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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Were cardiac electrodes sold to Texas hospitals, nursing homes, HMOs, doctors' offices, and clinics subject to sales tax?
Yes. The Texas Comptroller said cardiac electrodes were taxable when sold to the listed health-care providers.
Which charges at a Texas chili-cookoff fair were taxable, including food, drinks, admissions, rides, souvenirs, booths, and contest entries?
Food, most drinks, admissions absent exempt status, rides, and souvenirs were taxable. Booth rent and qualifying competitor entry fees were not; mixed-beverage permit holders used different reporting …
Were labor and material charges for repairing, painting, or lining railcars subject to Texas sales tax?
No. Texas said railcar repairing, painting, and interior lining were nontaxable, including both labor and materials, whether the work occurred inside or outside Texas.
I'm selling my 45% shareholder interest in a corporation whose only asset is New York real property, as part of a deal where the buyer will also acquire another shareholder's 50% interest (making the buyer's total acquisition a controlling interest). The price I'm actually getting for my shares is nominal, but the buyer is also assuming and satisfying a lot of debt. Is the 'consideration' for gains-tax purposes just the cash and debt relief I personally receive, or something else?
Something else -- consideration is the apportioned fair market value of the underlying real property, not the price actually paid for the shares. Miller Buckley Overseas Limited (MBO), a 45% sharehold…
When a county public utility agency buys discounted hydroelectric 'preference power' from the state power authority and arranges for Con Edison to distribute and bill for it as the agency's operator, who owes sales tax, utility gross-earnings/receipts tax, and local utility tax on each piece of the arrangement?
The county Utility itself, as a governmental entity, is exempt from sales tax on its own purchases (with a purchase order) and from the utility franchise taxes entirely (since it isn't a taxable corpo…
When Con Edison leases part of its distribution system to a county public power agency and acts as that agency's billing/collection operator for discounted 'preference power,' which pieces of the arrangement create taxable receipts for Con Edison itself under the sales tax and the utility franchise/gross-receipts taxes?
Con Edison's own rental/service fee for leasing part of its distribution system to the County of Westchester Public Utility Service Agency and acting as its billing/collection operator IS Con Edison's…
Could a Texas electricity customer exempt only the percentage used in processing, or did predominant use make all electricity taxable or exempt?
Percentage exemption was not allowed. With only 6.7% exempt use, all electricity was taxable; if more than 50% was used for processing, all purchases would be exempt.
How did Texas divide sales tax and hotel occupancy tax on lodging packages with meals, instructional programs, and health-club or spa access?
Meals bundled with taxable lodging followed hotel occupancy tax. Instructional charges were not sales-taxable, while health-club or spa charges were; long-term lodging shifted meals to sales tax.
Which Texas sales-tax rate applied to utility billing periods that began before or after January 1, 1987?
The increased rate applied to billing periods beginning on or after January 1, 1987. A period that began before January 1 used the old rate.
Did work chaps used strictly for farm and ranch jobs qualify for Texas's agricultural sales-tax exemption?
No. The Comptroller treated work chaps as taxable despite their livestock and ranch use and said the seller could back-bill customers for the tax.
Did a 1986 special order delivered in 1987 use the old Texas sales-tax rate when the customer paid a nonrefundable deposit?
Yes, if the original order had a set price, the customer signed it, and the customer paid the nonrefundable deposit.
Which purchase orders and contracts qualified for the Texas sales-tax rate in effect before the January 1, 1987 increase?
Pre-1987 actual orders for specific items and binding contracts with a definite price or pricing criteria outside the parties' control used the pre-increase tax rate.
When a business sells its subscriber list to a competitor, is that both a taxable sale of information and a bulk sale of business assets?
It is both. A C.P.A. asked, for a client that sells a taxable information service (a semi-monthly publication with about 200 subscribers), whether selling those accounts to a major competitor is both …
Did Texas assess tax on liquor and mixer ingredients lost when restaurant employees or customers spilled drinks or broke bottles?
Employee spillage and breakage were not assessed, but ingredients in a replacement for a customer-spilled drink were taxable like a complimentary drink. Records had to prove who caused each loss.
How did Texas tax a business that remodeled old buses into traveling vehicles and collected progress payments?
