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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Was a restaurant tabletop device used for ordering, paying, surveys, and optional games a taxable amusement device or redemption machine?
No, based on IDOR's understanding. The device was primarily used to buy food and services, place orders, and pay bills rather than for amusement, and it did not appear to meet the redemption-machine d…
Did Illinois' River Edge Redevelopment Zone building-materials exemption cover mixed-use projects with multifamily rental housing?
Only the commercial portion. The exemption covered materials incorporated into an industrial or commercial project, not a residential project. For a mixed-use development, retailers could claim the ex…
Was an annual software license and support fee subject to Illinois sales tax, and could the customer obtain a refund?
The license was nontaxable only if its signed written terms met all five conditions in 86 Ill. Adm. Code 130.1935(a)(1). Otherwise the canned-software license was taxable, and bundled support was taxa…
What special abandoned-building credit rules did SC Revenue Ruling 15-12 provide for formerly state-owned properties?
Under the historical ruling, a formerly state-owned abandoned building generally had to exceed 50,000 square feet, have been abandoned for more than five years, and have been most recently owned by So…
Can a large utility-scale solar generating facility qualify as a manufacturer for South Carolina sales-tax exemptions?
Yes for the requesting taxpayer's proposed facility. DOR treated the 74.9-megawatt, $100 million solar facility as a manufacturer because it would generate electricity—statutorily treated as tangible …
In a sale-and-leaseback, when do the purchase, the resale to the lessor, and the lease-back get taxed — and does the lease term change the answer?
It depends on the lease term. The lessee's original purchase is a tax-free wholesale (resale) buy only if it really resells to the lessor without using the property first. On the lease-back: if the le…
Does a city's 10-cent disposable bag fee get added into the sales tax base when a customer buys taxable goods?
No. A municipal disposable bag fee (here, 10 cents per bag charged to the customer and collected by the retailer) is not subject to state sales or use tax. The retailer gives the bag away free of char…
Did a general contractor owe Florida sales tax on materials it purchased for a public-works project for a tax-exempt governmental entity?
Yes. The contractor was the purchaser shown on the invoices and paid the vendors, so it owed sales tax on the public-works materials. The governmental entity could not assign its exemption, and no ref…
What South Carolina tax filing and payment relief is available to taxpayers affected by the October 2015 South Carolina floods (per SC IL #15-14)?
SC Information Letter #15-14 grants South Carolina tax filing and payment relief to individuals and businesses affected by the October 2015 South Carolina floods, matching the IRS relief (IR-2015-112)…
Was Brent's HVAC & Plumbing a successor to an owner's failed air-conditioning corporation, and did it owe the corporation's full tax assessment?
Brent's was a successor because essentially all unrepossessed equipment from the failed air-conditioning corporation was transferred outside its ordinary business. But Brent's primarily served homeown…
Could taxpayers restore a 2013 estimated-payment carryover by repeatedly ignoring Virginia's earlier out-of-state credit adjustments?
No. Virginia traced the carryover from 2010 through 2013 and upheld its reductions because the taxpayers kept reclaiming an out-of-state credit the Department had previously adjusted. The 2013 assessm…
Must subcontracted services be considered when a Virginia locality classifies a contractor for BPOL tax?
Yes. BPOL classification generally depends on the goods or services the business offers customers. Because the contractor remained responsible for services performed by subcontractors, those activitie…
Were prepackaged meals exempt when inmates customarily heated them in a microwave after purchase and before eating?
Yes. The prepackaged meals were exempt food because inmates customarily heated them in a microwave after purchase and before consumption, so the meals were not ready for immediate consumption when sol…
Did a three-year foreign job and another state's license, voting, and vehicle records prove that a Virginia domiciliary changed domicile?
No. The taxpayer's three-year foreign assignment was for a definite term, and she showed no permanent intent to remain abroad. Although she obtained another state's license, voter registration, and ve…
Should a taxpayer who moved into Virginia in May 2010 file as a full-year resident after an IRS income adjustment?
No. Virginia found that the taxpayer became domiciled in the state in May 2010 rather than being a full-year resident. He had to file Form 760PY, report income attributable to the Virginia-residence p…
How did Virginia correct overlapping estimated-tax and late-filing penalties on a December 2014 return for 2013?
