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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Did an affiliated corporate group need permission to include a newly acquired corporation in its Virginia consolidated return?
No permission was needed. A newly acquired affiliate must follow the filing method already elected by the affiliated group, so Corporation A belonged in the consolidated return. The group still should…
Does an allegedly incorrect W-2 or an employer's withholding failure eliminate an employee's Virginia income tax liability?
No. An employee still must report and pay tax on income received even if the employer failed to withhold or issued a disputed W-2. The taxpayer did not disprove the IRS-based assessment or show full p…
Was a private leaseholder exempt from recordation tax on a deed of trust signed jointly with a tax-exempt authority?
No. The joint deed of trust was not exempt, and because the regional authority could not be charged, the private taxpayer owed the required tax. The purchase-option price did not prove value, so the c…
Who pays Virginia sales or use tax when countertops are fabricated and installed through retailers and contractors?
The fabricator-installer pays sales or use tax on its raw materials, and the retailer does not tax the homeowner's installed job. If the countertops are sold without installation, the retailer buys th…
Did living and working in another state prove that a taxpayer had abandoned her Virginia domicile for 2013?
No. Out-of-state employment and withholding did not prove a permanent domicile change where she retained a Virginia address, license, and vehicle registration and gave incomplete residence and voting …
Can a Georgia tax-exempt nonprofit claim the Jobs, Less Developed Census Tract Jobs, or Quality Jobs Tax Credits for its exempt or unrelated-business activities?
Not for the nonprofit's tax-exempt activity. The Department found that the organization was not a taxpayer for the Quality Jobs Tax Credit and was not a business enterprise for the Jobs or Less Develo…
Could Pete’s Top Quality Landscape receive the reduced weight distance tax rate for one-way haulers based on testimony that at least half its truck miles were empty, without trip records?
No. The one-way-hauler rate required customary one-way hauling, at least 45% empty miles, classification by the Department, and supporting information. The owner estimated that at least half of the co…
A company sells an annual subscription to its cloud-based employee-scheduling platform, which customers access remotely. Is that subscription subject to Tennessee sales and use tax?
Yes — the subscription is taxable because the true object is remotely accessed software. The company develops and hosts a cloud-based employee-scheduling platform (the 'Interface') and sells customers…
Could Clean Rite avoid gross receipts tax penalties for janitorial work at a Navajo Nation facility because it relied on Raytheon's tax counsel and its own bookkeeper?
No. Clean Rite's janitorial services were performed in New Mexico Indian country for Raytheon, which was neither an Indian tribe nor a tribal member, so the receipts were taxable. Clean Rite conceded …
Does a pension from the Battery Park City Parks Conservancy Corporation, a subsidiary of a public benefit corporation, qualify for New York's public-employee pension subtraction?
Yes. The Battery Park City Parks Conservancy Corporation (BPCPCC) is treated as part of 'this State, its subdivisions and agencies' for the public-employee pension subtraction under Tax Law § 612(c)(3…
Could a governmental owner buy materials tax-free for a Florida public works project under its proposed direct-purchase contract?
Yes, but only after the owner changed the contract to require suppliers to invoice it directly and the parties actually followed that requirement. Without direct invoicing, the proposed owner-direct-p…
Which of seven medicated lotions and powders qualified as tax-exempt common household remedies in Florida?
Five products marketed to relieve eczema, itching, chafing, diaper rash, or minor skin irritation were exempt household remedies. A daily moisturizing lotion and a clear-complexion lotion remained tax…
Could nonresident executive Jack Dill allocate his New Mexico employer wages based on where he physically performed the work, including remote work from Indiana and New Jersey?
Yes. Dill was never a New Mexico resident and performed most executive duties for his New Mexico employer remotely from Indiana and New Jersey. Section 7-2-11(A)(4) allocated nonresident compensation …
New York Advisory Opinion TSB-A-17(2)C: Do an alien life insurer's premiums tied to Insurance Law section 2117(k) broker activities become 'New York premiums' for the Article 33 premiums allocation factor?
No. Premiums tied to a New York broker's Insurance Law section 2117(k) activities for unauthorized alien insurers are not 'New York premiums' because the alien insurers file no annual statement and th…
Was an online restaurant-ordering platform a Virginia sales-tax dealer for food sold by independent restaurants?
