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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Could Virginia tax a 2016 retirement distribution received after the taxpayer moved abroad and abandoned Virginia domicile?
No. The taxpayer had sufficiently abandoned Virginia domicile and established domicile in Country A before 2016. Federal law barred Virginia from taxing the retirement distribution received as a nonre…
Did financial disability or a timely estimated payment extend Virginia's deadline for a 2012 refund?
No. Virginia said federal financial-disability tolling did not alter its refund limitation period, and making a timely estimated payment did not preserve a refund claimed on a late return. The prior d…
Did military orders prevent a service member and retired spouse from becoming Virginia domiciliaries?
No. Military orders alone do not change domicile, but voluntary actions can. Based on the available record, Virginia found the retired spouse had established Virginia domicile and the service member h…
Could Virginia base a withholding assessment solely on another agency's worker-classification information?
No. Virginia could lawfully obtain VEC information, but the auditor still had to independently apply the employee-versus-contractor factors to the company's records. The case returned for a full revie…
Which services sold with audiovisual systems were taxable, and could the audit sample be revised?
Virginia exempted actual repair and installation labor, but taxed project management, bundled GUI work, training, and a sound-system rental with only a standby technician. Custom programming and netwo…
Was a business manager personally liable for the corporation's unpaid Virginia sales tax as a responsible officer?
Yes. Virginia found that the manager's authority over the company's financial affairs created a duty to ensure sales-tax filing and payment absent proof of delegation. He also failed to disprove knowl…
Is a truck rental to a contractor exempt if the contractor gives a Contractor Exempt Purchase Certificate (ST-120.1) with box A checked?
No — the rental is taxable. Renting a truck is a taxable sale of tangible personal property. The contractor used the truck to haul dirt on and off site, so the truck is equipment the contractor used t…
Are service fees earned by a Florida company from a foreign related customer sourced to Florida?
No on these facts. The Department treated the customer's purchase as the income-producing activity and sourced the fees to the customer's physical location. Because the related customer was outside Fl…
Could a government contractor buy communications equipment tax-free before shipping it abroad for installation on a naval ship?
Yes, under the resale exemption—not the temporary-storage exemption. The contract's true object was selling communications equipment to the federal government, so qualifying purchases could be made wi…
Could JTC deduct receipts from coating and blasting services without valid New Mexico nontaxable transaction certificates?
Mostly no. JTC performed coating and blasting services but lacked valid New Mexico NTTCs from Mid Columbia Engineering, ABQ Manufacturing, and other buyers. An incomplete Washington resale certificate…
Could an assisted-living facility calculate its deductible real-property rent by subtracting service costs from bundled resident charges without proving fair rental value?
No. SSC was entitled to deduct receipts attributable to leasing real property, but it had to use a reasonable method to separate rent from taxable assisted-living services. SSC subtracted its costs fo…
What happened after Shaun Holguin supplied records that caused the Department to abate his 2010 personal income tax assessment without telling the AHO?
The amended decision held that Holguin owed none of the assessed $1,164 tax, $232.80 penalty, or $246.66 interest. After the hearing, he timely supplied the records the Department requested, and the D…
Does a mid-term termination-fee option in a 28-year charter-school ground lease defeat the exempt improvement-to-realty contract test, if the property reverts to the school on termination?
Yes, still exempt. The Comptroller ruled that a charter school's 28-year Ground Lease/Lease IS an exempt contract under Section 151.311, even though it includes an option to terminate (for a fee) betw…
Can a landlord buy construction materials tax-free for a charter-school campus while it's still under construction, under a 25-year lease that hasn't started yet?
Yes. The Comptroller ruled that the charter school's 25-year lease IS an exempt contract under Section 151.311 -- even though construction hadn't reached Substantial Completion and the lease term itse…
Is a charter school's 25-year lease financing a student-housing apartment complex for international students an exempt improvement-to-realty contract?
Yes. The Comptroller ruled that a charter school's 25-year lease financing a new student-housing apartment complex -- built for international students in its Mandarin-immersion program -- IS an exempt…
Is a charter school's 25-year build-to-suit campus lease an exempt improvement-to-realty contract that lets the landlord buy construction materials tax-free?
