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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Is a fee for baling garbage and arranging to ship it out of state for disposal subject to sales tax?
Yes — baling garbage is taxable processing, so the per-ton fee is subject to sales tax. Michael J. Berger and Co., CPA's asked about a client planning to receive garbage from local carting companies, …
Is a telecommunications management company's bundle of services — including its management and membership fees and its usage reports — taxable as telephone service?
It is all taxable telephone service under § 1105(b), except interstate and international charges. Peat, Marwick Main & Co. asked about a client, a telecommunications management company that selects an…
Were vending-machine meal sales at the Veterans Home and Hospital exempt from Connecticut sales and use taxes under Ruling 89-30?
No. The ruling found no statutory exemption for X Company Food Services' vending-machine sales. The Veterans Home and Hospital was not the purchaser of the meals, so it also could not be liable for us…
Were services to paint business vehicles taxable, and could a vehicle lessor buy them for resale, under Connecticut Ruling 89-29?
Painting business vehicles, including vehicles leased to a business, was taxable. A motor-vehicle leasing company could not buy the painting service for resale because the lessor consumed the service.…
Did apartment buildings and rental homes retain Connecticut's residential gas-and-electricity exemption when managed for nonresident owners or temporarily vacant?
Yes. The ruling treated apartment buildings and rented houses as residential dwellings even when managed for nonresident owners, and vacant apartment units or rental homes retained the residential uti…
When a securities broker-dealer invests customer funds in repurchase agreements (repos) with banks, is that investment "investment capital" under New York's franchise tax, or something else — and does it matter whether the repo is really a purchase of securities versus a secured loan?
It depends on whether the repo is, in substance, a purchase of the underlying government securities (in which case it can be investment capital if it meets the other statutory requirements) or in subs…
New York Advisory Opinion TSB-A-89 (6)I: Issue raised is whether, under Article 22 of the Tax Law, a 'small partnership' is subject to the penalty for failure to file or late filing a partnership return imposed under section 685(h)(2) of the Tax Law, where such partnership is not subject to the failure to file penalty pursuant to section 6698 of the Internal Revenue Code.
No automatic exemption. A three-partner 'small partnership' that qualifies for the federal reasonable-cause safe harbor against the IRC § 6698 penalty (because it has 10 or fewer partners under IRC § …
Were a real-estate firm's feasibility studies, site searches, comparative analyses, risk assessments, and organizational analyses taxable under Connecticut Ruling 89-27?
Yes. The ruling classified those real-estate advisory services to individuals and private or public entities as taxable business analysis, management, or consulting services. The ruling is obsolete.
Were custom software, software maintenance agreements, and installation charges taxable under Connecticut Ruling 89-26?
Yes. The ruling treated custom software as taxable tangible personal property, the related maintenance agreement as taxable computer-programming or processing service, and installation charges as part…
When did a lender-support service become taxable debt collection rather than nontaxable file review?
Initial file review and comments were nontaxable when the lender contacted the borrower. The later phase became taxable when the company itself undertook collection efforts.
Were Texas-printed forms exempt merely because some were later sent by UPS to out-of-state branches?
No. The printer first stored the forms for the customer in Texas, so all forms were taxable; UPS charges billed by the printer were taxable too.
Were hoses, fittings, and hose assemblies sold to agricultural customers exempt under Connecticut Ruling 89-25?
Only when used directly in agricultural production. A customer with direct use issued an exemption certificate; indirect use remained taxable. The ruling is obsolete.
Did a hot-water heat exchanger used for handwashing qualify as machinery used directly in agricultural production under Connecticut Ruling 89-24?
No. The ruling treated the handwashing heat exchanger as indirectly used or outside agricultural production because the activity occurred before the first production operation. It contrasted machinery…
Could motor-vehicle dealers or repairers buy car-washing services for resale under Connecticut Ruling 89-23?
No. The ruling said dealers and repairers did not resell car-washing services to their customers and therefore could not give the car-wash provider a resale certificate. The ruling is obsolete.
Were appliance-repair services billed to a manufacturer under its warranty taxable after July 1, 1989 under Connecticut Ruling 89-22?
Yes. Repair and maintenance services performed on or after July 1, 1989 on tangible personal property, including appliances, were taxable. The official page marks the ruling obsolete and says the rema…
Under South Carolina's emergency 1989 guidance, what did a buyer have to withhold from payments to a nonresident seller of real estate and associated tangible personal property?
The buyer generally had to withhold 7% of net proceeds paid to a nonresident seller, or 5% when the seller was a corporation. Tangible personal property was covered only when sold with a real-estate i…
How did Connecticut Ruling 89-21 apply the July 1, 1989 commercial-renovation tax to existing contracts and carpet installation?
The new 8% tax applied to commercial, industrial, or income-producing renovation services performed on or after July 1, 1989, including existing contracts. Permanently affixed carpet made the full cha…
Were statutory solid-waste disposal fees included in the taxable price of garbage collection and hauling?
