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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Did returning to a foreign home and job end Virginia domicile when the taxpayer kept a Virginia home, license, vehicles, voting ties, and family connections?
No. Although the taxpayer returned to a permanent home and full-time work in Country A, he kept his Virginia residence, renewed his Virginia driver's license, maintained vehicle and voting ties, and l…
Were a graphic-design firm's brochures, signs, booklets, and exhibit panels exempt professional advertising services rather than taxable property sales?
Mostly no. Virginia kept brochures, signs, booklets, spec sheets, and other jobs in the audit because the available invoices and work statements did not prove professional media-advertising services. …
When a modular-home manufacturer sells to a builder who installs the home for a homeowner, who collects the sales tax — and how is the 52% rule applied?
It depends on the builder's contract. Colorado taxes only 52% of a manufactured home's purchase price, and a later resale isn't taxed again. If the builder uses a LUMP-SUM contract it's the consumer a…
Is a custom promotional video a taxable sale of property or a non-taxable service, and what about charges for raw footage and project files?
Likely a non-taxable service. Under the 'true object' test, producing a custom promotional video is generally a non-taxable service even though some property (a DVD, thumb drive, or hard drive) change…
Does propane sold to individuals for grills, temporary residential heating, patios, or recreational vehicles qualify for Virginia's domestic-consumption exemption?
Yes, when the propane is for an individual's nonbusiness use and the dealer can substantiate that use. Virginia treated grilling, outdoor cooking, temporary heating of residential spaces or patios, an…
What happens when neither a business nor the city provides a clear record supporting a local property-tax assessment, and who controls an offer in compromise?
Virginia remanded the 2010 assessment because neither the taxpayer nor the city supplied a clear factual and documentary record, and the assessment was more than 600% above the adjusted 2011 amount. T…
Is the full price of a children's party package taxable when one charge covers amusement admission, pizza, drinks, supplies, and party coordination?
Yes. When the single party-package price included play time plus pizza, drinks, a T-shirt, invitations, and party supplies, Virginia treated the entire charge as taxable. The primary purpose being amu…
What nexus rules did Illinois describe for remote retailers in 2014, and are those physical-presence rules still current?
IDOR declined to decide the affiliated companies' nexus because it required an auditor's fact-intensive investigation. The 2014 GIL described then-controlling Quill physical-presence rules, including …
How can taxpayers check whether an older South Carolina advisory opinion was modified or superseded (per SC IL #13-21)?
Use the citator attached to SC Information Letter #13-21. It helps you determine what effect newer South Carolina advisory opinions have on previously published ones — whether an opinion was modified,…
Did an acquisition create a new Virginia consolidated-return election when the buyer itself was not subject to Virginia income tax?
No new election arose. Because the buyer was not subject to Virginia income tax before or after the acquisition, the acquired group's existing consolidated election stayed in effect. The buyer's Virgi…
Could Illinois residents claim a Schedule CR credit when a reciprocal state withheld tax from deferred compensation that state was not entitled to tax?
No, if the reciprocal-state tax was withheld or paid in error. The reciprocal agreement barred that state from taxing the Illinois residents' employee compensation, so the residents had to claim a ref…
Were fuel sales to nonprofit volunteer fire departments exempt as government purchases under Virginia's 2010-2011 motor-vehicle-fuel sales tax?
No. Virginia treated the volunteer fire departments as nonprofit organizations, not governmental entities, and the nonprofit retail exemption no longer applied after the tax shifted to the wholesale l…
New York Advisory Opinion TSB-A-13(11)C: Are a broker-dealer's 'matched principal transactions' principal transactions whose income may be sourced using the production-credit allocation method?
Yes. Through its disregarded registered broker-dealer SMLLCs, the petitioner is a principal, and matched principal transactions in which it bears a risk of loss on the price spread are principal trans…
Can a company that invests $50M+ to expand its Tennessee headquarters and consolidate out-of-state operations claim Tennessee's headquarters-facility sales-and-use-tax credit — and which equipment and which jobs count?
Yes — with conditions, and not every job counts. The Department ruled that a company qualifies for Tennessee's 'qualified headquarters facility' SALES AND USE TAX CREDIT (Tenn. Code Ann. § 67-6-224(a)…
How does Tennessee's franchise & excise job tax credit apply to a company expanding its Tennessee headquarters — what investment and job thresholds apply, how much is the credit per job, and which jobs count?
