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 a private investigation and forensic accounting company owned by a licensed CPA owe Texas sales tax on its services as a taxable 'security service,' or is it exempt because the owner is a CPA?
Taxable. Private investigative and forensic accounting services performed by a company holding an Investigations Company License are taxable Texas security services, and there is no exemption just bec…
Are a land surveying firm's right-of-way negotiation services for oil and gas pipelines taxable, when billed separately from — or combined with — the firm's taxable surveying services?
Nontaxable. A land surveying firm's right-of-way (ROW) services — negotiating easements, following up on land reclamation, and resolving owner issues for oil and gas pipelines — are not taxable real p…
When a customer damages a tire under a road hazard warranty and gets a credit toward a replacement tire, is the replacement tire taxable and can the original sales tax be refunded?
No refund, new tax due. When a customer damages a tire covered by a road hazard warranty and receives a credit toward a replacement tire, the tax paid on the original tire is not refunded, and the rep…
Is demolition debris removal a nontaxable industrial-solid-waste service, and can a demolition company buy third-party debris hauling tax-free for resale?
No, demolition debris removal is not exempt industrial solid waste — it's taxable municipal solid waste removal. Whether the whole job is taxable then depends on the type of demolition: partial demoli…
Is a law-firm subscription bundling document-drafting software, CLE courses, and an online community for one monthly fee taxable in full?
Yes. A legal-practice-support subscription that bundles a taxable document-drafting software license with nontaxable CLE courses and an online community for one lump-sum fee is taxable in full, becaus…
What is South Carolina's tax interest rate for underpayments and overpayments for the period beginning April 1, 2018 (per SC IL #18-7)?
5%. SC Information Letter #18-7 sets South Carolina's interest rate on tax underpayments and overpayments at 5% for the period April 1, 2018 through September 30, 2018. Interest is compounded daily, e…
Can a pharmacy buy prescription bottles and labels tax-free — under the medical-materials exemption, or the container/label exemption?
Yes — but through the container exemption, not the medical-materials exemption. A pharmacy CANNOT use the medical-materials exemption, because that requires a 'licensed provider' with authority to pre…
What prescription and documentation must a retailer collect to sell massage chairs, hot tubs, and similar therapeutic appliances tax-exempt in Texas, and does a chiropractor's prescription count?
A retailer needs only a written prescription (signed, with the practitioner's name/address/license info, identifying the item) for most therapeutic appliances like massage chairs and adjustable mattre…
Is cloud-based website hosting a taxable Texas data processing service, and does it matter where the customer or the underlying cloud data center is located?
Taxable. The Comptroller ruled that all aspects of a Texas company's cloud-based website hosting service (deploying code, monitoring, maintenance, bandwidth) are taxable data processing services -- ta…
Is a 25-year build-to-suit lease of a new charter-school campus, with a 20-year early-termination option, an exempt contract that lets the for-profit landlord buy construction materials tax-free?
No. The Comptroller ruled that the charter school's 25-year lease is NOT an exempt contract under Section 151.311, because the lease includes a 20-year early-termination option that undercuts the requ…
May a Florida tenant use appraised values—not only square footage—to allocate taxable rent for multiuse hotel and golf property?
Yes. Appraisal values could be used if they reasonably valued the taxable rental, but actual square footage still had to identify hotel dwelling units and common areas rather than relying on an estima…
Who owes Georgia tax on free printed advertising materials mailed or shipped to customers, company stores, and third-party retailers, and where is the tax sourced?
The advertiser owed sales or use tax on free printed materials delivered to Georgia customers, its stores, or third-party retailers, at the rate for each delivery location. QR codes, posters, and bann…
Did employees Raytheon rehired through its Ktech asset acquisition occupy new jobs eligible for New Mexico's High-Wage Jobs Tax Credit?
Mostly no. The 2013 credit law applied because Raytheon filed its applications in 2015. Raytheon's purchase of substantially all Ktech assets and transition of about 120 employees was an acquisition, …
Does Colorado's $2-per-day vehicle rental fee restart when a short-term rental is terminated and the customer immediately signs a brand-new rental for the same vehicle?
