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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Are a New York mover's business forms and selling supplies taxable if bought from an out-of-state franchisor and used for interstate moves?
They are taxable. Bay Shore Warehouse, Inc., a New York mover operating under a franchise with an out-of-state van line, must buy the van line's forms and selling supplies (delivered to it in New York…
Which of a bank data processor's computer services are taxable, and which are exempt information or bookkeeping services?
It splits by the type of work. Northeastern Computer Services, Inc. provides on-line computer processing for banks, savings-and-loans, and credit unions (maintaining depositor/loan/checking/IRA accoun…
New York Advisory Opinion TSB-A-88 (10)I: Issue raised is whether advanced diagnostic imaging equipment purchased and owned by Petitioner and used for processing and producing X-rays, scans, images and related diagnostic information qualifies for the investment credit under section 606(a) of the Tax Law.
Yes. The Department ruled that Petitioner's diagnostic imaging equipment - MRI, CT scanner, radiologic/fluoroscopic unit, mammography unit, and ultrasound unit - qualifies for the section 606(a) inves…
Did an out-of-state clearinghouse that routed telephone billing records and payments owe South Carolina tax on communications charges?
No. XYZ did not furnish communications in South Carolina and therefore was not liable under section 12-35-1150. South Carolina retailers that actually provided communication services owed the tax, exc…
Were documentary stamps required when a bank transferred trust-account real estate without consideration from its trust division to a newly separate trust company?
No. The deeds were part of a corporate realignment, not a sale of real estate. The transfer changed the trustee holding legal title, involved no consideration, and left beneficial ownership with the i…
Were museum admission fees exempt from South Carolina admissions tax because the museum was housed in a building listed on the National Register of Historic Places?
No exemption applied. The museum's admission fees were taxable because visitors paid to enter the museum, not for the purpose of viewing the National Register building that housed it. A historic-build…
Did a South Carolina resident owe state income tax on operating-income distributions from a Tennessee S corporation, and could she deduct interest paid to buy the stock?
Generally no on the operating income, and no on the interest deduction. The Tennessee S corporation's income was not taxable in South Carolina except for listed categories such as salary, dividends, i…
Must a Texas bank or lending institution collect sales tax when it sells repossessed property?
Yes, for repossessed taxable property. Texas told banks and other lending institutions that they could not treat these dispositions as occasional tax-free sales, even when sales tax had been paid on t…
Does a part-time residential house cleaner owe Texas sales tax, or is she treated as the household's employee?
Residential house-cleaning done by an individual who is not an employee of a janitorial service is not taxable in Texas. In this case, a woman who cleans a few homes part-time is treated, for sales-ta…
Are well services taxable in Texas when performed to complete a well into a new, deeper formation rather than to restore existing production?
Well services are not taxable in Texas when they are performed solely to facilitate completing the well-bore into a new, deeper formation — as opposed to restoring production in an existing zone (here…
Could labor to restore, repair, or remodel a building listed in the National Register of Historic Places be purchased tax-free in Texas?
Yes. Texas said a person or organization restoring, repairing, or remodeling a building listed in the National Register of Historic Places could give the contractor an exemption certificate for the la…
When a savings bank reorganizes into a bank holding company structure by merging a shell subsidiary into itself and exchanging shareholder stock for holding-company stock, do the bank, its new parent, or its shareholders owe New York tax?
No New York tax results beyond the federal treatment: because the reorganization qualifies as a tax-free statutory merger under IRC section 368(a)(1)(A) (with parent stock used per section 368(a)(2)(E…
Which charges for designing, building, installing, repairing, storing, removing, and reinstalling luminaires were taxable in Texas?
Texas taxed designing and building a luminaire, its first installation, repairs, and travel billed as part of a taxable repair. It treated storage, later installation, removal, operator charges, and r…
Which mobile-phone installation, removal, reprogramming, repair, cleaning, and inspection charges were taxable in Texas?
Texas taxed installation tied to a phone sale or lease, repair-related reinstallation, replacement-unit installation, reprogramming, enhanced services, refurbishing, repairs, parts, and cleaning. Stan…
Is a microfilm billing service taxable in Texas when the film is processed out of state and never returns?
