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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What is South Carolina's tax interest rate for underpayments and overpayments for the period ending June 30, 2019 (per SC IL #19-6)?
6%. SC Information Letter #19-6 sets South Carolina's interest rate on tax underpayments and overpayments at 6% for the period January 1, 2019 through June 30, 2019. Interest is compounded daily, exce…
Could a New Mexico grandmother claim two minor grandchildren as dependents when they lived with and were supported by her but another taxpayer also claimed them?
Yes. Priscilla Montoya credibly proved that her two minor grandsons lived with her for more than half of 2017 and that she provided their home, food, clothing, school transportation, supplies, program…
Can a Florida government retroactively remove sales tax after its contractor already bought public-works materials and paid the tax?
No. Once the contractor bought the materials and paid tax, the government could not retroactively supply exemption documents. The government had not directly ordered, been invoiced for, paid for, take…
Did tax paid to vendors excuse untaxed employee sales or Virginia use tax when records were missing and an out-of-state tire vendor never remitted the tax?
No. Attire and tools resold to employees were taxable retail sales; the contractor should buy them under resale certificate, then collect and remit tax from employees. Current invoices could not prove…
How did the Veterans Benefits and Transition Act change Virginia tax residency elections for military spouses beginning in 2018?
Beginning with taxable year 2018, a qualifying military spouse could annually elect the service member's state residence for tax purposes even when the spouses previously had different domiciles. The …
Is a stand-alone vehicle trade-in appraisal service sold to car dealerships' customers a taxable information service in Texas?
Yes. A stand-alone motor vehicle trade-in appraisal service sold to a dealership's customers is a taxable information service (80% of the charge is taxable), because the service provider — not the dea…
Is a subscription-based online childhood education curriculum (with lessons, live tutoring, and assessments) subject to Texas sales tax?
No. A subscription-based online curriculum for home-schooled and classroom students — including lessons, videos, worksheets, live tutoring, and guided assessments aligned to Texas TEKS standards — is …
Is a SaaS platform that turns clients' raw customer data into structured advertising databases taxed as a data processing service or an information service?
It's a taxable data processing service (only 20% exempt under Tex. Tax Code § 151.351), not a nontaxable service and not an information service, because the platform processes, reformats, and restruct…
Is a trade association's live/recorded webinar training for bank employees, with free downloadable training materials, subject to Texas sales tax?
No. A nonprofit trade association's live and recorded webinar training for bank employees — including continuing-education and regulatory-compliance content, chat-room Q&A, and free downloadable train…
Is a company's online webinar training course subject to Texas sales tax as an amusement or information service?
No. A company's online webinar training courses are nontaxable educational services under Texas sales tax law, not taxable 'amusement services' or 'information services,' even though customers can ear…
Which pieces of compression, cooling, and refrigeration equipment in a Texas LNG export facility qualify for the sales tax manufacturing exemption?
Yes, with one narrow carve-out. Compressors and coolers that pressurize or temperature-condition the gas stream to the specs required by an already-exempt piece of processing equipment (like the Acid …
Could a New Mexico contractor avoid gross receipts tax penalty and interest because its customer said a direct-pay certificate made the customer responsible for the tax?
No. Apple Electrical Contractors stopped billing and paying New Mexico gross receipts tax after a major customer said it had a New Mexico direct-pay certificate and paid the tax itself. The customer n…
How did Virginia's 2019 emergency conformity law affect 2018 income-tax returns, GILTI, business interest, NOLs, and individual refunds?
Virginia advanced its fixed conformity date to December 31, 2018, generally adopting the Tax Cuts and Jobs Act and Bipartisan Budget Act rules for 2018, while preserving listed exceptions such as bonu…
Could a divorced New Mexico taxpayer use head-of-household status when her college-student son lived with her from June 24 through the end of the year?
Yes. Pamela Castaldi credibly proved that she was unmarried, maintained her home at her own expense, and supported her college-student son, who was under age 24 and lived with her from June 24 through…
Does a joint ownership agreement, where a nominee holds legal title to real property for five co-owners, create a separate entity subject to Texas franchise (margin) tax?
No. A nominee that holds bare legal title to real property for five co-owners under a joint ownership agreement (JOA) is not a taxable entity for Texas franchise tax purposes — it's not a partnership …
What does Illinois General Information Letter IT 19-0003-GIL conclude about Subtraction Modification (Retirement Income)?