Virginia found the estimated-tax addition had already been paid with the return, so it should not appear again. But the return was filed in December 2014, making the 30% late-filing penalty proper. Th…
Did an employer's failure to issue a W-2 or withhold enough Virginia tax excuse the employee from filing and paying 2011 income tax?
No. Even if the employer failed to issue a W-2 or withhold Virginia tax, the employee remained responsible for reporting the income, filing the resident return, and paying the full liability. Because …
Was Andrew Winton personally liable for an LLC restaurant's unpaid withholding tax because registrations listed him as an agent, manager, and officer?
No. Although Texas and New Mexico filings listed Winton as an LLC agent, manager, or officer, he did not own or operate the New Mexico restaurant, work there, receive pay, control accounts, handle fin…
Could Elizabeth Brower avoid estimated-tax penalties because her retirement distributions arrived mostly in December and she paid based on income received by each due date?
No. Brower was required to pay estimated personal income tax in installments using the lesser of 90% of current-year tax or 100% of prior-year tax. Although most retirement distributions arrived in De…
Did Virginia have to restore a tuition deduction after the IRS denied it and the taxpayer failed to amend the 2011 Virginia return?
No. Virginia began with federal adjusted gross income, and the IRS transcript showed that the tuition-and-fees deduction had been denied. The taxpayer was required to report that final federal change …
Did a military spouse keep her former-state domicile after moving to Virginia, renting out that home, and obtaining a Virginia driver's license?
No. Virginia found that the spouse did not maintain enough ties to her former state: its home became rental property, vehicles were registered only to the service member, and she obtained and kept a V…
Is a database-access 'interface' to medical records and lab results taxable in Kansas?
Not taxable. The 'interface' — a web-based system that lets physicians and hospitals access patient lab test results over the internet — is a nontaxable 'information' or 'database access service.' Kan…
Which horse-care products were exempt: nonprescription medicines, a glucosamine supplement, fly repellants, or fly-protection sheets and masks?
The nonprescription wormer and ulcer medicine were taxable except for qualifying sales to veterinary clinics or licensed veterinarians. The glucosamine supplement and fly repellants were exempt; the f…
Could Virginia assess a nonfiler from IRS information when the taxpayer claimed some reported income was nontaxable but filed no state return?
Yes. Virginia could use IRS information and other available data to assess a resident who filed no proper 2012 return. The taxpayer's assertion that some income should have been reported as nontaxable…
Could an employee-shareholder deduct loans that became worthless when his S corporation closed?
Yes, on the record before Virginia. A shareholder-employee's loans qualify as business bad debt only if protecting employment, rather than the investment, was the dominant motive. The Department lacke…
What Virginia return was required when a taxpayer moved into the state and established domicile in August 2011?
A part-year return. Virginia found that the taxpayer established domicile when he moved into the state in August 2011, so he was not a full-year resident. He had to file Form 760PY and report income a…
Did a taxpayer prove she was domiciled outside Virginia in 2011 without providing the requested objective records?
Not yet. The taxpayer claimed another-state residence but supplied no objective evidence despite two information requests, while her federal return used a Virginia mailing address. The assessment rema…
Did an apartment-complex statement prove that a taxpayer with a Virginia W-2 address was not a Virginia actual resident in 2013?
No. A Virginia address on the taxpayer's W-2 triggered a request for residency evidence. An apartment-complex statement from State B, without additional proof and against other returns showing nonresi…
Did an initial letter that questioned Virginia sales-tax assessments count as a complete appeal before the 90-day deadline?
No. The initial letter merely questioned the assessments and did not fully identify the alleged errors, supporting facts, requested remedy, or controlling authority. Virginia warned the taxpayer and g…
Could a tire wholesaler accept a valid resale certificate from a dealer not registered for Virginia's tire recycling fee?
Yes. Virginia sales-tax law did not require a tire buyer to be registered for the tire recycling fee before giving a valid resale certificate. Sales supported by complete Form ST-10 certificates had t…
Did moving abroad for a temporary job end a taxpayer's Virginia domicile when he kept major Virginia ties and planned another state later?
