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 prescribed myotherapy, passive exercise, stretching, and massage services for pain relief subject to Texas sales tax?
No. Services performed under written prescriptions from licensed doctors, dentists, or chiropractors were nontaxable. The clinic paid tax on its own supplies and needed a permit only if it also sold t…
Could a Texas security-service provider offset its service tax with tax paid to another state on equipment or repairs, or buy those items for resale?
It could not reduce tax on the Texas security service by out-of-state tax paid on equipment or repairs. It could issue a resale certificate only when care, custody, and control of the property passed …
Could a caterer rent reusable tables, chairs, silverware, or china tax-free for resale to catering customers?
No. The caterer's reusable-item rental was an expense of selling meals, not a re-rental to customers, even if separately stated. The caterer owed tax when renting those items.
Was finishing out a shell taxable when the building had previously been occupied, demolished back to shell condition, and then rebuilt?
Yes. Demolishing the previously finished building back to a shell was remodeling, and finishing out that remodeled shell was also taxable nonresidential remodeling rather than initial finish-out work.
When did Texas remove notarization from motor vehicle tax affidavits and related forms?
Effective April 1, 1990, Texas stopped requiring notarized signatures on Form 130-U for tax purposes and planned corresponding changes to Forms 131-U and 132-U. The notice followed H.B. 2020's removal…
Could farmers and ranchers buy parts and repairs tax-free for farm machinery, including highway-licensed vehicles or farm-tagged pickups?
Parts and repairs for machinery used exclusively in producing agricultural products for sale could be exempt. The exemption did not cover highway-licensed motor vehicles, including farm-tagged pickups…
E. Parker Brown II asked whether, under Personal Income Tax Regs § 131.5, a nonresident partner's distributive share of a partnership's interest income - earned on a promissory note secured by a purchase-money mortgage taken back on the sale of New York commercial property - constitutes income derived from or connected with New York sources.
No. The Department ruled that the interest is not New York-source income to the nonresident partner. Because the note is intangible property (not the underlying real property) and the partnership cond…
When could a vehicle delivered before the new car count as a trade-in for Texas tax?
The early trade-in qualified only when it was consideration in the same new-vehicle transaction, which a binding purchase order identifying it could document. Cash insurance proceeds did not reduce a …
Could an exempt organization buy meals for weekly meetings without state and city sales tax, and was the hotel's room charge also exempt?
The organization could exempt the qualifying meals with a properly completed exemption certificate. A hotel room-use charge remained subject to hotel occupancy tax because the organization did not qua…
Are a private investigator's guard, security-consulting, litigation-support, due-diligence, and corporate-investigation services subject to New York City's protective/detective-services tax and the statewide information-services tax, and how are they sourced?
It depends on the service, and two different taxes are in play. Peat, Marwick, Main & Co. asked about services of its client RST, a licensed private investigator based in New York City. New York City …
Were an advertising agency's consultation charges taxable when tied to producing a master layout or blueprint for the printer or client?
Yes. Because the consultation related to producing finished art or employee-fabricated property, the consultation charges on all four sample invoices were taxable.
Was electricity used to wash, sort, size, weigh, pack, and market potatoes exempt as agricultural use at the producer's own facility?
Yes, only if the business was the original producer of every potato handled and the facility was operated exclusively for its own products. Other electricity uses were taxable, and buying potatoes fro…
Were platemaking chemicals necessary and essential to printing exempt under the manufacturing rule applied in this 1989 correction?
Yes. The Comptroller corrected an earlier letter and found the platemaking chemicals exempt under § 151.318(a)(2) and Rule 3.300(d)(3)(A), with a refund available. STAR warns that later 1997 and 1999 …
Are soldiers who live off-post in federally leased Section 801 military housing treated as residing on a military base, or as New York residents whose vehicle purchases are taxable?
They are treated as New York residents, so their vehicle purchases are taxable. The Staff Judge Advocate at Fort Drum asked whether soldiers living off-post in federally leased 'Section 801' family ho…
Were charges taxable when a provider supplied a Texas number, received calls in Texas, and retransmitted them to Mexico, and did the billing address matter?