No: dividends paid on company stock held in a regular taxable brokerage account (as opposed to an IRA or qualified retirement plan) are not retirement income and may not be subtracted from adjusted gr…
Could Virginia source nearly all of an online-services company's receipts to Virginia under the costs-of-performance rule even though more than 95% of its sales were to out-of-state customers?
Yes. The Supreme Court of Virginia upheld the Department's use of costs-of-performance sourcing because the company's online content was developed by Virginia employees and stored on Virginia servers.…
Is frac sand that's washed, dried, and sized taxable as 'processed' material, or exempt as unprocessed sand, under Texas sales tax law?
It depends on whether the sand is recombined after sizing. A frac-sand producer's 40/70 sand stays exempt unprocessed sand because it needs no recombining after washing, drying, and size-separation, b…
Could Halliburton deduct gross receipts from hydraulic-fracturing chemicals as sales of chemicals in lots over 18 tons?
No. Halliburton used the products while performing hydraulic-fracturing services; it did not sell them to well operators merely because contracts discussed goods or invoices stated product amounts sep…
Are monthly membership fees for a fitness center that ONLY offers scheduled, instructor-led training classes (no open gym access) taxable as an amusement service in Texas?
No. Monthly membership fees for a fitness center are not taxable as an amusement service when members can ONLY attend scheduled classes led by certified coaches — with no open access to the facility o…
Can a Virginia cigarette wholesaler reduce an estimated sales-tax assessment by producing signed resale certificates and sales invoices after the audit?
Yes, for the documented sales. The Commissioner accepted customer-signed resale certificates and invoices as sufficient wholesaler records and ordered those sales removed from the assessment. Cigarett…
Are an auto auction's sales of total-loss vehicles to foreign buyers exempt from Virginia retail sales tax as motor-vehicle sales, resale transactions, or foreign exports?
No, not on the documentation presented. The Tax Commissioner upheld retail sales tax because the salvage or nonrepairable vehicles no longer had valid DMV titles, the foreign buyers' multijurisdiction…
A tissue bank charges medical-research clients fees to recover, process, store, and ship donated non-transplantable human tissue. Are those charges subject to Utah sales tax?
No. The Commission held the tissue bank is selling nontaxable services, not tangible personal property. Although body parts are 'tangible personal property,' Utah's Anatomical Gift Act bars selling th…
Could a cigarette wholesaler overturn reconstructed sales with unsigned invoices and resale certificates first supplied on appeal for inactive or nonfiling customers?
No. Virginia wholesalers must keep purchaser name, address, registration number, date, goods, price, and separate wholesale and retail records. The taxpayer's unsigned cash invoices lacked verificatio…
Can a business appeal a city's partial denial of a BPOL tax refund directly to the Virginia Department of Taxation?
Not immediately. A city's denial of part of a BPOL refund is an appealable event, but the taxpayer must first file a local appeal within one year of the denial. The city's existing letter was not a va…
Were fees for game-terminal software activation codes taxable when the codes were sent electronically and no tangible property accompanied them?
No. The terminal software was already installed, and an operator paid only for an electronically transmitted code that activated or renewed access. Virginia treated the code as an electronically deliv…
Can an Illinois partnership claim a refund or credit itself when it overpaid pass-through withholding on behalf of its nonresident partners?
No. Under 86 Ill. Adm. Code 100.7035(e), a partnership (or other pass-through entity) may not claim a refund or credit for an overpayment of pass-through withholding made on behalf of a partner; the i…
Which assessments remain exempt after a Florida homeowners' association merges with a recreational club?
Regular mandatory assessments and qualifying equity capital contributions were exempt. Optional benefitted and operating assessments for golf and tennis, along with voluntary dues, fees, and other opt…
How can taxpayers check whether an older South Carolina advisory opinion was modified or superseded (per SC IL #19-4)?
Use the citator attached to SC Information Letter #19-4. It helps you determine what effect newer South Carolina advisory opinions have on previously published ones — whether an opinion was modified, …
Where can taxpayers find South Carolina Department of Revenue advisory opinions by tax topic through December 31, 2018?
Use the subject index attached to SC Information Letter #19-3. It organizes South Carolina Department of Revenue advisory opinions issued from 1987 through December 31, 2018 under administrative, alco…
May a Florida janitorial company buy restroom supplies tax-free for resale when it also provides taxable cleaning services?
