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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Could a corporate member separately account for its Florida LLC income instead of including partnership factors in apportionment?
No. The corporation had to combine its share of the partnership-taxed LLC's property, payroll, and sales with its own factors. It did not prove the standard formula was unreasonably or arbitrarily dis…
Is a single charge for leasing a prescribed cancer-therapy system and buying its replacement supplies exempt from Georgia sales tax?
Yes. The patient possessed and controlled the self-administered therapy system, so the transaction was a lease of prescribed durable medical equipment. The frequently replaced supplies were treated as…
A Tennessee blood and plasma processor must run federally required disease tests on the blood it turns into products for sale. Are the chemical reagents used in that testing exempt from Tennessee sales and use tax?
Yes, with conditions. The chemical reagents the company uses to run federally required disease tests on donated whole blood and source plasma are exempt from Tennessee sales and use tax as 'industrial…
If a charter school sells undeveloped land it already owned to a single landlord LLC, who then builds a new campus and leases it back for 25 years, does that sale-leaseback structure qualify for the § 151.311 construction exemption?
Yes. The Comptroller ruled that a build-to-suit lease and purchase option qualifies as an EXEMPT CONTRACT under Tax Code § 151.311 where the charter school first SOLD undeveloped land it already owned…
If a charter school already owns undeveloped land it can't afford to build on, SELLS it to landlord entities who then build the campus and lease it back for 25 years, does that sale-leaseback financing structure still qualify for the § 151.311 construction exemption?
Yes. The Comptroller ruled that a build-to-suit lease and purchase option qualifies as an EXEMPT CONTRACT under Tax Code § 151.311 even where the charter school first SOLD undeveloped land it already …
When a 17-campus charter-school network has three out-of-state LLCs jointly acquire land and build a new campus, then lease it back for 25 years with a purchase option in years 2-5, does the construction qualify as exempt under § 151.311?
Yes. The Comptroller ruled that a build-to-suit lease and purchase option under which three Idaho LLCs, acting jointly as "Landlord," acquire previously unimproved land and construct a new campus to a…
Were cloud services that processed and routed calls inside customers' phone systems taxable communications in SC PLR 14-4?
Yes for the requesting taxpayer's service. DOR treated monthly charges for cloud-based call processing and routing, voice and video support, voicemail, audio and web conferencing, presence, and mobili…
Are walk-in bathtubs, in-home wheelchair lifts, and modular ramps exempt from Colorado sales tax as medical equipment?
It depends on the item — and all of them need a prescription. In-home wheelchair mobility lifts and modular ramps appear to qualify for Colorado's MOBILITY ENHANCING EQUIPMENT exemption, because they'…
Which wheelchairs, mobility equipment, replacement parts, and accessories were exempt from Florida sales tax?
Wheelchairs, scooters, walking aids, and specifically adapted replacement parts were exempt without a prescription. Lifts, ramps, carriers, bath benches, and oxygen holders required a prescription; co…
How did Illinois's 2014 local sourcing rules apply to leases treated as conditional sales?
Illinois used origin sourcing, so ultimate destination was not the controlling shortcut. The conditional-sale presumption applied only when the agreement was a conditional sale and the property was in…
Were a private club's dues and initiation fees taxable as admissions when members gained clubhouse access?
Yes. The dues and initiation fees gave members access to a clubhouse that facilitated social, boating, and other recreational activities, so the charges were taxable admissions.
A Tennessee firm rents out IT contract workers by the hour for software projects — business analysts, systems analysts, programmers, QA testers, database administrators, project managers. Which of those hours must it charge Tennessee sales tax on?
It depends on the role. The firm rents out IT staff by the hour, and Tennessee taxes the hours of its Programmers and Database Administrators — because their work is the creation or programming of sof…
Is hurricane rental insurance charged with a South Carolina vacation rental subject to accommodations tax?
An optional hurricane rental insurance charge is not subject to South Carolina sales tax under the ruling. A mandatory charge is part of the accommodations price and is taxed at 7% when the guest occu…
How did Virginia tax an out-of-state company's equipment leases, maintenance contracts, delivery, Internet access, and third-party billing?
