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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Is a gut renovation that leaves the wall studs and floor/ceiling joists in place treated as nontaxable 'new construction,' or as a taxable service to existing commercial real property?
It's taxable -- not new construction. A renovation that converts a building to a new use but leaves the interior and exterior wall studs and the floor and ceiling joists in place is a taxable service …
Does a nonprofit/volunteer group have to collect sales tax on food and beverages sold at its annual fund-raiser, and can it get a refund of tax it already paid on two past fund-raisers?
No sales tax collection is required on food and beverages (like iced tea, sodas, coffee) sold at an annual fund-raising event if the sale lasts a week or less, is run exclusively by unpaid volunteers …
Is use tax due on complimentary (free) servings of beer that a bar brews on its own premises?
No use tax is due on the beer itself, because its ingredients (corn, wheat, barley, salt, yeast, etc.) aren't taxable items to begin with — but use tax is still due on the cost of any non-reusable ite…
New York Advisory Opinion TSB-A-96(8)S: Is the removal, disposal, and decontamination of waste from tanks at an EPA Superfund cleanup site a taxable real-property maintenance service, or an exempt capital improvement, when the site's overall final remediation plan hasn't been determined yet?
Taxable, at least for now -- because the ultimate capital-improvement outcome can't yet be established. Frontier Chemical Royal Avenue Superfund Site is a group of companies designated "potentially re…
If a high-income New York taxpayer's gambling losses are fully deductible up to gambling winnings for federal tax purposes, are those losses just as fully deductible on the taxpayer's New York return?
Not necessarily. Federal law (IRC § 165(d)) lets the taxpayer deduct gambling losses up to the amount of gambling winnings without any 2%-of-AGI floor or overall itemized-deduction cap. But New York T…
I came back to the U.S. between jobs and would have moved anywhere for work — was I really a New Mexico resident for tax purposes that year?
Yes. You cannot be domiciled 'nowhere,' so an unsettled job search does not make you a resident of no state. Hannibal Madden, a physicist who had lived and paid tax in New Mexico for years, left for a…
I served in the military entirely while living outside New Mexico — is my military retirement pay taxable now that I live here?
Yes. Military retirement pay is taxable New Mexico income in the year you receive it if you are a New Mexico resident then — even if you served your entire military career while living outside the sta…
A direct-sales/multi-level-marketing company asked how it should collect and remit Texas state and local sales/use tax on sales made through its independent distributors.
Under Rule 3.286(a)(3), the company is treated as a distributor and must obtain a Texas sales and use tax permit and collect/remit state tax (then 6 1/4%) plus applicable local taxes on sales made thr…
Which cleanroom facilities and related equipment used in semiconductor (microchip) fabrication qualify for the Texas manufacturing exemption — specifically a chemical analysis lab and equipment air lock, chemical/gas dispense and storage rooms with their safety/cleanroom controls, and an electrical distribution room?
The chemical analysis lab and equipment air lock cleanrooms and their associated equipment are exempt under Sec. 151.318(q). For the chemical/gas dispense and storage rooms, the piping, filters, and s…
Are satellite-based data communications services (monitoring pipelines, messaging trucks, sending distress signals, tracking cargo) taxed in Connecticut as telecommunications services, or as computer and data processing services?
It turns on the label, and it's still taxable either way the company hoped to avoid. Connecticut's satellite-based data communications service is NOT taxable as a telecommunications service under Conn…
My tax check got lost in the mail even though I filed on time — do I still owe interest for the months the tax went unpaid?
Yes — interest keeps running until the tax is actually paid, even if your check was lost in the mail. Franklin and Shirley Niles mailed their 1994 New Mexico income tax return in early April 1995 and …
When a contractor pulls materials out of a valid tax-free inventory located inside a city and MTA (mass transit authority) taxing jurisdiction, and uses those materials on a lump-sum new construction job located outside that city/MTA area, which city's and MTA's local use tax applies?
The local (city and MTA) use tax is based on where the tax-free inventory is stored/kept at the time of or just before the materials are removed for use — not on where the construction job itself is l…
Does a nonprofit civic organization (and the nonprofit/school booster groups selling food in its festival concession area) have to collect sales tax on food and beverages sold as an annual fundraiser?
