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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Must a seller collect tax on audio/visual equipment sold to a contractor who presents a contractor's exemption certificate?
When a contractor working for an exempt entity (government, charity, or school) buys audio/visual equipment, the sale is exempt — and the retailer may accept either the contractor's exemption certific…
What corrections did Illinois make to a private sales-tax scorecard covering business inputs, local taxes, cloud software, credits, registration, and guidance reliance?
IDOR would not approve the private survey, but corrected several points: it supplied manufacturing-exemption citations; noted cable service was generally outside telecommunications excise tax; said el…
Did arbitration proceeds tied to a domestic subsidiary's stock sale qualify for Virginia's foreign-source-income subtraction?
No. The sold subsidiary was a U.S. corporation, so the gain was not from foreign intangible property, and the federally reported stock-sale gain could not be recharacterized as technical fees. Because…
Which labor and customer transactions were exempt in Virginia's sales-tax audit of an audiovisual system seller?
Only separately stated labor performed by installation technicians qualified for the installation exemption; engineering and other services remained in the taxable system price. Virginia allowed credi…
Were RJ Handyman's separately billed material reimbursements and Kayla Marshall's door-knocking work for an out-of-state company taxable New Mexico gross receipts?
Yes. Separately stating material costs satisfied bookkeeping rules but did not prove that RJ Handyman could bind customers or that retailers could enforce obligations against them. Without disclosed a…
Are Connecticut sales and use taxes owed on a home warranty (home service contract), and does it matter whether the home is owner-occupied or a rental?
It depends on how the home is used. A home warranty on income-producing (rental) residential property is taxable on the entire contract price as a service to income-producing real property. On an owne…
Did this non-Florida reinsurer have Florida corporate-income-tax nexus, and did its affiliates have a Florida regional home office?
No. The reinsurer had no Florida nexus, and none of the affiliated ceding companies was resident in Florida or had a Florida regional home office under the ruling's facts.
Could California residents amend a Virginia nonresident return for a reciprocal tax credit after California changed their 2011 liability?
Yes. California's September 2015 adjustment made the taxpayers eligible to claim Virginia's reciprocal nonresident credit, and their May 2016 amended Virginia return was within the special one-year pe…
Are disability benefits a city pays to injured employees under the Public Employee Disability Act (PEDA) subject to Illinois income tax withholding?
It depends on federal tax treatment: PEDA benefits are included in Illinois base income, and Illinois withholding is required, only if the same payments must be included in the employee's federal adju…
Did Illinois's $100 penalty apply when a company failed to file ST-556 or ST-556-LSE for a zero-tax motor-vehicle sale for resale?
It depended on whether the seller made any retail sales of titled property. A company selling titled vehicles exclusively for resale did not have to file transaction returns and incurred no $100 penal…
Could a trust-owned aircraft qualify as nonresident property when a Florida resident ultimately managed the trustee?
No nonresident treatment applied. Aircraft owned by the trustee and found in Florida were subject to sales or use tax because a Florida resident ultimately had authority to manage, direct, or control …
Does a private equity fund member or its management company have Illinois income tax nexus, and how is income from selling LLC units or receiving management fees apportioned to Illinois?
The Department will not issue a nexus ruling because nexus determinations are too fact-specific, but it points to Illinois' general apportionment rules: gains from selling intangible property (like LL…
Did Autoglass Technologies become liable for its predecessor's tax by continuing the same glass-repair business without a formal asset purchase?
Yes, for tax principal. The former company's supplies and goodwill transferred to Autoglass, which continued essentially identical work with many of the same employees and customers. That made Autogla…
How can taxpayers check whether an older South Carolina advisory opinion was modified or superseded (per SC IL #17-1)?
Use the citator attached to SC Information Letter #17-1. It helps you determine what effect newer South Carolina advisory opinions have on previously published ones — whether an opinion was modified, …
Could a USPS Highway Contract Route courier recover $179,732.03 of New Mexico gross receipts tax without its contract, route logs, receipts, or delivery-point records?
No. A Highway Contract Route was the modern name for a star route and fell within New Mexico's specific mail-contractor apportionment rule. Diamond T might have qualified for an interstate-commerce or…
Could CORE avoid gross receipts tax penalties or limit the assessment period because it did not know New Mexico taxes services?
