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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Were equipment and field flags used to spread biosolids on farms exempt as agricultural production property?
No. Although spreading biosolids helped nourish farmland, the business was not a farmer, did not own the land, and did not itself produce an agricultural product for market. Virginia therefore denied …
Did Illinois's three-year deficiency period run from an early-filed partnership return's original due date when the partnership never requested an extension?
No. A return filed early was deemed filed on the last prescribed filing day, and that day included Illinois's automatic six-month partnership extension even when the taxpayer filed no extension applic…
Did an Illinois Public Water Supply Construction Permit satisfy the permit requirement for the nonprofit community-water construction exemption?
Yes. IDOR said a Public Water Supply Construction Permit issued by the Illinois EPA under Title IV counts as a valid water-supply permit for the community-water exemption. A qualifying not-for-profit …
How did Illinois generally tax records-management charges for storage, shredding, equipment, software, maintenance, delivery, and cancellation?
IDOR declined to complete the requested item-by-item matrix, but gave category rules. Pure storage, shredding, data, and other services generally were not sales-taxable when no tangible property was t…
Could a taxpayer receive Virginia's 2011 research credit after filing Form RDC more than ten months late?
No. The taxpayer claimed the 2011 Research and Development Expenses Tax Credit on its return before filing Form RDC or receiving certification, then submitted the application more than ten months afte…
Which fringe benefits and payroll charges qualified for Virginia's Motion Picture Production Tax Credit?
It depended on the expense and credit component. Paid leave and taxable meal or lodging per diems counted as wages; employer unemployment tax and employer FICA did not. Workers' compensation, pension,…
Could a nonresident alien claim Virginia's standard deduction without claiming federal itemized deductions?
Generally no. Virginia continued its policy that a nonresident alien cannot claim the Virginia standard deduction even when no federal itemized-deduction amount is reported, because federal law requir…
Was a nonprofit's amended 2008 return timely after Virginia collected part of its corporate tax assessment?
Yes. Although the ordinary three-year period had expired, Virginia's collection of part of the assessment counted as payment. The nonprofit filed its amended return shortly afterward, raised only the …
Could Virginia residents claim an out-of-state tax credit for New York's Metropolitan Commuter Transportation Mobility Tax?
No. New York's MCTMT applied only to payroll or self-employment earnings connected with the metropolitan commuter district and funded that district's transportation authority. Virginia found it was no…
Did a military spouse and servicemember remain domiciled outside Virginia for 2010 income-tax purposes?
No. The spouse established Virginia domicile after moving in 2007: she worked full time, obtained a Virginia license and vehicle registration, voted in Virginia, and bought a home with the servicememb…
Did switchgear powering a qualifying Virginia data center count as exempt enabling hardware?
Yes, in whole or in part. Switchgear that distributed power to exempt servers, routers, and related computer equipment was enabling hardware under the data-center exemption. If it also powered taxable…
Were cloud-hosting and voice-routing services subject to Virginia retail sales tax or communications tax?
The hosted cloud, add-on, and maintenance services were exempt from retail sales tax because customers received no tangible personal property. But electronically routing voice, data, or audio and prov…
Was a business officer personally liable for unremitted sales and withholding taxes despite bankruptcy and a claimed IRS lien?
Yes. The officer admitted knowing of the business's sales and withholding liabilities and having authority to pay them. Virginia treated the collected taxes as trust funds and found that filing bankru…
My co-owner and I hold a Manhattan property as tenants in common (I own 12.32%, my co-owner owns 87.68%). We're building a condominium there: I'm paying my share of construction costs for the ground-floor commercial unit, then we'll swap -- I'll give up my TIC interest in the whole property and take sole ownership of the commercial condo unit instead, while my co-owner keeps the residential units. Is any of this -- the cost reimbursement, or the final swap of interests -- subject to New York's Real Estate Transfer Tax?
Neither the construction-cost payment nor the final swap of interests triggers RETT. Two tenants-in-common (Owners, holding 12.32%, and Developer, holding 87.68%) of a Manhattan property agreed that D…
Is a license to web-hosted prewritten software taxable in NY, and what happens to bundled training and support charges?
Yes -- a license to use web-hosted prewritten software is a taxable sale of tangible personal property, sourced to where the customer uses it, even though nothing is downloaded. Bundled, nontaxable se…
Do New York State or New York City sales taxes apply to a kinesiology practitioner's wellness-counseling services in NYC?
