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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Must an out-of-state seller that also has New York stores collect NY sales tax on goods it ships by common carrier from out-of-state warehouses to New York customers?
Yes. A company that maintains offices and retail stores in New York must collect New York State and local sales and use tax on merchandise it sells and ships to New York customers by common carrier fr…
Can condominium associations claim a 'prior contract' exemption from a city's reimposed 1% local sales tax on their natural gas and electricity purchases?
No. The Comptroller ruled that there is no prior-contract exemption from a city's reimposed local sales tax on residential natural gas and electricity purchases. The city had repealed its own tax on r…
Did Texas require a tax-free rental vehicle to be used exclusively for rental or require records of non-rental use?
No. A vehicle acquired tax-free for rental did not have to be used exclusively for rental, and Texas motor vehicle tax rules did not require records documenting non-rental use. But the minimum tax est…
Are unredeemed coupon revenue, exhibitor car-pass charges, and game revenue at a nonprofit state fair subject to Texas sales tax?
Split ruling on three issues. (1) Coupon revenue for unredeemed fair coupons is not taxable when the coupon is sold, but tax is triggered when the coupons are actually redeemed for food or an amusemen…
Is a merchant's returned/bad-check fee taxable, and does the answer change when the debt is turned over to an outside collection agency?
Split ruling based on who performs the work: a merchant's own returned/bad-check fee is not taxable when the merchant handles the collection in-house. But once an outside collection agency is involved…
Is a motor vehicle exempt from sales tax as an orthopedically-handicapped vehicle if it was purchased before the buyer's disability occurred and later modified for handicapped use?
No. The Comptroller denied the refund because the truck was purchased October 1, 1991, before the physician's statement (dated March 19, 1992) and hand-brake installation (dated April 14, 1992) establ…
When gas sold through a common-carrier pipeline changes hands at an in-state meter point but is ultimately delivered out of state, is the sale subject to Texas sales tax, and what documentation is needed to prove any exemption?
It depends on who the buyer is, not on where the gas ends up. If title passes in Texas to a broker or reseller (or to an out-of-state utility/reseller) who will resell the gas, the sale can be tax-fre…
For sales before September 1991, were a firm's custom software, stock-pricing service, and trade-confirmation reports subject to New York sales tax?
It depends on the item. For the audit period (Sept. 1, 1988 to Aug. 31, 1991): custom software written for one customer's specific computer environment was treated as intangible property, so its sale …
Does Texas's prescription-drug sales tax exemption apply to drugs sold in Louisiana to individuals covered by Texas Worker's Compensation insurance?
No -- Texas's prescription drug exemption does not apply. The Comptroller ruled that when prescription drugs are sold in Louisiana to Louisiana residents (even if they are covered by Texas Worker's Co…
When a landlord buys electricity and gas for an office building and bills tenants (including a nonprofit tenant) for their pro-rata share as part of the lease, is that utility purchase taxable to the landlord?
Yes. The landlord's purchase of natural gas and electricity for the leased office building is a taxable commercial use, because the utilities are an expense of the landlord's business of leasing offic…
Which oil-spill pad recycling, site assessment, and soil remediation charges were taxable in Texas?
Cleaning absorbent pads and booms and selling new or used pads were taxable. Proprietary site assessments and soil remediation were not, while reusable or public-source information could be taxable in…
Does Utah sales/use tax apply to natural gas sold and delivered through a pipeline with title passing in Utah, when the gas goes to a reseller, an out-of-state end user, or a utility company?
It depends on who buys the gas. A sale to a broker for resale is exempt (with a resale exemption certificate). A sale to a local distribution/utility company is also exempt as a resale, even though ti…
If a lump-sum contractor tells customers in writing that the contract price 'includes sales and use tax' instead of separately stating the tax, has the contractor erroneously collected tax on the entire contract amount that must now be remitted as error tax?
No -- merely telling customers in writing that the lump-sum price 'includes sales and use tax' (instead of separately stating a tax amount) is not, by itself, erroneous collection of tax on the whole …
Is a charge for cremating a deceased pet and disposing of or returning the ashes according to the owner's instructions subject to Texas sales tax?
No. The Comptroller ruled that charging pet owners to cremate a deceased animal -- and then returning the ashes, disposing of them, or following other owner instructions -- is a non-taxable animal fun…
Are materials used to build a railroad loading and containment facility exempt from Texas sales and use tax as railroad track materials?
