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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Are hosted email, fax, online meeting, and file-management services taxable in New York?
It splits four ways. Email service is not taxable: although email is telephony/telegraphy, the Internet Tax Freedom Act bars taxing Internet access, which includes email and instant messaging. Fax ser…
A Tennessee corporation will convert several subsidiaries that do business in Tennessee into single-member LLCs disregarded for federal income tax, effective December 31, 2016. How do those conversions affect its Tennessee franchise and excise tax returns and consolidated net-worth election?
It depends on the tax year. For the tax year ending December 31, 2016 (the reorganization is effective that day), the corporation and each converting entity are still SEPARATE entities, so they file S…
When a multi-state wind-power company sells its interest in a partnership that owns a wind farm, is the gain sourced to Illinois based on where the buyer is located or based on where the company's own work took place?
Illinois ruled the gain is sourced to the buyer's (customer's) location, not the seller's activity location, because the taxpayer qualified as a "dealer" in the partnership interest under Illinois' mo…
Could Good Karma reduce a gross receipts tax assessment by documenting out-of-state services and periods beyond the limitations period?
Yes, in part. Good Karma supplied documents showing that two companies' Form 1099 payments covered services performed outside New Mexico, and the Department also conceded that part of the assessment w…
Did the destination of goods shipped from an Illinois hub determine whether freight charges were taxable?
No. Freight taxability depended on whether delivery was inseparably linked to the sale, not destination. Charges were taxable when unstated or unavoidable; separately stated optional delivery could be…
Could a New Mexico freelance editor avoid a $276.96 negligence penalty because her longtime New York CPA never advised her about gross receipts tax?
No. Emily Metzloff owed gross receipts tax on editing services performed in New Mexico for out-of-state internet clients. Her New York CPA prepared only her income-tax returns, never discussed New Mex…
When did Florida diesel and pollutants taxes apply to B100 biodiesel and clear diesel sold for blending and export?
Diesel tax attached when the producer created taxable B100 below the bulk-transfer system, not merely at the later sale. B100 was not subject to pollutants tax, but the undyed diesel was.
A company sells access to a web-based interface that lets users send, receive, and manage text messages and other communications from one screen. Are its charges for that interface subject to Tennessee sales and use tax?
Yes. The company's charges for its web-based messaging interface are subject to Tennessee sales and use tax — as the sale of 'ancillary services,' a specifically enumerated taxable service (§ 67-6-205…
Is an equipment sale to an out-of-state customer taxable in Georgia when the customer's Georgia agent receives and assembles the products before final shipment?
Yes. The out-of-state customer received the products in Georgia when its third-party assembler accepted delivery on its behalf, so the Georgia dealer had to collect sales tax even though the assembled…
Did a faith-based nonprofit hospital qualify for Florida's religious-institution communications-services-tax exemption?
No. Although the hospital was faith based and operated public chapels, its primary function was medical care rather than operating as a religious institution within section 202.125(4).
Are prescription catheter, drainage, vertebroplasty, and kyphoplasty procedure kits exempt from Georgia sales tax as prosthetic devices?
Yes. The Department treated the catheters, tubing, collection containers, and bone cement as prescribed prosthetic devices permanently transferred to the patient. The kits' other items, such as scalpe…
Is a fraud-detection service that compares an online shopper's device data against a fraud database and returns an 'Allow/Deny/Review' recommendation a taxable information service in Texas?
No. The Comptroller ruled that a fraud-detection service — which gathers data from a shopper's device, compares it against the provider's own fraud database, and sends the retailer a recommendation to…
Were refrigerated pre-assembled meals sold through a weekly plan for later reheating subject to Florida sales tax?
No. The meals qualified as exempt food products because they required refrigeration and later heating, were not sold for immediate consumption, and were not sold by a restaurant or similar eating plac…
When a retailer sells and installs an appliance, is installation taxable and does the retailer become a construction contractor?
The appliance sale was taxable. Installation was included in taxable selling price only when bundled into that price; a separately agreed or separately listed installation charge was a nontaxable serv…
What corrections did Illinois give another state's survey about private vehicle sales, rentor sales, and long-term motor-vehicle leases?
