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 the section 189.6 exemption from the gas-importer tax apply where the same entity both owns/operates the qualifying co-generation facility and is itself the thermal energy host?
Yes. Buffalo Paperboard owns and operates a co-generation 'qualifying facility' (under section 201 of the federal Public Utility Regulatory Policies Act of 1978) at its Lockport plant and uses the ele…
New York Advisory Opinion TSB-A-96(1)S: Is a therapeutic powered air mattress system for bedsore-prone patients exempt from New York sales tax as medical equipment, when sold or leased to individual patients versus to hospitals and nursing homes?
Exempt medical equipment -- but with an important carve-out for sales to medical-service providers. Pegasus Airwave Inc. makes a powered air mattress system, fitted into a standard hospital bed or a p…
How did superseded RR 96-2 classify amusement machines, video games, free-play devices, and game tables for South Carolina license tax?
RR 96-2 assigned historical Type I, II, or III licenses based on the device's function, payment slot, video display, and free-play feature, while specified for-profit physical game tables followed the…
Did RR 96-1 continue the full disability-retirement income exclusion after benefits converted to a regular retirement plan?
No. Once benefits changed from a disability retirement plan to a regular retirement plan—whether the change was mandatory or optional—the full disability-retirement exclusion no longer applied. The re…
Does an out-of-state company owe Utah sales tax on discount memberships it sells, on catalog/drop-shipped products, and does using independent contractors in Utah create nexus?
It depends on the structure. Selling a bare discount membership — where the member later buys goods or services at a discount from a separate, unrelated retailer who collects its own sales tax — is no…
Does an air compressor used exclusively to power an abrasive blasting system that prepares steel surfaces for coating qualify for the Texas manufacturing sales tax exemption?
Yes. The Comptroller ruled that the air compressor qualifies for the manufacturing exemption because it is used exclusively to propel the blast media that prepares steel surfaces for coating — equipme…
Does Utah sales tax apply to a heli-skiing operator's helicopter transportation, backcountry ski-guide services, and included meals?
Yes to both main components. Intrastate helicopter passenger transportation is taxable, because federal law only limits state taxation of interstate passenger transportation (not intrastate air servic…
Does a maid who cleans houses need to collect Texas sales tax on her charges, and does the new small-business exemption for lawn care/landscaping apply to housecleaning?
No to both, with a distinction: the July 1, 1995 small-business exemption for self-employed lawn care/landscaping workers earning $5,000 or less does NOT extend to housecleaning services, because that…
Is a company that isn't a joint venturer with a theater/performance operator still liable for sales tax on admissions as a "provider" of taxable amusement services?
The Comptroller found that, based on the one contract reviewed, Operating Company is not a joint venturer with Company A — but that doesn't settle the matter, because Operating Company may still be a …
The Department sat on my protest for two years while interest piled up — can I at least get that interest reduced?
No. LEICA, Inc. was assessed New Mexico tax after a 1992 Multistate Tax Commission sales-tax audit: Assessment No. 1651584, for $13,793.38 in tax, $5,312.09 in interest, and $1,381.95 penalty. The com…
I paid my gross receipts taxes just one day late — why am I charged a whole month of interest and a penalty?
Because New Mexico interest is charged by the month 'or any fraction thereof,' so even a single day past due triggers a full month — and no law lets it be abated. Davis and Associates, Inc., a New Mex…
Is a Texas manufacturer's sale of etchant — a chemical used to etch unwanted copper off printed circuit boards — subject to sales tax, given that none of the etchant ends up in the finished circuit board and the spent etchant is bought back by the seller for recycling?
The sale of the etchant is a taxable sale of tangible personal property, but the purchaser (a circuit-board manufacturer) can buy it tax-free with a resale/exemption certificate, because the etchant i…
Is the construction of a special, secured room inside an existing building — built to protect a customer's inventory and equipment during manufacturing — exempt from Texas sales tax as either a manufacturing exemption or new construction?
