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 a Virginia resident claim all joint deductions when filing separately from a nonresident military spouse?
Not automatically. Deductions paid separately could be assigned to the paying spouse, but untraced joint deductions had to be allocated between the resident and nonresident spouses. The 2006 reconside…
When a customer gets a rebate from a manufacturer, utility, or government, is Colorado sales tax calculated on the full price or the price after the rebate?
On the full price, before the rebate. Manufacturer rebates are included in the Colorado sales tax base because a third party reimburses the retailer for that portion of the price, so tax is figured on…
Could a dealer obtain a Virginia refund for sales tax paid to vendors on resale purchases when some vendors would not refund it?
Yes, in the limited circumstances documented here. The dealer had to show which vendors could not or would not refund the tax, disclose refunds already received, and stay within the purchases and amou…
How should a consolidated Florida filer calculate income and tax from a qualifying Capital Investment Tax Credit project?
Prepare a pro forma calculation comparing current-year income with the redacted base year, treat the increase as project income, apply the project's separate-company Florida apportionment factor, and …
How should a separately filing corporation calculate project income and its Florida Capital Investment Tax Credit?
Use the actual F-1120's total Florida taxable income as the pro forma starting point, apply the qualifying project's own Florida apportionment factor, and multiply the result by the 5.5% corporate tax…
Are common-area maintenance assessments paid by commercial-property owners taxable as Florida real-property rent?
No. Assessments paid by owners to their nonprofit property association were not rent because there was no lessor-lessee relationship. But CAM amounts paid by tenants or other occupants were taxable co…
When a company sells custom signage to Colorado customers, are its separately stated charges for delivery and installation subject to Colorado sales or use tax?
Generally no, for the delivery and installation. Colorado taxes the sale of the signage (tangible personal property) but not services. Delivery and installation are typically services, so those charge…
Is a company's monthly 'subscription' charge for energy-saving technology it owns and installs at the customer's site a nontaxable service, or a taxable rental of tangible personal property?
It depends — and this GIL does NOT decide it. The question is whether a monthly charge for company-owned energy-saving technology installed at the customer's site is a nontaxable service or a taxable …
Can an investor amend a return to claim the River Edge Historic Preservation Tax Credit late, carry it forward, and transfer it to a new investor?
Partly yes, partly no. The Investor may file an amended 2016 return to claim the River Edge Historic Preservation Tax Credit and pass it through to its members, who can use it in 2016 or carry it forw…
Could Chamisa Hills Family Dental avoid penalties and interest because a retained office manager failed to open notices, file returns, and make correct tax payments?
No. Chamisa Hills delegated CRS return filing, payments, mail, and electronic tax notices solely to a retained office manager without verifying tax expertise, requiring training, or using controls tha…
Can a sports team buy construction materials tax-free for a new city-owned ballpark, if the team purchases the materials and then resells them to the city under the lease deal?
Yes, doubly exempt. The Comptroller ruled that a major league sports team's purchases of construction materials for a new ballpark qualify for the resale exemption (because the team will resell the ma…
Were fitness-club membership charges exempt when members could use the gym only during instructor-led classes?
Yes, under the proposed agreements. The charges were exclusively for professional instruction, members could use the gym only during class periods, and the classes had to be designed toward completion…
Is a fee paid for an electronic data-bridge that connects a loan-origination system to a mortgage-pricing engine a taxable telecommunications service, and can it be purchased tax-free for resale?
Taxable, but resellable tax-free. The Comptroller ruled that fees paid for an electronic data 'bridge' that routes mortgage loan information between a loan-origination system and a pricing engine are …
Could the Virginia Department review a locality's valuation of an individual's personal vehicle for tangible personal property tax?
No. The Department's local-tax appeal jurisdiction covers local business taxes and mobile property taxes, not tangible personal property tax assessed on an individual's personal vehicle. The owners ha…
Could the Virginia Department decide whether a county overvalued a boat for local mobile property tax?
No. Although local mobile property tax generally falls within the Department's appeal jurisdiction, the statute expressly bars the Tax Commissioner from deciding the property's value or valuation meth…
Could a retailer reopen BPOL issues and claim wholesale treatment after missing the evidence deadline set in an earlier remand?