Yes. When the company terminates the first short-term rental and writes a brand-new rental ticket for the next rental (even of the same vehicle), the second rental is a new contract—not a 'renewal' th…
How are sales of cereal malt beverage and beer taxed in Kansas after the 2017 and 2018 law changes?
Kansas Notice 18-04 explains two law changes -- effective April 1, 2019 -- affecting how cereal malt beverage (CMB) and beer are sold and taxed. Under 2017 House Substitute for Senate Bill 13, a CMB r…
How much did Kansas oil and gas conservation fees increase in 2018 and when?
Kansas Notice 18-03 announces that the Kansas Corporation Commission amended K.A.R. 82-3-206 and K.A.R. 82-3-307 to increase the conservation assessment on oil and gas production, effective June 15, 2…
Are manufacturer cash rebates on a new motor vehicle exempt from Kansas sales and use tax?
Kansas Notice 18-02 explains that, effective July 1, 2018 through June 30, 2021, a cash rebate granted by a manufacturer to the purchaser or lessee of a new motor vehicle is not subject to Kansas reta…
Can concrete mixer truck operators claim a Kansas motor fuel tax refund for non-highway fuel use?
Kansas Notice 18-01 says that a person who operates a truck designed, equipped, and used exclusively for concrete mixing and delivery may claim a refund of 25% of the motor fuel tax paid on fuel used …
Which packaging, storage, and warehouse equipment at a Virginia soft-drink plant was directly used in manufacturing and subject to local M&T tax?
Bulk-shipping palletizers, wrappers, and passive storage were not manufacturing machinery. Water-cooling and pressurized-air systems supporting bottle molding were taxable. The taxpayer failed to prov…
Did delayed voter registration and licensing prevent a taxpayer from proving that he changed domicile from Virginia before 2009?
No. The taxpayer bought and occupied a home in the other state in 2008, later registered to vote and obtained its driver's license, and explained that his Virginia address was leased property and his …
Was HMX Construction liable for its predecessor's tax, penalty, and interest as a successor in business?
Partly. HMX was a successor because it had the same owner as the predecessor, used the same recordkeeping system, continued homebuilding, claimed the earlier company's achievements as its own, and att…
Can a manufacturer's representative that buys equipment from manufacturers and resells it to customers under its own contracts take the cost of goods sold (COGS) deduction, even though it never physically handles the product?
Yes. A manufacturer's representative that contracts separately to buy equipment from manufacturers and resell it to its own customers — never physically touching the product, which ships directly from…
Is a Connecticut staffing company that employs healthcare workers and places them with client providers selling taxable personnel services?
Yes. Because the company employs the healthcare practitioners and the clients control what work they do and how, the true object is furnishing staff, so the charges are taxable personnel services unde…
Is a bundled call-tracking-and-marketing-consulting service package a taxable data processing service or a nontaxable consulting service?
Nontaxable. The Comptroller ruled that a lump-sum call-tracking, recording, and reporting package sold alongside marketing consulting is nontaxable consulting services, because the essence-of-the-tran…
Did an equity investment need to satisfy every qualified-investment rule for Virginia's qualified-business capital-gain subtraction?
No. The capital-gain subtraction did not import every “qualified investment” condition from the separate credit statute. Equity or subordinated debt was sufficient for the investment form. Because the…
Was a foreign-created trust a Virginia resident trust because its sole trustee was in Virginia, and how was its investment income treated?
Yes. A trust administered by a Virginia fiduciary was a resident trust. Income included in federal taxable income generally entered Virginia taxable income unless modified; federally excluded income g…
Did bank statements prove a Virginia resident separately paid the mortgage deductions claimed apart from a nonresident spouse?
No. The statements showed balances, deposits, transfers, and payments but did not identify the source of deposited funds or prove that separately owned funds paid the mortgage. An account in one spous…
Was Virginia's fiduciary tax assessment against a bankruptcy estate valid when it missed the federal prompt-determination deadlines and denied a debtor credit?
No. Virginia did not notify the trustee of examination within 60 days or finish within 180 days after the proper prompt-determination request. The assessment was untimely. The estate also inherited th…
Could a corporation carry forward a federal 2011 net operating loss when Virginia fixed-date conformity adjustments eliminated the Virginia loss?