No. The Comptroller ruled that building a special security room within an existing building — even though it was a specific contract condition needed to protect a customer's manufacturing inventory an…
What tax-collection and title-filing duties did Texas impose on licensed vehicle dealers beginning January 1, 1996?
Licensed dealers had to collect motor vehicle sales tax on all taxable sales, including cash sales, and remit it to a county tax assessor-collector within 20 county working days. They also had to comp…
A mail order company plans to set up two subsidiary corporations and a limited partnership that will operate in Texas, buying goods for resale to the mail order company, which then ships items to Texas customers; the mail order company will also periodically send a handful of employees into Texas to train and check on the limited partnership's staff. Does any of this create Texas sales/use tax and franchise tax nexus for the mail order company, and does the limited partnership have to collect sales tax on sales to the mail order company or its customers?
Yes, the mail order company has nexus. Sending its own employees into Texas on a recurring basis (initial training plus periodic quarterly/semi-annual site visits) to train and review the limited part…
Is a New York corporation subject to Article 9-A franchise tax after it discontinued all active business and was later dissolved by proclamation, when it merely holds record title to real property as nominee for others?
Two periods. For the years it was incorporated -- from 1963 until it was dissolved by proclamation on September 29, 1982 -- the corporation is subject to the Article 9-A franchise tax under section 20…
When an employer stays fully liable for its own employees' health claims and just pre-funds an account the insurer draws from to pay them, are those claim payments and the insurer's admin fee taxed as insurance 'gross direct premiums' in Connecticut?
No. When the employer remains solely liable for its employees' health benefit claims below a liability limit and simply pre-funds a claims account that the insurer draws on to pay those claims as the …
We're a nonprofit local development corporation. Under the SBA 504 loan program, we plan to take a construction-phase mortgage from a borrower, immediately have it enforced by a private lender who's actually funding the advances, then take it back once permanent SBA financing kicks in. Is that mortgage exempt from mortgage recording tax through both phases?
Exempt throughout, including during the construction phase when a private lender is really funding and enforcing it. This is the origin ruling for Greater Syracuse Business Development Corporation's (…
If a broker pays a financial-information company's subscription fee for a customer, and also pays the information company a separate premium/commission based on the customer's brokerage business, is that premium/commission subject to Texas sales tax — and does it matter that the broker is out of state?
The premium/commission a broker pays an information-service provider is NOT subject to sales tax as long as it's separately stated and represents genuine, separate compensation to the provider (not pa…
A vendor sells equipment to a leasing company, which then leases it to the original customer under a deal labeled a 'financing lease' with declining monthly payments and a buyout/return/renew option at the end of each year — is that a financing lease or an operating lease for Texas sales tax purposes?
It's actually three separate leases, not one financing lease. Because the customer can return the equipment, buy it, or roll into a new lease with a new rental amount at the end of each year, the Comp…
New York Advisory Opinion TSB-A-95(43)S: In a 22-year NYC IDA bond financing to keep CS First Boston headquartered in the city, are the layered purchase, lease, resale-certificate, service-contract, rent, and eventual buyout transactions among Purchasing, Leasing, the Group Agents, and the IDA exempt from New York State and City sales and use tax?
Yes, exempt across all 13 questions raised -- provided every layer of the structure follows the documented agency/resale-certificate paperwork. To keep CS First Boston Corporation ("CSFB") headquarter…
How did RR 95-18 treat current-year property taxes in a South Carolina delinquent-tax sale and redemption?
RR 95-18 required the forfeited land commission's minimum bid to include taxes levied for the year the redemption period began. A sale had to wait until those taxes could be computed. A redeemer paid …
Are charges for Internet access taxable in Utah as telephone/telecommunications service, back when Internet service providers first emerged?
No. In one of Utah's earliest rulings addressing the internet, an Internet service provider operating in Salt Lake City, Ogden, and Provo asked the Commission to clarify whether it had to charge sales…
If a Texas business creates a website for a customer located in Mexico, does it still owe Texas sales tax on the charge?
