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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Did a federally taxable annuity death benefit qualify for Virginia's subtraction when the payment came from a retirement plan?
No. Virginia's subtraction was intended for qualifying federally taxable lump-sum death benefits from annuity contracts with insurance companies, not payments from retirement plans. The 2010 assessmen…
Could S corporation vehicle depreciation be claimed as a Virginia fixed-date-conformity subtraction instead of through federal income?
No. Ordinary depreciation under IRC § 167 had to flow through the S corporation's federal Schedule K-1 and the taxpayers' federal adjusted gross income; it was not a separate Virginia fixed-date-confo…
Was a nonresident military spouse's Illinois self-employment income from providing child care exempt under the Servicemembers Civil Relief Act?
Yes, conditionally. The federal protection was not limited to employee wages and could extend to a military spouse's self-employment income to the extent it came from the spouse's own services. The sp…
Could Southwest Mobile Service deduct maintenance services resold by its customer using a timely multijurisdictional certificate or NTTCs obtained after New Mexico's 60-day deadline?
No deduction was allowed. The multijurisdictional certificate applied in New Mexico only to tangible personal property, not maintenance services, and both NTTCs were executed after the Department's 60…
Could Santa Lucia deduct independent-contractor service receipts when its Type 5 NTTC was executed two days after New Mexico's 60-day deadline?
No. Sarah Fresquez's Type 5 NTTC from Santa Lucia, LLC was executed on July 17, 2014, two days after the Department's July 15 deadline, so the service-for-resale deduction was disallowed. She also fai…
How did Virginia classify and situs an engineering-services company's BPOL receipts, and could it appeal a vehicle BTPP assessment?
Virginia found the company was a business-service provider, not a contractor, for 2009-2010 and ordered a classification-based refund. It remanded 2011-2012 classification and situs for records, denie…
Would the Virginia Department order a county to issue a machinery-and-tools-tax refund after two prior determinations?
No. The Department said it had fulfilled its duties by issuing a final determination and a reconsideration determination, and it would not direct how the county implemented them. If the county's inact…
What federal tax changes did Virginia adopt for 2014 returns when it advanced its Internal Revenue Code conformity date?
Virginia advanced its fixed conformity date from January 2, 2013 to December 31, 2014 for tax years beginning in 2014. It adopted the Tax Increase Prevention Act of 2014 but retained specified Virgini…
How did South Carolina Revenue Ruling 15-2 apply the construction-material exemption for major manufacturing and distribution facilities?
The ruling exempted construction materials incorporated into a new or expanded manufacturing or distribution facility when the taxpayer planned at least $100 million of real and personal property inve…
When a company builds and tests a custom piece of equipment in Colorado that it intends to sell, are the components subject to Colorado use tax during the design, build, and test process — and what happens if the company ultimately keeps the equipment to use itself?
On these facts, no use tax during development. Components a company builds into a custom piece of equipment and tests in Colorado are NOT subject to Colorado sales or use tax during the design, build,…
Did a salesperson's mileage schedule and meal receipts substantiate the unreimbursed employee expenses claimed on a 2013 Virginia return?
Yes. The mileage itinerary excluded the stated home-to-first-client commute, accounted for the employer's flat reimbursement, and documented travel between clients; the taxpayers also supplied the bus…
Did a technical-services company prove that its 2010 BPOL receipts belonged outside the city, and was interest due on later refunds?
Only in part. The taxpayer had not yet proved that its 2010 service receipts should be sitused outside the city, so that issue was remanded for 30 days of evidence. The city nevertheless had to pay st…
Does Colorado sales tax apply to a late-payment fee a seller charges when a customer pays an invoice late?
No. A late-payment fee is not included in the sales tax calculation as long as it is separately stated from the purchase price. Sales tax is a transactional tax fixed when the sale is created, and a l…
Were sales of prewritten measurement software retail or wholesale sales for Virginia BPOL classification purposes?
No. For BPOL purposes, the prewritten measurement software was not physically transferred goods, wares, or merchandise and therefore was neither a retail nor wholesale sale. It was classified as a bus…
Did pollution-control equipment certified after January 1 qualify for Virginia's local property-tax exemption for that same year?
