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 machinery disassembly, moving, reassembly, loading, unloading, in-plant moves, and export packing taxable?
Moving-related disassembly and reassembly were nontaxable when done only to relocate equipment and not to repair or reconfigure it. Loading, unloading, and in-facility moves were also nontaxable absen…
Could a customer's letter substitute for a properly completed Texas direct-payment exemption certificate?
No. The letter was unacceptable. The seller had to charge the customer tax on taxable items unless the customer issued a properly completed direct-payment exemption certificate in the form accepted un…
Did a company fabricating complete dump-truck covers qualify for Connecticut's manufacturing exemption on electric bills under Ruling 89-69?
Yes. The Department concluded that machining, bending, painting, sewing, and assembling components into finished dump-truck covers for sale qualified the company for the electric-bill sales-tax exempt…
Were customer-specific flight plans taxable when prepared for one flight and aircraft and not resold to others?
No. A flight plan that was unique information for a specific client, intended for one-time use, and not resold to others was not taxable.
Were charges to cut, shape, and install insulation in existing nonresidential property taxable?
Yes. A single contractor's entire charge was taxable; with separate contractors, cutting and shaping were taxable fabrication and installation was taxable remodeling.
Were lump-sum charges for billboard advertising space and temporary shape extensions taxable, and what if an outside company performed the alteration?
The billboard company's own advertising-space and extension charges were nontaxable; the extension was treated as additional advertising space rather than remodeling. The company paid tax on its input…
Were charges to test whether storage tanks held properly under EPA, Texas Water Commission, and Railroad Commission standards taxable?
No. Storage-tank testing against those standards was a nontaxable service. The testing company remained responsible for tax on the supplies, materials, and other taxable items used to perform it.
Did depreciating offshore equipment make later Texas storage a taxable use, and how did the appended letter classify surveying in and outside Texas waters?
Yes. Depreciated equipment returned to Texas for storage was used in Texas, creating state and applicable local use tax based on the storage location. The appended letter also taxed boundary, right-of…
How was Texas sales tax calculated for buy-one-get-one-free promotions and seller-accepted coupons?
Tax applied only to the paid item in a buy-one-get-one-free transaction; the free item was not taxed to the customer. When a coupon reduced the selling price, tax applied to the discounted amount—for …
What did the Comptroller's August 1989 news release say about the new sales-tax exemption for nonprofit publications?
Beginning August 28, charitable, philanthropic, and benevolent groups could sell writings tax-free when they both published and distributed them. The release identified historical societies, Junior Le…
How did the Comptroller's internal memo distinguish nontaxable bowling-lane maintenance from taxable repair?
Scheduled recurring lane resurfacing performed before lanes became unusable—typically every 18 to 24 months—was nontaxable maintenance. Work done to fix something broken was taxable repair.
Is trash collection taxable, and does a credit for customers who separate recyclables make it a nontaxable sale for resale?
Trash collection is taxable, and the recycling credit does not change that. A solid-waste hauler asked whether collecting trash is taxable under Tax Law § 1105(c)(5) and whether a bill credit offered …
Are a securities-quotation network's charges a taxable telephone service, a taxable information service, or an untaxed trade-execution service?
The three activities are taxed differently. NASDAQ, Inc. asked whether charges for using private telecommunication lines to provide stock quotations and execute securities trades are subject to the te…
Which animal feeds and horse health products were exempt, and when did the seller need an agricultural exemption certificate?
Catfish-pond and wild-bird feed were exempt without a certificate. Feed for rabbits raised for food or regular-course sale was exempt with a certificate because pet-rabbit feed was taxable. Horse medi…
Were lump-sum per-use charges for diagnostic-imaging equipment supplied with a technician taxable in Texas?
No. The Comptroller treated the provider as selling a diagnostic scanning service, not renting equipment, because its technician remained with the MRI, CT, ultrasound, or nuclear-medicine equipment. T…
Were lump-sum party, dinner, and overnight yacht-cruise packages taxable when the boat traveled on a border lake?