Yes. Municipal and commercial collectors and haulers had to include the disposal fees in the taxable sales price of garbage or solid-waste collection and removal.
Did a snack seller using unattended honor boxes have to hold a permit and collect Texas sales tax?
Yes. The seller was a vendor, and honor-box sales were treated like vending-machine sales: the full price was taxable and had to include the tax.
After South Carolina's Bingo Act of 1989 eliminated Class A licenses, could an existing Class A licensee keep offering $6,000 to $30,000 in prizes, and when did the Act's new procedures begin?
Yes. A Class A license in effect on October 1, 1989 remained valid until expiration, and its holder could keep offering $6,000 to $30,000 in prizes during that period. But every promoter and nonprofit…
Under South Carolina's 1989 guidance, did a hotel owe sales and accommodations tax on separately billed local calls, long-distance calls, and pay-per-view movies?
Yes. Separately billed local calls, long-distance calls, and pay-per-view movies were components of the accommodation price and were subject to both sales and accommodations tax. Telephone service sol…
Who was liable for South Carolina use tax when an in-state contractor bought building materials from an out-of-state retailer?
The contractor was liable for the use tax. If the out-of-state retailer was required or authorized to collect South Carolina tax, either party could be assessed. A receipt from such a retailer showing…
Could a contractor and subcontractor buy materials tax-free for a Connecticut construction agreement under Ruling 89-20?
Yes, for materials and supplies physically incorporated into and becoming a permanent part of the structure. The agreement was a construction contract, so Company X and subcontractor Company Y could g…
Could a farm purchaser use Connecticut's machinery exemption certificate for a screening plant under Ruling 89-19?
Yes. The screening plant was machinery used in the agricultural production process because it separated stones from soil to make fields more productive for cultivation. The purchaser could issue the m…
How could a grocery store estimate a sales-tax bad-debt deduction for returned checks covering mixed purchases?
It could subtract cash advances, apply its period-wide taxable-sales ratio to the remaining checks, estimate the included tax, and deduct that amount with supporting records.
Were investigation services performed under a self-insured plan taxable in Texas?
No, under Rule 3.355. Comparable covered activities for insurers, claimants, or their attorneys were taxable, subject to the letter's government and Texas-location rules.
Did a laundry and dry-cleaning business qualify for Connecticut's manufacturing fuel exemption under Ruling 89-18?
No. Cleaning garments did not substantially transform property into a different product with a distinctive name, nature, and use, so it was not manufacturing and the fuel exemption was unavailable. Th…
Which city publications did the 1989 letter treat as tax-exempt open-records documents?
Budget, audit, street-guide, and thoroughfare-plan sales were exempt; sales of uniform building, mechanical, plumbing, and electrical codes were taxable.
When could a new-construction contractor buy final cleanup or other services for resale?
A separated contractor could resell final cleanup, landscaping, and surveying, but not security, telecommunications, or daily cleanup. Lump-sum contractors could not use resale certificates.
Was leasing space on a satellite transponder subject to Texas sales or use tax?
No, under the stated facts. The letter distinguished satellite space from equipment located in Texas and did not decide separate uplink, downlink, or cable services.
Was recurring cleaning of rubber-finishing machines nontaxable maintenance when scheduled by usage rather than the calendar?
Yes. The usage-based cleaning was routine maintenance, but mixed invoices had to clearly separate it from taxable janitorial work or the full charge could be taxed.
Were separately billed mileage, airfare, and hotel costs taxable when incurred while servicing software?
They followed the software service. After October 1, 1987, reimbursed expenses were taxable when the seller serviced its own software, but not when another person performed the service.
Is a monthly subscription newsletter a tax-exempt periodical?
Yes — a monthly subscription newsletter that meets the periodical tests is an exempt periodical. Brownstone Publishers, Inc. asked whether its 'New York CO-OP & Condo Insider,' a monthly subscription …
Which nonprofit organizations qualified for the revised Texas exemption for books and other writings?
Religious, philanthropic, charitable, historical, scientific, and similar nonprofits qualified under the letter; nonprofit educational organizations did not.
How did Texas tax lump-sum installation of concrete landscape curbing?
The curbing was a permanent real-property improvement. On residential or new-construction jobs, the contractor paid tax on inputs and did not tax the lump-sum customer charge.
Were utility purchases for federally owned foreclosed properties exempt when a property manager paid the bills?
Yes, if the manager bought as the federal entity's agent; property title, government-backed financing, or reimbursement alone did not create the exemption.
Could farmers lease pecan shakers and sweepers under Texas's agricultural sales-tax exemption?
Yes, when used exclusively on a farm or ranch to produce and harvest pecans held for sale; equipment used for nuts not held for sale was taxable.
Were cleanroom cleaning and day labor cleaning common areas exempt manufacturing services?
No. Cleanroom laundry, surface, vent, and inspection work was taxable, as was day labor cleaning restrooms, cafeterias, and common areas.
How did Texas source local tax on cable-TV service bills around the September 1, 1987 law change?
