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 taxpayer use historic rehabilitation credits that accompanied an LLC partnership interest assigned by the prior owner?
Yes. Virginia generally does not allow a historic rehabilitation credit to be transferred by itself, but the taxpayer received the prior owner's LLC partnership interest. Under IRC § 704 and Virginia …
Could a taxpayer use historic rehabilitation credits that accompanied an LLC partnership interest assigned by the prior owner?
Yes. Virginia generally does not allow a historic rehabilitation credit to be transferred by itself, but the taxpayer received the prior owner's LLC partnership interest. Under IRC § 704 and Virginia …
Could a beneficiary use historic rehabilitation credits allocated to trusts that had matured before the credit distribution?
Yes. Because the taxpayer had reached the trusts' maturity ages before the credit distribution, IRC § 678(a) treated him as owner and the trusts as disregarded grantor trusts. He could use their histo…
Does Georgia's State Hotel-Motel Fee apply to shared camp lodging and private rooms in a nonprofit retreat center's lodge?
It depends on the accommodation. Shared dorms, cabins, and multi-unit housing were not subject to the State Hotel-Motel Fee because guests lacked private sleeping accommodations and linens. The separa…
Could a government owner buy public-works materials directly from suppliers without Florida sales tax under its proposed contract?
Yes. The amended contract required the government owner to issue purchase orders, receive supplier invoices, pay vendors directly, take title and risk of loss upon delivery, and give each supplier its…
Could Spelman Investments recover $14,746.07 of CRS filing penalties when it paid its taxes but mistakenly failed to file returns after New Mexico changed its online system?
No. When New Mexico moved to TAP, Spelman paid its CRS taxes on the payment page but did not separately file the related returns from May 2014 through July 2016. The mistake was unintentional, and Spe…
Do a Georgia manufacturer's light bulbs, lamps, and building-attached light fixtures qualify for the manufacturing machinery and equipment exemption?
Bulbs and lamps used by a manufacturer in making tangible personal property at a manufacturing plant qualify as manufacturing equipment, whether readily disposable or designed for long-term use. But l…
Were tickets to a nonprofit ballet company's Georgia performance exempt from sales tax under the temporary fine-arts admission exemption?
Yes. The ballet was a qualifying fine-arts performance, and the performing organization was a tax-exempt 501(c)(3) whose primary mission met the statutory arts-programming requirements. Ticket sales w…
Does underreported cable franchise fee revenue increase a locality's Trust Fund distribution when the corrected fee remains below its percentage share?
No. An underreported cable franchise fee increases a locality's Communications Sales and Use Tax Trust Fund distribution only when the franchise fee owed exceeds the locality's ordinary percentage dis…
Does underreported cable franchise fee revenue increase a locality's Trust Fund distribution when the corrected fee remains below its percentage share?
No. An underreported cable franchise fee increases a locality's Communications Sales and Use Tax Trust Fund distribution only when the franchise fee owed exceeds the locality's ordinary percentage dis…
Could alleged oral advice that a taxpayer had five years to file preserve a late 2012 Virginia refund claim?
No. The original 2012 return was filed in December 2016, after the May 2, 2016 refund deadline. The alleged five-year advice was not documented in writing, and Va. Code § 58.1-1835 applies to assessme…
Was a March 2017 Virginia estate tax refund claim timely after the IRS accepted the estate's Form 890-AD in December 2015?
No. The federal change became final when the IRS accepted Form 890-AD on December 7, 2015, so the estate had until December 7, 2016 to amend its Virginia return. Filing in March 2017 was late; the lat…
Must a Virginia partnership withhold for nonresident partners on guaranteed payments for services performed outside Virginia?
Not if the guaranteed payments are not Virginia-source income. Payments made without regard to partnership profitability are treated more like compensation; when the nonresident partners perform the s…
Did a fencing contractor prove that cash withdrawals recorded as tools and materials were personal and not taxable purchases?
No. The contractor's ledger recorded the cash checks in small-tools and materials expense accounts, and the contractor supplied no invoices or other proof that the money was withdrawn for personal use…
Were a dental practice's implant purchases exempt because they were ordered for specific patients?
Only purchases proven to be for specific patients qualified. Shipping implants to a lab, buying from registered vendors, or handwriting a patient's name later did not by itself establish exemption or …
Are separately stated FCC regulatory and PEG grant fees excluded from Virginia communications sales tax?