Yes. The Comptroller treated all three packages as taxable amusement services because the cruises did not travel offshore beyond Texas territorial waters. State tax applied to the entire package, and …
Could a company use a rubber-stamped signature on its Texas sales and use tax returns?
The Comptroller would process a rubber-stamped return, but the stamp still represented the taxpayer's or authorized agent's declaration that the return was true and correct. Processing did not prevent…
Did this computer-equipment contract qualify as a financing lease, and how did Texas tax its payments and purchase option?
No. The Comptroller classified it as an operating lease. The full $2,542.53 monthly payment, including interest, was taxable, and tax also applied if the lessee exercised the option to buy the equipme…
Was a support contract taxable when it covered a hotline and loaner equipment but billed repairs separately?
Yes. Providing replacement equipment while the customer's property was repaired made the support contract taxable, and the separately billed repair charges were also fully taxable.
Were a copy-machine lease, maintenance fee, per-copy click charge, and the business's charge to customers taxable in Texas?
Yes. The lessor had to tax the lease, maintenance, and click charges even when separately stated, and the business had to tax its entire charge for copies, including the passed-through click amount.
Under South Carolina Revenue Ruling 89-22, were the initial and renewal charges for a loose-leaf subscription publication with periodic updates subject to sales or use tax?
Yes. The Commission treated the loose-leaf publication, its periodic replacement or additional pages, and the renewal materials as tangible personal property. Both the initial subscription price and r…
Under South Carolina Revenue Ruling 89-21, were charges for converting a customer's records into microfilm or microfiche taxable sales or nontaxable services?
They were taxable. The Commission concluded that microfilm and microfiche copies were tangible personal property, so charges for providing them were subject to sales or use tax unless an exemption or …
Under South Carolina's 1989 backup-withholding guidance, when did a payor have to withhold from reportable interest, dividends, and other reportable payments?
A payor had to withhold 4% from covered reportable payments when the payee failed to provide a taxpayer identification number, the Tax Commission identified an incorrect number or notified underreport…
Were a state commission's purchases of conservation tillage machines and drip-trickle irrigation installation equipment exempt when the commission owned the machines but assigned them to conservation districts for farmers' use?
Yes. The exemption turned on the equipment's use, not its ownership. The conservation tillage equipment planted crops, while the tractor-pulled drip-irrigation machines formed planting beds, installed…
Were an aluminum-can manufacturer's steel strapping and seals for scrap bales excluded from sales and use tax, and were reinforced screens inside paint-sprayer nozzles exempt machine parts?
Yes to both. The steel strapping and seals were packaging materials used to hold scrap-aluminum bundles sold to customers, so their purchase was excluded from tax under section 12-35-170. The reinforc…
Could a Texas seller accept a later-dated resale certificate for an earlier sale and obtain a refund of tax returned to the customer?
Potentially. The customer had to hold a valid sales tax permit when the sale occurred, provide a currently complete resale certificate, confirm it had not and would not claim the same tax as a return …
Were labor charges to repair heating, water-heating, and air-conditioning systems in small owner-occupied homes taxable under Connecticut Ruling 89-68?
Yes. The ruling treated repair-labor charges for heat pumps, water heaters, furnaces, air-conditioning units, and similar systems in owner-occupied one-, two-, or three-family homes as subject to sale…
Were post-loss home cleaning and nonscheduled rug or upholstery cleaning taxable under Connecticut Ruling 89-67?
Yes. The ruling treated cleaning a home's interior or contents after a fire, flood, or furnace malfunction as taxable janitorial service, and also taxed nonscheduled rug and upholstery cleaning in res…
Were testing or inspection services performed on tangible personal property taxable under Connecticut Ruling 89-66?
No. The ruling said testing or inspection services rendered to tangible personal property were not subject to Connecticut sales or use tax.