No -- neither New York State nor New York City sales tax applies, as long as the services aren't provided in a weight-control or health salon, gym, sauna, or similar establishment listed in the NYC ta…
My company's only office is in Connecticut, but eight of my twelve employees (including my CEO) are New York residents who don't work from home. Does that make my company liable for New York's MCTMT?
No. The Metropolitan Commuter Transportation Mobility Tax (Tax Law § 801) applies only to employers "engaged in business within" the MCTD, a standard the Department analyzes the same way as the person…
Must an out-of-state internet wine retailer with a NY direct shipper's license collect NY sales tax despite having no physical presence here?
Yes. An out-of-state wine retailer that holds a New York direct shipper's license must collect New York sales tax on its New York sales, even with no employees, agents, property, or place of business …
Would the Illinois Department of Revenue verify and approve the tax and procedure content of a private vehicle title-and-registration textbook?
No. IDOR said it would not approve the accuracy of a private legal publication. It advised the publisher to rely on Illinois statutes, administrative rules, and Department publications. The Department…
Did a husband who worked and lived in another state remain a Virginia resident for 2010 and 2011?
No. The husband took an indefinite out-of-state job, established a home there, obtained that state's driver's license, registered a vehicle there, and spent no more than 183 days in Virginia in either…
Does Tennessee charge sales tax on online-gaming purchases — downloaded games, codes for games you play on a remote server, and prepaid game, points, or subscription cards?
It depends on the product — downloads are taxable, pure remote access is not, and prepaid cards are taxed only when (and if) they are redeemed for something taxable. This retailer sells five kinds of …
Were batting-cage memberships, daily use, and instructor-led baseball lessons subject to South Carolina admissions tax?
Daily fees and membership fees for customers to use indoor batting cages and pitching machines were subject to South Carolina's admissions tax. Separately charged instructor-led baseball or softball l…
Did equipment leased to a wholesale Internet-backbone provider qualify for Virginia's Internet-service equipment exemption?
No. Virginia interpreted the exemption as limited to retail online-service providers that sell end-user subscribers a paid package including Internet access, email, proprietary information, and other …
When a Tennessee manufacturer drop-ships goods for an affiliated buyer, which sales count toward its Tennessee franchise & excise tax — does title passing in Tennessee control, or the final delivery destination?
It depends entirely on where the goods are ultimately delivered — not on where title passes or who the buyer is. This Tennessee manufacturer sells products to an affiliated sales company ('SalesCo') t…
In a Section 351 restructuring of a Georgia manufacturer, do the successor entities qualify as existing manufacturing facilities for the investment tax credit, and can the credit be assigned to an affiliate?
Successor entities that receive a long-operating Georgia plant in Section 351 contributions qualify as 'existing manufacturing facilities' for the investment tax credit -- the historic operations cont…
Was a taxpayer who moved for work in 2009 still a Virginia resident required to file for 2010?
No. The taxpayer moved for an indefinite job, established a home in the other state, surrendered his Virginia driver's license, obtained the other state's license, and registered to vote and registere…
How did Virginia tax installed countertops, sinks, and vanity bowls after the July 2010 law change?
Installed countertops sold on or after July 1, 2010 were taxable retail sales, with separately stated installation exempt, and the prior auditor's contractor guidance for earlier periods was not erron…
Was a prison warden exempt from 2003 New Mexico income tax because he worked and lived most of the year in Texas but kept a New Mexico home, license, and voter registration?
No. Rodolfo Franco was not physically present in New Mexico for 185 days in 2003, but that was only one route to residency. He remained domiciled in New Mexico: he owned a larger home and farmland in …
What identity-theft protection, tax deductions, and reimbursement did South Carolina create after the 2012 Department of Revenue data breach (per SC IL #13-17)?
SC Information Letter #13-17 summarizes new South Carolina laws enacted after the Department of Revenue's 2012 security breach to help people affected by identity theft or state-agency data breaches. …
Was contaminated or mixed liquid recovered from vehicle fuel tanks outside Illinois motor-fuel tax, and could a broker sell it for resale?
