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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When did Texas require tax collection on a financing lease, and what collection right did the lessor have against the lessee?
Tax had to be collected when the lessee took possession or when the first payment became due, whichever came first. The cited law required adding tax to the selling price and provided a remedy to coll…
How did Texas distinguish a permanent real-property improvement from a sale and installation for floating boat docks and marinas?
Classification depended on permanent intent and whether removal would substantially damage the realty or improvement. The letter explained the tax rules for each category but did not expressly decide …
How did Texas tax a city's golf green fees, sales of food or other tangible property, and parking-meter fees in 1984?
The city did not collect tax on green fees at its golf course. It had to collect the stated 5 1/8% historical rate on sales of tangible property, including food, and on all parking-meter fees.
Which automobile, component, and accessory repairs did Texas treat as taxable under the 1984 repair law?
Repair of a motor vehicle, an operational component, or a component accessory was not taxable. Repair of an accessory was taxable; the letter listed a car radio as a nontaxable component-accessory exa…
Were Texas manicure, waxing, and sculptured-nail services taxable, and who paid tax on the supplies used?
The services were not taxable. The provider had to pay tax when purchasing all tangible items used to perform the manicures, waxing, and sculptured-nail services.
How did Texas tax TV pickup and delivery, warranty repair parts, and flat-rate manufacturer warranty charges?
TV pickup and delivery charges were taxable. Manufacturer-warranty repair parts created no tax liability if properly recorded and bought with an exemption certificate, and a flat-rate charge to the ma…
Were tool regrinding and sharpening taxable in Texas after October 2, 1984, and where was tax due?
Yes. The Comptroller classified regrinding and sharpening tools as repair work that became taxable on October 2, 1984, and said tax was due where the customer was located.
Did Texas's October 2, 1984 tax on repair and maintenance labor apply to piano tuning and repair?
Yes. The Comptroller said new legislation made repair and maintenance labor taxable effective October 2, 1984, so piano tuning and repair were taxable.
Was a dealer's $150-per-month employee use of inventory cars with dealer plates a taxable motor vehicle rental?
No. Internal Comptroller guidance concluded the arrangement was not a rental because employees did not receive exclusive use: the dealer could recall each car for demonstration or sale at any time. Th…
Was a Texas charge for videotaping monitored television news reports taxable when either the provider or customer supplied the tape?
Yes. The Comptroller treated the videotaping charge as taxable processing whether the provider or customer supplied the tape. The letter also allowed credit for tax paid when purchasing blank tape.
How did Texas tax truck fabrication, equipment installation, wreck repair, replacement, and body-conversion work?
The treatment depended on the job. Motor-vehicle repair labor was not taxable, but remodeling was. Fabrication and equipment sales were taxable, separately stated installation could be excluded, and d…
Was the Personal Independent Transport Accessory exempt from Texas sales tax as a wheelchair lift?
Yes. The Comptroller said the Personal Independent Transport Accessory was exempt from sales tax as a wheelchair lift.
What did this Texas letter say about the prior-contract exemption for a fixed-term parking contract?
The letter says a fixed-term parking contract entered before October 2, 1843 qualified for the prior-contract exemption through September 30, 1987. Because the printed threshold is 1843, the source do…
How did Texas's October 2, 1984 tax change affect ongoing boat repairs, boat-lifting charges, and slip rentals?
Documented repairs begun before October 2, 1984 could finish under the old statute and rate. A separately stated boat-lifting charge became taxable on that date, while boat slip rentals were not taxab…
Which all-breed dog-show admissions, entry fees, printed programs, and catalog advertising were taxable in Texas?
Spectator admission charges and sales of printed programs were taxable. Fees paid to enter a dog in the show and sales of advertising in the catalog were not taxable.
Was providing and maintaining power generators at customer locations for a flat daily charge a taxable Texas rental?
Yes. The Comptroller treated the arrangement as a taxable generator rental even though the provider maintained the units. Tax applied to the daily or standby rate, and engine oil and filters could be …
Did a federal real-property improvement contract entered before October 2, 1984 qualify for Texas's prior-contract exemption?
