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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How did Illinois's 2014 local sales-tax sourcing rules locate primary selling activities, sales offices, master agreements, and Internet sales?
A retailer generally sourced to a jurisdiction where at least three of five primary selling activities occurred. A separate sales office needed all first three: authorized sales personnel, binding agr…
How did Virginia's 2015 guidelines treat first-time home buyer savings accounts, tax subtractions, eligible withdrawals, and penalties?
An account holder could designate qualifying financial accounts, subtract federally taxable account earnings from Virginia income, and use distributions for a qualified beneficiary's Virginia down pay…
What did Virginia's pre-2016 guidelines require to qualify for, calculate, and claim the Research and Development Expenses Tax Credit?
For tax years beginning before 2016, Virginia offered a generally refundable credit for qualified research conducted in Virginia above a calculated base amount. The guide used 15% and 20% rates on cap…
Could Plumbwest obtain more gross receipts tax deductions with NTTCs produced after the deadline or reopen a completed hearing to hire counsel?
No. The Department reduced Plumbwest's gross receipts tax from $30,956.13 to $27,897.33 for NTTCs already produced, but any additional certificates would be untimely under the mandatory 60-day rule. T…
Was a membership fee taxable when it was calculated from the savings on each retail purchase?
Yes, based on the facts described. Membership fees generally were nontaxable intangibles when they transferred only membership rights. Here, the fee was charged with each purchase, tied to that item's…
Is a hospital vendor-credentialing service -- compiling vendor documents and issuing access badges -- a taxable 'data processing service' in Texas, and can the credentialing company buy the access badges tax-free?
Taxable data processing, not a nontaxable security service. The Comptroller ruled that a company's healthcare-facility vendor-credentialing service -- compiling vendor-submitted documents and accredit…
Were cloud-based camera, lock, sensor, and alert services taxable security services in Nebraska?
Yes. Recurring charges for cloud-based surveillance and alerts were taxable security services when the protected property was in Nebraska. Installation tax depended on whether devices remained tangibl…
How did Kansas change the vendor discount rate for Missouri and Nebraska retailers?
Kansas Notice 14-17 reduces the reciprocal 'vendor discount' Kansas allows out-of-state retailers who collect and remit the Kansas Retailers' Compensating Use Tax. Under agreements in effect since 196…
How should a consolidated corporation calculate project income for Florida's Capital Investment Tax Credit?
The company had to prepare pro forma project income under GAAP and Florida adjustments, apply the project's Florida apportionment fraction, and use the corporate tax rate to determine project tax liab…
How does South Carolina recognize same-sex spouses for property tax and deed recording fee rules?
A couple legally married under any state's law is treated as married and as spouses for South Carolina property-tax and deed-recording-fee purposes. That recognition can support the 4% legal-residence…
How must legally married same-sex couples file South Carolina income tax returns under Revenue Ruling 14-8?
A same-sex couple legally married under any state's law must file South Carolina income tax returns as married filing jointly or married filing separately, matching the federal filing status for that …
Were product-referral commissions, fiddle performances, and earthmoving jobs exempt from gross receipts tax as nonbusiness or isolated activities?
Mostly no. Russell Burris's Noni product-referral commissions were payment for promotional services, and lacking a CRS number did not make them nontaxable. About 20 fiddle performances and six earthmo…
Was propane or electricity used in an RV park's residents-only coin laundry exempt as residential household fuel?
Yes. The coin laundry was a residents-only common area used for a residential household activity, so its separately metered propane or electricity qualified for the residential-fuel exemption.
For Texas franchise tax, can a concessionaire exclude the percentage-of-receipts payments it makes to a venue owner or event promoter from total revenue as 'flow-through funds,' or deduct them as cost of goods sold?
No — a food-and-beverage concessionaire's payments to facility owners or event promoters under a concession agreement are NOT excludable from total revenue as 'flow-through funds mandated by contract'…
Is a company's fee for representing claimants in Social Security disability applications and appeals a taxable 'insurance service' in Texas?
No. The Comptroller ruled that a managed-care company's division providing Social Security disability (SSDI) representation services -- completing applications and appeals, gathering medical records, …
Could an Illinois dealer document a nonresident vehicle sale when the buyer had an Illinois driver's license?
