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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Was an extended warranty for repairs to a residential heating and air-conditioning system subject to Texas sales tax?
No. Texas said the residential real-property repair warranty and repair labor were not taxable, while the warrantor or third-party repairer owed tax on the applicable parts, supplies, materials, and e…
Was an approximately $50 fee to use a Galveston bungee-jump concession subject to Texas sales tax?
Yes. The Comptroller treated the per-jump charge as a taxable admission to an amusement service, comparable to taxable admission fees for a golf course or tennis court.
Were an investigator's unarmed process-serving and document-delivery charges taxable Texas security services?
No. The Comptroller treated unarmed service of subpoenas and legal notices and unarmed document delivery as nontaxable unrelated services because the work did not require a private-investigator or sec…
Could a Texas rental or leasing company use vehicles retired more than 18 months earlier for the fair-market-value deduction?
No. The agency applied an 18-month policy requiring the retired vehicle to be offered for sale and claimed against a replacement purchase within 18 months. The appended internal memo acknowledged that…
Were the Texas Workers' Compensation Commission's charges for medical fee guidelines, blank forms, rules, and agenda packets subject to sales tax?
No. The Comptroller treated those governmental publications and documents as exempt. STAR now warns that the cited Rule 3.341 was repealed in 2008 and its content moved to Rule 3.322(h)(5) in 2011.
How did Texas tax telecopy, telex, translation, and person-delivered voice-message services between Texas and the Soviet Union?
Translation and person-delivered message charges were not taxable. Long-distance telecopy and telex charges were taxable only when the service originated in Texas and was billed to a Texas telephone n…
If the Tax Department issues a tax levy against 'Mr. X individually and as an officer of ABC, Inc.' for the corporation's unpaid taxes, can the bank apply the levy against the corporation's own bank account, or only against Mr. X's personal account?
Only the individual's account. ABC, Inc. failed to pay sales taxes it owed, so the Commissioner issued a tax warrant and then a tax levy naming 'Mr. X individually and as an officer of ABC, Inc.' and …
Were customer damage repairs, equipment inspections, and freight charges connected with sold or rented equipment taxable in Texas?
Repair services and parts billed to a customer for damaged rental equipment were taxable; inspection-only charges were not. Freight on equipment sold or rented to customers was taxable whether provide…
Was a charge for underground-storage-tank vapor analysis and a confidential leak-detection report subject to Texas sales tax?
No. The report and sample-analysis charge was not taxable, but the provider had to pay sales tax on the tubes, equipment, and other tangible property used to perform the service.
Could an elevator maintenance contract tax only the percentage allocated to repairs and exclude scheduled maintenance and inspection?
Yes. Texas accepted a 72% nontaxable maintenance-and-inspection and 28% taxable repair allocation if credible job-history evidence supported it and both contracting parties agreed, with state and loca…
Was a $25 introductory airplane flight taxable as instruction or as an amusement service?
It depended on the flight. A documented flight conducted as part of an FAA Part 61 or Part 141 instruction course was not taxable; a noninstructional sightseeing or enjoyment flight returning the ride…
Are on-line financial news services delivered to subscribers on computer screens exempt newspapers or periodicals, or a taxable information service?
Taxable information service, not an exempt newspaper or periodical. The petitioner's client published four on-line financial newsletters delivered to subscribers as text on computer screens (via Teler…
Was leasing a permanently affixed above-ground storage tank larger than 500 barrels subject to Texas sales tax?
Generally no, because Texas treated it as real property. But the lease was taxable if its terms made clear that the tank remained tangible personal property, regardless of size.
For a railroad's charter excursions, is the transportation taxable, who pays tax on bundled event tickets, and what local rate applies to souvenirs and food sold on a moving train?
The Department answered three questions for a railroad running charter excursion trains. (1) Charter excursion fares — including tickets bundling rail transportation with admission to events like spor…
How did Texas tax towable dollies, jeeps, stingers, auxiliary axles, and converter gears beginning September 1, 1991?