Yes. The letter said the federal real-property improvement contract entered before October 2, 1984 qualified for the prior-contract exemption from the stated historical 4 1/8% sales tax.
Was a separately stated charge for laboratory analysis of diesel-engine lubricating oil taxable in Texas?
No. The internal Tax Policy memo said a separately stated charge for testing diesel-engine oil was not taxable when performed alone, during unrelated repairs, or during engine repairs.
How did Texas tax oilwell pump-unit motor work, control-panel repairs, incidental charges, and overhead power-line construction?
Motor rewinding, installing a repaired motor, control-panel and cable repairs, and related incidentals were taxable. Separately stated labor to set poles and build new overhead power lines was not, wh…
When were Texas installation and repair labor for orthopedic or prescription therapeutic equipment exempt from tax?
Separately stated installation labor was not taxable. Repair labor was exempt for orthopedic equipment or prescribed therapeutic equipment when tied to the prescription; repair of nonexempt equipment …
Was testing blowout preventers a taxable transaction in Texas?
No. The Comptroller said the described blowout-preventer testing was not a taxable transaction, without explaining the testing method or legal basis.
Could a corporation lease employee parking with a resale certificate when it charged some employees but let others park free?
Spaces relet to employees for $50 could be leased with a resale certificate, and the corporation collected tax on the employee fee. For spaces provided free, the corporation had to pay tax on its $100…
Were Texas packing, crating, and shipping labor and the related packing materials taxable for domestic and international shipments?
Packing, crating, and shipping labor was not taxable. Materials protecting items shipped outside U.S. territorial limits could be bought with an exemption certificate, while materials for U.S. shipmen…
How did Texas require a direct-sales organization to collect and report state, city, and MTA tax for independent salespeople?
The organization was the seller responsible for collection and remittance based on suggested retail price. Independent sellers did not need permits or returns, and city or MTA tax had to be reconciled…
Was a Texas laundromat's wash-and-fold service charge taxable?
Yes. The Comptroller said the laundromat's entire wash-and-fold service charge was taxable.
How did Texas's October 2, 1984 tax change apply to seasonal and month-to-month fur storage already underway?
Seasonal storage begun before October 2, 1984 stayed nontaxable even with monthly payments. Month-to-month storage was taxable for periods beginning after that date; the source's example has conflicti…
Were State Fair of Texas carnival ride tickets and admissions taxable when the fair was a co-producer?
No. After reviewing the fair's midway expenses and contract, the Comptroller concluded the State Fair was a co-producer of the carnival, so ride tickets and admissions were not taxable. Tax already co…
New York Advisory Opinion TSB-A-84 (4)I: If a New Jersey resident wins a New Jersey lottery prize and later moves to New York, will the remaining prize installments be subject to New York personal income tax?
No. The Department ruled that a New Jersey lottery winner's remaining prize payments are accrued - and therefore excluded from New York tax going forward - once he becomes a New York resident, because…
If a company claimed the investment tax credit for several years on property that was also eligible for the (larger) eligible business facility credit, can it go back and amend its returns to switch to the eligible business facility credit instead?
Yes, within the normal refund statute of limitations. Flexovit USA, Inc. held Job Incentive Board certificates of eligibility for an eligible business facility for 1978-1981, but claimed only the inve…
Two affiliated companies share one office and split their combined operating expenses based on relative sales, with the company that overpaid its share reimbursed by the other. Does that reimbursement count as a 'business receipt' in the receipts factor used to calculate New York's business allocation percentage?
No. Mr. Daneli, Ltd. and its affiliate Pateli Fashions, Inc. -- both clothing manufacturers sharing one office, employees, and space -- apportion their combined operating expenses based on each corpor…
When were Texas zoo admissions, rides, tours, tobacco sales, and vendor commissions taxable?
Admissions and society-provided rides or tours were nontaxable if the zoo operator proved 501(c)-type exempt status, but taxable if it was for-profit. For-profit contractors' rides and tobacco sales w…
Was electricity purchased to transmit cable-television signals exempt from Texas sales tax?
No. The Comptroller said electricity purchased to transmit cable-television signals was not exempt from sales tax.