The total remodeling charge was taxable. The converter could buy materials for resale, had to separately state and remit tax, and generally reported it as income was recognized unless tax was collecte…
Was the transfer of South Carolina motor vehicles to a newly formed corporation by its principal stockholder exempt from the state's title excise tax?
Yes. Although the statute literally exempted only a transfer to a principal stockholder, RR 87-1 held the legislature intended to exempt motor vehicles transferred by a principal stockholder to a corp…
Is a company taxable when it obtains copies of public records like deeds and mortgages from a county clerk and furnishes them to an attorney?
Yes — furnishing public-record copies is a taxable information service. A law firm asked whether receipts from obtaining and furnishing copies of public records (deeds, mortgages) to a bank were taxab…
Was a lump-sum charge taxable when a business computer-printed standardized real-estate advertising postcards and mailed them for customers?
Yes. Texas treated the business as producing tangible personal property—standardized advertising postcards—and taxed the total lump-sum charge.
What information did a Texas utility need on exemption certificates from religious, 501(c), nonprofit, or other exempt-entity customers?
Certificates identifying a qualifying exemption type could be accepted. A certificate saying only 'nonprofit' or 'exempt' required verification; liability relief also required a complete certificate a…
Are the trademark-search reports a company sells to attorneys a taxable information service, or are they exempt because they're personalized?
Taxable — the reports don't qualify for the personal/individual exclusion. Trademark Service Corporation compiles trademark records (federal, state, and common-law marks) into a library and sells sear…
My company sells a de-alcoholized wine product that tastes like wine but has less than half a percent alcohol by volume. Is this 'non-alcoholic wine' a taxable alcoholic beverage under New York's Article 18 excise tax?
No, not taxable. Joseph E. Seagram & Sons' "St. Regis Wine Without the Alcohol" products -- de-alcoholized wine containing trace amounts of alcohol (always under one-half of one percent by volume) -- …
Was a sign company's charge for hanging a tenant-owned sign on the sign company's pole subject to Texas sales tax?
No. Under the stated facts, Texas did not require the sign company to charge tax on its fee for hanging the customer's sign on the company's pole.
Does a church have to charge sales tax on cookbooks it sells occasionally from its office?
No — occasional office sales aren't through a 'shop or store.' A Greek Orthodox church holds an Exempt Organization Certificate and keeps a small number of cookbooks (made from parishioners' recipes, …
Are in-flight movie projection systems and the movie films rented to airlines taxable in New York, and where does delivery occur?
The equipment is exempt; the films are taxable based on where delivery occurs. Inflight Services rents airlines light-weight film projectors, screens, and ear sets (and supervises installation) plus a…
Did equipment used by Texas farmers and ranchers to control predators qualify for a sales-tax exemption?
No. The Comptroller stated that no exemption was available for equipment farmers and ranchers used to control predators.
How did Texas apply the January 1987 rate increase to advance-billed telephone service, dated calls, and bulk-billed items without service dates?
Advance bills spanning January were apportioned and dated calls used the rate for their date. A correction gave undated bulk-billed items a grace period, applying the higher rate when billed on or aft…
New York Advisory Opinion TSB-A-86 (18)I: Are pensions paid to employees of the Manhattan and Bronx Surface Transit Operating Authority (MaBSTOA) exempt from New York personal income tax as pensions of a state or municipal employee?
No, not under the general public-employee pension exemption. The Department ruled that pensions paid to Manhattan and Bronx Surface Transit Operating Authority (MaBSTOA) employees do not qualify for t…
Was alcohol purchased from an out-of-state supplier for processing surgical biopsies and Pap smears exempt from Texas tax?
No. Texas treated the alcohol as a taxable medical-facility supply, and the purchaser could accrue and remit the tax on its sales-tax return.
Did Texas give retailers time to convert cash registers to the January 1, 1987 sales-tax rate without penalties?
Yes. A December amendment replaced the earlier no-grace answer and granted a five-day penalty-free conversion period from January 1 through January 5, 1987.
I'm selling my interest in a joint venture that owns interests in shopping centers. Because a contribution I was supposed to make to the venture never happened, my actual share of the venture's profits and capital ended up below 50%. Does selling that sub-50% interest trigger New York's Real Property Transfer Gains Tax as an acquisition of a 'controlling interest' in a real-property-holding entity?
