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 a North Carolina beneficiary owe Virginia tax on trust income derived from rental property located in Virginia?
Yes. The trust reported that the distribution came from rental income on Virginia real property, making it Virginia-source income to the North Carolina beneficiary. He filed a Virginia nonresident ret…
Could a laboratory provider using payroll apportionment also deduct receipts for testing performed by out-of-state laboratories?
No. Payroll apportionment had already separated the receipts attributable to testing performed by out-of-state laboratories. The provider also failed to show that employees at its county facilities pa…
Could a cigarette wholesaler reduce a Virginia sales-tax assessment by supplying resale certificates and invoices after the audit?
Potentially. Virginia returned the audit to remove cigarette sales supported by valid Form ST-10 resale certificates and invoices, but late certificates received extra scrutiny because none were avail…
Did a retail printing-services business qualify for Virginia's industrial manufacturing exemption on print-production equipment?
Generally no. Virginia treated the business as a copy and reproduction service rather than an industrial custom printer, so its ordinary production equipment remained taxable. Audit staff had to revie…
Do six separate 25-year build-to-suit leases with six different landlords, financing six new charter-school campuses at once, all qualify as exempt improvement-to-realty contracts?
Yes, all six. The Comptroller ruled that all six of a charter school's separate 25-year build-to-suit leases -- covering six new campuses financed by six different landlords -- qualify as exempt contr…
Are 'Cross-Connect' fees that a data center charges customers for access to permanently installed fiber optic cable subject to Texas sales tax as a telecommunications service?
Not taxable. The Comptroller ruled that a data center's separately-stated 'Cross-Connect' fees for customer access to fiber optic cable are NOT subject to Texas sales tax, because the cable is permane…
How did Virginia's 2017 Tax Amnesty Program work, including eligibility, waived amounts, deadlines, and the post-amnesty penalty?
From September 13 through November 14, 2017, eligible taxpayers could pay all qualifying tax plus half the accrued interest and receive a waiver of all penalties and the other half of interest. Partic…
Are the receiver, sensor, and transmitter in a prescription continuous glucose monitoring system exempt from Georgia sales tax?
Yes, but under two rules. The handheld receiver is durable medical equipment and is exempt when permanently transferred to the natural person for whom it was prescribed; third parties may buy it tax-f…
Could New Mexico assess Eastern Sunbelt Real Estate for gross receipts tax on transactions Roy Rackler conducted individually and mistakenly reported on Schedule C?
No. The Department assessed Eastern Sunbelt because its CRS number was linked to owner Roy Rackler's name, but the transactions were Rackler's individual transactions and did not involve the business.…
Was a kitchen and bath remodeler a retail seller or a lump-sum real-property improvement contractor for Florida sales tax?
The remodeler was a lump-sum real-property improvement contractor, not a retail seller of the installed materials. It owed tax on its purchases of stone, tile, mosaics, and other materials; suppliers …
Were paid and free-trial memberships for grocery access, delivery benefits, and product discounts subject to Florida sales tax?
No. The membership's grocery access, same- or next-day delivery, qualifying free delivery, and changing product discounts were not taxable services or admissions. Florida therefore did not tax either …
A corporate group makes a consolidated net worth election for Tennessee franchise tax, and some affiliates are exempt from the tax. Are the exempt affiliates still included in the group, and do their assets count?
Include them in the group, but leave their numbers out. The taxpayer heads a corporate group making a consolidated net worth election for Tennessee franchise tax (§ 67-4-2103(d)), and some lower-tier …
Do server power and data cables or computer racking systems qualify as computer equipment under Georgia's high-technology sales-tax exemption?
No. Power cables and data-transmission cables did not qualify because the applicable regulation expressly lists cable as nonqualifying. The server racking systems also failed because, although they or…
Is a lessee's payment to a rental company for lost or damaged rental equipment subject to Colorado sales or use tax?
No. When a customer pays a rental company for equipment that is lost or damaged beyond repair, that payment is not subject to Colorado sales or use tax. It's compensation for the lost value of the com…
Are sales and leases of timber-harvesting (silviculture) equipment exempt from Colorado sales tax as farm equipment?
Likely yes. Timber-harvesting equipment (fellers, skidders, etc.) bought after 2013 and valued by the county assessor as silvicultural personal property likely qualifies for Colorado's farm-equipment …
What deed-recording-fee framework and transaction guidance did South Carolina Revenue Ruling 17-5 provide before RR 24-1 superseded it?