It depends. A separately stated government fee is excluded only when law requires the provider to add it to the service price. A fee the provider may pass through at its discretion remains taxable. Th…
How did Illinois's mid-2017 income tax rate increase (P.A. 100-22) affect 2017 tax computations, exemptions, the R&D credit, and estimated tax penalties?
Illinois explains that P.A. 100-22 raised the individual/trust/estate rate to 4.95% and the corporate rate to 7% effective July 1, 2017, so 2017 filers generally compute tax using a blended rate (a we…
Can a business with an existing Nebraska Advantage (or LB 775) project file a new application for a subsequent project covering the same activities, and how does timing affect its benefits?
Yes, you can file for a subsequent project covering the same activities -- but timing is everything. Revenue Ruling 29-17-2 (issued December 13, 2017) says a taxpayer with an Employment and Investment…
Could Kenneth White's estate recover a valid $1,000 income tax overpayment after waiting until 2016 to pursue the Department's inaction on the 2007 refund claim?
No. White's timely 2006 PIT-1 return made a valid $1,000 refund claim, and the Department had no apparent reason for failing to act. But the estate did not protest or sue within 210 days of the Octobe…
Does a joint development agreement between two unrelated oil-and-gas companies create a separate taxable entity for Texas franchise tax purposes, and can each company still deduct its own cost of goods sold?
Yes to both. Two unrelated oil-and-gas companies' Joint Development Agreement and Joint Operating Agreement — under which they jointly develop leasehold interests, share expenses, and each take their …
Was propane used only to heat a condominium residents' common-area swimming pool exempt from Florida sales tax?
Yes. The residents-only pool was a commonly owned area used exclusively for residential purposes, so propane used to heat it qualified for the residential fuel exemption. If any utility passing throug…
Does a casual seller — an individual selling personal property, a company selling small items at auction, or an auction seller — owe Illinois sales or use tax on the transaction?
It depends on whether the seller is regularly in the business of selling that type of property. Illinois does not impose Retailers' Occupation Tax (and the buyer owes no matching Use Tax) on an isolat…
Is Kansas nonwage business income (from an LLC, S corp, or sole proprietorship) taxable again after Senate Bill 30?
Kansas Notice 17-03 (revised December 6, 2017) explains that Section 5 of Senate Bill 30 (2017) amended K.S.A. 79-32,117 to end the 2012 exemption for nonwage business income. The 2012 law had let ind…
Was Agman Louisiana's gain from selling its WGI interest business income apportionable to New Mexico rather than nonbusiness income allocable to Louisiana?
Yes. Agman's WGI interest was not merely passive. Its corporate group retained board influence, initial management and administrative ties, insurance links, preferred storage access with lowest-price …
Do propane haulers need a Kansas liquid fuel carrier license, and by when?
Kansas Notice 17-13 explains that propane haulers must obtain a Kansas Liquid Fuel Carrier license. Under K.S.A. 55-507, a liquid fuel carrier must be licensed to transport liquid or motor fuels of 12…
Are travel trailers and fifth wheels motor vehicles for Georgia's $5,000 TSPLOST tax-base limit?
Yes. Although travel trailers and fifth wheels are not self-propelled, they are designed primarily for use on public roads. Georgia therefore treated them as motor vehicles for O.C.G.A. § 48-8-241(d),…
Can a repair seller avoid Georgia sales tax by accepting an unregistered coordinator's resale certificate or the truck owner's exemption certificate?
No. The repair seller could not accept the coordinator's resale certificate in good faith because the coordinator lacked a valid Georgia sales-tax registration number, could not fully complete the cer…
Is a charter school's 10-year campus lease (with renewal options) an exempt improvement-to-realty contract if the campus's useful life is 22 years?
No. The Comptroller ruled that the charter school's 10-year initial lease term is NOT an exempt contract under Section 151.311, because 10 years falls far short of the campus's 22-year useful life -- …
Were one-night hotel no-show charges taxable when the reservation effectively guaranteed the guest a room all night?
Yes. The hotels held a room until 3:00 or 4:00 a.m. and would place an overbooked guest at a comparable hotel, so the reservation effectively guaranteed lodging for the night. The forfeited one-night …
Does Illinois sales tax apply to a mobile app subscription and bundled distributor services sold by a multi-level-marketing company?
