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 does Illinois Private Letter Ruling IT 18-0003-PLR conclude about Sales Factor -Intangible Property?
Yes -- even though the taxpayer qualified for the federal 'negligible sales' exemption from mark-to-market dealer accounting under Treas. Reg. 1.475(c)-1(c), the Illinois Department of Revenue ruled i…
Were two nonprofit directors personally liable as employers for the corporation's unpaid withholding taxes merely because they were listed as officers and could sign checks?
No. Dr. Sistar Yancy and Robert D. Townsend were volunteer directors with check-signing authority, but the executive director prepared returns and checks and decided which obligations to pay. The boar…
Is Illinois Telecommunications Excise Tax imposed on fire alarm monitoring services?
It depends on how the fire alarm company bills for the phone/transmission line. Fire alarm services provided by telecommunications retailers, or by other retailers that resell telephone services, ARE …
Does a restaurant owe sales tax on the trays, platters, and lids it buys and gives customers with food?
It depends on whether the item is essential to handing the food to the customer — and this GIL sets out the test without deciding it. A free article, bag, or container a food vendor gives a customer i…
How does Florida's $5,000 discretionary sales surtax limitation apply when one invoice sells several quantities of different tree types?
Treat each tree type as its own bulk item. The $5,000 surtax limitation applied to the line whose same-type trees totaled $14,400, but not to the two tree-type lines whose totals were below $5,000.
Do vitamins and dietary supplements qualify for Illinois's low 1% sales tax rate, or do they get taxed at the general 6.25% rate?
It depends on the label. Vitamins and dietary supplements are generally treated as 'food' and taxed at the low 1% state rate (plus local taxes) under 86 Ill. Adm. Code 130.310 -- unless they purport o…
Is aircraft repair and maintenance work performed by a Class IV FAR Part 145 facility still exempt from Illinois sales tax under 35 ILCS 105/3-5(35), regardless of the aircraft's weight class?
No longer exempt for anyone. The Department did not reach the taxpayer's specific question about aircraft weight class, because the exemption itself sunset on December 31, 2014 by operation of law und…
Could New Mexico place a tax lien on a deceased business owner's estate and spouse when the underlying assessments named only the business?
No. The Department issued 42 gross receipts tax assessments only to Special Events Marketing Tal, then years later filed a $29,776.04 lien against owner Richard Shoudt's estate and Diane K. Shoudt. Ne…
Were a medical staffing company's New Mexico receipts excluded as disclosed-agent reimbursements or deductible as health-care services?
No. Ready Tech-Go employed and paid medical professionals, contracted with New Mexico facilities as an independent contractor, billed one hourly rate, and kept the difference between that rate and emp…
How did Virginia's 2018 Worker Retraining Tax Credit guidelines define eligible retraining and the new manufacturing-student training credit?
For taxable years 2018 and later, an employer could claim 30% of eligible worker-retraining expenditures, subject to certification and special per-employee caps for private-school courses. A manufactu…
Was a court reporter personally liable for a sole proprietorship's gross receipts tax after forming an LLC but failing to update the New Mexico tax registration?
Yes. Ana Koeblitz formed New Mexico Depo, LLC in January 2012, but the business continued using the sole proprietorship's CRS account and did not register the LLC with the Department until 2018. Exter…
Could Wagner Equipment avoid civil penalties when a key employee's sudden retirement caused seven months of withholding returns to go unfiled even though the taxes were paid on time?
No. Wagner Equipment paid its withholding taxes on time but failed to file seven monthly CRS-1 returns after a 34-year employee retired on two weeks' notice. Keeping her temporarily as a remote contra…
Does a city-owned golf-resort hotel and conference-center development qualify for Chapter 351 tax rebates, and are its design and construction contracts exempt from sales tax as improvements to public property?
Partly yes on rebates, but no on the construction contracts. The city can qualify as an eligible central municipality (Section 351.001(7)(C)) once it adopts a capital improvement plan for a conference…
In a mixed golf-resort/hotel/conference-center development on city-owned land, which pieces qualify for hotel-project tax rebates, and are the construction contracts tax-exempt?
A mostly-no ruling on a complex multi-facility development: retail shops, restaurants, coffee shops, bars, and parking DO qualify as tax-rebate-eligible facilities ancillary to the hotel, but the spa/…
Does a company that only 'cross-docks' already-Illinois-stamped cigarette packages (loading them onto pallets or trucks with other grocery items for delivery to retailers, without stamping, selling, warehousing, or repacking them) need a license under the Illinois Cigarette Tax Act?
