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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Can a Virginia resident claim a state subtraction or credit for Mexican tax on Mexican rental income that was not fully usable as a federal foreign-tax credit?
No. The taxpayer conceded that Virginia's ordinary out-of-state credit and its foreign-country credit for qualifying retirement income did not apply. Virginia's federal conformity starts with federal …
Can a Virginia S corporation shareholder subtract his share of qualified research expenses that the corporation could not deduct federally because it claimed the research credit?
Yes. An S corporation claimed the federal qualified-research credit, which under IRC § 280C(c) prevented a matching federal deduction for expenses equal to the credit. Because S corporation items flow…
Does taking a job in another state for one year end Virginia domicile when the taxpayer keeps Virginia ties and shows little evidence of establishing a new permanent home?
No. The taxpayer showed employment in another state but little else demonstrating a new permanent or indefinite domicile. He kept his Virginia driver's license and filed Virginia resident returns for …
Does Illinois source an investment advisor's fee receipts to the location of the investment funds' underlying investors, or to the billing address of the fund itself?
In this Private Letter Ruling, the Illinois Department of Revenue concluded that the taxpayer's investment advisory fee receipts are sourced, for Illinois sales factor purposes, to the office of the i…
What does Illinois Private Letter Ruling IT 19-0001-PLR conclude about Sales Factor?
IT 19-0001-PLR ruled that an investment advisor's gross receipts from advising investment funds are sourced to the billing office of the fund's custodian, not to the location of the funds' individual …
Can a certified Texas large-data-center operator extend its sales tax exemption to new "expansion buildings" by using a sale/leaseback structure to become their formal owner, when the transaction is disregarded for accounting and federal income tax purposes?
No. The Comptroller ruled that a proposed sale/leaseback — under which the data center operator would become the recorded owner of new "expansion buildings" while the seller kept them as owner for fed…
Can a Virginia resident obtain abatement of an individual income-tax assessment by broadly arguing that Virginia's tax system is discriminatory or regressive?
No. The taxpayer admitted Virginia residency and income but sought abatement of a 2013 assessment by arguing broadly that Virginia's income-tax system was discriminatory, regressive, and inequitable t…
Can Virginia resident S corporation shareholders claim the credit for tax paid to another state for D.C. corporate franchise tax paid by the corporation?
No. Although the shareholders' protective refund claims were timely, the Department denied them on the merits. Virginia's credit for tax paid to another state applies to qualifying income taxes, while…
When will Virginia accept resale documentation for exempt sales, and when can it uphold an estimated sales-tax assessment because a dealer's records cannot be reconciled?
Virginia gave the seller narrow relief for Customer A because a prior Department determination had accepted an undated resale letter without clearly limiting that acceptance to the earlier audit; thos…
What does Illinois Private Letter Ruling IT 19-0003-PLR conclude about Apportionment - Sales Factor?
Illinois ruled that when an S corporation's stock sale is treated as a deemed sale of all its assets under a federal Section 338(h)(10) election, the resulting gain is business income, but the gross r…
This ruling is filed under 'Miscellaneous,' but it's actually about Illinois's new Parking Excise Tax (effective January 1, 2020): if I'm a commercial landlord and I give my office tenants free parking spaces as a lease amenity -- no separate charge, bundled into their rent -- do I have to collect and remit the Parking Excise Tax on those spaces?
No. Because the landlord doesn't charge its commercial tenants any separate consideration for the parking spaces -- they're a free amenity bundled into unaffected monthly rent -- the landlord is not a…
Can a Virginia taxpayer appeal a local BPOL assessment to the Department when the locality's purported final determination was not properly signed or explained?
Not yet. The Department ruled that the county's letter was not a valid final local determination because it appeared not to have been signed by the Commissioner of the Revenue or an expressly designat…
Are paid subscriptions to a Florida-accessed live-streaming video platform subject to sales tax or communications services tax?
The subscriptions were not subject to Chapter 212 sales tax, but paid subscriptions that included Florida-sourced video services were subject to communications services tax on the subscription fee. Fr…
Did an IRS innocent-spouse determination automatically eliminate a Nebraska joint income-tax liability?
No. Nebraska had no specific innocent-spouse statute, but the Department could consider a written offer to settle a delinquent account after the IRS granted final innocent-spouse relief. The taxpayer …
Can Virginia licenses, vehicle registration, a home, and voter registration establish Virginia domicile when an overseas taxpayer was not yet physically living there?
