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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Are storage fees paid at a public warehouse, charged per carton per day with no formal lease, gross rents that must be capitalized at eight times and included in the Article 9-A property factor?
Yes. Corporation A stores inventory in public warehouses, paying on a per-carton, per-day basis with no formal lease. Under 20 NYCRR 4-3.2, real property rented to a taxpayer is included in the proper…
Is renting carbon absorption units used to treat recovered ground water taxable, or is it a nontaxable remediation service?
It's a nontaxable service, not a taxable rental. The Comptroller ruled that although carbon absorption units are left on customers' premises to treat recovered ground water, the customers are not rent…
Is painting lettering on a store's windows a taxable service in Texas?
Yes. The Comptroller ruled that painting letters on a store's windows is taxable as nonresidential repair and remodeling of real property under Rule 3.357. The service provider must collect and remit …
Is a for-profit bookstore required to collect sales tax on Bibles and other scriptures published by a nonprofit religious organization?
No. Tax Code Section 151.312 exempts periodicals and writings published and distributed by a qualifying non-profit religious, charitable, historical, scientific, or similar organization. Because 'dist…
Is a customer-satisfaction survey consulting business's fee for developing surveys, analyzing data, and delivering findings reports subject to New York sales tax as an information service?
It's an information service, but it escapes tax under the personal-information exclusion -- as long as each client's report stays unique to that client's own facility and isn't substantially folded in…
Is a monthly fee paid for an out-of-state computer disaster recovery/backup facility subject to New York sales or use tax, when the backup equipment never comes to New York and no repair work is performed here?
No -- New York sales tax is a 'destination tax' keyed to where delivery or possession actually happens, and since the backup computer facility is located in Philadelphia (with no equipment delivered t…
Are telephone cooperatives exempt from Texas sales tax on construction materials, and must their contractors pay tax on those materials?
It depends on how the cooperative was formed. Telephone cooperatives generally do not qualify as tax-exempt entities under Tax Code Sections 151.309 or 151.310, so contractors building new lines for t…
Does the Texas pollution control or manufacturing exemption apply to air quality monitoring systems (instruments, analyzers, computers, software) sold to manufacturers?
No. The Comptroller ruled that air quality monitoring systems sold to manufacturers — including the hardware, replacement parts, repair labor, and software programming and modifications — do not quali…
Does vibration monitoring equipment used by petroleum manufacturers and electric utilities qualify for the Texas manufacturing exemption?
No. The Comptroller ruled that vibration monitoring equipment used by manufacturers of petroleum products and by electric utilities using fossil fuel turbines does not qualify for the manufacturing ex…
Is a sale-leaseback transaction, structured as a financing arrangement even though it's booked as a sale for financial-accounting purposes, subject to New York sales or use tax on the 'sale' and 'lease' payments?
No -- applying the traditional multi-factor test for whether a 'lease' is really a security device, the customer keeps effective ownership (risk of loss, insurance proceeds, maintenance duty, upside/d…
Is a company that monitors horse races at racetracks with its own personnel and equipment performing a taxable equipment rental or a nontaxable service?
It's a nontaxable service, not a taxable equipment rental. The Comptroller ruled that a company providing race monitoring services to racetracks — using its own personnel and equipment (cameras, monit…
Could a seller-financing dealer apply a blended tax factor below the full rate to a vehicle down payment?
No. The full historical tax rate applied to the down payment because it did not include interest or other nontaxable charges. A tax-computation factor could be applied to scheduled payments that did i…
Can a manufacturer buy raw materials tax-free in Texas if the processed goods are sold to a foreign buyer rather than resold domestically?
Yes. The Comptroller ruled that a manufacturer buying raw materials (here, horse pericardia) to be processed and resold can use the Tax Code Section 151.318(a)(1) manufacturing exemption even though t…
My four-partner partnership has owned a mixed residential/commercial building for 20 years, with each partner exclusively occupying one residential floor. We want to convert it into a two-unit condominium, with the residential floors becoming a cooperative corporation that issues each partner shares for the same floor they already live in. Does any of this trigger New York's Real Property Transfer Gains Tax?
No gains tax at any step, because every partner ended up with exactly what they already had. 115 Spring Street Company was a four-partner (25% each) partnership that had owned a five-story New York Ci…
Are membership dues paid to a golf and country club subject to New York sales tax as dues to a 'social or athletic club,' when the club's stockholders (not its members) actually control the organization and membership is open to the public?
No -- because members have no ownership stake or say in management (only the separate group of stockholders elects the board and controls decisions), and membership is unrestricted and open to the pub…
Does a weekly industry newsletter qualify as an exempt 'periodical' under New York sales tax law, and does it matter whether the publisher writes every article personally?
