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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Do owners who rent out South Carolina vacation properties through 'rent by owner' websites owe sales and accommodations tax (per SC IL #15-4)?
Yes. SC Information Letter #15-4 reminds owners who rent South Carolina vacation properties — including through 'rent by owner' vacation rental websites — that furnishing sleeping accommodations to tr…
Did exchange memberships, SIPC-protected broker cash, and broker receivables count toward Illinois's 90% investment-partnership asset test?
Exchange seats or memberships did not qualify: they were neither listed investment securities nor office space or equipment, even if necessary to trading. The GIL treated SIPC-protected currency accou…
Is the annual fee for an internet retailer's shopping membership program (free shipping, streaming, e-book borrowing, member discounts) subject to NY sales tax?
Yes, the annual membership fee is taxable. A payment for the right to buy taxable goods at a discounted price -- or to get discounted delivery on taxable goods -- later is itself subject to sales tax,…
Could Covenant use New Mexico NOLs from subsidiaries' prior separate returns after switching to a combined unitary return, or retroactively switch back?
No NOL deduction or retroactive switch was allowed. New Mexico base income added back the federal Section 172 deduction, and Section 7-2A-2(H) did not authorize a combined group to use losses establis…
Are a healthcare-standards group's subscription Rapid Recall Exchange and Healthcare Registry internet services subject to NY sales tax?
Yes -- both subscription database services are taxable information services, though the separately sold ID codes are not. Furnishing information -- collecting, compiling, or analyzing information and …
If only one membership class of a social or athletic club has dues over $10 a year, must the club charge sales tax on all the other classes' dues too?
Yes -- because the club's class A members are active annual members paying dues well over $10 a year, the dues tax applies to the club, and once it applies the club must collect it on the dues, assess…
Are a fitness-training gym's membership and per-visit fees subject to New York State sales tax or New York City local tax?
Not State sales tax, but yes NYC local tax. The gym (a functional-fitness training affiliate with coaches and specialized equipment) charges membership or per-visit fees to use its facilities. These f…
Can a New York resident who made post-tax contributions to a Keogh Plan years ago, and later rolled that account into an IRA, exclude the return of those already-taxed contributions from New York taxable income once required minimum distributions begin?
No - Article 22 of the Tax Law contains no provision letting a resident subtract post-tax Keogh Plan contributions from federal gross income when the rolled-over IRA is later distributed. However, Tax…
Must a firm that writes radio news advertorials and places them on stations charge sales tax when it emails the client an MP3 copy?
No. The sales of the news advertorials are not subject to sales tax because the firm is providing nontaxable advertising services. The firm writes radio 'news advertorials' (financial-market-style ads…
New York Advisory Opinion TSB-A-15(1)C: Is an Internet access provider subject to the Tax Law section 184 additional franchise tax when it sells Internet access alone or bundled with VoIP?
No. The provider is not subject to the Tax Law section 184 additional franchise tax, because Internet access is not a telephone or transmission business under Tax Law section 179, and the provider's l…
Could a corporation exclude a large sale of Florida business real property from its corporate income-tax sales factor?
No. The alternative-apportionment request was late, and the corporation did not prove that the standard formula represented its Florida tax base unreasonably or arbitrarily. The sale proceeds had to r…
What productions, expenses, payroll, and application steps qualified for Virginia's Motion Picture Production Tax Credit under the 2015 guidelines?
Under these historical guidelines, an eligible production generally needed at least $250,000 of qualifying Virginia expenses. The refundable base credit was 15%, or 20% in a designated distressed area…
A retailer sells a custom home-improvement product that rests on the floor and is secured to walls only by small anti-tip brackets or finishing nails, then assembles and installs it at the customer's location. Are the sale and installation subject to Tennessee sales and use tax?
Yes. The sale and installation of the product are subject to Tennessee sales and use tax because the product remains tangible personal property after it is installed. Installing tangible personal prop…
Does a clinical laboratory's testing of pharmaceutical drug-trial samples qualify as exempt research and development, exempting its equipment and utility purchases?
Yes, the drug-trial testing is exempt research and development -- but not everything the lab buys qualifies. The lab tests clinical-trial samples to determine the safety and efficacy of new drugs (and…
Is a software maintenance and support contract taxable when it entitles the customer to upgraded versions of prewritten software?
