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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Does a tax-exempt 501(c)(3) non-profit have to pay Illinois income tax or report to the Illinois Department of Revenue when it receives personal donations from Illinois residents?
No. An organization that is exempt from federal income tax and has no unrelated business taxable income is not subject to Illinois income tax, and the Department of Revenue has no role in registering …
What were the significant South Carolina tax-law changes from the 2015 legislative session, as summarized by the Department (per SC IL #15-11)?
SC Information Letter #15-11 is the Department's brief summary of the significant tax and regulatory law changes enacted in South Carolina's 2015 legislative session, organized into categories: (1) in…
Does the same 25-year build-to-suit exempt-contract analysis apply when a Texas charter school's new campus houses two combined school campuses under one lease, rather than a single campus?
Yes. In a same-day companion ruling to a single-campus version, the Comptroller reached the identical result for a charter school's 25-year build-to-suit lease covering a facility that combines TWO sc…
Does a 25-year build-to-suit lease for a Texas charter school's new high school campus qualify as an exempt contract, letting the for-profit landlord's contractors buy construction materials tax-free?
Yes. The Comptroller ruled that a build-to-suit lease under which a for-profit landlord constructs a high school campus to a tax-exempt charter school's specifications, then leases it back for 25 year…
When several co-owners jointly act as landlord under a single 25-year build-to-suit lease for a two-campus charter-school facility, does the § 151.311 construction exemption still apply?
Yes. The Comptroller ruled that a build-to-suit lease and purchase option covering two charter-school campuses, where several parties collectively act as "Landlord" under a single 25-year primary term…
When a single landlord builds one facility housing two charter-school campuses and leases it for 25 years with a purchase option limited to years one through four, does the § 151.311 construction exemption still apply?
Yes. The Comptroller ruled that a single build-to-suit lease covering two charter-school campuses built by one landlord and leased back for a 25-year primary term — with the school's purchase option l…
If a charter school already holds legal title to its land but ground-leases it to a landlord entity for construction financing, then leases back the remodeled/expanded campus, does the § 151.311 construction exemption still apply?
Yes. The Comptroller ruled that a build-to-suit lease qualifies as an EXEMPT CONTRACT under Tax Code § 151.311 even where the charter school itself holds legal title to the land but grants a ground le…
If a charter school's build-to-suit lease runs through a chain of separate holding entities (one created just to shield against environmental liability), does the § 151.311 construction-contract exemption still apply?
Yes. The Comptroller ruled that a build-to-suit lease qualifies as an EXEMPT CONTRACT under Tax Code § 151.311 even though the property sits behind two layers of separate holding entities — a non-qual…
When a charter school relocates a campus by having a for-profit landlord build a new facility and lease it back for 30 years, with an option to buy at any time, does the construction contract qualify as a tax-exempt improvement to realty?
Yes. The Comptroller ruled that a build-to-suit lease under which a for-profit landlord constructs a relocated charter-school campus to the school's specifications, then leases it back for a 30-year p…
When a landlord builds a new high-school campus for a charter school and leases it back for 25 years with a purchase option, does the construction contract qualify as tax-exempt under § 151.311?
Yes. The Comptroller ruled that a build-to-suit lease under which a landlord constructs a new high-school campus to a charter school's specifications and leases it back for a 25-year primary term (wit…
How did Illinois tax steel cable reels and customer reel deposits when the manufacturer retained or transferred ownership?
Ownership controlled. If the manufacturer transferred reel title with the cable, it could buy the reel for resale and the deposit followed the cable sale's tax treatment. If it retained title and reus…
Can a corporation subtract a refund of out-of-state taxes from its federal taxable income when computing Illinois base income?
No. Illinois law does not provide any subtraction modification for a refund of state or local taxes included in a corporation's federal taxable income, even if the refund relates to years before the c…
How did Illinois tax a motor vehicle bought by a lessor for a lease longer than one year, and who could claim a refund?
Illinois taxed the vehicle sale to the lessor at the dealer-location rate, not the long-term lease. The lessee's repayment of that cost arose from the lease contract. For qualifying post-2014 leases, …
Did Illinois Watercraft Use Tax apply to a private-party boat purchase, and could IDOR remove a late-payment penalty?
Yes, Watercraft Use Tax applied even though an ordinary occasional sale might avoid sales and use tax; that law had no occasional-sale exemption. Only the Board of Appeals could waive penalty or inter…
Did an Illinois nonprofit exemption number exempt a church from utility excise taxes, local utility taxes, fees, and bill adjustments?
