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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Can a Virginia taxpayer add previously unreported net Virginia modifications to a net operating loss carryforward after the loss years are closed, and does the unrelated-member exception excuse the related-party royalty add-back?
Denied. A corporate group that owns multi-tiered pass-through operating companies (LPs) paid trademark royalties to a related affiliate, added them all back on its Virginia returns, then sought a refu…
If I rent out equipment — an inflatable, a mechanical bull, construction equipment, a gaming trailer — and my staff stays with it, is that a taxable rental or a nontaxable service in South Carolina?
It depends on whether you truly operate the equipment. In South Carolina, renting or leasing tangible personal property is a taxable sale (6%), but if you furnish an OPERATOR who uses skill to control…
When a partnership makes a one-off sale of Colorado real estate outside its regular business, do those gross receipts go into the apportionment factor that determines its owner's Colorado-source income?
No. Gross receipts from a partnership's infrequent, out-of-the-ordinary-course sale of Colorado real estate are not 'receipts' under § 39-22-303.6(1)(d), so they're excluded from the apportionment fac…
What 2024 state and county per-capita-income figures did South Carolina publish for tax-incentive compensation tests?
SC Information Letter 26-8 publishes 2024 per-capita-income figures for South Carolina and all 46 counties for use in income, sales and use, and property-tax incentive tests. County amounts range from…
If you mail a Virginia return but the Department never receives it, does mailing count as filing for the three-year refund deadline?
Denied. The taxpayer filed a 2019 Virginia return in April 2024 claiming a refund, but Virginia's three-year refund window (Va. Code § 58.1-499 D) had already closed on May 1, 2023. The taxpayer said …
If you file a Virginia return years late, can an amended return or a delayed IRS 'final determination' still get your overpayment refunded?
Denied. A couple filed their 2018 and 2019 Virginia returns years late—the 2018 return in December 2023 and the 2019 return in April 2024—each reporting an overpayment. Virginia's three-year refund de…
If I move to Virginia partway through the year, am I taxed as a full-year resident -- and can I get a credit for the income tax I paid to my old state?
You are taxed only as a part-year resident. This taxpayer moved from another state to Virginia in 2020; the Department had assessed her as a full-year Virginia resident, but the Commissioner held she …
What documentation does Virginia require to keep a Schedule C business-expense deduction, and can the Cohan rule or a federal Tax Court win on another year save undocumented expenses?
Mostly denied, with one small win. Virginia disallowed a sole proprietor's Schedule C business-expense deductions for 2021 because the taxpayers couldn't prove they had actually paid the expenses. On …
If the U.S. Tax Court later proves the IRS adjustment wrong, can Virginia still refund the tax it assessed on that adjustment, or do its filing deadlines control?
Denied—right on the merits, too late on the deadlines. The IRS adjusted the taxpayers' 2018 federal return, so Virginia assessed additional tax in March 2022 and later collected it by applying part of…
If a Tennessee lessor delivers leased trucks in Tennessee but they are used only out of state, must it charge Tennessee sales tax on every monthly lease payment?
Mostly no—only the first payment. When a Tennessee lessor delivers leased vehicles in Tennessee but the lessee drives them out and uses them only out of state, Tennessee taxes the first lease payment;…
Does South Carolina follow the 2025 federal One Big Beautiful Bill Act tax changes, or must taxpayers adjust their state return?
South Carolina has not adopted the 2025 federal One Big Beautiful Bill Act (OBBBA), so taxpayers must adjust their South Carolina return for those federal changes. As of this letter, South Carolina co…
Does Illinois's drive-away permit exemption cover utility and car-hauler trailers sold to Indiana residents, or only RVs and cargo trailers?
Only recreational vehicles and "cargo trailers" that meet a specific regulatory definition (built to be towed, designed for carrying property, and rated at least 2,200 pounds gross vehicle weight) qua…
When did South Carolina begin enforcing its new mandatory alcohol server training requirement, and how long do new employees have to comply?
The Department delayed enforcement until March 2, 2026. Employees and managers who had been employed for at least 30 days before March 2 had to complete approved training by that date. Anyone employed…
Can a company avoid Virginia's add-back of intercompany interest it paid to an affiliate if the loans had a real business purpose?
Yes -- with clear and convincing evidence. Virginia normally makes a corporation add back interest it pays to a related company when the interest is connected to intangible property (§ 58.1-402 B 9 a)…
If I rent portable cold-storage units to customers and already paid sales tax when I bought the units, do I have to charge my customers sales tax on the rental, storage, delivery, and other fees I bill them?