No. Virginia taxable income required federal taxable income plus fixed-date additions minus fixed-date subtractions. Because the 2011 additions exceeded the federal loss and subtractions, the corporat…
Could a corporation use foreign-source-income subtractions to increase Virginia NOL carryovers?
No. Virginia would not let foreign-source-income subtractions create or enlarge a Virginia NOL after federal taxable income reached zero. But the audit had to correct its IRC § 965 calculation, and af…
Could taxpayers recover old payments caused by a preparer's failure to claim withholding credits?
No. Virginia refunded only payments still within the statutory period and said it had no discretion to refund older payments. The appeal was also incomplete, and reliance on a preparer did not relieve…
Were a vascular practice's bulk purchases of stents exempt as patient-specific prosthetic devices or hemodialysis supplies?
No. A stent could qualify as a prosthetic implant when bought for a specific patient and could qualify when purchased for hemodialysis. But the practice bought undifferentiated bulk inventory and coul…
Were a sod farm's sales to its affiliate exempt as resale transactions?
Only in part. Sod actually resold by the affiliate qualified for resale treatment after the farm supplied a facially valid resale certificate. Sod the affiliate used in real-property installation cont…
Are an IT vendor's PC deployment, maintenance, and asset-management services taxable in Texas, or do they qualify as nontaxable 'services by employees'?
Taxable. The Comptroller ruled that an IT vendor's PC pre-deployment, installation, break-fix, move/add/change, asset-management, and reporting services are all taxable in Texas because they're perfor…
Is admission to a children's scaled-city role-play facility a taxable amusement service or a nontaxable educational program?
Taxable. The Comptroller ruled that admission to a scaled-city facility where children role-play adult jobs is a taxable amusement service, because the instructors don't meet the scholarly/expert stan…
Could a taxpayer challenge a 2007 Virginia assessment in 2018 after missing the appeal deadline?
No. The 2018 appeal of a July 2010 assessment was untimely and incomplete, and the no-return assessment was upheld. Because Virginia collected the assessment on March 8, 2018, the ruling allowed a lim…
Were Virginia's 2011 and 2012 individual income tax assessments issued within the statute of limitations?
The 2011 assessment was too late and was abated because Virginia found no fraudulent intent that would keep the assessment period open. The 2012 assessments were timely because they were issued within…
What Virginia tax interest rates applied during the third quarter of 2018?
For July 1 through September 30, 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 asse…
Is a Canadian corporation with no U.S. permanent establishment, claiming a Canada-U.S. treaty exemption from federal income tax, automatically exempt from Georgia corporate income tax?
Not automatically. A foreign corporation doing business in Georgia must file a return and compute its Georgia taxable net income, which starts from federal taxable income. If the Canada-U.S. treaty me…
Could a law firm avoid a $4,900 penalty when accounting-staff turnover caused its $783.48 unclaimed-property report to be filed 49 days late?
No. Guglielmo & Associates' unclaimed-property deadline was properly calendared and remained accessible despite sudden accounting-staff turnover, except for at most 24 to 48 hours. The firm did not re…
When is South Carolina's 2018 sales tax holiday and what items are exempt (per SC IL #18-5)?
South Carolina's 2018 sales tax holiday runs from 12:01 a.m. Friday, August 3, 2018 through midnight Sunday, August 5, 2018. During that three-day weekend, the 6% state sales and use tax and any appli…
What is South Carolina's most recent statewide per capita income figure used for tax incentive eligibility (per SC IL #18-6)?
South Carolina's most recently available statewide per capita income figure is $40,421, per SC Information Letter #18-6. This matters because a number of South Carolina income, sales-and-use, and prop…
What does Illinois Private Letter Ruling ST 18-0005-PLR conclude about Local Taxes?
Yes: the Illinois Department of Revenue ruled that the taxpayer's commercial fuel-marketing unit was engaged in the business of selling in the city where its sales office was located, because three of…
Can a Georgia copy shop buy or lease self-service copiers tax-free for resale or claim the manufacturing-equipment exemption?
No. Charging customers per copy did not transfer possession or control of the copier, so the copy shop was not leasing or reselling the equipment and had to pay tax on it. Copy shops also did not qual…
When a restaurant buys dressing mix, compounds it into a condiment, and sells it to customers, is the purchase of the mix taxable and the sale of the condiment taxable?