Texas moved these items into the trailer and semitrailer definitions. In-state purchases and rentals became subject to motor vehicle tax, while units used interstate by interstate motor carriers becam…
Could an exempt religious college buy basic local telephone service for student rooms tax-free when included in room and board?
No. The service did not relate to the college's exempt purpose. The college could pay tax and include it in room rent, or buy for resale, separately charge students, and collect tax.
How did Texas tax towable dollies, jeeps, stingers, auxiliary axles, and converter gears beginning September 1, 1991?
Texas moved them into the trailer and semitrailer definitions, subjecting in-state purchases and rentals to motor vehicle tax and interstate-carrier units to IMC tax instead of limited sales tax.
Could a Texas purchaser use wholly electronic purchase orders to claim resale, exemption, or direct-payment treatment?
Not by themselves. A traditional signed resale or exemption certificate had to remain on file with the seller; later written or electronic purchase orders could claim the exemption by referring to tha…
What documents could a Texas purchaser use to prove that multiple items were exported to its Mexican maquiladora?
Texas required specific export proof. The letter identified U.S. Customs certifications, a Mexican Pedimento de Importaciones with detailed supporting manifests or invoices, and a properly completed M…
Were medical case-management and rehabilitation-consulting services supplied to insurance companies taxable in Texas?
Yes. The provider's calls, meetings, medical and vocational assessments, appointment coordination, reports, and recommendations qualified as insurance investigation and claims adjustment or processing…
When did a crude-oil operator have to report and remit severance tax as oil moved from a lease into a pipeline or storage facility?
The operator had to remit tax on oil removed from the lease and report itself as purchaser. Oil piped only to on-lease storage was not reported until it left the lease, but commingled oil from multipl…
When a home-party hostess redeems earned credits for a direct-sales company's merchandise, is that a taxable sale even though no cash changes hands?
Yes, it is a taxable sale. Petra Fashions ran home merchandise parties and, as an incentive to host, gave hostesses credits redeemable only for its own line of merchandise. The Department held that tr…
Can a New York vendor keep computer-readable tapes instead of paper cash-register tapes to satisfy its sales tax recordkeeping duties?
Yes. A vendor may keep computer-readable tapes as an alternative to paper cash-register tapes to satisfy its sales tax recordkeeping duties under Tax Law § 1135(a)(1) and 20 NYCRR § 533.2(f)(1), provi…
Did Texas-based independent salespeople require an out-of-state seller to collect tax, and what resale or exemption documents could the seller accept?
Yes. Commissioned independent salespeople created Texas business activity, requiring a permit and tax collection or valid certificates. A permit copy was not a certificate; Texas required separate res…
Could a taxable security-service provider buy customer-controlled equipment for resale when the customer could keep it free or buy it for $1 after the contract?
Yes. Under the 1991 letter, equipment transferred to the customer's care, custody, and control as an integral part of taxable security service could be bought with a resale certificate under either pl…
How did Texas sales tax apply when a contractor filed a damaged-freight claim and transferred the damaged item to the carrier?
Treatment depended on whether the contractor was a seller or consumer. A seller generally excluded tax from the claim if the carrier resold the item. A consumer included previously paid tax in the cla…
Could a property manager make tax-free purchases for assets held in FDIC receivership without registering as an FDIC agent?
Yes, registration with the Comptroller was unnecessary, but the manager needed a written FDIC agency agreement and proof that FDIC held title to the property. With those records, the manager could iss…
What documentation could a service provider accept before stopping sales-tax collection from a manager acting for the RTC?
A completed, signed exemption certificate was enough to protect the service provider if accepted in good faith. The manager could sign as RTC's agent and assert the agency relationship; the manager, n…
Did a customer still owe sales tax on catalog jewelry that was returned but lost in transit before the retailer received it?
Yes. A sale occurred between the customer and the retailer, and the lost return shipment did not erase the tax debt. Under Texas Tax Code § 151.052(a)(1), sales tax was part of the sales price and rem…
Were a sports league's team entry fees and $10 player passes taxable as amusement services or sales of tangible personal property?
