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 Kansas change the definition of income for homestead property tax refund claims for 2013?
Kansas Notice 14-11 (July 1, 2014) explains that 2014 Senate Bill 265 (Section 2) amended K.S.A. 79-4502, which defines 'income' for homestead property tax relief claims. The 2012 income tax overhaul …
Can Kansas banks and other financial institutions now claim the expensing deduction?
Kansas Notice 14-10 (July 1, 2014) explains that 2014 House Bill 2057 (Section 7) amended K.S.A. 79-32,143a, the Kansas expensing (expense) deduction, so that certain financial institutions can claim …
Did Kansas repeal withholding on nonresident S corporation shareholders, partners and LLC members?
Kansas Notice 14-09 (July 1, 2014) explains that 2014 Senate Bill 265 (Section 9) repealed K.S.A. 79-32,100e, the provision that had required S corporations, partnerships and limited liability compani…
When does Kansas waive the 50% income tax penalty on additional tax from an adjusted return?
Kansas Notice 14-08 (July 1, 2014) explains that 2014 House Bill 2643 (Section 18) amended K.S.A. 79-3228(d), the income tax penalty statute, for tax years ending after December 31, 2013. When a taxpa…
Which counties were added to the Rural Opportunity Zone program in 2014?
Kansas Notice 14-07 (July 1, 2014) explains that 2014 House Bill 2643 (Section 19) amended K.S.A. 2013 Supp. 74-50,222 to add four counties -- Cherokee, Labette, Montgomery and Sumner -- to the list o…
Did Kansas restore the disabled accessibility credit for homes and extend the business version?
Kansas Notice 14-06 (July 1, 2014) explains that 2014 Senate Bill 265 (New Section 5) reenacted the disabled accessibility credit for dwellings that had been repealed in 2012, effective for tax year 2…
Did Kansas bring back the adoption income tax credit, and how much is it?
Kansas Notice 14-05 (July 1, 2014) explains that 2014 Senate Bill 265 (New Section 4) reenacted the Kansas adoption credit that had been repealed in 2012, effective for tax year 2014 and later. A resi…
Can a Kansas taxpayer subtract unreimbursed expenses for donating a human organ?
Kansas Notice 14-03 (July 1, 2014) explains that 2014 Senate Bill 265 added a new subtraction modification, K.S.A. 79-32,117(c)(xxi), letting a taxpayer subtract from federal adjusted gross income the…
How does Kansas treat a minister's self-employment tax deduction after the 2014 change?
Kansas Notice 14-02 (July 1, 2014) explains that 2014 Senate Bill 265 amended K.S.A. 79-32,117(b)(xx) so that the required Kansas add-back of the federal self-employment tax deduction (IRC section 164…
What were Kansas's simplified electronic return policies under the Streamlined Sales and Use Tax Agreement?
Kansas accepts the Streamlined Sales and Use Tax Agreement's simplified electronic return. Agreement-registered sellers generally were not required to submit Part 2 exempt-sales data unless Kansas fir…
Could a county defeat a Virginia BPOL appeal by treating an incomplete letter as final or by placing a later appeal under the general local-tax procedure?
No. The county's December 2012 letter lacked the analysis and appeal notice required for a final BPOL determination and the parties kept working on the dispute. The December 2013 appeal qualified unde…
Must a nonprofit performing-arts organization collect Georgia sales tax on admissions, donations tied to admission, and complimentary tickets?
Paid performance admissions were taxable despite nonprofit status. A documented tax-deductible donation was not a taxable admission contribution, but consideration exchanged for admission was taxable.…
Did a taxpayer avoid penalty and interest when she paid additional federal audit tax but did not file the required New Mexico amended return?
No. An IRS audit increased Sara Mills's 2007 federal tax, and she paid the federal amount on June 22, 2010 but did not report the adjustment to New Mexico. The law then in effect required a state amen…
How could a partnership calculate project income and allocate Florida's Capital Investment Tax Credit to its partners?
Florida approved a project pro forma based on Florida assets and workforce, with the resulting credit allocated to corporate partners by their represented ownership percentages.
Could a technology company remove audited use-tax purchases using representative invoices and unclear service agreements?