No. The taxpayer raised warranty, insurance, return, and capital-contribution arguments that could have been presented earlier and did not provide timely evidence that special-order sales were wholesa…
Could a cable company obtain Department review of converter-box BTPP assessments more than four years after the city's final determination?
No. The city showed that it issued the final local determination in April 2013, while the taxpayer did not appeal to the Department until September 2017. The taxpayer also had not used the statutory r…
Could a locality transfer land to a related nonprofit so the nonprofit could earn Virginia Land Preservation Tax Credits?
Not on the facts provided. The nonprofit—not the locality—would have to make a qualifying charitable conservation contribution with its own donative intent. Because the parties' contractual relationsh…
If a company buys an aircraft tax-free for resale and leases it to its own parent company, does replacing that lease with a lower-payment lease -- or the company later using the plane itself -- undo the resale exemption?
The resale exemption survives all three scenarios. In this companion ruling to 201801014L (same structure, an aircraft purchased about three months earlier), the Comptroller again held the resale exem…
When a contractor demolishes an old septic system and installs a new sewer line tying into the city system, which parts of the job are taxable repair/remodeling and which are nontaxable new construction or demolition?
It's a four-way split. New sewer line installation in a fresh trench is nontaxable new construction; complete demolition of the old septic tank and its pipe is nontaxable; but the labor to tie the new…
If a company buys an aircraft tax-free for resale and leases it to its own parent company, does replacing that lease with a lower-payment lease -- or the company later using the plane itself -- undo the resale exemption?
The resale exemption survives all three scenarios. The Comptroller ruled that the aircraft purchase qualifies as an exempt sale for resale even though the lessee wholly owns the purchasing company; re…
Was the taxpayer's commercial real-property lease exempt from Florida sales and use tax?
Yes. The Department concluded that the leased property's use qualified for a statutory exemption and directed the taxpayer to provide its landlord a copy of the relevant certificate. The public ruling…
For a subscription-box seller that doesn't collect Colorado tax: does each automatic monthly shipment need its own Transactional Notice, and what notices are owed when an out-of-state buyer ships the box to a Colorado resident?
Two answers. (1) No — for an auto-renewing subscription, a Transactional Notice is required only when the customer subscribes, enrolls, or renews; separate notices are NOT required for the repeated au…
Could Marc Gelinas deduct his commissions from sales of implantable prosthetic devices even though he did not possess buyer NTTCs?
Yes. Gelinas was an independent sales agent, not the seller or owner of the implantable prosthetic devices. Hospitals paid manufacturers, manufacturers paid distributors, and distributors paid his 109…
Did Joel and Jacqueline Drahman prove they changed domicile from New Mexico to Nevada before Joel received his final New Mexico paycheck in early 2016?
No. Joel rented a Nevada room at year-end 2015 and bought a Nevada home in March 2016, but he was unemployed, admitted he was rarely at the property before summer, and used little electricity there. J…
Which mixed-use retail, restaurant, and commercial facilities near a new city-owned convention-center hotel qualify as 'ancillary facilities' whose sales and hotel taxes the city can have rebated to help pay off the project's bonds?
A mixed answer: food/beverage operations and shops that exclusively sell tangible personal property qualify as 'facilities ancillary to the hotel' -- generating rebatable state sales, use, and hotel o…
Which businesses in a city-owned mixed-use development qualify as ancillary facilities for Texas qualified-hotel-project tax rebates?
Restaurants and stores selling tangible personal property may qualify if they meet the ownership and 1,000-foot tests. Medical offices, spas, fitness centers, museums, educational or civic units, and …
After a corporate restructuring creates new subsidiaries with different federal tax filing statuses (S corp, disregarded entities, consolidated C corps), do all the resulting entities still qualify as 'affiliated entities' for Texas's intercorporate services sales tax exemption?
Yes. The Comptroller ruled that after restructuring twelve business divisions into four new subsidiaries, the S-corp parent, its consolidated-filing C-corp subsidiaries, and its disregarded-entity LLC…
Should Virginia compute an Arizona resident's reciprocal credit using Arizona tax before or after credits for tax paid to other states?