It turns on whether the condiment is separately priced. If a restaurant just makes a condiment available (no separate charge), the restaurant is the user/consumer — like napkins or utensils — and pays…
When a company sells and installs a commercial sign, are its separately stated charges for surveying, engineering stamps, and permits included in the sales tax on the sign?
It depends on what the charge is really for. A sign is taxable tangible personal property, and a retailer's costs of bringing goods to market — government permits, engineering drawings, manufacturing …
How does South Carolina calculate sales or use tax on a qualifying fire truck and the firefighting equipment sold with it?
A qualifying fire truck is taxed at 5% of its sales price or $500, whichever is less. Non-clothing firefighting equipment shares that cap only when it is supplied with the truck by the same vendor and…
Did a military spouse become a Virginia domiciliary by buying a home and obtaining a Virginia driver's license?
No. Despite a Virginia home, vehicles, and driver's license, the taxpayer retained strong ties to the service member's State A domicile, including a home and active voting there. Virginia found no com…
Did a temporary move and job in another state end a taxpayer's Virginia domicile?
No. The taxpayer described the other-state residence as temporary and Virginia as her permanent home, while keeping a Virginia license and voter registration. Virginia treated her as a 2014 domiciliar…
Could a corporation use alternative records to support cost-of-performance changes to its Virginia sales factor?
Potentially. Virginia said no single document proves cost of performance for every business, so the corporation could submit alternative records and explain its methods. Refunds would be issued only t…
Which tier of pass-through entities had to report and pay Virginia nonresident-owner withholding?
The upper-tier LLC, trust, and estate—not the lower-tier taxpayer—were responsible for Virginia pass-through withholding and Form 502 filings. The LLC lacked proof of a hardship waiver, and the trust …
Could taxpayers subtract an entire prior-year federal NOL directly from Virginia adjusted gross income?
No. The taxpayers could not subtract the entire federal NOL and drive Virginia adjusted gross income below zero. But part of the 2009 loss could still be deductible after Virginia fixed-date-conformit…
How did Virginia tax restricted stock units earned partly from services performed in Virginia?
Virginia taxed the service-related portion of RSU income when the units vested, using a ratio of Virginia service days to total service days. Any later gain after vesting was investment income and was…
Could a corporation's president avoid converted tax assessments by saying she was only an investor?
No. The president provided no evidence that she lacked knowledge of the unpaid taxes or authority to prevent the failure. Because the assessments were presumed correct and she did not meet her burden …
Did solar-panel mounting, racking, and certified pollution-control property qualify for Virginia sales-tax exemptions?
Yes, in part. Mounting and racking integral to the solar tracking system qualified for the manufacturing exemption, but concrete foundations did not. Items certified by DMME qualified under the pollut…
Did vendor correspondence prove that software and maintenance were delivered only electronically and qualified for Virginia's exemption?
No. Later vendor correspondence identifying the purchase order did not satisfy Virginia's documentation rule. The invoice, contract, or sales agreement had to certify electronic delivery and that no t…
When does South Carolina use tax apply to purchases from Internet, catalog, auction-site, or out-of-state sellers, and how is it reported?
South Carolina use tax generally applies when taxable property is bought at retail for use, storage, or consumption in the state and South Carolina sales tax was not fully collected. Credit may be ava…
How did South Carolina's Utility License Fee Credit work under the rules summarized in RR 18-8?
Under RR 18-8, a company subject to the § 12-20-100 Utility License Fee could claim a nonrefundable credit equal to cash paid for qualifying infrastructure benefiting an eligible project. The annual c…
Under South Carolina's 2018 rules, how were boats, boat motors, and boat trailers taxed when sold alone or together by a retailer or private seller?
This historical ruling separated each item and seller type: boats were maximum-tax items; unattached boat motors were taxed at the full rate; and trailer treatment depended on retailer status and pers…
When can a South Carolina purchaser age 85 or older receive the one-percentage-point reduction in the state sales, use, or casual excise tax rate?
A purchaser age 85 or older receives the one-percentage-point state tax reduction only when the individual personally buys an item for personal use, requests the reduction at the time of sale, and pro…
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