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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Does a nonprofit's isolated-or-occasional-sale exemption still apply when it sells through a marketplace facilitator like an online platform?
No. Once a sale is made through a marketplace, Illinois no longer treats it as an isolated or occasional sale, so the exemption from Retailers' Occupation Tax does not apply to that sale, regardless o…
Are subsidy payments an employer pays a third-party food service company to operate its employee cafeteria subject to Texas sales and use tax?
Yes. Texas ruled that subsidy payments an employer makes to a third-party food service company — covering the gap between the cafeteria's operating costs and its food/drink sales receipts, plus an adm…
Does South Carolina follow the federal IRC Section 163(j) limit on deducting business interest expense, or can taxpayers deduct their full business interest for South Carolina income tax purposes?
South Carolina does NOT follow the federal IRC Section 163(j) limit on business interest expense for tax years beginning after 2017. South Carolina's adoption of the Internal Revenue Code is selective…
Through what date did South Carolina extend the simplified COVID-19 admissions tax refund procedure (per SC IL #21-3)?
Through June 30, 2021. SC Information Letter #21-3 extends the simplified admissions tax refund procedure the Department first announced in SC Information Letter #20-18. Under it, a qualifying busines…
Does electricity used in an apartment complex's common areas — pools, gyms, yoga rooms, clubhouses — qualify for Colorado's residential-energy sales-tax exemption?
No. Electricity used in an apartment complex's common areas — swimming pools, fitness centers, yoga rooms, clubhouses — does NOT qualify for Colorado's residential-energy sales-tax exemption and is ta…
Can a rural health care practitioner claim a New Mexico income tax credit refund after the three-year statute of limitations has run, if the eligibility certificate came in late?
No. Loretta Garrett, a rural health care practitioner, learned after filing her 2015 New Mexico return that she qualified for the rural health care practitioner tax credit. She obtained a certificate …
How does South Carolina's housing tax credit for low-income housing projects work — who qualifies, what taxes it offsets, how it passes through partnerships, and can it be sold?
South Carolina's housing tax credit (Code Section 12-6-3795, the 'Workforce and Senior Affordable Housing Act,' enacted May 14, 2020) gives investors in qualified low-income housing a state credit EQU…
How can taxpayers check whether a South Carolina Department of Revenue advisory opinion had been modified, superseded, or made obsolete through December 31, 2020?
Use the citator attached to SC Information Letter #21-2. It lists South Carolina Department of Revenue advisory opinions from 1987 through December 31, 2020 that the Department identifies as modified,…
Where can taxpayers find South Carolina Department of Revenue advisory opinions by tax topic through December 31, 2020?
Use the subject index attached to SC Information Letter #21-1. It organizes South Carolina Department of Revenue advisory opinions issued from 1987 through December 31, 2020 under administrative, alco…
Could a parent stop filing Florida consolidated returns after an acquisition ended the affiliated group that made the election?
Yes. Florida granted permission because the acquisition ended the taxpayer's former affiliated group and nullified its consolidated filing election. The taxpayer and members of its former group could …
Could a registered dealer avoid tax on its prime city lease by collecting Florida sales tax from its real-property sublessees?
Yes. The registered dealer could collect and remit tax on rent from its marina and restaurant sublessees instead of paying tax on the prime city lease, so long as it remained registered and annually g…
Are the chemicals a metal-plating and passivation business uses to clean, plate, coat, and treat customers' parts exempt from Illinois sales and use tax as manufacturing chemicals?
It depends on the chemical's role. Chemicals that directly and immediately change the customer's parts (cleaning, plating, chromate coating, sealing, passivation acids) can qualify for Illinois's manu…
Is a web-based (SaaS) fleet management service, and a free companion app that goes with it, subject to Illinois sales or use tax?
Generally no. Illinois does not tax subscription-based SaaS, so the fleet management service itself is not taxable. A companion app the provider gives customers for free is also not taxable if it's do…
Was a radio broadcaster's lease of tower space exempt because the tower stood on a privately owned dirt access road?
Yes. Although the Department said the tower site was not a right-of-way, additional facts showed that it was built on a privately owned dirt access road. Florida treated that road as a private street,…
Are web-based data analytics services — reports, dashboards, and analyst consulting — taxable in Tennessee, or a nontaxable service delivered through software?
Not taxable. The Department ruled that a company's web-based data analytics services — digital reports, an interactive analytics dashboard, and analyst consulting — are not subject to Tennessee sales …
What does Virginia Tax Bulletin 21-1 say about the increase to the Litter Tax rate and the new penalty for late payment?
