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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Were fees for taking game animals and receiving guide services on private Texas acreage taxable?
No. Texas treated the animal fee as payment for a private-land right, or profit a prendre, and Rule 3.298 specifically exempted hunting and fishing guide services.
Were catered meals and soft drinks sold to students during the regular Texas school day taxable?
No. Meals, food products, and soft drinks sold at school during the regular school day were exempt, but after-hours sales such as a fundraising supper were taxable.
Was the full $15 Dial 976 charge for merchandise taxable when part was retained as a marketing fee?
Yes. Texas taxed the full $15 selling price without deducting the seller's $5 marketing fee, supplier payment, service fee, or other expenses.
Which Texas taxes applied to residential gas and electricity, and how did a mixed-use meter qualify for exemption?
Residential use was exempt from state and specified local taxes, subject to some city exceptions; a mixed-use meter required an engineer-certified predominant-use study.
Was an independent private cogeneration power producer subject to Connecticut's utility company tax merely because electricity was its principal business?
No, provided it was not a public service company, a public-service holding company or subsidiary, a subsidiary of a holding company controlling a public service company, or a former public service com…
Was electricity used for aquaculture and drip-irrigation research exempt from Texas sales tax in this 1990 ruling?
No. Texas treated the research electricity and gas as commercial use because the taxpayer was neither manufacturing goods for sale nor conducting qualifying farm-or-ranch agriculture.
Was a Texas sightseeing tour exempt if it combined registered historic landmarks with other locations?
No. A multi-location tour was fully taxable if it included any place outside the statutory historic-site categories; tours exclusively of qualifying landmarks were exempt.
Did a publisher owe tax on printing and other services used to make free college telephone directories?
Yes. Because it gave the directories to schools rather than selling them, the publisher owed tax on purchased printing, photography, illustration, and similar services.
Could cash insurance proceeds for a stolen vehicle reduce the taxable price of its replacement?
No. A cash payment from the insurer could not be deducted from the replacement vehicle's purchase price. The letter's example taxed the full $20,000 price of a new vehicle regardless of the amount rec…
Were consumable overhead materials used by a contractor on a federal real-property contract exempt when title passed to the government?
No. Rule 3.291 taxed overhead supplies used on federal contracts unless incorporated into the realty, despite the contract's title-passage clause.
Did this 1990 Texas internal memo conclusively exempt feedlot grain-mixing equipment?
No definitive conclusion appears. One passage calls exclusive feedlot mixing equipment exempt, while later notes record conflicting views on whether bought ingredients made the activity taxable proces…
Were single-use drums and containers used for exempt hazardous-waste disposal exempt from Texas sales tax?
No. The disposal service was exempt, but the provider consumed the drums after manufacturing ended, so the containers remained taxable and did not qualify as pollution-control manufacturing materials.
What Texas tax exemptions applied to the Boy Scouts National Council and individual branches or troops?
The National Council had a 501(c)(3) sales-tax exemption, while all branches and troops had educational-organization exemptions covering sales, hotel, and motor-vehicle taxes.
Our company is buying substantially all the assets of a bankrupt railroad, with the sale authorized by the federal bankruptcy court, and financing part of the purchase with a note secured by a mortgage to the Federal Railroad Administration acting as trustee for the United States. Does the asset conveyance owe Real Estate Transfer Tax, and does the mortgage owe Mortgage Recording Tax?
Both exempt. D & H Corporation, an indirect subsidiary of Canadian Pacific Limited, purchased substantially all the assets of the bankrupt Delaware and Hudson Railway Company pursuant to a sale author…
Was a service that photographed personal property and maintained descriptive records for possible insurance claims taxable in Texas?
Yes. The photography charge was taxable, and storing and maintaining the records was taxable data processing; qualifying production inputs could be exempt or bought for resale.
Were a debt collector's fees and the attorney fees it incurred to collect overdue accounts taxable in Texas?
The debt collector's compensation was taxable, but attorney services were not taxable debt collection when the attorney fees were separately stated from other charges.
Could automobile dealers and repairmen buy vehicle glazes tax-free in Texas?
Yes when the glaze was physically incorporated into a vehicle before the dealer's sale or by a repairman under a separated contract, supported by a resale certificate.
Which parts of a computer communication system for hearing-impaired users were exempt from Texas sales tax?
Prescribed adaptive software and telephone-communication peripherals were exempt, but general-purpose computers, screens, printers, and modems remained taxable.
When was electricity for rodeos, livestock auctions, salt-water disposal, water flooding, and exempt organizations exempt from Texas sales tax?
The result depended on the purchaser and use: qualifying exempt organizations and water-flood production qualified, while auction-barn power generally did not.
Were parts and labor used to repair leased marine cargo containers in Texas subject to sales tax?
No. Parts and labor were exempt because the containers were components of qualifying commercial vessels and were used exclusively in interstate and international commerce.
Could an air-show service provider buy souvenir programs tax-free when it supplied them at no direct charge to exempt sponsors or military bases?
No. Exempt sponsors did not exempt the provider's inputs; resale treatment required a separately stated sale, while qualifying direct out-of-state delivery was exempt.
