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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If I bill taxable and exempt goods together as a single bundled charge, can I tax only the taxable portion or treat it as an exempt service?
No -- the entire bundled charge is subject to sales tax if any item in it is taxable. Billing taxable and exempt tangible personal property as one combined per-day charge does not transform the sale i…
What result is verifiable from the published order in Timothy S. Hunt v. Commonwealth of Virginia?
The Norfolk Circuit Court held that sovereign immunity prevented it from hearing the requested declaratory-judgment action. It sustained the Commonwealth's demurrer without leave to amend and dismisse…
For an existing Texas cloud-computing data center planning a 100,000+ square foot expansion, seven questions: does hosting customer data violate the exemption's single-occupant rule; is the pre-2013 existing center itself exempt; can the expansion qualify on its own; can shared jobs/investment/electricity/equipment be split between the old and new parts; do contractor-staffed jobs count; does providing some telecom service disqualify the project; and is a backup generator outside the building eligible?
A foundational, seven-question ruling on the qualifying data center exemption (Sec. 151.359). Key holdings: (1) hosting customers' data and letting them run their own programs on the operator's own se…
Would Nebraska have begun taxing internet-access charges if the federal Internet Tax Freedom Act moratorium expired in 2014?
No. The Department said Nebraska taxed only specifically enumerated services, and internet access as then defined by federal law was not among them. Providers and purchasers therefore would not have c…
Is the fee to enter walk-through haunted funhouses an exempt charge to use a 'device,' or a taxable admission to a place of amusement?
It is taxable. The fee is an admission charge to a 'place of amusement' under Tax Law section 1105(f)(1). Patrons pay to enter the physical space of the funhouses, move through them by their own locom…
Is assistive software that lets a severely disabled person operate a computer with a single switch (eye blink, breath puff) exempt as a prosthetic device?
Yes -- it qualifies as a prosthetic device exempt from sales and use tax under Tax Law section 1115(a)(4) when bought by a person with a disability. The software replaces the lost motor function the p…
Is an online food-ordering platform a vendor or co-vendor of the restaurant meals, and are its fees to restaurants taxable?
No -- the platform is not a 'vendor' of the restaurant meals under Tax Law section 1101(b)(8), and it cannot be designated a co-vendor jointly liable for the sales tax. It provides internet advertisin…
Is the salary a U.S. Foreign Service officer earns while assigned to the U.S. Mission to the United Nations in New York City subject to New York State personal income tax?
No federal or state law exempts Foreign Service wages from New York tax the way Tax Law § 631(e) exempts military pay. If Petitioner is a nonresident, his USUN wages are New York source income taxable…
What did the 2014 Kansas legislation change for motor fuel and natural gas taxes?
Kansas Notice 14-15 (revised, dated August 19, 2014) summarizes two 2014 motor fuel bills. House Bill 2057 (effective July 1, 2014) amends K.S.A. 79-3492 to add energy-equivalent conversion formulas (…
Could a nonresident use Illinois passive losses before federal law allowed them, and how were released losses sourced to Illinois?
No loss was available for Illinois before it was allowed in federal adjusted gross income. Illinois had no separate modification overriding the federal Section 469 limitation. When a suspended passive…
Would IDOR decide which lodging businesses owed a county accommodations tax and the Illinois hotel tax?
IDOR would not address the county ordinance because it did not administer that local tax. For the state hotel tax, the GIL gave the general rule—6% of 94% of gross room-rental receipts, excluding perm…
Does a maintenance provider owe Georgia tax when customer-owned replaced parts become its property and are later refurbished and reused?
Yes. Under the maintenance agreement, ownership of removed parts passed from the customer to the provider in exchange for consideration, creating a retail sale because the provider did not acquire the…
Could retirees count a 2012 balance paid in 2013 as a 2013 estimated payment while excluding their January 2014 quarterly estimate?
No. Roger and Louise Bumstead's $810 payment made in April 2013 paid their 2012 income-tax balance; its calendar-year payment date did not turn it into a 2013 estimated payment. Conversely, their Janu…
Could a nationwide commercial-property owner use separate accounting for one Illinois rental property instead of Illinois's statutory apportionment formula?