No. CORE's genuine lack of awareness did not establish reasonable care, affirmative misinformation, or reliance on informed professional advice. Its New Mexico educational-service receipts were taxabl…
Is Nebraska Revenue Ruling 29-87-11 on Computer Software still in effect?
No -- it has been withdrawn. Revenue Ruling 29-17-1 (issued January 3, 2017) rescinds Revenue Ruling 29-87-11, 'Computer Software,' which had been issued January 19, 1988. The one-page rescinding ruli…
Did a one-time or minimal Illinois sale by an out-of-state seller automatically limit it to collecting only the 6.25% Illinois Use Tax?
IDOR would not decide. Nexus was too fact-specific for a nonbinding GIL, and the seller supplied too little detail. The 2016 letter distinguished an Illinois retailer owing Retailers' Occupation Tax, …
How did Illinois classify a tissue bank's cost-plus charges for providing donated non-transplantable human remains for research and training?
IDOR said the tissue bank appeared to sell services, not make retail sales, so it did not incur Retailers' Occupation Tax. Tangible remains transferred with the service could create Service Occupation…
Did self-service copiers leased to retail print shops qualify for Illinois manufacturing or resale exemptions?
Generally no manufacturing exemption: a copier must be used primarily in a process commonly regarded as manufacturing, and ordinary self-service copying did not establish that. The lessee also could n…
Did the Servicemembers Civil Relief Act keep this active-duty member's basic pay outside Virginia income tax?
No. Military orders alone do not change domicile, but a servicemember can voluntarily establish a new one. The taxpayer provided no proof of continued ties to the claimed home state and instead owned …
Was saying that he neither worked nor lived in Virginia enough to overturn this nonfiler's 2012 assessment?
No. The taxpayer supplied no objective evidence despite two Department requests, so he did not prove abandonment of Virginia domicile or overcome the assessment's presumption of correctness. He receiv…
Could Virginia assess a nonfiler from an IRS audit adjustment and give notice at the taxpayer's last known address?
Yes. Virginia used the IRS's final income adjustment after the taxpayer failed to file a state return or respond to an information request. The Department had mailed proposed-assessment notice to the …
Could a Virginia resident defeat a 2012 assessment merely because the Department could not provide the employer's actual Form W-2?
No. Federal exchange data showed wages from a California employer and interest from a Virginia institution, and the taxpayer did not deny Virginia residency or receiving income. The assessment remaine…
Was an auto body shop subject to Virginia's annual litter tax because it sold replacement vehicle parts during repairs?
Yes. Motor-vehicle parts were enumerated litter-tax products, and the shop regularly sold and installed them while repairing damaged bodies. Those parts were integral to its primary repair business, n…
Are orthodontists' clear aligners, protective gloves and masks, and give-away dental hygiene items subject to Connecticut sales and use tax?
It's a mix. Custom clear aligners are exempt as corrective equipment worn for a functioning part of the body under Conn. Gen. Stat. § 12-412(19)(C). The gloves and masks orthodontists and their staff …
How did Illinois sales tax apply to a bowling and arcade venue's games, rentals, memberships, food, merchandise, and party packages?
Merchandise, meals, beer, and wine were taxable retail sales; bowling and other amusement play were not sales-taxed when no property transferred. Locker and shoe rental receipts were not taxed, though…
New York Advisory Opinion TSB-A-16(7)C: Is a foreign bank's New York office a 'branch' under Tax Law section 1454(a)(5)(B) — so its deposits go in the deposits factor — when the office approves loans and disburses funds but does not accept loan repayments?
No. Because the New York office did not accept loan repayments through its own employees on a regular and systematic basis (all repayments went by wire to an unrelated bank), it was not a 'branch' und…
When must a South Carolina manufacturer return its real and personal property, and when are the resulting property taxes due?
A manufacturer generally returned its South Carolina manufacturing property to the Department of Revenue using the last day of its income tax year preceding the property tax year as the lien date. The…
What did Virginia's original Food Crop Donation Tax Credit guidelines require from farmers and nonprofit food banks?
Beginning in 2016, qualifying Virginia farmers could claim 30% of donated food crops' fair market value, up to $5,000 per taxpayer and a $250,000 statewide annual cap. A Virginia nonprofit food bank h…
A company runs a cloud document-storage product and an optional add-on, both accessed through a web portal that is itself software. Are its charges subject to Tennessee sales and use tax, or is the real product a nontaxable data-storage service?