Split answer: materials actually incorporated into the railroad track itself (rails, cross ties, etc.) qualify for exemption from Texas sales and use tax. But materials used to build the loading and c…
Is a breakage/scratch protection guarantee for eyeglasses (and the reduced-fee replacement it provides) taxable under Texas sales tax, and does it matter whether the eyewear is prescription or non-prescription or who sells it?
Split answer that depends on two facts, not one. Repairs and reduced-fee replacements under the breakage protection guarantee are tax-exempt when the eyewear is prescription, as long as the seller kee…
How is Texas sales/use tax applied to three separate vendor invoices: a used scale and scale house, a new water well drilling job, and converting an existing tank into a silo?
Three separate answers for three separate invoices. The used scale and scale house is taxable tangible personal property (being bolted to a concrete slab does not make it realty). The water well drill…
Is a corporate wellness program's health screening, fitness instruction, and re-evaluation/monitoring services subject to Texas sales tax?
No -- the charge for the wellness program's services (health risk appraisal/screening, wellness information and instruction, and re-evaluation/monitoring) is not subject to Texas sales tax. However, a…
How did Texas Letter Ruling 9205L1169C06 tax refinishing labor for residential built-ins, nonresidential built-ins, and free-standing appliances?
Labor on residential built-in improvements was nontaxable. Labor on nonresidential built-ins and on free-standing appliances, furniture, or other tangible personal property was taxable. Residential ma…
Can a trash-removal company buy the containers it rents to customers tax-free as a purchase for resale?
No. A trash-removal company cannot buy its trash containers exempt as a purchase for resale, even when it separately states a container rental charge on the customer's bill. Under Tax Law § 1105(a) an…
Was a mandatory charitable Christmas-tree sponsorship taxable when the sponsor received possession of a decorated tree for three weeks?
Yes. The payment was mandatory to receive the tree, and the sponsor received value commensurate with the payment through three weeks of possession. The Comptroller treated the arrangement as a taxable…
When was a dealership's environmental fee on a Texas motor-vehicle repair order taxable under Letter Ruling 9205L1167G09?
The fee followed the underlying charge. A fee based on nontaxable motor-vehicle repair labor was nontaxable; a fee based on taxable materials was taxable; and a fee calculated from the combined materi…
Could a nonexempt club use the Knights of Columbus sales-tax exemption to buy equipment for facilities used by the Knights, and could it avoid tax on items bought for resale?
The club could not claim an exemption for its own purchases because it was not exempt. But the Knights of Columbus could buy qualifying equipment tax-free with its own funds, and the club could act as…
Were ultralight flight instruction and aircraft-repair labor taxable under Texas Letter Ruling 9205L1167B13?
Actual flight instruction conducted under FAA Part 61 or Part 141 was not taxable, and labor to repair an ultralight aircraft was exempt. A noninstructional pilot flight that went nowhere was taxable …
Are a company's charges for letting a medical practice use its leased MRI machine a taxable rental of equipment, or a nontaxable service?
Yes — the charges are a taxable rental of equipment. Where a company subleases an MRI system to a professional corporation (PC) and the PC's own technicians operate the machine and direct its use — wh…
Did a riding mower qualify for Texas' agricultural sales-tax exemption when it was used in pastures and in a garden?
No on the facts described. Mowing pasture weeds for production could qualify, but aesthetic mowing and mowing nonproduction areas did not. Garden use qualified only if the food was sold in the regular…
Were labor charges for cleaning up a crude-oil spill taxable when the spill might be an industrial discharge regulated by the Texas Water Commission?
Potentially no, but only conditionally. If the Texas Water Commission confirmed the crude spill was a regulated industrial discharge, the provider could accept an exemption certificate for collecting …
When did a plant-turnaround charge remain nontaxable real-property maintenance despite including some taxable repairs?
Scheduled periodic work on operating improvements was maintenance. If repairs and other taxable services were 5% or less of an individual lump-sum charge, that charge remained nontaxable. Significant …
Did a fertilizer manufacturer's converted spreader truck qualify for Texas's farm-machine vehicle tax exemption despite highway travel?
Yes. The vehicle would be converted into a spreader truck, loaded with fertilizer, driven to farms or ranches, and used off-road to spread fertilizer over the land. It met the farm-machine definition,…
Were separately stated oil-and-gas well gauging and pumping-service charges taxable under Texas Letter Ruling 9204L1166D11?
