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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How are CNG, LNG, and propane converted to gallon equivalents for South Carolina's motor fuel user fee?
For South Carolina motor fuel user-fee purposes, 126.67 cubic feet of compressed natural gas—or 5.66 pounds when dispensed through a mass-flow meter—equals one gasoline gallon equivalent. For liquefie…
How should taxpayers file when they moved to Virginia in June 2014?
They were Virginia part-year residents beginning with the June move. The couple had to file Form 760 PY, report income attributable to the Virginia resident period, and prorate personal exemptions and…
Did a temporary overseas assignment establish a new domicile outside Virginia for 2014?
No. The taxpayer kept a Virginia lease, driver's license, vehicle registration, and financial mailing address, and later moved to a different state rather than remaining abroad. Virginia treated the f…
Could nonresident individuals claim Virginia's corporate foreign-income subtraction on S-corporation income passed through trusts?
No. Pass-through owners could claim only modifications available under Virginia's individual-income-tax statute. The individual foreign-source-income subtraction had been repealed for years beginning …
Did a Japanese government employee working in Virginia owe Virginia income tax on compensation exempt from federal tax under the U.S.-Japan treaty?
No, on these facts. The treaty itself applied only to federal and national taxes, not Virginia tax. But Article 18 exempted this Japanese government employee's compensation from federal tax, leaving n…
Could Virginia assess an IRS adjustment when taxpayers failed to file an amended state return?
Yes. Taxpayers had one year to report the final federal adjustment on an amended Virginia return. Because they did not do so, Virginia could assess at any time from the IRS information, and the refund…
Did Virginia correctly limit a resident's credit for 2013 income tax paid to Vermont?
Yes. Virginia applied the allocation percentage from the Vermont nonresident return to Vermont taxable income and limited the credit to Virginia tax on the income actually taxed by Vermont. The reques…
Were retained arbitration proceeds foreign-source income when they arose from selling stock in a U.S. corporation?
No. The taxpayer retained the arbitration rights while selling stock in a U.S. corporation and reported the proceeds federally as gain. Virginia treated the proceeds as part of that domestic stock-sal…
Could nonresident grantor trusts, QSSTs, and ESBTs join an S corporation's Virginia composite return?
Yes. Qualifying grantor trusts and QSSTs could be included because their income is treated as owned by the grantor or beneficiary, and qualifying ESBTs could also participate. Each trust still had to …
Did a taxpayer successfully abandon Virginia domicile after moving to another state for work?
Yes. The taxpayer worked and lived in State A, leased a residence, moved his license and vehicle registration, registered to vote there, and had no meaningful Virginia ties beyond a mailing address. V…
Did employer error extend the deadline for a nonresident to reclaim 2011 and 2012 Virginia withholding?
No. Excess withholding remained subject to Virginia's three-year refund limitation regardless of whether the employer caused the error. The taxpayer filed both Form 763-S claims in March 2017, after t…
Could Virginia residents subtract overseas wages or defeat their assessments by asserting that one spouse changed domicile?
No. Virginia's foreign-source-income subtraction had been repealed for tax years beginning in 2003, so the overseas wages could not be subtracted if the couple were residents. The couple also failed t…
Did a six-year missionary assignment abroad end the taxpayer's Virginia domicile?
No. The taxpayer's wife and children remained in Virginia, a Virginia organization continued paying his stipend, the assignment was for experience, and he returned in 2016. Virginia treated the work a…
Could a taxpayer recover a 1999 overpayment by filing the Virginia return in 2016?
No. The 1999 return needed to be filed by May 1, 2003 under the general refund rule or by October 2007 under the two-year post-payment exception. Filing in August 2016 was too late under both periods,…
Could a residential contractor assume retailers had charged sales tax when invoices were missing?
No. Virginia required invoices or other records proving tax payment for each purchase. The audit was revised for transactions the contractor documented, but the remaining purchases stayed because gene…
Did payroll records and a reversing ledger entry prove that a fixed-asset entry was actually nontaxable labor?