Yes. The Comptroller confirmed that creating website software is taxable as tangible personal property, and that tax applies even when the customer is located in Mexico, because the software resides o…
Is the Tarjeta Nacional De Inscripcion (a Mexican vehicle-registration document a customer gave a Texas seller) valid proof that goods were exported to Mexico for the Texas export exemption?
No. The Tarjeta Nacional De Inscripcion is not acceptable proof of export because it doesn't document that the specific goods sold were actually shipped into Mexico. Valid proof of export instead requ…
For a company that sells and rents equipment used on a tribal reservation inside Connecticut's borders, do those receipts count in the Connecticut receipts factor when it apportions its corporation business tax?
Yes — they count. A company that sells or rents construction equipment for use on a federally-recognized tribe's reservation that sits within Connecticut's borders must include those receipts in BOTH …
Is Utah sales tax owed on dog grooming charges, and how does that compare to veterinary services and animal boarding?
Yes, dog grooming charges are subject to Utah sales tax. Animals are tangible personal property (per a 1970 Attorney General opinion), and Utah Admin. Rule R865-19S-78 taxes charges for services that …
Does a company that drafts customers' bank accounts electronically (EFT/ACH) on behalf of its business clients have to charge Texas sales tax on its drafting fees?
No. The Comptroller told the taxpayer that the fee it charges for its bank drafting service is not a taxable service, so it should not collect sales tax on those fees from its customers. However, beca…
New York Advisory Opinion TSB-A-95(42)S: In CS First Boston's proposed NYC IDA headquarters-retention deal -- where the building owner, Metlife, pays for and owns most leasehold improvements for regulatory-capital reasons while the IDA holds legal title -- are the purchases of Eligible Personalty, the Improvements, Metlife's reimbursements, and CS First Boston's debt-service payments exempt from sales and use tax?
Exempt, but with a genuinely fact-dependent condition on the Improvements question that this opinion couldn't resolve outright. CS First Boston Corporation ("CS First Boston") proposed a roughly 20-ye…
Can a towing company or mechanic access a vehicle's protected registration record based on their possessory lien, and does a protected registration stay protected after the vehicle is sold?
No, not directly. A towing company's or mechanic's possessory lien (created by statute) does not qualify as a 'bona fide security interest' under Utah Code Ann. § 41-1a-116(4), because that term requi…
Is a drilling contractor's charge for oil/gas well drilling services a taxable equipment rental or a tax-exempt service, and does it matter who physically operates the equipment?
It's an exempt service contract if the drilling contractor -- the one who supplies the equipment -- also retains CONTROL and supervision over the drilling operation, even if the customer's own employe…
In a sale-leaseback of manufacturing equipment, is the sale to the leasing company exempt, and are the lease payments back exempt?
The initial sale is exempt, but the lease payments are not. The manufacturer's sale of its own equipment to a leasing company is exempt as a purchase for resale. But because the leaseback was structur…
For deciding whether more than 95 percent of an insurance company's 'premiums' under section 1505(b) are for annuity contracts, do 'premiums' include reinsurance premiums (including from licensed or affiliated insurers) and all direct premiums on both New York and out-of-state risks?
Yes. For the section 1505(b) test of whether more than 95 percent of an insurer's premiums are for annuity contracts, 'premiums' means premiums as in the first sentence of section 1510(c)(1) modified …
Our state agency's subsidiary is redeveloping a 94-acre Queens waterfront site. A private developer will build the first residential parcel, financed by outside lenders, with our subsidiary named as the initial mortgagee even though it has no beneficial interest in the loan. Is recording that mortgage -- and its later assignment to the real lender -- exempt from mortgage recording tax?
Exempt, while UDC or its subsidiary QWDC remains the named mortgagee. This is the origin advisory opinion for the Hunters Point (Queens West) Waterfront Development project -- a 94-acre East River red…
Who owed Texas minimum rental tax after fleet refinancing, and could one entity use another entity's retired vehicles as deductions?
