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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When could federal real-property contractors buy incorporated materials without Texas tax after the 1991 House Bill 11 changes?
Only through qualifying prior-contract relief, a separated new-construction contract, or otherwise taxable nonresidential repair or remodeling. Equipment and ordinary consumables remained taxable to t…
What documentation made a municipal construction contract separated, and did a Texas city need to issue exemption certificates with progress payments?
The signed separated contract itself proved sales of incorporated materials to the exempt municipality, so no municipal exemption certificate was required. Unit-price bid documents needed binding tax …
Which farm and ranch software programs qualified for Texas's agricultural sales-tax exemption?
Five listed livestock and meat-management programs were exempt when bought by original producers for their own products. Bookkeeping, recordkeeping, accounting, mixed-use programs, and sales to nonpro…
Did natural-gas and electric-service contracts qualify for prior-contract protection from Texas tax-rate increases when they passed tax changes to customers?
No. The pass-through clause shifted tax increases to customers, defeating prior-contract relief under Rule 3.319(c)(3), and any rate increase made the agreements new contracts under Rule 3.319(c)(2).
Is a medical-records storage-and-retrieval subscription service a taxable information service or a taxable storage service in New York?
It's taxable — as a storage service, not an information service. Immediate Medical Records' subscription service (organizing, computer-storing, and on request transmitting a client's medical records t…
Is a telephone sales-lead generation service a taxable information service in New York, and does handing over written lead reports change that?
No. Alan/Anthony's telephone sales-solicitation service — calling potential buyers with a client-approved script to generate qualified sales leads and reporting them to the client in writing — is not …
If a corporation with deferred installment-sale gain on New York real estate transfers the remaining notes to an affiliate before the gain is fully recognized, must it accelerate the deferred gain into New York entire net income right away?
Likely yes for the actual corporation, but the Department can't pre-commit in an advisory opinion. Corporation X sold New York City real property in 1982 on an installment basis with no gain recognize…
For New York's corporate payroll-factor computation, are payments to independent corporate sales representatives (rather than employees) excluded from both the numerator and denominator of the payroll factor?
Yes. The taxpayer, an out-of-state apparel designer/distributor, sold through three independent corporate sales representatives whose own employees (salespersons) worked in New York and nearby states,…
Does a manufacturer's radiographic weld-inspection system qualify for Utah's manufacturing sales tax exemption?
Yes. The Utah State Tax Commission ruled that a propane tank manufacturer's radiographic inspection system — used to X-ray weld seams so the company could certify 100% of its welds, use thinner (cheap…
If a company bills customers a single monthly 'terminal rental' charge that covers a leased computer terminal, software, and a financial-data feed, is the whole charge taxable, or only the equipment-rental part?
The whole bundled charge is taxable. Leasing a computer terminal and software is a taxable rental of tangible personal property under Utah Code Section 59-12-103(1)(k). Receiving financial data or inf…
When a resort sells a single bundled vacation package price covering a hotel room, meals, airfare, car rental, ski passes, and other activities, how do sales tax, transient room tax, and the tourism tax apply?
Even when a resort charges one flat package price or daily rate, each component is taxed as if it were sold separately -- the innkeeper's internal records must reasonably allocate the price among the …
Were club memberships tax exempt when a university paid for memberships issued in individual employees' names?
No. Employees were not exempt entities merely because they worked for the university, and university payment did not turn individual memberships into sales to the university. A membership issued direc…
Which archery-club dues, range fees, tournament entry fees, admissions, prizes, and concession sales were taxable in Texas?
Club dues and range fees were taxable. Genuine competition entry fees could be nontaxable when they substantially exceeded ordinary range use or were paid only to compete; admissions, concessions, and…
Were unused private-club food, beverage, and liquor minimum charges subject to Texas sales tax?
Unused food and beverage minimums were taxable for nonprofit Section 501(c)(7) clubs from October 1, 1991, and for-profit clubs from October 1, 1987. Liquor minimums subject to alcoholic-beverage gros…
How did Texas tax floor-covering installation, materials, tools, and labor for remodeling, new construction, and residential jobs?