It depends on what is actually transferred: if the mobile app, dashboard, and personal-website bundle involve no transfer of tangible personal property (e.g., cloud-based access with nothing downloade…
Does a pending challenge to an IRS audit cancel Virginia's assessment based on the current federal adjustment?
No. Virginia treated the current IRS adjustment as controlling and kept the assessment due. If the IRS later changed its findings, the taxpayers could file an amended Virginia return within one year o…
Did a worker change domicile after moving from Virginia for a permanent out-of-state job, making Virginia wage withholding refundable?
Yes. The worker accepted permanent employment, obtained housing and a driver's license, registered a car, and took steps to sell Virginia property. Although his wife and some assets remained in Virgin…
Did a Canadian corporation with no Virginia office or employees owe Virginia corporate tax or have to file a return?
It appeared to owe no Virginia corporate income tax because the treaty produced no federal taxable income, but it still had to file a Virginia return if registered with the State Corporation Commissio…
Did medical disability extend Virginia's deadline to claim a 2012 income tax overpayment credit?
No. Virginia law did not suspend the three-year refund period for mental or physical disability, so a January 2017 return was too late to claim or carry forward the 2012 overpayment.
Did a taxpayer who moved abroad establish that he was no longer domiciled in Virginia for 2013?
Yes. After weighing all facts, Virginia found the taxpayer was not domiciled in the Commonwealth during 2013 and abated the assessment. His foreign residence, spouse's citizenship and property abroad …
May restaurants subtract payroll deductions lost because they claimed the federal tip-credit when computing Virginia taxable income?
No. Virginia law provides no subtraction for payroll expense deductions reduced by the federal IRC § 45B tip-credit, whether the restaurant reports on an individual or corporate return.
Did a former Virginia resident change domicile while attending school and later working in other states during 2013?
Partly. She remained a Virginia domiciliary while in graduate school, but changed domicile when she moved for indefinite employment in June 2013. Her pre-move capital gains were Virginia income, yet f…
Could a taxpayer challenge old Virginia income tax assessments and overturn later estimates without filing returns or records?
No for 2007-2010: the appeal was years late, so Virginia lacked jurisdiction. For 2011-2014, the timely appeal failed because the taxpayer supplied no returns or evidence, though he received 30 days t…
Was heat-resistant masking tape used in powder coating exempt manufacturing equipment, and could vendor-paid tax reduce a use-tax audit sample?
The masking tape was exempt because it was integral to powder coating and performed a quality-control function during production. But sales tax paid incorrectly to a vendor did not belong in a sample …
Did a Virginia auto repair shop owe tax on diagnostic and environmental charges and estimated underreported sales?
Yes. Diagnostic charges were taxable when connected with parts sales, environmental charges were taxable, and the shop did not disprove estimated underreported sales. Only separately charged repair la…
Is a Virginia seller and installer of water-flow instruments a retailer or a real property contractor?
Both, depending on the job. The firm was a contractor when installed instruments became part of real property and a retailer when they remained tangible personal property or were sold without installa…
Must a Virginia manufacturer collect sales tax on fiber posts sold in packs to dental practices?
Yes. The fiber posts were sold in packs for general dental use rather than bought on behalf of identified patients, so the manufacturer should collect Virginia sales tax from dental practices.
Are mowers and chain saws exempt when farmers use them to maintain the edges of crop fields?
No. Mowing field edges and trimming bordering trees were ancillary activities, not agricultural production for market, so the equipment was taxable. A dealer unsure of an exemption should charge tax a…
Can an internet-calling and messaging company source its Texas sales tax based on a customer's IP-registration address, and can it advertise a tax-included price without violating the ban on advertising that it 'absorbs' the tax?
Yes to both, with caveats. The company could source sales using the customer's IP-registration address when no business or residential address was available. It could also advertise a tax-included pri…
Does Illinois E911 tax apply to SIP trunk telephone services, and will IDOR confirm the calculation?
IDOR declined to rule on the taxpayer's proposed E911 tax calculation for SIP trunk services, explaining that the Emergency Telephone Assistance Act (50 ILCS 750/) is administered by the Illinois Depa…
Which Nebraska income tax withholding revenue rulings were rescinded, and where did their guidance go?
