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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Is a prescription oral appliance custom-fitted to correct snoring and obstructive sleep apnea exempt from Georgia sales tax?
Yes. The custom-fitted oral appliance was a prosthetic device because it was worn in the mouth to support proper jaw movement and breathing and correct a malfunction. Because it was prescription-only …
Could a building owner transfer part of a sustainable building tax credit after she had already claimed portions of the credit herself?
No. Kristin Ericksen could use the sustainable building credit or transfer the document granting it, and she could carry unused credit forward for seven years. But after she had claimed portions herse…
Is a taxable 'asset management' service that monitors oil-and-gas equipment and lets customers view collected data taxable data processing, or an exempt proprietary information or monitoring service?
Taxable, but with a 20% exemption. The Comptroller ruled the asset management service — which collects, stores, and lets a customer retrieve monitoring data from its oil-and-gas equipment — is a taxab…
Does compensation paid to an Illinois National Guard member who is also a dual-status federal military technician qualify for Illinois' military pay subtraction modification?
Yes. The Illinois Department of Revenue concluded that compensation paid to National Guard members employed as dual-status military technicians under 32 U.S.C. §709(a) qualifies for the subtraction mo…
Were a sole proprietor's reimbursed bills, surveying pay, and year-long equipment rentals excluded from New Mexico gross receipts tax?
No. Professional Services Company did not prove it received TKG funds as a disclosed agent or separately billed reimbursements. It also did not prove employee status for surveying work, and $26,567.75…
Are an MLM distributor's annual renewal fee and optional online-business-tools and personal-website fee subject to Georgia sales tax?
No. The annual renewal fee paid for the right to remain an active distributor, resell products, and receive possible discounts and support; the quarterly magazine was incidental. The optional online-s…
Can a partnership subtract, from its Illinois Replacement Tax base, the lifetime payments it makes to a retired partner for engineering services that partner performed before retiring?
Yes. The Illinois Department of Revenue ruled that a partnership's payments to a retired partner under a retirement plan qualify as personal service income under IITA Section 203(d)(2)(H), so the part…
Does a sole proprietor offering CPR and first-aid instruction need a sales-tax Certificate of Authority?
Only if he sells taxable property or services. In-person CPR and first-aid training is not a taxable service. If the training manual is included with the class for no extra charge, it is treated as an…
Did an automated pharmacy machine that counted pills and filled, labeled, and capped bottles qualify for Illinois's manufacturing machinery exemption?
Generally no. The manufacturing exemption required machinery used primarily in a process that substantially and significantly changed existing material into property with a different form, use, or nam…
How can taxpayers check whether an older South Carolina advisory opinion was modified or superseded (per SC IL #16-8)?
Use the citator attached to SC Information Letter #16-8. It helps you determine what effect newer South Carolina advisory opinions have on previously published ones — whether an opinion was modified, …
How did South Carolina Revenue Ruling 16-7 limit corporate net operating losses after an ownership change?
The ruling applied IRC Section 382 to South Carolina pre-change net operating losses. A corporation operating partly outside South Carolina generally apportioned the federal annual Section 382 limit u…
What historical South Carolina use-tax rules did Revenue Ruling 16-6 give individuals, businesses, and nonprofits?
The ruling said South Carolina use tax generally applied when taxable property was bought at retail for use, storage, or consumption in the state and the full South Carolina sales tax was not collecte…
Are customer charges for streaming television, movies, music, and similar content taxable in South Carolina?
Yes. The ruling treated charges for streaming television programs, movies, music, and similar content as taxable South Carolina communication services. The result was the same whether the customer pai…
Was an annual online shopping membership taxable in South Carolina, and was its free one-month trial taxable?
The annual membership fee was taxable because members received taxable streaming audio and video plus member-only discounts and delivery benefits on taxable merchandise, making the fee part of the con…
Did Virginia accept a research-and-development credit application received after April 1 when the envelope had no postmark?
No. An application without a postmark was treated as filed when Virginia received it. Because the Department received the application on April 6, after the April 1 deadline, the denial was upheld.
Does a multi-level marketing company owe sales tax on the annual renewal fee its distributors pay to stay active, and on the fee for its online Dashboard and personal-website tools?