Only partly. Virginia removed a documented $35 item and conditionally removed two invoices showing sales tax paid. But representative invoices, emails, and claims about electronic delivery did not pro…
Was a common carrier created after the Interstate Commerce Commission was abolished exempt from Virginia local BPOL tax merely because it registered with the FMCSA?
No. Under the statute as written in 2014, the carrier had to have been formerly certified by the Interstate Commerce Commission or meet the specified Surface Transportation Board registration language…
Can a company use separate accounting instead of Colorado's single-sales-factor formula to apportion its income—and what does it have to prove?
The Department denied this request. Colorado (like most states) abandoned separate accounting long ago: it conflicts with the single-sales-factor method the legislature adopted in 2010, it's administr…
What project-income method did Florida approve for a consolidated filer's Capital Investment Tax Credit?
Florida approved a separate-ledger pro forma return using GAAP and section 220.13, followed by the project's Florida apportionment fraction and the 5.5 percent corporate tax rate.
Did Virginia violate a transferee's taxpayer rights or miss the assessment deadline when it reduced a transferred Land Preservation Tax Credit?
No. Virginia upheld the assessment. The credit-award letter warned that the conservation-easement value remained subject to audit and adjustment, the Department gave notice and appeal opportunities, a…
A tiered multinational group with corporations, LLCs, and disregarded single-member LLCs wants to compute its Tennessee franchise-tax net worth on a consolidated basis. Which entities are disregarded, who is in the affiliated group, and how are foreign holdings and disregarded SMLLCs treated in consolidated net worth?
Three answers. (1) The group's single-member LLCs that are disregarded for federal income tax and owned by a corporation (here, LLCs taxed as corporations) are ALSO disregarded for Tennessee franchise…
Did the University of Illinois have to withhold Illinois income tax from scholarships, contractor fees, honoraria, royalties, and other payments to foreign recipients?
Only compensation treated as employee wages and subject to federal income-tax withholding triggered required Illinois withholding under the provisions discussed. Illinois followed federal employee-ver…
How did Florida treat a section 338(h)(10) stock sale and the target's pre-sale distribution of unwanted assets?
Florida followed federal treatment. The target had to report deemed asset-sale gain as Florida business income, while the unwanted-asset distribution received the same treatment as federally under the…
A company sells a wearable, continuous-use medical device — a portable pack, a worn component, and ancillary parts — at one monthly price to treat a disease. Is the device exempt from Tennessee sales and use tax as a prosthetic device?
Yes. The wearable medical device is exempt from Tennessee sales and use tax as a 'prosthetic device' (Tenn. Code Ann. § 67-6-314(1)). To qualify, a device must be (1) for human use, (2) a replacement,…
Did Virginia's ISP equipment exemption cover assets used for wholesale Internet service and web hosting as well as retail Internet access?
Only in part. Assets used in Fairfax County could qualify for the ISP exemption for retail or wholesale Internet service under a county circuit-court decision. Outside Fairfax, Virginia continued to d…
Can a bike-share operator buy all its equipment tax-free for resale, or only the bikes it actually rents to riders?
Only the bikes. The operator's purchase of the bikes is exempt as a purchase for resale, because riders rent the bikes -- they get custody, control, and direction of use during the rental. But the doc…
What is South Carolina's tax interest rate for the period ending September 30, 2014 (per SC IL #14-8)?
3%. SC Information Letter #14-8 sets South Carolina's interest rate on tax underpayments and overpayments at 3% for the period October 1, 2011 through September 30, 2014. Interest is compounded daily,…
Could a designated Special Payment taxpayer avoid penalty when it hand-delivered New Mexico bank checks on the usual due date instead of one business day earlier?
No. Santa Fe Hotel had been designated a Special Payment taxpayer effective January 1, 2008. When paying by a check drawn on a New Mexico bank, it had to deliver payment directly to the Santa Fe Depar…
Could a federal construction contractor and its subcontractor buy freestanding office furniture tax-free for resale to the agency?
Yes. Modular panels, freestanding furniture, chairs, shelving, file cabinets, power strips, and similar items that would not be incorporated into or permanently affixed to the building could be bought…
Did exterior light-box signs installed by a tenant become real-property fixtures rather than property subject to Virginia local BTPP tax?
No. Virginia upheld the county's classification of the entire light-box signage as taxable business tangible personal property. Although attached to the building, the boxes were not essential to the d…
What Virginia tax interest rates applied during the third quarter of 2014?
