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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Was electricity purchased by Charleston Air Force Base for on-base family housing and a trailer park exempt as electricity used for residential purposes?
Yes. Electricity used in the base's family housing and trailer park qualified for the former residential-purpose exemption because those spaces were intended as places for people to live, even though …
Was a separately stated insurance premium covering replacement of lost, stolen, or destroyed leased cellular phones taxable?
No. The premium was forwarded to an insurer, covered replacement rather than repair, and was optional for lessees with other coverage.
Were concrete, steel, and other materials used by a manufacturer to build a wastewater settling basin exempt under South Carolina's manufacturing-machine exemption?
Yes. The settling basin was an integral part of a wastewater treatment facility that operated as one pollution-control machine. Concrete, steel, and other materials the manufacturer used to construct …
Did South Carolina's six-year tax-assessment period for a 25% omission apply retroactively to returns due before its September 1, 1985 effective date?
No. The ruling concluded that section 12-54-80(2)'s six-year assessment period applied only to returns due after September 1, 1985. Returns due before that effective date remained subject to the limit…
What does SC Private Letter Ruling #89-5 conclude about a long-term capital-gains refund and estimated income tax?
One-half of the refundable credit for 1987 capital gains could be used when calculating the taxpayer's 1989 estimated South Carolina income tax. That half was taken on line 7 of the 1989 estimated-tax…
Was a 1987 IRA withdrawal fully taxable in South Carolina when another state had denied deductions for the original contributions?
Yes. South Carolina included the full IRA withdrawal because it was fully taxable on the taxpayer's federal return and the state's historical statutes provided no IRA-specific modification. The fact t…
Did affiliated corporations have to file a consolidated federal return to keep Texas's intercorporate-service exemption?
No. The group had to qualify for consolidated filing under federal law, but choosing not to file that way did not forfeit the exemption.
Which vehicle sales, adaptive equipment, repairs, and remodeling for an orthopedically handicapped person were exempt?
Qualifying modified motor vehicles and adaptive equipment were exempt, as was necessary accommodation labor; ordinary parts and aesthetic work were taxable.
Did Texas's agricultural exemption cover rodent-control equipment or poison?
Equipment and traps were taxable; poison could qualify only when a farmer used it to protect an agricultural product held for sale.
How did Texas tax fire-protection systems installed in new, residential, and existing nonresidential buildings?
New-construction labor was nontaxable, residential repair labor was nontaxable, and the total charge for existing nonresidential remodeling was taxable.
Were charges for workers' compensation claim files and required health-care guidelines taxable?
No. The 1989 letter exempted both categories as governmental records or required Open Records Act publications.
Were charges to tear down and bury PCB-contaminated property taxable in Texas?
No. Based on the Texas Water Commission's 1989 characterization of PCBs as hazardous waste, the disposal charges were nontaxable.
Were Treasury Trust Portfolio distributions subject to Connecticut's former dividends tax under Ruling 89-5?
Yes, when paid to shareholders who were natural persons residing in Connecticut. The government-obligation source did not change the result because the shareholders did not own those obligations. The …
How did Texas tax labor and parts for repairs to farm, livestock, horse, and utility trailers?
Repair labor was not taxable. Separately billed parts were taxable unless the trailer was unlicensed for highway use and operated exclusively on the farm or ranch by the original producer, documented …
How did Texas divide a guest ranch's packaged and separately stated charges between hotel and sales tax?
Lump-sum room packages bore hotel tax, while separately stated rides, meals, amusement, concerts, and equipment generally bore sales tax.
Were an economic expert's litigation-support services taxable in Connecticut under Ruling 89-4?
No. The expert gathered and analyzed case data and presented opinions before a trier of fact for an attorney, rather than advising a business client. The services were not taxable business analysis or…
Which tubes, tips, equipment, racks, bottles, labels, and sample inputs used to make culture media were exempt?
Single-use tubes, tips, and aspirators plus sale packaging qualified; reusable racks, most equipment, and sample containers did not.
Was a consumer's deductible payment for an automobile warranty repair taxable?
No. The internal memo treated the warranty deductible like an insurance-repair deductible and concluded that tax was not due.
Did rebuilding automobile and truck engines qualify as manufacturing under Connecticut Ruling 89-3?
No. Rebuilding engines with new parts did not substantially transform them into a different product or form. Parts incorporated into engines for resale could be bought on a resale certificate, but mac…
Were charges to copy and deliver hospital medical records taxable in Texas?
No. Both copying and separately billed delivery were nontaxable, but the provider owed tax on taxable items used to perform the service.
Are gastrostomy (stomach) feeding tubes for patients who cannot eat by mouth exempt from New York sales tax?
Yes. Gastrostomy feeding tubes are exempt from New York sales and use tax on two possible grounds. First, a tube that completely or partially replaces the function of a permanently inoperative or perm…
Is asbestos removal taxable when it is done only as a necessary step in replacing a home's boiler — a capital improvement?