On these facts, neither fee is taxable. The annual renewal fee distributors pay to stay 'active' isn't taxable: the magazine they receive is incidental promotional material (it's also given to custome…
Are advance payments and reservation fees for a short-term car rental subject to Colorado sales tax — including when the customer never shows up — and does it matter whether the payment is refundable?
It depends on whether the payment is refundable and how big it is, by analogy to hotel deposits. Any advance payment that's actually applied to the rental charge is taxable. A NONREFUNDABLE advance pa…
Was an oil-and-gas tax payment timely when the company sent it to the New Mexico Land Office by mistake on the due date?
No. Yates Petroleum electronically sent its $944,935.20 payment to the New Mexico Land Office on the due date, but payment was legally required to reach the Taxation and Revenue Department. The Land O…
New York Advisory Opinion TSB-A-16(6)C: Is an out-of-state real-estate brokerage with no New York office, whose employee worked 26 days in New York on two 2014 sales, doing business and subject to Article 9-A franchise tax?
Yes. A Washington real-estate brokerage with no New York office, whose Connecticut-based employee spent 26 days in New York visiting properties and meeting sellers on two 2014 sales for which it earne…
Is electricity to a detached residential garage taxed as residential or commercial in Kansas?
It is residential usage. The Department agreed that electricity to a separately metered detached garage next to a home — used only to store the owner's personal vehicles, with no business or commercia…
How do Kansas e-cigarette consumable material distributors register, report, and pay the tax?
Kansas Notice 16-06 sets out the registration and reporting requirements for the consumable material tax on electronic cigarettes, which House Bill 2109 (2015) imposed under K.S.A. 79-3399 at $0.20 pe…
When did Kansas start taxing e-cigarette consumable material, and at what rate?
Kansas Notice 16-05 explains that House Bill 2109 (2015) amended K.S.A. 79-3399 to impose a tax on the privilege of selling or dealing in electronic cigarettes by a distributor, at the rate of $0.20 p…
Are fencing materials and services to repair 2016 fire-damaged agricultural fences exempt from Kansas sales tax?
Kansas Notice 16-04 explains that House Substitute for Senate Bill 149 (2016) amended K.S.A. 79-3606d to exempt from Kansas retailers' sales tax the purchase of fencing materials and services during c…
Is a restaurant's tabletop tablet ordering/payment system taxable when the restaurant buys or rents it from a vendor, and are the fees the restaurant charges diners for games, news, and song requests on the tablet taxable?
Two separate answers, and they cut opposite ways. What the restaurant pays its VENDOR for the tabletop POS tablet system (monthly service fees and revenue-share commissions alike) IS subject to Utah s…
Did a Chapter 7 discharge eliminate a sole proprietor's New Mexico gross receipts tax debt when he did not prove timely returns or the federal timing requirements?
No. General Design and Construct abandoned its NTTC arguments at the hearing and relied only on a Chapter 7 discharge. It supplied no evidence addressing the federal timing exceptions and did not prov…
Did Type 5 and Type 6 NTTCs protect retail-store installation receipts when one certificate omitted the seller name and the service provider lacked a contractor license?
Yes, for three customers. Capacity Builders' complete Type 5 certificate supported service-for-resale receipts; an incomplete Type 5 certificate was accepted in good faith after timely submission; and…
Were charges for transporting railroad crews between trains, depots, and hotels within Florida subject to sales tax?
No. Transporting railroad engineers and conductors by motor vehicle between trains, depots, and hotels was a nontaxable transportation service, with no tangible personal property sold.
Could Virginia residents claim a Virginia credit for Maryland tax on commuting wages and have assessment interest waived?
No. Virginia-Maryland reciprocity meant the Virginia residents were not liable for Maryland tax on their commuting wages, so no Virginia credit was allowed. They had to seek any Maryland refund from M…
Could a taxpayer overturn a Virginia residency assessment without providing the domicile records the Department requested?
Not on the existing record. The assessment was presumed correct, and the taxpayer had not supplied the requested domicile evidence. Virginia allowed one final 45-day opportunity to provide documentati…
Could corporate partners apportion Virginia income when their partnership had Ohio nexus, using destination-based sales factors?