The out-of-state lessor had to register and collect tax on Virginia leases. Half of a flat parts-and-labor maintenance contract was taxable; qualifying installation and transport charges were exempt; …
What are the required wage and investment levels for Nebraska Advantage Act applications filed on or after January 1, 2015?
This ruling sets the 2015 thresholds. For Nebraska Advantage Act applications filed on or after January 1, 2015, the base average annual wage requirement is $23,979, and the required investment and em…
Could an admission provider buy catered meals tax-free for resale when premium tickets included the meals at no separate charge?
No. The admission provider was the end consumer because it sold admissions and did not separately state a price for the food. The caterer had to collect tax, and the provider was liable if it could no…
Could demolition and replacement construction qualify for South Carolina's abandoned-building credit under PLR 14-3?
Yes for the requesting taxpayer under the historical law described. Demolishing the qualifying nonhistoric abandoned building and constructing a replacement at the same location did not disqualify the…
Was electronically delivered software exempt when it was an integral part of a taxable medical hardware system?
No. Although electronically delivered software is generally nontaxable by itself, this software and its related services were integral to a taxable medical hardware system. Virginia included the charg…
Is engineering built into a Kansas steel sale taxable, even if billed separately?
The whole sale is taxable. Engineering services on their own are not a taxable service, but when they are part of providing tangible personal property they are included in the selling price and taxabl…
Did a public airport owner's proposed direct-purchase procedure qualify building materials for Florida's governmental exemption?
Yes. The public owner directly issued purchase orders and payments, took title and risk of loss at delivery, and provided exemption and entitlement certificates, while the contractor acted only as int…
Is the monthly rental of a prescription device that treats brain tumors with alternating electric fields subject to Colorado sales or use tax?
Exempt. The rental of this cancer-treatment therapy — a prescription device that delivers alternating electric fields through scalp electrodes to slow recurrent brain-tumor (GBM) cell division — is ex…
When may a seller exempt welding fuel gases, shielding gases, and hand tools sold to Georgia manufacturers or agricultural producers?
Qualifying manufacturers could buy necessary manufacturing fuel gases and shielding gases exempt with a proper certificate, but fuel gas known to be used for unrelated repair work was taxable. Agricul…
When were restaurant delivery charges and processing fees part of the taxable sales price of a meal?
Mandatory delivery charges were taxable. A separately stated delivery charge was not taxable when the customer could avoid it by picking up the meal. Processing fees were always taxable, and the franc…
Must Virginia finish collecting an assessed tax within seven years, or only begin a collection effort within that period?
Virginia's position was that it must make or institute a collection effort within seven years after assessment, but it need not finish collection within those seven years. Once some collection action …
How did Virginia resolve two sales/use-tax audits involving fixed assets, return reconciliations, wrong tax rates, exemption certificates, and customer-paid use tax?
Virginia sent both paid audits back for document review and adjustments. Reconciliations and several exemption certificates supported reductions; fixed-asset tax required more seller proof; customer-p…
Are amortized equipment charges in an IT-services contract taxable when the provider keeps title, possession, control, and operation of the servers?
No. The itemized contractual asset charges were part of nontaxable data-processing and server services because the provider owned, possessed, controlled, selected, and operated the equipment. The prov…
Could Illinois residents claim a credit for Indiana tax on nonprofessional gambling winnings when their other reported loss was entirely Illinois-sourced?
No. Illinois capped the other-state credit by the share of base income that would be sourced outside Illinois under Illinois's own rules. Nonprofessional gambling winnings were not treated as out-of-s…
Was a separately stated, customer-adjustable restaurant gratuity subject to Florida sales tax?
No. Because the gratuity was separately stated and the restaurant distributed 100 percent to employees without retaining a monetary benefit, it was excluded from the taxable sales price.
Is selling a discount loyalty card subject to Kansas sales tax?
No. Selling a one-year 'loyalty card' that gives a pawn shop's customers a 10% store discount plus better pawn terms (extra cash on new pawns, free interest after five redemptions, better loan offers …
Could a corporate group stop filing consolidated Florida returns after major divestitures, acquisitions, growth, and a changed business focus?
