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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What are the required wage and investment levels for Nebraska Advantage Act applications filed on or after January 1, 2016?
This ruling sets the 2016 thresholds. For Nebraska Advantage Act applications filed on or after January 1, 2016, the base average annual wage requirement is $24,711, and the required investment and em…
When a dealer or builder picks up modular home modules at a New York factory, is the sale taxed at the factory's location or at the installation site?
At the factory's location. New York sales tax is a 'destination tax,' but 'destination' means the point where the vendor transfers possession to the buyer (or the buyer's designee) -- not where the go…
What documentation applied when a registered truck-body manufacturer drop-shipped a vehicle to Illinois for an unregistered reseller?
IDOR identified the transaction as the standard drop-shipment pattern and directed the seller to the resale-certificate rules. It did not choose a form or deadline for the seller. It cautioned that Fo…
Did an adult tricycle and electric pedal-assist modification qualify for Illinois' 1% rate for disability modifications to motor vehicles?
No. IDOR said an electric adult tricycle was outside the Illinois Vehicle Code definition of a motor vehicle. Because the reduced rate covered modifications to a qualifying motor vehicle, neither the …
Did Virginia allow a 2009 net operating loss caused by theft to be carried back three years to a 2006 individual return?
Yes. Under the historical federal rule Virginia followed, the portion of an individual's net operating loss arising from casualty or theft had a three-year carryback. Virginia's exception for elected …
Would Virginia suspend 2010 and 2011 assessments while a taxpayer continued contesting the IRS audit that produced the federal adjustments?
No. Virginia used the IRS information then available and would not independently revisit the federal taxable-income determination. The 2010 and 2011 assessments remained due and payable. If the IRS la…
How does Georgia's transportation local-option tax (TSPLOST) apply to a leasing company's motor-vehicle leases, including vehicles that move between counties or leases covering assets in several counties?
TSPLOST applies to motor-vehicle leases only where the vehicle is still subject to sales tax (TAVT not due or not paid, or short rentals of 31 days or fewer), and only to the first $5,000 of lease pay…
Does Georgia tax hotel rooms redeemed with reward points, program reimbursements to hotels, and sales of the reward points themselves?
Hotel reimbursements for reward stays were taxable consideration included in the room's sales price, whether paid out or offset against the hotel's program contributions, with no deduction for those c…
How does Georgia tax a custom sign seller when it sells a sign alone versus installing the sign as a permanent real-property fixture?
A sign-only sale was a taxable retail sale, including delivery charges. When the seller installed a sign so it became part of real property, the seller was a contractor and owed tax on the purchase pr…
Could Christina Evaro use New Mexico's one-year late-payment refund rule after filing her missing 2010 return in 2015 when wage withholding had paid the tax in 2010?
No. Evaro said she mailed a 2010 return claiming $595 in April 2011, but the Department had no record of it; even assuming receipt, she did not challenge the ensuing inaction within 210 days. Her Marc…
Could Irasema Cervantes Pettibone preserve a timely 2008 refund claim after Department inaction when she missed the 210-day challenge deadline because of disability and lack of notice?
No. Pettibone filed her 2008 return and refund claim on December 24, 2012, before the general deadline, but the Department did not act within 120 days and she did not protest or sue by July 21, 2013—t…
When does the brownfield site-preparation credit window close, and do later Phase II construction costs qualify as site preparation costs?
The site-preparation credit may be claimed for up to five tax years after the year the Certificate of Completion (CoC) issued, so a December 2013 CoC means the last year is 2018. Phase II excavation, …
Does a photographer have to charge Colorado sales tax on photos delivered digitally over the Internet rather than as prints?
Yes, taxable. Colorado treats digital photographs as tangible personal property, so a photographer must charge sales tax on them — whether delivered as prints, on a CD/DVD/flash drive, or electronical…
When one company acquires another's assets and workforce, can the buyer claim the seller's Georgia quality jobs tax credit and its carryforward?
No. The buyer (Taxpayer 2) that acquired substantially all of Taxpayer 1's assets and its entire workforce cannot claim Taxpayer 1's quality jobs tax credit or use its carryforward. Unlike some other …
What proof does an Illinois employer need to keep to show that a hired veteran was 'unemployed' for purposes of the Credit for Hiring Qualified Unemployed Veterans?