Refinancing the existing fleet did not itself trigger minimum rental tax. But for newly titled vehicles, only the title owner could use retired vehicles titled to that same entity as deductions, and t…
Does a clean room used to make the protective garments worn in semiconductor fabrication qualify for Texas's semiconductor fabrication clean room sales tax exemption?
No. The Comptroller held that the 'semiconductor fabrication clean room' exemption (created by Senate Bill 640) only covers clean rooms used to manufacture an actual semiconductor product — a clean ro…
If my business charges landfill, garbage, or pallet companies a fee just to accept pallets and scrap materials at my facility (which I then use as raw material), do I owe sales tax on that fee?
No. The Comptroller ruled that a fee charged simply to accept pallets and related materials delivered by landfill, garbage, and pallet companies — without collecting the waste from the customer — is n…
Will Texas accept the Multistate Tax Commission's Uniform Sales & Use Tax Multi-Jurisdiction Certificate as a valid Texas resale certificate?
Not as submitted. The Comptroller's office reviewed a proposed Multi-Jurisdiction Sales & Use Tax Exemption Certificate and identified four problems that would need to be fixed before Texas could acce…
Does a law firm that performs background investigations for its clients have to charge sales tax like a licensed private investigator would?
No, not merely by doing background investigations for clients. Legal services are not on the list of taxable services, so attorneys don't collect sales tax on their legal fees — they're instead treate…
Is a New York investment-advisory subsidiary of a foreign 'bank' that is principally engaged in investment management (not deposits/lending) taxable under Article 32 as a banking corporation, or under Article 9-A?
Article 9-A. A corporation is a banking corporation under section 1452(a)(9) only if its foreign parent is itself a banking corporation -- and a corporation is 'doing a banking business' only if it is…
If a company hires contractors to clean up PCB contamination at its facility, does it owe sales tax on the site inspection, soil removal, decontamination cleaning, and waste-hauling charges?
It depends on the specific service. Site inspection and removal/replacement of contaminated soil are nontaxable services. Decontamination cleaning of the real property itself (like the compressor stat…
Are water trucks used to control lime dust at a limestone processing facility, as mandated by the State of Texas, exempt from tax because they're used for pollution control?
No exemption. The Comptroller ruled that if the water trucks are designed to transport persons or property on the highway, they are motor vehicles subject to motor vehicle tax (not sales tax), so sale…
Does a manufacturer owe sales tax when it sells hydrogen embrittlement test bars to plating companies, who use the bars to certify the quality of their plating tanks?
No exemption. The Comptroller ruled that hydrogen embrittlement test bars sold to plating companies for use in certifying the quality of their plating tanks do not qualify for the Rule 3.300 manufactu…
If my litigation support business produces trial exhibits like scale models, graphs, photographs, or videotapes for an attorney, do I have to charge Texas sales tax?
Yes, for the exhibits. The Comptroller ruled that separately stated consulting services are not taxable, but producing exhibits such as scale models, graphs, photographs, videotapes, maps, and charts …
Is a pre-employment background screening service (criminal, education, driving, and credit checks) taxable in Texas?
Yes. The Comptroller ruled that a company using on-line databases to run pre-employment screenings — pulling credit reports, criminal and civil records, education verification, and driver's license in…
Is equipment used in mining or quarrying (like screening equipment, shaker screens, front end loaders, sand screws, and gravel water pumps) exempt from Texas sales tax under the manufacturing exemption?
It depends on when the equipment is used relative to when processing (crushing/grinding) begins. Screening equipment, shaker screens, and sand screws are taxable if used before crushing or grinding st…
Was a fee paid directly to a licensed vehicle lease facilitator subject to Texas motor vehicle sales tax?
No, under the described structure. The dealer sold the vehicle directly to the banking-institution lessor, and the facilitator acted only as the lessor's agent. Tax applied to the total consideration …
Do refrigerated sandwich/pizza prep units and refrigerated worktop/undercounter units used in a restaurant qualify for Texas's manufacturing machinery and equipment sales tax exemption?
