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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Does Illinois tax a manufacturer's flavored malt beverage (FMB) products as beer, and at what excise tax rate?
Yes. In PLR ST 18-0012-PLR, the Illinois Department of Revenue ruled that the taxpayer's flavored malt beverage products are "beer" under the Liquor Control Act of 1934 and are taxed at the beer excis…
How should a multistate media distributor source broadcast-license fees for Florida corporate-income-tax apportionment?
Source the license fee to Florida only when the multichannel programming distributor buying the license is domiciled or has its principal place of business in Florida. The distributor's subscriber loc…
What does Illinois Private Letter Ruling ST 18-0011-PLR conclude about Agents?
In this PLR, the Department ruled that a company running school book fairs -- not the school or PTO -- is the disclosed principal responsible for Retailers' Occupation Tax, because the company sets pr…
How should a multistate service provider source its receipts for Florida corporate-income-tax apportionment?
The Department used market-based sourcing to the location of the customer receiving the service. Because the public copy redacts the services and key customer-location facts, its category-by-category …
What does Illinois Private Letter Ruling ST 18-0010-PLR conclude about Computer Software?
Yes -- a signed Order Form that incorporates a separate Terms & Conditions Agreement by reference can satisfy the written-signature requirement of 86 Ill. Adm. Code 130.1935(a)(1)(A), as long as the O…
Could a Virginia locality replace a contract-based direct-labor method with payroll apportionment when situsing BPOL gross receipts and calculating an out-of-state deduction?
No. The taxpayer's direct-labor method satisfied Virginia's statutory situs rule and was more accurate than payroll apportionment. The Commissioner remanded the case because the city also had to recal…
Was property at a manufacturer's data center exempt from local business tangible personal property tax when it supported manufacturing and separate government IT services?
Partly. Property supporting the manufacturer's operations was not subject to local business tangible personal property tax, even though no manufacturing occurred at the data center. Property dedicated…
Could Virginia residents claim an income-tax credit for the District of Columbia Unincorporated Business Franchise Tax paid on sole-proprietor income?
No. Virginia classified the District of Columbia Unincorporated Business Franchise Tax as a franchise tax rather than the broad-based individual income tax required for the credit. Denying the credit …
Was a taxpayer who worked 165 days in another state still a Virginia resident when he spent 200 days in Virginia and kept his home, license, vehicles, and voting ties there?
Yes. The taxpayer was both a Virginia domiciliary and an actual resident because he did not abandon Virginia and spent 200 days there. He still could claim Virginia's limited credit for income tax pai…
Where were ready-mix concrete sales sitused when Virginia plants manufactured the concrete and a shared Virginia call center first took customer orders?
Wholesale sales made from the manufacturing plants were exempt from BPOL tax, while any retail receipts generally followed the place of sales solicitation. For sales tax, the Virginia call center was …
What Virginia tax interest rates applied in the fourth quarter of 2018 to assessments, refunds, disputed assessments, estimated tax, and local taxes?
For October 1 through December 31, 2018, Virginia's ordinary interest rates were 7% on tax underpayments and assessments and 7% on overpayments and refunds. The reduced rate for qualifying disputed as…
A 501(c)(3) nonprofit runs an on-demand vehicle-share program in a Tennessee city. Are its membership fees, single-use rental fees, and penalty fees exempt from sales tax because it's a nonprofit — or are they taxable?
All of the fees are taxable. A 501(c)(3) nonprofit runs an on-demand shared-vehicle program (vehicles parked in city hubs, rented for 60-minute periods). The Department ruled: (1) the Membership Fees …
Under South Carolina's 2018 local-tax guidance, which local sales or use tax applied to delivered goods and how did the Catawba Tribal tax work?
Under this superseded ruling, a retailer with South Carolina nexus had nexus in every Department-administered local jurisdiction and collected local tax based on where goods were delivered. If the ret…
When does a remote seller without physical presence have South Carolina economic nexus and need to collect sales and use tax?
A remote seller has South Carolina economic nexus when gross revenue from property, electronically transferred products, and services delivered into the state exceeds $100,000 in the current or previo…
Must an Illinois trucking company withhold Illinois income tax from a nonresident interstate driver who is dispatched from Illinois but drives loads outside the state?
It depends on control, not just dispatch: if the driver's service is directed or controlled from Illinois (e.g., dispatching), Illinois withholding is required, but if it is directed or controlled fro…
Could a taxpayer revive a missed 90-day protest deadline for a denied New Mexico High-Wage Jobs Tax Credit by later claiming the same denied amount as a refund?