Nonresidential floor-covering remodeling was taxable on the total materials-and-labor charge. New construction, unfinished pre-occupancy buildings, residences, and new additions followed contractor ru…
Are individualized investment-evaluation and consulting reports a firm prepares for pension plan sponsors and money managers taxable information services?
No. SEI's investment-evaluation and consulting services for pension plan sponsors and money managers are not taxable. The reports it prepares — Investment Policy Planning, Asset Allocation, Investment…
Is asbestos removal taxable in New York when it is done as part of a capital improvement, such as reinsulating pipes and boilers?
No — not on these facts. Asbestos removal by itself is a taxable service (maintaining/repairing real property under Tax Law § 1105(c)(5)). But when the removal is a constituent part of a capital impro…
When an out-of-state seller drop-ships goods to a New York third party at an out-of-state customer's request, must the seller collect New York sales tax, and on what amount?
Yes. When Crescent Metal Products, an Ohio manufacturer registered as a New York vendor, drop-ships goods to a third party in New York at the request of its out-of-state customer, it must collect New …
Must a large housing cooperative collect New York sales tax on the fees it charges tenant-shareholders for parking spaces and garages?
Yes. United Veterans Mutual Housing Company, an 850-apartment cooperative in Queens, must collect New York sales tax on the fees it charges for parking spaces and garages. Providing parking, garaging,…
What Texas state and local sales taxes applied when hotel guests called a Richardson provider for information or call-connection services?
Texas callers buying information owed state tax, Richardson city tax, and any applicable caller-location local taxes, capped at 8.25%. Connecting a caller to a local number was telecommunications serv…
Did packaging, unpacking material, and broken pallets count as industrial solid waste for the nontaxable-removal treatment in Rule 3.356?
No. The Comptroller said shipping refuse such as packing and unpacking materials and broken pallets was not industrial solid waste because it did not result from the actual manufacturing or processing…
How did Texas tax replacement-building construction and the demolition, removal, testing, cleanup, and replacement of underground fuel tanks?
Replacement-building labor was nontaxable new construction. For tank work, excavation and soil testing were nontaxable; hauling away the tank and ordinary soil was taxable waste removal; contaminated …
What portion of vending-machine receipts did Texas require the operator to report for candy, drinks, juice, cookies, and snack foods?
The operator had to report tax on 100% of receipts from candy, sodas, and juice that was not 100% pure fruit juice. It reported tax on 50% of receipts from cookies, granola bars, snack mix, peanuts, c…
Was excavating and reinforcing an existing factory foundation for new heavy equipment treated as new construction or taxable remodeling?
It was remodeling, not new construction, because the work upgraded an existing structure. Since the work was performed under a lump-sum contract, the Comptroller said the total charge was taxable.
Did the City of Dallas have to collect sales or use tax on a floodplain-reclassification application and permit fee?
No. The $750-to-$1,400 city application and permit fee was not a sale of tangible personal property or a taxable service, so it was not subject to Texas sales or use tax.
Were property-tax research, mortgage analysis, tax-return preparation, and electronic filing services taxable in Texas?
Property-tax research was taxable information service, except a separately stated pass-through of the actual public-record cost. Tax-return preparation was not taxable, but a separately stated electro…
Which accounting-software setup, consulting, support, and data-conversion charges were taxable in Texas?
When the provider sold the software, related accounting setup, organizational advice, supplemental instructions, and technical troubleshooting were taxable. Extracting and transferring customer, vendo…
Was a telephone company's purchase of local-exchange access exempt when it resold the telecommunications service to final customers?
Yes, if the purchasing telephone company resold the service and gave a valid resale certificate. The final consumer owed tax on the total service charge, including access; mixed-use purchasers could n…
Could a pallet seller accept an exemption certificate when manufacturers bought wooden pallets to ship their manufactured products?