Effective for Litter Tax returns due May 1, 2021, the base annual Litter Tax rate doubled from $10 to $20 per Virginia business establishment, and the additional Litter Tax on grocery/soft drink/beer-…
What are the current rules for claiming Virginia's Port Volume Increase Tax Credit, and how do I calculate and transfer it?
These are the Department of Taxation's updated Guidelines explaining the Port Volume Increase Tax Credit, an individual and corporate income tax credit of $50 per 20-foot-equivalent-unit (TEU) of incr…
Could the Department reconstruct a law firm's taxes from bank deposits and impose 50% penalties after years of known nonfiling and nonpayment?
Mostly yes. The Behles Law Firm stopped filing gross receipts and withholding returns in 2010, filed no relevant corporate income returns, and paid no workers' compensation fees, despite prior filing …
Were per-diem receipts for housing state prisoners at privately operated county prisons deductible as licenses sold for resale?
No. GEO's contracts with Guadalupe and Lea Counties predominantly required operating secure correctional facilities—staffing, training, security, food, health care, transportation, and programming—not…
What form or information does a manufacturer need to document a Certificate of Resale in Illinois, and can a Multijurisdictional exemption form be used instead of the state's own forms?
Yes, a Multistate Tax Commission Uniform Sales & Use Tax Exemption/Resale Certificate can serve as a valid Certificate of Resale as long as it contains everything 86 Ill. Adm. Code 130.1405 requires: …
When a Texas port authority leases unimproved land to a private stevedoring company that will build a container yard, can the contractor buy construction materials tax-free under the governmental-improvement exemption?
Yes. Texas ruled that construction materials, consumables, and taxable services purchased to build both phases of a container-yard project at a Texas port — even though a private stevedoring company w…
Does Illinois Service Occupation Tax or Use Tax apply when a company sells two-component spray-on bedliner products to franchisees/dealers who apply them to customers' trucks?
The franchisees and dealers who buy the bedliner components and spray them onto customers' trucks are acting as 'servicemen' under the Service Occupation Tax Act, so they can buy the components from t…
Under Illinois's Parking Excise Tax, who has to collect and remit the tax when a garage operator sells parking spaces to a web-based aggregator that resells them to the public?
The web-based aggregator, not the garage operator, is the one that owes the Parking Excise Tax on its resale price, because an aggregator that buys parking for resale and itself contracts with the par…
Does Illinois Retailers' Occupation Tax apply when a leased rail car or truck is destroyed and the lessee pays the stipulated loss value and takes title?
Generally no. When a true-lease lessor who is not otherwise in the business of selling like-kind property has leased equipment destroyed, the lessee's payment of the stipulated loss value and the less…
Can a cash-basis Illinois used motor vehicle dealer that prepays a customer's sales tax get a credit or refund when the customer defaults on the financing?
Yes, but only in a limited way. Illinois denied the dealer's request for a full refund of prepaid tax on defaulted accounts, but ruled that because the dealer can actually claim a federal bad-debt ded…
Did the Virginia Tax Commissioner grant reconsideration of a prior determination that denied a sales tax refund based on the Internet Service Provider exemption and the electronically delivered software exemption?
No -- the Tax Commissioner denied the request for reconsideration, finding no misstatement of facts or misapplication of policy on either the ISP exemption or the electronically delivered software exe…
Did buying heavy equipment and assuming its debt make a new family oilfield company liable for the failed seller's entire $3.70 million tax assessment?
Only to the transferred property's value. M&J Oilfield Services became a successor in business when it acquired a track loader and backhoe loader from M & J Dumptruck & Backhoe Services and assumed $6…
Can an unlicensed motor fuel distributor sell fuel tax-free to the federal government while its Illinois distributor license is still pending?
No. Illinois only allows tax-free motor fuel sales to the federal government or its instrumentalities when the seller is a licensed distributor at the time of the sale. See 35 ILCS 505/6 and 86 Ill. A…
Is natural gasoline excluded from the definition of taxable 'gasoline' under the Illinois Motor Fuel Tax Law?
No. The Illinois Department of Revenue concluded that natural gasoline is included in the statutory definition of 'gasoline' under 35 ILCS 505/5, so licensed distributors must report it on their month…
Can an auto dealership claim the Illinois Use Tax interim-use exemption for vehicles it titles to a captive finance company and uses as service loaners?
The Department did not rule on whether this dealership's loaner vehicles qualify for the Use Tax interim-use exemption. It declined to issue a Private Letter Ruling because the matter was already befo…
How does Illinois source local Service Occupation Tax and Retailers' Occupation Tax when a company uses production managers and a network of outside suppliers to fulfill custom orders?
