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 separately stated programming charges and technician 'trip' charges tied to selling audiovisual equipment taxable?
Yes, both are taxable. An audiovisual integrator was assessed sales tax on separately stated 'programming' charges (customizing the AV equipment it sold) and 'trip' charges (sending a technician). It …
When a city leases a public facility to a private management company that pays for capital improvements and the city reimburses the company, are the improvements exempt from Texas sales tax?
It depends on who signs the contract, not who ultimately pays. Texas ruled that when a private limited partnership (LP) — which has full operational and revenue control of a city-owned convention/even…
Were U.S. online purchases sent to related Florida courier and export companies for foreign delivery exempt from Florida sales tax?
Yes, if the goods were committed to export at the time of sale and remained in a continuous and unbroken export process. The related Florida companies were licensed exporters, one was an indirect air …
Were online purchases shipped to Florida freight forwarders for delivery to foreign consumers exempt export sales?
Yes. The licensed air freight forwarder received goods at each foreign customer's assigned U.S. export address, processed them, and exported them within 24 to 48 hours. Because the contracts prevented…
Did a hotel contractor provide taxable housekeeping services rather than nontaxable temporary staffing?
Taxable housekeeping services. Although the hotel paid by the hour and described the arrangement as staffing, the contractor assigned supervisors, managed hours and performance, assisted with inspecti…
How did expired Nebraska GIL 29-20-2 count remote, ready-to-work, reduced-hour, and furloughed workers during the COVID-19 emergency?
Through July 30, 2021, displaced remote workers and qualifying paid ready-to-work or reduced-hour employees could count toward Nebraska Advantage Act employment levels under the GIL's rules. Furloughe…
Can a restaurant on a 52-53 week fiscal year show that a monthly-based audit sample overstated its unremitted sales tax?
A chance to prove it. A fast food restaurant's audit found it underreported sales tax versus its daily sales reports, treated as tax collected but not remitted. The restaurant said the mismatch came f…
Is a general contractor liable for use tax on payments to subcontractors who furnish and install materials on a real property project?
Mostly for the contractor. A real property construction contractor was assessed consumer use tax on untaxed purchases. The Tax Commissioner removed several items: a computer bought in 2007 (before the…
Is a corporation's NOL carryback refund time-barred by a late-submitted federal Form 870 when the Department never finally denied the original, timely refund claim?
Yes, the refund is allowed -- the corporation won. It timely filed a 2008 return with a net operating loss and, in October 2012, timely applied to carry the loss back to 2006 and 2007. The Department …
Can a corporation support its Virginia foreign-source-income subtraction with Virginia-only amended Form 1118s without amending its federal returns?
Yes -- the corporation prevailed. Virginia lets corporations subtract foreign source income, but the subtraction is net of related expenses computed under the federal sourcing rules of IRC Sec. 861 et…
Can a one-time end-of-lease equipment purchase be pulled out of an audit sample when the taxpayer can't prove the purchased item is the same equipment assessed?
No, on this record. A medical practice that never filed sales or use tax returns was audited using a sample factor extrapolated over the whole period. One sampled item was the exercise of an end-of-le…
Is the ticket price for a pedal-bus sightseeing tour subject to New York sales tax?
No. A sightseeing tour is not one of the services New York taxes under Tax Law § 1105(c). As long as the ticket is solely for the sightseeing tour and not for food or drink (none is sold or served on …
Are a graphic designer's charges for packaging designs, comps, and prototypes subject to New York sales tax?
It depends on how they're delivered. Comps or prototypes delivered in tangible form to a customer in New York are taxable on the entire charge (including design costs), whether or not separately state…
Do large operable wall partitions installed in hotels and convention centers qualify as a capital improvement, so the installation is exempt from sales tax?
Yes. The partitions are big, heavy, track-mounted structures that effectively replace walls and can't be removed without material damage (becoming inoperable demolition debris), so they meet the three…
Is a distillery exempt from local BPOL tax on its retail tastings as an agent of the ABC Authority or as a manufacturer, and can it appeal the local meals tax to the Department?
BPOL upheld on the tastings. A distillery argued it owed no local BPOL tax because it sold tastings as an agent of the Virginia ABC Authority and because it was a manufacturer. The Commissioner reject…
Is installing cellulose and spray-foam insulation in homes and commercial buildings subject to New York sales tax?
