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 subscription fees for an online training platform — downloadable prerecorded video courses plus interactive software tools — taxable in Utah, or are they nontaxable educational services?
Taxable. Subscription fees for an online training platform are subject to Utah sales tax when the user is in Utah — calling it 'education' doesn't exempt it. The essence of the deal is the right to us…
Is South Carolina's abandoned building revitalization credit still available, and where is the guidance on how it works?
South Carolina's abandoned building revitalization credit is still available — its repeal date has been postponed to December 31, 2025. SC Information Letter #21-13 announces that Act No. 21 of 2021 (…
We bought a veterinary practice and didn't know we had to charge sales tax on retail items like flea powder and pet food -- can we just remit the difference between what we paid vendors and what we charged customers, instead of the full amount?
No -- a veterinarian selling non-treatment retail items (like flea powder, pet food, or medicine sold apart from professional services) must collect and remit sales tax on the FULL marked-up retail pr…
The county's determination letters on our BPOL and BTPP tax appeal were signed by a deputy, not the Commissioner of the Revenue -- does that mean the county's decision isn't actually final and appealable yet?
Correct -- a county's determination letter on a BPOL or BTPP tax appeal isn't a valid 'final local determination' unless it's signed by the actual Commissioner of the Revenue (or chief assessing offic…
We're a staffing/recruiting firm and our locality denied our BPOL exemption for benefits paid to contract employees at seven different clients -- does the amount of control each client exercises over our placed workers matter?
It depends entirely on the facts of each individual client engagement -- a staffing firm's BPOL exemption for benefits paid to contract employees requires proving the firm's workers were assigned to S…
We're out-of-state headquartered with one Virginia location, and we say we were never contacted about an audit before getting an assessment -- does the Department have to actually redo the audit if we dispute getting notice?
No -- when the Department has extensive documented correspondence (emails and mailed letters over more than a year) with an employee at the taxpayer's own headquarters showing the audit was properly i…
My wife held an F visa and was a nonresident alien for federal tax purposes -- does that mean her wages earned while we lived in Virginia are exempt from Virginia income tax?
No -- a spouse's status as a nonresident alien under federal tax law (including on an F visa) has no bearing on whether her wages are taxable as Virginia income, once Virginia's own residency rules --…
Can a taxpayer use alternative apportionment to include gain from selling media outlets (mostly attributable to goodwill) in its Illinois sales factor, when that gain would otherwise be excluded under the Occasional Sale Rule?
No. The Department denied the taxpayer's petition for alternative apportionment. It held that the standard Occasional Sale Rule (86 Ill. Adm. Code 100.3380(c)(2)) properly excludes the gross receipts …
Can a used-car dealer recover New Mexico motor vehicle excise tax when customers later return titled vehicles under private rescission agreements?
No. Drivetime's customers signed retail installment contracts, gave consideration, received possession, and obtained certificates of title for 175 used vehicles. Those events completed taxable sales a…
Is a company's bundled sale of hardware (sensors, GPS trackers) plus a required software subscription subject to Illinois sales and use tax, and does the software license exclusion or the SaaS exemption apply?
Yes, taxable. The Illinois Department of Revenue could not issue a binding Private Letter Ruling because the request lacked billing detail, but its General Information Letter concludes the company is …
Could a New Mexico grandmother claim four grandchildren as dependents without a formal custody order when they lived with her full time and she provided all their support?
Yes. Candice Dubois proved that her four minor grandchildren were her qualifying dependents for 2019 even though she did not produce a formal custody order or a parental affidavit agreeing to the tax …
The IRS flagged that I never filed a Virginia return, but I was living and working in another state that year with employer-provided housing -- am I still on the hook as a Virginia resident?
No -- working and living in another state under employer-provided housing doesn't establish that you've abandoned your Virginia domicile if the arrangement's permanence is unclear and you kept strong …
I graduated college in another state, got a job and leased apartments there, and filed that state's tax return -- but I kept voting in Virginia elections -- does that mean I never actually left Virginia for tax purposes?
No, the domicile change failed -- continuing to register and actually vote in Virginia elections is treated as VERY strong evidence a person still considered Virginia their permanent home, and that al…
The Department audited us for SIX years and reclassified our 1099 subcontractors as employees just because we couldn't produce invoices and business licenses -- is that enough proof, and can they really go back that far?
Partially in the taxpayer's favor on both fronts -- a worker's status as an independent contractor can't be decided just because the business couldn't produce specific paperwork like invoices or busin…
As a locality, can we tax nonprofit hospital-affiliated wellness centers, physical therapy clinics, home health agencies, and diagnostic labs under BPOL, business personal property, or real property tax just because they compete with for-profit businesses doing the same thing?