Yes, but the Illinois license created a rebuttable presumption of Illinois residency. The dealer had to retain clear nonresidency evidence, such as out-of-state voter, home, tax, credit, or property r…
Could nonresidents use Virginia 529 programs, deduct contributions on a Virginia return, and avoid creating Virginia domicile?
Yes. The inVEST, CollegeWealth, and CollegeAmerica programs were open nationwide, and a nonresident with Virginia-source income could deduct eligible contributions when computing Virginia taxable inco…
How should an information-security company situs service receipts for BPOL tax when it had a Virginia headquarters and several data centers?
The Virginia headquarters and the staffed out-of-state management center were definite places of business, but mere servers at the other data centers were not. Service receipts had to be sitused first…
How much of a nonresident employee's wages from a Virginia LLC was Virginia-source income when his work-location records were doubtful?
Virginia treated 123 of 260 workdays in 2010 and 115 of 260 in 2011 as Virginia workdays. The taxpayers' claim that all services were performed from another state was not persuasive given the husband'…
Could a live-performance business overturn Virginia use-tax audit items without records showing electronic delivery, out-of-state assets, or tax already paid?
Not without proof. The taxpayer initially failed to document electronic software delivery, assets that allegedly never entered Virginia, and tax already paid on an asset. Virginia remanded the audit f…
Which advertising-business purchases remained subject to Virginia consumer use tax after the taxpayer supplied additional audit records?
Virginia removed many documented purchase lines, but kept consumer use tax on DVDs, exhibit cases, brochures, pens, and videos tied to the advertising business's media and promotional services. Other …
Did a prior New Mexico tax refund and Department penalty letter operate as a binding ruling that prevented later tax on Medicaid receipts?
No. Torrance County Counseling conceded that its Medicaid payments were taxable and abandoned its deduction challenge. A 2007 refund, refund check, warrant remittance, and separate letter about a repe…
Could a New Mexico combined unitary group use net operating losses that member corporations had reported in earlier separate-return years?
Yes. Covenant's wholly owned New Mexico subsidiaries had generated net operating losses on separate returns before the parent elected combined unitary reporting in 2012. Federal Section 172 and New Me…
Did Shawn Edwards prove that his 2005-2006 receipts were exempt employee wages when he did not attend the hearing or submit worker-classification evidence?
No. The hearing had been continued so Shawn Edwards could attend and file an IRS Form SS-8 on whether he was an employee or independent contractor, but he did neither. His attorney's last-minute argum…
Could a golf-package booking business avoid gross receipts tax penalty and interest because its owner stopped filing while experiencing depression?
No. The Department sharply reduced Golf New Mexico's 2008-2009 gross receipts tax after separating client money passed through to golf resorts from the business's own booking fees, and the company con…
Could a commission-paid nail technician avoid gross receipts tax as an employee or claim a resale deduction using NTTCs issued after the audit deadline?
No. Kevin Pham received commission checks and Forms 1099 from two salons, set his own hours, and had no withholding, workers' compensation, or unemployment coverage, so he did not prove exempt employe…
Was a nurse an employee exempt from gross receipts tax after a patient's mother began paying him directly, and what later changed in the amended decision?
No. The original decision held Christopher O’Connor's direct respite-care payments taxable because he did not prove employee status, and it upheld tax and interest for 2008-2011 plus penalties for 200…
How did new video, music, grocery, and pricing benefits affect tax on an online membership program?
The portions attributable to video and music were subject to communications services tax when charged to a Florida service address. Separately stated qualifying shipping and member-pricing benefits di…
When do Georgia income-tax-credit carryforward periods run after excess credits are approved for use against withholding, and must quality-jobs, film, and research credits be used in a set order?
For income-tax use, each credit keeps the carryforward period stated in its own statute. For withholding-tax use, the period begins with the first withholding period after the period named in the Depa…
When a company installs a custom VIP interior into a 'green' (interior-less) aircraft that a customer already bought from the manufacturer, is that manufacturing (with its sales-tax exemption) or taxable remodeling -- and does it matter that the FAA issues a new Standard Airworthiness Certificate only after the interior goes in?
Remodeling, not manufacturing -- and an FAA airworthiness certificate or pilot's license proves nothing about Texas tax status. The Comptroller ruled that a company hired to design and install a custo…
How did Florida tax digital-video rentals and permanent purchases delivered by streaming or download?
