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 taxpayers defeat a Virginia assessment by saying their 2006 return was e-filed when they had no confirmation number or proof of payment?
No, not on the submitted evidence. Virginia had no record of the return, and the taxpayers kept neither the e-file confirmation number nor proof of payment. The no-return rule allowed assessment at an…
Was a software developer a BPOL retailer or wholesaler because it delivered prewritten software on memory sticks?
No. Physical delivery on memory sticks did not outweigh the company's principal business of developing, licensing, maintaining, and supporting measurement software. Custom development, training, and m…
What annual caps applied to Virginia's Qualified Equity and Subordinated Debt Investments Tax Credit through 2014?
The bulletin listed annual caps of $3 million for 2005-2009, $5 million for 2010, $3 million for 2011, $4 million for 2012, $4.5 million for 2013, and $5 million for 2014. It said the $5 million statu…
Are wasabi and soy seasoned almonds taxable candy/confectionery, or exempt food, when the seasoning contains some sugar?
They are exempt food under Tax Law section 1115(a)(1), not taxable candy or confectionery. Nuts that are not glazed or sugar-coated are exempt food. These almonds are dusted with a spicy, salty wasabi…
Are fines charged for violating parking rules taxable as parking-service charges under New York sales tax?
No -- parking fines are not subject to sales tax. While New York taxes charges for providing parking, garaging, or storing motor vehicles (and that tax applies even to many exempt organizations), a fi…
Is transferring tangible personal property to an LLC in exchange for a membership interest a taxable retail sale?
No -- contributing property to a limited liability company in exchange for a pro rata membership interest is not a taxable retail sale, so no sales or use tax is due. The Tax Law specifically excludes…
Is a service that facilitates obtaining FBI criminal-history records for an employer -- acting only as a conduit -- subject to sales tax as an information service?
No -- the service is not subject to sales or use tax. The provider merely acts as an authorized channeling agency, transmitting an employer's fingerprint/authorization request to the FBI and forwardin…
Could a grocery store replace Virginia's two-day estimated sales-tax audit with revised EBT schedules when it lacked records of gross food sales?
Not yet. The store's inadequate records allowed Virginia to estimate taxable sales from a two-day observation period the store had accepted. EBT records could support revised exempt sales, but they di…
Are art-party participation charges taxable, and may the operator buy canvases, paint, and supplies tax-free for resale?
The art-party charge was taxable as admission to and participation in an amusement activity. When canvas, paint, and supplies were included without separate charges, the operator was their consumer an…
When and how does the Nebraska Department of Revenue publish its written responses to taxpayer inquiries, and what is the difference between a GIL, a revenue ruling, a taxpayer ruling, and a declaratory order?
Revenue Ruling 99-14-1 explains when and how the Nebraska Department of Revenue publishes its written answers to taxpayer questions, balancing the public benefit of guidance against strict confidentia…
Was a museum's lease of restaurant and food-service space exempt as an exhibition-hall concessionaire lease?
Yes. The museum qualified as an exhibition hall, and the restaurant was a retail concessionaire selling food and drink to the public within the facility.
Were chemicals used between printing-ink production runs exempt as supplies used directly in manufacturing?
No. Although cleaning prevented color contamination and protected product quality, the chemicals were used only after one ink run stopped and before the next began. Because they were not actively and …
Could taxpayers overturn old Virginia assessments by claiming that only government employees and seamen were subject to income tax?
No. The administrative appeals for 2006 and 2008-2012 were filed beyond 90 days, and the paid 2007 assessment's refund claim missed its separate three-year deadline. Virginia also stated that the argu…
Did survivor-annuity payments from a federal retirement plan qualify for Virginia's annuity death-benefit subtraction?
No. Virginia limited the subtraction to a federally taxable lump-sum death benefit from an annuity contract between a customer and an insurance company. The taxpayer's survivor payments came from a fe…
Could a county reject a poultry processor's manufacturer classification for 2006-2009 solely because supporting documents arrived after an initial 45-day period?
No final classification was made. Virginia found the taxpayer made a good-faith effort within the original 45 days, while the county specified needed records only afterward and then ignored the additi…
Was an appeal complete when a taxpayer mentioned an IRS dispute and challenged penalties and interest but identified no error, facts, or legal authority?