Yes -- if the upgraded software is prewritten software, the whole contract is taxable unless the support and upgrade charges are separately stated. Selling prewritten computer software (including prew…
Must a tax-exempt 501(c)(3) library-support group collect sales tax on its semi-annual used-book sales?
Yes. The semi-annual book sales are taxable because the organization is operating a 'shop or store.' Although the group is an IRS 501(c)(3) and holds a New York Exempt Organization Certificate, the ex…
For a retail merchandising agency's in-store marketing services, which are taxable, and is the whole charge taxable if some services are?
Only the installation work is taxable; itemizing lets you tax just that. Installing signs and assembling mannequins are taxable services of installing or servicing tangible personal property under Tax…
Is a pension from the World Bank (International Bank for Reconstruction and Development) exempt from New York personal income tax as a pension from a U.S. government instrumentality?
No. The Department concluded the World Bank is not an instrumentality of the United States, so a World Bank pension doesn't qualify for the Tax Law § 612(c)(3)(ii) subtraction available for pensions o…
Are receipts from renting self-serve mini-storage units subject to NY sales tax as a storage service, or are they a nontaxable real-property lease?
They're a nontaxable lease of real property, not a taxable storage service. Tax Law section 1105(c)(4) taxes storage services, but the essence of a taxable storage service is that the owner relinquish…
Are an online provider's legal-document services (wills, entity formation, registered agent, trademarks, legal plans) subject to NY sales tax?
No -- none of these services is subject to sales tax, because each one's primary function is producing documents or providing a legal or agent service, not furnishing information, and legal and regist…
Were a municipality's leases of unlit dark fiber subject to Florida communications services tax or sales tax?
The unlit dark fiber was not a communications service, so its lease was not subject to communications services tax. Sales tax depended on whether the real-property lease met the utility-use exemption …
Could an Illinois copy shop charge tax on paper copies even though copying was a service?
Yes, potentially. Illinois treated copying as a service, but paper transferred to the customer could create Service Occupation and corresponding Service Use Tax. Depending on the shop's method and de …
How did Illinois tax paper and electronic medical records, coding, training, abstraction, SaaS storage, and shipping?
The activities appeared to be services. Electronic records and services transferring no tangible property generally avoided retail, use, and service taxes; hardcopy records could create service-tax li…
What did Illinois report in a 2015 survey about nexus, software, digital goods, services, and drop shipments?
IDOR declined yes-or-no nexus answers and gave historical 2015 guidance. Physical presence through agents or representatives could create collection duties; affiliate and tracked-referral rules used $…
Did a charitable lessee's Illinois E-number exempt a lessor from Use Tax or cancel a contractual tax reimbursement?
Generally no. In a true lease, the lessor remained the end user and owed Use Tax on cost despite the lessee's E-number, subject to narrow hospital-equipment exceptions. Illinois did not tax rental rec…
Were an online retailer's mandatory shipping-and-handling fees taxable, and could it allocate fees between taxable and exempt items?
Yes. Customers had to choose shipping and could not pick up at the fulfillment centers, so shipping and handling were inseparably linked to taxable merchandise and entered taxable gross receipts. For …
What is South Carolina's tax interest rate for underpayments and overpayments for the period ending June 30, 2015 (per SC IL #15-2)?
3%. SC Information Letter #15-2 sets South Carolina's interest rate on tax underpayments and overpayments at 3% for the period October 1, 2011 through June 30, 2015. Interest is compounded daily, exce…
Was an out-of-state trust a Virginia resident trust after its family moved to Virginia, and could LLC income still create Virginia tax?
The trust was not a Virginia resident trust after the Virginia-resident trustee resigned on December 26, 2013, but that did not eliminate Virginia tax exposure. Depending on whether it remained a gran…
Did a federal filing extension preserve a Virginia refund when the original 2010 state return was not filed until September 2014?
No. A federal extension did not establish a Virginia extension, and filing the original state return after the extended due date negated the state election. The refund period reverted to the May 2, 20…
Were fees to reactivate disconnected Internet service subject to Virginia communications sales tax despite the Internet-access exemption?