Yes. The Comptroller ruled that the charter school's 25-year lease IS an exempt contract under Section 151.311, because a 25-year term is sufficiently long relative to the campus's 22-year useful life…
Could a deceased taxpayer's successor receive a 2013 Virginia refund claimed after the three-year deadline?
No. The 2013 return had to be filed by May 1, 2017, to claim a refund, but the successor filed it on November 13, 2017. Virginia said it had no discretion to waive the expired three-year limitation pe…
Were grocery personal-shopping fees, item surcharges, and home-delivery charges taxable in Virginia?
Personal-shopping fees and item surcharges followed the tax treatment of the groceries or other items sold because the true object was obtaining the goods. A separately stated home-delivery charge was…
Are the parts and the machinery a company buys to build an experimental aircraft prototype for its own research and development exempt from Colorado sales and use tax?
Mostly exempt. The parts a company buys and builds into an experimental aircraft prototype for its own R&D are exempt from Colorado sales and use tax — not under the 'components for resale' exemption …
Was a dissolving steroid-releasing sinus implant exempt as medical equipment, a prosthetic device, or medicine?
Generally no. The single-use physician-implanted product was not durable medical equipment, did not replace a missing body function, and was classified as a medical device rather than medicine. Sales …
Did a military spouse prove that she retained the service member's other-state domicile?
No. The spouse established substantial Virginia ties and did not show resident returns or other sufficient connections to the service member's claimed home state. Virginia upheld the assessments, whil…
Could a taxpayer claim Virginia's retirement subtraction without records showing which pension contributions another state taxed?
No. The taxpayer had to prove that pension contributions were deductible or excluded federally but added back and taxed by another state. Difficulty obtaining decades-old records did not satisfy that …
Should gross receipts from product sales between members of a Florida consolidated group be included in the sales factor?
Yes on these facts. The intercompany transactions involved transfer of title, consideration, actual delivery, an identifiable sales destination, and gross profit recorded in separate affiliate account…
Was BPOL a net-income tax excluded from the Internet Tax Freedom Act's internet-access protection?
No. Virginia said BPOL taxes gross receipts without deductions and is not a net-income tax excluded from the federal Act. Even so, the Department declined to decide whether the city's tax was grandfat…
Did Virginia order a county to refund BPOL tax on internet-access receipts under federal preemption?
No. Virginia said federal law may be judged by a tax's operation and effect and had previously applied the Internet Tax Freedom Act to BPOL. But it declined to decide the disputed grandfather-status q…
Did Virginia order a city to refund BPOL tax on internet-access receipts under the Internet Tax Freedom Act?
No. Virginia recognized that the Internet Tax Freedom Act could apply to BPOL tax, but declined to decide the disputed factual question whether the city was grandfathered. Without an order for correct…
Did Virginia order BPOL refunds after rejecting a city's narrow reading of the Internet Tax Freedom Act?
No. Virginia maintained that the Internet Tax Freedom Act was not limited to transactional taxes and could reach BPOL. But it declined to decide the city's disputed grandfather status, so the local re…
Did a sole S-corporation shareholder who received a W-2 count as an employee for Virginia's 2016 telework credit?
Yes. The 100% shareholder performed services for the S corporation, received compensation and a W-2, and was treated as the corporation's employee rather than an ineligible self-employed person. Virgi…
Were converted restaurant sales-tax assessments removed after zero returns showed the business was inactive?
Yes. After the restaurant filed returns showing no income for the assessed periods, Virginia reversed the business assessments, discharged the converted assessments against the former owner, and close…
If a Tennessee restaurant puts pay-to-use entertainment tablets on its tables, does it owe the coin-operated amusement machine tax, and is the premium-content fee — or the rental it pays for the tablets — subject to sales tax?
Three answers. (1) The tabletop tablets are NOT subject to Tennessee's coin-operated amusement machine tax: a machine only counts if it delivers amusement upon depositing a coin, token, or object up f…
When did a taxpayer become a Virginia resident if domicile changed in May but he spent more than 183 days here?