Yes for restroom consumables separately itemized and priced as customer purchases. No for chemicals, polishes, and solutions the janitorial company itself consumed while cleaning; it remained the taxa…
Does a hotel owe Texas sales tax on staffing fees it pays a temporary employment service for housekeeping and banquet/catering employees?
No. A hotel's purchases of temporary housekeeping and food-and-beverage staffing services are exempt from Texas sales tax under Tax Code § 151.3503(a)(2) because the hotel maintains its own regular st…
May a Florida landlord allocate rent for multiuse commercial property by square footage when different areas have different sales-tax treatment?
Yes, assuming the areas had similar rental value. Square footage was a reasonable way to apportion rent among differently taxed uses, but areas designated for an exempt use could not also be used occa…
Which BPOL assessments could a taxpayer still challenge when the county issued late and supplemental assessments during a local appeal?
The county had to abate the 2013 BPOL assessment because it was issued outside the three-year assessment period. The taxpayer's appeal time for the original 2015 and 2016 assessments had expired, so t…
Can a Virginia taxpayer use the government-employee salary subtraction for a federal retirement annuity reported on Form 1099?
No. The subtraction applies to qualifying salary earned as a federal or state employee, not a federal retirement annuity reported on Form 1099. The Department also rejected reliance on return instruct…
Does an out-of-state rental-listing website create Virginia corporate income tax nexus by employing one Virginia salesperson?
Not on the limited facts presented. The Department said the Virginia salesperson appeared not to create nexus if the employee only solicited and signed contracts subject to out-of-state approval and a…
Is a Virginia seller of topsoil, mulch, stone, compost, and soil mixes a real-property contractor when it only sells and delivers the materials without installing them?
No. The Tax Commissioner treated the business as a retailer because its invoices showed sales and delivery of tangible products but no installation or other work on real property. The special contract…
Is sand mined from Texas sand dunes, washed in paddle-agitated attrition cells and dried to under 0.1% moisture, taxable as processed sand?
No. A sand mining company's product — mined from Texas sand dunes, washed in paddle-agitated 'attrition cells' to remove clay, dried to under 0.1% moisture, and screen-sorted into precise sizes with n…
How is Texas sales tax computed on an employee incentive program that charges website-design fees, transaction fees, and reward certificates redeemable for merchandise or gift cards?
A four-way split: website design/consulting charges are a taxable data processing service (80% taxable); transaction fees for issuing reward certificates are NOT taxable because certificates are an in…
Does washing frac sand in 'attrition cell scrubbers' to remove clay make it taxable processed sand under Texas law?
No. A frac-sand producer's sand — washed in attrition cell scrubbers to remove clay and organics, then dried and sorted into two sizes with no remixing — stays exempt unprocessed sand because the scru…
If mined sand is unprocessed, can the mining company still claim a tax exemption on the electricity used to move it, even without the manufacturing-equipment exemption?
Yes for electricity used to transport the sand, no for equipment or natural gas. A sand mining company's washed, dried, sorted, and hydroclone-separated sand is unprocessed and exempt from sales tax; …
Is frac sand run through attrition mills (spinning-paddle scrubbers) to remove clay, then washed, dried, and sorted by size with no remixing, taxable 'processed' sand in Texas?
No, it's exempt unprocessed sand. A sand mining company's frac sand — even though it passes twice through attrition mills that spin the sand with polymer paddles to clean off clay — stays nontaxable u…
Could a New Mexico concrete contractor recover money taken by bank levy because private consultants had promised to arrange a tax payment plan?
No. Rojo Concrete Construction admitted its underlying tax debt and ownership of the Wells Fargo account. Two prior Department payment plans had ended after default, and neither a tax consulting firm …
Could a New Mexico rancher deduct Schedule F losses when the ranch had recent net losses but was operated in a businesslike manner with an intent to profit?
Partly. New Mexico had authority to determine the correct federal adjusted gross income even though the IRS had accepted the returns. But Ernesto Hurtado proved that his cattle ranch was operated for …
Are mandatory assessments paid by Florida homeowners for association-owned club facilities subject to admissions tax?
No for mandatory assessments paid by residential owners for association-owned common facilities. Annual charges to nonresident members and optional memberships or user fees were taxable, while qualify…
Is a 25-year build-to-suit lease for a Texas charter school campus an exempt contract, letting the landlord/developer buy construction materials tax-free?
