Kansas State Tax Rulings
Free plain-English summaries of state tax letter rulings and advisory opinions issued in Kansas, with full citations and the original source on every page.
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When did a manufacturer's cash rebate reduce the taxable price of a new motor vehicle purchased or leased in Kansas?
For a new motor vehicle sold or leased from July 1, 2006 through June 30, 2009, a manufacturer's cash rebate was excluded from Kansas sales and compensating-use tax only when the manufacturer paid it …
Can a contractor with a project exemption certificate buy drill bits, saw blades, and utility-knife blades exempt from Kansas sales tax?
No. A contractor's replaceable drill bits, saw blades, and utility-knife blades are taxable even when they will be used up on a project covered by a project exemption certificate (PEC). Every PEC stat…
What major Kansas tax changes did the Department summarize from the 2006 legislative session?
Kansas's 2006 legislation changed nearly every major tax area. It added or expanded employer, adoption, education-savings, entrepreneurship, law-enforcement, energy, and long-term-care income-tax bene…
When did a work-site utility vehicle qualify for Kansas's farm-machinery sales-tax exemption, and did the exemption cover ATVs?
Effective July 1, 2006, a defined work-site utility vehicle with a bed or cargo box could qualify for Kansas's farm machinery and equipment exemption when used only in listed farming, ranching, aquacu…
Is an interstate pipeline company's electricity for cathodic protection and for underground gas storage subject to Kansas sales tax?
Both are taxable. Electricity an interstate pipeline company uses to power cathodic (corrosion-protection) equipment is taxable because cathodic protection is not a production, mining, drilling, or re…
Are charges for telephone service at a church parsonage subject to Kansas sales tax?
Yes. Charges for telephone service at a parsonage, rectory, convent, or minister's residence are taxable. Following Notice 99-14, utilities for such residences are not purchases used exclusively for r…
What Kansas trip motor-fuel permits could interstate motor carriers buy beginning July 1, 2006, and what did they cost?
Beginning July 1, 2006, an interstate motor-fuel user could buy a 24-hour Kansas permit for $13 or a 72-hour permit for $25. Up to three permits, in any combination, could be purchased at one time for…
Are separately stated concrete-pumping charges taxable, and how does Kansas tax pumping performed as part of a mine-reclamation contract?
Separately stated concrete-pumping service was not taxable when the pumping company did not sell the concrete and merely placed it for the contractor. But a company responsible for part or all of a co…
Are a manufacturer's radial fatigue testing machine and the test consumables discarded after testing exempt from Kansas sales tax?
Yes, both are exempt. The radial fatigue machine used to test the quality of the finished aircraft wheels is exempt integrated-production equipment under K.S.A. 79-3606(kk)(3)(E), which covers machine…
How does Kansas sales tax apply to a nonprofit youth-development organization's fundraising events, sponsorships, and auctions?
It depends on what is sold. Because the organization holds a Kansas exemption as a nonsectarian comprehensive multidiscipline youth-development program under K.S.A. 79-3606(ii), its purchases for the …
Can a retail store buy cardboard compacting and baling equipment exempt from Kansas sales tax as manufacturing equipment?
No. A retail store's purchase of compacting and baling equipment is taxable. Under K.S.A. 79-3606(kk), only businesses that operate what the public regards as an industrial production operation qualif…
Is a separately stated premium for Guaranteed Auto Protection insurance subject to Kansas sales tax?
No. Kansas treated Guaranteed Auto Protection coverage as insurance rather than a taxable sale. A GAP premium charged to a vehicle buyer or lessor was not subject to Kansas sales tax when the charge w…
Must an independent retailer operating on a Kansas military base under an AAFES concession contract collect Kansas sales tax?
Yes. The Department concluded that an independent AAFES concessionaire was not an instrumentality of the federal government or armed forces and therefore did not share the sales-tax immunity of an AAF…
Are Guaranteed Auto Protection (GAP) premiums subject to Kansas sales tax?
No. The Kansas Department of Revenue treats a Guaranteed Auto Protection (GAP) premium as the sale of insurance, which is not a sale of tangible personal property or a taxable service. Therefore the G…
Are sales of restaurant equipment to American Legion and VFW posts exempt from Kansas sales tax?
