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 admissions to a for-profit amusement held at a historic location exempt from Texas sales tax?
Yes, if the place was a Recorded Texas Historic Landmark or was included in the National Register of Historic Places. The exemption turned on the location's designation, not whether the provider was n…
When were construction-management services taxable for new construction, owner-occupied homes, and existing business property?
Under this historical ruling, construction management for new construction and existing one-, two-, or three-family exclusively residential owner-occupied property was not taxable. The same service fo…
Were auction sales of bank-repossessed tangible personal property and the auctioneer's fee to the bank taxable?
Yes under this historical ruling. The auctioneer had to collect tax on total gross receipts from selling the repossessed property. The auctioneer's fee charged to the bank was also taxable as a sales-…
What did a supplier have to do when drop-shipping merchandise to a Connecticut customer for an out-of-state retailer?
ABC Corporation complied by charging Connecticut tax to the out-of-state retailer when ABC delivered the merchandise to that retailer's Connecticut customer. Instead, ABC could accept through the reta…
Were gross receipts from providing expert-witness testimony subject to Connecticut sales and use tax?
No under this ruling. Gross receipts for rendering expert-witness testimony remained exempt from Connecticut sales and use tax under Conn. Gen. Stat. § 12-412(11).
Were guest greens fees, tennis-court fees, club-professional services, and the professional's property sales or leases taxable?
Under this historical ruling, a country club's greens fees and court-time fees charged to members' guests were not taxable, and club-professional services were exempt. But tangible personal property s…
Did a private janitorial contractor avoid Texas tax on equipment and supplies because it served federal facilities and its contract funded those purchases?
No for equipment and consumed supplies. The janitorial service sold to the federal government was exempt, and transferred items could be bought for resale, but the contractor owed tax on equipment and…
Was a pager loss or damage protection fee taxable when it covered lost, stolen, destroyed, or damaged equipment?
Coverage strictly for loss, theft, destruction, or damage beyond repair was not taxable. A fee covering maintenance, repair, or repairable-damage waiver was taxable; a single premium containing damage…
When could a seller reduce the taxable sales price by the value of property accepted as a trade-in?
When the trade-in was of the same nature as the item sold, or was another type of item the seller sold in its regular course of business. A computer seller could offset a computer trade-in, but not a …
When were installation, renovation, repair, and maintenance services taxable in owner-occupied and rented condominium units?
Under this historical ruling, painting, carpentry, electrical, and plumbing labor billed directly to residents was nontaxable in owner-occupied units but taxable in rented units. Association-wide work…
Was a physician-prescribed book containing an at-home cardiac rehabilitation program exempt from Texas sales tax as a therapeutic device?
No. The book remained taxable even when sold under a licensed practitioner's written or oral prescription because it did not meet Rule 3.284(a)(11)'s definition of a therapeutic appliance or device.
Was electricity used to repair, renovate, or convert qualifying commercial barges exempt because the vessel materials and labor were exempt?
No. The vessel materials-and-labor exemption did not extend to natural gas or electricity. Utilities used to manufacture property for sale could be exempt, but utilities used later to sell or affix th…
Could a customer claim a residential gas or electricity exemption or refund after the utility account had been closed?
Only after Comptroller review of available evidence because no on-site use study could be performed. The claimant had to explain the account, closure, and utility uses; mixed exempt and nonexempt use …
Were teleconferencing charges and the related long-distance charges taxable, and could the provider buy long-distance service for resale?
Yes. Teleconferencing was a taxable telecommunications service, and the total charge—including qualifying long-distance charges—was taxable. The provider could issue a resale certificate if it made no…
How could an elevator contractor calculate the taxable portion of contracts combining real-property repair and maintenance?
It could apply one taxable percentage based on prior-year aggregate repairs divided by total repair-and-maintenance receipts, supported by time sheets or similar records, and use that percentage on in…
Was a service that collected customer mail, packaged it, and delivered it for shipment to foreign countries taxable?
No under this ruling. X Company's couriers collected mail from customer offices, brought it to X's office for packaging, and delivered it for shipment overseas. DRS said the described international ma…
How were the sale, installation, and removal of an underground storage tank taxed?