No. The taxpayer's foreign job was temporary, he did not intend to remain abroad, and he kept Virginia homes, family, voter registration, vehicles, and a driver's license. He also could not establish …
Did an active-duty service member and spouse have the same Virginia residency result for 2012?
No. The husband maintained another-state domicile through his military legal-residence certificate, driver's license, and voter registration, so his active-duty income was not treated as Virginia resi…
Could a restaurant overturn reconstructed sales-tax liability with revised figures unsupported by daily sales records?
No. The restaurant kept no daily sales logs or register tapes to reconcile its tax returns and alcoholic-beverage reports. Virginia could therefore use the best information available—beverage reports …
An Irish private limited company that owns property in Tennessee will elect to be a disregarded entity for U.S. federal income tax. Will it still be a separate taxpayer for Tennessee franchise and excise tax, or can it be disregarded?
It will be a separate taxpayer — it cannot be disregarded for Tennessee franchise and excise (F&E) tax. Tennessee follows federal entity classification, but with one key exception: a federally disrega…
Are charges for computer-based electronic messaging and data-distribution services subject to Georgia sales and use tax?
No. Georgia taxes services only when they are specifically listed as taxable, and data-distribution and electronic-messaging services are not on that list, so the provider's charges to customers are n…
Are prescription-only dental appliances that correct misaligned teeth exempt from Georgia sales tax when sold to dentists for patients?
Yes. The appliance was worn in a patient's mouth to correct misaligned teeth and could be sold or used only by prescription, so it qualified as an exempt prosthetic device. A dentist could buy it with…
What Virginia tax interest rates applied during the fourth quarter of 2015?
Virginia's fourth-quarter 2015 rates were 5% for tax underpayments and 5% for tax overpayments. The reduced rate for qualifying assessments in administrative appeals was 0%. Certain local delinquency …
Is a hosted IT cost-management service taxable -- as an information service, as software, or both?
It depends on how it's sold. The core 'Line-Item IT Billing' offering is a nontaxable information service: it collects, processes, and reports the customer's own IT-usage data back to that customer. I…
Were commercial kitchen-hood cleaning, hood repairs, and fire-suppression inspection or repair charges subject to Florida sales tax?
Generally no. Hood cleaning, hood inspection and repair, fire-suppression inspection, and fire-suppression parts replacement were nontaxable customer charges. But checking an alarm-panel signal was ta…
Does a Connecticut store have to charge sales tax on bottled kombucha, or is it exempt as a food product?
No — kombucha is not exempt; it is taxable. Because kombucha is a carbonated beverage, it is excluded from Connecticut's sales-tax exemption for food products for human consumption under Conn. Gen. St…
If the federal Internet Tax Freedom Act moratorium expires, will Kansas start taxing internet access charges?
No. Kansas does not tax internet access charges regardless of the federal Internet Tax Freedom Act (ITFA), because Kansas sales tax reaches only 'telecommunication service' and K.S.A. 79-3602(aaa)(6) …
Does a Georgia structural contractor owe use tax on materials fabricated in Georgia for out-of-state erection contracts, and can it recover tax if materials are later sold at retail?
Yes. A contractor owed Georgia sales or use tax on materials delivered to, stored at, or fabricated in its Georgia facility even when later installed into real property outside Georgia. The contractor…
Does Georgia's hotel-motel fee apply when commonly owned rental units are spread among separate buildings with fewer than five units each?
No. The property was made up of separate buildings, each with fewer than five hotel rooms. A connecting open stairwell and roof addition did not make them one building, so neither the overall property…
Can a taxpayer that already claimed Georgia's jobs tax credit for certain jobs later amend its return to claim the quality jobs tax credit using those same jobs?
No. A taxpayer can claim both the jobs tax credit and the quality jobs tax credit, but not for the same jobs. The choice of which credit applies to a given job is made when the taxpayer first claims e…
Can a taxpayer use separate accounting instead of Illinois's statutory apportionment formula just because separate accounting produces a lower or different tax liability?
No. Just like the near-identical companion ruling IT 15-0012-GIL, the Department denied this petition: a taxpayer cannot get permission to use separate accounting merely because it produces a differen…
Can a taxpayer use separate accounting instead of Illinois's statutory apportionment formula just because separate accounting produces a lower or different tax liability?