Was a 4% municipal franchise fee included in the taxable sales price of electricity in Texas?
Yes. The entire fee was a utility business expense included in the taxable electricity sales price, whether embedded in the rate or separately billed to customers.
Were improvements made by a private lessor for a federal agency's leased office exempt from Texas sales tax?
Yes. The tailored, required improvements were for the federal agency's primary use and benefit, allowing qualifying materials and services to be purchased for resale.
Did a publisher owe Texas tax when it licensed a hotel-advertising software database to an airline for no charge?
No. The no-charge license created no collection duty; if the publisher later charged, the airline could buy for resale while continuing to tax its software sales or leases to travel agents.
Our bank needs to reclassify all our non-voting preferred stock into voting common stock to satisfy new federal regulatory capital requirements. After the reclassification, the group of former preferred stockholders as a whole will end up owning more than 50% of our voting stock, even though no single stockholder crosses that line and none of us are acting together as a group. Does this trigger New York's controlling-interest transfer tax or gains tax rules?
Not taxable. CrossLand Savings, FSB needed to reclassify its Series A and Series B Preferred Stock into voting Common Stock to satisfy new federal regulatory capital requirements imposed by FIRREA. Af…
Is a cash-processing and armored-car money service taxable, and does bundling the charges make all of it taxable?
The armored-car transport is taxable; the cash-room processing is not — but bundling them into one price makes the whole charge taxable. Paul J. Carucci asked about a client that moves a customer's mo…
Were amine and the products used to clean recycled amine exempt in a Texas natural-gas processing plant?
Amine was exempt because it directly purified gas held for sale, but filter elements, carbon, and defoamers used only to clean the amine were taxable.
Was restoring sludge-collection ponds exempt because the Texas Water Commission required the environmental work?
No. Texas treated pond cleaning as taxable restoration of nonresidential real property, not garbage removal; only regular employee wages for in-house work were untaxed.
A developer builds subdivision roads it must later deed to the town — are the construction materials exempt from sales tax?
Taxable — unless the land is already owned by the exempt municipality when the materials go in. The Michaels Group, a residential developer, must build subdivision roads and, as a condition of subdivi…
Can an IDA developer's construction company buy materials and rent equipment tax-free as the IDA's subagent?
In principle yes, but this taxpayer couldn't prove it. Farash Corporation, Max Farash's wholly owned construction company, built IDA-financed facilities (Corporate Place) that the County of Monroe Ind…
Is installing dry-cleaning equipment in leased space a tax-free capital improvement, and can a contractor accept a capital-improvement certificate after already billing tax?
It is taxable, not a capital improvement — but a good-faith certificate within 90 days still shifts the liability. Allied Steam Corp. installed dry-cleaning equipment (bolted to the floor and piped in…
Were pecan-cracking services and sales of smoked turkeys subject to Texas sales tax?
Pecan cracking was not taxable. Smoked turkeys were not taxable unless sold ready for immediate consumption, and resale certificates could apply to resale purchases.
A store buys dog food from a veterinarian to resell — can it claim a credit for the sales tax shown on the vet's invoice?
No — the store cannot claim that credit. J. Leon Lascoff & Son, Inc., a pharmacy, buys dog food from a veterinarian to resell at retail; the veterinarian just passes along a copy of its own supplier's…
Are feeding pumps and tubes prosthetic aids or taxable medical supplies, and must an out-of-state mail-order seller collect New York tax?
The products are medical equipment/supplies (not fully exempt prosthetic aids), and the out-of-state seller must collect New York tax. Biosearch Medical Products, Inc., a New Jersey company, mail-orde…
How did Texas tax lump-sum installation of burglar bars on residential and nonresidential buildings?
Burglar bars were real-property improvements. Residential or new-construction lump sums were not taxed to the customer, but existing nonresidential installations were fully taxable.
Which tax applied when a private-club member failed to meet a required food-and-beverage spending minimum?
Amounts actually spent on food and beverages were subject to sales and use tax. But when a member spent less than the required monthly or quarterly minimum and had to pay the shortfall, that differenc…
Which aircraft and automobile upholstery labor was taxable in Texas, and what was required for a refund?
Initial upholstery and most reupholstery were taxable, but aircraft reupholstery and motor-vehicle repair or restoration labor were exempt; collected tax had to be refunded to customers first.
How did Connecticut tax pharmaceutical sales to physicians, hospitals, nursing homes, clinics, and free drug samples?
Prescription drugs sold to physicians were exempt; nonprescription drugs were exempt only if listed in Conn. Gen. Stat. § 12-412(48). Federal and Connecticut government hospitals were exempt with a go…
Was rental of heaters and dehumidifiers exempt when the equipment was necessary to apply a coating to structural steel?
No. Temperature and humidity control did not create an exemption, and the letter said neither the federal-contractor facts nor manufacturing use exempted the rental.
Was electricity used to ripen produce exempt from Texas sales tax?
Electricity used to refrigerate produce during a controlled ripening process was exempt, but electricity for later storage, packing, offices, and other nonprocessing uses was not.