No. The company's charges for its cloud 'Basic Product' and optional 'Add-On Component' are NOT subject to Tennessee sales and use tax. Both run on the company's proprietary software, and the web-base…
My tax preparer told me I didn't owe New Mexico gross receipts tax — if that advice was wrong, can the penalty be waived because I relied on a professional?
No — the penalty stood, because relying on a preparer whose competence you never checked is not the 'reasonable reliance on competent counsel or an accountant' the law requires. Hilario Leos and Chris…
Were separately stated freight charges on wine shipped directly to Illinois consumers excluded from sales tax when free winery pickup was available?
Potentially, but IDOR would not give a fact-specific statement. Delivery is taxable when inseparably linked to the sale, such as when the customer has no way to buy without paying delivery. If free pi…
Did a room lease and work aboard a vessel prove that this taxpayer abandoned Virginia domicile for 2012?
Not on the evidence provided. The taxpayer had a month-to-month room lease elsewhere and worked aboard a vessel most of each month, but renewed his Virginia driver's license in 2011 and ignored two re…
Did repeated requests that an employer start Virginia withholding relieve the employee from paying the tax due?
No. The employee reported Virginia wages and a tax liability but no corresponding withholding. Even if the employer should have withheld and ignored his requests, no tax was actually deducted from his…
Did a Public Health Service commissioned officer qualify for Virginia's military-pay subtraction when fewer than 90 active-duty days fell in 2012?
Yes. The Public Health Service Commissioned Corps counted as a uniformed service, and the 90-day test applied to the continuous extended-active-duty period rather than days within one tax year. Becaus…
What Virginia tax interest rates applied during the first quarter of 2017?
Virginia's first-quarter 2017 rates were 6% for tax underpayments and 6% for tax overpayments. The reduced rate for qualifying assessments in administrative appeals was 1%. Certain local delinquency a…
Are materials an IDA agent buys for off-site utility improvements exempt from New York sales tax?
No. An Industrial Development Agency (IDA) is exempt from tax on its own property and activities, and a private developer acting as the IDAs agent can share that exemption — but only for property the …
Was a food-and-drink concessionaire's percentage fee for space inside a public library subject to Florida sales tax?
No. The Department treated the publicly owned library as a recreational facility, so the food-and-drink concessionaire's monthly percentage fee for licensed space qualified for the section 212.031 exe…
Were a coupon-clearinghouse's internal fraud checks and purchased third-party investigations subject to Florida sales tax?
The clearinghouse's own manual and automated coupon-fraud checks were not taxable protection services. Purchased third-party investigative services were taxable when used in Florida or when their prim…
Could insurer-paid long-term disability benefits reported on Form W-2 qualify for Virginia's disability-income subtraction?
Potentially. Virginia modified its prior position and said Form W-2 reporting alone does not disqualify benefits proven to arise from long-term disability insurance. But the taxpayers documented perma…
Is a report analyzing a clients customers that benchmarks against industry data a taxable information service?
Yes. Collecting, compiling, and analyzing information and furnishing reports is an information service taxable under Tax Law section 1105(c)(1). There is an exclusion for information that is personal …
In a 'reverse' IRC § 1031 like-kind exchange, a specialized company (the exchange accommodation titleholder, or EAT) temporarily holds legal title to the replacement property until the taxpayer sells its old property. When the EAT later transfers that replacement property to the taxpayer, is that transfer itself subject to New York's Real Estate Transfer Tax (RETT)?
No RETT is due on that specific transfer. In a 'reverse' like-kind exchange under IRC § 1031, an exchange accommodation titleholder (EAT) buys and briefly holds legal title to replacement property bef…
Could a credit-card finance company use retailer assignments to claim Virginia sales-tax bad-debt credits on customer defaults?
No. Virginia strictly read the bad-debt statute to benefit the retail dealer that made the sale, reported it, and remitted the tax. The finance company bought or originated the accounts and bore the d…
Is civilian pay from a State of Illinois job that requires Illinois National Guard membership exempt from Illinois income tax?
No. The Illinois Department of Revenue concluded that civilian wages paid by the State of Illinois are not tax-exempt, even if the job requires the employee to maintain Illinois National Guard members…
If a nonresident partner's only Illinois income is pass-through income from a partnership that already withholds and remits tax on its behalf, does the partner still have to file its own annual Illinois corporate return?