No. The equipment had to be certified by the January 1, 2013 tax day to receive the pollution-control property exemption for 2013, and its March certification was too late. The case was remanded for t…
Did an antique seller avoid gross receipts tax because the antique-mall owner collected tax at checkout and later issued an NTTC?
No. Classic Cobwebs sold antiques directly to consumers through rented mall booths, so its receipts were presumed taxable. The mall owner's December 2014 NTTC came after the audit's 60-day deadline, n…
Does paying New Mexico combined fuel tax on time prevent a late-filing penalty when the corresponding return is filed months late?
No. Alon USA timely paid $927,776.01 of January 2014 combined fuel tax by February 25, but its return was not filed until May 5. Alon stipulated that the filing failure was not caused by a Department …
How does South Carolina sales and use tax apply to kayak and paddle-board rentals, tours, and businesses that do both?
Equipment rentals were taxable, while charges for guided river or lake tours were nontaxable service charges. A rental-only business could buy the equipment for resale without tax; a tour-only busines…
Must a nonprofit Virginia hospital have a religious affiliation for its property to qualify for the hospital-and-charity tax exemption?
No. Religious affiliation was not a requirement under the authorities discussed. The hospital still had to satisfy three factual conditions, including exclusive hospital use and operation exclusively …
Was a home-based worker paid by a foreign company operating a licensable Virginia business rather than working as an employee?
Yes. Form 1099 treatment, Schedule C business income and expenses, a home-office deduction, and 40-hour weekly work from the home or field supported independent-business status. The county's 2006-2011…
Did Virginia's seven-year collection limit bar a 2014 collection effort on sales-tax assessments converted to a responsible officer in 2004?
No. The converted bills were governed by the 20-year collection period in effect when the 2003-2004 assessments were issued, not the seven-year period in the 2015 statute. Virginia's 2014 collection e…
How did Illinois tax medical-record services delivered on paper, CD, or electronically to in-state and out-of-state recipients?
IDOR could not assign liability without invoices or determine whether the arrangement was multi-service. Electronic transmission was not tangible property. Paper or CD delivery could create service-ta…
How did Illinois tax a direct-mail postcard campaign bought from an out-of-state advertising agency and rebilled to dealers?
IDOR could not decide without invoices, contracts, and the parties' registration status. The campaign could be a service with postcards transferred incident to it and a multi-service arrangement betwe…
Are bulk water sales subject to Colorado sales or use tax when the water is sold to the oil and gas industry — and does it matter whether the customer takes it by tanker truck or through a pipeline?
It depends on how the water moves. Bulk water taken by tanker truck (in tanks) IS subject to Colorado sales or use tax, because water is corporeal tangible personal property and the Department's regul…
Can a Georgia domiciliary who is also taxed as a resident of another state claim Georgia's credit for taxes paid to other states on both business income and investment income?
Yes. Assuming the taxpayer is domiciled in Georgia, he may claim the O.C.G.A. § 48-7-28 credit for taxes paid to the other state on both his business income and his investment income, subject to the s…
Is contract manufacturing (making goods from a customer's own raw materials) a non-taxable service, and does doing some of it cost a manufacturer the machinery exemption under § 39-26-709?
When a manufacturer makes goods entirely from the customer's own raw materials, there's no transfer of property, so it's a non-taxable service, not a sale. And the manufacturing-machinery exemption (§…
Can a service organization claim Georgia's manufacturing exemption for leased printing equipment used by a small internal print division?
No. Although the internal division printed and sold tangible products and collected tax on them, it was not a separate legal entity and represented only a small share of the organization's revenue. Be…
Could a low-income housing project in a designated brownfield area receive a refund of sales tax paid on building materials?
Yes, conditionally. Every housing unit had to serve a person in one of the statutory eligible categories, and the owner had to file a timely refund application with the required proof of materials and…
Are a camera maker's cloud-storage service plans subject to Colorado sales or use tax — both the software/server side and the cellular-data side?
Likely mixed. The cloud software and storage appear non-taxable because the company looks like an application service provider (ASP), whose hosted software Colorado does not tax. But the cellular-data…
If a Colorado contractor pays sales tax on construction materials and only later gets an exemption certificate, must the supplier go back and refund or credit that tax?