It clears out 14 old rulings that were folded into the regulations. Revenue Ruling 21-17-1 (issued November 8, 2017) rescinds 14 Nebraska income tax withholding revenue rulings issued between 1976 and…
A company sells subscriptions to a library of pre-recorded online training videos, with discussion boards and other features included. Is a monthly or annual subscription to these pre-recorded courses subject to Tennessee sales tax?
Yes. The company's monthly and annual subscriptions to its library of pre-recorded online training courses ARE subject to Tennessee sales and use tax — but under a different rule than live or interact…
How did Florida calculate income and tax from the taxpayer's qualifying Capital Investment Tax Credit project?
Treat the Florida portion of adjusted federal taxable income as project income, applying GAAP and sections 220.13 and 220.15, then multiply it by the 5.5% corporate tax rate. The allowable credit was …
Were fitness memberships exempt as instruction fees when members could use the gym during normal business hours?
No. The agreements allowed members to use the gym during normal business hours, not only while instruction was occurring, and personal training memberships were sold separately. The prepaid and recurr…
An online education company sells two kinds of courses: self-study online courses a student works through alone, and live webinars taught by an instructor in real time. Are these subject to Tennessee sales tax?
It depends on the format. (1) SELF-STUDY online courses ARE subject to Tennessee sales tax — the student works through the material by interacting with a computer program (reading text, answering know…
A company invested heavily in software it built to deliver its own services and created new jobs. Does that investment make it a 'computer services' business eligible for Tennessee's franchise and excise job tax credit?
No — building software to run your own business isn't a 'computer services' enterprise, so it doesn't earn the job tax credit. Tennessee's franchise & excise job tax credit ($4,500 per qualified job) …
Did vendor volume discounts and promotional allowances count as additional compensation for the retailer's taxable customer sales?
No. One arrangement was a purchase-volume discount, and the other allowances were not reimbursements for specific customer transactions involving manufacturer coupons or rebates. On the represented fa…
Was Roswell Hospital Corporation's protest timely when the Department generated a refund-denial notice but could not prove that it mailed it?
Yes. Roswell Hospital filed its protest on February 21, 2017, exactly 210 days after submitting its refund claim. The Department's system had generated a September 19 denial, but no witness had person…
Are fees for disposing oil and gas waste at a permitted landfill, and separately for washing out the trucks that hauled it, taxable in Texas?
Both nontaxable. The Comptroller ruled that a permitted landfill's oil and gas waste disposal fees are nontaxable because Texas's real property services tax specifically excludes oil and gas waste dis…
Is a single-use spinal implant deployment kit -- where the implant is a small part of the total cost and can't function without the disposable delivery tools -- exempt from Texas sales tax as a medical device?
Exempt, but under a different category than requested. The Comptroller ruled that spinal implant deployment kits are NOT exempt 'prosthetic devices' (the implant can't be separated from the disposable…
Can a wholly-owned LLC subsidiary of a tax-exempt charter school issue sales tax exemption certificates in the school's name when making purchases on the school's behalf?
Yes. The Comptroller ruled that a charter school's wholly-owned LLC subsidiary (a disregarded entity for federal tax purposes) may issue sales tax exemption certificates in the school's name when acti…
Can a licensed customs broker use a smartphone app to remotely verify a foreign shopper's export tax refund claim instead of meeting the shopper in person?
No. The Comptroller ruled that a proposed smartphone app is NOT a valid export verification method, because Texas law requires the foreign purchaser and the customs broker to be physically present wit…
Are a homeowners association's membership dues, guest fees, and golf-related charges taxable as amusement services, and does that change for a golf cart rental fee?
Split result. The Comptroller ruled that a nonprofit homeowners association's membership assessments, guest fees, green fees, and trail fees ARE amusement services but are EXEMPT because the associati…
Is electricity used to power refrigeration equipment that merely stores already-exempt food products (with no processing) exempt from Texas sales tax?
Taxable. The Comptroller ruled that electricity used to power refrigeration equipment that only stores food products (even food that is itself exempt from sales tax) is taxable, because Texas's electr…
Could a possible Virginia domiciliary resident claim credit for New York tax paid on 2013 wages?
Yes. If she was a Virginia domiciliary and a New York actual resident, Virginia allowed a credit for New York tax on New York-source wages, subject to the statutory cap. She had to file a Virginia ret…
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