No, generally not. The Illinois Department of Revenue explained that a nonresident partner whose Illinois income tax liability is fully paid through pass-through withholding under IITA Section 709.5 i…
Is a cable companys charge to extend its broadband network to a rural property a taxable capital improvement?
No, and not for the reason asked. The customer paid a $15,000 contribution in aid of construction so the cable company would build 6/10 mile of coaxial cable (owned by the cable company) to bring broa…
Are a medical-records companys retrieval, coding, abstraction, training, and storage services taxable?
Mostly not. Retrieving and furnishing a patients specific confidential medical records to an authorized requester is not taxable, no matter how delivered, and neither are the related delivery charges.…
Were motor-vehicle title transfers exempt when corporations converted to LLCs in qualifying same-owner reorganizations?
Yes, for the conversions described. Each transfer required a signed DR-40 affidavit stating that the corporation-to-LLC conversion qualified as an I.R.C. section 368(a)(1)(F) reorganization solely in …
Did a federally taxable lump-sum annuity death benefit qualify for Virginia's income subtraction even though it was not life-insurance proceeds?
Yes. The payment came from an annuity contract with an insurance company, was paid to the beneficiary in a lump sum, and was federally taxable. Those facts met Va. Code § 58.1-322 C 32; the payment di…
Did claiming residence in another state overturn this nonfiler's best-information Virginia assessment for 2012?
No. The taxpayer did not answer the Department's request for evidence showing abandonment of Virginia domicile, so the best-information assessment remained presumed correct. He received one final 30 d…
Could an employee claim a Virginia withholding credit for tax his employer allegedly should have withheld after March 2014?
No. An employee may receive credit when an employer actually deducts Virginia tax but fails to remit it, but this taxpayer did not prove any deduction after March 2014. Unemployment eligibility, a sub…
Did an asserted post-divorce move outside Virginia overturn this taxpayer's estimated 2012 resident income-tax assessment?
No. Virginia unemployment records covered all four quarters of 2012, the taxpayer retained Virginia DMV ties, and she supplied no evidence of living elsewhere that year. Because she did not complete t…
Did a construction NTTC protect crane-and-operator receipts when the project manager, rather than the subcontractor that issued the NTTC, paid the invoice?
Yes. US Field Service timely accepted a properly executed construction NTTC in good faith from the wind-power subcontractor that bought its crane-and-operator services. The project manager's payment o…
Which receipts from ATC Healthcare's New Mexico staffing franchise were taxable: payroll collections, franchise royalties, and administrative services?
ATC's payroll and client collections were taxable because it was the legal employer and failed New Mexico's disclosed-agency test. Pre-June 27, 2007 franchise royalties were abated under then-controll…
Could a $35.39 estimated-tax underpayment penalty be abated when a husband's terminal illness left the taxpayers unable to address withholding or obtain tax help?
Yes. The Chwirkas underpaid because no tax was withheld from Joseph Chwirka's final three months of disability income. Although the penalty was initially mandatory, his terminal illness and Rebecca Ch…
Did diesel used by lock-and-dam construction vessels or a boat repairer's tow vessels qualify for Illinois bordering-river fuel exemptions?
Not for the construction contractor transporting its own materials; that was not transportation for hire. A repair company's tow fuel could qualify only when transportation to and from the repair site…
Did a supermarket's rotisserie oven, cleaner, grease bags, and related equipment qualify for Illinois's manufacturing machinery exemption?
No. The supermarket used the equipment to slow-cook chickens for retail sale in its deli. Illinois's rule states that food and beverage preparation by restaurants, food-service establishments, and oth…
Does Illinois tax a nonresident's capital gain from the sale of stock in an Illinois company received as farm patronage dividends?
No. Gain from the sale or exchange of stock is nonbusiness income made up of intangible personal property, and under IITA Section 303(b)(3) it is allocable to Illinois only if the taxpayer's commercia…
What are the required wage and investment levels for Nebraska Advantage Act applications filed on or after January 1, 2017?
This ruling sets the 2017 thresholds. For Nebraska Advantage Act applications filed on or after January 1, 2017, the base average annual wage requirement is $25,709, and the required investment and em…
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