Yes. A manufacturer could give the seller an exemption certificate for pallets used to ship its manufactured products, including pallets sent directly to a third-party distribution center. The exempti…
Were live telephone-answering charges taxable when provided to both in-house executive-suite clients and off-site telephone clients?
Yes. The Comptroller said all charges for providing answering services were subject to Texas sales tax, regardless of where in Texas the customer was located.
Can a Texas vehicle-accessory installer refund sales tax when installed parts leave Texas in a vehicle driven to Mexico?
No. Parts and materials installed on a vehicle in Texas were used in Texas before export, so driving the vehicle to Mexico afterward—even with customs-broker proof—did not qualify the sale for an expo…
Did a funeral-service provider owe Texas sales tax on separately stated burial-container installation and service fees?
No. Separately stated installation and other service charges from a burial-container supplier were not taxable, while the separately stated container price was taxable. If a service company billed one…
Did a general nonprofit service organization's sales-tax exemption cover its Texas motor vehicle purchase?
No. The 1992 letter said the organization's limited-sales-tax exemption for office supplies and equipment did not extend to motor vehicles, and donating the purchased vehicle did not change the tax. A…
Was a parking-garage manager or the county owner ultimately responsible for sales tax collected under their management agreement?
The county was ultimately responsible on the reviewed contract. Although the manager collected, calculated, and reported parking tax, it deposited the receipts daily with the county treasurer, so the …
Did an out-of-state supplier need a Texas sales-tax permit when its food broker took grocery-store orders in Texas?
Not if the broker took orders only for exempt food. If it took orders for taxable food or other taxable property, the broker gave the out-of-state supplier Texas representation, requiring a permit and…
Were in-place underground-tank abandonment, testing, contaminated-waste removal, and restoration of surrounding improvements taxable in Texas?
Filling and permanently plugging the tank was nontaxable demolition, and laboratory testing and site assessment were nontaxable. Contaminated-fluid and dirt removal could be supported by an exemption …
Was a five-year truck sale-leaseback treated as a taxable vehicle sale or a financing arrangement?
It was treated as financing, not a taxable motor vehicle sale. The financial institution could take title for security with the stated affidavit language and no tax at registration. When the trucks we…
Which purchases, dues, meals, events, booth charges, mailing lists, advertising, and fundraisers of a nonprofit chamber of commerce were taxable?
Qualifying chamber purchases and dues were exempt. Chamber-paid meeting lunches were exempt but member-paid lunches were taxable; booth space and newsletter advertising were nontaxable; mailing lists …
How did Texas tax sales, rentals, and real-property installation of movable prefabricated buildings with or without axles and wheels?
Movable units built with frames, axles, and tires were motor vehicles even after wheel removal if reasonably movable. Units built without axles or wheels were tangible personal property; when the manu…
What proof did an audited retailer need to show that sales tax had already been assessed in the purchaser's audit?
The retailer had to prove the purchaser's audit assessed tax on the same transactions. For a sample-and-projection audit, it had to show the same period and transaction type were sampled and tax was a…
Was electricity used to excavate a large drainage tunnel exempt as electricity used in mining or transporting material extracted from the earth?
No. Digging the drainage tunnel was contractor work, not mining. Electricity was a taxable consumable supply, and the federal-project exemption covered only materials actually incorporated into the im…
Were store-window display, prop-rental, flower-arrangement, installation, and design charges taxable in Texas?
The total invoice was taxable when the provider transferred rented props or other tangible personal property, including separately stated installation and related service charges. Design and decoratin…
Were passenger-train tickets taxable when the train only transported riders between two cities and offered no sightseeing or amusement?
No. The train provided transportation only, which was not taxable. The ticket seller could recover tax previously collected and remitted only after refunding it to the customer or giving credit to a c…
When were charges to sell or install software updates taxable, including installation of a third-party update?
Selling and installing an update were both taxable, even if separately stated. Installing a third-party update was taxable when the installer had sold the underlying program, because it modified the i…
How did Texas tax French drains, drainage-system construction and repair, regrading, and unprocessed gravel or soil used in the work?