No. The independent restaurants retained title and possession until customers received the food, so the platform was not the retail dealer. Because it collected tax for restaurants, it still had to do…
Does Georgia's manufacturing exemption cover potable-water chemicals and drinks, ice, coolers, and cups provided for employee and visitor hydration?
No. Sodium hypochlorite used to make restroom, kitchen, and shower water potable, plus bottled water, sports drinks, frozen hydration pops, ice, portable coolers, and disposable cups for employees and…
Are custom dental devices like anti-snoring mouthpieces and dental bars taxed at Illinois' reduced 1% medical appliance rate, and can dentists buy them for resale?
The Department said the custom dental devices described (a prescription anti-snoring/sleep apnea mouthpiece and a metal dental bar) would generally qualify as medical appliances taxed at Illinois' red…
If my laser tag business charges one price for a birthday party package that includes laser tag, pizza, soft drinks, and a party host, do I owe sales tax on the whole thing?
It depends on how you bill it. If you charge a single bundled price covering the laser tag, food, drinks, and party host, Illinois Retailers' Occupation Tax applies to the entire charge; if you separa…
If my business charges one price for admission plus food and drinks (like a birthday party package), does Illinois sales tax apply to the whole charge or just the food?
It depends on how you bill it: if you charge one single, undivided price covering admission, food, and drinks, Illinois Retailers' Occupation Tax applies to the entire charge, but if the food and soft…
Is a transprostatic implant that corrects a urinary-tract deformity exempt from Connecticut sales tax as a correction for a functioning part of the body?
Yes. A permanent transprostatic implant that corrects a urinary-tract deformity is exempt from Connecticut sales tax under Conn. Gen. Stat. § 12-412(19)(C) as a correction or substitute for a function…
Does shipping goods into Illinois to a third-party vendor for remanufacturing, without storing goods there, create Illinois corporate income tax nexus under Public Law 86-272?
Illinois would not issue a binding nexus determination because nexus is inherently fact-specific, but based on the facts described, the Department indicated the company's activities go beyond what Pub…
Is a temporary embolic-protection filter used in heart-valve replacement exempt as a prosthetic device, or taxable medical equipment?
It's taxable medical equipment, not a prosthetic device. The filter is implanted in a patient's carotid artery at the start of a heart-valve replacement to catch debris and prevent stroke, then remove…
Could Highland Construction avoid gross receipts tax on nonprofit construction projects because its customers delivered Type 9 NTTCs that it accepted without reviewing?
No. Construction services for nonprofit organizations were fully taxable, and the Type 9 NTTCs from United World College and Collins Lake Autism Center covered purchases of property or construction ma…
Which supplies used aboard ships in interstate or foreign high-seas trade qualify for Georgia's sales-tax exemption?
Qualifying supplies are disposable, consumable, expendable, or temporary items used or consumed aboard ships plying the high seas in trade between Georgia ports and ports in other states or countries.…
Is installing, maintaining, or repairing a residential mosquito misting system taxable in Texas, and does it matter whether pesticide is involved or who originally sold the system?
Split by whether pesticide is involved. Selling/installing a mosquito misting system and adding pesticide to one are TAXABLE structural pest control services (tax on the whole charge, even separately-…
Did low operating capacity require a county to reduce the taxable value of a new automated racking system?
Not on the evidence submitted. A representative's economic-obsolescence analysis did not invalidate the county's cost-based value, but the county had to consider any bona fide independent appraisal de…
Are separately-billed CRM platform advisory/consulting services taxable as part of the taxable data processing service, even though consulting isn't itself a taxable service in Texas?
Taxable. The Comptroller ruled that a CRM software company's advisory/consulting services -- though separately billed and not themselves a taxable service category -- are taxable as part of the price …
Is a novel e-cigarette-style device whose capsule contains granulated tobacco leaves a taxable 'tobacco product' under the Illinois Tobacco Products Tax Act?
Yes. The Department ruled that because the Act's definition of 'tobacco products' expressly includes 'granulated' tobacco and must be construed broadly, a capsule containing granulated tobacco leaves …
Were VoIP adaptors loaned to subscribers exempt as broadcasting or Internet-access equipment?
No. The VoIP provider was not a broadcaster, cable company, video programmer, or open video system and did not provide direct Internet access. Its adaptors required a separate third-party Internet con…
Did merchandise costs, credit-card fees, and wage reimbursements change the taxable proceeds from an amusement-machine lease?