Yes. The combined changes in business focus and operational growth established good cause, but the request missed the 90-day deadline for the first year sought, so permission began in a later year and…
Would IDOR verify a private vehicle title-and-registration publication, and what 2015 motor-vehicle lease change did it flag?
IDOR would not approve the accuracy of a private legal publication. It said the previously published information generally remained correct, but flagged Public Acts 98-628 and 98-1080, which changed t…
A Tennessee firm resells ERP software and separately offers optional consulting services — training, configuration, project management, data conversion, documentation, testing, and report writing. Which of those services must it charge Tennessee sales tax on?
Mostly no. Of the firm's optional consulting services, only Report Writing is taxable on its own — and only when it includes software coding or programming that isn't merely incidental, which makes it…
What were the eligibility, calculation, transfer, and asset-sale rules for South Carolina's expired Angel Investor Credit?
Before the Act's December 31, 2019 repeal, a qualifying angel investor could receive a nonrefundable South Carolina income tax credit equal to 35% of a cash investment in a registered qualified busine…
Is a 'consolidated freight charge' for moving goods between a seller's own facilities subject to Colorado sales tax, even if separately stated?
Probably taxable. A 'consolidated freight charge' — a fee for moving goods between the seller's own plants to combine a customer's order into one shipment — escapes sales tax only if BOTH conditions h…
Does Colorado's interstate-commerce exemption apply to lease payments on trucks, and how is the exemption documented?
It can apply to lease payments, but two conditions matter — and the second likely defeats it here. Colorado's interstate-commerce exemption (§ 39-26-712(1)(b)) reaches a LEASE only if the lease is tre…
Did qualifying Illinois charitable hospitals owe Retailers' Occupation Tax on patient food and medicine or employee cafeterias?
No, under the stated conditions. Hospitals meeting Section 2-9's exemption criteria did not incur Retailers' Occupation Tax on food and medicine sold to patients or on cafeteria food sold through faci…
Could a joint account holder undo a New Mexico tax levy when she supplied all the money but had given her deceased brother withdrawal rights?
No, not through the levy protest. Elaine Lopez opened the accounts and made every deposit, but she added her brother Richard as a joint owner and authorized him to withdraw funds. After his death, she…
Could a Florida commercial tenant fully credit tax collected on a sublease when prime-lease tax was higher?
Yes, for the one service-plaza location and month reviewed. Because tax paid on the prime lease exceeded tax collected from subtenants, the tenant received a full credit for the collected sublease tax…
How did Virginia income-tax filing change when it began recognizing same-sex marriages in October 2014?
Virginia began recognizing same-sex marriages valid under any state's law for Virginia income-tax purposes. Legally married couples could file jointly or as married filing separately, and couples who …
Are customer fees for using permanently installed storage lockers subject to Georgia sales tax?
No. The charges were essentially for nontaxable storage services. The lockers were also permanently attached to buildings and concrete foundations, and removal would cause significant damage, so they …
How can taxpayers check whether an older South Carolina advisory opinion was modified or superseded (per SC IL #14-14)?
Use the citator attached to SC Information Letter #14-14. It helps you determine what effect newer South Carolina advisory opinions have on previously published ones — whether an opinion was modified,…
Could a corporation carry an old Illinois net loss forward only after it missed the return box electing to give up the carryback period?
No. For the pre-December 31, 2003 loss addressed, the election to relinquish the carryback period had to be made on the loss-year return by its extended due date. The corporation did not check the ele…
Could an Illinois resident claim an other-state tax credit attributable only to nonprofessional gambling or lottery winnings?
Generally no credit was attributable to the nonprofessional gambling winnings themselves. Illinois limited the resident credit by the share of base income that would be sourced outside Illinois if eve…
Are the RFID tracking tags that marijuana growers are required to use exempt from Colorado sales and use tax as farm equipment?
They're taxable. The RFID tags Colorado requires growers to attach to track marijuana through the supply chain are subject to sales or use tax when purchased by cultivators. The grower's firm argued t…
How does SC Revenue Ruling 14-5 classify hotel room charges, mandatory fees, optional services, and additional guest charges?
Room charges and mandatory amounts that are part of furnishing accommodations generally fall into the 7% accommodations-tax base. Separately charged room service, laundry or dry cleaning, in-room movi…
Were a surgery center's required software training, bulk eye-surgery devices, distilled water, and documented purchases exempt from Virginia sales tax?