Neither rentals nor purchases were subject to sales tax because no tangible property was furnished. Timed rentals were taxable video services under communications tax, while permanent purchases were n…
Were an electric utility commission's sales of electricity to its creating city subject to Florida gross receipts tax?
Yes. The commission was a distribution company separate from the city, and the city was its retail customer. The commission therefore owed 2.5% gross receipts tax on the utility-service receipts.
Could canned software be licensed tax-free in Illinois, and how was custom software treated?
Yes, as a general rule. A canned-software license and its later updates were not taxable when the license met all five conditions in Section 130.1935(a)(1). Separately, qualifying custom software prep…
Does a homeowner owe Connecticut sales tax on propane bought to fuel a standby generator at home?
No. The sale of propane used to run a standby generator at a residential dwelling is exempt from Connecticut sales and use tax under Conn. Gen. Stat. § 12-412(3)(A), which exempts gas -- including bot…
Which Nebraska hunting-access, guide, exclusive-land, and animal fees were subject to sales tax?
Nonexclusive access to land for hunting was a taxable admission. Guide and animal fees charged by the admission seller entered the taxable price, while a separately hired guide's service was not taxab…
Can a Louisiana lessor buy repair parts tax-free for property held for lease or rental?
Yes, when the lessor buys the part separately from taxable repair services and installs it in property held for lease or rental. Lessee purchases and parts consumed by a repair shop remain taxable.
Was a retired tradesman an employee exempt from gross receipts tax when an estate paid him hourly for recurring property-maintenance work?
No. Edward Chavez worked 20-30 hours per week maintaining up to 14 estate homes and was paid hourly, but six of seven employee factors supported contractor status. The estate issued Forms 1099, withhe…
What is South Carolina's tax interest rate for the period ending March 31, 2015 (per SC IL #14-16)?
3%. SC Information Letter #14-16 sets South Carolina's interest rate on tax underpayments and overpayments at 3% for the period October 1, 2011 through March 31, 2015. Interest is compounded daily, ex…
An S corporation's shareholders are selling their stock and making a federal § 338(h)(10) election (treating the stock sale as an asset sale), with part of the price paid as a later earn-out. Is that gain — including the earn-out — counted in the company's Tennessee excise-tax net earnings?
Yes. When an S corporation's owners sell their stock and make a federal I.R.C. § 338(h)(10) election (which treats the stock sale as a deemed sale of the company's assets), the gain the S corporation …
Did Alaska licenses, voter registration, and a claimed intent to return there end Kevin Fenner's New Mexico domicile for 2003 and 2005-2010?
No. Fenner established New Mexico domicile in 1994 and did not prove physical presence plus a bona fide intent to make another place his permanent home. Alaska licenses, voter records, vehicle registr…
Could Virginia residents keep a credit for Maryland tax on reciprocal wages after Maryland's refund deadline had expired?
No. Maryland-Virginia reciprocity made the residents' Maryland wages exempt from Maryland tax, so the Virginia credit did not apply. Virginia issued its assessment within three years of the return due…
Could taxpayers subtract gains from Virginia bonds when unrelated capital losses had already offset all of those gains in federal adjusted gross income?
No. Virginia's subtraction applied only to Virginia-obligation income included in federal adjusted gross income. Because unrelated current and carried-over capital losses had already offset all of the…
Did a merchant mariner abandon Virginia domicile by working at sea and leasing a residence in another state while retaining Virginia ties?
No. The taxpayer's out-of-state lease and maritime employment did not show a permanent abandonment of Virginia. He retained Virginia voter registration, a Virginia-resident spouse, return visits, powe…
Was the requesting taxpayer's web-based insurance-claims system taxable, or excluded as data processing?
The charges were not taxable for the specific service described because the provider's personnel collected insurance-claim data from multiple carriers, checked and corrected it, converted it to a stan…
What Virginia tax interest rates applied during the first quarter of 2015?
Virginia's first-quarter 2015 rates were 5% for tax underpayments and 5% for tax overpayments. The reduced rate for qualifying disputed assessments after the nine-month point was 0%, while the corresp…
Were a U.S. Public Health Service officer's active-duty wages exempt from New Mexico income tax, and could accountant reliance remove the penalties?