Mostly no, with one exception. Because the operator already paid sales tax when it bought the storage units, its recurring rental charges, on-site storage fees, mandatory and optional delivery/pickup/…
Does a grocery store have to charge sales tax when it sells small propane cylinders and small bundles of firewood to customers?
Yes. A grocery store must collect sales tax on propane cylinder purchases/exchanges and small firewood bundles unless it can show the sale qualifies for the narrow 'domestic use' exemption, which requ…
Are fees charged for parking violations (like parking near a fire hydrant) subject to Illinois's Parking Excise Tax?
No -- a separately stated charge for a parking-rule violation (like parking near a fire hydrant or too close to a crosswalk) is not related to or incidental to the actual privilege of using the parkin…
Is a lessee being double-taxed if their equipment lease already had sales tax paid at signing, before Illinois started taxing lease payments themselves in 2025?
It feels like double taxation but isn't legally recognized as such: the tax paid when a lessor originally bought equipment to lease (pre-2025 Use Tax on the lessor's cost) and the NEW tax now added to…
If a South Carolina retailer rounds a cash total because pennies are unavailable, should it recalculate the sales tax using the rounded amount?
No. When pennies are unavailable, a South Carolina retailer may round the final cash amount up or down, but the Department says the sales tax due must still be calculated from the original sales price…
Does South Carolina's 5% admissions tax apply to charges to enter or use my venue — a gym, golf course, escape room, bowling alley, movie theater, museum, or similar place of amusement?
Probably yes. South Carolina charges a 5% admissions tax on any paid charge to enter OR use a 'place of amusement,' defined broadly as any location with an activity that occupies spare time, distracts…
When do I remit South Carolina's 5% admissions tax on advance ticket sales, season tickets, season passes, and gift certificates — in the month I sell them or the month of the event?
Report it in the month of the event, not the month of sale. For advance and season TICKETS to a specific scheduled event, South Carolina's 5% admissions tax is reported and remitted on the admissions-…
How does the South Carolina Department of Revenue decide penalties when a beer, wine, or liquor (ABL) licensee violates the alcohol laws, and when will it suspend or revoke a license?
It's the Department's penalty playbook for alcohol-license violations. SC Revenue Procedure #26-1 updates the guidelines the Department uses to assess administrative penalties for violations of South …
How does South Carolina's new mandatory alcohol server training differ from the training that reduces penalties for alcohol violations?
They are two separate things. Under Bill H. 3430 (effective January 1, 2026), South Carolina now requires every alcohol server and manager who sells alcohol for on-premises consumption to complete a m…
Can a construction-equipment rental company with one Illinois office source all its rental receipts to that office for local sales tax purposes, regardless of where the equipment is delivered or picked up?
No -- a single-location origin-based approach isn't automatically approved. For a lease with recurring periodic payments where the equipment is delivered to the customer, Illinois sources each payment…
Does sending a 'notice of intent to appeal' preserve my Virginia tax appeal, or must I file the complete application for correction within 90 days?
Barred as untimely. A commercial bakery wanted to challenge a retail sales and use tax audit, arguing the Department wrongly taxed items it used for quality-control testing, sanitizing, and cleaning. …
What wage levels must a Nebraska Advantage Rural Development Act or Microenterprise Tax Credit Act applicant meet for applications filed on or after January 1, 2026?
For applications filed on or after January 1, 2026, the Nebraska Advantage Rural Development Act required wage level is $20.22 per hour, and the Nebraska Advantage Microenterprise Tax Credit Act wage …
Does a mobile home park owner/dealer owe Illinois sales tax when it resells a used, previously-titled manufactured home out of its park inventory?
Yes. Once a mobile home park owner becomes a licensed dealer and holds a manufactured home in its park inventory, its sale of that home to a purchaser -- whether it's the home's first sale or a later …
If I resell promotional items like pens, banners, and brochures to not-for-profit organizations, can I keep skipping sales tax on those sales, and what do I need to have on file?
Yes, but only if you get and keep an exemption certificate. Missouri lets a reseller skip sales tax on educational, marketing, and promotional items sold to not-for-profit civic, charitable, religious…
Does a public school district owe Missouri sales tax on food, coffee, and drinks sold by students at a student-run restaurant and coffee shop inside its career center?
No. Missouri's Director of Revenue ruled that a public school district's student-run restaurant and coffee shop at its career center are not subject to state and local sales tax, because the sales are…
If I manufacture equipment and hire a subcontractor (who isn't licensed as a Missouri contractor) to install it at a customer's Missouri site, is the subcontractor's installation labor subject to Missouri sales tax, and how do exemption certificates flow between everyone involved?