The lessee's 50% shares of merchandise purchases and credit-card processing fees were taxable lease proceeds because they were agreed conditions of the machine lease. The lessor's reimbursement of the…
Are fees for premium content on restaurant table tablets taxable, is the vendor's device charge a taxable lease, and must the out-of-state vendor register in Connecticut?
Three yeses. Fees the restaurant charges customers for premium content (news, sports, games, music) on the table tablets are taxable computer and data processing services. The monthly fee the restaura…
Are spinal braces and cervical collars exempt from Connecticut sales tax when a medical provider customizes them for a specific patient?
Yes. Spinal orthotics such as back braces and cervical collars are exempt from Connecticut sales tax under Conn. Gen. Stat. § 12-412(19)(B) when a medical provider individually alters them (trimming, …
Is taxidermy a taxable fabrication service or an exempt personal service in Virginia?
Taxidermy was an exempt personal service because the customer's true object was the taxidermist's expertise, not incidental boards or glass eyes. The taxidermist still owed tax on consumed supplies, a…
Did placing digital projectors in theaters without charging for their possession create a taxable lease?
No. The theaters paid installation and setup fees but no consideration for possessing or using the projectors, so there was no taxable lease and the assessment was abated. The provider still owed use …
Did placing digital projectors in theaters without charging for their possession create a taxable lease?
No. The theaters paid installation and setup fees but no consideration for possessing or using the projectors, so there was no taxable lease and the assessment was abated. The provider still owed use …
Are lump-sum body-piercing and insertion charges taxable when they include jewelry, and could Virginia audit six years?
Piercing charges were exempt personal services because the included jewelry was incidental. Insertion fees could also be exempt if documented, but stand-alone jewelry remained taxable. The six-year no…
How did Virginia's ABLE account contribution deduction work, including limits, carryforwards, and recapture?
For tax years beginning in 2016, an individual could deduct contributions to a Virginia529 ABLE account, generally up to $2,000 per account each year with unlimited carryforward. Contributors age 70 o…
How did South Carolina Revenue Ruling 17-6 calculate and document the refundable motor fuel income tax credit?
For tax years 2018 through 2022, the ruling allowed a South Carolina resident taxpayer a refundable credit for up to two qualifying South Carolina-registered vehicles. For each vehicle, the credit was…
A single-member LLC owned by a partnership has no Tennessee activity and just does securitization. Does it qualify for Tennessee's franchise and excise exemption for partnerships and trusts?
Yes — a disregarded SMLLC owned by a partnership is treated as a partnership for this exemption. Tennessee exempts certain asset-backed securitization entities from franchise & excise (F&E) tax if the…
What Virginia filing and payment relief was available to Florida and Georgia taxpayers affected by Hurricane Irma?
Virginia offered historical extensions and late-filing and payment penalty waivers to qualifying Florida and Georgia taxpayers whose records were unavailable because of Hurricane Irma. Deadlines varie…
Could Michael Lunnon defeat a New Mexico personal income tax assessment based on IRS account transcripts by denying the federal figures without producing contrary evidence?
No. New Mexico could calculate liability using adjusted gross income identified by the IRS. Lunnon filed no state returns for 2011 or 2012 and produced no evidence contradicting the IRS transcripts, w…
Does the manufacturing machinery and equipment sales/use tax exemption cover equipment, like cleanrooms, that starts out in research and development before being used in production?
It depends, and the Department declined to give a firm yes or no here. Machinery and equipment (including the taxpayer's cleanrooms) can qualify for Illinois's manufacturing machinery and equipment ex…
Do I owe Illinois sales tax when I buy an optional extended warranty or maintenance agreement separately from the product it covers?
No. When an optional extended warranty or maintenance agreement is sold separately from the tangible personal property it covers, the sale of that agreement itself is not a taxable transaction under I…
Did a Virginia domiciliary stop being a resident while working abroad when he kept his Virginia home, driver's license, vehicles, and returned to that home?
No. The taxpayer did not prove that he abandoned Virginia and established a new permanent or indefinite domicile abroad. He kept his Virginia home available, retained his driver's license and two vehi…
Could Virginia residents claim a Virginia credit for California tax when their California return did not actually impose alternative minimum tax?