Yes. Internet access itself was excluded from the tax, but reactivating disconnected service was a taxable connection or reconnection of communications service. The charge was not an exempt incidental…
Was a hospital's one-time sale of laboratory equipment exempt as an occasional sale even though the hospital was registered for other retail sales?
Yes. The hospital's sales-tax registration covered its cafeteria and gift shop, not the laboratory assets, so the one-time equipment sale qualified as an occasional sale. A refund was due only after t…
Could a restaurant replace Virginia's reconstructed alcoholic-beverage sales audit with bank-based reports that ABC had not yet verified?
Not yet. Virginia could use ABC reports to reconstruct sales because the restaurant lacked adequate daily records. It would accept revised bank-based MBAR figures only after ABC verified them within 6…
Could a mobile repair business overturn an estimated Virginia sales-tax audit when its records were stolen and it supplied no proof of exempt services or sales?
No. With no returns or sales records, Virginia could estimate taxable sales from ticket books, bank statements, corporate returns, and prior audit data. Unsupported claims about exempt services did no…
Is a tumor-treating-fields cancer-treatment device, with its supplies and replacement parts, exempt from NY sales tax as medical equipment?
Yes -- the device, its supplies, and replacement parts are exempt medical equipment when the patient is the buyer. The device produces alternating electrical fields, applied through scalp electrodes, …
New York Advisory Opinion TSB-A-15(2)C: Is a corporation dissolved by proclamation that merely holds title to land as an inactive nominee still subject to Article 9-A franchise tax after dissolution?
The corporation was subject to Article 9-A franchise tax from its incorporation through its dissolution by proclamation, but not after dissolution, because afterward it merely held title to land as an…
Is reformatting electronic data and transmitting it to third parties taxable, and must a mailing-list vendor collect tax from a customer who resells the information?
Reformatting and transmitting data isn't taxable; selling mailing-list information is a taxable information service, exempt only when bought for resale. The combined service of changing the format of …
What Virginia tax interest rates applied during the second quarter of 2015?
Virginia's second-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 …
Was Use Tax due on leased computer servers placed in an Illinois data center for cloud-hosting customers outside Illinois?
The servers were taxable tangible personal property. IDOR could not classify the lease without its contracts. If it was a true lease, the lessor owed Use Tax on server cost and rental receipts were un…
How did Illinois tax HVAC retrofit hardware bundled with cloud monitoring and a SaaS subscription?
IDOR did not decide the four proposed scenarios. Hardware delivered in Illinois was taxable unless resale or another exemption was documented. Online data access appeared to be a service, and electron…
Could an Illinois non-home-rule village's voter-approved municipal sales tax apply to boats and automobiles?
No. The taxable base was set by statute, and the Non-Home Rule Municipal Retailers' Occupation Tax excluded property titled and registered by an Illinois agency, including boats and automobiles. The s…
How did Illinois tax game access codes, downloadable software, subscription or points cards, and online content?
Cards or coupons redeemable for property were generally intangible when sold, with tax arising when property was redeemed. Ordinary electronically transferred data was intangible, but downloaded canne…
Is a telecommunications carrier protected from the section 186-e excise tax if it accepts a resale certificate from a foreign carrier that has no certificate-of-authority number?
No. A section 186-e resale certificate (Form CT-120) is not properly completed without the purchaser's certificate of authority (COA) number, so it cannot rebut the presumption that the sale is taxabl…
Is a company providing temporary housing to students and interns in a former dorm operating a taxable 'hotel' for NY sales tax?
No. The accommodations don't qualify as a hotel, so the room charges aren't subject to State or local sales tax. The company rents rooms in a former college residence hall only to enrolled students or…
I hold an oil and gas lease on New York real property, and I'm extending its primary term by paying my lessor an additional sum, per an option clause in the lease. I want to record an affidavit documenting that extension with the county clerk. Do I have to complete and file Form TP-584 (the Real Estate Transfer Tax return), including Schedule B, to record that affidavit?
Yes. Extending an oil and gas lease's primary term -- even under an option clause already written into the original lease -- is itself an additional conveyance of an interest in real property, so Form…
Which video-game access codes and stored-value cards must a Kansas retailer charge sales tax on?
It depends on whether the customer ends up with downloadable prewritten software. A retailer's sales of access codes and stored-value cards for video-game content break down this way: codes for downlo…
Does Colorado's low-emitting heavy-vehicle exemption carry through to a long-term lease, and who is the 'dealer' that completes Form DR 1369?