No, the installation labor itself is not taxable because installation is not one of the services listed as taxable under Section 144.020, RSMo -- only materials the subcontractor sells as part of that…
Does ice sold from vending machines qualify for Missouri's reduced sales tax rate on food?
Yes. Missouri LR 8377 holds that bulk and bagged ice sold from vending machines is food for home consumption under Section 144.014, RSMo, so it is taxed at the state's reduced food sales tax rate rath…
If I never filed my New Mexico income tax returns and the state assesses me, can I beat the assessment just by claiming business deductions without records?
Mostly no. Robert Duran did not file New Mexico personal income tax returns for 2016 through 2021, so the Department assessed the tax based on IRS income data. Because an assessment is presumed correc…
Can I get a South Carolina tax credit for rehabilitating an abandoned building, how big is it, and what buildings and expenses qualify?
Yes — you can claim a credit worth about 25% of your rehab costs. South Carolina's Abandoned Buildings Revitalization Act gives a nonrefundable credit for rehabilitating, renovating, or redeveloping a…
Does a waste-hauling broker owe Illinois sales/use tax on charges for roll-off dumpster and portable-toilet services when it subcontracts the actual dumpsters and toilets to third-party haulers?
Yes, but as Service Occupation Tax, not Retailers' Occupation Tax on a rental: the Department ruled that delivering a dumpster or portable toilet to a customer's site is a taxable 'lease' of tangible …
What period did South Carolina's December 2025 advisory-opinion index cover, and where should researchers look for the newer version?
SC Information Letter 26-3 was the Department's subject index of South Carolina advisory opinions issued from 1987 through December 31, 2025. It is no longer current: SC Information Letter 26-11 super…
What period did South Carolina's December 2025 advisory-opinion citator cover, and is that citator still the current version?
SC Information Letter 26-2 was the Department's advisory-opinion citator covering 1987 through December 31, 2025. It is no longer the current citator: SC Information Letter 26-10 superseded it on Apri…
Does equipment used to turn captured landfill methane into pipeline-quality renewable natural gas (RNG) qualify for Illinois's manufacturing machinery and equipment sales tax exemption?
No. The Department ruled that this taxpayer's RNG facility does not qualify for the manufacturing machinery and equipment exemption, because its process of cleaning, cooling, compressing, and purifyin…
Is a bundled IVF specimen-storage offering -- combining a leased robotic system, a nominally-sold storage tank, and subscription database software -- taxable in Illinois?
The Department didn't issue a specific yes/no on this taxpayer's bundled tank/robot/software offering. Instead, it explained the general framework: a software-as-a-service provider is a 'serviceperson…
Does Texas sales tax apply to a company's fee for reviewing and proofreading auto dealers' manufacturer-warranty reimbursement claims before they're submitted?
No. A company that only reviews, edits, and proofreads dealers' warranty reimbursement claims already entered into the manufacturer's own system — without keeping its own database, entering data, or s…
In South Carolina, do people 85 and older really pay less sales tax, and how do they actually get the lower rate at the register?
Yes, but only if they ask for it. South Carolina gives individuals 85 years of age or older a 1-percentage-point cut in the STATE sales and use tax rate (so 5% instead of 6%) on tangible personal prop…
Can a marketplace facilitator subtract its own currency-exchange, payment-processing, and platform fees from taxable gross receipts, since those fees are charged to marketplace sellers rather than buyers?
No. A marketplace facilitator that has met the $100,000 remittance threshold is treated as the retailer for every sale made over its marketplace, and its taxable gross receipts include all considerati…
Does corrugated plastic field tile used to drain farmland qualify for Illinois's farm machinery and equipment sales tax exemption?
No. Illinois's farm machinery and equipment exemption specifically excludes corrugated plastic pipe and other water-management/drainage products from the definition of exempt 'equipment,' so field til…
Is Illinois's Renewable Energy Charge being repealed at the end of 2025, and does it apply to a solar energy provider's lease/electricity bill?
No, the charge isn't expiring as scheduled -- Public Act 104-0010 extended its repeal date from December 31, 2025 to December 31, 2030, so it remains in effect. The charge is assessed by public utilit…
Our LLC currently files as a partnership and has a large Illinois net loss carryforward -- if we make an S-corp election next year while keeping the same LLC, does that carryforward transfer to the new S corporation?
No. Even though the same LLC continues to exist as a legal matter, converting from a partnership to an S corporation is treated federally as a liquidation of the partnership followed by formation of a…
Will dietary supplements that don't make medicinal claims still be taxed at a reduced rate after Illinois eliminates its 1% state grocery tax on January 1, 2026?