No. The $400 team charge was a nontaxable entry fee under Rule 3.298(c), and the $10 pass bought association membership and participation rights—not property or admission to an amusement. The operator…
Was sales tax due up front on all payments under a financing lease even if the lease was later terminated and the equipment sold?
Yes. The contract was a financing lease, so tax applied to the full sales price—including all lease payments—when possession began or the first payment came due, whichever was earlier. Termination, re…
Did a nonprofit trade association have to collect Texas sales tax on correspondence-course tuition or the course binder, test, and certificate?
Tuition or enrollment was not taxable. A separately stated materials charge—including shipping and handling—was taxable, and the association could buy participant materials for resale. If materials we…
Was the Dallas/Fort Worth International Airport Facility Improvement Corporation exempt from Texas sales tax as a political subdivision?
No. After reviewing its articles of incorporation, the Comptroller concluded that FIC was not a political subdivision and denied the sales-tax exemption. The corporation could reapply if it later obta…
Did SC Revenue Ruling 91-11 allow bingo players to cover every even or odd number, or every number sharing a drawn ball's final digit?
No. A single randomly selected ball could not authorize players to cover every number with the same ending digit, and a random selection could not authorize covering every even or odd number. The hist…
Was a Texas seller still responsible for sales tax when its customer refused both to pay $288.83 in tax and to provide a resale certificate?
Yes. The seller had to collect and remit the tax. Under § 151.052, tax became part of the sales price and a legally recoverable debt owed by the purchaser. The seller could also correct an invoice and…
My corporation and two related partnerships (with overlapping but not identical family ownership) plan to swap parcels of undeveloped land, with cash making up any difference in value. Does this land swap trigger New York's Real Property Transfer Gains Tax, and does the mere-change-of-identity exemption help since the same family owns pieces of all three entities?
The exchange is a taxable transfer on both sides (each party is a transferor of what it gives up), but each side gets a PARTIAL mere-change-of-identity exemption to the extent the exchange doesn't act…
Did a vehicle brought into Texas owe motor vehicle use tax or the historical new-resident tax?
It depended on whether the owner qualified as a new resident. The 1991 letter said an out-of-state purchase generally incurred 6% use tax, with credit for another state's vehicle tax, but a vehicle al…
Could a nonprofit corporation sell its own books, magazines, newsletters, and other writings without Texas sales tax?
Only if it qualified under the nonprofit-writings exemption and was not an educational organization. Rule 3.299 specifically excluded schools, colleges, universities, and similar institutions systemat…
Did a railroad's electronic load-cell scale qualify for the Texas exemption for supplies essential to operating trains?
The Comptroller could not decide from the submitted facts. The railroad had to show how the load cells were attached to the bridge and identify the federal or state rule requiring railcars to be weigh…
Was a lessor's reimbursement charge for personal property tax on leased equipment subject to Texas sales tax?
Not when the property-tax reimbursement was separately stated from the equipment lease price. If it was included in the lease price, sales tax applied to the entire charge. The Comptroller pointed to …
Who had to collect and report Texas state and local sales tax on retail sales made by a Utah network-marketing company's independent distributors?
The direct-sales organization, CORP A, was responsible under Rule 3.286(a)(3). Tax reporting depended on whether distributors took customer orders before buying from CORP A or stocked products first, …
Were electricity and natural gas exempt when used to manufacture equipment the company retained and used to provide services to hotels and motels?
No. Utilities used to make equipment for the company's own service activity were taxable commercial use. Direct manufacturing utilities could qualify only for equipment sold, leased, or rented as tang…
Could change orders separate equipment sales from partially completed lump-sum real-property construction contracts for Texas sales-tax purposes?
Yes, if both parties agreed, the addendum separated every equipment purchase, delivery, and installation component, and the equipment invoices became part of the contract by reference. Contractors cou…
Did an auto dealer have to collect Texas sales tax when recovering, filtering, returning, or adding refrigerant during an air-conditioner repair?
Only if the dealer charged for the refrigerant. With no refrigerant charge, the procedure was treated as nontaxable motor-vehicle repair. A charge for refrigerant was taxable whether the gas was new o…
Are an art advisor's consulting and support services taxable in New York, and when do they become taxable interior decorating and designing services?