No. A reversing ledger entry and payroll records did not prove the capitalized-materials entry had been corrected for tax purposes. Virginia required amended federal and state returns removing it from…
Could a door-and-glass shop remove church-association and other transactions from an audit extrapolation?
No. The church association was not itself a qualifying church, and the shop did not prove the disputed sales and purchases were isolated from its normal business. The sample extrapolation remained, an…
Was an appeal of denied HB 2313 transitional sales-tax refunds filed within Virginia's 90-day period?
No. Virginia treated the March 22, 2016 refund-denial letter as the assessment date, making June 20 the appeal deadline. The contractor's July 6 certified-mail postmark was late, so the Department cou…
Was the wife a full-year Virginia resident in 2014 despite spending substantial time in another state?
Yes. The couple moved to Virginia intending a permanent change in 2013, filed a Virginia part-year return, established a home here, and added licenses and vehicle registrations. Virginia treated the w…
Were Del Corazon Hospice's Medicaid receipts for nursing-home room and board excluded from gross receipts as amounts received solely for disclosed principals?
No. Del Corazon was contractually responsible for paying nursing homes, often advanced its own funds before Medicaid reimbursed it, billed Medicaid in its own name, received the money in its own accou…
Did a restaurant prove its complimentary meals, loyalty rewards, and construction-related fixed assets were exempt?
Only in part. The restaurant did not document which free meals arose from poor food quality or prove loyalty items were retailer coupons, so those audit items stayed. It did prove certain fixed assets…
Could a restaurant exclude complimentary meals and loyalty rewards without records showing why they were given?
No. Free meals avoid additional tax only when issued because of poor food quality; meals for service, public relations, or other reasons trigger use tax. The restaurant did not document which categori…
Did an overseas worker prove that he was domiciled outside Virginia for 2011?
No. The taxpayer asserted State A residence but kept a Virginia driver's license and possibly Virginia property, while providing insufficient evidence that Virginia domicile had been abandoned. The re…
When a company that bought an aircraft tax-free for leasing dissolves and distributes the aircraft to its parent for no payment, does Texas sales or use tax become due?
No tax is due. The Comptroller ruled that an LLC's original tax-free resale purchase of an aircraft stays intact because the aircraft was leased out (under third-party operational control) more than 5…
Did moving to another state before an overseas assignment end the taxpayer's Virginia domicile?
No. The taxpayer knew he would relocate abroad and did not show an intent to remain permanently or indefinitely in the other state. His Virginia property, license, vehicle registrations, addresses, an…
Did an airline pilot and spouse abandon Virginia domicile when they moved abroad for his employment?
No. Although the couple established a home abroad, they kept Virginia licenses, vehicles, and a home, repeatedly visited Virginia, used a Virginia federal-tax address, and had stated an intent to reti…
Could a Virginia resident subtract all income of a nonresident military spouse on a joint Virginia return?
No. A joint Virginia election would include both spouses' income, while separate treatment required allocating income and deductions to each spouse. Virginia computed the resident wife's separate liab…
Did living and working abroad establish that the taxpayer had abandoned Virginia domicile for 2015?
No. The taxpayer supplied no documentation showing a permanent departure, had filed the 2015 return as a Virginia resident, and retained a Virginia driver's license. The Department concluded he failed…
Could a contractor obtain a transitional sales-tax refund for purchases outside the three-year claim period?
No. The contractor filed its refund claim on November 30, 2016, so only purchases made in November 2013 or later were eligible. The Department found no applicable exception allowing a refund for earli…
How should a joint-venture project calculate and allocate Florida Capital Investment Tax Credit income?
Prepare a pro forma attachment separating project income and expenses, allocate the credit by each partner's joint-venture percentage, and attach both the Florida partnership return and pro forma sche…
Does a Florida vehicle-restoration shop owe tax on consumables that do not become part of the restored vehicle?
