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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Could three New Mexico RV-storage facilities deduct receipts from assigned open-air and overhead-covered parking spaces as leases of real property?
No, but the penalties were abated. Even though customers received assigned spaces under month-to-month contracts and had round-the-clock gated access, the open-air and overhead-covered spaces lacked p…
Which charges of a Georgia document-storage and information-management company are taxable, including boxes, paper records, cloud services, storage, and delivery?
Only the company's sales of boxes, cases, and packaging materials and its physically delivered record copies were taxable. Its physical storage, electronic delivery and cloud products, pickup and deli…
Does a Georgia multi-level marketer owe sales tax on hemp-extract dietary supplements and topical balms, and on the fees distributors pay to enroll and renew their status?
Yes for the products, no for the fees. Georgia has no sales-tax exemption for dietary supplements, so an MLM's hemp-extract oils and powder (labeled with a 'Supplement Facts' box) and its topical hemp…
Is specialized modular farm equipment (and its software, installation, and warranties) subject to Tennessee sales tax when sold and installed for a farmer?
Four answers for a portable, modular farming-equipment 'System' sold and installed by dealers. (1) The equipment is TANGIBLE PERSONAL PROPERTY, not an improvement to real property — it's standardized,…
How is a monthly car-subscription service taxed in Tennessee — is the whole fee a taxable motor-vehicle lease, and does the 3% rental car tax apply?
Two answers. First, the car-subscription service is a taxable lease of a motor vehicle, and ALL of its fees — the one-time activation fee, the monthly subscription fee, hold (suspension) fees, late fe…
Could two UNM sports-marketing affiliates reduce their New Mexico tax assessments for trademark sublicenses, national radio advertising, bad debts, or a supposedly mailed pass-through payment?
No. Lobo Sports Properties and Iceberg Ventures did not prove that sponsorship receipts came from sublicensing UNM trademarks, reliably identify qualifying national radio-advertising receipts, or docu…
Does an aircraft purchased in Illinois and leased to a foreign commercial airline that flies only between Illinois and a foreign country (never touching another U.S. state) qualify for Illinois's rolling stock sales/use tax exemption?
Yes -- the Department agreed that flights in foreign commerce (Illinois to a foreign country) count as flights in "interstate commerce" for purposes of the rolling stock exemption, so routes limited t…
Can I appeal a county's business tangible personal property tax assessment directly to the Virginia Department of Taxation without first appealing to the county?
No. The Department lacked jurisdiction because the taxpayer appealed the county's 2018 vehicle assessment directly to the state without first filing a local administrative appeal. A BTPP taxpayer must…
Did a worker domiciled in another state become a Virginia resident by keeping a Virginia home for at least 183 days, and could he claim credit for tax paid elsewhere?
Yes. Although the worker remained domiciled in another state, he maintained a Virginia place of abode for at least 183 days in 2015 and was therefore a Virginia actual resident subject to tax on his i…
Was a military spouse a Virginia resident in 2014, and could she avoid the assessment because Department live-chat advice told her not to file?
Yes on residency, but the assessment had to be abated. The taxpayer's Virginia license, vehicle registrations, long-term Virginia home, prior resident return, and weak evidence of a continuing domicil…
How did Virginia resolve a corporate audit involving an ineffective NOL carryback waiver, fixed-date conformity, and disputed property, payroll, and sales factors?
It was a mixed result. The Department upheld its NOL carryback and carryforward adjustments because the corporation had not attached the required statement electing to forgo the two-year carryback, an…
Was a Virginia cable, internet, and telephone provider entitled to a sales-and-use-tax refund for thousands of equipment purchases without item-specific proof of exempt use?
No. Cable-television and internet amplification, transmission, and distribution equipment could qualify for Virginia's exemption, but telephone-service equipment did not qualify after the public-servi…
Are easy-return-label fees, logo setup and embroidery, combined shipping-and-handling charges, and a resale sale taxable in Virginia?
Mostly yes. Easy-return-label fees were taxable because they paid for purchaser-to-seller return delivery, not exempt seller-to-purchaser transportation, and remained tied to the original merchandise …
Can a corporation treat income from its 17% interest in an operating LLC as a passive investment, exclude the LLC's factors, and allocate the income outside Virginia?
No. The Department held that the corporation had to include the retail LLC's income or loss and its appropriate property, payroll, and sales factors in the corporation's Virginia apportionment calcula…
Can a city split ownership of a qualified hotel project — city owns the convention center, a local government corporation owns the hotel — and still qualify for the Chapter 351 tax rebate, and what exactly does a city need to submit to actually collect the rebate?