It depends on what the art advisor actually does. Pure consulting — advising a client whether to buy particular works of art for their investment potential, or advising on framing/restoration without …
If a trucking company taxed under Article 9 (not Article 9-A) makes an S corporation distribution to its sole shareholder from the accumulated adjustments account, can the shareholder deduct that distribution on their New York personal income tax return?
No deduction is available. Petitioner is the sole shareholder of a federal S corporation trucking company taxed under Article 9 (sections 183 and 184) rather than Article 9-A. For franchise tax purpos…
Were charges for customer-controlled computer hardware and on-site or off-site computer data storage taxable in Texas?
Yes. Giving customers total operational control of computer hardware was a taxable rental, and both online and offline computer data storage were taxable data-processing services.
Are a city impound lot's charges for towing, storage, notification letters, and DMV searches subject to New York sales tax, even though the operator is a government body?
Yes — the entire charge is taxable. Operating an auto pound is operating a place of business that provides storage of motor vehicles, which Tax Law § 1105(c)(6) taxes. The fact that the City of Roches…
Did Texas require out-of-state circuses and other itinerant vendors operating in the state to register and collect sales tax?
Yes. Texas said itinerant vendors, including out-of-state circuses, had to obtain sales-tax permits and collect tax under Rules 3.374 and 3.424.
Who had to collect Texas tax under a software rent-to-own agreement that let the customer stop paying and return the software?
The software developer did. The agreement was an operating lease, so the developer had to collect sales or use tax on each lease payment as rental income was recognized.
Was a paper-mill capacity project entirely new construction, or did replacing and upgrading existing equipment count as remodeling?
It was both. Adding a new electrical room was new construction, but additions, deletions, and replacements to existing equipment were remodeling under Rule 3.357.
What documentation did a retailer need to sell tax-free to a property manager acting for the FDIC or RTC?
The retailer could accept an exemption certificate alone. The manager had to retain proof of FDIC/RTC title and its written purchasing authority for audit.
Could a retailer accept an FDIC or RTC property manager's exemption certificate without receiving separate ownership and agency documents?
Yes. The manager kept the ownership and agency records for audit, while the retailer could accept the certificate and issue a refund based on it alone.
Could a retailer accept an exemption certificate from a property manager buying for the FDIC or RTC without receiving the title and agency documents?
Yes. The manager or FDIC/RTC could sign the certificate, while the manager kept title-transfer and agency documents for audit instead of giving them to the retailer.
How did Texas distinguish a true vehicle lease with a purchase option from a conditional sale?
A standard lease with an optional purchase was treated as a lease followed by a taxable purchase when the option was exercised. A must-purchase clause or transfer below fair market value made the agre…
Did a cable company have to refund Texas sales tax when a customer canceled before a prepaid service period ended?
No. The company was not required to refund the tax, but if it chose to do so it also had to refund the unused service fee and follow Rule 3.325.
Could an FDIC or RTC property manager issue an exemption certificate without giving the retailer its title and agency records?
Yes. If the manager retained those records for audit, it could issue the certificate; a retailer accepting a proper certificate in good faith was relieved of tax liability.
Can a fireworks company buy pyrotechnic materials tax-free for resale when it uses them to put on a fireworks display for a customer?
No — the materials aren't bought for resale, because the company is selling a service, not the fireworks. Under its standard contract, Bay Fireworks furnishes a 'fireworks exhibition' — providing all …
What tire and short-term vehicle-rental tax changes took effect in Kansas on July 1, 1991?
Effective July 1, 1991, House Bill 2407 broadened the $0.50 tire excise tax to more highway vehicles and to tires mounted on new vehicles at first retail sale. Senate Bill 14 imposed a 3.5% excise tax…
When were sales and delivery of dirt, sand, gravel, equipment, and construction services taxable in Texas?
Unprocessed dirt, sand, or gravel and their delivery were not taxable. Processed materials, equipment rentals, and taxable services were taxed with related delivery charges.
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