Virginia's third-quarter 2014 rate was 5% for both tax underpayments and overpayments. The reduced rate for a qualifying assessment still unresolved nine months after assessment was 0%. The bulletin a…
Did informal discussions with a Department auditor extend the deadline to protest a corporate income-tax assessment?
No. New Mexico Tech University Research received an $85,570.03 corporate income-tax assessment on May 20, 2013. Its CPA tried to resolve the net-operating-loss issue informally and noted that no prote…
Could a Public Health Service officer avoid penalty and interest after relying on employer statements and tax software to claim the armed-forces exemption?
No. Tracy Sanchez conceded that her Public Health Service pay was taxable because she was not serving in the armed forces covered by Section 7-2-5.11. Her PHS earnings statements and tax software had …
Could a contractor buy modular buildings tax-free because it installed them for a federal agency under a government contract?
No. The contractor installed modular buildings as real-property construction and was the consumer of the materials, even though title passed to a federal agency and the agency supplied an exemption ce…
Could a Virginia domiciliary avoid Virginia tax on another state's pension because he lived there more than 183 days and filed returns there?
No. The taxpayer remained domiciled in Virginia, so Virginia could tax all of his retirement income even though he spent more than 183 days and filed resident returns in another state. A credit might …
Did ongoing Department communications preserve a timely 2008 refund claim when no protest or lawsuit followed 120 days of agency inaction?
No. Josephine Miskowiec timely claimed a 2008 medical credit refund on April 9, 2012, but the Department neither granted nor denied it within 120 days. She then had until November 5, 2012—210 days fro…
Are remotely hosted cloud applications supporting customer phone and collaboration systems taxable in Georgia when no hardware or software is transferred?
No. The cloud collaboration and hosting charges were nontaxable services because customers received no title, possession, use, or control of hardware or software, and the provider did not sell taxable…
When a company that earned Georgia's quality jobs tax credit simply converts to an LLC, can the converted entity keep and continue that credit and its carryforward?
Yes. After the company converts from Taxpayer 1 to an LLC (Taxpayer 2), the converted entity keeps the quality jobs tax credit: its owners can claim the income-tax carryforwards and the unused approve…
How should a combined Virginia corporate group report Coalfield Employment Enhancement Tax Credits used against its income-tax liability?
The credits were not refunds or overpayment credits eligible for Virginia's income subtraction because they were fully used against current combined tax. Instead, they reduced the affiliate's deductib…
Is an agreement with required title transfer and a $1 purchase option a lease or purchase, and are separately stated interest and installation charges taxable?
The agreement was a purchase, not a lease, because it required title transfer after the payments and a $1 option. After an addendum separately identified principal, interest, and installation, sales t…
Are hand-calligraphy charges taxable when the customer supplies the envelopes, and which calligraphy materials may be bought tax-free?
Calligraphy was taxable fabrication and custom printing whether performed on customer-provided paper or paper supplied by the calligrapher, with tax on the total invoice charge. Ink, paper stock, and …
Were rentals of personal mobility scooters used by handicapped or infirm people exempt from Florida sales tax?
Yes. The Department found the described electric mobility scooters functionally equivalent to powered wheelchairs and therefore specifically exempt as mobility-assistance medical devices.
Were dairy-cow hoof-trimming receipts exempt as livestock handling or deductible as cultivation of agricultural products?
No. Enchantment Custom Hoof Care trimmed dairy cows' hooves to maintain animal health and milk production. It did not sell livestock, and its handling was not performed in anticipation of a sale expec…
Did a military spouse qualify for Virginia nonresident withholding relief by sharing the service member's domicile in another state?
Yes. The preponderance of evidence showed that the taxpayer and active-duty spouse had established and maintained domicile in the same other state. Their legal-residence certificate, vehicle registrat…
Could Virginia residents avoid a 2008 assessment based on an IRS income adjustment by arguing they had not pledged income or contracted with the Department?
No. Virginia starts with federal adjusted gross income, and the IRS reported that the couple had underreported it. They supplied no objective evidence that the federal information was wrong, and argum…
Which Nebraska sales and use tax revenue rulings were superseded by Revenue Ruling 01-14-2?