A microfilm billing service's charge to its customer is not taxable in Texas. The business films clients' ledger cards with a portable camera, sends the exposed film to an out-of-state processor, and …
How does Texas tax pipeline painting, repairs, replacement, relocation, land clearing, and material handling charges?
For pipeline contractors, Texas treats the work by category. Pipeline painting and pipeline repairs are presumed taxable — painting can be exempt if it qualifies as maintenance under Rule 3.357(c)(3),…
Did Texas audit policy treat chairs, tables, refrigerators, and similar property in stadium sky boxes as taxable?
No. An internal Texas Comptroller memorandum said chairs, tables, refrigerators, and similar tangible personal property in stadium sky boxes had not been taxed in the audit and were to be treated as e…
Were canteen sales and patient meals at a Texas clinic exempt because an exempt state entity operated the clinic?
No. Texas required tax on taxable canteen items and found no patient-meal exemption for a clinic because clinics were not licensed by the state as institutions for the care of human beings. The letter…
What did the Comptroller's letter on the proposed audiovisual-works rule say about taxing video photographers?
This is not a taxpayer-specific ruling but a June 1988 Comptroller letter responding to industry comments on the proposed sales-tax rule for audiovisual works. It confirms the Comptroller adopted the …
When a car buyer trades in an old vehicle to the dealer but leases the new one from a separate finance company, can the trade-in value reduce the lease amount subject to New York sales tax?
No — the trade-in value can't reduce the taxable lease amount, so New York sales tax is due on the full lease price. Marine Midland Automotive Financial Corp. leases cars to consumers through dealers …
Are membership dues at a golf-and-pool facility owned and run by one individual, where members have no say in management or membership, subject to New York sales tax on club dues?
No — the dues are not taxable, because this isn't really a club. EverGreen Country Club, Inc. offers members a golf course and swimming pool (also open to non-members for a fee) but is owned and opera…
Does a company selling discount membership cards owe Texas sales tax or need a permit, and is its list of participating retailers a taxable information service?
Selling memberships in a discount-card service is not taxable in Texas. If the list of participating retailers is provided to cardholders as part of their membership, the company is not providing a ta…
Were forensic-engineering investigations connected with insurance claims taxable as insurance services in Texas?
Yes. Texas treated forensic-engineering and applied-science services as taxable insurance services when performed for a customer in connection with a claim against an insurance policy, even if the cus…
Which tree-service, land-clearing, stump-grinding, demolition, and debris-hauling charges did Texas treat as taxable?
Texas treated most tree cutting, trimming, stump grinding, and stand-alone debris hauling as taxable, while land clearing for construction-site preparation, complete demolition-and-removal jobs, pastu…
Is a Texas money-order service taxable, and who pays tax on the machines, forms, telephone equipment, and service used to provide it?
The sale of a money order was nontaxable to the customer. But the provider of the nontaxable service had to pay sales or use tax on taxable items and services used to provide it, including dispensing …
If an out-of-state bank regularly sends its own officer or a New York agent into New York to negotiate purchases of New York mortgage loans, is it 'doing business' in New York and subject to the bank franchise tax, even without a New York office or employees?
Yes -- regularly sending its own chief operating officer into New York, or using a New York agent, to negotiate purchases of New York-secured mortgage loans is doing business under Article 32, regardl…
Were hotel charges to federal employees taxable when the employee paid personally and was later reimbursed by the government?
It depended on who paid. RR 88-8 held that when a federal employee is billed directly and pays personally (check or credit card) and is later reimbursed, the sale is to the employee and the 7% accommo…
As a coin-operated laundromat, which of my charges are taxable — the wash-and-fold service, vending-machine sales, and cleaning supplies sold by attendants?
It depends on the charge. In Revenue Ruling 88-7 the South Carolina Tax Commission held that (1) 'wash and fold' laundering service is a taxable service under § 12-35-1130(A) — the 1986 phase-out only…
For a South Carolina corporate license-fee report, was capital measured on the first day of the filing year or the first day of the prior year?
The filing year. For ABC's report due March 15, 1988, the license fee was based on capital stock and paid-in surplus shown on January 1, 1988, not January 1, 1987. The Commission treated the fee as pr…
Is a service that obtains Texas driving records for insurers taxable, and may the DPS record fee be excluded?