The installer's charge is not. Installing insulation is a capital improvement (it adds value, is meant to be permanent, and isn't intended to be removed), so the installer's receipts are exempt under …
Does a tax-exempt youth softball league have to charge sales tax on food and drinks sold at its concession stand?
Yes. A 501(c)(3) organization's sales-tax exemption does not extend to prepared food and drink sold at a concession stand. Under Tax Law § 1105(d) and § 1116(b), food and beverages sold by a restauran…
Does a member-owned club owe sales tax on dues from a new class of 'limited members' who have no ownership stake or voting rights?
Yes. The limited members' payments are 'dues' paid to a social or athletic club, taxable under Tax Law § 1105(f)(2)(i). Lacking an ownership or voting interest does not stop someone from being a 'memb…
What South Carolina state per-capita income figure did the Department publish in May 2020 for tax-incentive tests?
The Department published $45,314 as the most recently available South Carolina state per-capita personal income figure. The figure helped taxpayers test wage requirements for incentives such as the jo…
Can individuals get a 2005 Virginia refund from a 2008 casualty-loss carryback when the amended return was filed years after the federal change and the three-year limit?
Denied -- the refund is time-barred. The taxpayers suffered a 2008 casualty loss from a Ponzi scheme and, working with the Department, learned the loss had to be carried back three years (to 2005) und…
What does Illinois General Information Letter ST 20-0017-GIL say about sales tax nexus, marketplace facilitators, and related topics?
This isn't a ruling for a specific taxpayer -- it's Illinois's reply to an outside organization's annual multistate tax survey. The Department declined to fill out the survey format (nexus questions a…
Were the requesting company's cloud software subscription and optional training taxable in South Carolina?
The online software subscription was taxable as access to an application service provider. Training was also taxable when sold in conjunction with or as part of the subscription because the service ch…
How did South Carolina extend the May 31, 2020 renewal deadline for coin-operated device and owner-operator licenses?
Eligible biennial coin-operated device and owner-operator licenses expiring May 31, 2020 could be renewed and paid by July 31, 2020 without the stated penalties. The renewed license still covered the …
Can a Virginia contractor that paid Virginia sales tax on materials used in a North Carolina project get a Virginia credit or refund through a reciprocity agreement?
No relief. A Virginia real property contractor paid Virginia sales tax on materials it used on a North Carolina construction project and asked whether a reciprocity agreement could give it a credit to…
Could a separately filing subsidiary treat all of its Florida apportioned income as income from its Capital Investment Tax Credit project?
Yes. The subsidiary's only activity was the qualifying project, all expenses related to it, and it had no other locations. Florida approved using 100% of its Florida apportioned income as project inco…
Was installation of a hospital pneumatic tube conveyor system a real-property improvement or installation of tangible personal property?
Installation of tangible personal property. Florida classified the hospital pneumatic tube conveyor as machinery and equipment that retained its identity, even though parts were attached to the buildi…
Did a temporary COVID-19 remote-work location change create South Carolina nexus, alter income apportionment, or change employer withholding from March 13 through September 30, 2020?
Generally no. From March 13 through September 30, 2020, South Carolina did not use an employee's temporary COVID-related work-location change by itself to establish nexus, alter income apportionment, …
Are a company's utilization review, peer review, and independent medical exam services — sold to insurers to evaluate whether an injured patient's treatment is appropriate — taxable insurance services in Texas?
Yes, generally — with one important 2023 carve-out. Texas ruled that utilization review, peer review, and independent medical examination services a company sells to insurance companies to evaluate wh…
Did a retiree who registered to vote in another state, inherited a home there, and later moved his license and vehicle successfully change his domicile out of Virginia for 2014?
Won -- the assessment was abated. On reconsideration of P.D. 19-103, the Commissioner found this retiree had successfully changed his domicile to another state by the 2014 tax year. He moved there in …
When a cigarette retailer cannot document its resale purchases, can Virginia assess tax from distributor records, and is a new owner liable for the prior owner's cigarette sales tax?
Mostly upheld, with one credit. A cigarette retailer could not produce sales records, bank statements, or purchase invoices, so the Department used distributor records of the retailer's tax-free (for …
Does the ISP equipment exemption cover wholesale Internet access and 100%-exempt mixed-use claims, and can a refund be denied for unverified transactions?
Refund denied. This is one of three materially identical companion determinations the Department issued the same day (May 12, 2020) to related Internet service providers -- see P.D. 20-80 (the fuller …
Does the ISP equipment exemption cover wholesale Internet sales and 100%-exempt mixed-use claims, and can a refund be denied for unverified transactions?