The wages were taxable, but the penalties were abated. Kathleen Franklin was an active-duty commissioned U.S. Public Health Service officer, yet the New Mexico exemption applied to the armed forces, w…
I set up an intentionally defective grantor trust (IDGT) and funded it with $5 million cash. I now want to exercise my substitution power to swap my New York apartment into the trust in exchange for cash equal to the apartment's appraised value. Since I already gave the trust the cash and I'm just swapping assets I control, is this exempt from New York's Real Estate Transfer Tax as a gift?
No -- it's taxable, not exempt. A grantor set up an intentionally defective grantor trust (IDGT), an estate-planning structure where trust assets are outside the grantor's estate for estate-tax purpos…
What are South Carolina's latest per capita income figures used to qualify for tax incentives (per SC IL #14-15)?
SC Information Letter #14-15 publishes the state and county per capita personal income figures the Department uses to test qualification for various South Carolina income, sales and use, and property …
Were optional customer contributions to an electric utility's solar pilot program subject to sales or gross receipts tax?
No. The separately stated, cancellable contributions were unrelated to electricity usage and were not enforced as utility charges, so they were neither charges for electricity nor gross receipts from …
Could an Illinois governmental unit use the exempt-organization event rules for food and alcohol sales at community festivals?
No. The limited sales exceptions in Section 130.2005 applied to qualifying charitable, religious, and educational organizations, not governmental bodies. Government sales to the public were taxable un…
Were cable-television converter boxes subject to a Virginia city's 2013 business tangible personal property tax?
No. Virginia held that cable converter boxes were property used in a cable television business and that the 1984 statutory change classified them as intangible property. The case was remanded to the c…
Did an inherited Virginia home, vehicle registration, driver's license, and federal-return address make a long-term foreign resident taxable as a Virginia resident?
No. The taxpayer had lived and worked abroad since 2006, held foreign residency status, participated in professional and civic life there, and filed a foreign tax return. Virginia found that he change…
Did Virginia's manufacturing exemption cover a propane storage tank and stair handrails on an exempt raw-material silo?
No. The propane itself was an exempt production supply, but the tank merely stored it and was taxable. The raw-material silo qualified as part of integrated manufacturing, but its stair handrails only…
Were granite countertops and glass activity walls in an indoor athletic facility taxable as business tangible personal property?
No. The countertops and glass walls were attached to the building, essential to the concession and activity areas, and intended as permanent additions. Virginia classified them as real-property fixtur…
Could a Virginia part-year resident claim a credit when a neighboring state taxed all of her wages, including wages also taxed during her Virginia-resident period?
Yes. The neighboring state's return taxed the taxpayer's entire wage income, not merely wages from her pre-Virginia residency period. Because those earned wages were also subject to Virginia tax durin…
Could a copier company deduct the supply portion of bundled maintenance contracts with governments and nonprofits without separately invoicing supplies?
Yes, for the documented supply portion. New Mexico law did not require a separate invoice when reliable records readily established the tangible-property amount in mixed copier maintenance contracts. …
Was GEO selling the Town of Clayton a license for resale when it built, managed, and operated a town-owned jail housing state prisoners?
No. GEO's agreement required it to provision, manage, and operate Clayton's jail and supply staffing, security, food, health care, programming, maintenance, and other core services. Accreditation was …
Was a private prison operator selling a license for resale when a county paid it per inmate to operate a county-owned correctional facility?
No. Cornell Corrections managed and operated Bernalillo County's correctional center, supplying staffing, security, food, medical care, maintenance, programming, and other essential services for a per…
Were walk-in bathtubs, stairway wheelchair lifts, and outdoor ramps exempt as durable medical equipment without a physician's prescription or work order?
No. The products met Virginia's durable-medical-equipment criteria, but a sale was exempt only when purchased by or on behalf of an individual under a licensed physician's prescription or work order. …
How does Georgia sales tax apply to prepackaged meal replacements and vitamin supplements labeled with Nutrition Facts or Supplement Facts?
Products with Nutrition Facts labels qualified as food for off-premises consumption and were exempt from Georgia state sales tax but remained subject to local tax. Products with Supplement Facts label…
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