Not on the submitted record. Owning an identifiable Illinois rental property and providing a property-specific income schedule did not show that the statutory formula failed to fairly represent the ma…
Could a manufacturer force machinery revaluation using depreciation schedules while refusing the county's requested federal and Virginia returns?
Not yet. The county could require complete tax returns and schedules to verify original capitalized cost, and the manufacturer's depreciation schedules were insufficient. Virginia found the denial pro…
Did a taxpayer living abroad remain a Virginia resident in 2009 because she kept a Virginia license and voter registration?
No. After weighing all evidence, Virginia found that the taxpayer abandoned her Virginia domicile and established domicile in another country by 2005. Selling her Virginia home and vehicle and living …
How did Illinois answer a 2014 sales-tax survey on nexus safe harbors, special charges, local taxes, and virtual currency?
Illinois reported no nexus safe-harbor zones. Retained restocking fees were not taxable gross receipts, but the customer received all sales tax back. Handling was taxable; a genuine separately contrac…
Was a hotel's full contract charge for canceled rooms and meals taxable when the agreement labeled it liquidated damages plus applicable taxes?
Yes. The customer remained obligated to pay 100% of the contracted rooms, food, and beverages as liquidated damages plus applicable taxes. Virginia treated the balance, after credit for services the c…
Who collected Virginia tax when an out-of-state consignor sold goods for resale to a separate online seller that lacked Virginia nexus?
Under the 2014 facts, neither company collected tax on the retail sale. X did not sell to Virginia consumers and was not a Virginia dealer; Y made the consumer sale but had no Virginia nexus. Y should…
Did periodic moves to another state, without a permanent home or steady job there, establish a new domicile outside Virginia for 2009?
No. The taxpayer moved between Virginia and State A as employment required, but did not establish a permanent abode, steady employment, or significant State A ties beyond a vehicle registration. Her V…
Could a Florida corporate group end consolidated filing after its businesses, revenue mix, and membership changed?
Yes. The Department found the group's changed business focus, service growth, acquisitions, divestitures, and altered membership were good cause, subject to four conditions.
Could a Florida corporate group stop filing consolidated returns after major changes in its business and group structure?
Yes. The Department found the group's substantial growth and changed business focus were good cause to discontinue consolidated filing, subject to effective-date and deferred-item conditions.
Were separate closed-end truth-in-lending and loan/security documents subject to Florida documentary stamp tax?
No, while unrecorded. Neither document contained a signed promise to pay a sum certain, and a reference did not expressly incorporate the other form; filing or recording either security document would…
How did Illinois's 2014 Telecommunications Excise Tax guidance treat Internet access, lit fiber, and dark-fiber leases?
During the federal Internet-access moratorium then ending November 1, 2014, qualifying Internet access and lit fiber used by ISPs to provide it generally were not taxable. Other telecom services, incl…
Was federal tobacco excise tax included in the wholesale-price base for Illinois Tobacco Products Tax?
Yes. The federal excise tax was imposed on the manufacturer or importer and treated as the manufacturer's cost of doing business. It was included in wholesale price for Illinois Tobacco Products Tax w…
Did a couple living in their out-of-state home for medical treatment reestablish Virginia domicile because they owned a Virginia townhouse and used its address?
No. The couple moved into their State A home in 2009 so the husband could receive nearby hospital treatment. Although they owned Virginia property, registered two children's vehicles there, and used a…
What did rescinded Illinois GIL ST 14-0041 say about Illinois-only rolling-stock trips?
Historical only—ST 14-0046-GIL rescinded this letter. ST 14-0041 had said an Illinois-only carrier-for-hire trip could generally count when the passenger journey or property shipment originated or ter…
What did rescinded Illinois GIL ST 14-0040 say about nonprofit hospital patient and cafeteria sales?
Historical only—ST 14-0048-GIL rescinded this letter. ST 14-0040 had said an exclusively charitable nonprofit hospital with an IDOR exemption number did not owe Retailers' Occupation Tax on patient fo…
Did unsupported factual disagreements and previously requested but unproduced records justify reconsidering Virginia's 2005-2010 income-tax assessments?
No. The taxpayer did not satisfy a reconsideration ground or provide new documentation supporting nonresidency or disputing Virginia-source income. State A records contradicted his license claim, he r…
Did a timely appeal of a foreign-source-income adjustment preserve unrelated audit issues that were first raised more than 90 days after assessment?