Yes. The partnership's Ohio activities exceeded protected solicitation and passed nexus through to its corporate partners. They could amend their returns to apportion income using destination-based sa…
Could a holding company join a Virginia combined return based on commercial domicile or a positive Virginia apportionment factor?
No. The group did not prove that the holding company's affairs were directed from Virginia or that it had a positive Virginia apportionment factor. Its losses could not be attributed entirely to Virgi…
Are prepaid grocery-delivery memberships and separately stated delivery charges taxable in Virginia?
No, under the stated facts. A prepaid delivery service bought separately from groceries was an exempt transportation charge and provided no tangible property. Delivery fees on mixed food and non-food …
Could a Virginia sign seller avoid sales tax on manufactured signs because a Department employee allegedly gave contrary oral advice?
No. Manufactured signs were taxable retail sales, and Virginia could not abate the assessment based on alleged oral advice. The statutory relief required erroneous written Department guidance, which t…
Was a 2016 assessment of 2011-2012 construction receipts timely when the contractor underreported gross receipts tax by more than 25%?
Yes. Kinsey Construction reported far less on its New Mexico CRS returns than on federal Schedule C, with discrepancies exceeding 25% in both 2011 and 2012. That triggered the six-year assessment peri…
Were a hospital lessee's additional tax-equivalent payments part of taxable Florida real-property rent?
Yes. Payments approximating property taxes, fire-district taxes, and special assessments were additional consideration for the right to occupy the leased hospital premises and were taxable as rent.
When did a couple become Virginia residents for taxing a 2012 IRA distribution?
They became Virginia domiciliaries when they closed on their Virginia home in September 2012. Because the IRA distribution came in November, it was attributable to their Virginia-resident period and h…
Did taking a visiting-professor job in another state end a taxpayer's Virginia domicile?
No. The taxpayer showed employment in another state but did not prove a permanent home or other domicile ties there, while retaining a Virginia license, vehicle registrations, and mailing address. Vir…
Did the Servicemembers Civil Relief Act exempt a military spouse's income when the couple did not prove a shared out-of-state domicile?
Not on the record provided. The couple did not prove that both spouses shared the claimed out-of-state domicile or avoided Virginia domicile. Virginia gave them 30 days to provide complete records or …
Did electronically delivered software and cloud subscriptions create Virginia sales tax or corporate income-tax nexus?
The all-electronic software and cloud subscriptions were not subject to Virginia sales tax. Corporate income-tax nexus was conditional: an independent developer merely providing services would not cre…
Are implantable cardiac monitors exempt from Virginia sales tax as durable medical equipment?
Yes, when a monitor is bought by or for a specific patient on a licensed practitioner's prescription or work order and the seller keeps supporting records. Bulk purchases by a medical practice are tax…
Was natural gas used to generate electricity exempt from compensating tax as chemicals bought in 18-ton lots or as a manufacturing ingredient?
No. Natural gas qualified as chemicals or reagents and each invoice exceeded eighteen tons, but Tucson Electric did not prove how the gas was sold and delivered as a discrete 'lot.' Its alternative in…
Did military-spouse status exempt a taxpayer who had established Virginia domicile before the federal protection changed?
No. The taxpayer's pre-2009 resident returns, Virginia home and employment, and 2009 Virginia driver's license supported Virginia domicile. She supplied no documentation proving a shared out-of-state …
Did a federal construction contractor owe consumer use tax on freestanding furniture, audiovisual equipment, and installed cabling?
The audit had to be revised. Freestanding furniture and equipment not affixed to real property could be retailer sales if resale requirements were met. Permanently affixed cabling remained taxable to …
Are custom herbal formulas that a licensed acupuncturist prepares and sells to clients exempt from Colorado sales tax as prescription drugs, nonprescription drugs, or materials furnished by a licensed provider?
They're taxable. Custom herbal formulas an acupuncturist prepares and sells do NOT qualify for Colorado's medical exemptions for prescription drugs, nonprescription drugs, or materials furnished by a …
Does Colorado sales tax apply to charges for a live web seminar, a pre-recorded webinar, and a self-study course delivered over the web?