No -- a locality cannot tax a genuine IRC § 501(c)(3) nonprofit organization's BPOL gross receipts just because its activities resemble or compete with for-profit businesses, and cannot 'look behind' …
I claimed unreimbursed employee expenses plus business expenses for my rideshare driving and refereeing side jobs, using bank statement notations and oil-change mileage receipts as proof -- why did the auditor disallow almost everything?
No, generally not -- vague documentation like a bank statement with 'business consultant' scribbled next to a charge, or mileage recorded only between oil changes (with no breakdown of business versus…
Is a professional association's annual membership fee — bundling access to industry publications, networking events, certifications, and an online library — taxable in Texas?
Yes. Texas ruled that a professional association's $129 lump-sum annual membership fee (plus a $10 application fee) is taxable, because the membership bundles access to an online library of industry p…
Does the owner of an online ordering platform have to collect and remit Tennessee sales tax as a 'marketplace facilitator' when it lists dealers' inventory but never handles the payments?
No. The Department ruled that the company is not a 'marketplace facilitator' and therefore does not have to collect and remit Tennessee sales tax on sales made through its online platform. The platfor…
When a company bundles devices, streaming, games, cloud storage, and other products into one monthly subscription price, is the whole package subject to Tennessee sales tax, and at what local rate?
Taxable in full. When this technology company bundles its products and services into one non-itemized monthly subscription price and the bundle contains at least one taxable item, Tennessee sales tax …
Does the $10,000 cap on the trade-in credit for First Division motor vehicles under Illinois' 2020 trade-in law apply to boats?
No. The $10,000 cap on the trade-in credit for First Division motor vehicles does not apply to boats, because boats are regulated as "vessels" under the Boat Registration and Safety Act, not as "motor…
Could an independent registered nurse deduct payments from a developmental-disabilities service company under New Mexico's health-practitioner or Medicare gross receipts rules?
No. Mary Johnson was a registered nurse, but her receipts came from The Tungland Corporation under her independent-contractor agreement—not directly from a proven managed health care provider, health …
Were a tenant's required dealership improvements and property-tax payments additional taxable rent under a county real-property lease?
The required dealership improvements were not taxable rent because the tenant owned them during the lease, made them for its own business, received no rent credit, and paid fair-market rent. Property …
How does Illinois decide which local Retailers' Occupation Tax applies when a business sells products shipped directly from an out-of-state manufacturer to customers?
It depends on where the retailer's own selling activities occur, not on where the item ships from or to. Illinois local sales tax is sourced to the jurisdiction where the retailer is 'engaged in the b…
Are monthly payments for a leased residential HVAC system and water heater — installed by the provider and removable on default — taxable as a lease of tangible personal property, or exempt as a real property improvement?
Taxable. Texas ruled that monthly payments under an HVAC/water-heater "Advantage Program" — where the provider leases and installs the equipment but retains ownership and a right to repossess on defau…
Are "buydown" payments a retailer receives from a manufacturer or wholesaler subject to South Carolina sales tax?
No — effective April 16, 2021, "buydown" payments are excluded from the "gross proceeds of sales" and are not subject to South Carolina sales tax. SC Information Letter #21-12 announces that the Legis…
My business has to make Virginia's 'accelerated sales tax payment' in June -- how is it calculated, when is it due, and can I get a waiver?
Virginia requires dealers whose taxable sales and/or purchases met a set threshold in the prior fiscal year ($10.0 million for the payment due in June 2021 onward, confirmed by the 2021 Appropriation …
Is labor to install new pipe onto an existing above-ground pipe rack, or to add new levels to an existing rack, taxable new construction or taxable real property repair and remodeling?
Mixed. Texas ruled that installing brand-new pipe onto an existing above-ground pipe rack, and adding entirely new levels to an existing rack, both qualify as nontaxable new construction to real prope…
For a multistate title-report company, should local sales/use tax on its Texas information services be sourced to the address of the property the report covers, or to the customer's location?
To the customer's location, not the property address. Texas ruled that a title-report company's local sales and use tax should be sourced based on where its Texas customer is located (and where the co…
Was a 2016 gross receipts tax refund claim timely when the application was hand-delivered on December 30, 2019 but stamped January 3, 2020 and supplemented in April?
Yes. Copper Canyon sought $10,023.51 of gross receipts tax refunds for March 2016 through February 2017. The Department paid $2,011.95 for later periods but denied $8,011.56 for 2016 solely as untimel…
Are sales of honey bees subject to South Carolina sales and use tax, or are they exempt as 'livestock'?