Yes. Consumables such as masking materials, abrasives, gloves, towels, and tools were taxable to the shop because it used them and they did not become vehicle components. Only incorporated parts and m…
How can taxpayers check whether an older South Carolina advisory opinion was modified or superseded (per SC IL #18-4)?
Use the citator attached to SC Information Letter #18-4. 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 March 30, 2018?
Use the subject index attached to SC Information Letter #18-3. It organizes South Carolina Department of Revenue advisory opinions issued from 1987 through March 30, 2018 under administrative, alcohol…
Was Virginia tax computed on a retirement distribution before subtracting federal income tax withheld?
Yes. Virginia began with federal adjusted gross income, which included the entire retirement distribution, including the amount withheld for federal tax. Virginia law provided no deduction for federal…
Could Virginia assess a resident from IRS information before the taxpayer's federal dispute was finally resolved?
Yes. Virginia could use IRS information to assess the resident without waiting for the federal dispute to end. If a later final federal determination changed the taxpayer's income, the taxpayer could …
Did a corporation's brief timely letter preserve a refund claim when its detailed amended return came later?
Yes. The timely letter identified the corporation, tax type, year, requested refund, and failure to claim a foreign-source-income subtraction. Because the assessment and payment dates were determinabl…
Did a former service member become domiciled in Virginia during 2013 while attending graduate school elsewhere?
No. The husband retained his prior state's license, vehicle registration, and voting ties through military service and while attending school elsewhere. Virginia found that he did not change domicile …
Did an active-duty service member remain domiciled in another state despite extensive Virginia connections?
No. The service member's Virginia home, driver's license, vehicle registrations, voting, resident returns, and statement of Virginia domicile in a divorce decree showed that he had established Virgini…
Could taxpayers carry forward excess prepaid-tuition contributions even though they claimed no deduction in the contribution year?
Yes, for the amount that exceeded the annual deduction limit for each contract. Failing to claim the available 2011 deduction did not bar legitimate excess contributions from carrying forward to 2012 …
Could illness and problems with tax preparers extend Virginia's three-year deadline for a 2010 refund claim?
No. The 2010 return claiming a refund was filed in November 2014, after the May 2, 2014 deadline. Virginia law provided for an agent to file for a disabled taxpayer but did not suspend the limitations…
What does Illinois General Information Letter ST 18-0015-GIL conclude about Nexus?
The Department explained the general nexus rules but did not confirm the taxpayer's specific conclusion: whether this out-of-state distributor must collect Illinois Use Tax depends on nexus, and separ…
Is a club's credit-card 'convenience fee' subject to New York sales tax?
Yes, to the extent the underlying charge is taxable. A social or athletic club adds a convenience fee — a percentage of the credit-card purchase — to offset its card-processing costs. 'Receipt' is the…
Did Mosaic Potash prove entitlement to $1,772,593.89 of denied High-Wage Jobs Tax Credit for claimed new jobs, resident employees, and later qualifying periods?
No. The Department could examine whether each claimed position was genuinely new instead of treating headcount growth as conclusive. Mosaic did not rebut the finding that 60 claimed jobs covering 92 p…
Are fees paid by a condominium association to its food-service manager taxable as rent or a license to use real property?
No. The association paid the manager for services and bore the operating losses; the manager paid nothing for use of the premises. The fees were not taxable rent, but the manager had to register and r…
Are paid subscriptions for ad-free game, music, eSports, and other live streams plus enhanced chat features taxable in South Carolina?
Yes. The Department treated both paid subscription tiers as taxable communication services because they provided ways or means to receive streamed voice or messages plus subscriber-only transmission f…
What does Illinois General Information Letter ST 18-0014-GIL conclude about Prepaid Sales Tax?