No. The taxpayer's letter did not identify an alleged assessment error, relevant facts, grounds for relief, or controlling authority, so it was not a complete appeal. The 2012 assessment based on tax …
Could an employee subtract his own Form W-2 wages under Virginia's federal jobs-credit or Work Opportunity Credit subtraction?
No. The subtraction was designed for an employer whose federal wage deduction was reduced because the same wages generated the federal Work Opportunity Credit. The taxpayer neither incurred employer w…
Could a taxpayer abate Virginia's 2009 assessment by producing only a State A return showing residence there for the first six months?
Not on that record. A State A return showing residence there for the first six months did not establish that Virginia domicile had been abandoned or quantify the correct liability. Because the taxpaye…
Did a federally taxable survivor benefit from a federal retirement plan qualify for Virginia's annuity death-benefit subtraction?
No. Virginia required a federally taxable lump-sum death benefit from an annuity contract between a customer and an insurance company. The wife's benefit came from a federal retirement plan, so it fai…
Which sales and equipment purchases did Virginia remove from a packaged-concrete manufacturer's sales/use-tax audit?
Virginia granted partial relief. It removed one qualifying underground-mine project sale for this audit, an exempt label machine, a server first used and taxed in another state, and replacement compre…
Which furniture-manufacturing, advertising, certificate, and penalty items did Virginia change in a sales/use-tax audit?
Virginia ordered a partial audit revision. It removed a valid resale sale, certified pollution-control filters, direct out-of-state shipments, and qualifying printed materials; it kept invalid carrier…
Did a tax preparer's fax of an unsigned federal return prove that a 2010 return was filed and require New Mexico to recalculate a 1099-based assessment?
No. Guidance Tax Services faxed Melinda Schramm's 2010 return to the IRS, but the IRS rejected it because it needed an original signed return. Her wage-and-income transcript showed only Form 1099-MISC…
Can a Kansas taxpayer subtract the net gain from selling certain breeding or draft livestock?
Kansas Notice 14-04 (revised July 15, 2014) explains that 2014 Senate Bill 265 added a subtraction modification, K.S.A. 79-32,117(c)(xxii), for the net gain from selling certain livestock: (1) cattle …
Are canned coffee-based energy drinks taxable soft drinks, or exempt coffee, when sold to go?
They are exempt. Sold in cans for off-premises consumption, Starbucks Doubleshot Energy coffee drinks are treated as coffee, not as a taxable soft drink. Coffee is the first listed ingredient and the …
Are tickets to a narrated sightseeing bus tour -- which includes brief staged street performances -- subject to NY sales tax?
No -- the bus tour tickets are not taxable. The tax on transportation services doesn't reach bus service (a bus seats 15+ and is excluded from taxable 'livery service'), so the tour isn't a taxable tr…
How did Georgia's manufacturing and agricultural exemptions apply to a poultry processor's refrigerated trailers and sanitizing chemicals?
Registered refrigerated trailers never qualified as manufacturing machinery but were exempt agricultural equipment for a qualified producer beginning in 2013. Manufacturing sanitizing chemicals were t…
Was a software vendor's outsourced printing and mailing of customer invoices and late letters taxable in Illinois?
IDOR did not decide without the invoices, license, contracts, registration status, and delivery facts. A service with no tangible-property transfer generally was outside Retailers' Occupation and Serv…
When is South Carolina's 2014 sales tax holiday and what items are exempt (per SC IL #14-10)?
South Carolina's 2014 sales tax holiday runs from 12:01 a.m. Friday, August 1, 2014 through midnight Sunday, August 3, 2014. During that three-day weekend, the 6% state sales and use tax and any appli…
Are receipts from branded 'mind body' fitness classes (yoga-based but marketed for toning) subject to New York City sales tax?
Yes -- when the classes are aimed at improving bodily appearance (building strength, toning, sculpting), the facility is a 'weight control salon, health salon, gymnasium or similar establishment,' and…
How can taxpayers check whether an older South Carolina advisory opinion was modified or superseded (per SC IL #14-9)?
Use the citator attached to SC Information Letter #14-9. It helps you determine what effect newer South Carolina advisory opinions have on previously published ones — whether an opinion was modified, …
Can modular or container server units qualify as Georgia high-technology facilities, and which parts count as exempt computer equipment?