No. The taxpayer had previously established domicile in State A and moved overseas for work with her spouse. Although she owned a second home in Virginia and obtained Virginia driver's licenses, vehic…
Are purchases and leases of computer equipment between affiliated Virginia companies exempt as internal transfers when the entities charge each other?
No. Virginia treated the automotive dealership and its affiliate as separate entities, not two locations of one company. Department records showed the dealership had reported under its own FEIN since …
Does taxable scholarship money used for living expenses count as salary when applying Virginia's $15,000 state-employee salary subtraction limit?
No, not when the scholarship funds are not compensation for services. The taxpayer earned $10,000 in W-2 wages as a Commonwealth employee and received $17,500 in scholarships. A $1,500 tuition scholar…
Can Virginia abate resident income tax when a taxpayer remained domiciled in Virginia but reasonably relied on the Department's earlier written advice saying otherwise?
Yes. The taxpayer's long State A lease and vehicle registration did not outweigh his retained Virginia driver's license, vehicle and voter registrations, Virginia voting, and Virginia address for tax …
Can a person living and working in D.C. remain domiciled in Virginia, and which D.C. taxes qualify for Virginia's out-of-state credit?
Yes. The taxpayer lived and worked in D.C., had D.C. tax withheld, and filed a D.C. resident return, but she kept a Virginia driver's license and voter registration, received tax documents at a Virgin…
Does a Georgia equipment lessor make a taxable sale when a leased asset is destroyed and the lessee pays the casualty amount in exchange for title?
Yes. When a total-loss clause requires the lessee to pay the remaining contractual amounts and the lessor transfers title to the destroyed equipment, Georgia treats the transaction as a taxable retail…
What did Kansas require of remote sellers after the Wayfair decision, before the $100,000 threshold?
Kansas Notice 19-04, issued August 1, 2019, provided guidance to remote sellers after the U.S. Supreme Court's June 21, 2018 decision in South Dakota v. Wayfair, which overturned the physical-presence…
What records did Virginia require to substantiate medical, home, charity, mileage, work-clothing, and cell-phone itemized deductions?
Virginia required records that established the nature, payment, business purpose, and deductible amount of each expense. Bank or credit-card statements without medical receipts did not identify qualif…
Can someone remain domiciled in Virginia after moving to West Virginia yet still receive Virginia's credit for West Virginia tax withheld from wages?
Yes. The taxpayer established substantial West Virginia ties by selling her Virginia home, taking a West Virginia job, and buying a home there, but she kept her Virginia driver's license and vehicle r…
When may a Virginia resident subtract pension income attributable to contributions that another state taxed, and is tax-software guidance enough proof?
Only when the taxpayer proves that the retirement contributions were deductible for federal purposes but nevertheless taxed by another state when made. The couple showed later South Carolina taxation …
Can a business defeat Virginia withholding-tax estimates by saying it closed when it never notified the Department or filed the missing payroll returns?
Not on the unsupported statement alone. The business had filed no withholding returns for August 2017 through September 2018, did not answer the Department's request, and supplied no evidence that it …
Can an affiliated hotel-management company use a percentage of each hotel's revenue to allocate its costs and still deduct the fees as services provided on a nonprofit or cost basis?
Yes. Total Management Systems provided administrative, managerial, accounting, and customer services to family-owned affiliate hotels. Section 7-9-69 did not require one cost-allocation formula, and t…
Does Tennessee sales tax apply to a subscription information-database service, its email alerts and data licenses, and a bundled system that includes physical equipment?
Mostly no, with one exception. The company runs a web-based subscription information database and sells several related services. The Department ruled that the core database subscription is NOT subjec…
May the New Mexico Taxation and Revenue Department automatically deny a timely protest of disputed tax because the taxpayer did not pay a smaller, unprotested amount on the same assessment?
No. El Castillo timely protested $224,867.10 of compensating-tax liability but did not pay or arrange payment of an unprotested $1,025.20 withholding-tax liability on the same notice. Payment of the u…
How did Virginia's certified-company apportionment program reduce taxable income for new businesses locating jobs and investment in qualified disadvantaged localities?
A corporation or pass-through entity with no Virginia property or payroll as of January 1, 2018 could seek annual VEDP certification after creating at least 50 jobs in qualified localities, or at leas…
Does Florida sales tax apply to chilled, pre-assembled weekly meal-plan food delivered in sealed containers for customers to reheat later?