Virginia found the taxpayer changed domicile in May 2015, but his taxable period began March 8. Because he spent more than 183 days in Virginia during 2015, he was an actual resident from his first Vi…
Were Virginia's corrections to 2014 and 2015 income tax returns untimely because the errors were not found sooner?
No. Virginia notified the taxpayers of the corrections in August 2017, within the three-year assessment period for both returns. The tax and interest remained due, and interest could not be waived unl…
Did living in Pennsylvania and working in Delaware end a taxpayer's Virginia domicile for 2013?
No. The taxpayer kept a Virginia license, vehicle registration, voter registration, and prior home while showing little evidence of a permanent Pennsylvania domicile. Virginia taxed him as a resident …
Is an equipment lease with an end-of-term purchase option at fair market value subject to Florida documentary stamp tax?
No. Because the lessee could return the equipment or buy it only at no less than its end-of-term fair market value, the agreement was a true lease rather than a taxable written obligation to purchase.
Did a Florida food hall's agreement with independent restaurant vendors create a taxable license to use real property?
Yes. Although the agreement denied creating a lease, independent vendors operated their businesses on the food hall's premises. The sales proceeds retained by the food-hall operator were taxable consi…
Are labor-only inspections and repairs of fire alarms, sprinklers, and extinguishers subject to Florida sales tax?
Fire-alarm inspection and repair labor was taxable. Labor-only sprinkler and extinguisher work was not taxable when separate from the alarm system, but extinguisher work became taxable if parts were a…
Did buying a Virginia retirement home and obtaining a Virginia license establish domicile while the taxpayer worked abroad?
No. The taxpayer showed future intent to live in Virginia but was present only for brief vacations while working abroad. Because domicile requires intent and physical presence together, Virginia found…
Did the Internet Tax Freedom Act require Virginia to cancel a city's 2016 BPOL assessment on internet-access receipts?
No correction was ordered. The Department reiterated that the Internet Tax Freedom Act can apply to BPOL tax and that BPOL is not a tax on net income, but it declined to decide the disputed question w…
Were conveyor bottoms and hangers exempt repair parts for coal-mining equipment?
Yes. The bottoms and hangers were integral repair or replacement parts for an exempt mining conveyor, not taxable structural supports fixed to realty. Virginia accepted the customer's late Form ST-11 …
Which mining and manufacturing audit items were exempt, taxable, or sent back for verification?
Virginia reached a mixed result. Direct production parts and certain repair labor were removed; water-truck parts, maintenance tools, and post-production testing stayed taxable. Several lubricants, pa…
Does Illinois have a 'trailing nexus' rule that requires a remote seller to keep collecting sales/use tax for a period after its Illinois nexus ends?
As of this 2018 letter, Illinois had no rule addressing 'trailing nexus' (continuing to owe sales/use tax for a period after nexus ends); the Department said any nexus determination would depend on th…
In Connecticut, does a third-party food-delivery company have to charge sales tax on restaurant meals it resells, and is the delivery fee taxable?
The delivery company must charge sales tax on the meals it resells to customers and must include its delivery fee in the taxable price. Because the delivery company is reselling the meals, the restaur…
Are hotel destination marketing fees subject to South Carolina's accommodations tax?
Yes. A destination marketing fee, hotel marketing fee, or similar charge imposed with transient lodging is part of the gross proceeds from furnishing accommodations and is subject to South Carolina's …
When a company rents scaffolding and bills extras like sheeting, planks, lighting, delivery, on-site equipment, consumables, and erection labor, which of those charges are included in the Colorado sales tax on the rental?
It depends on the rental's length and how each charge relates to the rental — and this GIL lays out the framework without deciding the specific items. Key points: (1) for rentals of three years or les…
What sales-tax change took effect in Williamsburg, James City County, and York County on July 1, 2018?
Effective July 1, 2018, a new 1% Historic Triangle regional tax raised the combined retail sales and use tax rate in Williamsburg, James City County, and York County to 7%. The bulletin also set sourc…
Is an in-store product demonstration and sampling service taxable in Texas, and does the provider owe tax on the supplies it uses even if it bills clients a flat fee for them?