The NAICS 51121 operator qualified as a high-technology company, and a modular or container server could be a qualifying facility when it was a single physical establishment with a qualifying primary …
If I arrange HVAC repair and maintenance through subcontractors and bill my clients directly, are my charges (including my management fee) taxable?
Yes -- you are the retail vendor of taxable repair and maintenance services, so all of your receipts from those services, including your separately stated management fee, are subject to sales tax. The…
Did Florida documentary stamp tax apply to the initial and later advances under a business-loan agreement?
The initial advance was taxable because the agreement contained a signed, unconditional promise for a fixed sum. Later advances were not taxable because they remained contingent when the agreement was…
Were emergency notification, voice-message, and interactive voice-response services subject to Florida CST or sales tax?
Generally no on these facts. Notification and voice-message products were information services, while IVR phone access or transfer was communications service sourced outside Florida and not charged to…
Was Florida sales tax still due after a landlord merged into its tenant and the surviving tenant owned the property?
No. The landlord ceased to exist in the merger, title vested in the surviving hospital, and no landlord-tenant relationship or rent payment remained to create taxable rental consideration.
How did Illinois tax forensic data-collection services delivered online, with no results, or on a hard drive, disc, or thumb drive?
Online viewing or downloading of extracted text and data, and a service producing no transferred property, generally involved no taxable tangible property. Delivering the results on a hard drive, CD/D…
Did a prior no-exception audit and alleged oral advice excuse a cigar retailer from tobacco products tax on purchases from unregistered out-of-state vendors?
No. Santa Fe Cigar bought tobacco products from out-of-state vendors not registered in New Mexico, making it the first purchaser liable for tobacco products tax. A 2006 audit found no exceptions becau…
What project-income and carryforward method did Florida approve for a $100 million manufacturing expansion?
Florida approved actual gross profit by qualifying production line, less project expenses and adjusted Schedule M items, followed by Florida apportionment to determine project tax and credit.
Did a federal employee remain domiciled in another state after settling with his family and conducting his affairs in Virginia?
No. The taxpayer's declaration of State A domicile was outweighed by his conduct: he had not lived there since 1999, documented no continuing ties, and instead maintained a family home, driver's licen…
Could a separate tobacco packaging-and-shipping service buy cartons, paper, chipboard, and strapping under Virginia's manufacturing exemption?
No. The service provider did not process or change the tobacco and performed handling, storage, packaging, and shipping away from the manufacturer's plant. It was therefore the consumer of its cartons…
When do employer contributions to a nonqualified deferred compensation plan count toward my company's MCTMT payroll expense -- when they vest, or when they're actually paid out to the employee?
When the compensation vests (or is earned, if later), not when it's distributed. New York's MCTMT payroll expense follows the federal FICA timing rule for nonqualified deferred compensation under IRC …
Is medical equipment loaned 'free' to hospitals along with catheters taxable, and does the medical-equipment exemption apply?
The loaned equipment is treated as part of the taxable sale of the catheters, not as a separate exempt item -- and it does NOT qualify for the medical-equipment exemption because it is sold to hospita…
Does a high-security facility that hosts customers' websites qualify as an 'internet data center,' making its equipment purchases exempt?
Yes -- the facility qualifies as an 'operator of an internet data center' under Tax Law section 1115(a)(37)(i). It is a purpose-built, high-security data center that houses customers' website servers …
Is a company that applies coatings to manufacturers' parts a 'producer,' and is its coating equipment and fuel exempt from sales tax?
Yes, with conditions. Applying coatings that change the nature of a customer's parts is 'processing,' and the coater is engaged in production for sale -- as long as the coated parts are, or become a c…
Is a private NYC gym a taxable 'athletic club' on its dues, and is it a NYC-taxable gymnasium whose fees owe city sales tax?
It is not a taxable social or athletic club -- the members don't control the activities, management, or selection and hold no proprietary interest, so the dues tax under section 1105(f)(2) doesn't app…
Is a fitness facility that includes a swimming pool a NYC-taxable gymnasium, and how are its food/drink and locker charges taxed?
As decided in 2014, no -- because the facility included a participatory-sports facility (a swimming pool), it was NOT a New York City-taxable 'weight control salon, health salon, or gymnasium,' and it…
Is a heart mitral-valve repair clip -- sold with its single-use guide catheter and delivery system for one price -- exempt as a prosthetic device?