No. The original timely appeal challenged only the foreign-source-income subtraction. Because the taxpayer did not identify the other alleged audit errors within 90 days of the December 2011 assessmen…
Was a manufacturer's separately stated consolidated freight charge for moving goods between its own plants taxable?
Yes. Moving products from one company facility to another to consolidate a customer's order was incoming freight and a retailer cost of doing business. The charge remained part of taxable gross receip…
Could a corporation obtain administrative relief after appealing Virginia corporate-income-tax assessments beyond the 90-day deadline?
No administrative appeal relief was available because the corporation filed on March 28, 2014, after both 90-day deadlines, and it did not identify an assessment error. Virginia instead gave it 30 day…
Could Virginia residents claim credit for Pennsylvania tax on an independent-contractor honorarium for teaching a university course abroad?
Only if the couple was actually liable for Pennsylvania tax. The husband appeared to be an independent contractor, so the honorarium was not employee compensation covered by reciprocity. But because h…
Did Virginia apply a Fairfax County circuit-court ISP equipment exemption statewide, and which purchases qualified for a refund?
No. Virginia continued to construe the ISP equipment exemption narrowly and declined to apply the Fairfax County Cisco decision statewide. It allowed a refund, with interest, only for equipment the au…
Did Virginia communications tax and the Internet Tax Freedom Act exempt activation fees for mobile plans providing only Internet access?
No. Internet access itself was not taxed, but Virginia treated activation and connectivity as separate taxable communications services. The Department also found that connectivity was not an incidenta…
Were Internet reactivation charges taxable, were cable rights-of-way fees payable to Virginia, and could a missed-return penalty be waived?
Virginia upheld all three audit issues. Internet reactivation charges were taxable communications services even though Internet access itself was not taxed; the cable operator had to remit its rights-…
Did a telecom repair pricing agreement qualify for the rule taxing only half of a parts-and-labor maintenance contract?
No. The agreement set prices for optional repair and replacement transactions but imposed no predetermined fee or total charge when signed. It was a pricing agreement, not a qualifying maintenance con…
Did a telecom repair pricing agreement qualify for the rule taxing only half of a parts-and-labor maintenance contract?
No. The agreement set prices for optional repair and replacement transactions but imposed no predetermined fee or total charge when signed. It was a pricing agreement, not a qualifying maintenance con…
Did Virginia sales tax remain due on the remaining payments under a noncancellable equipment lease after the customer returned the equipment early?
Yes. The four-year lease was noncancellable and required payment despite dissatisfaction. Returning the equipment after one year did not eliminate the remaining gross proceeds, so the out-of-state les…
Was a microchipped medical-information bracelet taxable when furnished with nursing or data-entry services or sold by itself?
Nursing or nurse data-entry charges that included a bracelet were exempt services, not bundled retail sales, but the provider owed tax when buying the bracelet. A bracelet sold without services was ta…
What did rescinded Illinois GIL ST 14-0038 say about federal excise tax in the tobacco wholesale-price base?
Historical only—ST 14-0042-GIL rescinded this letter. ST 14-0038 had said federal tobacco excise tax was a manufacturer cost included in wholesale price for Illinois Tobacco Products Tax whether embed…
Could a one-way hauler report only loaded miles and avoid the weight-distance mileage-underreporting penalty for an honest mistake?
No. Gloworks Trucking qualified for New Mexico's reduced one-way-hauler rate, but it still had to report every mile traveled in New Mexico, including empty return miles. Reporting only loaded miles cu…
Could an Illinois school buy required books tax-free for resale and then sell them tax-free to students?
The school could buy the books tax-free for resale by giving its supplier a valid resale certificate, but its sales to students were taxable. IDOR said selling school books and supplies to students wa…
Was the requesting delivery company primarily engaged in transportation for hire for South Carolina property tax?
Yes for the requesting taxpayer. DOR concluded that a company paid to deliver packages by aircraft, trucks, and vans was primarily engaged in transporting property for hire. Its furniture, fixtures, a…
What did Virginia's 2014 Tobacco Products Tax guidelines require, and what penalties applied to intentionally untaxed products?