It splits three ways by how 'live' the instruction is. A charge to attend a LIVE web seminar is NOT taxable — it's a service, because a live instructor is providing educational services. A charge to w…
Is the 'into-plane fee' for transporting aviation fuel from the airport fuel farm to a customer's aircraft subject to Colorado sales tax when the customer buys the fuel from one company but contracts separately with a different fixed-base operator for the fueling service?
No, on these facts. The 'into-plane' fee — for moving fuel from the airport fuel farm into the customer's aircraft — is a nontaxable service here, because the customer buys the taxable fuel from one c…
Was gain from an out-of-state property sale excluded when the taxpayers had already bought a Virginia home and reported moving before the sale?
No. The taxpayers did not prove that their Virginia domicile began after the September 24, 2012 sale. Their August home purchase, time spent in Virginia, vehicle record stating a September 17 move, la…
Could a service member claim Virginia's National Guard pay subtraction without proof of Virginia Guard service?
Not on the existing record. The subtraction applied only to qualifying service in the Virginia National Guard, while the W-2 suggested Department of Defense reserve service. Virginia allowed 30 days t…
Did a retiree living in Virginia for more than 183 days owe Virginia tax on New York retirement income?
Yes. The retiree took steps to abandon New York and establish Virginia domicile, and she also lived in Virginia for more than 183 days. Virginia could tax her retirement income, subject to a possible …
Did renting a District of Columbia apartment establish a new domicile outside Virginia for 2012?
No. Renting a D.C. apartment and later registering to vote there did not prove a permanent D.C. domicile, especially without evidence of a D.C. tax filing and amid an overseas move followed by a retur…
Could Virginia recover a refund after a second return reported higher federal adjusted gross income?
Yes. Virginia properly issued the first refund from the original return, but the second return increased federal adjusted gross income and tax liability. The earlier refund then became an erroneous re…
When did a family that moved for work, schools, and a home purchase become Virginia residents?
Their Virginia residency began in September 2012. By then the husband had permanent Virginia work, the children attended Virginia schools, and the family was staying in Virginia before buying a home. …
Which audit items could a Virginia wholesaler remove using a resale certificate, electronic-delivery evidence, or customer use-tax payments?
Only the resale-certificate sales were removed. The wholesaler accepted a complete certificate in good faith. Its generic vendor email did not prove the specific software was electronically delivered,…
Could a convenience-store owner avoid converted sales- and withholding-tax assessments by disputing the underlying audits?
No, based on the existing record. The owner showed neither that another person was responsible nor that the store audits were wrong, so the assessments were properly converted to him. Virginia allowed…
Were a New Mexico USANA associate's downline sales commissions deductible because the Utah company's underlying product sales lacked New Mexico nexus?
No. USANA products were delivered and consumed in New Mexico, and its local associates and distributors established and maintained the company's market, creating substantial nexus under the law applie…
Could a replacement septic system at an Illinois manufacturing plant qualify for the enterprise-zone building-materials exemption?
Potentially yes, if the septic system was permanently affixed to real estate in an enterprise zone, but IDOR could not decide without more information. For purchases on or after July 1, 2013, the cont…
What Virginia tax interest rates applied during the third quarter of 2016?
Virginia's third-quarter 2016 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 voluntary tip-jar payments to a Santa Fe Plaza street musician subject to New Mexico gross receipts tax?
No. Roark Barron operated Luscous Music as a business and properly paid tax on $10 compact-disc sales, but Plaza listeners had no obligation to pay for his street performances. Their voluntary tip-jar…
Do Kansas fiduciaries filing Form K-41 have to make estimated income tax payments?
No. Fiduciaries filing a Kansas Form K-41 (for a trust or estate) are not required to make estimated income tax payments. As of 2016 the Department's system was not designed to accept them, and volunt…
Did a Type 9 government NTTC exempt DNA and drug-testing services sold to New Mexico's Children, Youth and Families Department?
No. Mobile Blood Services sold laboratory testing services to CYFD, while the Type 9 NTTC CYFD issued covered tangible personal property rather than government purchases of services. The tax and inter…
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