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 Texas tax financing leases of removable energy-management systems, including demonstration units, interest, and installation charges?
A financing lease was a sale, taxed at possession or the first payment due date. Demonstration units were taxed when the lease was signed. The full lease was taxable unless interest and installation w…
Which Texas storage-stall charges for automobiles, recreational vehicles, trailers, and a boat with its trailer were taxable?
Storage charges for automobiles, recreational vehicles, and trailers became taxable October 2, 1984. A single charge for storing a boat together with its trailer was not taxable.
Was a lump-sum architectural-model project a taxable sale of a model or a real-property construction service in Texas?
It was a taxable sale of an architectural model, not a real-property contract. Tax applied to the sales price including materials and labor, while materials incorporated into the model could be bought…
Was electricity used to extract oil from the ground exempt from Texas sales tax, and what certificate was required?
Yes. The Comptroller said electricity used to extract oil from the ground was specifically exempt, and the purchaser had to give the utility company an exemption certificate.
Was a Texas utility's minimum bill taxable when the meter appeared to show zero natural-gas or electricity consumption?
Yes, unless conclusive evidence showed no consumption. The minimum bill was part of the utility's gross receipts and presumed taxable even when the meter face appeared to show zero use.
Did Texas require colleges and universities to collect tax on student and faculty parking permits and fees in 1984?
No. On September 25, 1984, Comptroller Bob Bullock reversed an earlier September 17 instruction and said colleges and universities did not need to collect tax on student and faculty parking permits an…
Was an employer-paid desk coffee service taxable, and which disposable and reusable items could the provider buy tax-free?
The provider collected tax on its total coffee-service charge to the employer. Nonreusable items furnished with the coffee could be bought tax-free, while reusable items and taxable supplies used in t…
When were bicycle-race entry fees nontaxable, and were practice admissions and annual track memberships taxable in Texas?
A contest entry fee was nontaxable if it met the stated competition-and-prize test or was required to use the facility. Practice admissions were taxable, and the annual membership fee became taxable O…
Was pure masonry cement subject to Texas sales and use tax, and what happened when it was mixed with other substances?
Pure masonry cement was not subject to sales and use tax because it was taxed under another law. Cement mixed with sand, gravel, or any substance other than water became taxable.
How did Texas tax parking fees, separately stated towing and returned-check charges, government parking, consulates, supplies, and operator reporting?
Parking fees were taxable, but separately stated towing and returned-check charges were not. The operator or owner reported tax based on who received receipts, government employees were not exempt, an…
Were railroad crossties shipped into Texas exempt as supplies essential to operating locomotives and trains?
Yes. The Comptroller treated railroad ties as supplies essential to train operations under Section 151.331, so the seller did not collect Texas use tax when the purchaser issued an exemption certifica…
Were entry fees to professional golf tournaments and charity pro-am events taxable when charged by a nonprofit organization?
No. Entry fees to both professional golf tournaments and charity pro-am events were not subject to state sales tax when charged by the nonprofit organization, which had to keep written proof of its IR…
How did Texas's October 2, 1984 amusement tax apply to private health-club memberships, dues, initiation fees, and existing contracts?
Private health-club membership fees and monthly dues became taxable October 2, 1984. Preexisting contracts remained exempt for their term, and pre-October 2 payments were exempt even for later-startin…
How did Texas's October 2, 1984 amusement tax apply to private figure-salon memberships, dues, initiation fees, and existing contracts?
Private figure-salon membership fees and monthly dues became taxable October 2, 1984. Preexisting contracts remained exempt for their term, and pre-October 2 payments were exempt even for later-starti…
Were admissions to live-entertainment performances taxable in Texas, and did nonprofit amusement-service sales qualify for exemption?
Live-entertainment admissions became taxable amusement services on October 2, 1984. Sales of amusement services by nonprofit organizations were exempt.
An out-of-state typesetting company's New York salesmen solicit orders, pick up customer manuscripts for delivery to the out-of-state plant, and deliver the finished typeset negatives back to New York customers. Does that combination of activities stay within Public Law 86-272's protected 'solicitation' safe harbor, or does it create New York franchise tax nexus?