No — not on these facts. Although asbestos removal is by itself a taxable service of repairing/maintaining real property under Tax Law § 1105(c)(5), when it is performed as a constituent part of a cap…
Which cleaning chemicals and supplies used in cattle slaughtering and meat processing were exempt?
Direct-contact denaturant, soap, qualifying hide treatment, and by-product-equipment degreaser were exempt; general cleaning and worker-clothing supplies were taxable.
When were charges for temporary technical personnel nontaxable staffing rather than taxable identifiable services?
The agreement had to supply temporary employees, bill by employee-hour rather than job completion, and let the customer replace unsatisfactory workers.
Did a corporate group lose Texas's intercorporate-service exemption by choosing not to file a consolidated federal return?
No. Eligibility to report on a consolidated federal return was enough; the group's decision not to use that method did not destroy the exemption.
Which state, city, county, and transit taxes applied to a Texas City investigation firm's assignments in 1989?
The firm collected state and Texas City tax plus applicable customer-area use tax, subject to the historical 8% cap and drop-off order.
Did an unfunded $6 million paid-in-capital book entry have to be included in the subsidiary's 1989 franchise-tax surplus?
The preserved STAR body states the facts and question but gives no answer, so the surplus treatment cannot be determined from this record.
When did Texas's temporary-storage exclusion protect equipment held or assembled in Texas for out-of-state use?
Out-of-state purchases could qualify if temporarily stored and used solely outside Texas; in-state purchases and Texas manufacturing use were taxable.
Were hourly aircraft-use charges by nonprofit flying clubs taxable, and were owner reimbursements taxed?
Club-member use was a taxable rental; the club's hourly reimbursement to aircraft owners was a tax-free rental for rerental.
Were subscription background-music services transmitted by radio frequency taxable telecommunications services?
No. The Comptroller found no legislative support for treating subscription music like telephone, telegraph, paging, or similar communications.
What happened under SC PLR 89-3 when a fruit-juice seller had not registered its product for the historical soft-drink tax exemption?
ABC was not liable because it was neither required to be licensed as a South Carolina distributor nor the first in-state recipient. If ABC voluntarily registered the juice and the Commission approved …
Did maintenance of legally required environmental or energy-conservation equipment have to be essential to manufacturing to qualify for the Section 151.338 exemption?
No. The equipment did not have to be essential to manufacturing; Section 151.338 covered maintenance and related services required by law to protect the environment or conserve energy.
Were periodontal testing fees and the contents of dental test kits taxable?
The testing fee was nontaxable, but the kit's treatment was unresolved because its contents were unspecified; the provider owed tax on taxable inputs.
Did a customer claiming 100% exempt electricity use need a utility study and engineer certification?
No. A specific exemption certificate was enough for exclusive exempt use; studies and engineer certification applied to predominant-use claims.
Was the Texas Animal Health Commission's $6.25 charge for a book of 25 blank veterinary inspection certificates subject to sales tax?
No. The Comptroller determined that the required $6.25 certificate-book fee was not subject to sales tax.
Was electricity used in separately metered apartment-style patient housing at a drug-rehabilitation or psychiatric center exempt residential use?
No. Texas treated the electricity as taxable commercial use because the 60-day patient housing was not occupied as a home or residence.
Were Comfort Ease, Neuroaid, Respond II, Comfort Wave, and similar therapeutic devices exempt from Texas sales tax?
Only in a prescription sale to an individual. The products qualified as therapeutic devices, but nonprescription sales and sales to medical practitioners or health-service organizations were taxable.
William and Mary Yuriko Kochiyama asked whether the $20,000 restitution payments they were entitled to receive under the federal Civil Liberties Act of 1988, for the U.S. government's internment of Japanese Americans during World War II, are subject to New York State and New York City personal income tax.
No. Because the Civil Liberties Act of 1988 itself directs that this restitution be treated for federal tax purposes as damages for human suffering (and so is excluded from federal adjusted gross inco…
Was a gas-compression agreement a taxable equipment rental or a nontaxable compression service when the provider operated and controlled the compressor?
It was a nontaxable compression service. Although the equipment was substantial, the customer had no control over it and the provider handled installation, operation, repair, and starting and stopping…
Did HMOs' gross-premium tax and franchise-tax exemption also exempt their separate management company from franchise tax or sales tax on taxable services?
No. The management company was a separate taxable corporation, and premium-taxed funds did not exempt it or its HMO clients from sales tax on taxable services.
On what amount did a direct-sales company collect Texas sales tax when it sold through independent consultants and charged shipping?
On the documented retail sales price, including shipping. For the facts reviewed, the company collected tax on $20 because that stated retail price included the 50-cent shipping charge.
Was installing furniture that was not permanently attached to a building a real-property construction contract, and how were mixed contracts classified?