Yes. The service originated in Texas because calls were received and retransmitted there, so Texas tax applied regardless of billing address. A service originating entirely outside Texas was not taxab…
How were civil engineering, subcontracted land surveying, landscaping, and services connected with State projects taxed?
Under this historical ruling, the firm's civil engineering was not taxable building engineering. Boundary and topographic surveys bought from land-surveyor subcontractors were taxable and could not be…
Were nursing-home, personal-care, and congregate-living natural gas and electricity exempt, and could nursing homes obtain refunds?
Yes. Nursing-home utilities were residential and exempt from state, county, and transit tax from January 1, 1988, with city tax depending on local retention. Written refund requests and exemption cert…
Are stock-for-stock exchanges, contributions of assets to a corporation's capital, and the transfer of custom software in a corporate reorganization subject to New York sales tax?
No — none of the described transfers is a taxable retail sale. Nomura Securities International, Inc. (NSI) planned a three-step corporate restructuring, and asked whether the transfers were excluded f…
When a New York bank computes the IBF modification for its international banking facility, does it need to first add back interbranch income and expenses between the IBF and its foreign branches that got washed out (netted to zero) in federal taxable income?
Yes. Because interbranch transactions between the IBF and the bank's foreign branches offset to zero in federal taxable income (an IBF isn't a separate entity federally), the bank must first restore t…
When were equipment-installation charges taxable if the manufacturer sold the equipment and a separate subsidiary installed it?
A single manufacturer bill was fully taxable after October 1, 1987. A separately billed subsidiary installation could be nontaxable only for stand-alone installation with no assembly, property sale, o…
Was heat treatment taxable when used to strengthen pipe, molds, dies, or tools, or to restore welded pipe to its original condition?
Yes in both cases. Strengthening was taxable processing labor, while restoring an item to its original condition was taxable repair of tangible personal property.
When a company sells stone and gravel and also delivers it to customers, which parts of its revenue count as "transportation" for deciding whether it's taxed as a transportation corporation under Article 9 instead of a general business corporation under Article 9-A?
Delivery/hauling charges count as transportation revenue (Article 9) in all three billing setups — pure delivery fees, separately stated delivery charges, and the delivery-attributable portion of a lu…
Did transferring all shares of a Panama corporation holding Connecticut real estate to a commonly owned Barbados corporation trigger transfer taxes?
Yes. DRS treated the share transfer as one for consideration and subject to controlling-interest transfer taxes. The ruling also said that if the Panama corporation were domesticated into Delaware thr…
Could a tax-exempt religious institution buy a vehicle without sales tax when it paid the full price but registered the vehicle in its rabbi's name?
Yes under this ruling. When the institution paid the full price, bought the vehicle solely for religious purposes, and used its rabbi's name only for insurance and liability reasons, the dealer could …
Was electricity used to make printing plates exempt when the printer separately billed the customer for the plate?
Only when the plate was actually manufactured for sale and a written agreement clearly made the customer its owner. A separate plate charge alone did not establish a sale; electricity for plates retai…
What contract language was required for a building owner to obtain an Enterprise Zone Project refund of tax on construction materials?
The contract had to separately state materials and labor or require later separated billings. A lump-sum contract made the contractor the material consumer, and invoices disclosed after the fact did n…
Were an engineer's study and maintenance recommendations for a harbor fuel-oil transfer pier taxable as building engineering or design services?
No under this historical ruling. Studying a fuel-oil transfer pier, reporting its deficiencies, and recommending maintenance and corrective measures were not taxable building engineering or building p…
Were engineering services for improvements and modifications to utilities' existing fuel systems taxable as building engineering or design?
No under this historical ruling. A consulting engineer's designs for safe and reliable operation of local electric utilities' existing fuel systems or processes were not taxable building engineering o…
Was an answering service's charge for patching callers directly through to customers taxable, including labor and equipment portions?
Yes. The total patching charge was taxable, including labor and equipment. If patching was bundled into the live-answering charge rather than separately stated, the entire combined charge was taxable.