Gauging was not taxable when it consisted of reading well-production information and reporting the results. Pumping services were taxable because adjusting well instruments that affected production wa…
Were a pressure washer and air compressor exempt farm-maintenance equipment when they were also used on highway vehicles and well casing?
No. Maintenance equipment qualified only if used exclusively on exempt farm equipment. Using the washer on highway vehicles and the compressor on well casing, an improvement to realty, meant both purc…
The Niagara Falls Bridge Commission plans to issue bonds to finance improvements to and maintenance of the highway bridges it operates across the Niagara River. Will interest paid to individual bondholders be subject to New York State and New York City personal income tax?
No. The interest is exempt from both New York State and New York City personal income tax, because the Commission is neither another state's political subdivision nor a federal instrumentality - it's …
Which parts of a gas pipeline are tax-exempt 'materials used directly in the furnishing of gas,' and is building the pipeline a taxable service?
Partly exempt. An interstate gas-pipeline company bought the components of a new Connecticut pipeline. DRS split them: the PIPE and the VALVE ASSEMBLIES and CONNECTORS are 'materials used directly in …
Is managing the redevelopment of a vacant office complex into a leased multi-tenant property a taxable service in Connecticut?
Yes, taxable. A property-management company was hired to oversee turning a vacant office complex into a fully occupied, multi-tenant property -- developing a master plan, hiring the architect and cont…
Are an investment advisory firm's consulting fees subject to Connecticut sales tax, and does it matter whose investments the advice concerns?
It depends on whose investments the advice is really about. An investment advisory company asked whether its investment-consulting fees are subject to Connecticut sales and use tax. DRS held: (a) NOT …
Is a qualified REIT subsidiary a separate corporation for Connecticut corporation business tax, or is it merged into the REIT?
Both, in a sense. A qualified REIT subsidiary -- a wholly-owned subsidiary of a real estate investment trust that federal law disregards as a separate corporation under 26 U.S.C. § 856(i) -- is STILL …
Could an electric cooperative formed under Article 1528(b) buy taxable items for its own use without paying Texas sales or use tax?
Yes, if it was formed under the Electric Cooperative Corporation Act, Article 1528(b). Such a cooperative was exempt on taxable items bought for its own use and could give vendors properly completed e…
Could a commercial-property tenant obtain a sales-tax refund for natural gas bought by its landlord and passed through at cost?
No for the period at issue. The property owner was the gas purchaser and used it in connection with commercially leasing the property. The tenant's manufacturing activity and reimbursement of the land…
Is installing a synthetic-turf putting green on real property a nontaxable capital improvement, or a taxable installation service?
It's a nontaxable capital improvement — with a catch. Installing a permanent synthetic-turf putting green on real property qualifies as a capital improvement under Tax Law §§ 1105(c)(3) and 1101(b)(9)…
Does the reduced residential sales-tax rate on energy apply to a homeowners association's energy used to maintain development common areas?
No. The reduced residential sales-tax rate on energy sources and services under Tax Law § 1105-A does not apply to a homeowners association's charges for energy used to maintain the development's comm…
Is number 2 heating oil used only for heating a taxable 'petroleum product' under Connecticut's petroleum products gross earnings tax?
Not taxable as a petroleum product. A petroleum refiner/distributor sold NUMBER 2 HEATING OIL (ASTM Specification D396-69) to a customer that used it only to HEAT things -- the interior of its commerc…
Was a customized, computer-generated diet plan taxable when an independent dealer collected the questionnaire and fee and the diet company sent materials to the client?
Yes. The Comptroller said the custom diet was taxable to the clients. The independent dealer had to collect the tax and report and remit it on quarterly returns.
How did Texas tax soil decontamination, disposal, hauling, and backfill sales by a facility treating petroleum-contaminated soil?
Decontaminating the soil was nontaxable regardless of reimbursement. Disposing of soil after treatment was taxable waste removal; hauling untreated soil could be nontaxable if it was a regulated indus…
Was electricity for condominium common areas exempt as residential use when about 30 of 114 units were rented to the public, usually for fewer than 30 days?
No. Short-term rentals made the common areas serve both residential and commercial use, so the electricity was taxable and the refund was denied. An exemption could apply to separately metered residen…
Did an FDIC or RTC property manager inherit the federal entity's Texas sales-tax exemption, and did a financial institution's tax debt disappear after takeover?