This historical ruling imposed a $1.85 fee for each $500 or fraction of $500 of realty value, generally made the grantor primarily liable, defined value broadly, allowed specified deductions and exemp…
When does South Carolina's residential-electricity exemption apply to assisted living, nursing homes, healthcare facilities, dormitories, and prisons?
Qualifying residential areas of an assisted-living facility can be exempt, much like apartments, while healthcare or supervised-care areas remain taxable. Electricity for nursing homes, healthcare fac…
What affidavit must be filed with a South Carolina deed, and which sample affidavits does the Department provide (per SC IL #17-13)?
SC Information Letter #17-13 provides two updated sample affidavits for South Carolina's deed recording fee and supersedes SC Information Letter #15-20. Under S.C. Code § 12-24-70, an affidavit showin…
Did a new IRS bill justify reconsidering Virginia's 2010 income-tax determination when the federal transcript showed no new adjustment?
No. The updated 2010 federal transcript still showed no new IRS adjustment affecting Virginia taxable income, and the later IRS bill likely concerned another year. The taxpayer identified no factual e…
How did Florida tax a cooperative utility's fixed community-solar block charge and related solar kilowatt-hour credits?
The fixed solar-block charge was a charge for electrical power or energy, subject to the 4.35% electricity sales-tax rate used in the ruling and to utility gross receipts tax. Solar kilowatt-hour cred…
Could Virginia assess 2013 income tax from final IRS audit information when the taxpayer failed to file an amended Virginia return?
Yes. Virginia required the taxpayer to report the final federal change within one year. Because he did not file an amended Virginia return, the Department could assess from the IRS information and wou…
Was a promotional distributor's DVD sale exempt when the customer supplied a Virginia ST-10A certificate accepted in good faith?
Yes. The DVDs contained information used in the purchaser's advertising campaign and qualified under the ST-10A certificate. Because the distributor accepted the certificate in good faith and supplied…
Could a restaurant reduce an estimated Virginia sales-tax assessment without records supporting its claim that projected sales were too high?
The estimated tax stayed because the restaurant supplied no records and did not rebut the $50,000 annual sales projection from its business-license application. Virginia waived the first-audit complia…
Were a service member and spouse both exempt from Virginia resident tax merely because they claimed the same out-of-state military domicile?
No. Virginia accepted that the husband remained domiciled in State A, though his Virginia farm could require a nonresident return. The wife did not prove she had ever been physically present or domici…
Could Virginia residents subtract an entire IRA distribution because contributions may have been taxed by another state?
Not without documentation. The subtraction covered only the prorated portion tied to federally deductible contributions that another state actually taxed. The couple did not prove the prior taxation o…
Could a Virginia resident receive credits for tax paid through composite nonresident returns, and was Virginia's assessment timely?
Yes, with state-by-state documentation. Virginia found the taxpayer entitled to credits for tax paid through composite returns in Hawaii, Mississippi, and Montana. The April 21, 2017 assessment was st…
Did keeping a Virginia driver's license and using a Virginia tax-return address prevent a worker from changing domicile to another state?
No. The worker leased a home near his State A job, moved his belongings, had State A withholding, and did not vote or renew his license in Virginia while away. Considering all the evidence, Virginia f…
Would Virginia reconsider an IRS audit adjustment or waive interest while the taxpayer disputed the federal result?
No. Virginia does not look behind the IRS's final adjustment and upheld the 2013 assessment after the taxpayer failed to file an amended Virginia return. Interest was mandatory and could not be waived…
Could a taxpayer obtain review of a late refund claim after fully paying a Virginia assessment?
Yes. Although the ordinary refund period for the late 2010 return had expired, the taxpayer had fully paid the March 19, 2014 assessment and pursued the claim within three years. Virginia treated the …
Could federal income tax withheld from an IRA distribution reduce the Virginia tax due after an IRS audit adjustment?
No. The IRA distribution was included in federal adjusted gross income and no Virginia tax had been withheld. Virginia provides no deduction for federal income tax withheld from retirement income, so …
Could taxpayers dispute IRS changes to federal adjusted gross income through a Virginia tax appeal, and was the resulting assessment timely?