IDOR did not determine whether the recovered tank liquid was legally “motor fuel” because it lacked enough information about the product. Regardless of motor-fuel classification, the broker's Illinois…
Was a federal-base ground lease under the Military Housing Privatization Initiative subject to Florida's governmental leasehold intangible tax?
No. Congress had not consented to state taxation of leases under the Military Housing Privatization Initiative, so Florida could not impose its governmental leasehold intangible personal property tax …
How does Illinois tax a manufacturer's sales of window and door frames, including sales to construction contractors?
A manufacturer that sells window or door frames without installing them sells tangible personal property and owes Retailers' Occupation Tax unless an exemption, such as resale, applies. When a constru…
Are leases of reusable pallets exempt when manufacturers use them to package and ship finished goods, and what certificate protects the lessor?
Reusable pallets generally failed the ordinary packaging exemption, which excluded items bought for reuse, but the 2013 manufacturer exemption expressly included pallets and did not distinguish reusab…
A not-for-profit local development corporation will be the named mortgagee on our project financing, then immediately assign all its rights to our actual bank lenders. Does mortgage recording tax apply when the LDC records the mortgage, or when it later assigns the mortgage to our lenders?
Both steps are exempt from mortgage recording tax. New York Not-for-Profit Corporation Law section 1411(f) exempts the income and operations of a local development corporation (LDC) organized under th…
My organization is a municipal urban renewal agency. If we make and record a purchase money mortgage to help finance a low-income housing buyer's purchase of our land, do we owe mortgage recording tax on that mortgage?
Yes, exempt. Tax Law § 252 generally bars exemptions from mortgage recording tax based on other statutes, but the courts and the Department recognize that state agencies, instrumentalities, and politi…
Was a hospital-owned nonprofit laundry cooperative exempt from city BPOL and business-property taxes?
No. The cooperative was a separate legal entity with its own employees, management, laundry operations, charges, and economic benefit to its hospital owners. It did not qualify as an IRC § 501 nonprof…
Could a storage company recover gross receipts tax paid from 1999 through 2008 when it filed refund claims in 2013 after learning its receipts might have been deductible?
No. Mountain Moving & Storage filed all of its refund claims in March 2013, but New Mexico required each claim within three years after the end of the calendar year in which the payment was due. Even …
For Colorado income tax apportionment, is digital imagery delivered electronically tangible personal property, and how is it sourced?
It's tangible personal property, sourced to where it's delivered. For Colorado income tax apportionment, a static digital image delivered electronically is treated as a sale of tangible personal prope…
Is a third-party administrator that buys auto glass and bills insurers a marked-up price correctly collecting Colorado sales tax on the marked-up amount?
Yes — the method is correct. A third-party administrator of auto glass insurance claims that buys glass from local repair shops and bills the insurer a marked-up price is acting as a RESELLER, not a m…
Does an out-of-state S corporation owe Colorado tax when an employee works remotely from Colorado, even if that employee is a non-resident military spouse exempt from Colorado tax?
Yes. An out-of-state S corporation that performs services through an employee working in Colorado has Colorado-source income, because service income is apportioned to where the cost of performing the …
When an out-of-state company leases medical equipment to Colorado doctors, dentists, and vets, is sales tax collected up front at the start of the lease or on each rental payment?
When the tax is due depends on the type of lease. Colorado taxes leases of medical equipment — both 'true' leases and 'finance' leases — and the end-of-lease purchase price (nominal or fair-market) is…
Is a company that maintains a Material Safety Data Sheet (MSDS) database and prepares regulatory compliance reports, permits, and transport documents making taxable sales of tangible personal property, or providing nontaxable services?
The Department couldn't decide. A digital Material Safety Data Sheet (MSDS) is tangible personal property — like a digital reference manual — and is taxable if the customer is really just buying acces…
How did Florida tax home service contract premiums, contractor repair charges, and customer service-call fees?
Contract premiums were subject to the 2% premium tax, not sales tax. Real-property contractors owed tax on materials; personal-property repair charges to the provider were fully taxable; and the custo…
Was a monthly easement fee for access to leased parking spaces taxable along with the parking fee?
Yes. Access through the garage was an interdependent part of leasing the parking spaces, so both the monthly parking fee and the monthly access-easement fee formed the taxable total rental charge.
How can taxpayers check whether an older South Carolina advisory opinion was modified or superseded (per SC IL #13-16)?