Yes, with conditions — and the size of the credit depends on whether the company also hits the bigger 'additional annual credit' targets. A company expanding its qualified Tennessee headquarters facil…
Did restaurant franchise royalties qualify for Virginia's unrelated-member add-back exception when the holding company had no comparable direct third-party license?
No. Even accepting that the holding company indirectly derived substantial revenue from unrelated franchisees, the exception also required comparable rates and terms. The holding company had no direct…
Could a corporation exclude all royalties paid to an affiliate from Virginia's add-back because the affiliate reported royalty income in other states?
No. Virginia limited the subject-to-tax exception to the portion of the affiliate's royalty income actually apportioned and subjected to tax in other states. It also refused to consider the valid-busi…
Which reconstruction-contractor purchases could be removed from a Virginia use-tax audit when invoices were missing, mismatched, or showed duplicates?
Virginia removed transactions supported by adequate records and entries shown to be duplicates. It kept purchases where invoices were missing, did not match the audited item, showed no sales tax, or i…
Were gaming points cards and online console memberships subject to Virginia retail sales tax or communications sales tax under the 2013 rules?
No. Virginia treated the cards and memberships as ways to secure online access, not as sales of tangible personal property. It also found that the products were not communications services. Sales in t…
Did a country club owe use tax when employees ate leftover banquet food for free and the club recorded an internal $2 meal allowance?
No. The customers' banquet meals had already been sold and taxed, employees received leftovers without charge, and the $2 amount was only an internal accounting entry that did not affect wages. Virgin…
What are South Carolina's latest per capita income figures used to qualify for tax incentives (per SC IL #13-20)?
SC Information Letter #13-20 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 …
How are South Carolina counties ranked for the job tax credit for 2014, and which counties qualify for the fee-in-lieu and tax moratorium (per SC IL #13-19)?
SC Information Letter #13-19 publishes South Carolina's county rankings for the job tax credit for 2014, together with the counties that qualify for a reduced minimum investment under the fee in lieu …
When could gelatin embolization pledgets be sold tax-free to for-profit and nonprofit Virginia hospitals or clinics?
For-profit hospitals and clinics could buy the devices exempt only when each purchase was specifically for an identified individual patient; bulk purchases did not qualify. Qualifying nonprofit hospit…
Does an employer's failure to withhold enough Virginia tax excuse an employee from filing a resident return and paying the remaining tax?
No. An employer's insufficient withholding did not reduce the employee's duty to report income, file the Virginia return, and pay the full tax. Because the assessment used the best information availab…
Could Virginia residents claim Virginia's other-state tax credit for capital-gains tax paid to India on the sale of Indian real estate?
No. Virginia's credit applied only to income tax paid to another U.S. state, not to a foreign country. The U.S.-India income tax treaty covered specified federal and Indian national taxes and did not …
Did annuity income received from insurance companies in both 2010 and 2011 qualify for Virginia's death-benefit subtraction?
No. Virginia required a federally taxable death benefit from an insurance-company annuity contract that was awarded to the beneficiary in a lump sum. Although the taxpayer's payments came from insuran…
Could an Office of Personnel Management survivor annuity qualify for Virginia's death-benefit subtraction if the beneficiary chose a lump sum?
No. The payment came from a federal retirement plan rather than an annuity contract between a customer and an insurance company. Virginia said that source disqualified the benefit even if the taxpayer…
Did a Form 1099's annuity label make periodic federal retirement survivor payments eligible for Virginia's death-benefit subtraction?
No. The payments came from a federal retirement plan, not an annuity contract between a customer and an insurance company, and they were not paid as a lump-sum death benefit. The Form 1099's annuity l…
Did monthly federal retirement survivor payments qualify for Virginia's annuity death-benefit subtraction when they were not paid as a lump sum?
No. Virginia required the qualifying death benefit to come from an annuity contract, be awarded to the beneficiary in a lump sum, and be federally taxable. The wife received continuing monthly payment…
Did Virginia's mistaken allowance of a federal retirement survivor subtraction for 2007 require the same subtraction for 2008-2010?