Revenue Ruling 01-14-2 (sales and use tax), issued June 4, 2014, is a housekeeping ruling that supersedes three older Nebraska sales and use tax revenue rulings the Department considers obsolete -- be…
Could a nail technician paid on Forms 1099 deduct services resold by salons when the salons issued NTTCs after the audit deadline?
No. Thu Hong Nguyen was an independent contractor because the salons paid commissions, issued Forms 1099-MISC, withheld no tax, and provided no unemployment or workers' compensation coverage. Her mani…
Was a prescribed electric-field device used to treat recurrent brain cancer exempt from Florida sales tax?
Yes. The device was designed for medical treatment of human illness and was dispensed to each patient under an individual prescription written by a licensed practitioner.
Did an automobile dealership become liable as a successor when it bought the predecessor's operating assets through a secured-creditor transaction?
Yes. Hi Country acquired the predecessor dealership's inventory, equipment, franchise agreements, goodwill, customer lists, intellectual property, and trade-name rights, then continued a Buick GMC dea…
What surface mining machinery and equipment did Kansas exempt from sales tax in 2014?
Kansas Notice 14-16 (dated June 2014) explains that 2014 House Bill 2378 added new subsection (4)(F) to K.S.A. 2013 Supp. 79-3606(kk)(4), deeming exempt all machinery and equipment used in surface min…
What agricultural construction projects qualify for the new Kansas sales tax exemption?
Kansas Notice 14-13 (dated June 2014) explains that House Substitute for Senate Bill 265 created a new sales tax exemption, K.S.A. 2014 Supp. 79-3606(hhhh), effective July 1, 2014. It exempts sales of…
Which digital fax, email, EDI, and VPN messaging charges were subject to Florida CST or sales tax?
Traditional-fax and qualifying VPN charges could be subject to CST based on Florida equipment sourcing. Email-only, nontraditional digital fax, EDI VAN, reporting, and customization services were not …
Were ceiling-track movable office partitions tangible personal property for resale, or real-property installations making the fabricator liable for use tax on materials?
They were treated as real-property installations. The partitions were attached to ceiling and floor systems, adapted to long-term office use, and not shown to be temporary. The contractor therefore co…
Could a retailer overturn an estimated Virginia sales-tax assessment without keeping sales, invoice, bank, or register records?
No. The retailer discarded records after a few months and could not substantiate claims about meat costs, gradual growth, a competitor's closure, invoices, deposits, or reported sales. Virginia found …
Did a Virginia seller owe Virginia sales tax when out-of-state manufacturers shipped products directly to buyers' locations outside Virginia?
No. The products never entered Virginia, and title and possession passed to the buyers outside Virginia with no use in the state. The sales therefore fell outside Virginia's retail-sales-tax jurisdict…
Did a military spouse prove she shared the service member's out-of-state domicile and qualified for Virginia withholding refunds?
Not on the record submitted. The spouse bought a Virginia home, obtained a Virginia driver's license, registered vehicles in Virginia, used a Virginia address on federal returns, and produced no evide…
Was a lump-sum nonqualified pension payment taxable by Virginia when a part-year resident received it after moving into the state?
Yes. For a part-year resident, Virginia attributed income to the state when it was received during the Virginia-resident portion of the year. The husband's earlier out-of-state employment did not chan…
Did taxpayers receive refunds after paying assessments caused by a reduced transferred Land Preservation Tax Credit?
No. Virginia treated the protective refund claim as an appeal on the merits and denied it. A separate Department determination had already upheld the lower conservation-easement valuation, so the resu…
Did Virginia cancel a 2008 assessment caused by reducing a transferred Land Preservation Tax Credit?
No. A separate Department determination had already upheld the lower conservation-easement valuation as the most accurate appraisal. Because the taxpayers' transferred credit depended on that valuatio…
Did taxpayers receive a 2008 refund after paying an assessment caused by a reduced transferred Land Preservation Tax Credit?
No. Virginia treated the protective refund claim as an appeal on the merits and denied it. A separate Department determination had already upheld the lower conservation-easement valuation, so the resu…
Did housing, subsistence, and other military compensation count when phasing out Virginia's subtraction for basic military pay?
No. Virginia's subtraction and its $15,000-to-$30,000 phaseout used only statutory military basic pay. Housing and subsistence allowances and other compensation shown on a W-2 were not basic pay. The …
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