No. An Illinois E number documented exemption from Use Tax on qualifying purchases made for the church's organizational purpose. It did not exempt Electricity Excise Tax, Gas Revenue Tax, or other uti…
Does a same-day checkout and check-in on day 30 restart Georgia's hotel-motel fee when the guest never stops occupying the room?
No. A same-day checkout and check-in did not interrupt continuous occupancy when the same guest remained in the room and it was never released to another customer. The rental became an extended stay o…
Were hosted customer-management, inventory, antivirus, firewall, and reporting solutions subject to Illinois sales or service tax?
They appeared to be service transactions and generally avoided Illinois retail, use, and service taxes when no tangible property or canned software was transferred. Hardcopy reports could create servi…
Could a federal real-property contractor buy freestanding office furniture for resale tax-free and recover use tax paid on it?
Yes. Freestanding furniture, fixtures, and equipment that remained unattached to the buildings could be purchased with Form ST-10 for resale and then sold tax-free to the federal agency. Virginia orde…
Why did Jacksonville, Illinois restaurants charge different sales-tax rates, and what was the 2015 rate on general merchandise?
Rates varied by item, jurisdiction, and effective date. IDOR said Jacksonville's general-merchandise rate was 7% before July 1, 2015 and 8% afterward, when a 1% County School Facility Tax was added to…
Must an Illinois caterer tax separately billed equipment, labor, setup, and delivery, and how are cleaning supplies treated?
Yes. A caterer's taxable gross receipts included food-related charges for linens, tables, chairs, dishes, flowers, labor, setup, and delivery even when separately billed. Truly separate non-food enter…
What did Illinois report in its 2015 survey response about advertising, nexus, tax rates, and local sales taxes?
IDOR declined the survey format but supplied a historical overview under 2015 law. Advertising without transferred property generally escaped retail, use, and service taxes; Illinois presence could cr…
Could a Virginia county apply the local definite place of business's payroll factor to known gross receipts from business conducted in another state when calculating the BPOL out-of-state deduction?
Yes, if the data are suitable. When actual gross receipts from business conducted in another state are available, the Virginia definite place of business's payroll factor may be applied to that amount…
How should a Virginia locality calculate the BPOL out-of-state deduction when payroll apportionment is used?
When payroll apportionment is necessary, the locality may apply the Virginia payroll factor to reliable gross receipts from business conducted in a state where the taxpayer owes an income-based tax. T…
Did a Treasury Offset Program notice restart Virginia's 90-day appeal period, and was a citizen's domestic income exempt from Virginia tax?
No. The 90-day appeal period ran from the June 2014 assessment, not the later Treasury Offset Program notice, so the April 2015 appeal was untimely. The assessment remained due, and Virginia rejected …
Could parents deduct contributions to Virginia 529 accounts when the money came from their children's irrevocable UGMA or UTMA custodial accounts?
No. Although the husband was listed as owner of the Virginia 529 accounts, the contributed money belonged to the children because it came from their irrevocable UGMA or UTMA accounts. The parents ther…
Did paying by the original due date preserve Virginia's six-month extension when the original 2010 return was filed after the extended deadline?
No. A valid extension required both timely estimated payment and filing the original return within the six-month extended period. Because the return was filed after that period, Virginia treated the e…
Could a Virginia corporation exclude wages of employees working solely overseas from its payroll-factor numerator by substituting wages subject to Virginia income-tax withholding?
Not by using withholding wages as a substitute. Wages reported to the Virginia Employment Commission were strongly presumed to belong in the Virginia payroll numerator, but the presumption was rebutta…
Did Foreign Service assignments and an intent to retire in another state end a couple's established Virginia domicile for 2010?
No. The couple established Virginia domicile before the overseas assignments, which were temporary. An intention to retire in another state and withholding there did not establish domicile without ren…
Could taxpayers who moved into Virginia in July 2011 claim itemized deductions on a full-year resident return?
They had to use a part-year return. Because the couple moved into Virginia in July 2011, they were taxable as residents only for the Virginia portion of the year and could claim itemized deductions pa…
Could Virginia extend the three-year deadline for sales-tax refunds voluntarily overpaid from February 2008 through March 2012?