No. The periodic federal retirement survivor payments did not meet the annuity-contract and lump-sum requirements. Virginia also found that the earlier 2007 review did not supply binding written advic…
How did Virginia calculate the related-party royalty add-back exception, including royalties subjected to New Jersey's gross-receipts-based tax?
Virginia limited the exception to the portion of affiliate royalty income actually subjected to tax in each state, not 100% of the gross payments. For New Jersey, where the tax base was effectively gr…
Did federal income from deemed partnership sales of Virginia Land Preservation Tax Credits also increase the partner's Virginia taxable income?
No. Virginia law provided that transferring Land Preservation Tax Credits did not create gain or loss, so the partner could subtract the federal income created by the IRS's deemed-sale treatment. But …
Did assembling purchased electronic components into custom military devices qualify as manufacturing for Virginia BPOL tax?
Yes. Although many components had other uses and the process used ordinary tools, the company assembled numerous parts into integrated custom systems whose components were enclosed and not readily ide…
Are separately stated vehicle diagnostic charges exempt when the repair shop also sells and installs replacement parts?
Only standalone diagnosis was exempt. When testing identified a faulty part and the customer authorized replacement, Virginia treated the transaction's true object as the consequential sale of the par…
Which Virginia military-pay subtractions applied when extended-duty combat pay was excluded federally but later National Guard pay was taxable?
The basic-pay and combat-pay subtractions did not apply. Pay earned during extended active duty was already excluded federally as combat pay, while the taxable pay earned later was not extended-duty o…
Could a business that bought homes, hired contractors to renovate them, and resold them be classified as a BPOL contractor?
Yes, potentially. Virginia's BPOL rules included a person who regularly engaged others to perform construction work and a business improving its own real estate for resale. The county had to decide th…
What Virginia tax interest rates applied during the first quarter of 2014?
Virginia's first-quarter 2014 rates were 5% for tax underpayments and 5% for tax overpayments. The reduced rate for qualifying assessments under administrative appeal was 0%. The corresponding federal…
How should Virginia BPOL receipts be assigned when a mobile consultant works from multiple residences?
The consultant's multiple residences were each definite places of business because he maintained no separate office. Receipts should be assigned, where possible, to the residence where each engagement…
Was a Section 501(c)(3) research nonprofit exempt from Virginia local BPOL tax?
Yes. Because the organization was recognized under Section 501(c)(3), qualified under the cited charitable-nonprofit rule, and reported no unrelated business taxable income, Virginia concluded that al…
Could an air-charter operator bypass local BPOL appeals by requesting a Virginia advisory opinion?
No. Virginia Tax would not decide the air-charter BPOL exemption through an advisory opinion while assessments were disputed and the taxpayer had not used the required local appeal process. The taxpay…
How could Virginia BPOL tax apply to recreation-center events, lodging packages, and sales by a nonprofit?
BPOL treatment depended on the activity. A developer's race fees were taxable gross receipts unless it proved a genuine agency relationship with the nonprofit; temporary vendors could face an itineran…
Does an RV park keep its transient-rental exemption after an ownership change, and must the new owners file a new declaration?
Yes. The exemption follows the qualifying facility, not the owner, so an ownership change alone did not end it. No new declaration was required if the prior owner filed one and the park continued to m…
When may state investors and purchasers join a Georgia low-income-housing project structure and receive Georgia housing tax credits?
A state investor may receive Georgia low-income housing credits if it joins the project partnership before that partnership's taxable year ends, satisfies all credit requirements, and is recognized as…
Which apportionment factor applies when computing the Capital Investment Tax Credit for a qualifying headquarters project?
Use an apportionment percentage based solely on the qualifying project's factors. The taxpayer could not use the overall consolidated apportionment factor of its entire affiliated group to compute the…
Is documentary stamp tax due when a developer deeds Florida property to a land trust but remains its sole beneficial owner?
No. The deed did not trigger documentary stamp tax while the developer remained the sole beneficial owner and no other person received any interest, use right, or occupancy right in the property.
Could siblings own beer-and-wine businesses on different tiers, and could one person work for both a wholesaler and retailer?