Mostly no. Required training was taxable as part of the medical-records system; bulk-purchased eye devices were not bought for named patients; and distilled water was not an exempt controlled or nonpr…
Were a Florida 501(c)(3)'s gift-shop and proposed thrift-shop sales exempt from sales tax?
No. Its current 501(c)(3) certificate exempted qualifying purchases by the organization, not its retail sales; it was not classified as a religious institution or an organization benefiting minors.
Did transformers, electrical distribution, compressed air, bulk gases, a machining center, and its isolated foundation qualify for Virginia's manufacturing exemption?
Yes. Virginia found the listed equipment directly used in manufacturing: 87% of the general electrical system served production, the compressed air and gases powered production, the machining center c…
Is a landfill operator a manufacturer because it produces and sells landfill gas, and can its gas or leachate systems qualify for Georgia's pollution-control exemption?
The landfill operator was not a manufacturer because it was primarily a waste-management and remediation service business, despite selling landfill gas. Its manufacturing exemption failed, but qualify…
Could a pension payor withhold Illinois tax from a nonqualified pension at a flat 5% without accounting for the recipient's claimed allowances?
No. The payor could withhold Illinois tax from the described nonqualified pension, but Section 701(a)(2) required withholding only on the distribution exceeding the proportionate withholding exemption…
What Virginia tax interest rates applied during the fourth quarter of 2014?
Virginia's fourth-quarter 2014 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 corres…
Would Georgia tax cable-modem internet access, including higher-speed tiers and non-itemized bundles, if the federal Internet Tax Freedom Act expired?
No under the Georgia provisions addressed. Internet access was not a service specifically listed as taxable, regardless of bandwidth. It remained nontaxable in a single-price bundle when the provider …
After Illinois eliminated partnership composite returns, did every nonresident partner have to file an individual Illinois return?
No. For the post-2014 rules described, the partnership had to withhold on Illinois-allocated pass-through income, and that payment was credited toward each partner's estimated liability. A nonresident…
How can a licensee appeal a decision of the Nebraska State Athletic Commissioner or a referee after LB 78 (2013) eliminated the old appeal procedure?
Athletic Commissioner Ruling 2014-1 sets up an interim appeals process for the Nebraska State Athletic Commission (boxing, professional wrestling, and mixed martial arts) after LB 78 (2013) abolished …
Was income earned by an Illinois prepaid funeral trust currently taxable to the trust, or permanently exempt from Illinois income tax?
The income was deferred, not permanently exempt. Section 4a(c) required the trust principal and accrued earnings or losses to be held in suspense because the ultimate recipient was not yet known. The …
Were a franchise regional developer's shares of monthly royalty fees taxable commissions, and which local gross-receipts rate applied?
The commissions were taxable, but the Department used the wrong local rate. BBCB received a share of franchisees' monthly royalty fees only while it remained obligated to inspect and report on the New…
Did Illinois separately recognize foreign subsidiaries that had elected federal disregarded-entity status?
No. A subsidiary disregarded as separate from its corporate owner for federal income-tax purposes was also disregarded for Illinois income tax. Its income and loss became items of the owner, and its p…
Did an Illinois employer have to withhold Illinois income tax from a nonresident engineer working mainly from an out-of-state home office?
No, on the described facts. More than 95% of the engineer's work occurred at a permanent out-of-state home office, and the occasional Illinois client meetings and inspections were incidental to those …
When a landlord renovates a former retail building (a furniture store) into a charter-school campus and leases it back for 30 years, does that renovation contract qualify as exempt under Tax Code § 151.311 -- the same as new ground-up construction?
Yes. In what the Comptroller describes as a question of first impression not previously addressed with these precise facts, the Comptroller ruled that a build-to-suit lease and purchase option under w…
When is propane a taxable 'special fuel' in Colorado, and how must propane dealers license, report, and pay tax on it?
Propane is a 'special fuel,' and any propane that is or may be used to propel a motor vehicle is taxable—so a dealer must be licensed (§ 39-27-104) unless it is certain none of its propane will go to …
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