Was repair labor taxable when a manufacturer paid the full cost under its warranty, and how were those charges reported?
No tax was due on repair labor when the manufacturer paid the entire warranty-repair cost. The repairer had to keep warranty records and could deduct charges to the manufacturer from gross sales when …
When a waterproofing contractor repoints mortar, recaulks joints, and reroofs a building, which parts are taxable repairs and which are tax-exempt capital improvements?
Most waterproofing work — repointing mortar, recaulking joints, and rebuilding masonry — is a taxable repair of real property, but re-covering and insulating a complete roof is a tax-exempt capital im…
Is the electricity a manufacturer uses to light its production facility exempt from sales tax under the production exemption?
Electricity used to light a manufacturing plant is taxable — it is not used 'directly and exclusively' in production, so it fails the § 1115(c) exemption that covers power running the production machi…
How does a registered motor-fuel distributor that sells gasoline through its own stations compute the sales tax, and when is the tax due?
A registered motor-fuel distributor that sells gasoline through its own retail outlets must compute sales tax on the statutory selling-price base — not on its own purchase price — and the tax becomes …
Which pieces of a computer system that produces NC control tapes for exempt factory machines qualify for New York's production-machinery exemption?
Of a five-machine computer system that produces NC control tapes, only the tape punch unit — used exclusively to punch the tapes — is exempt production machinery; the computer, disc drive, plotter, an…
When an advertising supplement is inserted into a shopping paper, is the supplement's area counted in the percentage of the publication devoted to advertising?
When an advertising supplement is included as part of a shopping paper, the area of that supplement is not counted in computing the percentage of the publication's printed area devoted to advertising …
Is reconditioning already-installed kitchen cabinets — new doors, drawer fronts, hinges, pulls, and veneers — a taxable repair service or a tax-exempt capital improvement?
Reconditioning already-installed kitchen cabinets is a taxable repair/servicing of real property, not a tax-exempt capital improvement, so the contractor must charge sales tax on the whole job. Nu*Loo…
Are charges to pick up containers of chemical waste from a plant and deliver them to a treatment/disposal company subject to sales tax?
Charges to pick up filled chemical-waste containers from a plant and haul them away are taxable trash removal — a service to real property under § 1105(c)(5) — even though the separate treatment and d…
Is a common carrier's satellite up-linking and down-linking of television signals taxable telephony/telegraphy, and is its transmission equipment exempt?
A common carrier's satellite up-linking and down-linking of television signals is taxable 'telephony and telegraphy' under § 1105(b) — not exempt cable-TV entertainment — but the receipts are exempt w…
Are a telephone company's charges for installing and repairing telephone systems subject to sales tax, and does it matter whether repair equipment is used?
Charges for installing and repairing telephone equipment are taxable, and repair charges are taxable whether or not repair equipment is used; the only relief is where equipment is sold installed as a …
Is a general contractor's payment to an excavation subcontractor a taxable equipment rental, or an exempt service that's part of a capital improvement?
A general contractor's payment to an excavation subcontractor is a nontaxable service, not a taxable equipment rental, because the contractor has no right to direct and control the equipment or operat…
In a car lease where the customer trades in a vehicle, is the trade-in allowance included in the sales tax base or excluded?
A trade-in vehicle accepted in part payment and intended for resale is excluded from the sales tax base even in a lease, so tax is measured only by the cash portion — here $14,000, not the full $18,00…
When did Texas treat commercial refrigeration, cooking, HVAC, and exhaust equipment as personal property or real property for repair-labor tax?
Repair labor on personal property was taxable, including commercial refrigerators and cooking equipment merely attached to a wall or floor. Labor on built-in real-property equipment, central HVAC syst…
Was labor to repair or service an above-ground or below-ground swimming pool or spa taxable as work on real property?
Repair or service labor on a permanent real-property improvement was not taxable. A below-ground pool qualified, as did an above-ground pool or spa attached to a deck with fill-and-drain plumbing inco…
Was the sale of advertising space in Texas newspapers and magazines taxable?
No. The Comptroller said the sale of space in newspapers and magazines was not taxable.