No. Precheck applied for $186,140.03 of High-Wage Jobs Tax Credit, received approval for $7,798.57, and did not protest the $178,341.46 partial denial by the September 11, 2017 deadline. Filing a refu…
Does Illinois Retailers' Occupation (sales) Tax apply to the sale of cryptocurrency 'utility tokens' that represent ownership of mining hardware?
No. The Illinois Department of Revenue ruled that the utility tokens described (smart contracts representing fractional ownership of crypto-mining hardware) are intangible personal property, and sales…
If my business sells, installs, and repairs garage doors in Illinois, do I owe sales tax, use tax, or both on the materials and labor involved?
It depends on whether you're acting as a construction contractor or a retailer. The Department didn't rule on the taxpayer's five specific numbered scenarios one-by-one; instead it explained the gener…
Can a manufacturer's 'agency agreement' with the Illinois Department of Revenue cover a local distributor's sales of product samples, and what sales-tax rate applies to those samples?
If the manufacturer (here, a nutrition-products company) has an 'agency agreement' with the Department under 86 Ill. Adm. Code 130.550, it must collect and remit Retailers' Occupation Tax on the distr…
Can a nonprofit school with an Illinois sales-tax E-number sell household goods to its members for fundraising without collecting and remitting Retailers' Occupation Tax?
Not clearly, on the facts described. The Department explained that E-number holders may sell to members tax-free only when the sales are 'primarily for the purposes of the selling organization,' but i…
Does a 5-month operating lease of household goods, where the customer can later continue leasing, return the goods, or buy them at fair market value, qualify as a taxable 'rental purchase agreement' under Illinois's Rental Purchase Agreement Occupation and Use Tax, and is that tax ever subject to local rates?
No, not on the facts described — because the initial lease term was 5 months (more than 4 months), the Department said the agreement does NOT qualify as a 'rental purchase agreement' under 35 ILCS 180…
If a rent-to-own agreement has a rental term of consecutive 90-day periods but requires payments every other week, is it subject to Illinois's Rental Purchase Agreement Occupation and Use Tax?
Generally no. The Department's opinion is that a rental agreement with a rental term made up of consecutive 90-day periods, but with payments due every other week, does not meet the statutory definiti…
If a company installs energy-saving equipment it owns in a customer's building and bills only a monthly share of the energy saved, is that 'pay-from-your-savings' arrangement subject to Tennessee sales and use tax?
Yes. The company's agreements to furnish and remotely monitor energy-saving power equipment are subject to Tennessee sales and use tax as a lease of tangible personal property (§ 67-6-204). The compan…
Are charges for a paid online course that includes streamed pre-recorded university lectures, course materials, and a completion certificate taxable in Texas?
No. The Comptroller ruled that charges for a paid online course — streamed pre-recorded university lectures plus course materials, quizzes, and a discussion forum, capped off with a completion certifi…
Are online training courses for property management professionals — with interactive lessons, progress tracking, and completion/mastery certificates — a taxable information service in Texas?
No. A company's online training courses for the property management industry — including interactive lessons, instructor content, student/supervisor progress tracking, and randomized assessments leadi…
For a Texas-based wholesale/distribution combined group, how do you apportion receipts from sales to unaffiliated buyers in and out of Texas, and sales between the group's own members?
For a Texas-based wholesale/distribution company's combined group: receipts from sales delivered to unaffiliated buyers outside Texas count in total receipts but are not apportioned to Texas; receipts…
Instead of filling out an annual multistate tax survey, what sales-tax positions did the Illinois Department of Revenue volunteer on trade show nexus, click-through nexus, economic nexus after Wayfair, short-term rentals, the manufacturing exemption, medical items, and cannabis?
The Department declined to fill out the requested survey questionnaire itself, but instead summarized existing Illinois law on eight topics the questionnaire raised: trade show presence can create nex…
What is South Carolina's tax interest rate for underpayments and overpayments for the period beginning April 1, 2018 (per SC IL #18-11)?
5%. SC Information Letter #18-11 sets South Carolina's interest rate on tax underpayments and overpayments at 5% for the period April 1, 2018 through December 31, 2018. Interest is compounded daily, e…
What does Illinois General Information Letter IT 18-0001-GIL conclude about Residency?
The Department declined to determine this individual's residency status, but explained that an Illinois domiciliary who is posted overseas on a temporary or short-term work assignment generally remain…
When does an out-of-state video-game company create Texas sales-tax and franchise-tax nexus by sending employees to plan and host a one-time eSports tournament in Texas, and when does that nexus end?
ALERT: This ruling's nexus analysis predates Wayfair-driven rule changes (Rule 3.586 added an economic-presence nexus test effective 12/29/2019; Rule 3.286 was amended effective 1/1/2019 for online sa…
Does an out-of-state video-game company create Texas sales-tax and franchise-tax nexus by sending employees to plan and host a one-time esports tournament in Texas?