The corporation remains exempt from New York's Article 9-A franchise tax -- its New York activities fall entirely within Public Law 86-272's protected safe harbor. The out-of-state typesetting company…
Were a cochlear implant and its external transmitter, microphone assembly, and signal processor exempt from Texas sales tax?
Yes. The internal receiver and the external transmitter, microphone assembly, and signal processor were exempt as a hearing aid under Section 151.313(4).
Were stationary billboard rentals and custom-painted logos or lettering on vehicles and equipment taxable in Texas?
Stationary billboard rentals were not taxable because they were real-property rentals. Painting logos or lettering on trucks, cars, and equipment was taxable as printing or imprinting under Section 15…
How did Texas's October 2, 1984 change tax carpet, rug, drapery, and garment cleaning or repair charges?
Charges to clean or repair carpet, drapery, and garments became taxable October 2, 1984, including rug and carpet cleaning at the customer's premises or the provider's plant. One-time customer logo ch…
Were ballet-performance admissions and ballet-class tuition taxable when sold by the tax-exempt organization described?
Neither charge was taxable. The exempt organization qualified for an exemption on ballet-performance admissions, and ballet classes were not regarded as a taxable service.
How much Texas tax was due on impounded-vehicle storage fees when an unpaid vehicle was sold at public auction?
Storage fees were taxable. If auction proceeds covered them, the full storage tax was reported; if net proceeds were short, tax was paid proportionately. No tax was due when there was no bid or the st…
How did Texas tax separately stated hospital charges for patient televisions, guest cots, and telephones?
A separately stated patient television fee was a taxable rental, and the hospital could give its supplier a resale certificate. A guest-cot charge was not taxable, but the hospital paid tax when buyin…
Were rentals of Texas self-storage facilities taxable after the 1984 tax changes?
No. The Comptroller said self-storage facility rentals were not a taxable service and were not affected by the recent tax changes.
When did Texas begin taxing initiation fees and monthly dues charged by privately owned racquetball clubs, and how were earlier contracts treated?
The letter says initiation fees and monthly dues for privately owned racquetball clubs became taxable amusement-service receipts on October 2, 1984, subject to 4.125% state tax plus applicable city an…
Which truck and trailer repair, accessory-installation, remodeling, and freight charges were taxable under this 1984 Texas guidance?
Ordinary repair labor on highway-registered trucks and trailers was not taxable. Separately stated accessory-installation labor was also untaxed, but labor included in an accessory's sales price was t…
When were bowling tournament receipts and newly added league teams protected from Texas sales tax by contracts signed before October 2, 1984?
Bowling receipts under a tournament contract signed before October 2, 1984 were exempt if the contract specified the price, date, location, and similar terms. Teams added to a league after October 1 r…
How did Texas apply the October 2, 1984 amusement-service tax to fitness-center memberships, including medically prescribed memberships and older contracts?
Medically prescribed memberships were excluded from taxable amusement services, but the written prescriptions had to be kept for audit. Contracts or membership periods beginning before October 2, 1984…
Who had to collect Texas state and local sales tax on recreational-event admissions beginning October 2, 1984?
Admissions to recreational events became subject to state and local sales tax on October 2, 1984. A nonprofit organization with tax-exempt status did not have to collect the tax, but a non-nonprofit p…
Was a portable generator mounted on a custom towable platform treated as a motor vehicle or as taxable movable specialized equipment?
It was taxable movable specialized equipment. Tax Administration concluded that the custom towable platform was only a component of the generator unit. The platform's design and construction to the se…
Did Texas tax validated free restaurant parking, separately charged parking, or the services of strolling troubadours?
Validated free parking for restaurant customers was not taxable. A separate parking charge became subject to sales tax on October 2, 1984. The restaurants were not required to collect or report tax on…
Were green fees and annual passes charged by a city-owned municipal golf course subject to Texas sales tax?
No. The Comptroller said no tax was due on the municipal golf course's green fees or annual passes because the city providing the amusement service was an exempt municipality.
Which professional and personal services did Texas say would or would not be taxable under the October 2, 1984 law changes?
Doctor, accounting, and legal fees were not taxable under the October 2, 1984 changes. Group 721 laundry, cleaning, and garment services, plus massage parlors, escort services, and Turkish baths, were…
How did Texas tax aircraft repair labor and parts under lump-sum versus separately stated repair bills?