Yes -- a weekly fur-industry newsletter qualifies as an exempt periodical because it's published at least four times a year, has consistent title and content, is available to the public, doesn't amoun…
When a company sells substantially all of its business assets to a single buyer, do cash, life insurance contracts, corporate books/records, and partnership interests have to be included for the sale to qualify as an exempt occasional sale?
No — the Comptroller ruled that selling the entire operating assets of a business in a single transaction to a single purchaser qualifies as an exempt occasional sale even if the seller keeps back its…
For privacy reasons, we bought a Manhattan townhouse and adjacent lot through a nominee trust -- a bank trustee held bare legal title, but under a separate nominee agreement, I (the settlor) kept all the equitable ownership, all benefits and burdens, and the right to revoke the arrangement at any time. Privacy is no longer a concern, so I want to revoke the trust and nominee agreement and put legal title back in my own name. Does unwinding this nominee structure trigger New York's Real Estate Transfer Tax or Real Property Transfer Gains Tax?
Exempt -- the beneficial owner never actually changed. H. Christopher Whittle had purchased a Manhattan townhouse (4 East 79th Street) and an adjacent empty lot for $11.5 million through a nominee str…
How did PLR 94-4 tax a food-service company selling university meal plans as the school's agent?
The ruling treated unprepared food bought for board-plan meals as taxable retail purchases and treated separate meal or food sales as taxable retail sales. For shared inventory, the agent bought whole…
Is a document-shredding and destruction service taxable under Texas sales tax?
No — a document shredding/destruction service is not taxable under Texas sales tax when the essence of the transaction is destroying the documents, not hauling away trash. In this ruling, the shreddin…
Is a customer's exemption certificate valid if it claims Texas sales tax is illegal because U.S. currency isn't backed by gold or silver coin?
No. The Comptroller ruled this 'gold and silver coin' exemption certificate is invalid on its face, so the vendor could not accept it in good faith and must go back and collect the tax from the custom…
Does Texas sales tax apply to finance/interest charges if they aren't broken out separately from the item's price?
Yes, the tax was correctly assessed. Tex. Tax Code § 151.007(c)(4) excludes finance, carrying, service, and interest charges from taxable sales price, but only if they are separately identified to the…
When an employee claims more than 10 withholding allowances on a federal Form W-4 (submitted to the IRS as required) and does not file a separate New York Form IT-2104 because they want the same allowances for both federal and state withholding, must the employer send a copy of Form IT-2104 to the New York State Department of Taxation and Finance?
No. Under Reg. § 171.4(d)(1), an employer may accept a properly completed federal Form W-4 in place of Form IT-2104 when the employee wants the same number of allowances for both federal and New York …
How did RR 94-7 compute tobacco tax for promotional products, allowances, and early-payment discounts?
The ruling used the manufacturer's actual promotional price for packaged units, free-case bundles, and temporary price allowances. It calculated tax before any separate early-payment cash discount.
Who counted as an agent, promoter, or house representative barred from playing bingo under RR 94-6?
Promoters, employees, assisting contractors, volunteers, officers, and anyone empowered to act for the promoter or nonprofit could not play at that operation. An independent bus driver could play only…
Did RR 94-5 permit a retailer to pay a beer or wine wholesaler electronically after delivery?
No. Under the statute then in effect, beer or wine had to be paid for in cash, by bona fide check, or by money order before or at delivery. The proposed end-of-day electronic debit occurred too late.
Did RR 94-4 treat malt coolers as beer under South Carolina's producer-and-wholesaler rules?
Yes, if the malt cooler contained no more than 5% alcohol by weight. The ruling treated a stronger malt cooler as alcoholic liquor instead, outside the cited beer-producer and wholesaler provision.
If I bought my health club membership in Texas but moved out of state, do I still owe Texas sales tax on my dues?
Yes, as long as your membership contract is with the original Texas facility — Texas tax remains due on the dues even after you move away and start using an affiliated out-of-state club. To stop owing…
We're a state public authority, exempt from the Supplemental Petroleum Business Tax. Our electric utility shows a separate line item on our bill for the Supplemental Petroleum Business Tax it paid on the fuel it used to generate our electricity. Since we're tax-exempt, can we get a refund of that amount?
No refund. The Suffolk County Water Authority, a New York State public authority exempt from the Supplemental Petroleum Business Tax under Tax Law § 13-a, purchased electricity from Long Island Lighti…
Does the Texas manufacturing exemption cover disinfectants and cleaning chemicals used by a food/meat processor?