Did a $25 million South Carolina headquarters expansion qualify for a county property-tax exemption and corporate headquarters and new-jobs credits?
Yes. Under the proposed facts, the $25 million expansion qualified for five years of county property-tax exemption, a headquarters credit equal to 20% of the full investment, and the new-jobs credit. …
Were time-based charges for accessing an out-of-state computer research database over telephone lines subject to South Carolina sales and use tax?
Yes. Charges for computer database access time were taxable as charges for transmitting messages through a modem and telephone lines. XYZ became liable for sales and use tax on those charges effective…
Was South Carolina documentary tax due when a grantor trust transferred real estate to partnerships owned in the same percentages by the trust's eight grantors and beneficiaries?
No. The transfer was not subject to documentary tax because the same eight grantors and beneficiaries were the only partners and each person's 12.5% interest in the real estate remained unchanged. The…
Which subcontractor services on a State of Connecticut project were exempt, and which incidental services remained taxable?
Services that were integral, inseparable components of the architect's ultimate design service to the State were exempt, normally including engineering, land surveying, and landscaping. Incidental ser…
Were total landscaping receipts taxable, and could landscapers buy bolts, cables, and lags for resale?
Under this historical ruling, total gross receipts for landscaping services were taxable. Landscapers could buy bolts, cables, and lags tax-free for resale by giving suppliers valid resale certificate…
Were a 2% credit-card surcharge and a restocking fee on returned merchandise subject to Texas sales tax?
The credit-card surcharge was taxable as part of the selling price. The restocking fee was not taxable because the item was returned and no sale remained; the retailer had to refund all sales tax orig…
Were golf-cart rentals taxable at a municipal golf course even though municipal green and driving-range fees were exempt?
Yes. Golf-cart rental was a taxable rental of tangible personal property, not an exempt municipal amusement service. The city had to collect tax from nonexempt renters.
Is installing a bolted-and-wired trash compactor in an apartment building a capital improvement, or a taxable sale and installation of equipment?
It is not a capital improvement. Multi-Pak Sales Corp. manufactures trash compactors and sells them from a catalog, installing them (as New York code requires) under the trash chutes of apartment buil…
Were manufacturing tool-resharpening services taxable when performed inside or outside Connecticut?
Yes under this historical ruling. Beginning July 1, 1989, repair and maintenance services to tangible personal property were taxable, including tool sharpening obtained by Connecticut companies even w…
Did placing precast concrete products into an excavation prepared by someone else make the manufacturer a real-property contractor?
No. Mere placement in a prepared excavation was not an improvement to realty. The seller had to perform some act affixing or incorporating the product into the customer's property; Administrative Hear…
Were nursing-home natural gas and electricity exempt, and could utilities accept certificates and refund tax for prior qualifying periods?
Yes for billing periods beginning on or after January 1, 1988. Nursing-home utilities were exempt from state, county, and transit taxes, while city tax could remain; utilities could accept completed c…
Were cavern admissions exempt because the site was listed as a National Natural Landmark?
No. Rule 3.298 exempted amusement at places in the National Register of Historic Places or designated Recorded Texas Historic Landmarks, not places listed only as National Natural Landmarks.
When is replacing air-conditioning condensing units or thru-the-wall units a nontaxable capital improvement, and when is the work taxable repair of tangible personal property?
It depends on what is installed and how permanently. ANC Heating and Air Conditioning, Inc. asked whether replacing air-conditioning condensing units (for an upgrade or after a breakdown) and replacin…
As part of a corporate restructuring, our wholly-owned subsidiary is transferring a New York City parcel of real estate to us, its parent company, for no consideration -- just an accounting entry moving the property's book value between our respective capital accounts. Does this trigger New York Real Estate Transfer Tax?
Exempt. American Telephone and Telegraph Co. (AT&T) was the parent of AT&T Resource Management Corporation (AT&T-RMC), which held one share of stock, all owned by AT&T. As part of a 1990 corporate res…
Were fees for martial-arts, tennis, or gymnastics lessons subject to sales and use tax?