Labor by certificated aircraft mechanics or repair stations for repairing, maintaining, restoring, or remodeling aircraft, parts, and accessories was not taxable. A lump-sum repairer was the consumer …
How did Texas instruct federal lump-sum contractors to handle the October 2 tax change while an Attorney General opinion was pending?
The change applied only to lump-sum federal contractors; separated contracts kept their existing sales-tax exemption. Permit holders gave suppliers resale certificates and reported the tax, while cont…
When were repairs to medical and therapeutic equipment exempt from Texas sales tax, and when was a prescription required?
Repairs to wheelchairs, walkers, and IPPB machines were exempt because of the item's nature. Repairs to listed therapeutic equipment were exempt when an individual used the item under a licensed pract…
Did Texas tax admissions to carnivals, fairs, amusement parks, and rides beginning October 2, 1984?
Yes. State and local tax applied beginning October 2, 1984, except for events sponsored by a nonprofit or charitable group or under governmental sponsorship. Providers needed a sales-tax permit and co…
Did Texas tax horse-racetrack and horse-show admission fees beginning October 2, 1984?
Yes. State and local sales tax applied beginning October 2, 1984, unless the event was sponsored by a nonprofit or charitable group or under governmental sponsorship. Providers needed a sales-tax perm…
Did Texas tax motion-picture-theater tickets beginning October 2, 1984?
Yes. Motion-picture-theater tickets came under state and local sales taxes beginning October 2, 1984. Theater operators could report and pay admission tax with other sales taxes they already handled, …
Did Texas tax boxing and wrestling admission fees beginning October 2, 1984?
Yes. State and local tax applied beginning October 2, 1984. Events sponsored by nonprofit or charitable organizations or under a government entity's sponsorship were not taxed. Providers needed a sale…
Did Texas tax tennis admissions, court fees, and green fees beginning October 2, 1984?
Yes. State and local sales taxes applied beginning October 2, except to events sponsored by nonprofit or charitable groups or under governmental sponsorship. Providers needed sales-tax permits and cou…
How long did Texas protect pre-October 2, 1984 fitness-club membership contracts, and what happened when annual contracts renewed?
Monthly-dues contracts with an initial fee that were entered into and effective before October 2, 1984 were untaxed only through September 30, 1987; after that, all fees were taxable regardless of con…
Which skating-rink admissions, rentals, facility charges, and lesson fees did Texas treat as taxable in Letter Ruling 8408L0590A01?
Public-session admission for skaters, admission for non-skaters, skate rentals, and a license fee for exclusive use of the rink were taxable. Group lessons taught by salaried rink employees and privat…
Were fees for instructional Jazzercise classes taxable in Texas, and did ownership of the facility matter?
No. The Comptroller treated instructional Jazzercise activities as a nontaxable service, so class fees were not subject to tax. The result did not change based on who owned or operated the facility wh…
Were movie or video club membership fees subject to Texas state sales tax under Letter Ruling 8408L0589D14?
No. The Comptroller said movie or video club membership fees were not subject to Texas state sales tax. The short 1984 letter did not address charges for renting or selling videotapes, local taxes, or…
Did a Texas carpet-cleaning business have to collect state and local sales tax on its cleaning services beginning October 2, 1984?
Yes. The Comptroller told the carpet cleaner that its services would become subject to state and local sales tax beginning October 2. The business had to begin collecting the tax on that date, obtain …
Which vehicle, trailer, boat, wrecker, and transportation charges did Texas treat as taxable in Letter Ruling 8408L0586B11?
Fees to store, park, or garage a motor vehicle—including a trailer—were taxable regardless of owner consent. A single charge for storing a boat on a trailer was not taxable. Wrecker and transportation…
Is installing new linoleum over an entire room's floor a tax-exempt capital improvement, no matter what surface it's glued over?
Installing new linoleum over the floor of an entire room by cementing it down is a tax-exempt capital improvement, regardless of what surface it's glued over — so the homeowner was wrongly charged tax…
Before it opened a formal New York sales office, a Florida homebuilder advertised in New York papers using an officer's home telephone number, and that officer met with prospective customers at his Long Island home. Did that activity amount to 'maintaining an office' in New York, subjecting the company to New York franchise tax even before the formal office opened?