No. The Comptroller ruled that refrigerated sandwich/pizza preparation units and refrigerated worktop/undercounter units do not qualify as exempt manufacturing machinery and equipment. These units are…
Can an outside accountant who prepares a client's sales tax reports for a fee be held personally liable for the client's unpaid sales tax under Texas's responsible-person rule?
No. The Comptroller's office explained that personal liability under Section 111.016 of the Texas Tax Code for "control or supervision" of the accounting, collection, or payment of tax generally exten…
Did a lessee's residual-value obligation or purchase option turn the vehicle leases into conditional sales?
No. Requiring the lessee to act as sales agent or cover a minimum resale amount was not the same as requiring the lessee to buy the vehicle. One lease also gave an option to purchase, but the letter s…
Does an indoor golf-simulator business have to charge Utah sales tax on time or per-round charges to use the machines?
Yes. Charges for using golf simulation equipment — whether billed by the quarter-hour or by the round — are taxable as admission/user fees for a recreation or amusement activity. The billing method (t…
Are fees that bowling leagues pay for use of bowling lanes subject to Utah sales tax, or are they exempt like country club membership dues or facility rental?
Yes, fees bowling leagues pay for the use of bowling lanes remain subject to Utah sales tax as taxable admission or user fees — whether paid by an individual bowler or collected by a league on behalf …
Is electricity used at a restaurant chain's central commissary/kitchen exempt from sales tax if the food leaving the commissary isn't yet ready to eat?
No. The Comptroller ruled that the electricity used at the commissary is taxable. Even though the commissary only partially prepares the food before sending it to the restaurants to finish, the restau…
Do I have to charge Texas sales tax when I sell to an out-of-state government agency, college, university, or school district?
Generally yes for out-of-state government agencies — Texas doesn't exempt other states' governmental agencies unless a border state (like Louisiana or Oklahoma) has a reciprocal exemption agreement wi…
If I have a contract to improve realty for a tax-exempt entity (like a city), can I buy telecommunications/telephone services for the job site tax-free?
Not automatically. The Comptroller said telecommunications services aren't considered integral to improving realty, but a contractor can still give an exemption certificate for telecom services used a…
Does a trade show exhibit contractor have to charge sales tax on storage, transportation, installation, design/construction, supplies, and refurbishing services for client-owned exhibits and displays?
It depends on the service. Storage, transportation, handling/removal charges, and installation (electrical drop) charges for client-owned exhibits are not taxable unless tied to a sale or lease of the…
Is a contractor's charge for repairing or remodeling a warehouse for a movie production company exempt under Texas's manufacturing exemption?
No. The Comptroller advised that the repair or remodeling of the warehouse is a taxable nonresidential repair and remodeling service. Even though the movie production company that rented the warehouse…
Is Connecticut sales or use tax owed on construction equipment and materials sold or rented for use on a Connecticut tribe's reservation — when sold to the tribe itself, and when sold to the non-Indian contractors building for the tribe?
It depends on WHO buys and WHERE title or delivery passes. Sales and rentals of construction equipment made DIRECTLY to the Connecticut tribe or its enrolled members are exempt (federal preemption, Co…
Is a consultant who uses handwriting analysis, body language, statement analysis, and human behavior analysis to evaluate individuals for jury profiling or employment screening providing a taxable service in Texas?
No, generally not. The Comptroller's office told this consultant that using a computer to prepare analysis reports for clients doesn't make the work taxable "data processing services," and the underly…
If a manufacturer's plant and equipment are destroyed by fire and it rebuilds on the same site, does the new replacement manufacturing equipment qualify for Utah's sales tax exemption for new or expanded operations?
No. The Tax Commission ruled that manufacturing equipment purchased to replace equipment destroyed by fire does NOT qualify for the new-or-expanded-operations sales tax exemption -- it's a normal oper…
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