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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How did South Carolina calculate the five-year county property-tax exemption for additions costing at least $50,000 to an existing manufacturing establishment?
For 1987 additions valued in the 1988 property-tax year and later additions, the exemption equaled the increase in the total real-property-improvement appraisal caused by the qualifying addition—not a…
Were services to clean and treat ventilation systems for soot, mold, or mildew taxable in Texas?
Yes. The Comptroller classified ventilation and duct cleaning as taxable real-property cleaning services under Rule 3.356.
How are wages received by Nathaniel Moore, a nonresident professional football player for the Miami Dolphins, allocated to New York State for the 1985 and 1986 tax years under section 632(c) of the Tax Law?
Nonresident professional athletes allocate their wages to New York based on the ratio of games played within New York to total games played for the year - not the standard days-worked formula used for…
Are the dues and initiation fees of a golf and country club owned by one company taxable, when members have no ownership or control and anyone on the waiting list can join?
No. Because members of this owner-operated golf and country club have no proprietary interest, no control over its management or activities, and membership is not exclusive (new members are simply tak…
How were pager rentals, repairs, damage waivers, and lost-equipment charges taxed when connected with paging service?
Rented pagers and repairs followed the paging-service tax rate; outright purchases and repairs took the full tangible-property sales-tax rate. Damage waivers were taxable, but lost-equipment replaceme…
Was computer-assisted geophysical data analysis a taxable data-processing service or a nontaxable scientific-analysis service?
Scientific analysis and interpretation were not taxable merely because a computer was used. Mere data input, manipulation, and report production were taxable data processing, and rented computer time …
Was a charge for handling infectious waste subject to Texas sales tax?
No, provided the infectious waste described by the requester met one of the definitions in Rule 3.356(a)(4)(C) or (D).
Can a photofinisher buy its film processors and printing equipment tax-exempt as production machinery, when part of the work develops the customer's own film?
It depends on the step. Machinery a photofinisher uses to develop a negative from film the customer already owns is NOT exempt, because that step is a taxable processing service on the customer's prop…
Were subscriptions and geological or geophysical surveys exempt when their information came from direct scientific exploration?
Yes, when the information was derived from exploratory testing or experimentation; statistical completion data that merely recorded facts was taxable.
Did a taxpayer need to redo a 1986 utility predominant-use study after Texas began requiring engineer certification?
No. The certification requirement applied to studies performed on or after August 3, 1987, so the taxpayer could retain the 1986 study and update it if operations changed.
Was a fee paid to terminate a computer-equipment lease early subject to Texas sales tax?
Yes. The fee was part of the lease agreement and was not among the deductions allowed from taxable lease receipts, so it was included in the taxable amount.
How did Texas apply sales tax to paging service, long-distance inputs, switching equipment, and related charges?
Paging service was taxable, and integral long-distance calls could be bought for resale. Tax on messages and equipment depended on origin, destination, and installation facts.
New York Advisory Opinion TSB-A-89 (10)I: Issue raised is whether, under several sets of circumstances, a nonresident individual is subject to tax under Article 22 of the Tax Law when the individual has commodity trading profits or receives dividends from a corporation.
No, in every scenario Petitioner described. The Department ruled that a nonresident commodities trader who trades solely for his own account - even while physically present on a New York exchange floo…
Were a college security-training program director's services taxable as security services?
No. The director was not providing a watchman, guard, or patrol service, so the college training-program services were not taxable under the stated licensing provisions.
Was the federal excise tax collected from telecommunications customers included in the Texas sales-tax base?
No. Texas excluded the customer-paid federal excise tax from the sales-tax base for telecommunications services and said the treatment applied retroactively.
Is it a taxable sale when a company moves a division's assets into a brand-new corporation in exchange only for that corporation's stock?
No — not if the assets go to the new corporation solely in exchange for its stock. Transferring property to a corporation upon its organization in consideration for the issuance of its stock is expres…
Is machinery sold to the solid-waste industry exempt from sales tax — recycling equipment that turns scrap into materials for sale versus equipment that just compacts trash for a landfill?
It splits by what the machine does. Machinery used to process scrap (metal, wood, paper, cardboard) into usable materials that will be SOLD is exempt production machinery under Tax Law § 1115(a)(12) —…
If a U.S. company's export-sales subsidiary is a Foreign Sales Corporation (FSC) that properly uses the IRS's safe-harbor administrative pricing rules to set its commissions, does that automatically mean New York can't require a combined franchise tax report between the parent and the FSC?
No. Using the IRC's administrative pricing safe harbor for FSC commissions doesn't by itself prevent the Commissioner from requiring a combined report — the administrative pricing rules only cover the…
Was a separately stated charge for placing a flood-plain designation on a taxable survey itself taxable?
Yes. The flood-stamp charge was taxable when performed with a taxable survey because it was part of the surveying service, even if separately stated.