No. Installing furniture that was not permanently affixed was not an improvement to real property; for mixed contracts, the contract had to be viewed as a whole, and incidental real-property work did …
Was a separately stated municipal franchise fee part of the taxable sales price of electricity?
Yes, when the electricity was taxable. The fee was the utility's cost of doing business and remained part of the sales price even when billed separately.
Are construction materials exempt from sales tax when a private developer builds an office tower on land owned in fee by the U.S. Postal Service, so that the finished work becomes Postal Service property?
Yes. Because the materials become an integral component of real property owned in fee by the United States Postal Service — an exempt federal instrumentality under Tax Law § 1116(a)(2) — and title to …
Is a foreign nonprofit agricultural cooperative, authorized to do business in New York under the Not-For-Profit Corporation Law, automatically exempt from New York corporate franchise tax?
Not automatically. Being a nonprofit cooperative or being authorized under the Not-For-Profit Corporation Law doesn't by itself exempt a cooperative from Article 9-A tax — but if the cooperative actua…
Which customer sales were exempt from Connecticut use tax under Ruling 89-2?
Direct sales to Connecticut municipalities or their agencies were exempt if the government customer was directly billed, paid directly by its own check, and gave a completed exemption certificate. Sch…
For South Carolina's former six-year assessment rule, did the 25% omission test include wholesale sales, exempt retail sales, or only taxable retail sales?
The test included total retail sales before deductions for exempt retail sales, but excluded wholesale sales when retail and wholesale books were kept separately. Without separate records, all sales w…
Who owed South Carolina's historical soft-drink license tax when an out-of-state distributor supplied in-state retailers?
The first person receiving or manufacturing the soft drinks in South Carolina owed the historical tax. Under the stated facts, that placed liability on the in-state retailer receiving products from th…
Did a pro hac vice federal-court appearance count as practicing law in Connecticut under Ruling 89-1?
Yes, if the attorney was admitted by the judges of the superior court. Admission pro hac vice to represent a client in federal district court at Bridgeport counted as engaging in the practice of law i…
How could a Texas seller document an export when transportation was delayed and the goods had not left the country before an audit?
Use a freight forwarder or customshouse broker. Its receipt could show the goods were being held for export during an audit, followed by the bill of lading or broker certification after shipment.
Could the Comptroller waive a nonprofit mail-order seller's prior Texas tax liability when it volunteered to register and collect tax prospectively?
No. The Comptroller said it had no authority to waive the tax itself, although it would waive penalties and interest; the organization should obtain a use-tax permit and collect tax if doing business …
Were art appraisals taxable when performed for insurance purposes, and did the result change for sale, authenticity, or market-value appraisals?
Insurance-related appraisals were taxable insurance services. Appraisals performed only for a sale, authenticity check, or market-value decision were not taxable.
When a partnership (not a corporation) operates a cellular telephone utility business in New York, are its corporate partners individually subject to New York's Article 9 telephone-business franchise tax, and can the partnership's own section 186-a utility gross-receipts tax be passed through to be paid by the partners instead?
Each corporate partner that is itself principally engaged in the telephone business (through the partnership, since each partner acts as the partnership's agent) is subject to Article 9 tax under sect…
Which affiliated company could count jobs created for a transferred production line under South Carolina Private Letter Ruling 89-1?
XYZ could include the new full-time jobs in its historical new-job tax-credit calculation. Although the jobs supported ABC's production line, XYZ hired and controlled the workers and treated them as i…
Which parts of a shopping-mall project were new construction, and how should shared HVAC and mechanical-installation labor be allocated?
New exterior entrances adding footage were new construction; replacement space and storefront expansion within existing floor area were remodeling. Shared equipment labor was allocated by the new cons…
Did an elevator company have to calculate the taxable repair portion of each maintenance contract separately?
No. Revising an earlier contract-by-contract approach, the Comptroller allowed one taxable percentage for all Texas maintenance contracts.
How did Texas tax repair or remodeling of nonresidential and residential real property under the corrected guidance?
Nonresidential repair or remodeling was taxed on the total charge. For residential work, lump-sum contractors paid tax on materials, while separated contracts taxed the materials charge.
Could an elevator maintenance company use one historical taxable-repair percentage for all of its Texas maintenance contracts?
Yes. For simpler recordkeeping, the company could establish one verifiable taxable percentage and apply it across its Texas elevator maintenance contracts.
When did the referenced Texas policy change for sand, gravel, and similar unprocessed materials take effect, and was it retroactive?
The memo gave June 13, 1988 as the effective date and said the policy decision was not retroactive. It did not explain the policy's substantive tax rule.
Does a contractor owe sales tax on materials used to rehabilitate privately owned homes, when the work is paid for with state and federal housing-program funds?
Yes. A contractor must pay sales tax on materials it buys to rehabilitate and improve privately owned homes and rental property, even though the work is funded and administered through New York State …
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