Yes. A city's convention center hotel project qualified for the Chapter 351 tax rebate even though the new convention center is owned directly by the city while the adjoining hotel is owned by a city-…
Does a mid-size city's downtown hotel-and-convention-center project qualify for the Chapter 351 'qualified project' rebate program, and how do ownership, financing, leasing, and the 10-year entitlement work?
Yes — the Comptroller answered nineteen questions and confirmed the project qualifies. A city of 110,000–135,000 spread across two counties each under 135,000 is an eligible municipality under Section…
Could Virginia assess the bank's 2013 franchise tax late, include minority interests in 2014 capital, and deny subsidiary-surplus deductions and credit carryovers?
No, not as audited. The Department held the 2013 bank franchise tax assessment untimely. For 2014, it reversed the addition of noncontrolling minority interests because those interests were not among …
Did Kansas give corporate filers penalty relief for 2018 income tax returns?
Kansas Notice 19-05 explains that the Department gave late-filing penalty relief for 2018 corporate income tax returns. The extended Kansas due date of October 15, 2019 matched the federal return; to …
Does the July 1, 2019 expansion of Illinois's manufacturing machinery and equipment exemption cover propane fuel for forklifts, earplugs, protective gloves, quality-control gloves, and nitrogen used in a steel stamping press die?
The Department did NOT individually confirm or deny each of the taxpayer's five specific items. Instead, it restated the general July 1, 2019 rule -- production-related tangible personal property is e…
Did a contractor's previously denied real-estate construction contracts appear eligible for Virginia's refund of the 0.3% state sales-tax increase that took effect July 1, 2013?
Potentially yes. The Commissioner found that the contracts submitted on appeal appeared dated before April 3, 2013 and bona fide, so the auditor had to review the contracts and invoices. Refund eligib…
Could a corporation obtain Department review of 2015, 2016, and 2018 county business-personal-property assessments after filing its local appeal in November 2018 and adding new software and equipment issues?
Only partly. The 2015 and 2016 local appeals were filed after their one-year deadlines, so the Department lacked jurisdiction over those years. The 2018 appeal was timely, but because the taxpayer rai…
How must a Virginia locality calculate the BPOL out-of-state deduction when a multistate service business first situses contract receipts among offices using direct labor?
First situs each contract's receipts to a definite place of business using direct labor. Then, from receipts assigned to the Virginia locality, deduct specifically identifiable amounts attributable to…
Could a Florida consolidated group deconsolidate after major shifts in business strategy, composition, growth, acquisitions, and divestitures?
Yes. Florida found reasonable cause because the group's business focus, external reporting, membership, acquisitions, divestitures, growth, and geographic footprint had changed substantially since the…
Was manufacturing machinery subject to a Virginia city's machinery and tools tax merely because it was on site on tax day, even though it was not yet operational or producing goods?
No. The Department's advisory opinion said the machinery was not yet being used in manufacturing while it remained nonoperational and produced no products. Until it became operational in the manufactu…
Does a Georgia electric-vehicle charging-station operator collect sales tax when it bills drivers by charging time or by kilowatt-hour?
Time-based EV charging was not a taxable retail sale of electricity, so the operator did not collect sales tax from drivers and instead owed tax on property it consumed in providing the service. If pr…
Are a smart-farming company's irrigation control components — pump controls, flow meters, soil probes, weather stations, network equipment, and software — taxable tangible personal property, exempt agricultural equipment, or realty improvements when sold to Texas farmers?
It depends entirely on how each component is physically installed. Parts that stay removable without substantial damage (pump controls, flow meters, most probes/stations) remain tangible personal prop…
If a Florida Capital Investment Tax Credit project increases its expected investment to at least $100 million, does its project-income method change, and can unused credits carry over?
The project-income method did not change. If cumulative capital investment reaches at least $100 million, credit unused because of insufficient tax liability may be used in years 21 through 30 after o…
Could a New Mexico salon deduct its independent contractors' weekly booth and room payments as receipts from leases of real property?
No. Solutions Salon did not prove that it surrendered exclusive dominion and control over its booths and rooms. Contractors could use assigned spaces only for salon services, generally only during bus…
If I move to Maryland but keep my Virginia driver's license, have I abandoned my Virginia domicile for income tax?
She did not abandon it. A taxpayer who moved to Maryland still owed Virginia tax as a domiciliary resident for 2015 because she couldn't prove she had truly given up her Virginia domicile. To change d…
Can a Virginia resident claim the out-of-state tax credit for the D.C. Unincorporated Business Franchise Tax, and is denying it unconstitutional double taxation?