No. A supplier is not required to go back and refund or credit sales tax it correctly charged before a contractor presented an exemption certificate. The contractor must apply to the Department for a …
Amended Texas Private Letter Ruling: Is converting pipeline-quality natural gas into liquefied natural gas (LNG) at a new Texas LNG plant exempt manufacturing 'processing,' or is it all just excluded 'transportation' activity because the gas is being prepared for overseas shipment?
AMENDED RULING (corrects typographical errors in a December 19, 2014 original). At least some of the activities that convert pipeline-quality natural gas into liquefied natural gas (LNG) at a planned …
Was a nurse an employee exempt from New Mexico gross receipts tax after a patient's mother began paying him directly for respite care?
No. Christopher O’Connor's direct payments from a patient's mother were taxable business receipts, not exempt employee wages. Although she set his schedule and paid him hourly, she did not withhold ta…
Can I subtract from my Colorado taxable income the dividends and capital gain distributions a mutual fund pays me from U.S. and Colorado government obligations?
Only true interest income qualifies—not dividends or capital gain distributions. Colorado lets you subtract interest from U.S. obligations and doesn't add back interest from Colorado state/local oblig…
Were consignment and loaner fees for surgical instruments and implant sample kits taxable rentals in Florida?
Yes. Transfers of surgical instruments and sample kits for consignment or loaner fees were rentals. Without a valid resale certificate, tax applied to rental proceeds for property located in Florida d…
Does using a boat broker prevent a private vessel sale from qualifying for Louisiana's isolated or occasional sale exclusion?
Not necessarily. The exclusion could apply if the owner was not in the boat-selling business, had no pattern of repeated sales, bought the vessel for personal use, and kept title or possession until t…
Are an online marketing company's customer-review platform and its separately billed SaaS analytics product subject to NY sales tax?
The review platform isn't taxable but the analytics product is. The Core Offering -- which captures, moderates, and displays customer feedback on the client's and other retailers' websites -- compiles…
Was downstream reseller documentation enough for an out-of-state seller drop shipping directly to an Illinois customer?
The documents provided were incomplete. The seller had to obtain a valid resale certificate from its own purchaser containing all required information, including that purchaser's number or qualifying …
Did grass seed, sod, trees, hydromulch, and fertilizer qualify for Illinois's enterprise-zone building-materials exemption?
Permanently planted trees, shrubs, topsoil, sod, and grass seed generally qualified as building materials for an eligible enterprise-zone project. Hydromulch and fertilizer did not. The sale also had …
Did an Illinois self-assessing electricity purchaser include third-party supplier bills in taxable purchase price?
Yes. The aggregate purchase price included payments to the electricity supplier and, when different, the transporter for supply, transmission, delivery, and directly related services unless specifical…
When was a custom millwork transaction an Illinois construction contract rather than a retail sale with installation?
A combined contract to sell and install cabinets, countertops, or other property permanently affixed to a structure was a construction contract, making the contractor the end user taxable on material …
Did two automation-software licenses qualify as nontaxable Illinois licenses, and how were maintenance and updates treated?
IDOR declined to classify the two agreements. Canned software was taxable unless a license met all five regulatory conditions. Separately sold optional maintenance was generally nontaxable when sold, …
How can taxpayers check whether an older South Carolina advisory opinion was modified or superseded (per SC IL #14-18)?
Use the citator attached to SC Information Letter #14-18. It helps you determine what effect newer South Carolina advisory opinions have on previously published ones — whether an opinion was modified,…
How did Virginia tax a country club's 20% service charges, minimum quarterly food charges, and fertilizer reimbursements?
Virginia removed tax from the club's mandatory service charges of 20% or less and from quarterly charges imposed when members bought too little food. Fertilizer reimbursements were taxable retail sale…
Were hotels' mandatory 20% service charges on banquet and meeting meals subject to Virginia sales tax?
No. Mandatory gratuity or service charges of 20% or less on the hotels' meal charges were excluded from taxable sales price; only the portion above 20% was taxable. Virginia reversed the assessments a…
Was a deed transferred after confirmation and pursuant to a Chapter 11 plan subject to Virginia state and local grantor's tax?
No. Because the affiliate's deed transfer occurred after confirmation and pursuant to the Chapter 11 plan, federal law barred Virginia's state and local grantor's tax. The Department ordered its porti…
Was a post-confirmation deed transfer required by a Chapter 11 plan subject to Virginia state and local grantor's tax?