It depends what the chemicals clean. Disinfectants and cleaning solutions used to sanitize product-contact surfaces of processing equipment qualify for the Texas manufacturing exemption because they a…
Is laser surveying used to determine blast burden on a rockface in a quarry or mine a taxable real property service in Texas?
No — the Comptroller ruled that laser surveying used only to determine burden on a rockface for planning explosive blasts is not taxable surveying. Under 34 Tex. Admin. Code Rule 3.356(a)(9), taxable …
Is plastic Visiqueen carpet protection, laid over rented trade-show carpet and later discarded, taxable to the rental company or purchasable tax-free for resale?
The Visiqueen plastic sheeting is considered sold to the customer as part of the carpet rental. Because of that, the rental company may purchase the Visiqueen tax-free from its suppliers by issuing a …
Does an escort referral service have to collect and pay Texas sales tax on its referral fees?
Yes — the Comptroller ruled that an escort referral service's fees are taxable. Escort services fall under Group 721, Major Group 72 of the Standard Industrial Classification Manual, which Tex. Tax Co…
If New York's Department of Taxation and Finance has a tax warrant filed against a debtor and is properly notified of a sheriff's sale of that debtor's real estate under CPLR § 5236(c), does the Department's tax lien survive the sale if it never delivers its own execution to the sheriff beforehand?
No. Under CPLR § 5236(e), a judgment creditor - including the Department with a docketed tax warrant - who was duly notified of the sheriff's sale but did not deliver its own execution to the sheriff …
If Walk In Medical Care, Inc. classifies a part-time physician as an independent contractor for federal income tax purposes under the Section 530 safe harbor, does New York State recognize that safe harbor, and what are Petitioner's New York reporting and withholding obligations if the worker would otherwise be an employee for New York personal income tax purposes?
It depends on whether Petitioner actually qualifies for the federal Section 530 safe harbor, a factual question the Department did not decide in this opinion. But as a legal matter, New York does not …
Is sales tax due on tickets to a college football game when a for-profit promoter helps run the event and shares in the revenue?
No — the Comptroller ruled the ticket sales were not subject to sales tax. Because the universities' own students played in the game, the contract disclaimed any partnership or joint venture, and the …
If a pay-phone servicer charges one flat monthly fee that covers both coin collection and minor incidental repairs, is any part of that fee subject to Texas sales tax?
Yes, the repair portion is taxable. Cleaning, replacing parts, and clearing coin jams are taxable repair/maintenance services under Tex. Tax Code § 151.0101(a)(5). Separately stated charges for coin c…
Is a finance/interest charge excluded from Texas sales tax if it isn't broken out separately on the contract or invoice?
No — the tax was correctly assessed. Tex. Tax Code § 151.007(c)(4) excludes finance, carrying, and service charges (and interest) from the taxable sales price only if they are separately identified to…
Does machinery and equipment used to remediate groundwater already contaminated by decades-old waste disposal qualify for the manufacturing waste-treatment exemption from sales and use tax?
No -- the waste-treatment exemption only covers equipment that treats waste materials AS PART OF an ongoing manufacturing process to prevent pollution in the first place; equipment built to pump and p…
Can a 501(c)(3) organization that runs a regular retail store still hold two tax-free sale days a year, and how must it document them?
Yes — a qualified 501(c)(3) organization may designate any two days a year as tax-free sale or auction days, even if it also holds a Texas sales tax permit and sells taxable items regularly through a …
Is 'moss rock' or rip-rap rock sold in its natural state for landscaping subject to Texas sales tax?
No — moss rock and rip-rap sold in the natural, unprocessed condition they are found in are not subject to Texas sales tax. The Comptroller has treated unprocessed sand, dirt, gravel, and rock as exem…
Does Texas sales tax apply to motor vehicle repairs or replacement vehicles paid for with insurance claim settlement money?
Yes for parts and for a replacement vehicle, no for labor. There is no special sales tax exemption for motor vehicle repairs or replacements paid via an insurance claim settlement or salvage title pro…
Is a warehouse discount-club membership fee (like Sam's Club) subject to sales tax, and if so, at which county's tax rate, and to which county should the tax be remitted -- the county where the membership was purchased, or the county where the club warehouse is located?
Yes, the membership fee is taxable as a prepayment for merchandise -- and the applicable rate and destination county are determined by where the discount club's own warehouse is located (or the specif…
Is a coronary atherectomy catheter, used to excise and retrieve plaque from diseased arteries, taxable in Texas?
Yes — the coronary atherectomy system, a disposable catheter device used to excise and retrieve plaque from diseased coronary arteries, is taxable. The Comptroller pointed to Rule 3.284 (Drugs, Medici…
What does 'industrial solid waste' mean under Texas Rule 3.356?