In-store product demonstration and marketing services are NOT taxable in Texas because demonstration services aren't on the statutory list of taxable services -- but the provider still owes sales tax …
Did years of living in another state end Virginia domicile when the taxpayer kept voting and maintaining a home here?
No. Although the taxpayer lived in State A, she retained a Virginia home, license, vehicles, mailing address, and repeatedly voted full Virginia ballots. Virginia found she had not abandoned domicile,…
Could a gas station overturn estimated Virginia sales and use tax assessments without producing its records?
No. Virginia was allowed to estimate taxable sales, purchases, and fixed assets from the best information available after the business supplied no records. Because it still produced no evidence on app…
Did additional documents prove that a data warehouse appliance was resold tax-free to the federal government?
No. The new documents did not verify that the appliance and maintenance support were sold for resale, later transferred to a federal agency, or tied to the cited government contract. The prior assessm…
Could a homebuilder remove freight-and-handling and millwork purchases from a Virginia audit sample?
Only with more documentation. Combined freight-and-handling charges stayed taxable unless the builder proved they were freight only or obtained corrected invoices. Millwork purchases also required inv…
Would Virginia-based independent contractors create sales-tax nexus if they solicited only out-of-state wholesale customers?
Yes. Under the law applied in this 2018 ruling, using independent contractors who lived and solicited sales from Virginia created sufficient in-state business activity, even though they targeted only …
Does a company that leases mobile storage units (containers, trailers, office units) to construction contractors qualify for Texas's reduced retail/wholesale franchise tax rate?
No. A company that leases mobile storage units (containers, storage trailers, office units) to construction contractors and other commercial users does not qualify for Texas's reduced retail/wholesale…
Does the Metropolitan Pier and Exposition Authority (MPEA) food and beverage tax apply to food, alcohol, and soft drinks sold on tour boats that depart from and return to docks on the Chicago River?
Yes. The Illinois Department of Revenue concluded that the Metropolitan Pier and Exposition Authority (MPEA) Retailers' Occupation Tax on food, alcoholic beverages, and soft drinks applies to sales ma…
Which construction-company audit purchases could be removed based on the records supplied?
Virginia removed one engineering-services charge and one subcontract-labor charge after new records showed they were not material purchases. Other transactions stayed taxable because the documents did…
Were tickets to theatrical productions exempt under Georgia's temporary fine-arts exemption when a for-profit presenter used a qualifying nonprofit venue?
Yes under the temporary law then in effect. The theatrical productions were fine arts and occurred in a facility owned and operated by a 501(c)(3) organization with a qualifying arts and educational m…
Does the sale of jointly-owned real estate by a sale-leaseback company count in its Illinois sales-factor apportionment, and if so, how?
Yes -- the Illinois Department of Revenue ruled that the taxpayer's distributive share of gross proceeds from its joint venture's sale of investment real property must be included in its Illinois sale…
Is racing gasoline used off-road at tracks or in speedboats subject to South Carolina's motor fuel user fee?
Yes. Racing gasoline, racing gasohol, and racing blends containing gasoline are subject to South Carolina's motor fuel user fee whenever used or consumed in the state, even when used only in race cars…
Do sales and long-term leases of barges qualify for South Carolina's maximum tax as boats?
Yes. A barge used as a boat qualifies for South Carolina's 5% sales and use tax capped at $500. A lease qualifies only when written, stated for more than 90 continuous days, and kept in force for that…
Does South Carolina treat a jet ski or other personal watercraft as a boat for the maximum tax?
Yes. South Carolina treats a personal watercraft, including a jet ski, as a boat for the maximum sales and use tax. Effective July 1, 2017, tax is 5% of the applicable sales or lease amount, capped at…
When is kerosene subject to South Carolina's motor fuel user fee?
Kerosene is subject to South Carolina's motor fuel user fee when it is delivered into a highway vehicle's fuel tank, blended in South Carolina with undyed diesel fuel, sold as part of a gasoline-and-k…
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