Yes -- Gulf Homes, Inc. was subject to New York's Article 9-A franchise tax even before it opened its formal Massapequa sales office in August 1980. Starting in 1978, Petitioner (a Florida real estate…
Are computer-generated financial reports, like loan amortization printouts made from a client's figures, a taxable information service or exempt personal information?
Computer-generated financial reports, such as loan amortization printouts produced from a client's figures, are a taxable information service, because the exemption for personal information requires t…
Could a company claim omitted fair-market-value deductions for replacement vehicles during a later Texas motor vehicle tax audit?
Only with proof. After an earlier liberal audit, the Comptroller would allow deductions only for vehicles actually identified as replacements or claims inadvertently omitted from the title affidavit. …
A holding company borrows money from its own wholly owned subsidiaries and re-lends those exact funds to its parent corporation at the same interest rate. Must the holding company add back the interest it pays to its subsidiaries as interest 'attributable to subsidiary capital,' even though the borrowed funds never funded an investment in the subsidiaries themselves?
No add-back is required. A Delaware holding company planned to borrow funds from its own wholly owned subsidiaries and immediately re-lend those same funds to its parent corporation at the identical i…
I sold my property and took back a promissory note from the buyer for part of the price, with an option-to-purchase document that mentions the note but was never called a 'mortgage.' Years later, when that instrument was finally recorded, the county clerk demanded mortgage recording tax. Was that tax actually due?
Yes, the tax was due. George and Alberta Smith sold real property to F. H. Simpson Enterprises, Inc. in December 1977 for a price that was partly cash and partly a $31,000 promissory note from the buy…
Could a Texas resident obtain a deficiency redetermination after wrongly claiming the historical $15 new-resident vehicle tax?
Not through the late redetermination request. The taxpayer had sworn on the title affidavit that they were a new resident and paid the historical $15 tax, but the Comptroller found they were already a…
Is a company-owned country club a taxable 'social or athletic club,' and are its storage and restaurant charges taxable?
A company-owned country club whose members have no proprietary interest, no control over management or activities, and open first-come-first-served membership is not a taxable 'social or athletic club…
Does New York's related-party interest add-back rule reach interest a second-tier subsidiary pays directly to its corporate 'grandparent'?
No. McCullagh Leasing, Inc. is a wholly owned subsidiary of Auto Fleet Leasing Corporation, itself a wholly owned subsidiary of Commercial Credit Company -- its corporate 'grandparent.' Commercial Cre…
Does New York's related-party interest add-back rule reach interest a second-tier subsidiary pays directly to its corporate 'grandparent'?
No. Relocation Realty Service Corp. is a wholly owned subsidiary of Auto Fleet Leasing Corporation, itself a wholly owned subsidiary of Commercial Credit Company -- its corporate 'grandparent.' Commer…
Does New York's related-party interest add-back rule reach interest a second-tier subsidiary pays directly to its corporate 'grandparent'?
No. C C Leasing Corp. is a wholly owned subsidiary of Auto Fleet Leasing Corporation, itself a wholly owned subsidiary of Commercial Credit Company -- its corporate 'grandparent.' Commercial Credit Co…
Does New York's related-party interest add-back rule reach interest a second-tier subsidiary pays directly to its corporate 'grandparent'?
No. Commercial Credit Equipment Corp. is a wholly owned subsidiary of Auto Fleet Leasing Corporation, itself a wholly owned subsidiary of Commercial Credit Company -- its corporate 'grandparent.' Comm…
If a second-tier subsidiary borrows from its corporate 'grandparent' -- its direct parent's own parent -- rather than from its direct parent or a more-than-5% stockholder, does New York's related-party interest add-back rule reach that interest?
No. Commercial Credit Development Corp. is a wholly owned subsidiary of Auto Fleet Leasing Corporation, which is itself a wholly owned subsidiary of Commercial Credit Company -- making Commercial Cred…
How did 1984 legislation change the Kansas severance tax exemptions for natural gas, crude oil, and new pools?
It clarified three exemptions. In this 1984 memo to Kansas natural gas and crude operators, the Mineral Tax Bureau explains minor 1984 legislative changes to the severance tax law: (1) the $81-a-day n…
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