Based on the limited facts described, likely no. The Department said that if a person does not meet the definitions of 'distributor,' 'secondary distributor,' 'transporter,' or 'retailer' under the Ci…
Can an Illinois wholesaler sell unstamped cigarettes and tobacco products to a Missouri-licensed distributor without paying Illinois cigarette tax?
The Department did not give a yes-or-no answer. It responded with a General Information Letter (GIL) instead of the Private Letter Ruling the taxpayer had been told to request, and simply pointed the …
How does Illinois sales/use tax apply to a software license/maintenance agreement, including annual licensing fees and charges for updates or maintenance?
It depends on whether the software is 'canned' or 'custom' and how the agreement is structured. Canned (pre-written) computer software is generally taxable as a retail sale, but a software license esc…
What are the required wage and investment levels for Nebraska Advantage Act applications filed on or after January 1, 2019?
This ruling sets the 2019 thresholds. For Nebraska Advantage Act applications filed on or after January 1, 2019, the base average annual wage requirement is $26,895, and the required investment and em…
Which events at a qualifying nonprofit Georgia theater counted as tax-exempt fine arts under the temporary 2017-2020 admissions exemption?
Under the temporary exemption then in effect, musical theater and scripted radio performances qualified as fine arts. General narrative or book-tour events, stand-up comedy, popular performance art su…
Does Illinois approve or confirm the accuracy of another state's chart summarizing motor-vehicle sales/use tax rates and rules across states?
Not exactly. The Department said it cannot formally approve publications other than its own, but noted the submitted chart 'generally appears to be correct,' and it then supplied additional guidance o…
How should a Florida qualifying project calculate and allocate income for the Capital Investment Tax Credit?
Use a separate project ledger and pro forma return applying GAAP and section 220.13 to income earned after operations begin. Allocate the resulting Capital Investment Tax Credit among partners by owne…
Did an IT-services company prove a Virginia NOL carryforward and out-of-state cost-of-performance claim for a 2012 refund?
Not yet. Fixed-date conformity adjustments left the company with positive Virginia federal taxable income for 2011, so no Virginia NOL carried to 2012. Its aggregate payroll and property data did not …
Were Harris Corporation's $5,038,488 of High-Wage Jobs Tax Credit applications timely after a 2016 amendment changed New Mexico's filing deadlines?
Yes. Harris acquired Exelis, retained the previously approved New Mexico jobs and employees, and filed three applications for later qualifying periods on December 22, 2016. The 2013 law allowed those …
A retailer sells and installs custom wall-mounted storage systems. Is the installed system a taxable retail sale of goods, and are separately stated installation charges taxable?
The installed storage systems stay tangible personal property, so the whole sale is a taxable retail sale and the retailer is not a real-property contractor. But the separately stated installation cha…
Was Phillips 66 entitled to abatement of a $9,369.03 penalty when a Department system error and employee advice delayed its severance-tax payment by one day?
Yes. Phillips 66 tried to file its April 2018 Oil and Gas Severance Tax report a week before the deadline, but the Department's TAP system rejected valid property and pool codes. After Department staf…
If an online used-car dealer opens a licensed Utah location, are its Utah sales — including cars shipped straight from out of state to the buyer — sourced to that dealership and subject to Utah sales tax?
Yes. Once an online used-car retailer has a licensed Utah dealership, every sale to a Utah customer is sourced to that Utah location for sales tax — including vehicles shipped directly from out of sta…
Did Virginia's net-operating-loss carryforward method apply to a corporation filing separate Virginia returns?
Yes. Virginia held that the cited NOL calculation method applies to corporations filing separate, consolidated, or combined returns. It upheld the prior adjustment to the taxpayer's carryforward and d…
How did Virginia correct a corporation's foreign-source-income expenses, foreign partnership loss, and currency amounts in its sales factor?
Virginia remanded the foreign-source-income expense calculation for review of the corporation's separate-company pro forma data. It removed the partnership loss and required the corporation's share of…
Did a military spouse become domiciled in Virginia after buying a home and obtaining a Virginia driver's license?
No. Although the couple bought a Virginia home and the spouse obtained a Virginia driver's license, she kept substantial ties to the prior state and later surrendered the Virginia license. Virginia fo…
How did Virginia limit a resident's credit for Delaware income tax when Delaware computed nonresident tax using an allocation percentage?