The Illinois Income Tax Act does not specify any required documentation or proof to establish that a veteran was 'unemployed' under 35 ILCS 5/217.1(b). The Department noted that as evidence of receivi…
Are fees to download and maintain prewritten software taxable in New York, and are per-order fees charged to website vendors taxable?
The software fees are taxable; the per-order vendor fees are not. Charging customers to download prewritten software is a taxable sale of tangible personal property, and the company's 'installation fe…
Is New York sales tax on a car lease due all at once, and can I get a refund if I move the car out of state?
The tax is due all at once, and there's no refund. For a motor-vehicle lease of one year or more, New York charges sales tax at the inception of the lease on the total of all lease payments for the en…
Is a flaxseed Moist Heat Pack for breastfeeding relief exempt from New York sales tax as medical equipment?
Yes -- it's exempt medical equipment. The Moist Heat Pack (a flannel pillow filled with flaxseed that can be heated or cooled and worn against the skin) is designed to treat and help prevent breastfee…
Did a married couple prove that the husband left Virginia before 2013 and the wife changed domicile to another state in April 2013?
Yes. The evidence showed that the husband was domiciled in another state throughout 2013 and spent only about 60 days working in Virginia, while the wife abandoned Virginia and began residing exclusiv…
Did relinquishing a trust instrument's power to substitute assets convert the irrevocable grantor trust into a complex trust without a court order?
Yes. The trust instrument expressly allowed the grantor to relinquish the power to substitute assets by written notice. Exercising that provision was not a modification requiring a court order or bene…
Could a parent restore a subsidiary to its Virginia consolidated return without documenting the subsidiary's Virginia nexus and source income?
Not on the record provided. The auditor removed the subsidiary because it appeared not to have Virginia nexus, and the parent failed to supply requested records showing Virginia-source income or taxab…
Does transferring an aircraft's legal title into an FAA-compliance owner trust trigger Georgia sales or use tax, when the owner keeps beneficial ownership and already paid use tax?
No. The owner moved only bare legal title to a trustee — through a revocable owner trust created solely to satisfy FAA rules for a foreign-controlled company — while keeping every right and obligation…
Were taxpayers entitled to a Virginia refund merely because they filed an amended federal return contesting an IRS audit?
No. Virginia properly assessed 2011 tax from the IRS information after the taxpayers failed to report the federal adjustment, and it would not independently revisit the IRS determination. Their refund…
Who owed Virginia sales or use tax when a retailer sold and installed a modular home, and how did the 2013 regional rates apply?
The retailer that contracted to furnish and install the modular home was the taxable real-property contractor; the resident customer owed no sales tax on the construction-service transaction. Under th…
Are a utility-scale solar facility's electricity sales for resale subject to South Carolina sales tax or electric power tax?
Electricity sold by a utility-scale solar generating facility to an electric utility or cooperative exclusively for resale is a wholesale sale, so South Carolina sales and use tax does not apply. The …
Was a California resident's February 2015 amended Virginia return timely after California changed her 2010 tax liability that same month?
Yes. Although the ordinary three-year period for amending the 2010 Virginia return had expired, Virginia law allowed one year after another state's final tax change. California disallowed its credit i…
When did a Virginia resident working and traveling abroad establish a new foreign domicile during 2012?
The taxpayer remained a Virginia domiciliary resident until August 2012, when he began leasing a home in the foreign country where he had accepted employment. Time spent traveling or temporarily carin…
Did Virginia's recomputation of a taxpayer's retirement-income subtraction produce relief for the paid 2010 assessment?
Yes. Virginia used the available records and W-2-verified contributions to recompute the allowable retirement subtraction. It reduced the paid 2010 assessment and directed a refund with accrued intere…
Could taxpayers defeat Virginia assessments by disagreeing with final IRS audit adjustments to their 2010-2012 federal income?
No. Virginia relied on the IRS's final audit adjustments and would not re-decide whether the taxpayers qualified for federal securities-trader treatment. The 2010-2012 assessments were upheld, but the…
Did a taxpayer prove he was not a Virginia resident in 2011 after ignoring requests for domicile records?
Not yet. The taxpayer said he had lived outside Virginia since 2004, but Virginia records showed later resident returns, an active Virginia driver's license, and financial documents sent to a Virginia…
Did overseas contract work make a husband a Virginia part-year resident when his family home and other domicile ties remained in Virginia?