No. Virginia matched the taxpayers' federal adjusted gross income to the IRS record and would not reconsider the federal audit. The January 2017 assessment was timely before the May 1, 2017 general de…
Must a seller collect Colorado sales tax on erosion-control logs and silt fencing sold to contractors who present a contractor's exemption certificate?
Yes — the seller must collect tax. Excelsior (wood-fiber) erosion-control logs and silt fencing sold to construction contractors are NOT 'construction and building materials,' so the public-works cont…
Is a separately stated 'core charge' on a recyclable automotive part subject to Colorado sales tax?
Yes. A 'core charge' — the separately stated, refundable amount on a recyclable/remanufacturable auto part — is part of the part's purchase price, so sales tax applies even though it's separately stat…
What certificate and application rules did Virginia's 2017 guidelines establish for tax-exempt purchases of stamped cigarettes for resale?
Starting January 1, 2018, dealers purchasing Virginia-stamped cigarettes for resale had to use Department-issued Form ST-10C rather than Form ST-10. The guidelines created fast-track, expedited, and f…
Does the manufacturing-machinery exemption apply to a contract manufacturer that doesn't own or sell the finished product?
Likely yes. Colorado's exemption for manufacturing machinery and machine tools applies even when the manufacturer doesn't sell the finished product — including contract manufacturers who process a thi…
When a state-contracted data center operator procures software licenses on behalf of tax-exempt government agencies, does the operator owe sales tax on those purchases?
No — when a company operating a state data center under contract procures business application software at a governmental customer's request, and the software vendor licenses the software directly in …
Could a community development district buy fill tax-free for a public storm-water management system?
Yes, if the district strictly followed Florida's public-works direct-purchase rules. It had to use public funds, order and pay directly, receive direct invoices, take title, bear risk of loss until in…
Does butane-blending equipment that a pipeline/tank-storage company installs just before its truck loading rack qualify for Illinois's manufacturing machinery and equipment sales tax exemption?
It depends on where each piece of equipment sits relative to the production cycle. The Illinois Department of Revenue ruled that equipment used to sample, test, measure, and inject butane into the gas…
Could a port tenant allocate rent between taxable areas and areas used exclusively to load or unload vessel cargo?
Yes. Florida approved the tenant's square-footage allocation between taxable property and port property used exclusively for loading or unloading vessel cargo. The ruling's summary states that 53.03% …
Does a nonprofit have to charge Illinois sales tax on admission tickets, food, merchandise, and hospitality sales at a fundraising event?
It depends on what is being sold: admission tickets alone are an exempt intangible, but food and beverages sold separately, clothing/programs/souvenirs, and catering to corporate hospitality tents are…
Does Illinois Retailers' Occupation Tax or Use Tax apply to a company's various cloud-based (SaaS) software products -- tax-preparation, bookkeeping, self-employed finance, professional tax-prep, and payroll offerings -- including their related free mobile apps, desktop conversion tools, and occasional downloadable components?
The core SaaS access to each of the five product lines is not taxable because it is delivered purely through the cloud with no software downloaded to the user's device. However, whenever the company D…
How does a taxpayer request a refund of an overpaid Illinois income tax credit that hasn't been fully applied?
The Department didn't decide whether the taxpayer was entitled to the specific refund; it pointed to the general rule instead. Under IITA Section 909, the Department may credit and must refund any bal…
Was pet food tax-exempt when a veterinarian prescribed it but a non-veterinarian pet store made the sale?
No, not merely because a veterinarian prescribed it. The non-veterinarian retailer's animal foods were taxable unless federal or state law required prescription dispensing; the separate exemption for …
Are a platform's webinar and live-stream products taxable, and what about its optional add-on services?
The core products aren't taxable, but two software add-ons are. Letting customers make presentations available to viewers over the internet — webinars and live streams — isn't a taxable service. Inter…
Which replacement parts and repair charges qualified for Florida's industrial machinery sales-tax exemption?
Repair labor and parts incorporated into qualifying milling, turning, grinding, quality-control, and engraving machinery were exempt. Replacement stand-alone tools and furniture-like workstations or w…
Did an out-of-state medical staffing company owe New Mexico gross receipts tax on receipts from about 100 employees working at New Mexico healthcare facilities?