Yes. An out-of-state gaming company and its subsidiaries created Texas nexus for both sales/use tax and franchise tax the moment their employees first entered Texas for pre-event planning visits ahead…
When a marketing company buys equipment on a client's behalf as the client's purchasing agent, can it charge the client sales tax on that equipment if the out-of-state supplier didn't collect tax?
No. When a marketing company acts as its client's purchasing agent to buy equipment from an out-of-state supplier that didn't collect Texas tax, the agent — not the client — must accrue and remit use …
Did military assignments outside Virginia change a service member's domicile when he kept Virginia licensing, registration, and voting ties?
No. Military orders and leases in other states did not by themselves change domicile. The service member showed neither a new domicile elsewhere nor abandonment of Virginia, where he kept a driver's l…
Could a New Mexico USPS mail contractor deduct all receipts from routes that crossed into Texas, or was the interstate-commerce deduction limited by scheduled delivery points?
The deduction was limited to 17%, not 100%. Diamond T's trucks crossed between Texas and New Mexico, but its schedule also included extensive New Mexico stops and entirely intrastate trips. Applying t…
Are free advertising publications, mailed print subscriptions, and digital-only subscriptions subject to Florida sales tax?
Qualifying free, regularly circulated publications that were primarily advertising and mailed were exempt, including printing inputs. Mailed print subscriptions were also exempt, and digital-only subs…
After a Florida golf club merges into an HOA, which dues, membership contributions, and capital assessments are taxable?
If the merged entity qualified as an HOA, dues up to the mandatory minimum membership level were exempt, while excess elective dues were taxable. Equity membership contributions and capital assessment…
Under South Carolina's original manufacturing-property partial exemption, which manufacturers and property qualified and how was the exemption claimed?
Under this superseded ruling, manufacturers received a phased-in partial exemption for property used in the manufacturing business and assessed at the 10.5% ratio. It applied automatically through the…
Is a nonresident executive's office, where he sleeps on work nights, a 'permanent place of abode' that could make him a New York statutory resident?
No. The office is not a permanent place of abode under Tax Law § 605(b)(1)(B). The taxpayer lacked unfettered access (he could stay only on work nights), the space had no cooking or bathing facilities…
Could a corporate provider of New Mexico Medicaid developmental-disability services exclude state payments from gross receipts as a disclosed agent or under caregiver exclusions for individuals?
No. Active Solutions' Family Living Services receipts were payments for its own contractual services, not reimbursements received solely as a disclosed agent of the state or its direct-care contractor…
If a company negotiates free perks (golf, water park passes, bike rentals) for a property-management company's rental guests and pays sales tax on those items itself, does it owe additional sales tax on the fee the property manager pays it?
No. A company that negotiates complimentary golf, water park, bike-rental, and similar perks for a property-management company's rental guests, and pays sales tax directly to each vendor when a guest …
When a buyer pays a separately stated fee for a program that pays a credit toward a replacement vehicle if their car is totaled or stolen, is that fee taxable — and does the credit count in the sales tax on the replacement vehicle?
The separately stated, optional program fee is NOT subject to sales or use tax — it buys an intangible right to future compensation, like an insurance premium, not tangible personal property. The comp…
Does having one remote, non-sales employee working from a home office in Utah force an out-of-state online retailer to collect Utah sales tax?
Yes. A single non-sales employee — here an R&D 'Director of Innovation' telecommuting from her own home in Utah — gives an out-of-state online retailer Utah sales-tax nexus, so it must collect and rem…
A company bills customers one combined line-item charge for a metered commodity. Can the part of that charge covering final delivery to the customer be carved out of the tax base as a nontaxable delivery charge?
No. The Commission held the entire combined line-item charge is taxable. None of it qualifies as an excludable delivery charge — the 'distribution' components weren't shown to be for preparation and d…
Did temporary overseas work establish new domiciles when a married couple kept a Virginia home, licenses, voting ties, and a vehicle registration?
No. The overseas moves appeared temporary, and the couple did not prove abandonment of Virginia. They retained a Virginia home, active driver's licenses, voter registration, and a vehicle registration…
Were tent, table, and chair rentals nontaxable services because the vendor transported, set up, monitored, and removed the equipment?
No. The true object was the use of the tents, tables, and chairs. The vendor's attendants only transported, set up, monitored, and removed the items; they did not continuously operate skilled equipmen…
For a company selling EV charging stations, must it collect sales tax on (1) the station, (2) an annual network fee, and (3) maintenance contracts?