The 2014 guidelines required covered distributors to be licensed, pay the Tobacco Products Tax when products were sold in Virginia, file monthly Form TT-8 returns even when no tax was due, and keep de…
What proof did an Illinois restaurant need for tax-exempt government, nonprofit, or foreign-diplomat sales, and was a Moorish card valid?
The restaurant needed an active Illinois exemption number for an exempt organization or governmental entity, or a valid U.S. Department of State diplomatic tax card recognized by Illinois. The sale ha…
Did a bank owe Illinois sales tax when it sold repossessed nursery-school property after foreclosure?
IDOR did not decide on the limited facts. Lending agencies generally owed Retailers' Occupation Tax on repossessed-property sales. A bank acting only as agent for a disclosed owner and not taking titl…
Did IDOR determine that a reseller's software license met Illinois's five conditions for nontaxable treatment?
No specific determination was made. IDOR said a canned-software license was nontaxable only if all five conditions were met, including a ban on third-party transfer without the licensor's permission a…
Is a flat fee to use a golf simulator a taxable admission to a place of amusement, or a non-taxable charge to use a device?
It is not taxable. The flat fee is a charge for the use of the golf simulator -- a device -- not an admission charge to enter the place where the simulators are located. A charge to use an amusement d…
Could buyers of transferred Virginia Land Preservation Tax Credits protect a refund claim while litigation challenged the Department's easement valuation?
Potentially. Virginia did not reverse the Department's lower conservation-easement valuation. Because litigation was pending over that valuation, the taxpayers could consider a protective claim under …
Could a corporation combine two federal short taxable years for Illinois and use more than the historical $100,000 net-loss deduction cap in the second period?
No. Illinois followed the corporation's two federal short taxable years, so each period was a separate Illinois taxable year. The first period generated a $7,215,196 Illinois net loss, while the secon…
Does a nonresident who buys Colorado tax lien certificates owe Colorado income tax on the interest the property owner pays to redeem them?
Yes. A nonresident is taxed on Colorado-source income, and interest on Colorado tax lien certificates qualifies under any of three independent provisions of § 39-22-109(2)(a): it's income from an owne…
Are colocation cross connects, cables, direct private lines, and remote-management software subject to Colorado sales or use tax?
It depends, and the Department gave only limited guidance because the company declined to request a (binding) private letter ruling. Whether colocation cross connects and cables are a taxable rental o…
Could a military spouse claim another state's domicile and Virginia withholding refunds when residence and intent were not established at the same time?
No. The spouse lived in State B only from July through September 2008, while vehicle registrations and voter registration occurred later. Because personal presence and intent to make State B a permane…
Did Virginia's automatic six-month extension preserve a 2008 refund when the taxpayers did not file the original return until October 2012?
No. Because the taxpayers did not file the original 2008 return by the extended due date, the extension was negated and the timely-filing date reverted to May 1, 2009. Their three-year refund period e…
Was propane used to heat migrant-worker housing exempt as agricultural production, and were movable tobacco-curing barns taxable?
The housing propane was taxable because worker comfort and personal needs were not agricultural production for market. By contrast, movable tobacco-curing barns placed on concrete pads remained tangib…
Did New Mexico's income-tax exemption for active-duty armed-forces pay cover a Public Health Service officer's salary?
No. Rochelle Young was a Public Health Service officer, but Section 7-2-5.11 exempted only salary for active-duty service in the armed forces. The decision applied 10 U.S.C. § 101(a), which defined th…
Could remote employees' homes or rented data-center space reduce an Internet-services company's county BPOL receipts through situs or payroll apportionment?
Potentially for 2010-2011, but not automatically. The 2009 refund claim was late. Server space alone was not a definite place of business, while employee homes could qualify after a factual review. Re…
Did a pending IRS reconsideration prevent Virginia from assessing 2005 tax when the taxpayer had not filed a Virginia return?
No. Virginia used the IRS information then available after finding no 2005 Virginia return on file. The return later submitted did not match the federal adjustment, and the Department would not look b…
Did an IRS reconsideration request stop Virginia from assessing tax based on the IRS's existing 2007 audit adjustment?
No. Virginia used the IRS information then available and did not look behind the federal audit determination merely because reconsideration was pending. The assessment remained payable. If the IRS lat…
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