Local Service Occupation Tax and Retailers' Occupation Tax are sourced to the location where the company's own selling activities occur (here, its production managers), not to the location of an outsi…
Does a federal construction contractor owe Illinois Use Tax on materials and equipment it buys to fulfill federal government contracts?
Generally yes. The Department explained that a government contractor who buys items to fulfill a contract with a governmental unit is using those items and owes Illinois Use Tax, even if ownership of …
Does Virginia's manufacturing sales and use tax exemption cover materials used to construct a new electrical generating facility?
It depends on the specific item -- the Tax Commissioner could not give a yes-or-no answer because the Taxpayer did not identify the actual materials, equipment, or supplies involved, so the ruling ins…
Does an online food-ordering and local-delivery platform have to collect Tennessee sales tax on orders from local restaurants and stores, or does it escape the marketplace-facilitator collection duty as a 'delivery network company'?
It can qualify as a 'delivery network company' and avoid the collection duty. The Department ruled (in an advisory, non-binding revenue ruling) that an online platform connecting Tennessee customers w…
Was an extra charge for a mobile-app security feature taxable when bundled with or separately stated from alarm monitoring?
Yes. The optional mobile-app feature worked with and enhanced the company's taxable security monitoring service. Florida treated it as a component of taxable protection services—and said its features …
How did Florida tax lump-sum contracts to fabricate and install structure-mounted and freestanding commercial signs?
Florida treated the contracts as sales of tangible personal property because sign fabrication predominated over the incidental real-property work. The sign maker correctly charged sales tax on each fu…
Was a hospital's rental of an automated instrument that analyzed blood and urine exempt from Florida sales tax as a test kit or blood analyzer?
No exemption applied. Florida treated the large automated immunoassay system as a laboratory instrument, not a test kit. It also analyzed urine as well as blood, so the Department did not treat it as …
Is fabricating and installing a permanent non-canvas awning a taxable installation or a non-taxable capital improvement?
It's a capital improvement, so the installer shouldn't charge customers sales tax on the job. The business builds awnings from metal framework and PVC/vinyl material (no canvas), securely attached so …
Is a contract packager's charge to fill, weigh and seal a food manufacturer's product subject to New York sales tax?
No. A food manufacturer outsources packaging to an unaffiliated company, supplying both the food and the bags and paying per bag to have the product filled, weighed, and sealed, then reselling it. Fil…
We accidentally filed a discharge of our mortgage by clerical error. If we now record a new agreement to restore the same debt and terms, does that count as an exempt "supplemental mortgage," or do we owe mortgage recording tax again?
Mortgage recording tax must be paid again. Tax Law § 255 exempts a "supplemental mortgage" recorded to correct or perfect a prior mortgage on which all tax was already paid, from further recording tax…
Did paying Arizona sales tax on assets delivered to Virginia excuse the Taxpayer from Virginia use tax?
No -- the Tax Commissioner upheld the assessment because the fixed assets were delivered to and used in Virginia, so Virginia use tax was due regardless of the Arizona tax the vendor mistakenly collec…
What happened when a Virginia rental business appealed a sales and use tax assessment issued because it had not filed its returns?
The appeal became unnecessary -- the Taxpayer filed its overdue sales and use tax returns and paid the tax due, so the Department cancelled and reversed the assessments on its own records, and the Tax…
Is a coaching service that administers a DISC behavioral self-assessment and gives each employee a report subject to sales tax?
No. The coach teaches effective listening and communication and, as part of the service, has each employee take a DISC self-assessment and receive a report analyzing their behavioral style. Coaching/f…
Is fabric sold for more than $110 exempt under New York's clothing exemption if the buyer will make several garments from it?
No. New York exempts clothing and footwear costing less than $110 per article, and 'clothing' includes fabric, thread, buttons, zippers and similar items that become part of clothing. But the $110 tes…
Are services to create, host, maintain and optimize a client's mobile website subject to New York sales tax?
No. The company designs, builds, hosts, maintains, and optimizes mobile websites for retailers, all for a fixed monthly fee. Website development — design, creation, and the operation of a site the dev…
Are an environmental firm's testing, remediation-design, monitoring, construction-oversight, and consulting charges subject to New York sales tax?
It varies by service. Testing and monitoring of real property — even if no remediation follows — are taxable services of maintaining/servicing/repairing real property (§ 1105(c)(5)), UNLESS they are e…
Is a spinal-cord-stimulator pain system exempt as a prosthetic device or medical equipment when sold to physicians, hospitals, and pain clinics?