Use the citator attached to SC Information Letter #13-16. It helps you determine what effect newer South Carolina advisory opinions have on previously published ones — whether an opinion was modified,…
What purchases qualified under Virginia's historical Energy Star and WaterSense sales-tax holiday?
Under these historical guidelines, specified Energy Star appliances and WaterSense-labeled products costing $2,500 or less per item were exempt during the four-day October holiday when bought for nonc…
Did the Paynes obtain relief for an amended 2004 Virginia tax return filed after the limitations period?
No. The Isle of Wight County Circuit Court found that Virginia properly denied Michael and Rhonda Payne's amended 2004 tax return because it was filed beyond the statute of limitations. The court ente…
Did a federal technical termination and deemed asset transfer trigger Illinois reversals of prior bonus-depreciation modifications?
Yes under the technical-termination rules applied in the 2013 GIL. When more than 50% of partnership capital and profits changed hands within 12 months, federal law deemed the old partnership to trans…
Could an independent physical therapist deduct services resold by a clinic when the clinic executed its Type 5 NTTC nine days after the audit's 60-day deadline?
No. Ravelle's Jewel's sold physical therapy services to Southwest Sport and Spine for resale, but it did not hold an NTTC when its 2006 returns were due. After the Department mailed an audit notice on…
What were the significant South Carolina tax-law changes from the 2013 legislative session, as summarized by the Department (per SC IL #13-15)?
SC Information Letter #13-15 is the Department's brief summary of the significant tax and regulatory law changes enacted in South Carolina's 2013 legislative session, organized into categories: (1) in…
Did taxpayers owe interest after New Mexico mistakenly sent unsolicited 2009 and 2010 income-tax refunds based on credits they never claimed?
No. Lawrence and Earnestine Mitchell filed and paid their 2009 and 2010 personal income taxes without claiming refunds or special-needs adopted-child credits. The Department nevertheless sent refunds,…
Did a business owe a $900 late-filing penalty when it timely mailed and paid its 2012 withholding return, then refiled electronically after learning e-filing was required?
No. Tierra Resources Intern timely mailed its 2012 withholding return and payment, then refiled electronically about a month later after the Department explained the e-filing requirement. Because the …
Could a retailer inside an Illinois business district pay the additional local retailers' occupation tax itself instead of charging customers?
Yes. A retailer in an Illinois business district must pay the additional Retailers' Occupation Tax to IDOR, but the statute does not require the retailer to reimburse itself by separately charging cus…
Were hosted canned-software license fees and mandatory maintenance fees taxable when Illinois customers accessed the system online?
IDOR did not give a fact-specific yes-or-no answer. It said canned software is generally taxable even when transferred electronically, but a license is not a taxable retail sale if it satisfies all fi…
Was a company buying future receipts and making business loans a financial-services provider subject to county BPOL tax?
The company appeared to be a financial-services provider, not a buyer and seller of tangible property, because it advanced cash against future card receipts, bought receivables, and made loans. But Vi…
Did a Virginia-based employee developing consulting test methods create corporate-income-tax nexus for an out-of-state company?
Probably yes. Developing test methods in a Virginia home office for the company's consulting and training services went beyond protected sales solicitation and produced a positive Virginia payroll fac…
Could a Madoff fraud victim avoid interest when a theft-loss carryback unexpectedly increased her 2005 New Mexico income tax, even though the penalty was abated?
No. Dyanna Taylor amended her 2005 New Mexico return on her accountants' advice after suffering Madoff investment-fraud losses. For reasons she could not explain, the theft-loss carryback increased he…
What Virginia tax interest rates applied during the fourth quarter of 2013?
Virginia's fourth-quarter 2013 rates were 5% for tax underpayments and 5% for tax overpayments. The reduced rate for qualifying assessments under administrative appeal was 0% after the statutory nine-…
Was fixed interconnected VoIP service over a private managed network subject to Georgia sales tax under the provisions addressed in 2013?
No under the provisions addressed. The fixed VoIP service exchanged calls with the public telephone network but first converted and routed communications through a privately managed internet-protocol …
Was a cloud restaurant back-office system sold to franchisees taxable in Illinois when no hardware was provided?
IDOR did not determine whether the restaurant system was a nontaxable service or a software license. A service with no tangible-property transfer generally was outside Illinois sales and service taxes…
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