Dietary supplements without a medicinal label claim keep being classified as 'food' (groceries), but the way they're taxed changes on January 1, 2026: the State's 1% grocery tax is eliminated, and ins…
What county per capita income figures should South Carolina taxpayers use for incentive eligibility while the 2025 figures are delayed?
South Carolina's updated county per capita personal income figures -- used to test eligibility for several income, sales and use, and property tax incentives -- are delayed. Because of the federal gov…
Can a business place vending machines selling vapes and nicotine pouches inside bars, and what Illinois licenses does that require?
Yes, placing vape and nicotine-pouch vending machines in a bar is permitted under Illinois law -- these products can be sold from a machine only if they aren't mixed with non-tobacco items (other than…
When a South Carolina dinner theater charges one ticket price for a meal plus a show, is the ticket taxed as a meal, as an admission, or both?
Both. A dinner attraction show — one ticket price that buys admission to watch a show AND a meal — has two 'true objects,' the meal and the entertainment, and neither is merely incidental to the other…
Can an electing Alaska Native Settlement Trust deduct its beneficiary distributions on its Colorado return, and must it withhold Colorado tax on distributions to nonresident beneficiaries from renting a Colorado building?
No to both. Because the trust elected out of the IRC § 661 distribution deduction federally, it can't claim that deduction on its Colorado return either (Colorado starts from federal taxable income). …
If my out-of-state online retail company uses a Missouri third-party logistics (3PL) warehouse to fulfill orders, do I owe Missouri sales tax or use tax, and does it depend on where the order ships?
It depends on where the goods are located and where title transfers. Orders shipped from outside Missouri to a Missouri address owe Missouri use tax; orders never touching or delivered to Missouri owe…
If a contractor builds a home addition under a lump-sum contract and separately invoices the homeowner for the sales tax it paid on materials, who is legally responsible for that sales tax -- the contractor or the homeowner?
The contractor is. Under Missouri law, a contractor who purchases materials to fulfill a lump-sum construction contract is the final user and consumer of those materials, so the contractor -- not the …
Does Texas's sales tax exemption for gas and electricity sold to a qualifying data center cover hydrogen used to power on-site fuel cells?
No. The Texas Comptroller's long-standing interpretation of the sales tax exemption for gas and electricity sold to data centers limits "gas" to natural gas, so hydrogen purchased to power data center…
What project-income method did Florida approve for the Capital Investment Tax Credit in TAA 25C1-007?
Florida approved subtracting base-year income from each taxable year's income to determine income generated by the qualifying project because all Florida activities were project-related. The agreement…
Which city's local sales tax applies when a company's headquarters processes an order but the customer picks up the item at a different warehouse in another town?
It depends on where the selling activities actually happen: sales that a company's headquarters receives, processes, prices, and bills are sourced (and local sales tax is owed) to the headquarters cit…
What can a South Carolina farmer buy without paying sales tax, and how does the SCATE card work?
A lot, but usually only with a SCATE card and only for agricultural BUSINESS use. South Carolina exempts many farm purchases from state (and Department-collected local) sales and use tax across eight …
If I'm a Virginia resident working remotely from home for an out-of-state employer, can I claim a Virginia credit for the income tax that state charged me?
Denied. A Virginia resident who spent early 2021 working remotely from his Virginia home for an out-of-state employer claimed a credit on his Virginia return for the income tax he paid that state. The…
The company I invested in sent my Qualified Equity and Subordinated Debt Investments Tax Credit paperwork to the wrong address, so I missed the April 1 deadline. Can I still get the credit?
Denied -- the deadline is hard, and it does not matter that a third party dropped the ball. This investor applied for Virginia's Qualified Equity and Subordinated Debt Investments Tax Credit for a 202…
Can Virginia extend or pause its three-year refund deadline for a taxpayer who couldn't file on time because of illness or disability?
Denied for the closed years. A taxpayer filed his 2018, 2019, and 2020 Virginia returns together in May 2024, seeking refunds; Virginia paid the 2020 refund but denied 2018 and 2019 as outside the thr…
Does the six-month filing extension give me three more years to amend for a refund, even if I filed my original return before the original due date?
Denied. Taxpayers timely filed their 2020 Virginia return, then filed an amended return seeking a refund, which the Department rejected as too late. They argued the amendment was within three years of…
My business was audited for sales and use tax and hit with an estimated assessment I think is arbitrary. Can Virginia estimate my tax if my records are incomplete, and are bank and credit-card statements enough proof?
The assessment was upheld -- Virginia can estimate your tax when your records are incomplete. This taxpayer was a Virginia "consuming contractor" audited for sales and use tax over March 2017 through …
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