Refund denied. This is one of three materially identical companion determinations the Department issued the same day (May 12, 2020) to related Internet service providers -- see P.D. 20-80 (the fuller …
Does the Internet service provider (ISP) equipment exemption cover wholesale Internet sales and mixed-use equipment, and can a refund be denied for unverified transactions?
Refund denied. The Internet service provider (ISP) equipment exemption (Va. Code Sec. 58.1-609.6 2) reaches only equipment used to provide Internet access to end-user subscribers -- retail ISPs -- not…
Can a pass-through entity claim the IRC 965(c) repatriation deduction and an IRC 754 basis deduction when computing its 2017 Virginia nonresident withholding tax?
Won -- the withholding assessment was abated. A pass-through entity owes 5% nonresident withholding on Virginia-source income allocated to nonresident owners (Va. Code Sec. 58.1-486.2). This entity cl…
Could a medical-billing company avoid New Mexico gross receipts tax by treating part of its revenue as software licensing and the rest as services performed outside the state?
No. PST Services supplied billing and accounts-receivable services to ABQ Health, including access to Flowcast software. The evidence did not show that fewer than all 525 licenses were employed in New…
Did IFTA registration and weight-distance payments at New Mexico ports of entry protect a tour-bus company from the separate audit penalty for underreported miles?
No. Jackson Rock Springs Stages operated tour buses on New Mexico highways but never registered for the state's weight distance tax program or filed its required quarterly mileage reports. Its federal…
Are water transfer services and frac fluid treatment services provided to oil and gas drillers subject to Texas sales tax, or to the state's oil/gas production or oil well service taxes?
Split ruling. Texas ruled that transporting fresh water to a client's frac tanks is not taxable (transportation isn't a listed taxable service), but treating used "frac fluid" afterward — removing hyd…
If goods originally purchased for export are stuck in storage at a Texas freight forwarder after the export deal falls through, and a new buyer is found in Texas instead, does the sale lose its tax-exempt export status?
Yes, the Texas sale is allowed. Texas ruled that two mobile power plants originally purchased for export to Venezuela — but stranded at a Texas freight forwarder after U.S. sanctions blocked the expor…
If I have a pre-existing tax deficiency, will Illinois apply my overpayment credit to that old deficiency first instead of letting me credit it to a current or future liability?
Yes. The Department confirmed that if a taxpayer with a pre-existing liability files a return asking to credit an overpayment toward a future liability, the Department will first apply the overpayment…
Can a manufacturer make the modified (single sales factor) apportionment election retroactively on an amended return after an audit, instead of on a timely original return?
Denied. After an audit, a manufacturing corporation tried to elect the modified apportionment method for manufacturers (Va. Code Sec. 58.1-422) -- effectively a single sales factor -- for years it had…
Can a Virginia partner subtract the entire gain from selling a Historic Rehabilitation Tax Credit, or is the subtraction limited to net capital gain?
The entire gain is subtractable. A partner reported his share of a short-term capital gain from the partnership's sale of a Historic Rehabilitation Tax Credit and subtracted the full amount on his Vir…
Can Virginia estimate a use tax assessment from a contractor's income tax returns, and use a six-year period, when the contractor did not provide records or file sales tax returns?
Upheld, with one more chance. A real property contractor with a Virginia location never filed Virginia sales and use tax returns and did not respond to the auditor's repeated requests for records or t…
In a fuel dealer's audit, which sales qualified as exempt home heating fuel, and when do manufacturing or government exemptions and out-of-state certificates fail?
Partly won. This fuel dealer's audit was adjusted but mostly upheld. Home heating oil, gas, coal, or firewood sold to an individual for non-business use is exempt for domestic consumption (Va. Code Se…
Does the ISP equipment exemption cover wholesale Internet access and 100%-exempt mixed-use claims, and can a refund be denied for unverified transactions?
Refund denied. This May 5, 2020 determination is part of the same materially identical series of Internet service provider refund rulings as P.D. 20-80 (the fuller companion) and P.D. 20-81 and 20-82 …
Does providing a certified operator along with rented bypass-pumping equipment turn a taxable equipment lease into a nontaxable service, and does that depend on who keeps "operational control" of the equipment?