No. Virginia's credit for taxes paid to another state (Va. Code § 58.1-332) applies only to a broad-based income tax similar to Virginia's -- and the District of Columbia's Unincorporated Business Fra…
If a person is not a Virginia resident but works part of the week in Virginia, does he still owe Virginia income tax on his Virginia earnings?
Yes -- even as a nonresident he owed Virginia income tax on his Virginia-source income. The IRS flagged that the taxpayer may have had to file a 2016 Virginia return; when he did not respond to the De…
If the IRS never adjusted my return, can Virginia still deny my business expense, itemized, and alimony deductions?
Yes -- Virginia can adjust your deductions even if the IRS never touched your federal return. In an audit, the Department denied a taxpayer's business expense and itemized deductions for 2016 and 2017…
Did a taxpayer who kept Virginia ties and never answered the Department's domicile questionnaire remain taxable as a Virginia domiciliary resident?
Yes -- the assessment was upheld and the taxpayer remained a Virginia domiciliary resident. After the IRS flagged that the taxpayer may have owed Virginia tax for 2014 and no return was on file, the D…
Are Universal Service Fund, Dual Party Relay, and 911 charges taxable on South Carolina phone bills?
A Universal Service Fund surcharge passed through by a local exchange carrier, VoIP provider, or commercial mobile radio provider is generally part of taxable telephone-service gross proceeds, except …
When are purchases by government employees, diplomats, and nonprofit employees exempt from South Carolina tax?
A federal employee's official purchase is exempt only when the federal government is the purchaser—such as direct government billing, a centrally billed government card, or a federal check. An employe…
Could a physical-therapy practice seek administrative costs and professional fees in a new refund claim after receiving its tax refund and unconditionally withdrawing the original protest?
No. Rio Rancho Physical Therapy received its full gross receipts tax refund plus interest, then unconditionally withdrew the protest without requesting or reserving administrative costs and profession…
How did Nebraska report, deduct, and apportion IRC section 965 transition-tax income for the 2017 tax year?
Federal section 965(a) income entered Nebraska returns and the allowed section 965(c) deduction also carried through, but the net inclusion was not a deductible foreign dividend. For the specified pre…
Is selling and installing a modular cleanroom subject to Tennessee sales tax — and how do you tell whether an installed item stays taxable personal property or becomes a nontaxable fixture?
Yes — selling and installing a modular cleanroom is subject to Tennessee sales and use tax, because the cleanroom REMAINS tangible personal property (TPP) after installation rather than becoming a fix…
Can a Texas fleet lessor retitle retired out-of-state vehicles as 'Title Only' and use their value to reduce tax on replacement vehicles?
Retitling the retired vehicles as Texas 'Title Only' caused no use tax because they would not use Texas highways. But their value could not reduce tax on new fleet vehicles because the retired vehicle…
If a marketplace seller sells exclusively through a registered Illinois marketplace facilitator, does that seller still need to register for an Illinois sales tax permit and file returns, or can it cancel an existing registration?
The Department did NOT answer either question. A sales tax consulting firm asked whether marketplace sellers who sell exclusively through registered marketplace facilitators must still register and fi…
Can a Virginia resident claim the foreign pension credit for withholding on returned foreign retirement contributions, and does following the tax form instructions protect them?
No, on both points. Virginia's foreign pension credit (Va. Code § 58.1-332.1) applies only to a foreign country's tax on genuine pension or retirement income included in your federal adjusted gross in…
Can a cigarette wholesaler avoid use tax on resale purchases when its exemption certificates are incomplete or belong to another supplier?
Partly. A cigarette wholesaler assessed use tax on exempt resale purchases wins relief only for sales it can properly document. The Department accepted the wholesaler's sales invoices (rejecting the a…
Did a Texas wooden-pallet manufacturer owe New Mexico gross receipts tax when New Mexico business customers traveled to its Texas location and picked up the pallets there?
No. Eduardo Aguirre lived, worked, manufactured wooden pallets, and completed customer sales at his Texas business. His New Mexico customers traveled to that location and picked up their pallets; his …
When several financial institutions jointly fund a loan to refinance affordable housing in Tennessee, which of them can claim the franchise & excise community investment tax credit, and how is it divided?
It depends on the loan structure. The 'community investment tax credit' (Tenn. Code Ann. § 67-4-2109(h)) lets a financial institution offset its Tennessee franchise & excise tax when it makes a qualif…
Can a New Mexico company's CEO avoid personal liability for unpaid employee withholding tax by delegating all financial work to a CFO during Chapter 11 bankruptcy?
No. Drew Markell was Santa Fe Medical Group's CEO, controlled wage payments and finances, could sign checks, hire and fire staff, approve large expenditures, and signed bankruptcy reports identifying …
May a Florida senior-living community that is licensed in part under chapter 429 buy and furnish meals tax-free to all of its residents?