IDOR said the survey was generally correct but needed clearer labels separating retail from occasional sales. Private-party vehicle transfers faced Private Party Vehicle Use Tax, while rentors selling…
Did an aircraft used primarily for crop scouting and field maintenance qualify for Illinois's farm machinery exemption?
No on the stated primary uses. An aircraft can qualify if used primarily in production agriculture, but Illinois's definition included activities such as tilling, planting, irrigation, chemical applic…
Does a lessee owe Illinois tax when buying a car at the end of a true lease after reimbursing the lessor's original Use Tax?
Yes. The original payment was likely a private contractual reimbursement of the lessor's up-front Use Tax, not the lessee's own tax liability. The later buyout was a separate retail sale, so the purch…
Did a nonprofit campground owe Illinois Hotel Operators' Occupation Tax on cabins rented for camps and public events?
Generally yes. The campground offered lodging for weddings, retreats, orientations, youth camps, and individual cabin stays, so it rented to the public as well as program participants. When sleeping a…
Did a nonprofit Christian camp or retreat center avoid Illinois hotel tax by renting only to church groups and youth camps?
Generally no for the described operation. A facility renting only to its own members may not be open to the public, but one renting to members and any public group is treated as public and all rental …
How did Illinois tax optional medical-equipment service agreements, later repairs and parts, restocking fees, and shipping?
An optional agreement invoiced separately from equipment was not taxable when sold; the provider instead owed tax under the serviceman rules on parts later transferred, while labor-only service involv…
Could a company obtain an Illinois cigarette stamping distributor license to sell stamped cigarettes directly to retailers?
It depended on whether the company was a manufacturer. A manufacturer licensed under the second or third statutory category could not sell stamped original packages directly to retailers or secondary …
Are charges for a golf driving range, batting-cage tokens, and professional golf lessons subject to Georgia sales tax?
Driving-range charges and batting-cage token charges are taxable retail sales because customers pay to participate in games or amusement activities. Separately charged golf lessons from a professional…
Could S.J. Tile avoid 2010-2012 gross receipts tax without NTTCs by arguing that its construction-contractor customers paid the tax?
No. S.J. Tile produced no NTTCs for its 2010-2012 tile-setting receipts and no specific evidence that construction contractors paid gross receipts tax on its behalf, so equitable recoupment and double…
Did buying a Tennessee home and working mostly in Tanzania end a taxpayer's New Mexico domicile when his wife, primary U.S. visits, mail, and vehicles remained in New Mexico?
No. James Hellerman clearly intended Tennessee to be his home and worked mostly in Tanzania, but he did not prove that his established New Mexico domicile changed. His wife and valuable New Mexico hom…
Must a tax-exempt nonprofit collect Georgia sales tax on admission to a historic home and its docent-led tour?
Yes. Admission to the historic home, including the docent-led tour, was a taxable retail sale because Georgia taxes admission to places of exhibition or display. The organization's Section 501(c)(3) s…
Are custom corporate-video production charges taxable when the video is delivered electronically or on a hard drive, thumb drive, or DVD?
Custom video production for one customer's specifications is a nontaxable professional service whether delivered electronically or on tangible storage media. If the seller separately charges for a har…
What South Carolina tax filing and payment relief is available to taxpayers affected by Hurricane Matthew (per SC IL #16-12)?
SC Information Letter #16-12 grants South Carolina tax filing and payment relief to individuals and businesses affected by Hurricane Matthew. Deadlines for returns and payments due on or after October…
Could this cargo-delivery business use Florida's transportation-company revenue-mile apportionment factor?
Yes. Because the taxpayer primarily earned income by transporting customer cargo, it qualified as a transportation company and apportioned income using Florida revenue miles over revenue miles everywh…
Are the franchise royalty fees I collect from my New Mexico franchisees taxable, or is the trademark-license part of the fee exempt from gross receipts tax?
They are taxable, and the franchisor lost. A & W Restaurants, Inc. licenses New Mexico franchisees to run A&W restaurants and collects a continuing royalty fee (5% of gross sales) plus an advertising …
Is a sewing (quilting) service performed on a customers quilt subject to New York sales tax?
Yes. The petitioner sews the layers of customers quilts together with a stitching design. That is taxable under Tax Law section 1105(c)(2) as producing, fabricating, or processing tangible personal pr…
Could a business overturn its Virginia sales-and-use-tax audit by claiming it operated only as a wholesaler?