No. California imposed no alternative minimum tax because the couple's tentative minimum tax was below regular tax. California also allowed their credit for Virginia tax to reduce liability below the …
Did buying an existing business create new investment and employment eligible for Nebraska microenterprise tax credits?
Not by itself. The acquisition price was not new investment, and the prior owner's employee compensation and health-insurance costs entered the buyer's base year. The buyer could earn credits only for…
What Virginia tax interest rates applied in the fourth quarter of 2017 to assessments, refunds, disputed assessments, estimated tax, and local taxes?
For October 1 through December 31, 2017, Virginia's ordinary interest rates were 6% on tax underpayments and assessments and 6% on overpayments and refunds. The reduced rate for qualifying disputed as…
Was ConAgra's interest income from payment-in-kind notes received in a completed business divestiture apportionable business income in New Mexico?
No. ConAgra had already apportioned and paid New Mexico tax on the full sale proceeds, including the PIK notes' face value, when it divested its grain-storage business. The later interest did not aris…
Do the materials a company buys to build a natural gas-fired power generation facility qualify for Illinois's Enterprise Zone building materials sales tax exemption?
Yes. The Illinois Department of Revenue ruled that the company's materials -- from turbines and boilers to buildings, piping, and structural steel -- qualify as "building materials to be incorporated …
Are fees for a paid membership add-on (offering delivery perks and item discounts) subject to Illinois Retailers' Occupation Tax, Use Tax, Service Occupation Tax, or Service Use Tax?
No. The Department ruled that because the membership itself does not transfer any tangible personal property to the customer, the fees for the paid add-on membership -- and for its free one-month tria…
What Virginia filing and payment relief was available to taxpayers affected by Hurricane Harvey?
Virginia offered temporary extensions and late-filing and payment penalty waivers to qualifying taxpayers whose records were unavailable because of Hurricane Harvey. Federal-linked income and withhold…
Could an estate transfer unused Virginia Land Preservation Tax Credits that remained when the original credit holder died?
No. The decedent could use the credit on his final return, but any remaining carryover was extinguished at death. Virginia treated tax credits as legislative privileges rather than personal property, …
Could a pass-through LLC file one 2015 Virginia unified return for selected nonresident individual and grantor-trust owners?
Yes. Virginia allowed the LLC to submit a 2015 unified return if it followed the Department's conditions: include only consenting qualified nonresident owners, provide Schedule VK-1, use the highest i…
Which cable, internet, and telephone equipment was exempt or taxable, and how did Virginia allocate mixed-use purchases?
Virginia reached mixed results. It allowed bandwidth allocation for mixed-use equipment through 2015, required percentage-of-time allocation from 2016, exempted signal-leak testing devices used throug…
How were Louisiana telecom companies supposed to collect a 4.5-cent monthly tax that could not be billed in half-cent increments?
Companies could charge four cents per month in the fourth and first quarters and five cents per month in the second and third quarters. That alternating schedule collected 54 cents annually for each c…
Were a handyman and personal assistant's client reimbursements excluded from New Mexico gross receipts tax as amounts received in a disclosed agency capacity?
No. State Construction separately stated its out-of-pocket costs, but it did not prove that it could bind its clients to vendor contracts or that vendors could enforce those obligations against the cl…
Which sales, rentals, repair, training, and rigging receipts of Texas-based Permian Machinery Movers were subject to New Mexico gross receipts tax?
New Mexico could not tax Texas-only training, rigging, repairs, customer-pickup sales, or rentals not shown used here, so $325,221.47 of assessed receipts was removed. Tax remained on interstate riggi…
When an out-of-state holding company with no Texas nexus sells the stock of its Texas subsidiary, does the gain from that stock sale get counted in the combined group's Texas-apportioned receipts?
No, not fully. When an out-of-state holding company that has no Texas nexus of its own sells the stock of its Texas subsidiary, the combined group must still include the net gain from that sale in its…
Did an affiliate's Virginia government-affairs employee create corporate income-tax nexus for a seller making tangible-property sales into Virginia?
No. The seller had Virginia-source income through destination-sourced sales, and the affiliate's government-affairs employee was treated as its representative. But the employee's Virginia lobbying had…
When did dealer warranty work, technician visits, and a Virginia home-based events employee create corporate nexus or Virginia payroll?
The outcomes differed. Independent dealers' warranty repairs would not be attributed to the manufacturer, rare technician visits required a fuller de minimis review, and a home-based employee's annual…
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