On Those ‘Byzantine and Often-Conflicting’ Tax Rulings Recently Released

Chas Sisk has done a revealing review of recently-released rulings by the state Department of Revenue, deemed to be “shedding new light on the byzantine and often-conflicting rules that taxpayers face.”
Sometimes bizarre, counterintuitive and seemingly arbitrary, the rulings illustrate just how critical tax questions can be to businesses.
In recent months, the Department of Revenue has told a country club that it has to tax lockers. But a fitness club does not, provided it offers services like racquetball.
Revenue lawyers have also told a company that makes an injection that eliminates smile lines that its product is tax-free because users can get it only by prescription. Sunscreen remains taxable, they add.
And revenue officials have told a firm that it must collect sales taxes on its shop drawings because it prints them out. The drawings do not have to be taxed if the firm leaves them on computers.
“You know, I’ve had members calling me up about that,” said Jim Brown, state director of the National Federation of Independent Business. “There’s no question there is some complexity” in the state’s sales tax laws.
The Department of Revenue has so far released 23 so-called “private rulings” this summer.
The rulings let taxpayers — usually businesses — get a decision from the Department of Revenue up front about complex or ambiguous aspects of the state’s tax laws. Each ruling is supposed to apply only to the taxpayer that asks for it, but lawyers and accountants scrutinize them for clues as to how the law would be applied.

Note: Previous post on the partial opening of revenue rulings to the public HERE.

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