreement (it doesn't normally enter into those), but it approved the substance of the proposed system: keeping each member's signed exemption certificat…
If I transfer my manufacturing equipment to a new LLC to reduce personal liability and lease it back to my business, do the lease payments qualify for Utah's manufacturing sales tax exemption?
No, not on these facts. Transferring already-in-service manufacturing equipment to a new LLC purely for liability protection, then leasing it back to run the same operations it always has, does not qu…
Does an out-of-state finance company with two Utah-based sales employees, but no Utah office or property, owe Utah corporate franchise/income tax?
Yes. The Utah State Tax Commission ruled that a California-based company purchasing motor vehicle installment contracts from Utah dealers has Utah corporate income tax nexus solely because it has two …
Do I have to charge sales tax on sodium bentonite clay that I sell for different uses — animal feed, cat litter, well-plugging, pond/landfill sealant — and on delivery charges for it?
Sodium bentonite clay is taxable when sold to an end user no matter how it's used -- as animal feed additive, cat litter, well-plugging material, or a pond/tank/landfill sealant. The seller only needs…
Is an air compressor that powers pneumatic tools exempt from Texas sales tax under the manufacturing exemption?
Yes, conditionally: the Comptroller ruled that an air compressor used to power pneumatic tools qualifies for Texas's manufacturing exemption, but only if the pneumatic tools themselves are used for as…
Is my company's charge for online continuing-education courses and certification testing subject to Texas sales tax?
No -- charges for providing continuing education courses and testing over the Internet are not subject to Texas sales tax. However, if the company pays its Internet Service Provider separately for mai…
Does automating an existing manual production line count as tax-exempt 'new or expanding operations' equipment, or is it a taxable 'normal operating replacement'?
Not automatically exempt — it depends on facts the Commission hadn't yet been given. Utah's manufacturing exemption applies to equipment for 'new or expanding operations' but not to 'normal operating …
Is a service that compiles and reports weekly underground natural gas storage capacity data from multiple subscribers a taxable information service, or does it qualify as a nontaxable proprietary compilation or geophysical survey?
No exemption applies -- the Comptroller ruled that a company's weekly reports on underground natural gas storage capacity, compiled from data submitted by storage operators and sold to industry subscr…
Is an LLC taxed as a partnership a 'portfolio investment partnership,' and is a foreign corporate member subject to Article 9-A by reason of its membership?
New York follows the LLC's federal classification, so an LLC taxed as a partnership is a partnership for New York tax. An LLC that meets the IRC section 851(b)(2) gross-income requirement and is not a…
Does a cotton mote fiber processing operation qualify for the same sales tax exemption on electricity (without needing a predominant use study) that Texas already grants to cotton ginning operations?
Yes. The Comptroller found that the process and equipment used to condition, clean, and package cotton mote fiber (a waste byproduct of cotton ginning) are substantially the same as those used in cott…
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.