No. The chilled, sealed meals were delivered for refrigeration and later reheating, not immediate consumption, and the seller was not operating as a restaurant. Florida treated them as exempt food pro…
Could a newly incorporated auto-repair shop avoid the former operator's New Mexico tax debt by leasing the same shop and equipment through a related company instead of formally buying the old business?
No. Potter Endustries became a successor in business when it immediately continued American Car and Truck Care at the same location with the same equipment, name, sign, website, contact information, m…
Is digital music temporarily downloaded to a coin-operated jukebox subject to Texas sales tax, and who — the music service, the jukebox operator, or the bar/restaurant hosting the jukebox — owes it?
Yes, the sale of digital music downloaded to a coin-operated jukebox is taxable tangible personal property even though it exists on the jukebox only for the length of the song — but who owes the tax d…
How does Georgia sales tax apply when a sign company sells, installs, or repairs freestanding signs and signs permanently attached to real property?
Freestanding signs remain tangible personal property, so the seller collects tax on the sales price; separately stated installation and repair labor are exempt. Permanently attached signs become real …
Did a California teleradiology company prove that stipends and cash collection guarantees from New Mexico hospitals were nontaxable compensation only for out-of-state availability?
No. Online Radiology argued that hospital stipends compensated it for after-hours availability and remote reads performed outside New Mexico, but its contracts also tied the payments to medical direct…
I bought a vehicle directly from the federal government (GSA) at auction -- do I file Form RUT-50 or RUT-25, and do I owe use tax at all?
File Form RUT-50 -- even though the sale itself, because it was made by the federal government, is exempt from Retailers' Occupation Tax (and so there's no corresponding regular Use Tax on it), you st…
Does Illinois's new Parking Excise Tax apply to parking lots that my municipality operates directly?
The Department did not actually answer this question -- it was left unresolved. The Department confirmed that the Act's definition of 'Person' does not explicitly include the State of Illinois, the fe…
Does a Virginia S corporation need a special limitations extension while another state audits income that may change its shareholders' Virginia credit?
No special extension was needed. Virginia generally allows amended returns within three years, but Va. Code § 58.1-1823(A)(v) separately gives one year after another state's final determination to cla…
Can a Virginia heavy-construction contractor avoid use tax by saying its purchases served exempt mining or gas work, belonged to end users, or predated an ownership change?
Not without transaction-specific proof. The contractor supplied no evidence that contested assets were used directly and predominantly in qualifying mining, natural-gas, oil, or legally required recla…
Does a Virginia resort owe sales tax when guests redeem donated gift certificates for lodging and when venue customers pay a garbage-disposal fee?
Yes. Donating gift certificates to nonprofits and receiving no cash when guests redeemed them did not make the lodging free or exempt. The certificate's original sale was not taxable, but redemption p…
May a Florida consolidated corporate group stop filing consolidated returns after an unrelated parent acquires the group?
Yes—and on these facts the former group could no longer file a Florida consolidated return. The unrelated-parent acquisition terminated the old affiliated group, and the acquired companies became subj…
I bought a semi-trailer that I'll pair with my truck leased to an interstate for-hire carrier -- does the trailer qualify for Illinois's rolling stock sales tax exemption, and how do I document it?
Yes, if the trailer is used more than 50% for interstate trucking for hire, is paired with an interstate carrier holding an active USDOT Number with Carrier Operation listed as 'Interstate' and Operat…
I sell and install manufactured product elements for customers -- how do I know whether Illinois taxes it as tangible personal property (sales tax) or as a real estate conversion (use tax on me as a contractor)?
The Department could not tell this taxpayer whether its specific 'PRODUCT' counts as real property or tangible personal property for Illinois sales/use tax purposes -- the facts submitted (a manual an…
Can a conservation nonprofit sell excess animals from its preserve tax-free as an 'occasional sale,' even if it has to do this every year?
This specific batch of sales qualified as an exempt isolated/occasional sale, but IDOR explicitly declined to promise the same exemption for future sales -- because the organization must regularly and…
Do the turbines, pipes, tanks, and other equipment used to build a power plant qualify for Illinois's Enterprise Zone sales tax exemption on building materials?
Yes -- essentially the entire described equipment package for the power plant qualifies as exempt Enterprise Zone building materials, because it will be permanently affixed to the real estate. The onl…
Do solar farm racking, support posts, AC collection systems, cables, and inverter-transformers qualify for Texas's manufacturing sales tax exemption as equipment used to generate electricity for sale?