Yes. Texas treated the service of obtaining Department of Public Safety driving records for insurance companies and prospective customers as taxable, including electronic delivery. The DPS charge itse…
How did Texas tax hydrostatic testing and separated repair charges for compressed-gas tube trailers?
Texas treated the tube trailers as motor vehicles. Under the separated repair invoices described, labor to disassemble, test, and repair the trailers was not taxable, while sales tax had to be collect…
Is a charge for copying data from one storage device to another taxable in Texas when the customer supplies the disks or tapes?
Yes. Texas treated the charge for transferring data from one storage device to another as a taxable data-processing service, even though the customer supplied the disks or tapes and the provider did n…
Is return freight charged by an equipment lessor at the end of a rental agreement taxable in Texas?
Yes. Texas treated all transportation charges billed by an equipment lessor as taxable, including separately stated return freight. Tax applied whether the lessor hired a commercial hauler and rebille…
When is auto-upholstery work a nontaxable lump-sum motor-vehicle repair, and when is installing seat covers a taxable sale?
Texas treated work on headliners, vinyl roofs, convertible tops, carpet, and custom permanently installed seat covers as motor-vehicle repair, so the shop did not charge tax on its lump-sum bill after…
Could a taxable landscaping provider buy the city's later removal of collected grass, trees, and organic debris tax-free for resale?
Yes. Because waste removal was included in the landscaper's taxable customer charge, the landscaper could give the city a resale certificate for the city's further debris removal.
Is jewelry bought with hostess credits earned through home-party sales subject to Texas sales tax?
Yes. Texas treated the hostess's jewelry purchase with earned credits as a taxable barter transaction. The credits were based on events, buying guests, and purchase volume, making the hostess similar …
What portion of a Texas payroll-service charge was taxable when the provider also handled employee pay and employer obligations?
The payroll provider's total service fee was taxable. But amounts the employer supplied solely to pay employee salaries, the employer's Social Security share, workers' compensation, and similar obliga…
Did a pre-July 22, 1987 lease qualify for Texas's prior-contract exemption when the customer bore later sales-tax increases?
No. Texas denied the prior-contract exemption because the master lease made the customer responsible for sales-tax changes or increases. That clause protected the lessor from a rate change, meaning it…
How did Texas tax freight-bill auditing combined with computerized or manual accounts-payable processing?
Freight auditing was nontaxable whether performed manually or by computer. Accounts-payable processing was taxable data processing when computerized but nontaxable when manual. Because taxable account…
Must an advertising agency collect New York sales tax when it bills clients for arranging billboard displays and for placing ads in trade journals that aren't sold at newsstands?
No — both charges are exempt advertising services, so the agency doesn't collect sales tax from clients. Stillman Advertising Inc. asked about (1) arranging billboard advertising and (2) placing ads i…
Is a vendor's sale of medical practice-management software taxable, when the software is either sold as-is, customized, or recompiled to add a doctor's insurance ID for electronic billing?
It depends on whether the vendor analyzes or adapts it. Compu Service sells 'THE MEDICAL MASTER,' a medical office-management program (with hardware and installation) that lets physicians file insuran…
When a business buys custom software along with taxable hardware, is the software taxable — and what happens if the vendor doesn't separate the software price from the hardware price?
The software is exempt, but an unsegregated bundle is fully taxable. Rock's Tire and Battery, Inc. bought a computer system after months of vendor analysis; the initial bill did NOT separate the softw…
How did Texas tax installation, standby-consultant, and mileage charges for oil-and-gas well equipment?
Installation connected with selling, leasing, or renting wellhead and well components was taxable, as was installation forming part of taxable nonresidential repair or remodeling. The described standb…
New York Advisory Opinion TSB-A-88 (6)I: Issue raised is whether, for taxable year 1987, the gain realized on the sale of stock in a cooperative housing corporation is subject to New York personal income tax under Article 22 of the Tax Law when the owner was a non-resident of New York State at the time of the sale and the cooperative apartment was partially used for business purposes.
Only in part. Because Petitioner was a nonresident when she sold her stock in a New York City cooperative housing corporation, the gain is New York-source income under Tax Law section 632(b)(2) only t…
How did Texas divide a strip-center project between new construction and taxable remodeling under a lump-sum contract?
Rebuilding from the slab up and adding square footage were new construction; removing walls and repainting were remodeling. If remodeling exceeded 5% of one lump sum, the entire charge was taxable.