The tank sale was taxable. Installation was not taxable if separately stated, but the full gross receipts were taxable when installation was bundled with the tank charge. Removing an underground stora…
When were masonry and sprinkler installation taxable, and were landscaping and tree-removal services taxable?
Under this historical ruling, masonry and sprinkler installation were taxable on existing commercial, industrial, or income-producing property but not at new construction or qualifying owner-occupied …
Was sharpening or resharpening cutting tools used in manufacturing taxable, and could the manufacturer issue an exemption certificate?
Under this historical ruling, sharpening manufacturing cutting tools was a taxable repair or maintenance service. The manufacturer could not issue a resale certificate or manufacturer's exemption cert…
Was a service that addressed, folded, enclosed, sealed, and mailed customer-provided literature subject to sales and use tax?
No under this historical ruling. X Company used postal cards or stamped envelopes to mail customer-provided literature and separately stated postage on its bills. DRS ruled that the mailing service wa…
Did selling all operating assets of an identifiable division qualify as an occasional sale if the seller later bought or leased some assets back?
Yes, if the original asset sale and later purchase or leaseback were clearly separate transactions. The whole-division sale remained exempt, but the seller owed tax on the later purchase, rental, or l…
Did forklifts used inside a plant to move raw materials to mixing tanks qualify for Texas's phased-in manufacturing exemption?
No. Moving raw material to mixing tanks was intraplant transportation in preparation for manufacturing, which Tax Code § 151.318(c)(2) and (4) specifically excluded from the exemption.
Could a nursing home claim the residential-use exemption and refunds for natural gas and electricity, and did city tax still apply?
Yes for qualifying billing periods beginning on or after January 1, 1988, if the facility clearly stated the exemption basis. State, county, and transit taxes were exempt, but this city's tax remained…
Which impounded-vehicle charges were taxable: notification, towing, daily storage, or impound fees?
Daily storage and impound or administrative fees were taxable. Notification and towing fees were not taxable under the described limits and purposes.
Were employee meal charges and the corporation's subsidy payments to a corporate-cafeteria vendor subject to sales tax?
The cafeteria's total gross receipts from meal charges to employees were taxable. The corporation's separate subsidy payments to the food vendor were not subject to sales tax.
Was nutritional or science-diet dog food exempt from Texas sales tax when prescribed by a veterinarian?
Yes, when sold under a veterinarian's oral or written prescription. A pet-shop sale without such a prescription was taxable.
Is a nonprofit professional corporation exempt from New York corporate franchise tax if it holds federal 501(c)(3) tax-exempt status but was required by state law to issue stock?
No. New York's nonprofit franchise-tax exemption applies only to corporations that have no stock or shares at all — a stock corporation stays taxable under Article 9-A even if it operates strictly on …
Were a private golf club's golf-cart rentals, greens fees, locker rentals, and bag-storage fees taxable?
Under this historical ruling, golf-cart rentals were taxable rentals of tangible personal property. Greens fees, locker rentals, and bag-storage fees were not subject to sales and use tax. DRS marks t…
Could four nursing homes obtain sales-tax refunds on now-inactive natural gas and electricity accounts?
Yes for qualifying billing periods beginning on or after January 1, 1988, if they gave the utilities properly completed exemption certificates and written refund requests. State, county, and transit t…
Could a vehicle lessor buy repair and replacement parts for rental tractors and trailers tax-free?
Yes. The 1990 letter allowed repair and replacement parts installed on rental or leased tractors and trailers to be purchased tax-free from Texas suppliers with a properly completed resale certificate…
Could a Girl Scout troop treat the $1 it kept from each mandatory $2 calendar payment as a donation rather than part of the taxable sales price?
No. The calendar's sales price was the full $2 because buyers had to pay that amount to receive it. The troop's retained $1 was not a voluntary contribution and therefore could not be separated as a d…
Was annual calibration of tools used to inspect manufactured parts subject to Texas sales tax?
Yes. The described calibration qualified as taxable maintenance or repair of tangible personal property under Rule 3.292, so the total service charge was taxable.