No. The business did not keep or provide records separating wholesale from retail sales or substantiating sales, purchases, fixed assets, and an exempt Virginia transaction. Virginia upheld the assess…
Did work in another state and later hotel stays in Pennsylvania end this taxpayer's Virginia domicile for 2011 through 2013?
No. An out-of-state employment letter did not prove a permanent new domicile, and temporary Pennsylvania hotel stays were not a permanent abode. Virginia treated the taxpayer as a domiciliary resident…
Was a workstation and tool chest used to support cleaning, deburring, and inspection exempt as industrial manufacturing equipment?
No. Although the cabinet facilitated product inspection and could be essential to the business, it was not indispensable to or an immediate part of actual production. Its quality-control function also…
Did the Internet Tax Freedom Act or Virginia's Internet-access exclusion exempt a cellular provider's Picture Mail charges?
No. Picture Mail did not provide Internet access; customers needed Internet access before using it. Virginia also found the service was picture messaging rather than email, instant messaging, or a sim…
Which common catering charges were taxable, and when could nonprofit, church, or government customers buy meals and related services exempt?
Virginia treated customer charges for wait staff, passed-through delivery, disposable paper goods, and administrative fees as taxable. Gift certificates were taxed when redeemed, not when sold. Exempt…
Can a vendor bundle sales tax into its hourly rate, and must it investigate a customers exemption certificate?
No to absorbing tax, and no duty to investigate. A person required to collect tax may not absorb the sales tax into its hourly rate; the Tax Law requires it to collect the tax from the customer and to…
Is a demolition company that prepares recovered scrap for sale a manufacturer eligible for Georgia's manufacturing sales-tax exemptions?
No. The taxpayer's NAICS code classified it as a metal scrap and waste merchant wholesaler, not a manufacturer, and its income came from selling recovered scrap. The Department found it would not gene…
Is an on-site document-shredding service a manufacturer eligible to buy its truck-mounted shredding and compacting equipment tax-free?
No. The taxpayer was classified under NAICS 561990, All Other Support Services, and most of its revenue came from document-management services rather than shredded-paper sales. The Department treated …
What were the significant South Carolina tax-law changes from the 2016 legislative session, as summarized by the Department (per SC IL #16-11)?
SC Information Letter #16-11 is the Department's brief summary of the significant tax and regulatory law changes enacted in South Carolina's 2016 legislative session, organized into four categories: (…
Where did a technology distributor source Illinois local sales tax after moving its headquarters but retaining its credit and distribution center?
All Illinois sales remained sourced to the city containing the company's credit department, invoicing and payment functions, IT systems, and primary Illinois distribution center. That included invento…
How can taxpayers check whether an older South Carolina advisory opinion was modified or superseded (per SC IL #16-10)?
Use the citator attached to SC Information Letter #16-10. It helps you determine what effect newer South Carolina advisory opinions have on previously published ones — whether an opinion was modified,…
If a digital marketplace collects and remits Colorado sales tax on its third-party sellers' sales as a 'jointly responsible' retailer, does that relieve the third-party sellers of liability — and are both relieved when a buyer presents an exemption certificate naming the marketplace as seller?
Largely yes. When a marketplace collects and remits Colorado sales tax on its third-party sellers' sales as a 'jointly responsible' retailer (an agent the Department may treat as jointly liable under …
How did Illinois tax equipment leases with a nominal buyout compared with true leases, installation, and other stated charges?
A lease with a dollar or other nominal purchase option was a conditional sale from the outset, so all lessor receipts were subject to Retailers' Occupation Tax. A true lease used no buyout or a fair-m…
Were separately stated shipping and handling charges on an online computer purchase automatically exempt from Illinois sales tax?
No. Separate statement alone did not break the link between sale and delivery. Freight was taxable when the customer had no pickup or qualifying free-delivery option. If a genuine free delivery or pic…
How could a crowdfunding investment qualify for Virginia's Qualified Equity and Subordinated Debt Investments Tax Credit under the 2016 guidelines?
An SEC-authorized crowdfunding investment made through an online solicitation, broker, or funding portal could qualify if it otherwise met Va. Code § 58.1-339.4. The business needed annual Virginia ce…
Did limited religious-group rentals or nonprofit status exempt a Christian camp from Illinois Hotel Operators' Occupation Tax?