Bills for service beginning before September 1, 1987 used the former Rule 3.313 allocation; later service was sourced where delivered.
How did Connecticut Ruling 89-17 tax cartons and packing materials used by moving companies?
Moving companies generally consumed their cartons, so purchases were taxable even if cartons were itemized, retained by customers, or used on moves. True over-the-counter sales were taxable retail sal…
Was electricity used to quick-chill fruits and vegetables exempt from Texas sales tax?
Only in part. Electricity used to reach the required core temperature was exempt processing use; later refrigeration was taxable storage use.
Which interior-design installations — floor coverings, shelving, cabinetry, drapery, blinds, lighting — are tax-free capital improvements, and who pays tax on the materials?
It depends on permanence and, for floor covering, on a June 1, 1989 rule change. Hafner Associates, Inc., an interior designer, asked whether 20 different installations are tax-free capital improvemen…
Were membership dues, seminar fees, and publications taxable for a Texas membership organization?
Membership and seminar fees were not taxable, but the organization owed tax on free member publications and had to collect tax on copies sold to nonmembers.
Could a Texas Masonic lodge hold an annual tax-free fundraising sale lasting several days?
Only one day could be tax-free. The lodge could sell its Masonic items tax-free on one designated day each year, not throughout a multiday sale.
How did Texas tax different methods of installing, repairing, and maintaining flagpoles?
Wall- and roof-mounted flagpoles were taxable personal-property sales; a pole set in a concrete footing was treated as a real-property improvement.
Could a builder give contractors exemption certificates for a facility built for two exempt organizations?
Yes. Because the job benefited two qualifying exempt organizations, the builder could give contractors a properly completed exemption certificate.
Were engineering studies of motor-vehicle accidents taxable when they generally became attorneys' work product?
Yes. Based on the facts provided, Texas treated the engineering studies as taxable insurance services under Rule 3.355(a)(5).
How much Texas use tax applied to out-of-state catalogs and a mailing list used for Texas and non-Texas recipients?
Texas taxed the share of catalog cost delivered into Texas and the share of the mailing-list service representing Texas names.
Did Texas apply the manufacturing exemption for rock-breaking explosives only prospectively?
No. The Tax Policy Committee changed its prior position and applied the exemption retroactively, allowing the seller to refund sales tax collected in error.
How did Connecticut Ruling 89-16 define and apply the controlling interest transfer tax?
The tax was measured by the entity's interest in Connecticut real property and imposed on the transferor. A controlling interest meant more than 50% of corporate voting power or more than 50% of an en…
When was labor to install new sheet-metal manufacturing equipment taxable in Texas?
Independent labor that only placed equipment in position was not taxable; assembly or installation by the equipment seller was taxable.
Did Texas's industrial-solid-waste exemption cover office garbage or commingled waste?
No. Office garbage was taxable, and mixed office and industrial waste was presumed taxable unless the required certification was provided.
How could State Fair concessionaires document tax-free purchases for resale when the fair collected their sales tax?
The fair could issue resale certificates on behalf of booth operators for whom it collected and remitted tax, identifying those operators to suppliers.
New York Advisory Opinion TSB-A-89 (5)I: Issue raised is whether, for personal income tax purposes, Petitioner can take a resident credit, pursuant to section 620 of the Tax Law, for 'C Corp' taxes paid to North Carolina on 'S Corp' earnings reported in New York State.
Yes. Because North Carolina does not recognize S corporation status, Petitioner's wholly North-Carolina electrical contracting company paid North Carolina's corporate net income tax directly, even tho…
When did Texas treat temporary workers as a customer's employees rather than as a contractor performing taxable services?
Only when the work was normally done by the customer's employees, the customer supplied the tools, and the customer supervised the workers.
Were vocational and psychological testing services taxable in Connecticut under Ruling 89-15?
It depended on the customer. Vocational aptitude testing and counseling for the general public were not taxable. Psychological testing and profiles for prospective or existing employees were taxable s…
When did Connecticut petroleum gross earnings tax apply to advance deposits for diesel fuel under Ruling 89-14?
Not when the deposits were received. The tax applied only when the diesel fuel was sold because it was calculated on earnings from the first Connecticut sale of petroleum products.
How did Texas tax telecommunications, local-network access, answering services, and free telephone directories?
Texas taxed qualifying in-state telecommunications and final-consumer access charges, while directory and answering-service treatment depended on the facts.
Does a company owe New York tax on parts it buys out of state, receives in New York, then uses to repair cars at out-of-state race tracks?
No — the parts are purchased for resale, so there is no sales or use tax. BRM Motorsports, Ltd. transports race cars to out-of-state tracks and repairs and maintains them there; it buys parts out of s…
Is tax-processing software that requires analysis of the customer's needs and program modification exempt as custom software, and are annual license renewals also exempt?
Yes to both, if the software charge is separately stated. Computer Language Research, Inc. sells in-house tax-processing systems (Fast-Tax) whose preparation requires it to analyze each client's speci…
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