Yes, except for assessment periods barred by the six-year limitations period. All Medical had nexus through about 100 employees working in New Mexico, was not its clients' disclosed agent, and could n…
Could the Virginia Department of Taxation review a county tax on a personal vehicle or decide whether an income-tax-refund setoff paid that debt correctly?
No. A personal vehicle was not local business or mobile property within the Department's appeal jurisdiction, and refund-setoff disputes had to be raised with the county that certified the debt. The t…
Is a company that arranges HVAC repairs for retail chains an agent (non-taxable) or a reseller that must collect tax on all its charges including its management fee?
It's a reseller, so all its charges are taxable. The company designs HVAC maintenance programs for national retailers and, when needed, hires pre-screened local contractors (its 'Peer Partner Network'…
Is a bank-benchmarking analytics service a taxable information service, and is a custom predictive-model product exempt as custom software?
They split. Product A — a benchmarking service that compares each bank's portfolio performance against a synthetic index built from other participating banks' data — is a taxable information service, …
When are motor vehicle towing, transport, and roadside assistance services taxable in Connecticut, and can they be bought for resale?
It depends on how the vehicle is moved. Moving vehicles by automobile carrier truck (between lots or to auction) is not taxable, but moving them by wrecker or flatbed wrecker is taxable motor vehicle …
When a landlord builds two new K-8 charter-school campuses and leases them to the school for 25 years each, can the construction contracts qualify as tax-exempt, and can the landlords' suppliers avoid paying sales tax on materials used in the build?
Yes — build-to-suit leases under which landlords construct two new K-8 charter-school campuses and lease them to a tax-exempt charter-school operator for 25-year primary terms qualify as exempt constr…
When a landlord builds a new charter-school campus and leases it to the school for 25 years, can the construction contract qualify as tax-exempt, and can the landlord's suppliers avoid paying sales tax on materials used in the build?
Yes — a build-to-suit lease under which a landlord constructs a new charter-school campus and leases it to a tax-exempt charter-school operator for a 25-year primary term qualifies as an exempt constr…
When a landlord builds a new charter-school campus and leases it to the school for 25 years, can the construction contract qualify as tax-exempt, and can the landlord's suppliers avoid paying sales tax on materials used in the build?
Yes — a build-to-suit lease under which a landlord constructs new charter-school campuses and leases them to a tax-exempt charter-school operator for a 25-year primary term qualifies as an exempt cons…
Is an on-site fire-safety training program subject to New York sales tax?
No. The company's employees travel to a customer's site and deliver a fire-safety program in person — lectures, group discussion, PowerPoint, video, and a hands-on drill using a laser digital-extingui…
New York Advisory Opinion TSB-A-17(1)C / (18)S: How do sales tax and the section 186-e excise tax apply to an MVNO's prepaid mobile sales through retailers, refills, and wholesale to another MVNO, and how are they sourced?
An MVNO's own-brand prepaid sales through retailers qualify for the sales-tax resale exclusion but are taxable to the MVNO for the section 186-e excise tax; refills are taxable for both; wholesale to …
Is a gym's charge to an independent personal trainer for using its facilities subject to New York City sales tax?
Yes. New York City imposes a 4.5% local sales tax on charges for the use of gyms, health salons, and similar establishments directed at improving bodily appearance (NYC Administrative Code § 11-2002(a…
Are charges for inspecting backflow / cross-control prevention devices subject to New York sales tax?
It depends on whether the inspection is government-mandated. A diagnostic test of equipment is normally a taxable maintenance service even if no repair is done. But inspections that are mandated for c…
Is property management for a residential housing cooperative a taxable service to real property in Connecticut?
Yes. A residential housing cooperative is treated as income-producing real property -- the cooperative owns the property and members pay their share of its expenses as cooperative income -- so propert…
Is customized retail-training software (with embedded videos) and its subscription fees taxable, and how is the tax sourced?
Mostly taxable, sourced to where it's used. The 'skinned' training software is prewritten software customized for each retailer — taxable as tangible personal property, and because the custom 'skinnin…
A trust is dividing a NYC condo interest and other assets equally among four beneficiaries. If one beneficiary receives the real property interest in place of their cash share, does that trigger New York's Real Estate Transfer Tax (RETT) -- and does it matter whether the property is worth more or less than that beneficiary's one-quarter share?
It depends on whether cash changes hands. A trust held marketable securities, cash, and a 96% interest in a NYC condo, to be split equally among the settlor's four children after her death. The truste…
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