Were museum admission charges sold by a Texas tax-exempt organization taxable?
No. The Comptroller agreed that the tax-exempt organization's museum admission charges were not taxable, while stating that this exemption on its sales applied only to amusement services.
Were materials for federal real-property lump-sum contracts bid before October 2, 1984 exempt under Texas's prior-contract rule?
Yes. Materials bought for the described federal real-property lump-sum contracts bid before October 2, 1984 qualified for the prior-contract exemption, which the letter said remained valid only throug…
Which tax-exempt park-board admissions, rentals, parking fees, equipment rentals, and vending-machine sales were taxable in Texas?
The listed park, museum, fishing, bumper-boat, locker, and pavilion charges were nontaxable for the exempt Park Board. Vending sales, civic-center parking, and movable-equipment rentals were taxable; …
Were annual-fair admissions and extra ride or game charges taxable when a tax-exempt organization or a for-profit operator provided them?
Fair admissions were not subject to state or city sales tax because the tax-exempt organization sold the amusement service. Extra amusements were exempt only when it provided them directly; for-profit…
Were costs of storing, preserving, and towing an impounded vehicle taxable under Texas's Abandoned Motor Vehicle Act process?
Storage and preservation costs were taxable and the tax was deducted from sale proceeds before payment to the owner or lienholders. Separately stated charges such as towing were not taxable.
New York Advisory Opinion TSB-A-84 (3)I: How is a nonresident employee's sick leave and vacation pay allocated to New York if she worked entirely within New York during the year, and can a nonresident couple claim the federal marriage penalty deduction based on the lower-earning spouse's out-of-state income?
Sick leave and vacation pay are allocated using the same working-days method used when a nonresident works partly in and partly out of New York - and since the wife here had no non-New-York working da…
New York Advisory Opinion TSB-A-84 (2)I: If someone sells New York real property in exchange for a private life annuity and then moves out of New York, must the future annuity payments be accrued and taxed all at once under New York's change-of-residency rule?
No. The Department ruled that a private life annuity's future payments are not accruable under Tax Law § 654(c)(1) when the taxpayer changes from resident to nonresident, because the amount ultimately…
New York Advisory Opinion TSB-A-84 (1)I: If an IRA's funds are invested entirely in tax-exempt New York and Puerto Rico municipal bonds, is the IRA distribution still tax-exempt when withdrawn?
No. The Department ruled that even though interest on New York and Puerto Rico municipal bonds is normally excluded from federal gross income under Internal Revenue Code § 103, that exemption doesn't …
Was leasing propane tanks to Texas customers taxable, and could the lessor buy the tanks with a resale certificate?
Yes. The propane-tank leases were taxable, and the lessor could give its supplier a resale certificate instead of tax when acquiring the tanks for lease.
Were major-appliance repair parts and labor taxable when the manufacturer paid the full warranty-repair cost?
No. Repair parts and labor were not taxable when the manufacturer paid the entire cost under its warranty. The repairer had to keep records showing that the parts and services were for manufacturer-wa…
Which Texas charges for pet grooming, boarding, training, and handling were taxable?
Pet grooming was taxable. Charges for pet boarding, training, and handling were not taxable.
Does an advertising agency's purchase order disclose principal-agent status clearly enough to buy materials as its client's agent for sales tax purposes?
An advertising agency's purchase order that says it is 'an accredited advertising agency and as such' acting as agent for its client does not clearly disclose principal-agent status, so the agency is …
Could a Texas retailer round a sales-tax rate when its cash register could not program the full rate?
No. The law did not permit rounding the rate. If the retailer rounded up, it had to remit the extra tax collected; if it rounded down, it had to pay the difference between tax collected and tax actual…
How these rulings are useful
- See how the rule applies: A letter ruling shows how a state revenue department actually applied the tax law to a specific business and set of facts.
- Plan with confidence: Find a ruling with facts close to yours before you charge, remit, or claim an exemption.
- Binding only on the requester: A ruling is binding on the department only for the taxpayer who asked. It is persuasive, not a substitute for your own ruling or professional advice.
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