Yes. Because a long-term lease (over three years) is treated as a sale, the low-emitting heavy-vehicle exemption flows through to the lease payments. The 'dealer' for Form DR 1369 is whoever sells or …
Were band-performance payments taxable to John Widell when he received the checks and distributed all of the money to other musicians?
Yes. John Widell operated Broomdust Caravan as a sole proprietor, gave the bars his Social Security number, received and cashed their checks, and then paid the other musicians. Even though he kept non…
Could New Mexico sustain a gross receipts tax assessment against Mariah Ranch when the disputed receipts were outside the assessed period or belonged to Lawrence Burke personally?
No. The decision abated the entire assessment. It held that $525,046 attributed to Lawrence Burke was received outside the period stated in the assessment, leaving no jurisdiction to decide those rece…
How should a city resolve BPOL and machinery-and-tools liabilities when it classified the taxpayer as a manufacturer but both sides lacked complete records?
Virginia remanded the case. The city had to credit every payment the taxpayer could verify, while the taxpayer had to provide records separating the activities and receipts of multiple entities. If an…
Could taxpayers carry a 2010 overpayment into 2011 when their original 2010 return was filed after Virginia's refund deadline?
No. The same three-year limitation that barred a cash refund also barred carrying the overpayment forward. Because the original 2010 return was filed in June 2014, after the May 2, 2014 deadline state…
Did returning to Virginia for about two weeks within six months of moving away prevent a taxpayer from proving a domicile change?
No. Although returning to Virginia within six months was prima facie evidence that the taxpayer had not abandoned Virginia domicile, the full record showed a genuine move from State B to State A. Virg…
Could taxpayers use Virginia's Historic Rehabilitation Tax Credit subtraction to restore a partnership-interest loss disallowed by the IRS?
No. Virginia's subtraction applied to gain or income recognized from allocating or applying Historic Rehabilitation Tax Credits, not to a loss on selling a partnership interest that the IRS disallowed…
Could taxpayers apply a January 2012 estimated payment to 2012 after it had already been credited and claimed for 2011?
No. Local and Department records showed that the January 2012 payment was applied to 2011 under the estimated-tax schedule and the taxpayers claimed it on their 2011 return. It could not also be credi…
Could an employer reduce estimated Virginia withholding assessments by filing its annual return and supplying W-2 and payroll records?
Yes. Virginia abated the 2009 estimated assessment after finding that an annual return had been filed, and it returned the 2010 and 2011 assessments for adjustment because the employer's W-2 forms and…
Did a taxpayer prove that computer-controlled medication management systems had to be classified as computer equipment for local BTPP tax?
No. The systems combined computers and peripherals with medication drawers and shelving, and the taxpayer did not prove the computer components could be reprogrammed and used separately. The county's …
Were a data center's fixed monthly circuit-access fees subject to Florida gross receipts tax on electricity?
No gross receipts tax applied because the data center was not an electric distribution company and charged by circuit rather than electricity used. The fees were instead taxable consideration for lice…
Did a business owner prove that a city's BPOL and BTPP assessments were wrong based on separate businesses, contracting, out-of-state work, and property value?
Only in part. The taxpayer did not document separate businesses, contractor work, excluded insurance proceeds, or eligibility for an out-of-state BPOL deduction, so the BPOL assessments were upheld. T…
Could Virginia excuse a refund claim filed several weeks after the three-year deadline because the taxpayer was traveling and unfamiliar with the law?
No. The original 2010 return was filed in June 2014, after the May 2, 2014 refund deadline stated in the ruling. Va. Code § 58.1-499 D gave the Department no discretion to excuse the late filing based…
Did a military spouse prove that she retained another state's domicile and qualified for relief from Virginia income tax for 2011?
No. The taxpayer did not prove that she retained the same out-of-state domicile as her military spouse. Living and working in Virginia, registering her vehicle there, and obtaining a Virginia driver's…
Could taxpayers avoid Virginia assessments based on final IRS changes merely because they were still contesting the federal audit?
No. Virginia does not look behind the IRS's final determination and could assess the unreported federal changes at any time because the taxpayers did not file amended Virginia returns. If the IRS late…
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