Exempt. Sales of honey bees are exempt from South Carolina sales and use tax as 'livestock' under Code Section 12-36-2120(4). Because honey bees are livestock and ALL sales of livestock are exempt, an…
If an Illinois resident moves abroad indefinitely for work but still receives K-1 income from his Illinois-based S corporation employer, is his foreign-earned income taxable by Illinois?
No, not if he actually changed his domicile. The Department said that if the taxpayer's 2007 move to another country was indefinite (not temporary or transitory) and he has no intention of returning t…
Is Voice Over Internet Protocol (VoIP) voice service subject to Illinois's Telecommunications Excise Tax and the Simplified Municipal Telecommunications Tax?
Yes. Illinois taxes VoIP voice service the same as any other telecommunications — both the statewide Telecommunications Excise Tax and, where a municipality has adopted it, the Simplified Municipal Te…
Did a television manager change domicile to Virginia when she worked and rented there but kept a spouse, marital home, voting, licenses, and tax-return address in New Mexico?
No. Rosalie Pauly credibly lived and worked full time in Virginia in 2013–2014, rented an apartment, opened bank accounts, joined community organizations, and filed Virginia returns. But the Administr…
If a municipality hires a private company to collect parking fees and run the payment machines at its parking garages, does the municipality still qualify for the government exemption from Illinois Parking Excise Tax, or does hiring the company make it taxable?
The municipality still qualifies for the exemption. The Illinois Department of Revenue ruled that because the municipality (not its hired payment-processing company) owned the garages, set the parking…
What is South Carolina's per capita income figure used for tax incentive qualification, per SC Information Letter #21-11?
$47,502. SC Information Letter #21-11 reports the most recently available per capita personal income figure for the State of South Carolina — $47,502 — which the Department publishes so taxpayers can …
Could a locum-tenens psychiatrist deduct staffing-company payments when he treated patients for a provider with government health funding but could not trace the payer or program?
No. Dr. James Benvenuti treated children for Open Skies Healthcare, but his only contract was with Staff Care, Inc., a locum-tenens staffing agency that paid him $115 per hour and issued his Forms 109…
If a company leases computers to a sublessor who in turn leases them to a government agency, and the computers pass in and out of Illinois warehouses for provisioning and reshipping, when is Illinois Use Tax owed?
The government lease exemption did not apply because COMPANY1 leased to a sublessor (COMPANY2), not directly to the government agency. Under the temporary storage exemption, devices that went from Ill…
How can taxpayers check whether a South Carolina Department of Revenue advisory opinion had been modified, superseded, or made obsolete through March 31, 2021?
Use the citator attached to SC Information Letter #21-9. It lists South Carolina Department of Revenue advisory opinions from 1987 through March 31, 2021 that the Department identifies as modified, mo…
Where is the Department of Revenue's index of South Carolina advisory opinions issued from 1987 through March 31, 2021 (per SC IL #21-10)?
SC Information Letter #21-10 attaches the Department of Revenue's index of every South Carolina advisory opinion issued from 1987 through March 31, 2021. The index catalogs the Department's advisory o…
Could Florida's $5,000 discretionary surtax limitation apply once to an entire multi-line boat-repair invoice?
Yes. All repairs related back to one contract and work order, the boat was a single working unit, and the repairer kept continuous care, custody, and control throughout the job. The entire invoice was…
Does Illinois charge the low 1% food tax rate on fresh culinary herb plants sold in grocery stores, or the regular 6.25% rate?
The low rate. Illinois ruled that fresh culinary herb plants (like basil or parsley sold in a pot of dirt or bare-root in a bag of water) sold in a grocery store's produce section for human consumptio…
Did an employee temporarily working remotely in South Carolina because of COVID-19 create nexus or change withholding for the employer, and how long did the relief last?
South Carolina extended its COVID-19 relief so that a business does not establish South Carolina nexus (for income or sales tax) solely because an employee is temporarily working from a different loca…
Did the Department's request for documents turn an untimely refund claim into an audit that allowed older overpayments to be refunded?
No. Desire.Sante filed its refund claim on February 21, 2020, after the December 31, 2019 deadline for payments due and made in 2016. The Department's request for documents supporting that claim did n…
I missed the April 1 deadline to apply for Virginia's Qualified Equity and Subordinated Debt Investments Tax Credit -- can I still get the credit, or at least apply it to next year's investment pool?
No -- an individual investor lost her appeal after filing her application for Virginia's Qualified Equity and Subordinated Debt Investments Tax Credit six weeks past the April 1 deadline (she filed Ma…
I'm a member of an LLC that claimed a federal research tax credit -- can I still subtract my share of the research expenses on my Virginia individual return?
Yes -- an individual member of an LLC won his appeal after the Department disallowed his Virginia subtraction for his proportional share of the LLC's qualified research expenses. As a general rule, Vi…
I bought into an LLC from a previous owner who took a Virginia bonus-depreciation addition in an earlier year -- can I still claim the offsetting Virginia subtraction in a later year, even though I wasn't the original owner?