No on both points. A private manager did not become tax-exempt merely by working for FDIC or RTC, though a written purchasing-agency arrangement could change the purchase result. A financial instituti…
How far back could a manufacturer seek a Texas utility-tax exemption refund under the 1991 Rule 3.295 amendments?
Up to four years from the request date. The amendments restored exemptions for manufacturing-area lighting, heating, and cooling retroactive to August 3, 1987, but the four-year limitations period pre…
Was a professionally performed fireworks display a taxable sale of fireworks, and could the provider buy the fireworks tax-free for resale?
No. The display was a nontaxable service because the customer received neither title nor possession of the fireworks. The provider consumed the fireworks and supplies and owed tax when buying them. Vi…
Was a corporation's transfer of equipment to a new limited partnership for a 99% interest exempt as a joint-ownership transfer?
Only if the corporation retained a joint or undivided interest in the equipment after transfer and had paid tax when it acquired the property. If limited-partnership law prevented that ownership, the …
Was a third party's electronic transmission of audio or audiovisual commercials to broadcasting stations subject to Texas sales tax?
It depended on where the transmission originated. The Comptroller classified the transmission as a telecommunications service: a Texas-origin transmission was taxable, while one originating outside Te…
Were the listed cake and cookie decorations taxable as candy under Texas Letter Ruling 9204L1164F10?
No. Although candy was generally taxable, the Comptroller treated confections used exclusively for cooking as nontaxable. Every listed decoration—including nonpareils, crystals, toppers, mixes, candy-…
How were swabbing, pressure testing, paraffin removal, and casing repair taxed when performed with an acidizing job?
The acidizing job was subject to the 2.42% oil-well-service tax, so the related services were not taxed again under limited sales tax. Without acidizing, the total charge would have been sales-taxable…
Could a bicycle prescribed for rehabilitation after knee surgery qualify for Texas' therapeutic-device sales-tax exemption?
Yes. Reversing its earlier answer, the Comptroller said the bicycle could qualify if the buyer gave the seller a doctor's prescription or letter that stated the medical problem and explained how the b…
Which outboard motors were subject to South Carolina's historical casual excise tax under Revenue Ruling 92-2?
Motors of five horsepower or more were taxable because they had to be titled. Motors below five horsepower were not taxable because no title, registration, or license was required, even if the owner v…
How could a farm credit bank claim its Texas sales-tax exemption on tangible personal property purchases?
The bank had to give the seller a completed exemption certificate; a bank letter was not enough. The certificate had to cite 12 U.S.C. § 2023, describe the items, and be signed and dated.
Could invoices support an export certificate, and did parts installed on a vehicle before it was driven to Mexico remain tax-exempt exports?
Invoices qualified only if broker-signed, identified on the certificate, and naming the buyer. The submitted invoices failed. Parts installed and used in Texas before the vehicle went to Mexico lost t…
Did an aggregator reselling discounted 800-number long-distance usage have to collect Texas state and local sales tax?
Yes. The aggregator sold long-distance telecommunications service and had to collect Texas sales tax on calls originating in Texas and billed to a Texas telephone number, billing address, or service a…
Is a corporation that filed a 'final' return and stopped operating, but was never formally dissolved, still subject to Article 9-A franchise tax for the years it remained incorporated?
Yes -- it owes franchise tax for all those years. Vi-Toria Building Corp. filed a 'final' return for 1980, stopped collecting rents, signing leases, and paying bills, and the owner's heir managed the …
Is microfilming blueprints and reports required for building permits a nontaxable capital improvement, or a taxable sale of tangible personal property?
It's taxable. Microfilming blueprints, applications, and inspection reports for architects, engineers, and developers is a sale of tangible personal property subject to sales tax under Tax Law § 1105(…
Are charges for writing one-page abstracts that summarize conference speeches subject to New York sales tax?
No — the abstract-writing isn't taxable. One-page abstracts summarizing the speeches and papers from a client's conferences are 'manuscripts,' which count as intangible personal property, so receipts …
How did Texas tax coupons, clothing alterations, delivery, property installation and repair, and janitorial services?
Tax applied after either coupon discount; clothing alterations, taxable-goods delivery, seller-connected installation, repairs, and janitorial services were taxable. Independent third-party installati…
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