New drainage construction and residential repair followed contractor rules; nonresidential repair was taxable on the full charge. Regrading and adding soil to correct drainage were taxable landscaping…
Did a single purchase of gas plants, gathering systems, vehicles, equipment, contracts, and related operating assets qualify as an exempt occasional sale?
Yes. Each seller transferred the entire operating assets of an identifiable business segment, and the segment's income, expenses, and assets were separately ascertainable from its books and records, s…
Were a doll guild's membership dues, public show admissions, and vendor display-space charges taxable?
The answer depended on the guild's status. Membership dues were exempt if it was a hobby club or qualified under Rule 3.298(g)(1). Public show admission was taxable if the guild was for-profit or not …
Were a nonprofit shooting club's membership dues, match entry fees, spectator admissions, and exempt-entity range fees taxable?
Membership dues and required assessments became taxable October 1, 1991 because the club provided a shooting range. Qualifying competitor entry fees were not taxable, spectator admissions were taxable…
Did the 1991 Texas tax change make fraternity and sorority membership fees and dues taxable?
No. Although the legislation removed the amusement-service exemption for nonprofit organizations such as country clubs, dues and membership fees paid by members of fraternities, sororities, and simila…
Were unprocessed rock, dirt, sand, gravel, and similar materials taxable when used in a contract combining new construction and landscaping?
Materials incorporated through taxable landscaping were taxable as part of that service, while materials incorporated through new construction were not taxable to the customer. If one lump-sum materia…
How did Texas tax new sprinkler systems, residential and commercial repairs, and unprocessed materials used in the work?
New construction and residential repair followed contractor rules; nonresidential sprinkler repair was taxable on the full charge. The correction clarified that unprocessed material transferred throug…
How did Texas tax monitoring wells, underground-tank removal and replacement, contaminated waste, soil work, testing, and cleanup equipment?
New wells and replacement tanks were new construction; existing-well repairs were taxable. Tank excavation was nontaxable demolition, but hauling, storing, and disposing of the old tank was taxable. Q…
How did Texas tax combined telephone-answering and secretarial-service charges?
Telephone answering was taxable, while ordinary secretarial service was not unless it was another taxable service such as word processing. One combined monthly charge was fully taxable when answering …
Did the amendment to Texas Tax Code § 151.3101 make sports league fees or spectator admissions taxable?
No. The letter said neither league fees paid by individuals or teams to participate in games nor admission paid by individual spectators was taxable for the requesting organization.
Were Texas local recording agents' separately authorized client-service fees subject to sales or use tax?
No. Fees authorized by Senate Bill 324 for services outside the agents' insurance-company commissions were not taxable. The agent still had to pay tax on taxable property or services purchased for the…
Were lumbar cushions and cervical pillows taxable when sold to health-care providers or prescribed individuals?
They were taxable when sold to hospitals, clinics, nursing homes, physicians, and other health-care providers for their use, but exempt as therapeutic devices when sold to an individual under a doctor…
Which Texas utility uses qualified for exemption, and how did a taxpayer support a predominant-use claim?
Residential and specified noncommercial uses were exempt, including qualifying agricultural, manufacturing, processing, mining, and drilling use. Utilities used to provide data processing or other tax…
Was a voluntary one-dollar charitable donation added to a restaurant guest check part of the taxable meal price?
No. The Comptroller said the donation was not taxable consideration for the meal when the customer voluntarily selected it, the guest check separately stated it as a charitable donation, and the resta…
Were a country club's initiation fees and monthly dues exempt when its amusement services were provided exclusively in a Recorded Texas Historic Landmark?
Yes. Although amusement services of Section 501(c)(7) organizations had become taxable, the Comptroller said the historic-landmark exclusion still applied when the country club provided those services…
Was an air-purifying system sold to an allergy patient exempt from Texas sales tax when prescribed?
Yes. The Comptroller treated the air purifier as a therapeutic device and said its sale was exempt when made to an individual under a written prescription from a licensed healing-arts practitioner.
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