Yes -- a husband and wife who acquired an ownership interest in an LLC from a prior owner won their appeal of a disallowed fixed-date-conformity (FDC) depreciation subtraction. Virginia doesn't confor…
I got a sales tax refund based on a retroactive exemption certificate -- why did Virginia calculate less interest on it than I expected?
A multinational tech company that qualified for a data-center sales tax exemption won its appeal: the Department had wrongly applied a special rule (Va. Code § 58.1-623 E) that limits interest on a re…
Is kombucha taxed as a "soft drink" under Illinois sales tax law, or as ordinary (lower-taxed) food?
Based on the ingredients described, no — the Illinois Department of Revenue concluded that this particular kombucha product line (25 flavors made from kombucha culture, black tea, green tea, kiwi juic…
Does Illinois's Parking Excise Tax residential off-street parking exemption still apply if the parking facility is located near a building rather than inside it?
Yes. The Illinois Department of Revenue confirmed that the residential off-street parking exemption applies regardless of whether the parking spaces are inside the residential building or in a separat…
Did South Carolina extend the 2020 individual income tax filing deadline to May 17, 2021, and what was South Carolina's IRC conformity status for 2020?
South Carolina automatically extended the deadline to file and pay 2020 individual income tax to May 17, 2021, matching the IRS's COVID-19 relief. SC Information Letter #21-7 explains that returns and…
Did a concrete purchase agreement and related construction documents create one sale for Florida's $5,000 discretionary surtax limitation?
No. The purchase agreement, subcontract documents, and addendum were executed on different dates and did not clearly specify all quantities and delivery periods. Each delivery or invoice therefore rem…
The IRS adjusted my old federal return years ago and I never amended my Virginia return -- can Virginia still assess me now, and can I settle the bill for less?
Yes, Virginia can assess tax with no time limit at all if a taxpayer never files the Virginia amended return required after an IRS adjustment, and no, an offer to settle for less doesn't work when the…
My employer withheld Maryland income tax from my wages even though I live in Virginia -- can I claim a Virginia credit for the Maryland tax withheld?
No -- a Virginia resident who commuted to a job in Maryland lost her appeal after claiming a Virginia credit for Maryland income tax her employer had withheld. Virginia has a reciprocal agreement with…
I moved to Virginia partway through the year -- the Department assumed I was a full-year Virginia resident, but I filed a part-year return. Who's right?
A couple who moved to Virginia from another state in 2016 won their appeal after the Department initially assumed they were full-year Virginia domiciliary residents and adjusted their part-year return…
I never filed my Virginia return because my taxes were too complicated, and the Department assessed me based on IRS data -- can I get the penalty and interest waived?
No -- a couple who never filed a 2017 Virginia return, and were assessed based on IRS-supplied income data after the Department got no response to its requests for information, lost their bid to have …
Did Kansas extend the 2020 tax filing and payment deadline, and to when?
Kansas Notice 21-01 explains that, to conform to filing and payment extensions announced by the IRS, the Director of Taxation extended the Kansas deadline for 2020 returns from April 15 to May 17, 202…
Could a California contractor deduct military-range cleanup services because the Air Force command accepted contract deliverables in Virginia?
No. Timberline performed demilitarization and range-debris removal at the Oscura and Melrose ranges in New Mexico. Although Air Combat Command was an out-of-state buyer and the contract designated Lan…
A cigarette distributor's own sales records show I bought more cigarettes tax-free for resale than I reported selling -- can the Department assess me on that difference even without my own sales records?
Yes -- a convenience store lost its appeal of a sales tax assessment on cigarettes, which the Department calculated using the DISTRIBUTOR's own purchase records rather than the store's, because the st…
What does Virginia Ruling of the Tax Commissioner P.D. 21-40 conclude about Net Operating Loss (NOL) : NOL Deduction (NOLD) - Amendments to Carryback Provisions - Tax Cuts and Jobs Act (TCJA) - Coronavirus Aid, Relief and Economic Security Act (CARES Act)?
NO, the refund/NOL carryback was correctly denied -- even though the federal CARES Act let this taxpayer carry its 2018 NOL back to 2016 for federal purposes, Virginia's conformity to the Internal Rev…
What does Virginia Ruling of the Tax Commissioner P.D. 21-39 conclude about Residency: Domicile - Failure to Abandon Virginia Domicile; Administration : Written Advice - Previous Audit Abatement?
The taxpayer remained a Virginia domiciliary resident for 2015-2017 despite claiming to live and work in another state, because he kept a Virginia home, vehicle registration, and driver license, and, …
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