How did Connecticut Ruling 89-65 tax marketing research and related consulting services?
Marketing research was exempt, but advice to businesses about the research findings or results was taxable consulting. If exempt research and taxable consulting were not separately stated on the invoi…
Which real-property inspection services were taxable under Connecticut Ruling 89-64?
Inspections of existing commercial, industrial, or income-producing real property were taxable. Inspections of new construction and existing exclusively residential, owner-occupied one-, two-, or thre…
Was electricity used for residential dwelling purposes in a condominium complex exempt under Connecticut Ruling 89-63?
Yes. Electricity used in residential condominium units was exempt whether each unit was billed separately, rented to a residential tenant, or included in a single association bill for a predominantly …
Who had to pay or collect Connecticut use tax on pads delivered by an out-of-state seller under Ruling 89-62?
The Connecticut purchaser owed the tax. If the out-of-state seller met Public Act 89-41's registration requirement, it had to register, collect, and bill the tax; otherwise, if it did not register, th…
How did Connecticut Ruling 89-61 tax asbestos training programs and asbestos testing services?
The full gross receipts from asbestos training programs provided to businesses were subject to sales or use tax, while asbestos testing services were not taxable. The ruling is obsolete.
How did Connecticut Ruling 89-60 tax plan reviews, property inspections, and construction management services?
Specified new-construction and small owner-occupied residential services were not taxable, while services for existing commercial, industrial, or income-producing property were taxable. Work integral …
Were charges for planning and arranging business meetings or conventions taxable under Connecticut Ruling 89-58?
Yes. The ruling applied sales or use tax to the total gross receipts from planning and arranging business meetings or conventions, including discussing arrangements, formats, and agendas with clients.…
Would a multistate retailer owe Texas use tax on out-of-state printed materials mailed directly to Texas recipients?
Under the proposed Rule 3.346 revision described in the letter, yes. A corporation doing business through five Texas stores would report use tax on the portion of its out-of-state printed-material cos…
Was weather information sold by computer link or in hard copy taxable as a Texas information service?
No. Although it was an information service, the weather data was derived from direct scientific observation of physical phenomena and therefore fell within Rule 3.342(d)(2)'s nontaxable-information ca…
When is selling an electric thermal storage heating system a taxable sale of goods, and when is installing it a nontaxable capital improvement?
It depends on who installs it. Joseph J. Guido, d/b/a Guido's Electric & Bldg. Supply, sells electric thermal storage heating units and systems and asked how four sales scenarios are taxed. The Depart…
Is a machine used to master compact discs exempt production equipment, and does it matter whether the discs are made for sale?
It is exempt when used to produce discs for sale, and the for-sale requirement is decisive. Script Systems, Inc. makes a compact disc-interactive 'Authoring System' that records video, audio, and text…
Were separately stated charges for inspecting pipe or casing taxable in Texas?
Not when the charge covered inspection only. The Comptroller said the charge became taxable if the work involved repair, remodeling, restoration, or maintenance.
When could a Texas seller treat merchandise shipped out of state as exempt from Texas sales tax?
The sale was exempt when the seller delivered the goods out of Texas through a carrier or its own trucks and kept records—such as bills of lading or trip logs—showing the out-of-state shipment.
How did Texas distinguish nontaxable transmission-repair labor from a taxable sale of a rebuilt transmission?
Labor was nontaxable when the shop repaired a transmission or removed and replaced one as part of repairing the customer's vehicle. But when the shop simply sold a rebuilt transmission without repairi…
Was restoration labor exempt when a building's listing in the National Register of Historic Places was still pending?
No. Because the building was not listed when the work was performed, the contractor had to tax the total charge. If the building was listed later, the customer could give the contractor an exemption c…
Who owed Texas use tax when an out-of-state seller without Texas nexus shipped customer-branded note pads into Texas?