Were road blading and watering taxable repairs or maintenance, and how did Texas distinguish residential from commercial roads?
Blading, alone or with watering, was repair; watering alone was maintenance. Repairs to a road connecting a residence to a public road were not taxable, but repairs to private commercial roads were.
Were broiler-house litter cleaning and wood shavings used as a farm desiccant taxable in Texas?
No. Texas said cleaning wood shavings and sawdust from broiler-house floors was a nontaxable service to farmers. The provider could buy shavings and sawdust tax-free with an exemption certificate when…
If a portion of my deferred installment-sale income is deemed received under the federal proportionate disallowance rule, can I spread the resulting Nebraska tax over several years the way federal law lets me?
No -- the Nebraska tax is due all at once. Under Revenue Ruling 22-88-3, the amount of income that federal law deems received under the proportionate disallowance rule for installment sales (Internal …
Did Texas sales tax apply to insurance services performed under stop-loss coverage for self-insured plans?
No. The Tax Policy Committee decided not to apply sales tax to those services, made the policy retroactive to October 1, 1987, and said the rule would be amended.
Which automatic-teller-machine network charges did Texas treat as taxable or nontaxable?
Texas taxed ATM per-transaction processing, file-label generation, network maintenance, data lines, vendor service contracts and installation, equipment, after-hours response pay, and debit-card proce…
Were charges for installing, assembling, repairing, refinishing, or moving a customer's tangible personal property taxable in Texas?
Standalone installation and moving without reassembly were not taxable, but assembly or erection and repair or refinishing were taxable. Related services became taxable when performed with the taxable…
How did Texas tax a separated contract containing both new construction and repair or remodeling work?
Materials were taxable, and the repair-or-remodeling percentage applied only to labor. Each subcontractor had to determine its own taxable labor; the contractor could not simply tax that percentage of…
Can an alien (foreign) bank with a New York International Banking Facility exclude interbranch interest income from its taxable entire net income while still counting that same interbranch income toward its separate, tax-favored IBF income calculation?
No -- for taxable years 1982 through 1985 and after, the bank must first modify its federal taxable income to restore (recognize) the interbranch income and expenses between its New York IBF and its f…
Was a pre-screening service taxable as credit reporting in Texas, and how did the Comptroller source the service?
Yes. The Comptroller treated pre-screening as a credit-reporting service and sourced it to the delivery point; Texas tax was not due when delivery occurred outside Texas.
Could labor to restore, repair, or remodel a National Register historic building be purchased tax-free in Texas?
Yes. The letter allowed qualifying labor to be purchased tax-free under Rule 3.291(b). With a separated contract and direct-pay certificate, the requester would remit tax only on materials.
What makes a New York exemption certificate properly completed, who then owes the sales tax, and what are a contractor's obligations when it receives a capital improvement certificate?
A properly completed certificate shifts the tax burden to the buyer; a contractor doing a capital improvement pays use tax on its own materials. D.C. Distributing Inc., a siding-and-window wholesaler …
Is a contract to clean grease and odor exhaust systems in commercial kitchens exempt as interior cleaning and maintenance, or is it taxable equipment maintenance?
It's taxable — this specialized equipment cleaning isn't the exempt ordinary interior janitorial service. Shaban & Son, Inc. cleans grease and odor exhaust systems in commercial kitchens under contrac…
Is a deed conveying standing timber subject to South Carolina's documentary (deed-recording) tax, even when the price is set per board foot or cord cut rather than by the acre?
Yes. In Revenue Ruling 88-6 the South Carolina Tax Commission held that a timber deed conveying standing timber that the buyer will cut is subject to the documentary tax under § 12-21-380, no matter h…
As a manufacturer, do I have to include all capitalized costs — like installation, not just the machine's price — on my South Carolina property tax return?
Yes — all of them. In Revenue Ruling 88-5 the South Carolina Tax Commission held that under § 12-37-930 a manufacturer must include on its property tax return every capitalized cost associated with it…
Did Texas sales tax apply when Kansas bought debt-collection services for Kansas tax debts owed by people or businesses in Texas?
No. The Comptroller agreed that Kansas was not doing business in Texas under Section 151.107 and could give an exemption stating that it was not engaged in business in Texas.
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