No — not if the sale is an annual event lasting a week or less, is run exclusively by unpaid volunteers of the participating nonprofit organizations, is entirely noncommercial (no caterer, restaurant,…
New York Advisory Opinion TSB-A-96(7)S: Does a computer-services tenant in an Economic Development Zone building qualify for the sales tax refund/credit on construction materials used to build or rehabilitate the building, even though it isn't the one buying the materials?
The building itself qualifies for the EDZ construction-materials refund, but Petitioner personally does not, unless Petitioner is the one who actually buys the materials and pays the tax. Gloria S. Fr…
If a Utah parent company spins off a wholly-owned subsidiary to hold an office building (leasing space back to affiliates) or to centralize intercompany financing (borrowing, lending, and investing for the group), is the new subsidiary automatically part of the parent's unitary combined-report group from inception, are the intercompany rent/interest and dividends eliminated from combined income and the sales/property factors, and is income from unrelated third parties business income?
Yes, with one nuance on investment income. Both a new office-building-holding subsidiary and a new centralized-financing subsidiary are unitary from their inception because they're wholly owned, centr…
Does a school district's fuel-tax exemption carry over to a private contractor that operates the district's school buses, if the district still buys and dispenses the fuel from its own tanks?
No. Utah's fuel tax is imposed on the end user of the fuel, not on whoever purchases or dispenses it, so a private contractor operating school buses under contract must pay fuel tax on all gasoline an…
Is an electric cooperative exempt from Texas sales tax on the materials it buys to build a distribution line, and is the cooperative's charge to a customer for that line taxable?
The electric cooperative itself owes no sales or use tax on the materials it buys to build the distribution line — the Electric Cooperative Act (Article 1528b, Sec. 30) exempts electric cooperatives f…
Does Utah sales tax apply to charges for converting customer drawings or ideas into computer-generated drawings and prototypes?
Yes, generally taxable — but the reasoning depends on what you're really selling. The Commission's final position: under Utah Admin. Rule R865-19S-92, charges for producing computer-generated output (…
If I sell and install storm doors, do I charge my customer sales tax, or do I just pay sales tax myself when I buy the doors?
It depends on whether you install the door. If you sell AND install a storm door, converting it from personal property into part of the building, you're a 'real property contractor' under Utah Admin. …
Is a utility-line-locating 'damage prevention' service — where a contractor uses a computer-dispatched service to find and mark underground utility lines before excavation — taxable in Texas?
No. In this internal Comptroller memo, Tax Administration audit staff described a 'damage prevention' service in which a company, under contract with utility companies, uses a one-call center and a co…
Which schools and institutions qualify for Utah's tax-free construction materials exemption, and what paperwork does a contractor need for each purchase?
Public elementary and secondary schools qualify automatically. Private or religious schools qualify only if they're recognized by the IRS as tax-exempt under Section 501(c)(3) — for-profit schools nev…
Is a $1 surcharge that a private club must collect from baseball ticket purchasers and remit to a sports facility authority (as required under the Development Corporation Act of 1979) subject to Texas sales tax?
No. A $1 surcharge that a sports facility authority requires a private club to collect from ticket purchasers and remit directly to the authority — authorized under the Development Corporation Act of …
When a grocery store's gas-pump trading stamp promotion is redeemed for a mix of taxable and nontaxable food items, how is sales tax computed?
Redeeming trading stamps for merchandise is treated as a retail sale. The retailer must collect and remit sales tax on the taxable items redeemed (here, soda), based on whichever is larger: the redemp…
New York Advisory Opinion TSB-A-96(6)S: Is electricity used to power pipeline pumping stations that transport partially refined petroleum products between a refinery and terminals -- where the products get further blended before final retail sale -- exempt production electricity under Tax Law Section 1115(c)?
Not exempt -- taxable. Atlantic Pipeline Corporation, a Sun Company subsidiary, operates a FERC-regulated interstate pipeline network partly in New York that transports petroleum products (85% gasolin…
As a direct sales organization (multi-level marketing company), who is responsible for collecting and remitting Texas sales/use tax on sales made by its distributors, and how should local tax be tracked?