Industrial solid waste, as used in Rule 3.356, means waste products resulting from the actual manufacturing process, such as sawdust from lumber mills or slag from a steel manufacturing process. It do…
Can a company that monitors house arrest units buy its telephone lines tax-free for resale, since the phone service is resold as part of its monitoring service?
No. Electronic monitoring of a person as a condition of probation, parole, mandatory supervision, or bail is a nontaxable service, so the company cannot issue a resale certificate for the telephone li…
Is labor to repair storm/water damage to a parking lot taxed as new construction or as taxable repair, and is contract labor for real property repair taxable?
Repairs made to this taxpayer's damaged parking lot before October 1, 1993 qualified as nontaxable 'new construction' labor. But that casualty-damage exemption was replaced by Tax Code Section 151.350…
Does a doctor's prescription to clean air ducts for allergy relief make the cleaning service exempt from Texas sales tax?
No — a doctor's written prescription recommending air duct cleaning to relieve allergic reactions does not exempt the service from Texas sales tax. The Comptroller ruled that air duct cleaning is a ta…
Is Texas sales tax due on printed book covers that a business buys and then donates to public schools?
No — buying taxable items (like printed book covers) that will be donated to a public school, with no use by the buyer, is exempt from Texas sales tax under Tex. Tax Code § 151.155(b), as long as an e…
Are annual membership fees for a public pistol range, and separate fees for its firearm safety course, subject to New York sales and use tax?
No -- because membership is open to the public, members have no ownership stake or management control, and the range hosts no social activities, it isn't a taxable 'social or athletic club,' and a fir…
If a utility company accepts a predominant-use energy study in good faith and issues an exemption, can the Comptroller still challenge that study on audit?
Yes. Under Rule 3.295(e)(3), neither the Comptroller's review nor the utility company's good-faith acceptance of an exemption certificate confirms that the underlying utility study is accurate. The st…
If a commercial landlord separately bills tenants for chilled and heated water (air conditioning and heating), does the landlord owe Texas sales tax as if selling utilities?
No — the Comptroller ruled that separately stated chilled/heated water (AC and heating) charges billed by a commercial landlord to its office tenants are not taxable. Because the landlord rents the re…
Is the charge a recycling business collects to receive asphalt shingles hauled in by others subject to Texas sales tax?
No — the charge a recycling business collects from a hauler to receive asphalt shingles for processing into usable products is not subject to Texas sales tax. However, the hauler who pays that receivi…
For Article 9-A, can a corporation's loan to a partnership be classified as investment capital, with the interest treated as investment income?
No. Friendly Home Parties, a New York S corporation, made a $3.5 million demand loan to a partnership (owned by individuals who hold 70% of the corporation) and receives 7% interest, taking back an in…
Are a mandatory condominium association's dues, which fund both a swimming pool/tennis courts and ordinary building maintenance, fully subject to sales tax as social/athletic club dues?
Yes, as originally issued -- because membership is mandatory, sold as a single non-optional unit, and the association provides a swimming pool and tennis courts, the ENTIRE assessment paid by unit own…
Is the sale and installation of a residential direct-broadcast satellite receiving system a tax-exempt capital improvement, or is it a taxable sale of tangible personal property?
It's split -- the underground wiring and the concrete-based support pole ARE tax-exempt capital improvements, but the microwave antenna/dish itself keeps its identity as tangible personal property (it…
Is a service that finds a judgment debtor's attachable assets for a creditor a taxable credit-reporting or private-investigation service in Connecticut?
No, on both counts. A company that searches by phone and computer to locate a judgment debtor's attachable assets for a judgment creditor — and just delivers a written asset report — is NOT providing …
Does the electricity used in a newspaper's prepress-operations building qualify for Connecticut's manufacturing/fabrication utility exemption?
No. The electricity used in the building that houses a newspaper's PREPRESS operations (advertising, composing, art, camera, editorial, darkroom, classifieds) does NOT qualify for the utility exemptio…
Is teleconferencing/audio conferencing a taxable telecommunications service in Texas, and can a provider buy long-distance calls or equipment tax free?
Teleconferencing is a taxable Texas telecommunications service, but interstate (out-of-Texas) long-distance charges are exempt from Texas sales tax. A call is only taxable if it both originates from a…
When a contractor or repair/remodeling firm uses consumable supplies on a job, who owes Texas sales tax on those supplies — and does it matter if the job is for a tax-exempt organization?
It depends on the customer. If the contract is for an improvement to realty for an organization exempt under Tax Code Section 151.309 or 151.310, the contractor can buy consumable supplies tax-free (v…
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