Were stand-alone inspection and X-ray services on casing or drill pipe taxable, and what changed when they accompanied a repair?
Stand-alone inspection and X-ray charges were not taxable. With a repair they were taxable unless separately stated, and resale treatment was available before the pipe's resale.
How did Texas tax telephone wiring and jack installation in residential, new-construction, and existing commercial property?
Residential and new-construction work followed contractor rules, while existing-commercial repair or remodeling was taxable on the total charge.
Were charges for trips on gambling ships taxable as amusement services?
Yes. The internal Comptroller memo said charges for gambling-ship trips were taxable as amusement services; it did not distinguish trips by duration.
Were charges for lifting and moving large equipment with a crane taxable when no other taxable service was performed?
No. Texas treated the work as nontaxable third-party transportation, regardless of lump-sum or separated billing and regardless of the property's classification.
Were charges associated with layaway included in the sales price used to compute Texas sales tax?
No, under the announced policy change. Texas said layaway-related charges would no longer be part of the sales price for sales-tax computation, prospectively.
Could a retailer use cash-basis accounting for Texas sales-tax reporting while keeping its general books on the accrual basis?
Yes, if sales tax was reported consistently and separate cash-basis sales records supported audit verification. The method could not be used for tax on taxable purchases.
Was a charge to a manufacturer for verifying that service-station equipment was safely and properly installed taxable?
No. The verification charge was not taxable, but the service provider had to pay tax on equipment or materials used to perform the service.
Did a purchaser's written sales-tax refund request to a supplier stop Texas's limitations period?
No. The letter said only a refund request by the person that paid the tax directly to the Comptroller tolled limitations, so part of the requested period was lost.
Were services applying tax-law knowledge to a client's benefit plan taxable as data processing or insurance services?
No. Texas revised its earlier answer and treated the work as nontaxable professional services similar to accounting, whether performed manually or by computer.
Were a theme park's school curriculum program and behind-the-scenes tour taxable amusement services?
The school program was not taxable after additional educational facts were supplied, but the behind-the-scenes program remained a taxable amusement service.
How was an all-day charter taxed when nontaxable business transportation included a guided city tour?
The transportation portion was not taxable if separately stated, but the guide and the bus time used for the tour were taxable amusement charges. Without separation, the total charge was taxable.
Were a state-university library's lost-book charges taxable, and how were online searches and photocopies treated?
Lost-book charges were not taxable because Texas treated them as damages. Online searching and photocopying were taxable services under the letter.
Can a warranty-repair company buy its equipment tax-exempt as production machinery, when it reconditions defective units and ships them back to the manufacturer for resale?
No. A company that reconditions defective or damaged units and parts and ships them back to the manufacturer for resale is performing repair — not production — so its equipment does NOT qualify for th…
When a bank reorganizes into a savings-and-loan holding-company structure by having shareholders exchange their bank shares for holding-company shares — a transaction treated as tax-free under federal IRC section 351 — does the bank, the new holding company, or the shareholders owe New York corporate or personal income tax on the exchange?
No. Because the share exchange qualifies as a tax-free transaction under IRC § 351(a) for federal purposes, it is tax-free for both the bank and the new holding company under Article 32 (no entire net…
Did Texas's power-of-attorney rule apply to both predominant-use and exclusive-use electricity refund claims, and did a defective form alone expose the utility?
The rule applied to both types of electricity refund. Accepting an apparently valid customer-signed power of attorney that missed the rule's wording did not alone create utility liability.
Which tools and supplies could a surveyor buy for resale, and which were taxable to the surveyor?
Surveying equipment and consumed supplies were taxable to the surveyor. Markers transferred in a taxable survey could be bought for resale, with limited treatment for substitute markers.
If customers bid no-value promotional 'bonus dollars' for merchandise at an auction, are those transactions taxable Texas sales?
The auction bids are not taxable. Because the promotional 'bonus dollars' have no monetary value, exchanging them for merchandise, meals, or services is not a 'sale' under Texas Tax Code § 151.005, so…
Our partnership's founding families disputed a 1977 agreement to divide up jointly-owned properties, litigated for years, and finally settled in 1988 with a different split than the 1977 agreement's terms implied. Can the 1988 settlement's property distribution still qualify as exempt from New York's Real Property Transfer Gains Tax as a transfer made pursuant to a written contract signed before the tax existed in 1983?
No -- the distribution is taxable, because the 1977 agreement never manifested the kind of binding commitment the grandfather exemption requires, and the eventual 1988 settlement changed the property …
When were Kansas monthly oil and gas production reports due, and what late penalty applied?
Purchasers of Kansas crude oil and natural gas filed monthly production reports with the Department of Revenue by the last day of the first month after each production month. K.S.A. 79-4225(b) imposed…
Were administrative and computerized billing services for a self-funded insurance plan taxable?