Sibling status alone did not bar one sibling from owning a beer-and-wine wholesaler while the other owned a retailer, but neither could act for or hold an ownership or financial interest in the other'…
What is South Carolina's tax interest rate for the period ending March 31, 2014 (per SC IL #13-18)?
3%. SC Information Letter #13-18 sets South Carolina's interest rate on tax underpayments and overpayments at 3% for the period October 1, 2011 through March 31, 2014. Interest is compounded daily, ex…
Could Texas residents claim the full New Mexico special-needs adopted-child credit and revive a 2007 claim based on a later National Guard deployment?
Only in part. The Department conceded that Timothy and Teresa Martin qualified for the special-needs adopted-child credit for all eight children in 2009 and 2010, not just four, and after Servicemembe…
For a city developing two separate convention-center-area hotel projects (with ancillary restaurants/shops), when can each qualify as a separate 'qualified hotel project' entitled to a 10-year 100% state and local tax rebate, and how do ancillary businesses sign up for and split that rebate?
A single, combined ruling covering two separate City of Irving hotel developments (the 'Northshore Project' and the 'City Project'). Key holdings: (1) two hotels within 1,000 feet of the same conventi…
Did a servicemember who lived in Virginia owe Virginia income tax for 2009 and 2011?
Not under the assessments as issued. Virginia treated the servicemember as a nonresident in 2009, so her military pay was protected and her nonmilitary work performed outside Virginia was not Virginia…
Can a REIT's federally disregarded subsidiary take the REIT dividends-paid deduction — or the public-REIT exclusion or exemption — when figuring its Tennessee excise tax?
No to both. This advisory ruling addresses subsidiaries of real estate investment trusts (REITs) that run sale-leaseback financing and own Tennessee real estate. Each is DISREGARDED for federal income…
Could a medical association avoid late-return penalties because it paid its gross receipts tax on time and no Department employee suggested a managed audit?
No. New Mexico Orthopedic Association paid its February, March, and April 2013 gross receipts tax on time, but its departing CEO/CFO had been responsible for filing the CRS returns and the organizatio…
May an Illinois construction contractor buy materials tax-free for incorporation into property owned by an exempt organization or government entity?
Yes, if the contractor buys tangible personal property for physical incorporation into real estate owned by an exempt organization or government entity that has a valid Illinois E number. The contract…
Could a company stop filing monthly Illinois ST-1 returns because its shipments were international and its returns showed no sales-tax liability?
IDOR did not approve stopping the returns because the company's transaction details were insufficient. A registered retailer generally must file Form ST-1 monthly even without a minimum sales threshol…
Are refrigerated bagged or packaged salads exempt from Colorado sales tax as food, or are they taxable 'prepared salads'?
It turns on whether dressing (and a utensil) is included. Colorado exempts food for home consumption but statutorily EXCLUDES 'prepared salads' from the definition of food. A bagged salad of lettuce a…
Was a Navajo Nation member's college income exempt from New Mexico personal income tax when he lived and worked on Navajo land but remained domiciled in Farmington?
Yes. James Tutt was an enrolled Navajo Nation member, earned the disputed income while working for a Navajo college in Crownpoint, and lived within the Navajo Nation for most of each tax year at issue…
Are Illinois hotel receipts from qualifying Taiwan representatives exempt from Hotel Operators' Occupation Tax?
Yes. Hotel receipts from Taipei Economic and Cultural Representative Office representatives were exempt when the guest possessed an American Institute in Taiwan card stating that the holder was exempt…
When were licensed software, updates, support, training, and maintenance taxable in Illinois?
IDOR declined to decide the reseller's specific transactions. Generally, canned software was taxable regardless of delivery unless every signed-license criterion in Rule 130.1935(a)(1) was met; then t…
Was a claimed Illinois software-license exemption valid based only on the limited documents submitted?
Unresolved. Canned software was generally taxable regardless of delivery method, but a license could be nontaxable only if every requirement in 86 Ill. Adm. Code 130.1935(a)(1) was met, including a si…
Did a cloud collaboration provider owe Illinois Telecommunications Excise Tax when customers used their own internet and telecom connections?
Generally no, if customers accessed the cloud applications through internet or telecommunications connections they bought from third parties. In that situation the cloud provider was not itself provid…
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