No. The latest disputed period's three-year refund deadline expired before the taxpayer's May 2015 request. Virginia law authorized refunds only through a timely amended return and provided no applica…
Could Virginia estimate a grocery store and café's taxable sales from incomplete records, and did the estimate support penalty and interest?
Yes, Virginia could estimate the sales-tax liability because the grocery store and café kept incomplete records and did not prove the methodology wrong. But the estimate did not prove tax was actually…
Which of a data-center colocation provider's charges -- space, power, cabling/bandwidth, tech support -- are subject to New York sales tax?
It varies by charge. (1) Space -- charges for rack, cabinet, cage, or suite space where the customer puts its own servers and has 24/7 access are nontaxable as a lease of real property (security ID ch…
A charter school's build-to-suit lease was amended to stretch its term from 20 to 25 years shortly before the ruling request -- does that longer, amended term satisfy the § 151.311 two-prong exemption test?
Yes. The Comptroller ruled that a charter school's build-to-suit lease — which the parties AMENDED on June 12, 2015 to increase its term from 20 years to 25 years — qualifies as an EXEMPT CONTRACT und…
Did Virginia reverse the remand of BPOL and machinery-and-tools assessments when records did not show which of several entities performed each activity at one business location?
No. Virginia affirmed the remand to the city because the records did not identify which legal entity conducted each activity at the shared business location. The taxpayers had to provide enough docume…
How does Virginia BPOL tax treat a telecommunications company's data-transmission revenue, and does the long-distance-call exclusion cover electronic document exchanges or interstate local calls?
Data-transmission revenue is gross receipts whether the provider is a statutory telephone company or a business-service company, but the local BPOL situs rules differ. Electronic Data Interchange docu…
Was an HVAC distributor a BPOL retail merchant because contractors consumed many purchased parts while performing services, or was it a wholesaler?
Virginia classified the distributor as a wholesale merchant. Its contractor, government, and industrial customers bought goods for business use, the HVAC contractors likely used them in a productive p…
Could a taxpayer who moved to Virginia in March claim an out-of-state tax credit on a full-year resident return without submitting the other state's return?
Not as filed. A March mover should file Virginia Form 760PY and report only income received while a Virginia resident, attaching the other state's return to support any credit. The credit cannot cover…
Could a taxpayer who moved to Virginia in November overturn a 2011 income-tax assessment merely by saying he worked in Virginia for only two weeks?
No. The taxpayer admitted moving to Virginia in November and had Virginia-source income, but provided no objective evidence or return showing the correct 2011 liability. Virginia gave him 60 days to f…
Did one Virginia-resident co-trustee make a Pennsylvania testamentary trust a Virginia resident trust when that trustee could not act alone?
Not by itself. Because the Virginia co-trustee could act only with at least one nonresident co-trustee, that person's residency alone did not make the trust administered in Virginia if the trustee gro…
Were Medicaid room-and-board payments excluded from Star Hospice's gross receipts when it passed the funds to nursing homes that actually provided the room and board?
No exclusion applied. Medicaid paid Star Hospice 95% of the nursing-facility room-and-board rate, and Star contractually paid the homes 100%. Although the homes provided room and board, Star's contrac…
Could a parent company stop filing consolidated Florida corporate income-tax returns after major changes in its business circumstances?
Yes. Major changes in supply, administration, customers, acquisitions, products, and business focus established good cause to discontinue consolidated filing, subject to five stated conditions.
Can a Kansas resident's credit for taxes paid to another state include local income or earnings taxes?
Kansas Notice 15-15 (August 10, 2015) explains that, following the U.S. Supreme Court's May 18, 2015 decision in Maryland v. Wynne, the Kansas Department of Revenue will allow the credit for taxes pai…
Does Georgia's hotel-motel fee apply to free-standing vacation homes rented as whole accommodations in a resort development?
No. The resort consisted of separate free-standing homes, and each home was rented as one accommodation with all bedrooms available to the guest. The development was not one building with five hotel r…
Could an Illinois resident subtract a qualified profit-sharing-plan distribution from Illinois income when converting it to a Roth IRA?
Yes, if the plan was a qualified profit-sharing plan under IRC Section 401(a). The Department said its distributions would be included in federal adjusted gross income under IRC Section 402(a) or (c) …
Was New Mexico's 2015 assessment of Floyd and Anna Rivera's 2010 return timely when they omitted most of the required state-and-local-tax itemized-deduction addback?