Before those other-state credits. Virginia law required applying the Virginia-to-Arizona income ratio to the taxpayers' entire Arizona tax. The Department had incorrectly reduced Arizona tax first by …
How were Virginia local and regional sales taxes sourced when inventory, order processing, the dealer, and customer were in different localities?
An out-of-state dealer owning inventory in a Virginia fulfillment center had to register, and its local and regional use tax was sourced to the Virginia customer's delivery locality. For an in-state d…
Was a former corporate officer personally liable for use tax assessments arising after he left the company?
No. The taxpayer proved that he ceased being an officer and employee before the audit began. He lacked actual knowledge of the audit and assessments and had no authority to pay or prevent nonpayment, …
Could ACME Mechanical use construction-service NTTCs obtained more than 40 days after the audit's statutory 60-day deadline?
No. ACME's plumbing receipts would have been deductible and the two NTTCs would have covered the full assessment, but Section 7-9-43 required the certificates by the audit notice's August 2, 2017 dead…
Is a live-streaming video platform's paid subscription tier (ad-free video plus enhanced chat features) taxable in Texas as cable television or amusement service?
Taxable. The Comptroller ruled that a live-streaming platform's paid monthly subscriptions -- offering ad-free video, custom chat emoticons, and extended video storage on top of the free service -- ar…
Did momentary title to equipment in Virginia require a foreign company to register when every proposed sale was for resale?
No for the proposed resale-only transactions. Repeated momentary ownership of valuable goods in Virginia was more than minimal physical presence, but the company sold only to its subsidiary for resale…
Were prefabricated walk-in cooler panels and their installation taxable retail sales rather than real-property improvements?
Yes. The free-standing panels were easily removable, not wired or plumbed into the building, and commonly resold when customers moved, so they were tangible personal property rather than fixtures. The…
Is a corporation's gain from selling its LLC interest business income, and is that gain (or the LLC's sales) included in the Colorado apportionment factor?
On these facts: (1) the gain is business income, because the corporation's LLC interest was intangible property used in its trade or business (and a corporation can elect to treat all income as busine…
Could a qualifying Virginia nonprofit buy alcohol and alcoholic beverages exempt from sales tax?
Yes, when all three meal-policy conditions were met: the purchase furthered the nonprofit's mission, the nonprofit was billed and paid from its own account, and it controlled who consumed the items an…
Who paid Virginia sales or use tax in a cabinet installation chain involving a big-box retailer, broker, and installer?
The party that directly purchased the cabinets and materials owed sales tax to the supplier or consumer use tax to Virginia. The big-box retailer, broker, and installer were all real-property contract…
Are the materials and components of orthodontic braces subject to Colorado sales tax?
It depends on where the material ends up. Orthodontic materials a licensed provider furnishes to the patient — that leave with the patient or are consumed by the patient at the office (like the braces…
Is providing non-transplantable human tissue to medical facilities and labs for research and training subject to New York sales tax?
No. The petitioner runs a non-transplantable human tissue bank: it receives donated bodies, processes, preserves, prepares, and ships tissue specimens to hospitals, universities, and device makers for…
Were a section 501(c)(3) nonprofit's performance tickets exempt when a venue sold them as the nonprofit's agent?
Yes. The nonprofit's own admission-ticket sales were exempt under section 212.04(2)(a)2, and tickets sold through the venue agent also qualified under the contract described. Sales of food and tangibl…
Is sales tax owed on perpetual software license fees and annual maintenance fees for canned (non-custom) software like SAP?
It depends on the license terms. Illinois taxes sales of "canned" (non-custom) software like SAP, including maintenance fees for updates, unless the license agreement meets all five criteria in 86 Ill…
Can an ROTC instructor paid by a school district subtract that pay as military pay on Illinois Schedule M?
The Department did not give a yes-or-no answer. It explained that Illinois law lets active-duty and National Guard members subtract military pay on Schedule M, but said civilian pay generally does not…
Are non-combustible tobacco capsules used in a vaping device taxable 'tobacco products' under the Illinois Tobacco Products Tax Act?
No. The Illinois Department of Revenue ruled that a company's imported tobacco capsules, used in a vaping device that heats but never burns or combusts the tobacco, do not meet the statutory definitio…
Does a sandwich-shop chain owe Retailers' Occupation Tax on a separately stated delivery charge when customers can also pick up the same food in-store at the same price?