The direct sales organization itself — not each individual distributor — is responsible for collecting and remitting sales or use tax on Texas sales made through its distributors, per Rule 3.286(a)(3)…
Can a Utah vendor scan customer sales tax exemption certificates and store them electronically instead of keeping the paper originals?
Yes. A vendor may scan a customer's sales tax exemption certificate and store it electronically instead of keeping the paper original, as long as the electronic version captures essentially the same i…
New York Advisory Opinion TSB-A-96(5)S: Is admission to a no-seating, no-food 1,000-capacity concert hall subject to New York's "cabaret" sales tax on admission charges, given that a cash bar accounts for roughly a third of the venue's revenue?
Not taxable as a cabaret charge -- this venue passes the "merely incidental" test its sister ruling failed. "The Music Hall," a 1,000-capacity venue, will host only touring-musician concerts, with tic…
I paid extra tax after an audit but before the Department issued any formal assessment notice — does my refund clock start from the audit or from the original due date?
From the audit — the producer won. BTA Oil Producers paid additional New Mexico oil and gas production taxes in October 1990 after a Department audit, remitting the underpayment shown in the Departmen…
A towing company asks whether towing/transfer charges billed in connection with vehicle repossessions — including a "second tow" from a storage facility to an auction — are taxable debt collection services or nontaxable towing/transportation.
It depends on whether a repossession actually occurred. If a towing company is hired only to move a vehicle the lender already has access to (e.g., after the borrower voluntarily drops it at a dealers…
A business sold all its operating assets (except two officers' cars and equipment it leased from a third party under an operating lease, which it couldn't transfer). Does the sale still qualify for the occasional sale exemption?
Yes. The Comptroller ruled that the sale still qualifies for the occasional sale exemption. The two automobiles didn't count because they were used for general business purposes, not operations. And b…
We're trustees of two charitable lead annuity trusts, created under the same family trust instrument with currently identical beneficiaries, that co-own New York real property as tenants-in-common. We're proposing to combine them into one 'Surviving Trust' by court order because their income no longer covers required annual charitable payments. To protect the separate remainder beneficiaries' interests, we're setting up a detailed 'Pro Forma Account' formula (tracking what each set of beneficiaries would have received had the trusts stayed separate, adjusted for years of investment gains/losses and a complex liquidity test) plus a 'Loan-Back Agreement' so that if a 2003 distribution requires deeding out New York real property, the recipients can immediately loan the property back to the Surviving Trust. Will combining the trusts -- or the later Pro-Forma-driven mechanism -- trigger New York's Real Estate Transfer Tax or Real Property Transfer Gains Tax?
Exempt -- the proposed combination wouldn'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…
Is tire retreading for interstate common carriers subject to Kansas sales tax?
In this letter to the Kansas Tire Dealers Association, the Secretary of Revenue determined that the sale of retread tires to interstate common carriers is not subject to Kansas sales tax. Interstate c…
Can an authorized agent for a mechanic or towing company access a protected vehicle registration record to send a legally required lien notice to the owner?
Yes. The Commission adopted a broader reading of the 'advisory notice' exception in Utah Code Ann. § 41-1a-116(4), holding it now covers not only vehicle-safety notices from manufacturers/government b…
Should the Tax Commission's Auditing Division simply accept a Utah State Historic Preservation Office (SHPO) certification (Form TC-40H) as sufficient proof that a residential rehabilitation project qualifies for the historic preservation income tax credit, rather than independently second-guessing whether the work really counts as qualifying rehabilitation, and what does the credit require to begin with?
Yes. The Tax Commission's Auditing Division should accept a signed, project-numbered Form TC-40H certification from the Utah State Historic Preservation Office (SHPO) as sufficient evidence that a pro…
What are Utah's rules for vendor registration, exemption certificate formats (including electronic/paperless certificates), and stale-dating of resale and exemption certificates?
Utah gave a detailed, question-by-question rundown of its exemption certificate policies for a company building certificate-automation software. Vendors must register (form TC-69) if they have Utah ne…
Does Utah sales tax apply to a commercial printer's charges for printing grocery store advertising inserts, including artwork/prepress services, when the inserts are distributed with newspapers versus delivered directly to stores?