No. The husband remained a Virginia domiciliary resident while working abroad because he kept a permanent Virginia home with his wife, vehicles and a driver's license there, and presented no evidence …
Did three months of bank statements prove that an out-of-state domiciliary spent too few days in Virginia to be an actual resident in 2010?
No. The taxpayers claimed they spent only 35 days in Virginia, but supplied bank statements for only January through March rather than the full 2010 year. Virginia upheld the presumptively correct ass…
Was a nonprofit hospital's fee for screening, testing, pasteurizing, storing, and distributing donated human milk subject to Virginia retail sales tax?
No. Virginia treated donated human milk as a self-replicating body fluid and the hospital's screening, testing, pasteurization, storage, and distribution fee as a nontaxable processing service. Becaus…
Did the Internet Tax Freedom Act exempt broadband recovery, activation, and early termination fees from Virginia communications sales tax?
No. Virginia treated the broadband recovery, service activation, and early termination fees as taxable communications services because they covered connection, cost recovery, or termination functions.…
Did the Internet Tax Freedom Act exempt broadband recovery, activation, and early termination fees from Virginia communications sales tax?
No. Virginia treated the broadband recovery, service activation, and early termination fees as taxable communications services because they covered connection, cost recovery, or termination functions.…
What audit relief did Virginia grant a food and facilities management company that disputed untaxed sales, purchases, penalties, and a local meals-tax overpayment?
Only limited relief. Virginia removed one sale covered by a customer's direct payment permit and one documented purchase, but kept the other unsupported audit items and denied penalty waiver. The comp…
Could Family Workshop deduct Medicaid counseling payments because an insurer subsidiary acted like a managed-care organization, and were older assessments time-barred?
No deduction applied. Section 7-9-93 expressly excluded services to Medicaid patients from “commercial contract services,” regardless of whether the paying subsidiary was a managed-care provider. Fami…
Did an out-of-state seller owe Florida sales tax when an out-of-state buyer directed common-carrier delivery to its Florida customer?
No. The sale between the out-of-state seller and out-of-state buyer occurred outside Florida's jurisdiction, although the Florida recipient remained responsible for collecting tax on resale or paying …
Could a municipality impose a hotel-like excise tax on nonresident patients of a nonprofit hospital?
IDOR did not decide. Local hotel taxes were generally outside its jurisdiction, so it directed the municipality to its State's Attorney and municipal preemption law. A hospital's sales-tax exemption n…
Could Santa Fe Baking avoid negligence penalties after its office manager omitted 33 months of gross receipts tax while continuing to file and pay withholding tax?
No. Santa Fe Baking's office manager omitted the gross receipts portion of CRS returns for 33 months while continuing to file and pay withholding tax. The AHO held that Department system silence was n…
Could dealership service-loaner vehicles qualify for Illinois' interim-use exemption before retail resale?
Possibly. A dealer-owned vehicle bought for resale could qualify while used as a loaner only if it stayed in sales inventory, remained available for sale, and met the rule's accounting and depreciatio…
Who owed Illinois tax when a financing company paid a contractor to install energy-efficiency equipment and recovered costs through a capital lease?
The installer owed Use Tax on its cost because the LED or HVAC work was a construction contract improving real estate. The financing company could not give a resale certificate and was not technically…
What does SC Revenue Ruling 15-13 say about South Carolina's Debt Setoff and GEAR collection programs?
South Carolina DOR may help governmental claimant agencies collect qualifying debts through Debt Setoff and GEAR. The ruling lists potential actions such as intercepting state income tax refunds or wa…
Can a petroleum terminal operator claim the sales tax exemption on the natural gas it uses to heat customer-owned fuel oils, on the theory that the heating is part of processing (blending) or part of transporting a material extracted from the earth?
Denied, for lack of proof. The Comptroller declined to rule that a petroleum terminal operator's natural gas -- used to heat and keep warm stored fuel oils awaiting transport -- qualifies for either t…
Did a state university's Illinois Telecommunications Excise Tax exemption also exempt its service from the infrastructure maintenance fee?
No. Although qualifying state universities were outside taxable retail telecommunications under the excise-tax law, the Infrastructure Maintenance Fee Act had no state-university exemption. The retail…
Which charges by an indoor rock-climbing gym — memberships, passes, classes, guided climbs, and birthday parties — are subject to Georgia sales tax?