No. The Illinois Department of Revenue ruled that because the taxpayer's customers can always pick up their sandwiches, chips, and drinks in-store at the same price with no delivery charge, there is n…
Does a retailer owe sales or use tax on cooperative direct-mail advertising materials produced and mailed by a third-party advertiser?
No. A retailer that hires a cooperative direct-mail advertiser — one that bundles ads for several businesses into a single mailer — does not owe sales or use tax on the materials produced and mailed. …
How does Illinois source a nonresident self-employed consultant's income when the client is headquartered in Illinois but the work is mostly done elsewhere?
Illinois says the income is business income, not wages, so it is sourced under the state's services-sourcing rule rather than by counting workdays: because the consultant's client was a corporation wi…
Could the Department decide whether a personal-vehicle tax should be prorated after the owner moved away?
No. Tax on an ordinary personal vehicle is neither a local business tax nor local mobile property tax within the Department's jurisdiction. Even though the city's final letter gave misleading appeal i…
Could the Virginia Department review a city's local food-and-beverage tax assessment?
No. Department review is limited to specified local business, property, mobile-property, and utility taxes. Local food-and-beverage tax, commonly called meals tax, is not on that list, so the taxpayer…
Did a city's failure to issue promised BPOL refunds create an appealable denial?
Apparently yes. Although the city had not issued formal written findings, it promised partial refunds and then failed to pay them for more than a year. Virginia treated that inaction as an apparent de…
Did a city's failure to pay promised BPOL refunds amount to an appealable denial?
Apparently yes. The city promised partial refunds but neither paid them nor issued written findings for more than a year. Virginia said that inaction appeared to deny the refund, permitting a local ap…
Did a city's failure to pay promised BPOL refunds amount to an appealable denial?
Apparently yes. The city promised partial refunds but neither paid them nor issued written findings for more than a year. Virginia said that inaction appeared to deny the refund, permitting a local ap…
Could a laboratory claim the BPOL out-of-state deduction merely because Virginia staff coordinated testing with out-of-state labs?
No. The deduction required receipts attributable to business conducted in another taxing jurisdiction, not merely coordination between Virginia and out-of-state employees. Virginia upheld the county's…
What are the required wage and investment levels for Nebraska Advantage Act applications filed on or after January 1, 2018?
This ruling sets the 2018 thresholds. For Nebraska Advantage Act applications filed on or after January 1, 2018, the base average annual wage requirement is $26,146, and the required investment and em…
Do refractory materials stacked in layers on kiln cars, which both protect the car and help distribute heat evenly to bricks being fired, qualify for the Texas manufacturing sales tax exemption?
It depends on the layer's function. Refractory materials stacked on kiln cars that serve EXCLUSIVELY to distribute heat evenly during brick firing qualify for the manufacturing exemption -- but the bo…
Could a home-based business reduce BTPP value by the percentage of time equipment was used personally?
No. Virginia law directed the city to value business tangible personal property using a percentage of original cost. The taxpayer cited no authority allowing an additional reduction based on the owner…
Was a gasoline retailer's BPOL tax based on gallons sold or gross receipts, and was its 2013 refund timely?
Gross receipts. Virginia BPOL tax applied to the retailer's total gasoline-sale receipts, not the number of gallons sold. The February 2017 refund request for 2013 also came more than three years afte…
Could Golden Services, a hospice, deduct qualifying managed-care and Medicare Part C receipts under the 2007 version of Section 7-9-93 despite regulations excluding hospices?
Yes. Golden Services' managed-care and Medicare Part C payments satisfied every condition in the 2007 version of Section 7-9-93. That statute did not limit the deduction to a particular type of taxpay…
Could a taxpayer receive a 2012 Virginia income tax refund when the original return was filed in December 2016?
No. The 2012 return had to be filed by May 2, 2016 to claim the overpayment, but the taxpayer filed it in December 2016. Virginia's three-year refund statute gave the Department no discretion to pay t…
Did wages earned and taxed in another country escape Virginia income tax for a Virginia resident in 2013?
No. A Virginia resident is taxed on foreign wages included in federal adjusted gross income. The former foreign-income subtraction had been repealed, the other-state credit does not cover foreign coun…
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