It depends on who keeps "operational control." Texas ruled that when a company rents bypass-pumping equipment to a customer without an operator, the customer takes operational control and possession, …
Are on-hold telephone messaging, digital video-signage programming, and overhead music services subject to Tennessee sales tax, and does the provider owe use tax on the equipment it hands customers for free?
They're taxable. The Department ruled (in an advisory, non-binding revenue ruling) that a provider's On-Hold Messaging, VideoCast (digital video-signage) Programming, and Overhead Music services are a…
What tobacco products tax rate changes took effect July 1, 2020, and how is the new tax on liquid nicotine (vaping) products applied?
These are the Department's guidelines implementing the July 1, 2020 tobacco products tax changes enacted by Item 3-5.21 of the 2020 Appropriation Act (House Bill 30). Effective July 1, 2020, the tobac…
Is a service that automatically pulls, compiles, and reports a client's own internet-advertising performance data subject to New York sales tax?
No. The service is an information service, but it falls within the 'personal or individual' exclusion: each client receives reports built only from its own advertising data, not shared with or compile…
Does a building-supply retailer's lumber mill shop qualify for the industrial manufacturing exemption when milling is only 12-15% of the business?
No exemption. A business that sells building materials at retail and also runs a lumber mill shop making custom millwork asked whether its mill equipment qualifies for the industrial manufacturing exe…
Can a Virginia resident who works remotely from Virginia for an out-of-state employer claim a credit for tax paid to the employer's state?
Denied. A wife who moved to Virginia and worked remotely from her Virginia home for an employer based in another state reported that income to the other state and claimed a Virginia credit for the tax…
Can a corporation reduce late-payment penalty and interest by carrying back a later net operating loss, and is a two-year-late appeal timely?
Denied as untimely. A corporation filed its 2016 return but did not pay, so the Department assessed the tax plus a late-payment penalty and interest in November 2017. The company later carried a 2017 …
Can taxpayers reopen assessments after exhausting appeals, and do photographs prove the value of donated items for a charitable deduction?
Denied across the board. On reconsideration of P.D. 18-144, the Commissioner upheld every assessment. The 2010 year had already been decided in prior determinations and would not be revisited. The 201…
Could Virginia consolidate a parent with its subsidiary and attribute partnership sales to the parent without proving Virginia destination sales, nexus, or income distortion?
No, not on the audit record developed here. Although Va. Code § 58.1-446 allows equitable adjustments for arrangements that improperly reflect Virginia income, the auditor did not establish a rational…
What happens when a taxpayer supplies, on appeal, the audit documentation it could not produce during the audit itself?
Closed and referred back. The taxpayer's whole appeal turned on documentation it could not provide during the audit. Because it supplied that documentation on appeal, the Department referred it to the…
Is cloud-delivered software exempt from Virginia use tax, are out-of-state-shipped purchases exempt, and can a third-generation audit's compliance and amnesty penalties be waived?
Mixed, with relief. This government contractor's use tax audit was adjusted on several fronts. Software from two vendors was cloud-based software-as-a-service, so it was electronically delivered and e…
Which Virginia tax payments received an automatic interest waiver during the 2020 COVID-19 crisis, and what deadlines and exclusions applied?
Virginia automatically waived interest and penalties on certain 2019 individual, corporate, fiduciary, estimated, and composite income-tax payments if paid by June 1, 2020; extension filers generally …
How did Florida correct the final consolidated and first separate filing periods after an acquisition ended the taxpayer's old group?
Florida corrected its earlier ruling to require two short-period filings: a final consolidated return under the old election, followed by separate returns for the former parent and affiliates aligned …
Could a film company claim credits for a late 2015 application and a timely 2016 application supported by paid invoices but no matching canceled checks?
Only for 2016. Working Boy Productions' last 2015 qualified invoices were paid December 7, 2015, making December 7, 2016 the mandatory one-year application deadline. Its documented October 9, 2017 fil…
Did the COVID-19 national emergency automatically prevent Nebraska Advantage Act incentive recapture?
No. The March 13, 2020 national emergency was a qualifying trigger, but a project holder still had to prove that forces beyond its control directly caused the failure to maintain employment or investm…
What does Illinois General Information Letter ST 20-0008-GIL conclude about Manufacturing Machinery & Equipment?
Since July 1, 2019, Illinois' manufacturing machinery and equipment sales tax exemption also covers 'production related tangible personal property' -- consumable supplies like drill bits, tooling chem…
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