The seller did not have to collect Texas use tax if it truly lacked Texas nexus. Customers that did have Texas nexus were responsible for paying use tax directly to the Comptroller on note pads delive…
Was a church exempt from Connecticut corporation business tax without an IRS determination specifically recognizing its federal tax-exempt status?
No. The ruling required an IRS determination referring specifically to the church before the Connecticut corporation business tax exemption applied. The church could choose whether to file Form 1023, …
How did Connecticut Ruling 89-56 treat resale purchases of electricity or steam and gas used to produce utility service?
Electricity or steam bought for resale was not taxable if the purchaser gave the seller a resale certificate. Gas used directly to furnish steam or electricity through lines or pipes to consumers was …
How did Texas tax computer hardware and software support sold through a subcontractor?
Texas taxed in-state hardware support and software support for software the service company had sold. Software support for software it had not sold was nontaxable. Taxable and nontaxable charges had t…
Were submeter installation, repair, reading, and tenant-billing services taxable for Texas apartments and condominiums?
Computerized submeter reading and billing for property owners was taxable data processing. Installation and repair treatment depended on whether the meters remained tangible personal property or becam…
Could a grocery business estimate the taxable portion of dishonored-check bad debts using statistical percentages?
Yes, with safeguards. The Comptroller accepted the proposed approach if it used the non-cash complement, recent taxable-sales data by outlet, removed included tax using each outlet's rate, counted all…
When did Texas exempt vessels, vessel components, or equipment used in offshore mineral exploration?
The operator was not exempt as an entity. A vessel over eight tons qualified only when bought from its builder for exclusive commercial use; attached component parts could qualify; and exploration equ…
Was electricity used by country-club pumps to extract well water and move it to fairways and greens exempt?
Yes. The Comptroller said electricity used both to extract water from the earth and to transport the water after extraction was exempt from sales tax.
How did Texas tax industrial tank washing, plant labor, maintenance, demolition, debris removal, and new-tank construction?
Hydro-washing labor to inspect and prepare a tank was nontaxable while consumed materials were taxable. Other labor depended on the work: scheduled realty maintenance and demolition to the slab were n…
Were lobbying services performed by an employee for the employer taxable under Connecticut Ruling 89-55?
No. The ruling said the lobbying-services tax did not apply when an employee performed the services for the employer as part of the employee's job duties. The ruling is obsolete.
How did Texas tax magazine production, subscriptions, individual sales, giveaways, and copies included in association dues?
A publisher could give its printer a resale certificate. Six-month-or-longer subscriptions mailed at second-class rates and magazines included in annual trade-association dues were nontaxable; individ…
If a business believed for 11 years that it was a validly incorporated New York corporation — filing corporate tax returns and paying corporate taxes the whole time — but later discovers the incorporation paperwork was never actually completed, was it a corporation subject to franchise tax all along?
Yes. Because the organization held itself out as a corporation and conducted business as one since 1977 — filing corporate returns and paying corporate taxes — it is treated as a corporation subject t…
Could a Texas seller accept a faxed resale certificate with a copied signature?
Yes. A faxed certificate was acceptable if it contained all required information, substantially followed the prescribed form, and was accepted in good faith. The signature did not have to be an origin…
How did Connecticut Ruling 89-54 tax management and property services for residential condominium associations?
Management, garbage removal, exterior painting, and road repair were taxable in proportion to non-owner-occupied units. Landscaping, furnace repair, and snowplowing were fully taxable even when every …
Did a class-reunion organizer have to collect sales tax on the full ticket price under Connecticut Ruling 89-53?
Yes. Because the organizer's arrangement fees were commingled with the event's catering, entertainment, and other costs, sales tax applied to the total ticket price. If the organizer contracted direct…
Which real-property inspection services were taxable under Connecticut Ruling 89-52?
Inspections of existing commercial, industrial, or income-producing property were taxable. Inspections of new construction and existing exclusively residential, owner-occupied one-, two-, or three-fam…
How these rulings are useful
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