No. Just like the near-identical companion ruling IT 15-0012-GIL, the Department denied this petition: a taxpayer cannot get permission to use separate accounting merely because it produces a differen…
Can a taxpayer use separate accounting instead of Illinois's statutory apportionment formula just because separate accounting produces a lower or different tax liability?
No. The Department denied the petition: a taxpayer cannot get permission to use separate accounting merely because it produces a different (or more favorable) result than the statutory apportionment f…
Was documentary stamp tax underpaid on a recorded mortgage that allowed unpaid principal to grow to 115% of the original loan amount?
Yes. Documentary stamp tax was due on the maximum debt secured—115% of the original principal—so the recorded mortgage was underpaid. Either borrower or lender remained liable, with interest.
Was a prescription-only, single-use permanent urological implant system sold to hospitals and medical facilities exempt from Florida sales tax?
Yes. The prescription-only urological implant system was a medical device intended for one patient and not reusable, so sales to hospitals and medical facilities were exempt. The seller had to retain …
Were services previously found outside Illinois telecommunications excise tax subject to Retailers' Occupation, Use, or Service Occupation Tax?
Not if the services transferred no tangible personal property. IDOR declined a supplemental PLR but explained that pure services were outside Retailers' Occupation and Use Tax, and Service Occupation …
What is South Carolina's tax interest rate for underpayments and overpayments for the period ending December 31, 2015 (per SC IL #15-13)?
3%. SC Information Letter #15-13 sets South Carolina's interest rate on tax underpayments and overpayments at 3% for the period October 1, 2011 through December 31, 2015. Interest is compounded daily,…
When are Kansas sellers relieved of liability for wrong tax charged because of an error in the state's taxability matrix?
Kansas Notice 15-13 (originally dated July 10, 2015, revised September 14, 2015, and replacing Notice 14-01) sets the Department's policy on taxability-matrix liability relief under K.S.A. 2014 Supp. …
Could an automobile dealership buy gasoline for resale when it filled new vehicles before delivery to customers?
Only to the extent it could prove the gasoline was actually resold. For a bulk tank, the dealer had to allocate resale versus dealership use, issue a resale certificate only for the resale percentage,…
When do customer sites become definite places of business for situsing an IT provider's Virginia BPOL receipts?
Customer sites may become definite places of business when employees work there regularly and continuously for at least 30 days, potentially requiring local licenses and receipt situs there. If the cu…
Could an independent hunting guide deduct payments with an NTTC executed after the 60-day audit deadline when a Department employee failed to respond before time expired?
The deduction failed, but penalty was abated. Burton Buchan was an independent hunting guide, not the outfitter's employee. Flat Landers did not obtain an NTTC by the April 1, 2015 deadline, and the l…
Does a rewards-program operator owe Georgia tax on the tokens it sells to businesses, and on the machines, prizes, and tokens it buys out of state?
The token 'sales' are not taxable, but the out-of-state purchases are. The Department treats the rewards program as a nontaxable service, so the operator does not collect sales tax on the tokens it pr…
Does Georgia tax medical-record copies, electronic delivery, online database access, and related postage charges?
Tangible medical records, including paper or disc copies, were taxable, and postage or handling was taxable with them. Records delivered solely by fax or emailed PDF and charges for online database ac…
Are charges for medical coding, healthcare training and education, and medical-record abstraction subject to Georgia sales tax?
No. Medical coding, training and education, and abstraction were not services specifically identified as taxable under Georgia law. The provider still had to pay sales or use tax on tangible personal …
Can a tissue-distribution business buy its surgical equipment and supplies tax-free as medical exemptions, and is the rent it charges for meeting space taxable?
Mostly taxable here. Colorado's medical-equipment and -supply exemptions apply only when the item is bought pursuant to a prescription or furnished by a licensed provider as part of professional servi…
Was pollution-control equipment exempt from 2013 local tax when it was operating by January 1 but had not yet been certified?
No. The exemption required qualifying equipment to be certified by the Department of Environmental Quality, and the equipment was not certified as of the January 1, 2013 tax day. Virginia upheld that …
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