A general overview, no binding determination. (1) Selling the charging station is a taxable retail sale of tangible personal property (and use tax can apply to its use). (2) The annual network fee is …
Are subcontracted carpet, window and floor cleaning services subject to New York sales tax?
It splits. Cleaning rugs and wall-to-wall carpeting falls within the laundering/dry-cleaning exclusion (Tax Law § 1105(c)(3)(ii)), so it isn't taxable — provided the carpet-cleaning charge is separate…
Which cleaning services are taxable — carpet cleaning, upholstered furniture cleaning, and wood floor refinishing/stripping/waxing?
It splits. Carpet cleaning and the cleaning of upholstered furniture fall within the laundering/dry-cleaning exclusion (Tax Law § 1105(c)(3)(ii)), so they aren't taxable — provided the charge is separ…
Does a hotel owe Hotel Operators' Occupation Tax on a guest's stay of more than 30 consecutive days when a different company took over paying the bill partway through, with no break in the stay?
No. Under this PLR, once a guest occupies the same hotel room for at least 30 consecutive days without interruption, the guest is a 'permanent resident' and the hotel's receipts for that period are ex…
Can an airline's block of hotel rooms qualify for Virginia's 90-day sales-tax exemption when different employees use different rooms each day?
Yes, for the minimum number of rooms occupied on every day of a continuous 90-day period. The same employee did not have to stay in the same room; if occupancy fell to zero on any day, however, no roo…
What does Illinois Private Letter Ruling ST 18-0008-PLR conclude about Gross Receipts?
Vendor incentive payments a retailer receives are NOT included in taxable gross receipts under the Retailers' Occupation Tax as long as the payment is not conditioned on an individual retail sale (e.g…
How may South Carolina counties spend revenue from the local 1% transportation (penny) sales and use tax (per SC IL #18-10)?
SC Information Letter #18-10 issues guidelines for how counties may spend revenue from the local 1% transportation sales and use tax (the "Penny Tax") authorized by Title 4, Chapter 37 (the Optional M…
Does an out-of-state clothing-subscription retailer owe Texas sales tax on shipments where customers get a 7-day try-on period before being charged?
Yes. An out-of-state online clothing-subscription retailer has a Texas sales and use tax collection obligation, because it retains ownership rights over the clothing — the right to charge for it — whi…
Does a battery system a wind farm installs to store generated electricity for grid-reliability service qualify for Texas's manufacturing sales tax exemption?
No. A battery system a wind farm installs to store electricity for a grid fast-response reliability program does not qualify for Texas's manufacturing sales tax exemption, because the exemption exclud…
Does a battery system a wind farm installs to store generated electricity for grid-reliability service qualify for Texas's manufacturing sales tax exemption?
No. A battery system a wind farm installs to store electricity for a grid fast-response reliability program does not qualify for Texas's manufacturing sales tax exemption, because the exemption exclud…
If a public REIT owns Tennessee rental-property LLCs and limited partnerships through a partnership, and those entities are disregarded for federal tax, can they deduct from Tennessee excise tax the earnings the partnership distributes up to the REIT?
Yes. The single-owner LLCs and limited partnerships (the 'Taxpayers') qualify for Tennessee's excise-tax deduction under § 67-4-2006(a)(5)(A) for net earnings the partnership distributes — directly or…
For Texas franchise tax purposes, is revenue from an online airport-parking reservation service apportioned based on where the parking lot is located or where the company's servers/customers are, and does a Multistate Tax Commission voluntary disclosure program cover franchise tax?
ALERT: This ruling's core apportionment holding has been PARTIALLY SUPERSEDED. As originally issued, the Comptroller ruled that an online airport-parking reservation company's receipts are apportioned…
Is repair and remodeling labor on fractionally owned vacation homes taxable in Texas, and are the homes treated as residences or as hotels?
Yes — the repair and remodeling labor is taxable. Charges for real property repair and remodeling labor on the fractionally owned homes are taxable under Section 151.0047 because the homes are not 're…
Is a mobile app that lets multi-level-marketing distributors view their sales and downline data, sold alone or bundled with a dashboard and personal website, a taxable data processing service?
Yes. A mobile application and bundled dashboard/personal-website service that let multi-level-marketing distributors view their own sales and downline data are taxable data processing services — tax a…
Is labor to repair and remodel a fractionally owned vacation home taxable, if owners are barred from renting their ownership interest but the operator can rent the homes to the public as hotel accommodations?
Yes. Repair and remodeling labor on fractionally owned vacation homes is taxable, because the homes qualify as "hotels" (not exempt "residences") once the operator holds the right to rent them to the …
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