Insurance services for the self-funded or stop-loss plan were not taxable. Computerized billing was taxable data processing if it exceeded 5% of the total administrative-services bill.
When were fishing tools treated as taxable rentals rather than taxable well services, and could the tools be bought for resale?
Tools supplied alone or with a supervisor were rentals eligible for resale purchase; the supervisor charge joined the rental tax base. Tools supplied with an operator were taxable well services.
Could an airline give an exemption certificate for approved improvements to public airport terminals?
Yes under the stated facts. The tax-exempt airport was the ultimate beneficiary, and the approved terminal improvements directly benefited the airport and public.
Which printing and mailing-service charges were taxable, including folding, collating, labels, mailing lists, transportation, and postage?
Folding and collating were taxable parts of printing. Post-production inserting, labeling, and mailing could be nontaxable, while printed labels, mailing lists, and seller-billed delivery were taxable…
Did exchanging promotional 'West Texas Bucks' for auction items create taxable sales, and who owed tax on donated merchandise?
The exchange was not a sale because the promotional currency had no monetary value. Donating retailers owed tax on resale-certificate merchandise used in the promotion.
When is a Texas motor vehicle rental to a state agency or an employee on official state business exempt?
A rental directly to a state agency was exempt. STAR partially superseded the letter's denial for employee rentals: an employee on official state business may issue an exemption certificate when the r…
Were claims-adjusting and insurance-investigation services taxable when provided for municipal coverage?
They were not taxable when provided to a third-party administrator for a self-insured municipality, but were taxable when sold to an insurance carrier insuring a municipality.
Which employees of a licensed customhouse broker could witness goods entering Mexico and certify their export?
Full- or part-time salaried employees could do so if they held power of attorney and had U.S. Customs approval; commission workers could not.
Could a licensed customhouse broker use part-time employees to witness exports to Mexico and complete Texas export certifications?
Yes, if they were salaried, held power of attorney for that purpose, and had U.S. Customs approval. Commission workers still could not certify exports.
Is a construction management company liable for sales tax on purchases it makes as agent for the project owner, or is only the owner liable?
Ordinarily the owner, not the agent, is liable — but the agent's protection is not absolute. A construction management company that genuinely acts as agent for a disclosed principal (the project owner…
Could a private purchasing agent for NASA buy items tax-free, and what happened when the agent used the items itself?
Items transferred by title and possession to the federal government could be bought for resale. Items used by the private agent were taxable, because the agent was not exempt.
Could a parent use a later-acquired company's pre-acquisition earnings to support a franchise-tax refund after the acquired company merged into a subsidiary?
No. Forming the subsidiary was not an acquisition, and the later merger eliminated the stated basis for using the acquired company's earnings to offset the investment.
Were charges to blade farm or ranch roads and terraces taxable, and how did maintenance or residential use affect the result?
Road and terrace blading was taxable unless it qualified as maintenance. Repairing a road used exclusively from a residence to a public road was not taxable.
Was the described voice-mail service taxable in Texas?
Yes. Texas classified it as taxable telecommunications service and said the described offering could also qualify as data processing.
Was a separately sold site license allowing unlimited copies of general-use software taxable in Texas?
Yes. Texas treated the site license as a taxable license of a computer program under Rule 3.308. STAR also notes that the custom-software distinction was repealed in 1987.
Were charges for temporary workers taxable when they performed general tasks or helped during a busy period?
No for general temporary help. A business that regularly sold a taxable service still had to collect tax, even for a short engagement.
Did a qualifying prior-contract exemption survive when unchanged data-processing contracts passed to a surviving company in a liquidation?
Yes. The exemption remained because the contracts were transferred unchanged and the surviving company was bound by the same terms.
How did Texas treat partner-interest transfers, dissolution distributions, and a later computer-equipment sale involving assumed debt?
Partner-interest sales and dissolution distributions were not taxable. The later debt-assumption transfer was a sale but could qualify as an occasional sale.
Was a nonrefundable $1 admission fee to a self-service auto-wrecking yard taxable as an amusement service?
No. The admission fee was not a taxable amusement service when it was nonrefundable and could not be applied to a purchase.
When was rebuilding a damaged aircraft radome or flight surface taxable manufacturing rather than repair?
Near-complete reconstruction was taxable manufacturing on the total charge. Restoring the original item was repair, with separated labor nontaxable and materials taxable.
What Texas sales-tax duties arose when an out-of-state direct seller used demonstrators to take orders at Texas home parties?
The company had to collect Texas tax on distributor sales. Local sourcing depended on delivery or distributor facts; hostess gifts created tax for the retailer, and handling was taxable.
Could manufacturing tenants claim a utility exemption when gas and electricity accounts remained in the commercial landlord's name?
No. Utilities bought through the landlord's account were treated as the landlord's taxable commercial use and part of rent, even when the tenant paid the utility directly.
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