No. Interstate Properties held an interest in a joint venture (with Pyramid Company of Utica) that was originally structured around three shopping centers, but because Interstate never contributed one…
Which of a bulk-mailing company's services — labeling, sealing, stamping, inserting, sorting, imprinting — are subject to sales tax?
The services split — some taxable, some not if separately stated. Skyview Graphics runs a bulk-mailing service and asked about eleven tasks. Producing, fabricating, processing, printing, or imprinting…
Is an employment-background investigation firm's work taxable as 'detective services' under New York City's tax, or exempt as an information service?
Taxable as detective services. Fidelifacts, an investigative agency, prepares employment-background reports on job applicants for its clients — including verifying application information but also int…
When a photo studio ships finished photographs, does New York sales tax depend on where they're delivered — including when out-of-state clients have them dropped at a New York address first?
Delivery point controls. A CPA asked, for a New York City photography studio, whether finished photographs delivered to various places are taxable. New York sales tax is a destination tax (20 NYCRR 52…
If a foreign government's central bank opens a small New York trading office to buy U.S. Treasury securities and trade currencies -- but has no federal taxable income because its activities aren't a U.S. trade or business -- is its New York State bank franchise tax liability capped at the $250 minimum?
Yes, assuming the stated facts hold -- because New York's Article 32 entire net income starts from federal taxable income, and Petitioner (Malaysia's central bank) is not engaged in a U.S. trade or bu…
New York Advisory Opinion TSB-A-86 (17)I: Must an individual shareholder of a New York S corporation add back, under section 612(b)(3) of the Tax Law, the New York City General Corporation Tax paid by the corporation?
No. The Department ruled - citing its own three-week-old opinion in Matter of AD Rutland Realty, Inc. (TSB-A-86(16)I) by name as controlling precedent - that the New York City General Corporation Tax …
For a hazardous-waste treatment company, what's taxable — its equipment purchases, its charges to customers, and the disposal services it buys?
Equipment taxable; customer charges taxable; resold off-site disposal not taxable. BDT runs a hazardous-waste treatment facility (incineration and hydrolysis); nothing is reclaimed. (1) Its purchases …
Can a gas supplier buy the cylinders it provides to customers tax-free as purchases for resale?
Generally no — not on these facts. Jackson Welding sells industrial gases and welding supplies and provides gas cylinders to customers, almost always by lease. It argued its cylinder leasing is a sepa…
When Con Edison and New York City's own Public Utility Service jointly petition about a preference-power distribution deal -- Con Edison leasing part of its distribution system and acting as the City's billing/collection agent -- which pieces of the arrangement create taxable receipts for Con Edison, and which stay exempt as the City's own governmental purchase/resale?
The City's Public Utility Service, as a municipality, is exempt from sales tax on its own purchases (with a governmental purchase order) and owes nothing under the section 186 or 186-a utility franchi…
Were annual bicycle-association membership fees and per-race competitor entry fees subject to Texas sales tax?
No. The Comptroller treated both the described annual membership package and race entry fees as nontaxable.
How did Texas tax a petroleum storage facility's capital contribution, leaseback, third-party sale, ground lease, and related subleases?
The capital contribution and realty leases were nontaxable. The ruling nevertheless called the third-party sale taxable immediately after saying the improvements were not tangible personal property, w…
Were monthly leases of real estate with incidental personal property or of an entire purchased operating business subject to Texas sales tax?
No under the stated facts. Real-property rent remained nontaxable with incidental tax-paid personal property, and the purchased business assets qualified as an occasional sale before the exempt lease.
How did Texas apply its 1984 and 1987 state tax-rate changes to a fixed written lease extending through January 1991?
The lease qualified for the 1987 prior-contract exemption. A pre-October 1984 lease also had temporary protection from the earlier one-eighth-percent increase, expiring September 30, 1987.
Were fees charged by video-rental outlets for rewinding returned cassette tapes subject to Texas sales tax?
Yes. An internal Tax Policy memorandum classified video-cassette rewinding charges as taxable maintenance.
Did equipment added to pre-October 1984 maintenance agreements keep the historical prior-contract tax exemption?
Only additions made before December 1, 1986 kept the earlier administrative treatment. Additions from that date used current tax rates, and renegotiating the contract voided the exemption entirely.