The Department did not resolve the taxpayer's specific refund request, but explained that a reseller registered solely under Section 2c whose sales are all nontaxable owes no prepaid sales tax on moto…
Could New Mexico include General Electric's foreign dividends and Subpart F income in the tax base of its elected domestic consolidated group?
Yes. GE elected New Mexico's federal consolidated-group reporting method, which included the aggregate income of its domestic consolidated group. The AHO held that adding foreign dividends and Subpart…
What does Illinois General Information Letter ST 18-0013-GIL conclude about Prepaid Sales Tax?
Yes: the Illinois Department of Revenue told this fuel importer that, because it was already filing Illinois sales tax returns, it was responsible for collecting and remitting prepaid sales tax on the…
What does Illinois General Information Letter ST 18-0012-GIL conclude about Rental Purchase Agreement Tax?
The Department did not give a definitive yes-or-no answer; it stated only its general opinion that items taxed at the 1% state sales tax rate (such as the durable medical equipment described by the re…
If a company earns a Texas historic-structure rehabilitation tax credit and sells it to another company that later claims it, does the buyer need to make an extension payment, and when does the credit expire?
ALERT: A 2023 law (SB 1013) later moved the certified historic structure tax credit statute from Tax Code Chapter 171 to Chapter 172 and expanded a related federal-tax exception, effective 9/1/2023, a…
What Texas motor vehicle tax applies when federal surplus vehicles go to public agencies, 501(c)(3) charities, or other nonprofits?
Public agencies received federal surplus vehicles exempt from motor vehicle tax. A qualifying 501(c)(3) recipient owed $10 gift tax, while a nonprofit without 501(c)(3) status or another nonexempt rec…
What does Illinois General Information Letter ST 18-0011-GIL conclude about Coal Mining Equipment?
The Department found that gypsum a utility sold to a company (for use as a pond-lining coating) is a consumable supply, not exempt coal mining equipment, so it appears not to qualify for the Retailers…
Did living and working in Maryland during 2014 end a taxpayer's Virginia domicile or invoke wage reciprocity?
No. The Maryland apartment, withholding, and return did not outweigh the taxpayer's Virginia license, vehicles, voter registration, and surrounding years of Virginia residency. Reciprocity did not app…
Did payments from a joint account prove that a resident spouse separately paid all itemized deductions?
No. Checks and statements from a jointly held account did not establish that the resident spouse alone funded the itemized expenses, so proportional allocation applied. She could still claim both depe…
How were joint deductions, dependent exemptions, and dependent-care expenses allocated to a resident military spouse?
Untraced itemized deductions were allocated proportionally between the spouses. The resident spouse could claim all dependent exemptions and the full child-and-dependent-care deduction because her sep…
Could a Virginia spouse claim all joint itemized deductions and dependent exemptions when the military spouse was a nonresident?
Only in part. Without proof of separate payment, joint itemized deductions had to be allocated between the spouses based on income. The resident spouse could claim both dependent exemptions because he…
What does Illinois General Information Letter ST 18-0010-GIL conclude about Service Occupation Tax?
The Department did not give a yes/no answer on collecting sales tax on 'sublet' auto repair parts and labor; instead this GIL explains the general Service Occupation Tax framework for multi-service (s…
What does Illinois General Information Letter ST 18-0009-GIL conclude about Manufacturing Machinery & Equipment?
There is no Illinois sales-tax exemption for electricity used in manufacturing (electricity is taxed separately under the Electricity Excise Tax Law), but machinery and equipment used more than 50% of…
Were a grower's plants and nursery equipment exempt from local Merchants' Capital and property taxes?
Only the plants. Plants grown from the taxpayer's own clippings were agricultural products held by their producer and exempt from Merchants' Capital tax. The county could still classify the business a…
Did a civilian spouse share the service member's out-of-state domicile without ever becoming physically present there?
No. The husband established Virginia domicile through his abode, job, resident filing, vehicle, and license. After marriage he could not acquire the wife's other-state domicile without physical presen…
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