Yes -- the system is exempt from sales and use tax as a prosthetic aid under Tax Law section 1115(a)(4). The implanted clip permanently restores the function of a leaking mitral valve, so it is a pros…
Is a nursery 'farming' for the sales-tax exemption, and is its equipment exempt -- even for plants already ready to sell?
The nursery is engaged in farm production only for plants it is still growing toward saleable size -- not for plants that already arrive (or already are) in the form it will sell, which is administrat…
We're buying THREE adjacent condo units with one purchase money mortgage and plan to combine them into a single home after closing, but the units aren't merged yet. Does our mortgage get taxed at the residential rate or the higher commercial rate?
The lower combined residential rate of 2.175% applies (rather than the higher commercial rate), extending the same "clear intent to combine" analysis from TSB-A-13(3)R to a three-unit combination. Eve…
I'm a touring musician who performs a few shows a year in New York City, and my business manager and accountant happen to be based there too. Does that subject all my self-employment earnings to New York's MCTMT?
Partially -- only on the earnings actually tied to the in-district work. Tax Law § 801(a)(2) taxes an individual's net self-employment earnings attributable to the Metropolitan Commuter Transportation…
After a 2012 policy change, does the section 1505(a)(2) premiums-based limitation still cap the Article 33 tax of an unauthorized life insurance corporation that has no New York premiums?
No longer. This modification of TSB-A-08(3)C applies a 2012 Department change (TSB-M-12(4)C): because an unauthorized life insurance corporation owes no additional premiums tax under section 1510(b)(1…
Did a retiree who kept homes in two states become domiciled in Virginia after renewing a Virginia driver's license and maintaining vehicles there?
Yes. After weighing all evidence, Virginia found the taxpayer changed domicile to Virginia in 2007. Renewing a Virginia driver's license, relinquishing the other state's license, allowing most registr…
How did Virginia classify selected lip, acne, earwax, fiber, mouthwash, medical, beverage, propane, and coupon products for sales tax?
Virginia issued a product matrix. Acne medicine, Debrox, antiseptic mouthwash, qualifying heating pads and ice bags, domestic propane exchanges, and entertainment coupon books were exempt. Several bal…
Did reusable fabric sandwich and snack bags qualify as lunch boxes during Virginia's school-supplies sales-tax holiday?
No. The holiday guidelines used an all-inclusive list of qualifying school supplies. Lunch boxes were listed, but reusable fabric bags that held only sandwiches were more like ordinary plastic sandwic…
Could accountant error or financial hardship extend Virginia's deadline for claiming a refund on a late 2006 return?
No. The refund deadline expired May 3, 2010, but the original 2006 return was not filed until January 2013. Virginia had no discretion to extend the three-year period for accountant error or financial…
Was a Virginia appeal timely when the assessment went to the IRS-reported last known address and the taxpayer learned of it later?
No. Virginia treated the assessment as made when it was mailed to the last known address supplied through IRS information, so the March 26, 2013 appeal missed the February 5 deadline. The merits appea…
Could New Mexico calculate withholding penalties on tax that was paid late but fully paid before the Department issued its assessments?
No. Exerplay timely filed monthly returns but failed to pay May-October 2013 withholding tax because its payroll contractor and accountant each thought the other handled payment. Exerplay discovered t…
Are injectable medications and injectable biologics exempt from South Carolina sales and use tax (per SC IL #14-4)?
Phasing in. SC Information Letter #14-4 explains that S.C. Code § 12-36-2120(80) exempts injectable medications and injectable biologics from the state and local sales and use taxes, but the exemption…
What Virginia state and local tax legislation did the Department summarize for the 2014 General Assembly and Special Session I?
This Department guide summarizes state and local tax legislation enacted during Virginia's 2014 General Assembly and Special Session I through July 1, 2014. It covers administration, income tax, tobac…
When are the Kansas mineral severance tax return and payment due after the 2014 change?
Kansas Notice 14-12 (July 1, 2014) explains that 2014 Senate Bill 266 (Sections 7 and 8) amended K.S.A. 79-4220 and K.S.A. 79-4221 to change the mineral severance tax due dates. Previously the return …
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