It's split by function. The solar panels/modules themselves are exempt manufacturing equipment, but the fixed racking, tracker racking, and support posts that merely hold and position multiple panels …
When are electricity and fuel used at South Carolina homes exempt from sales and use tax?
Electricity and fuel used for living purposes at a primary residence, vacation home, or second home are exempt from South Carolina sales and use tax, including when the home is rented for any number o…
Can the Virginia Department of Taxation decide whether a city properly converted a company's unpaid local meals tax to an allegedly responsible individual?
No. Virginia law can impose responsible-person liability on certain officers, employees, members, or managers who knowingly and willfully fail to collect or pay specified local taxes and had authority…
Is a breast tissue expander and its dosage controller — used temporarily after a mastectomy before a permanent implant — exempt from Texas sales tax as a prosthetic or therapeutic device?
No, neither is exempt. A tissue expander and its companion dosage controller — a temporary, single-use system used to stretch skin before a permanent breast implant following a mastectomy — don't qual…
Are sales of gold and silver coins and precious-metal bullion exempt from Kansas sales tax?
Kansas Notice 19-02 explains that 2019 House Bill 2140 amended K.S.A. 79-3606 to add a new sales tax exemption, effective July 1, 2019, for all sales of gold or silver coins and palladium, platinum, g…
Did The GEO Group prove entitlement to 2011 and 2012 New Mexico corporate income tax refunds based on net operating losses from entities included in combined or consolidated returns?
No. GEO's multiple original and amended returns inconsistently claimed the net operating losses, often left the required CIT-1 line 5 blank, and sometimes omitted the mandatory Federal Form 1120. The …
Can an LNG exporter use its own loading documents (Master's Receipt, Certificate of Quantity, Certificate of Quality) instead of a traditional bill of lading to prove the export exemption from Texas sales tax?
Yes. A set of "Loading Documents" — a Master's Receipt, Certificate of Quantity, and Certificate of Quality, signed by the LNG vessel's master or agent and showing the carrier's issuance, the seller a…
When did Virginia's 2019 economic-nexus law require remote sellers and marketplace facilitators to register, collect tax, source sales, and track direct versus facilitated transactions?
Beginning July 1, 2019, a remote seller or marketplace facilitator with more than $100,000 of annual Virginia retail-sales revenue or at least 200 Virginia transactions in the current or prior calenda…
Were two men who continued a New Mexico towing business after its corporate certificate was canceled personally liable for gross receipts tax collected but not reported or remitted?
Yes. Prestige Towing & Recovery's 1997 corporate certificate was canceled on August 7, 2007, but Gabriel and Elauterio Vigil continued the business until a new corporation was formed on September 21, …
Is the labor to install a fuel cell facility on real property a taxable service in Connecticut, or is it exempt as new construction / a site improvement?
The labor to install the fuel cell facility is a service to real property, not the installation of tangible personal property. And because the facility is a site improvement (construction of new real …
Can Virginia issue a 2013 income-tax refund claimed on a return filed after the three-year deadline because the taxpayer relied on an accountant?
No. A Virginia overpayment may be refunded only if the Department discovers it or receives the taxpayer's written claim within three years after the original timely-return deadline. The 2013 return wa…
Could unused Virginia land-preservation tax credits pass through a residuary will clause when the credit holder died before July 1, 2018?
No. Virginia formerly treated land-preservation credits as personal to the taxpayer and not transferable at death. The 2018 legislation newly allowed transfers by will, bequest, other transfer instrum…
Does entering active duty or claiming a former military home of record automatically end Virginia domicile for a service member or spouse?
No. The wife entered active duty in November 2015, but the Servicemembers Civil Relief Act does not erase a Virginia domicile established before military service. The husband was retired, and his form…
Could a Florida insurance-company group discontinue its longstanding grandfathered consolidated corporate income tax filing?
Yes. Florida allowed the group to file separately for tax years beginning on or after January 1, 2016, but required deferred gains and intercompany or other deferred items that could escape separate r…
What qualifies for South Carolina's annual August sales tax holiday, and when is a purchase treated as tax-free?
From 12:01 a.m. on the first Friday in August through midnight Sunday, qualifying clothing, accessories, footwear, school supplies, computers, software, printers, printer supplies, and specified bed a…
Was a publicly traded company actively managing mortgage-backed securities subject to Virginia local BPOL tax, and which receipts could it exclude?
Yes, with a limited exclusion. The company's employees regularly acquired, hedged, managed, and traded a large mortgage-backed-securities portfolio using shareholder capital, debt, repurchase funding,…
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