Printing charges are generally taxable, including folding, cutting, and addressing, and a printer buying paper, ink, or resold prepress materials can do so tax-free as resale inputs (but owes tax itse…
New York Advisory Opinion TSB-A-96(4)S: Are a company's "stock watch" and "NOMINEX" services -- which identify a client's beneficial stockholders and monitor changes in stock ownership -- excluded from New York sales tax as personal/individual information not incorporated into reports for other clients?
Not taxable, under the personal/individual information exclusion. Kissel-Blake, Inc. offers two services to corporate clients trying to identify their own beneficial stockholders: the "stock watch ser…
New York Advisory Opinion TSB-A-96(3)S: Is a proxy solicitation firm's confidential "stock watch service," which identifies a client's individual shareholders and debtholders through investigative research, excluded from New York sales tax as personal information not shared with other clients?
Not taxable, under the personal/individual information exclusion -- the same result as the companion Kissel-Blake ruling issued the same day. Morrow & Co., Inc. provides proxy solicitation and stockho…
If a company owns the patents and formulas for its products but has a separate contract manufacturer physically make the product under the company's supervision, is the company itself considered the 'manufacturer' for Texas sales and use tax purposes?
Yes. Because the company developed the formulation process, supplies the manufacturing formulas and instructions, keeps its own manager/scientist on site during manufacturing and testing, and is respo…
Is labor to repair major appliances taxable, and does a laundry/dry cleaner that owns and rents out uniforms, mops, or linens qualify for the manufacturing exemption on its washers, dryers, and repair parts?
It depends on what's being repaired and how the appliance is used. Repair labor on tangible personal property (free-standing, plug-in appliances) is generally taxable, while repair labor on real prope…
Is a repossession company's charge to a bank or lender for repossessing a vehicle a taxable service, including when the bank calls off the repossession before the vehicle is picked up?
Yes. Repossession work done for a financial institution is a taxable "debt collection service" under Rule 3.354(a)(4). This applies whether the repossession is a voluntary turn-over the company picks …
Is a hotel pay-per-view video service taxable in Utah, and if the video is delivered on a physical videocassette rather than by satellite or cable, does that change the answer?
It depends on how the video reaches the guest's room, and the Commission's position changed over the course of this ruling. A company that installs pay-per-view (PPV) video systems in hotels -- along …
I build railroad track and separately bill my customer for materials — can I take New Mexico's railway-roadbed materials deduction on the materials portion?
No. A contractor that reconstructs railroad track is selling a construction service, not materials, so it cannot take the Section 7-9-51.1 deduction for 'materials necessary for the construction or re…
When a company does lump-sum interior refurbishing, avionics upgrades, or performance modifications on a customer's private aircraft, is that taxable repair/remodeling labor, or nontaxable processing/manufacturing labor — and does it matter that the work is done on an unfinished ('green') aircraft versus one already in service?
Interior refurbishing and performance-altering modifications performed on an already-completed customer aircraft are repair or remodeling, not processing — and Texas law specifically excludes repair, …
Is the labor to repair refinery/chemical plant processing equipment taxable, and is the labor to repair railroad track taxable, given that the equipment and track were exempt as manufacturing equipment or rolling stock when first purchased?
It depends on whether the item is still personal property or has become part of the realty. If refinery/plant manufacturing equipment still retains its character as tangible personal property, repair …
Is the computer hardware and software a company uses to draw its own blueprints for fabricating food processing equipment exempt from Texas sales tax as manufacturing equipment?
No. Preparing blueprint drawings happens before the first stage of production, so the computers and software used to create those blueprints do not qualify as exempt manufacturing equipment under Rule…
For the affiliate that actually holds New York City IDA industrial development bonds, are the bonds (1) investment capital under section 208.5, (2) producing investment income under section 208.6, and (3) governmental securities for the Article 9-A investment allocation percentage?
Yes to all three. Smith Barney Holdings is the wholly-owned subsidiary that actually holds the New York City IDA bonds issued for the Travelers TGI Project. As in the companion opinion to its parent, …
New York Advisory Opinion TSB-A-96(2)S: Is the fee a business pays Pitney Bowes to have its rented "Postage by Phone" meter reset by telephone subject to New York sales tax?