Yes. The Riveras claimed $11,700 of state and local taxes on federal Schedule A but entered only $2,160 on New Mexico PIT-1 line 8, understating New Mexico base income by $9,540. With two smaller erro…
What historical rules did SC Revenue Ruling 15-11 give for purchases by government employees, diplomats, and nonprofit employees?
Under this superseded ruling, a federal employee's official purchase was exempt only when the federal government was the purchaser through direct billing, a centrally billed card, or a federal check; …
Are printed, media-delivered, or electronically delivered photographs taxable in South Carolina, and what charges enter the tax base?
Printed photographs and photos delivered on videotape, CD, DVD, or flash drive were taxable tangible personal property, even when the customer supplied the media. Email attachments and website downloa…
Could a Florida wholesaler obtain a fuel-tax refund for undyed B99 biodiesel intentionally blended with dyed diesel fuel for resale?
Conditionally yes. A refund could apply only when at least 80% of the blend was diesel dyed at a terminal and the balance was biodiesel or another product that was not diesel fuel or kerosene, with re…
What corrections did Illinois provide for a 2015 survey on vehicle trade-ins, private sales, and long-term leases?
IDOR would not approve another agency's publication but said its Illinois chart generally appeared correct. It clarified that retail trade-ins could reduce taxable price, while qualifying long-term-le…
How did Illinois service taxes apply when a business printed and distributed advertising door hangers?
IDOR could not give a transaction-specific answer without the contracts and registration facts. It treated the arrangement as a service transaction that could require Service Use Tax collection or Use…
Could Saiz Trucking deduct dirt, gravel, hauling, and grading receipts from Albuquerque park projects as government sales, and which audit periods remained timely?
The City receipts were taxable because Saiz provided and installed dirt and gravel while building or altering parks, ballfields, and similar facilities. Government sales of tangible property could be …
Under Illinois law described in 2015, how were motor-vehicle sales and leases longer than one year taxed?
A vehicle sale used the tax rate imposed where the retailer made the sale. For a lease longer than one year, Illinois did not tax the lease receipts under Department-administered taxes; the lessor was…
Is diesel exhaust fluid exempt from Kansas sales tax when sold to interstate carriers?
Exempt only for interstate carriers. Diesel exhaust fluid (DEF) sold to an interstate common carrier — a public utility — for consumption or movement directly and immediately in interstate commerce co…
Is audiovisual equipment a 'construction and building material,' and can a contractor buying it for a tax-exempt project use the contractor's exemption certificate?
Generally no. Audiovisual equipment usually isn't a 'construction and building material' (it's removable, not a fixture), so the Department would treat an A/V installer as a retailer reselling the equ…
Are organic blended fruit-and-vegetable juice drinks taxable, and does selling them with an insulating bag for one price make the charge taxable?
No to both. The cold juice drinks are made from organic fruits and vegetables plus water (blended, not juiced, so the fiber is retained), with nothing else added. They qualify as exempt 'food and food…
Were a retailer's sales to diplomats exempt when its transaction records lacked exemption-card numbers, and could a diplomat pay with another person's card?
The audited sales were removed because later documentation proved they were made to diplomats, despite the missing exemption-card numbers. For future sales, the retailer had to record the card number …
Which manufacturing purchases, contractor charges, and services could be removed from a Virginia use-tax audit, and was the second-audit penalty waived?
Virginia removed documented items used directly in manufacturing, qualifying contractor work, hauling, HVAC maintenance, and a purchase credit, but kept taxable or unsupported items and allowed 30 day…
How should a propane (LPG) distributor report purchases and sales—gross gallons or net gallons—when suppliers don't give it the data to compute gross gallons?
Colorado's LPG excise tax is imposed per gross gallon, but House Bill 15-1228 (2015) changes reporting to a net-gallon basis effective January 1, 2016. Because the legislature signaled a preference fo…
Could Bed Bath & Beyond refile a penalty-refund claim after the Department mailed its first denial to the wrong internal department, and did its electronic-payment mistake justify a refund?
Bed Bath & Beyond could refile because the first denial was sent “ATTN Payro” even after it told the Department to use its Tax Department and named a refund contact; the misaddressed notice was ineffe…
Were James Szenasi's resale NTTCs timely when he received the audit letter on its printed deadline after an unexpectedly extended trip and obtained certificates days later?
Yes. Szenasi arranged a mail hold before traveling, unexpectedly extended his trip for a Washington course, returned August 25, and collected the audit letter on August 26—the deadline printed in it. …
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