No — those sales are taxable. The implant blocks pain by delivering electrical pulses to the spinal cord; it doesn't replace a missing or permanently inoperative body part, so it isn't an exempt prost…
Is a service/maintenance contract bought to cover exempt production equipment subject to New York sales tax?
No. A plastics manufacturer bought a factory protection plan covering only its on-site generator, which produces the electricity that directly and predominantly powers its production equipment. Mainta…
When a photographer transfers photos to a client to reproduce, is the charge taxable — and do expenses and digital vs. physical delivery matter?
It depends on whether it's a sale or a temporary transfer for reproduction, and on the medium. Selling a photograph on a physical medium (print, slide, negative, CD) delivered in New York is a taxable…
My New York retail business sells only vaping products (e-cigarettes, vape pens, and e-liquid) -- no cigarettes or tobacco. Do I need a cigarette/tobacco dealer registration, and do I owe any special New York excise tax on vaping products?
No tobacco dealer registration is needed, but a vapor products dealer registration is required. A retailer that sells only vaping products (no cigarettes or tobacco) is not required to obtain a certif…
State Tax Ruling
No. In P.D. 20-193, Virginia's Tax Commissioner upheld the denial of a Qualified Equity and Subordinated Debt Investments Tax Credit application because it was filed after the April 1 deadline, reject…
What does Virginia Ruling of the Tax Commissioner P.D. 20-192 conclude about Exemption : Nexus (P.L. 86-272) - De Minimis, Property, Payroll Compensation : Nonresident - Virginia Wages Virginia Source Income : Nonresident - Apportionment?
The Tax Commissioner found the subsidiary had no Virginia nexus in 2013 (no property or payroll in the state), but its 2014 and 2015 activities -- placing company laptops in the Virginia office and ha…
Was a fire extinguisher servicer's service-call surcharge taxable, and could it get its audit penalty, amnesty penalty, and interest waived?
No relief -- the Tax Commissioner held the service call fees (billed as either a 'surcharge' or 'service call fee') were taxable to recoup the taxpayer's own costs, and denied waiver of the compliance…
What does Virginia Ruling of the Tax Commissioner P.D. 20-190 conclude about Use Tax: Fixed Asset Purchases - Legal Obligation Applies to Both Dealer and Purchaser, Purchases - Caterer Audit: Records - Expenses, Sampling Exemptions: Catering - Nonprofit Organizations, Churches, and Governments, Certificates - Reasonable Care Administration: Penalty - First Audit, Interest?
The Virginia Tax Commissioner upheld the full use tax audit assessment against a restaurant/caterer, ruling that unpaid tax on untaxed online purchases is the purchaser's legal responsibility, the sam…
How did Nebraska treat GILTI, the federal section 250 deduction, and GILTI receipts for income-tax apportionment?
GILTI included in federal taxable income or adjusted gross income also entered Nebraska income. A domestic corporation's section 250 deductions were already reflected through federal taxable income, a…
Do a homebuilder's capitalized 'soft costs' — labor, interest, permits, services — count in the Tennessee franchise tax minimum property measure, or just the land and materials?
Yes — the soft costs count. The Department ruled (in an advisory, non-binding revenue ruling) that a homebuilder's capitalized 'soft costs' — labor, interest, permits, architectural/engineering servic…
Is a hosted call-handling/voice-recognition product a taxable sale of prewritten software, and where is the sale taxed?
Yes — it's a taxable sale of prewritten computer software. The company's proprietary software, hosted on its own out-of-state servers, determines callers' intent and routes calls for its customers; li…
Is a firm's automotive marketing product a taxable sale of prewritten computer software, or a non-taxable advertising service?
It's a non-taxable advertising service. The firm uses its own staff and proprietary software to gather dealership sales data, build marketing models, and design and launch targeted ad campaigns (email…
Are digital document services — scanning, data capture, validation and cloud storage of a customer's documents — subject to New York sales tax?
No. The provider scans and converts a customer's documents (Product A), captures and validates data from them (Products B and C), and hosts them in the cloud (Product D). Converting documents to PDF w…
Does a company that processes automobile insurance claims as the insurer's agent have to collect sales tax on the payments and on its administration fee?
No. The company administers auto damage claims as the agent of insurance companies — confirming coverage, processing the repair-shop invoices, and forwarding the insurer's payment to the repair garage…
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.
- Research across states: Compare how different states treat the same issue, from SaaS and food exemptions to nexus and contractor purchases.