Taxable. Grace Borgenicht Gallery, Inc. rents a "Postage by Phone" meter from Pitney Bowes, a system that eliminates the need to have the meter reset in person at the Post Office. Instead, Petitioner …
Are New York City IDA industrial development bonds (1) investment capital under section 208.5, (2) generating investment income under section 208.6, and (3) governmental securities for the Article 9-A investment allocation percentage?
Yes to all three. New York City Industrial Development Agency bonds -- the IDA being a governmental instrumentality (a public benefit corporation under Article 18-A of the General Municipal Law) -- ar…
My extra tax only got pinned down years later after the IRS adjusted my return — does interest really run all the way back to the original due date?
Yes. Interest on unpaid New Mexico income tax runs from the original due date of that tax — not from when a federal adjustment is finalized or an amended return is filed. Donald Duszynski, a New Mexic…
Is cleaning debris out of an existing farm irrigation ditch or canal every fall and spring taxable as nonresidential repair/restoration, or is it exempt agricultural maintenance?
Taxable. Cleaning debris out of an existing irrigation canal restores it to as near its original working order as possible, which is nonresidential restoration under Rule 3.357 — not exempt maintenanc…
What was the January 1996 internal memo about a special postcard mailing to Texas taxpayers who had a local sales tax rate change in 1995?
This is NOT a taxpayer-specific letter ruling — it's an internal Comptroller staff memo (with the attached postcard text) explaining that 610 sales-tax yearly filers in specific jurisdictions (the cit…
A wholesale floor covering distributor asks: is sales/use tax due when it buys carpet samples for its own showrooms, when it later resells those used samples to dealer customers at a discount, when its salespeople swap out a dealer's sample display for free, and can it get a tax refund when it has to discard samples that go out of style?
Tax is due when the distributor first buys the carpet samples, because it uses them in its own showrooms. When those used samples are later resold to a dealer, a resale certificate can be taken instea…
Can a cellular telephone company buy 'positive validation' (fraud-prevention/roamer-validation) services tax-free with a resale certificate, on the theory that the cost is passed through to customers on their cellular bill?
No. The Comptroller ruled that positive validation service is not an integral part of the cellular service sold to customers, so the cellular company cannot purchase it tax-free for resale — regardles…
Did RR 96-3 impose South Carolina sales or use tax when software was delivered entirely by modem and telephone line with no physical media?
No. Software delivered entirely by modem and telephone line, with no diskette, tape, or other physical copy, was intangible software rather than taxable tangible personal property. The transmission sy…
Is the sale of electronic tokens/credits used to play phone-based casino-style games taxable in Texas, when winning tokens also enter callers into a weekly raffle drawing?
Yes. The Comptroller determined that selling the tokens/credits is taxable as an amusement, regardless of the raffle mechanic layered on top. The letter also flags that raffles are generally not legal…
Is a nutritional drink taxable in Texas, or exempt like a food product or meal replacement?
Taxable, as of this 1996 letter. The Comptroller advised that products marketed as a replacement or substitute for a meal (such as Slim Fast and Ultra Slim Fast) are treated as food products and are e…
As of the mid-1990s, did Utah use tax apply to mail-order and early online purchases, and how did Utah tax software, newspapers, and other products delivered electronically?
As of this January 1996 opinion: Utah use tax is owed by a Utah purchaser whenever tangible personal property is bought for use in Utah and sales tax wasn't charged, but the out-of-state vendor only h…
Does producing an animated television commercial using computer graphics qualify for Texas's motion picture exemption, and does the computer/software used to make the master tape qualify for the manufacturing exemption?
Yes to both, with limits. Using computer graphics to produce a master video tape that will be sold, broadcast, or distributed qualifies for the motion picture exemption (Rule 3.350). The computer and …
Can an apartment complex give a utility company a residential-use exemption certificate for gas/electricity without first getting a formal utility (predominant use) study done?
Yes, for apartment complexes matching the studied pattern (meters that mix small commercial use, like the manager's office, with residential common-area use, like club rooms, laundry rooms, pool pumps…
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.
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