Essentially all of them. Georgia taxes charges for admission to places of amusement and for participation in amusement activities, so the gym's memberships, daily passes, climbing classes, guided outd…
Were cover-crop seeds exempt as a sale for resale when the cover crop was plowed into soil before a later cash crop?
Yes, if the cover crop was plowed into the soil, became part of the next crop, and that next crop was actually sold. The retailer then made a sale for resale and needed a valid Certificate of Resale. …
Were a fuel hauler's rebillings sales for resale when fuel was charged to one customer but delivered to another?
They appeared exempt as sales for resale on the limited facts, but only with proper documentation. The purchaser had to provide a signed Certificate of Resale using its own active registration or resa…
Could Corporate Executive Board replace Virginia's statutory corporate apportionment method with customer billing-address sourcing for its subscription income?
No. The Arlington Circuit Court upheld Virginia's statutory apportionment method for CEB's 2008-2010 income. CEB did not prove the method unconstitutional, inequitable, or grossly distorted, and its p…
How is Georgia sales tax applied to a cellular 'Shared Plan' that bundles taxable voice access with nontaxable data across multiple devices?
The whole lump-sum charge is taxable unless the provider unbundles it. Georgia taxes cellular voice/telephone service but not data, so a single price covering both is fully taxable by default. The pro…
Can a Virginia locality or its economic development authority earn transferable Land Preservation Tax Credits by donating a conservation easement?
No. Virginia concluded that a locality is not a 'taxpayer' under the tax-title definition, and an economic development authority is likewise a governmental political subdivision outside the listed tax…
Could Virginia residents use the special border-state credit for partnership income reported in Maryland, North Carolina, and West Virginia?
No. The special rule applied only to qualifying income from one contiguous state, and in 2012 only North Carolina met the required tax-base condition. The taxpayers' North Carolina partnership income …
Could a nonfiler overturn a 2012 Virginia assessment by claiming domicile in another state but providing no objective evidence?
No. The taxpayer ignored two residency-document requests and provided no objective evidence that he had abandoned Virginia domicile and acquired another one. The best-information assessment remained p…
Were machines that made disposable wax patterns and ceramic molds directly used in manufacturing and subject to a Virginia city's machinery-and-tools tax?
Yes. Virginia found that making wax patterns and ceramic molds was part of the metal producer's manufacturing process because each stage transformed raw materials into a substantially different produc…
How should a door supplier and installer structure and tax lump-sum versus retail-sale-plus-installation contracts?
Contract terms controlled. A nonitemized finished-job contract was generally lump sum, so the contractor paid tax on materials and did not tax the customer. A properly itemized retail-sale-plus-instal…
A company hosts proprietary software and offers it two ways: a subscription where the client logs in and uses the software, and an outsourcing package where the company does the work and the client rarely touches the software. Which charges are subject to Tennessee sales and use tax?
It depends on the package. The Subscription Package — where the client logs in and uses the company's hosted software itself — IS taxable as remotely accessed software (Tenn. Code Ann. § 67-6-231(a)(2…
When does a steel subcontractor collect sales tax, which exemption certificates can it accept, and what's taxable on a taxable job?
A subcontractor does NOT collect sales tax on its charges to a prime contractor when the job is for a Tax Law section 1116(a) exempt organization or is a capital improvement, provided it receives the …
When a real-property lease for a residential facility bundles in furniture, fixtures, and equipment as part of the rent, does the landlord have to charge sales tax on that bundled tangible personal property?
No sales tax is due. The Comptroller ruled that when a landlord leases real property (land, buildings, and improvements) together with furniture, fixtures, and equipment as part of a single rental cha…
Are a cloud DNS-security firm's services taxable in New York, does its data center create nexus, and are its software plug-ins a separate taxable sale?
Yes to nexus and to tax. The firm (and its predecessor LLC) has had New York nexus at least since 2006, when it established a data center here -- physical property in the state is more than a slight p…
Can a cost-reimbursement Army facilities contractor buy property tax-free as purchases for resale?
No. The contractor has a cost-plus contract to operate, maintain, and repair facilities at a New York Army post, buying property in its own name (with title passing to the Army on delivery) and gettin…
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