Was booth furniture taxable when rented together with trade-show booth space, and what if a separate furniture company supplied it?
A promoter or facility owner could include tables and chairs with real-property booth or building rental without charging tax. A separate company that did not own or manage the facility had to collect…
Our property has a title defect that makes it currently unsellable. We signed a contingent contract with one company to buy it IF we ever clear title within 15 years, at an escalating price, and simultaneously leased the property to a related company at fair rent for 5 years (with renewal options). The contingent purchase contract itself says it becomes null and void unless the state confirms this whole arrangement doesn't trigger the Real Property Transfer Gains Tax. Does it?
Yes, taxable -- a contingent purchase agreement coupled with a simultaneous lease functions the same as a lease coupled with a purchase option, which is always taxable regardless of the lease's own te…
How did a general contractor handle tax on subcontracted services for an out-of-state customer, especially when the services also benefited the contractor?
Under this historical ruling, the contractor could buy subcontracted taxable services for resale and charge tax to the ultimate consumer. No tax applied when the foreign customer received the service …
How were minor pool repairs included with cleaning taxed, and how did separate repair or remodeling charges differ for residential and nonresidential pools?
Minor repairs performed as part of pool cleaning were taxable. Separate residential repair or remodeling followed contractor rules and depended on lump-sum versus separated billing; all nonresidential…
Were toxicologist or engineering consulting services taxable when used to investigate an insurance claim or loss?
Yes. Consulting used to investigate claims or losses under an insurance policy was taxable insurance service, whether paid by the law firm or insurer. Similar non-litigation policy-payoff consulting w…
Was mowing acreage and vacant lots taxable for individual and commercial customers, and what if the property belonged to an exempt organization?
Mowing acreage and vacant lots was taxable for individuals and commercial clients. The provider did not collect tax when mowing property of an exempt entity such as a church or city.
What Texas sales and use tax applied when a cruise-ship retailer sold goods outside U.S. territorial waters and passengers brought them back to Texas?
The retailer owed tax when it withdrew tax-free inventory for resale outside U.S. territory, and passengers still owed Texas use tax when they brought purchases back. The Comptroller encouraged the re…
Can a seller-installer of equipment buy the labor its subcontractors perform on installation, maintenance, repair, and warranty work for resale?
Yes. British Telecom (CBP) Inc. sells and installs electronic equipment and bills customers two ways — a per-project installation charge based on actual hours, and an annual or periodic fee for mainte…
New York Advisory Opinion TSB-A-90 (3)I: Rosenblatt, is whether as a nonresident working in New York he is entitled to deduct all or a portion of alimony payments paid to his spouse from whom he is legally separated.
No. The Department ruled that a nonresident working in New York gets no benefit from alimony payments in computing New York tax. Under Tax Law § 601(e), a nonresident's tax is computed as if a residen…
Which items did SC Revenue Ruling 90-1 classify as exempt dental prosthetic devices when purchased by a dentist?
The ruling defined a dental prosthetic device as an artificial device or part replacing a missing body part, not one that merely straightens or supports. It exempted crowns, inlays, bridges, veneers, …
Were valet-parking contract charges, mandatory patron fees, and voluntary tips subject to Texas sales tax?
The business customer's contract price and any mandatory patron charge were taxable. A genuinely voluntary gratuity from a patron was not taxable.
Were books, periodicals, newsletters, and other writings published and distributed by a qualifying nonprofit historical society taxable?
No for qualifying publications under the exemption described. The letter's effective-date year conflicts internally—one paragraph says August 28, 1988 and another uses August 28, 1989—so this page doe…
Which cable-system mapping, surveying, blueprint, drafting, and engineering charges were taxable?
Mapping, locating, relocating, and as-built or boundary surveying were taxable real-property services. Separately stated centerline staking and engineering were not taxable; certified original bluepri…
Was an oilfield company's sale and delivery of fresh water taxable, and what if chemicals or a taxable service were included?
Fresh water sold and delivered by itself was not taxable. A combined water-and-chemical charge was fully taxable, and water used in performing a taxable job became part of that job's taxable total cha…
When did a software business's natural gas and electricity qualify for Texas's manufacturing exemption, and could an audit reject its predominant-use study?