Virginia limited the credit to the lesser of Delaware tax paid or Virginia tax on the Delaware income actually subject to tax. It applied Delaware's allocation percentage to Delaware net taxable incom…
Was a taxpayer a Virginia resident when he spent only 161 days there but kept a long-term job, home, license, vehicles, and voting ties?
Yes. The taxpayer was not an actual resident because he spent only 161 days in Virginia, but he remained a domiciliary resident. His long-term Virginia job, home, voter registration and voting, vehicl…
Could a cigarette retailer abate tax on purchases above $40 by citing fraud allegations involving a different distributor?
No. Distributor records showed untaxed purchases for resale, and the retailer provided no documentation proving that purchases above $40 were fraudulent. A police investigation involving another distr…
Could a cigarette retailer defeat a reconstructed sales-tax assessment by claiming that distributor purchases were fraudulent?
No. Distributor records showed untaxed cigarette purchases for resale, and the retailer produced no sales, resale, or fraud documentation to overcome the assessment. The police report had been closed …
Could a corporation subtract fees for technical services performed abroad and challenge Virginia's use of later refunds to pay old assessments?
No. Virginia limited qualifying foreign technical fees to fees incidental to foreign property rental or licensing, not compensation for stand-alone technical services. It also upheld the statutory off…
A company imports printed gift cards into a Tennessee warehouse and ships them to restaurants and retailers across the country. Does it owe Tennessee sales or use tax on the cards, and can it buy them tax-free for resale?
It depends on where the cards end up. The company imports printed gift cards from an out-of-state vendor, stores them in a third-party Tennessee warehouse, and ships them to its restaurants and retail…
How should a monitored-security dealer be classified for BPOL, and where were receipts from customers served by its city office sitused?
Virginia classified the company as one business-service provider, not a contractor plus separate retail and wholesale businesses. Equipment and installation were ancillary to selling monitoring servic…
Did living and working in another state from a recreational vehicle establish a new domicile when Virginia ties remained?
No. Even if the husband acquired ties to the other state through work and living there in an RV, he did not prove abandonment of Virginia. The Virginia home, vehicle and RV registrations, driver's lic…
When did a taxpayer end Virginia domicile after a temporary move to one state before permanently settling in another?
Virginia domicile continued until June 2014. The taxpayer's temporary move to an intermediate state did not establish a new domicile, and the actions showing residence in the destination state occurre…
Could Virginia assess additional 2014 tax from a final IRS income adjustment when the taxpayers filed no amended Virginia return?
Yes. Virginia began with federal adjusted gross income, required taxpayers to report the final federal change, and could assess at any time when they failed to amend. The Department relied on IRS data…
Did working and leasing homes in another state end Virginia domicile when the taxpayer kept a Virginia home, spouse, vehicles, and license?
No. The taxpayer established work and residences in the other state, but did not prove abandonment of Virginia. His spouse and home remained in Virginia, along with vehicle registrations, a driver's l…
Could taxpayers overturn a 2015 Virginia assessment by saying they filed and paid when the records they cited related to 2014?
Not on the evidence provided. The May 2015 filing and payment would have related to 2014, and Virginia had no record of a 2015 return or tax payment. The best-information assessment stood, but the tax…
Are reusable portable metal racks exempt packaging supplies when a Georgia manufacturer uses them to store and ship finished rolls like pallets?
Yes. Reusable portable metal racks used briefly in the finished-goods warehouse and then used like pallets to ship manufactured rolls qualified as exempt packaging supplies. Georgia's manufacturing ex…
Did Old Dominion Freight Lines prove that it qualified for $324,214.83 of New Mexico High-Wage Jobs Tax Credit?
No. The AHO rejected the Department's theory that an employer incorporated and based outside New Mexico was categorically ineligible, because the statute focused on high-wage jobs created in New Mexic…
Did an appraisal prove that an underperforming automated racking system deserved an economic-obsolescence reduction?
No. The system's efficiency problems were internal, not external economic-obsolescence factors, and the appraisal measured usefulness to this taxpayer rather than market value to a willing buyer. The …
What does Illinois General Information Letter IT 18-0003-GIL conclude about Alternative Apportionment?