No. The affiliate's property transfer occurred after confirmation and pursuant to the Chapter 11 plan, so 11 U.S.C. § 1146(a) barred the state and local grantor's tax. Virginia ordered its portion ref…
Did a trust administered outside Virginia have to file a Virginia fiduciary return when its creator and primary beneficiary had Virginia ties?
Yes. The Virginia decedent's will exercised a power of appointment and created the trust, making it a resident trust. Although its trustee and property were outside Virginia, its primary beneficiary l…
How did Virginia resolve estimated withholding assessments when an employer had missing returns and incomplete payroll records?
Virginia ordered the 2009 assessment adjusted using the W-2 information supplied. The 2010 assessments remained based on the employer's own annual reconciliation unless better records were produced. V…
Was a private country club's mandatory 20% service charge on banquet meals subject to Virginia sales tax?
No. The country club qualified under the broad restaurant definition used for the meal-charge exclusion, so its mandatory service charge of 20% was not taxable. Only a portion above 20% would be taxab…
Were an active-duty U.S. Public Health Service officer's wages exempt from New Mexico income tax as active-duty service in the armed forces?
No. Thomas Hammack was an active-duty U.S. Public Health Service officer, but he was not detailed to the Army or Navy. New Mexico's armed-forces pay exemption and the federal definitions distinguished…
Were Illinois sales of tobacco products to out-of-state wholesalers or retailers exempt from Tobacco Products Tax?
For tobacco products other than little cigars, purchases by wholesalers not selling at retail and purchases by wholesalers or retailers for delivery outside Illinois were exempt. The seller had to obt…
Did Illinois rule that dry-film photoresist sold for printed-circuit-board manufacturing qualified for the machinery and equipment exemption?
No determination was made. The manufacturing exemption was use-based, so IDOR would not issue a supplier-specific ruling because the supplier was not the user. A customer using the photoresist could r…
What are South Carolina's 2015 county tier rankings for the job tax credit, and which counties qualify for the tax moratorium and reduced fee-in-lieu investment (per SC IL #15-1)?
SC Information Letter #15-1 sets the 2015 county designations that drive several South Carolina incentives. For the job tax credit, the 46 counties are ranked into Tiers I-IV (higher tiers = larger cr…
Were a bottle maker's cartoning equipment, alleged ghost assets, and idle machinery subject to local machinery-and-tools tax?
The cartoning equipment was exempt because it served shipping rather than the manufacturing process. Virginia did not overturn the county's treatment of alleged ghost assets and idle machinery because…
Were cable-television converter boxes subject to a Virginia city's business tangible personal property tax?
No. Virginia classified the cable converter boxes as intangible property under Va. Code § 58.1-1101 A 2a, so the city could not impose business tangible personal property tax on them. The case was rem…
Could a national securities exchange use Virginia's financial-corporation apportionment method?
Yes, if more than 70% of its gross income came from qualifying financial-service fees. Virginia treated the exchange's transaction, issuer, and some market-technology services as financial services; a…
Did Virginia voting, driver's licenses, a vehicle, and an investment home make foreign residents Virginia domiciliaries for 2009?
No. Although the taxpayers owned a Virginia investment home, registered to vote, obtained Virginia driver's licenses, and registered a vehicle, they retained their established foreign domicile and had…
Was a Virginia refund claim timely when an overseas taxpayer filed on July 1, three years after the automatic extended due date?
Yes. Because the taxpayer was overseas on the original May 1 due date, Virginia's July 1 extension applied automatically. The return claiming a refund was filed exactly three years after that extended…
How do Kansas sales, use, and transient guest taxes apply when a buyer presents a federal diplomatic Tax Exemption Card?
Kansas honors the diplomatic Tax Exemption Card issued by the U.S. State Department's Office of Foreign Missions (OFM) -- and the American Institute in Taiwan equivalent -- for state and local sales, …
Did Florida communications services tax apply when a Florida serving carrier handled roaming for foreign-carrier customers?
No, when the roaming customers' places of primary use were outside Florida. The foreign carriers were the home service providers, while the Florida taxpayer acted only as the serving carrier.
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