Utilities directly used to create software for sale, lease, or license could be exempt; contract programming, customer-software work, time-sharing, and other nonproduction use were not. Each meter and…
Does a New York corporation qualify for New York's reduced 'small business taxpayer' franchise tax rates if it is wholly owned by a foreign (non-U.S.) parent whose own income and capital exceed the small business thresholds?
Yes. Because the foreign parent is not an "includible corporation" in a federal affiliated group, the New York subsidiary is tested on its own numbers, not combined with its foreign parent — so it qua…
When a corporation had a federal S election in effect (but no New York S election) during its loss years, how is its New York net operating loss carryforward computed for a later year when it's a regular C corporation?
The New York NOL carryforward is limited to the amount that would have been allowed under IRC § 172 as if the corporation had never made the federal S election during the loss years — recomputing the …
Robert L. Hoffman, a lifelong Connecticut resident who worked for IBM for 29 years and 3 months - the first 20 years and 6 months entirely outside New York and the final 8 years and 9 months entirely within New York - asked what portion of the lump-sum 'Financial Assistance Payment' IBM gave him upon early retirement is subject to New York personal income tax.
Because the payment did not qualify as an annuity, it is treated as compensation for past services and allocated under Personal Income Tax Regs § 131.20. Under the default rule (retirement-year portio…
Which guest-use and instruction charges at a member-owned private country club were excluded from sales and use tax?
Under this historical ruling, guest golf, swimming, paddle-tennis, tennis, beach-club, and shooting-club fees were not subject to sales and use tax. Golf, swimming, paddle-tennis, and tennis lessons f…
Was conveying an interest in real property subject to state and municipal conveyance taxes when the interest was encumbered?
Yes under this ruling. An encumbered real-property interest was treated as conveyed for consideration and was therefore subject to both Connecticut state and municipal real estate conveyance taxes.
Was an apartment manager's office and lobby residential or nonresidential for repair-and-remodeling tax, and was the 5% test applied per building or complex?
The 5% test applied to each building, using square footage. Office and lobby space under 5% of its building was residential; over 5%, or a separate office building, was nonresidential and its repair o…
Were services coordinating medical care and rehabilitation for injured workers subject to Texas sales tax?
Generally no for physical therapy, occupational therapy, health care, and medical rehabilitation. Coordination became taxable only if it met the definition of taxable insurance service or data process…
Could a chief warrant officer certify a higher-ranking service member's eligibility for South Carolina's historical military vehicle sales-tax exemption?
Yes. Chief warrant officers in grades W-2 through W-4 were commissioned by the President and counted as commissioned officers, so a higher-ranking chief warrant officer could provide the certification…
Were sales to and purchases by the Federal Reserve Bank of Richmond's Columbia Office exempt from South Carolina sales and use tax?
Yes. The Commission treated Federal Reserve Banks as federal instrumentalities performing important governmental functions, so sales to and purchases by the Richmond Bank's Columbia Office were exempt…
Could a nonpermitted importer treat the resale of one granite container as an exempt occasional sale?
Yes, only if the seller had sold no more than one other taxable item during the prior 12 months and sold the entire granite container to one purchaser in one transaction, assuming it was not acting as…
Were horse-racing forms taxable when sold in Texas or bought out of state for use in Texas, including from October 1985 through July 1989?
Yes. Racing forms were taxable tangible personal property, not newspapers or magazines. Texas sales tax applied to in-state sales, and use tax applied when forms were bought elsewhere for use in Texas…
Was natural gas bought by a cogeneration facility exempt when used directly to furnish steam and electricity to consumers through mains, lines, or pipes?
Yes under this ruling. X Company's natural gas purchases were exempt to the extent the gas was used directly to furnish steam or electricity delivered to consumers through mains, lines, or pipes. The …
Did take-out pizza and pizza-delivery businesses qualify for the manufacturing exemption on electricity purchases?
No under this historical ruling. DRS treated the businesses as preparing and furnishing meals for immediate consumption, not as manufacturers or fabricators operating industrial plants. They could not…
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