Generally no for the described camp. A lodging facility renting exclusively to its own members may not be open to the public, but one renting to members and public groups is treated as public and all …
How did Illinois tax related-company equipment leases, a dental lab's custom dentures, and a dental practice's supplies?
Custom dentures were sales of service; the dentist and lab had to apply the serviceman and multi-service rules. Dentures generally qualified as medical appliances at the 1% State rate, while impressio…
Who owed Illinois tax when a glass contractor permanently installed materials, used subcontractors, and also sold some items over the counter?
The construction contractor was the end user and owed Use Tax on the cost of materials permanently incorporated into Illinois real estate, regardless of lump-sum billing. Customers owed no Use Tax, th…
After an out-of-state buyer restructures the ownership, is a holding company's gain from selling its partnership interest included in Colorado's apportionment factor?
On these facts, no. The gain is business income (the holding company's whole business was buying, holding, and selling the investment), and the company includes its distributive share of the partnersh…
Could a paid family caregiver deduct independent-contractor receipts without an NTTC because the healthcare company said it paid gross receipts tax?
No. Anthony Martinez was an independent contractor paid to care for his grandfather, so his receipts were taxable. The healthcare company refused to issue an NTTC, and Martinez produced no proof that …
Did Section 130.330(c)(3) generally exempt gases consumed in manufacturing, as Illinois GIL ST 99-0296 had stated?
No. IDOR corrected its September 29, 1999 General Information Letter ST 99-0296, which had incorrectly said the rules specifically exempt gases consumed in manufacturing. The correction states that ga…
Did Section 130.330(c)(3) generally exempt gases consumed in manufacturing, as Illinois GIL ST 11-0021 had stated?
No. IDOR corrected its April 1, 2011 General Information Letter ST 11-0021, which had incorrectly said the rules specifically exempt gases consumed in manufacturing. The correction states that gases a…
Did Section 130.330(c)(3) generally exempt gases consumed in manufacturing, as Illinois GIL ST 09-0112 had stated?
No. IDOR corrected its August 31, 2009 General Information Letter ST 09-0112, which had incorrectly said the rules specifically exempt gases consumed in manufacturing. The correction states that gases…
Did Illinois Use Tax apply when a new resident brought in an aircraft titled to an LLC after paying tax in another state?
Yes, and Form RUT-25 was required when the aircraft was titled or registered in Illinois. The exemption for a nonresident individual who used property outside Illinois for at least three months did no…
Did Section 130.330(c)(3) generally exempt gases consumed in manufacturing, as Illinois GIL ST 09-0101 had stated?
No. IDOR corrected its July 31, 2009 General Information Letter ST 09-0101, which had incorrectly said the rules specifically exempt gases consumed in manufacturing. The correction states that gases a…
Could Sonja Foote deduct cattle-breeding losses when seven of the nine federal profit-motive factors weighed against treating the ranch as a business?
No. Land and herd appreciation supported a profit motive, and startup losses were neutral, but seven factors weighed against the cattle operation. Foote showed no business plan, separate bank account,…
Would the Illinois Department of Revenue verify the tax, fee, and procedure information in a private vehicle title-and-registration textbook?
No. IDOR would not approve the accuracy of a private legal publication. It advised the publisher to consult Illinois statutes, administrative rules, and Department publications, said the previously pu…
Does a paid income tax return preparer need a separate Illinois-issued PTIN, and which Illinois tax returns require a PTIN?
No — the PTIN required on Illinois returns is the same Preparer Tax Identification Number already issued by the IRS; Illinois does not issue its own PTIN. Once Department rules take effect for tax yea…
Where did an Illinois distributor source local tax on warehouse walk-ins and sales processed through a separate headquarters office?
Walk-in sales were sourced to the warehouse city because binding the sale, payment and invoicing, and inventory were there. All other Illinois sales were sourced to the Illinois headquarters city afte…
What is South Carolina's tax interest rate for underpayments and overpayments for the period April 1, 2016 through December 31, 2016 (per SC IL #16-9)?
4%. SC Information Letter #16-9 sets South Carolina's interest rate on tax underpayments and overpayments at 4% for the period April 1, 2016 through December 31, 2016. Interest is compounded daily, ex…
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