Yes. Because the community was licensed in part under chapter 429, it qualified as a home for the aged, and meals furnished to all residents—including extra resident meals—were exempt. Guest and other…
IDOC's inmates fund 'offender debit accounts' by paying money at prison commissaries, and IDOC forwards that money to its telecom vendor to pay for phone service. Does that arrangement make IDOC a 'reseller' of telecommunications services -- entitled to give the vendor a certificate of resale -- and does a separate statute capping per-minute inmate calling charges relieve the vendor of its own Telecommunications Excise Tax liability?
No on both counts. IDOC is not acting as a retailer or reseller of telecommunications services merely because it collects money from inmates at commissaries and forwards it to the telecom provider, so…
What records do I need to keep unreimbursed employee expenses -- mileage, work clothing, cell phone -- as Virginia itemized deductions?
The taxpayers lost on the records they had, but got one more chance. A married couple's unreimbursed employee-expense itemized deductions -- vehicle mileage, work clothing and laundry, and cell phone …
Did a 5-year employer transfer to another state end my Virginia domicile if I kept my Virginia home, license, and voter registration?
No -- he remained a Virginia domiciliary resident for 2015. A taxpayer transferred by his employer to another state (State A) for about five years bought a home and built community ties there, but he …
If my W-2 shows state wages and Virginia withholding but the income is excluded difficulty-of-care pay, does Virginia tax it?
No -- and the Department reversed its adjustment and issued a refund. A care provider's Medicaid-waiver 'difficulty of care' payments are excluded from federal gross income under IRC § 131 and IRS Not…
Is a servicemember's spouse who registers to vote, gets a Virginia driver's license, and lives in Virginia still exempt from Virginia income tax under the Servicemembers Civil Relief Act?
The military spouse lost. The Servicemembers Civil Relief Act can let a servicemember's spouse keep an out-of-state domicile while stationed in Virginia, but only if the spouse actually maintains that…
Are nonmonitored fire alarm systems taxable, and can a taxpayer pull a vendor's untaxed purchases out of an audit sample by calling them a one-time glitch?
Nonmonitored fire and alarm systems are taxable sales of tangible personal property (only separately stated installation is exempt), so the contractor's purchases of subcontracted fire safety systems …
Can a Virginia resident subtract an employer's moving-expense reimbursement that was already excluded from federal income?
No. Virginia has no subtraction for moving-expense reimbursements. Virginia income tax starts from your federal adjusted gross income (FAGI), and a qualified moving-expense reimbursement paid under an…
Who must collect South Carolina sales and use tax on transactions made through a marketplace?
A marketplace that lists or advertises another person's products and collects or processes customer payments is the retailer and must license, file, and remit South Carolina state and local sales and …
Can an S corporation shareholder claim a Virginia subtraction for the business-expense deduction the company had to give up to take the federal tip credit?
No. Shareholders of an S corporation cannot subtract, on their Virginia returns, the business-expense deduction the corporation had to give up to claim the federal tip credit under IRC Section 45B. Th…
In figuring Virginia's insurance retaliatory tax, does a fee another state charges only its own domestic insurers count against a Virginia insurer operating there?
No -- and the assessment was abated. Virginia's insurance retaliatory tax (Va. Code § 38.2-1026) raises the costs Virginia charges a foreign insurer only when a Virginia-domiciled insurer would pay MO…
If I work abroad on an employer-sponsored visa but keep a Virginia driver's license and voter registration, have I abandoned my Virginia domicile?
No. A Virginia taxpayer who took an indefinite executive job abroad still owed Virginia income tax as a domiciliary resident for 2014 because he couldn't prove he intended to abandon his Virginia domi…
Who collected Nebraska sales and lodging taxes on short-term rentals, and what charges entered each tax base?
A marketplace platform collected and remitted both taxes on rentals it facilitated; the property owner handled non-platform sales. Both tax bases generally used the guest's total payment, but lodging …
If my business only runs ads or referral links for other merchants — paid per click or per view — am I a 'marketplace facilitator' that has to collect Utah sales tax on whatever those shoppers buy?
No. A business that merely runs internet advertising or referral links for third-party merchants — paid per click or per view — is NOT a 'marketplace facilitator' under Utah's 2019 marketplace law (SB…
Did a military-academy student change domicile from Virginia to another state when a parent moved there and the student stayed there temporarily during a shutdown?
No. The taxpayer's father moved to another state, and the taxpayer stayed there temporarily during a 2013 government shutdown, but he intended to return to the military academy when it reopened. Most …
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