The Department denied the taxpayer's petition for alternative apportionment because the taxpayer's letter gave no information about the market for its goods or services showing that standard single-sa…
Could a delinquent New Mexico income-tax taxpayer overturn a brokerage levy and vehicle liens by disputing the mailing address, collection timing, Social Security source, $1,000 exemption, and aggregation of tax years?
No. Kevin Fenner's 2003 and 2005–2010 income-tax liabilities had already been upheld in D&O 14-39 and on appeal, and a separate 2011 assessment remained outstanding. The Department reasonably mailed n…
Are a restaurant's monthly charges for table-ordering tablets taxable, and is its separate $1 customer charge for playing offline tablet games taxable?
The vendor's monthly service fee and its share of game revenue were taxable because they paid for the restaurant's rental and use of the tablets. But the restaurant's $1 customer game fee was not taxa…
Were five related New Mexico food and restaurant businesses liable for penalties when their trained tax employee had emergency surgery, never returned, and the controller filed one day late upon returning from vacation?
No penalties were due. The accounting assistant responsible for the five entities' monthly gross receipts tax filings underwent unexpected emergency surgery while the controller was away, never return…
Why did South Carolina Revenue Ruling 18-16 withdraw the Department's earlier guidance on spending 2% local accommodations-tax funds?
The Department withdrew RR 98-22 because the General Assembly repealed the statute that had authorized the Department to answer questions about use of 2% local accommodations-tax revenue. The Tourism …
Could a store overturn cigarette assessments by saying it reported all sales when its records did not reconcile to distributor purchases?
No. Distributor records showed tax-free cigarette purchases exceeding reported gross sales, and the store lacked records proving collection, exemption, or error. Virginia credited tax already reported…
Were cigarette sales and tobacco-products assessments valid when distributor invoices contradicted a retailer's records?
Yes. Distributor invoices and the retailer's signed resale certificate supported the cigarette purchases, while the retailer lacked proof of fraud or out-of-state sales. Untaxed tobacco products on ha…
Could a federally disregarded LLC belong to a BPOL affiliated group and exclude service fees received through a wholly owned LLC chain?
Yes. Federal disregarded-entity status did not prevent the LLCs from forming a BPOL parent-subsidiary affiliated group. Service fees paid by the downstream corporation were therefore excluded from BPO…
What deduction could a Virginia contributor claim for prepaid tuition or ABLE contributions after reaching age 70?
At age 70, the contributor could deduct the remaining prepaid-tuition balance after subtracting prior deductions, rather than staying under the usual $4,000 annual limit. Virginia applied the same app…
Did Kansas give corporate filers penalty relief for 2017 income tax returns?
Kansas Notice 18-05 explains that the Department gave late-filing penalty relief for 2017 corporate income tax returns. The extended Kansas due date of October 15, 2018 matched the federal return; to …
Could an S corporation claim Virginia's BPOL out-of-state deduction merely because it filed returns or paid franchise taxes in other states?
Not merely from filing a return. Virginia ruled that Texas's margin tax was not an income or income-like tax and that this S corporation had no qualifying Florida income-tax liability. Seven other jur…
Has a city's 0.5% economic development sales tax been terminated by a letter that wasn't intended as formal cessation notice, blocking a Type B corporation from issuing bonds?
No, the tax was never terminated. The Comptroller confirmed a city's voter-approved 0.5% economic development sales and use tax (for the benefit of a Type B corporation) has been continuously collecte…
When were a nonresident's personal services substantially performed in Nebraska for withholding purposes?
Withholding generally applied when more-than-minimal activities essential to completing the service had to occur in Nebraska. If essential work occurred in several states, Nebraska withholding could b…
Was a Virginia sales-tax audit assessment untimely, and could a subsidiary be assessed for its parent's sale of restaurant assets?
The audit assessment was timely because Virginia delivered the notice to the Postal Service before the extended deadline. But the restaurant asset-sale portion was abated because the parent—not the as…
Were Schedule K-1 guaranteed payments to owners of New Mexico partnership-taxed LLCs subject to gross receipts tax when the owners acted as partners on behalf of the businesses?
No. Thomas and Linda Krumland received $2,508,534 of Schedule K-1 guaranteed payments from partnership-taxed LLCs they owned. Although federal Section 707(c) treats guaranteed payments as compensation…
After a Florida HOA merges with a recreational club, which portion of annual dues is subject to admissions tax?
The mandatory portion supporting non-golf common areas was exempt. Extra annual dues paid to obtain full or limited golf rights, green fees, nonresident facility charges, and other optional payments w…
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