No under this historical ruling. Fees charged for lessons in martial arts, tennis, or gymnastics were not subject to sales and use tax. DRS marks the ruling not current and obsoleted by AN 95(3).
Did sales and use tax apply to greens fees or charges for golf, tennis, and swimming lessons?
No under this historical ruling. The health and athletic club services tax did not apply to greens fees or charges for golf, tennis, and swimming lessons. DRS says AN 95(3) obsoleted the ruling.
Were health and athletic club service fees charged by a charitable nonprofit organization subject to sales and use tax?
No under this historical ruling. Charges or fees for health and athletic club services provided by a charitable nonprofit organization were not subject to sales and use tax. DRS says AN 95(3) obsolete…
Which vending-machine foods at schools and colleges were exempt, and which remained taxable?
Food such as cookies, cakes, pastries, chips, milk, and coffee sold from vending machines in student cafeterias, student-union areas, and dormitory hallways was exempt under the educational food provi…
Were continuous thickness gauges mounted on production lines exempt manufacturing or quality-control machinery?
Yes on the ruling's narrow facts. Gauges mounted on rolling mills or processing lines, required to produce the finished product, and measuring continuously were exempt as machinery used directly in ma…
When were plumbing, HVAC, appliance installation, and repair labor taxable for owner-occupied homes and business property?
Installation labor was nontaxable at new construction and qualifying owner-occupied one- to three-family homes but taxable on existing commercial, industrial, or income-producing property. Repairs to …
Was the first finish-out of two never-finished, never-occupied floors taxable as renovation work?
No under this historical ruling. The first finish-out of floors never finished or occupied was nontaxable new construction. But any prior use of the unfinished space, including storage other than buil…
Were gross receipts from auditing residential or commercial mortgages subject to Connecticut sales and use tax?
No under this ruling. Connecticut DRS stated that the total gross receipts from a service auditing residential or commercial mortgages were not subject to sales and use tax.
Were a youth league's sales of pizza slices, hot dogs, candy bars, or soda for $5 or less exempt when the proceeds supported its youth activities?
Yes under this historical ruling. The listed items were exempt when sold for $5 or less and the proceeds were used exclusively for the youth activities the league sponsored and supported. The league s…
Was grinding existing pavement and reusing it as the base for a new parking lot taxable when no new materials were added?
No under this historical ruling. Recycling the pavement into the base of a new parking lot, without adding new materials during recycling, was treated as nontaxable new construction. DRS states that A…
Were total receipts for media-advertising services, including placement fees and development charges, subject to sales and use tax?
No under this historical ruling. Total receipts for advertising services related to television, radio, newspaper, or periodical advertising were not taxable, including placement fees and development c…
Were subterranean core sampling and test-hole drilling subject to sales and use tax?
Core sampling for engineers' predesign analysis was not taxable. Test-hole drilling was also nontaxable for new construction and existing owner-occupied one-, two-, or three-family residential propert…
Which furniture installation and delivery charges were taxable when furniture and movable office partitions were sold?
The furniture sale was taxable, but a separately stated installation charge for unpacking, arranging, and connecting removable panels was not. Delivery before title passed, including moving furniture …
Could a plumbing contractor act as a retailer, issue resale certificates for parts, and charge tax to customers?
Yes if the contractor qualified and was registered as a retailer of plumbing supplies, materials, or parts. Although contractors generally consume their materials and pay tax when buying them, a contr…
Were Foran, Ethrane, Fluothane, oxygen, and other gases administered to patients under a physician's direction exempt from Texas sales tax?
Yes. Anesthesia gases and other gases administered to patients qualified as drugs and medicines and were exempt when dispensed on a licensed healing-arts practitioner's prescription.
When did a sale to a federal agency qualify for Connecticut's governmental sales and use tax exemption?
The retailer had to bill the federal agency directly, receive payment directly from it, and obtain a completed exemption certificate for each sale. Billing an employee who paid personally did not qual…
How were a music manager's band-booking fees and client payments to the bands taxed?
Under this revoked ruling, Company X's booking fees were taxable employment-agency fees whether paid by clients or bands, while direct client payments to independent bands were not. If the musicians w…
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