Is a digital-microwave-network company that leases dedicated data/voice circuits to businesses a taxable 'transmission corporation' under Article 9 sections 183 and 184, even though it isn't a licensed common carrier and can't connect directly to the public phone network?
Yes, once its receipts are principally from that business -- and it's also separately subject to the section 186-a telephone-service tax regardless. Interactive Media Services, Inc. operates a digital…
Is a corporation still liable for New York franchise tax and its shareholders liable as transferees, when the corporation was dissolved by proclamation in 1978 but kept a bank account, collected rents, and stayed listed as landlord on renewed leases for another decade before formally transferring the property?
Yes to both. Barshabe Realty Corp. was dissolved by proclamation on September 26, 1978, but its bank account (opened in 1972 for rent deposits) stayed open, and its tenant leases were continued and re…
Was labor to turn a motor vehicle brake rotor subject to Texas sales tax?
No. The 1990 letter treated labor to repair a motor vehicle or component such as a brake rotor as nontaxable. The repair business, however, had to pay tax to its supplier on the lathe and accessories …
How did Texas tax sold coupons and memberships that provided free video rentals?
A sold coupon was a nontaxable intangible right, but the retailer paid tax on printing and use tax on the tape's fair-market rental value during customer use.
Is selling and installing a steam boiler for a dry-cleaner in leased space a tax-free capital improvement?
No — the boiler's sale and installation are taxable, not a capital improvement. Allied Steam Corp. sold and installed a high-pressure steam boiler that supplies steam to a dry-cleaning operation in re…
When an ad agency buys a jingle, which parts of the demo, creative, and production fees are taxable, given that an original written score is an intangible manuscript?
An original written lead sheet or musical score is an intangible manuscript, so the part of the fee for it is not taxable even when the jingle deal closes with a taxable broadcast tape. This opinion m…
Were orthotics, massage rollers, and massage pillows subject to Texas sales tax?
Orthotics were exempt orthopedic appliances. Massage rollers and pillows were exempt therapeutic appliances only when provided to an individual under a practitioner's prescription.
Could a retailer use accrual accounting generally but report Texas sales tax on credit sales using the cash basis?
Yes. A retailer could report sales tax consistently on the cash basis while using accrual accounting, but the change was prospective and required transaction-level records.
How did Texas tax residential and commercial reroofing under lump-sum and separated contracts?
Residential and new-construction treatment depended on contract form, while labor, materials, and other charges for reroofing an existing nonresidential building were fully taxable.
Did a child-care facility contracted for Levels I-IV services qualify for Texas's residential-facility vehicle-tax exemption?
The Attorney General did not decide. Section 152.093 required a licensed facility serving both children not needing specialized treatment and emotionally disturbed children, but those terms were not l…
Could a surveyor buy stakes and other supplies tax-free when performing taxable or nontaxable surveys for exempt entities?
For a taxable survey, transferred items could be bought for resale, but the surveyor owed tax on retained inputs. For a nontaxable survey, all taxable inputs were taxable.
Could federal credit union employees and volunteer directors claim Texas tax exemption while traveling on official business?
Only when the credit union paid the purchase directly and supplied a purchase voucher; personal payment followed by reimbursement did not qualify.
Which animal feed, medicines, and supplements were exempt from Texas sales tax?
Feed normally consumed by farm or ranch animals, animals held for sale, and wildlife was exempt; pet feed was generally taxable unless a documented special use qualified.
Were insurance claims-adjusting services taxable, and could an insurance company buy qualifying subcontracted adjusting services for resale?
Yes. Adjusting and claims processing were taxable, but a buyer could issue a resale certificate when the purchased services were essential to its own taxable insurance service.
Were sales of pecan trees taxable in Texas?
Generally yes, but a buyer in the business of raising and regularly selling pecans could buy the trees exempt by giving the seller an exemption certificate.
Did a Texas sales-tax refund assignment have to state the assigned refund amount to be legally effective?
No. The Comptroller would accept an assignment without the amount stated, but the country club had to prove the refund amount and keep supporting evidence.
When did service charges and credit-card fees on computerized ticket sales enter South Carolina's admissions-tax base?
A service charge was taxable when everyone had to pay it for admission, but not when it applied only to remote or mail buyers. A credit-card fee was excluded unless every entrant had to pay by card.
Did South Carolina sales or use tax apply when a company nominally sold equipment and leased it back but retained title, possession, costs, and risk of loss?
No. The purported equipment sale and leaseback were a financing arrangement, not an actual sale and lease, because ABC retained legal title, possession, ownership costs, risk of loss, and tax ownershi…
What receipt did a Texas business need to prove sales tax was paid on company credit-card purchases?
The vendor receipt had to separately state tax or say in writing that the price included tax; a verbal agreement or an unitemized card statement did not protect the purchaser.
Could a Texas nonresidential repairman rent job equipment tax-free for resale or deduct its taxed cost from the customer bill?
No. The repairman consumed the rented equipment and paid tax on the rental, while the entire customer billing remained taxable with no credit for that input tax.
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