Yes. A charter school's 25-year build-to-suit lease with a private landlord qualifies as an exempt contract under Tax Code § 151.311, letting the landlord issue exemption certificates instead of payin…
What does Illinois General Information Letter IT 19-0001-GIL conclude about Credit — Hospital Credit?
The Department explained that the Section 223 hospital income tax credit for a given taxable year equals the lesser of the real property taxes paid that year on hospital property (for use in the prior…
Does a retail bakery that bakes and sells its own kolaches and pastries qualify for Texas's reduced retail/wholesale franchise tax rate?
No. Even though a retail bakery's sales of kolaches and pastries count as "retail trade" revenue, the bakery doesn't qualify for Texas's reduced retail/wholesale franchise tax rate because 88% of its …
Does an older, non-current comic book issue lose Illinois's sales-tax-free 'newsprint and ink' exemption just because it's not the newest issue?
No. As long as the comic book title is currently published at least twice a year and this particular issue is sold at or below cover price, it stays exempt from Illinois Retailers' Occupation Tax as '…
Could New Mexico taxpayers avoid estimated-tax and negligence penalties when the Department mistakenly mailed an overpayment they had asked to apply to the next year?
No. Ronald and Paula Peterson asked New Mexico to apply their $2,978 2016 overpayment to 2017 estimated tax, but a Department data-entry error caused a refund check instead. They cashed the unexpected…
New York Advisory Opinion TSB-A-20(1)C: Does being 'formed for' a telephone business decide Article 9 vs Article 9-A status, and does deriving more than 50% of receipts from non-Article-9 activities make a corporation an Article 9-A filer?
What a corporation was 'formed for' is not dispositive; Article 9 vs Article 9-A status turns on what it is principally engaged in, and a corporation deriving more than 50% of its aggregate gross rece…
Do charitable organizations owe Illinois sales tax when they sell snacks to the students they serve?
It appears yes, taxable. The organization hoped its snack sales to students would qualify for the nonprofit noncompetitive-sales exemption, but IDOR found the students' dominant motive was buying food…
Did Silver Oak Drilling qualify as an eligible employer for New Mexico's High-Wage Jobs Tax Credit, and which of its 148 claimed positions qualified?
Silver Oak was an eligible employer, but only 12 positions qualified. Its two largest customers had New Mexico operations but were headquartered outside the state and authorized and funded purchases f…
What are South Carolina's 2019 county tier rankings for the job tax credit, and which counties qualify for the tax moratorium and reduced fee-in-lieu investment (per SC IL #19-2)?
SC Information Letter #19-2 sets the 2019 county designations that drive several South Carolina incentives. For the job tax credit, the 46 counties are ranked into Tiers I-IV (higher tiers = larger cr…
What are South Carolina's state and county per capita income figures used for tax incentive eligibility (per SC IL #19-1)?
South Carolina's per capita income is $41,633, and SC Information Letter #19-1 lists the per capita income figure for each of the 46 counties (from Dillon at $27,111 to Charleston at $57,281). These f…
Does selling a financial-planning company that uses proprietary spreadsheets and software qualify for Virginia's technology-business capital-gain subtraction?
No. A financial-planning and investment-management company did not become a qualified technology business merely because proprietary spreadsheets, forms, charts, graphs, and other programs were includ…
May part-year Virginia residents exclude income earned before moving to Virginia when calculating the credit for low-income individuals?
No. For the credit for low-income individuals, a part-year resident starts with federal adjusted gross income and may make only the Virginia additions and subtractions authorized by statute. Income ea…
Does a notice saying a taxpayer plans to appeal preserve Virginia's 90-day tax-appeal deadline if it gives no grounds or supporting facts?
No. A complete Virginia administrative appeal had to state the taxpayer's grounds and relevant facts within 90 days after the assessment was mailed. The taxpayer's letter was only a notice of intent, …
Did a taxpayer successfully abandon Virginia domicile after moving for an indefinite job, listing the Virginia home for sale, and relocating with a spouse?
Yes. The Commissioner found that the taxpayer changed domicile in March 2014 by leaving for indefinite employment, physically relocating with his spouse, listing the Virginia home for sale, using the …
Are home-staging design fees exempt from Virginia sales tax when furniture-rental and design charges appear separately on the same invoice?
No. Interior-design services are exempt when sold alone, but listing design and furniture-rental charges separately on the same invoice still created a taxable lump-sum transaction under 23 VAC 10-210…
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