How did Texas reclassify motor-vehicle undercoating after an administrative hearing had treated it as processing for earlier audit years?
The processing classification remained correct for the 1979–1983 audit period, but effective February 12, 1986 Texas treated undercoating as protection or maintenance under Rules 3.292 and 3.312.
Were separately stated storage and transportation charges taxable when a restoration company moved, cleaned, stored, and returned damaged household goods?
Yes. Texas treated both the separately stated storage fee and the pickup, delivery, and handling transportation charge as taxable under the described restoration arrangement.
How did this November 1986 Texas letter apply the coming rate increase to advance-billed, dated, and undated telephone charges?
It apportioned December bills covering January service and used actual dates for known calls. It originally applied the higher rate to undated bulk bills on January 1, but a later STAR letter correcte…
Could purchase-order language serve as a Texas resale or exemption certificate, and when could blanket certificates or direct-payment permits be used?
The submitted purchase orders were insufficient. Certificates had to be recognizable, contain proper language, and have a certificate-specific signature; blanket certificates or a direct-payment permi…
Were a minimum-usage shortfall charge and a separate service-line charge in a mixed interstate and intrastate long-distance plan taxable in Texas?
Yes. The Comptroller said both the additional amount needed to reach the minimum charge and the separate service-line charge were taxable.
Which materials and equipment were exempt when contractors fabricated and installed pollution-control facilities under the Clean Air Financing Act?
Only materials and equipment actually installed in the control facility could be bought tax-free. Equipment used and materials consumed while performing the contract remained taxable.
How did Texas tax printed grocery sacks used for advertising, the advertising-space charge, and art setup or plate fees?
The seller paid tax when buying the printed sacks and did not tax advertising space. The $45 art setup and plate fee was taxable, with resale-certificate treatment for outsourced workup.
Did a standard mattress and box spring qualify for a Texas medical sales-tax exemption when sold on a doctor's prescription?
No. The Comptroller said the standard mattress and box spring did not qualify for exemption and confirmed that the seller correctly charged sales tax.
New York Advisory Opinion TSB-A-86 (16)I: Must a shareholder of a New York S corporation add back, under section 612(b)(3) of the Tax Law, their distributive share of the New York City General Corporation Tax paid by the S corporation?
No. The Department ruled that the New York City General Corporation Tax is not an 'income tax' within the meaning of Tax Law § 612(b)(3), because federal case law requires an income tax to be a net in…
Could a basketball team collect and remit tax for tickets sold through third-party outlets, and did handling charges enter the taxable price?
Yes. The team was authorized to assume collection and remittance, but tax had to be based on the outlet's actual selling price, including handling charges.
For a biotech company, which equipment, utilities, and services are exempt as research-and-development versus production — and does the exemption reach New York City?
R&D exemptions reach New York City; production exemptions don't. Enzo Biochem does laboratory research and manufactures DNA-based diagnostic probe kits, and asked how the research-and-development and …
Were copies of court, bankruptcy, probate, real-property, and other governmental records sold by a research service subject to Texas sales tax?
Yes. The Comptroller said sales of copies of documents, publications, or general information obtained from governmental entities were taxable transactions.
Did a parking-contract rider qualify for prior-contract treatment, how were exemptions documented, and when was prepaid parking script taxed?
The indefinite-price rider did not qualify. Exemptions needed valid certificates and matching payment records; parking script was taxed when sold, so no second tax was due at redemption.
What Texas sales-tax rate applied to student meal plans paid in late 1986 but used after the January 1, 1987 rate increase?
The pre-increase four-and-one-eighth-percent state rate applied because the university was bound by a fixed-price written contract entered before January 1, 1987.
Were prescribed external urinary incontinence devices exempt from Texas sales tax, and what documentation supported unlimited refills?
Yes. Texas exempted the external devices when prescribed by a doctor; if the prescription allowed unlimited refills, the seller could retain it for the ongoing exemption.
Could Texas suppliers accept a Mexican pedimento that listed only weight and value as export proof when detailed warehouse and customs records were also retained?
Yes. Suppliers could accept the pedimento with the detailed supporting records, provided the exporter kept six specified documents together and produced them to the Comptroller on demand.
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