Taxable. A seller must collect Kansas sales tax on restaurant equipment it sells to American Legion and VFW posts. The 1998 exemption only relieved members from tax on their membership dues (K.S.A. 79…
Is a trash-disposal company's recycling equipment exempt from Kansas sales and use tax as manufacturing equipment?
No. Even though Missouri exempts this company's recycling equipment as a 'Recovery Facility,' Kansas taxes it. The integrated production (manufacturing) exemption in K.S.A. 79-3606(kk) applies only to…
Does the Kansas manufacturing machinery and equipment exemption apply to the equipment in a natural gas producer's gathering systems, booster stations, and compressor stations?
Mostly no. The manufacturing machinery and equipment (integrated plant) exemption in K.S.A. 79-3606(kk) does not reach the equipment in a natural gas producer's gathering systems, booster stations, or…
Are charges for criminal background-check services subject to Kansas retailers' sales tax?
No. Kansas taxed sales of tangible personal property and only the services enumerated in its retailers' sales tax act. Criminal background checks were not an enumerated service, so the business's paym…
Are massage therapy services subject to Kansas sales tax?
No. Kansas sales tax is not imposed on charges for massage therapy services. Kansas taxes sales of tangible personal property and only the specific services listed in K.S.A. 79-3603, and massage thera…
Did Kansas cities and counties impose local sales tax on piped water sold for residential noncommercial or agricultural use after January 1, 2006?
No. Effective January 1, 2006, public water suppliers stopped collecting Kansas city and county retailers' sales tax on water delivered through mains, lines, or pipes for residential noncommercial or …
Must a nonprofit shelter collect Kansas sales tax on its annual fundraiser's admissions, food, and auction sales?
Yes. Most Kansas nonprofits, including this community shelter, are not exempt from the sales tax act, so the shelter must pay tax on its purchases and collect tax on its taxable sales. Because it hold…
Which Kansas state and local sales-tax rate should an online retailer collect when goods are shipped to a Kansas customer?
Kansas used destination-based sourcing. A Kansas retailer shipping goods to a Kansas buyer collected the combined state and local rate at the ship-to address; if the buyer took possession at the retai…
Does the Kansas motor-vehicle and trailer exception for an entity's transfer of all assets apply when only its Kansas assets are transferred?
No. The exception in K.S.A. 79-3603(o)(2) applied only when one corporation or LLC transferred all of its assets to another corporation or LLC. Transferring every asset located in Kansas was not enoug…
Are infrared thermographic scanning services and the written reports provided with them subject to Kansas sales tax?
No. Infrared thermographic scanning was not an enumerated taxable service, and the explanatory report was incidental to that nontaxable service. The provider therefore did not collect tax from custome…
How does Kansas sales tax apply to an auto retailer's various charges — warranties, tire fees, core charges, coupons, labor, and warranty repairs?
It varies by charge. The Department ruled that road-hazard warranties (K.S.A. 79-3603(r)), tire recycling/disposal fees, core charges, and general merchandise like clothing, food, and soda (all under …
May a retail copy-and-duplicating service buy or lease copiers and binding machines tax-free under Kansas's integrated production exemption?
No. Purchases and leases of copiers, binding machines, and other production equipment by a retail copying service were subject to Kansas sales and use tax. The integrated production exemption in K.S.A…
Can the manufacturing machinery and equipment exemption apply to electrical work on a main breaker that powers production equipment?
Yes, with one exception. Work on a main breaker that supplies power to production machinery can qualify for the manufacturing machinery and equipment exemption, because K.S.A. 79-3606(kk)(3)(I) treats…
Is an out-of-state company's electronic medical-billing service subject to Kansas sales or use tax?
No. An out-of-state company that prepares a provider's medical billings electronically and submits them electronically to insurers — producing no paper invoices — is providing a service that is not su…
How is a direct-selling company's Kansas sales tax sourced when distributors pick up orders at its fulfillment center versus having them shipped?
It depends on delivery. When in-state and out-of-state distributors pick up their packages at the company's Kansas regional distribution (fulfillment) center, the pick-up point is the situs of the sal…
Did checking a Kansas sales-tax exemption number online replace the retailer's duty to keep the purchaser's exemption certificate?
No. Kansas created an online service allowing a registered retailer to verify a Department-issued exemption number and view the exempt entity's identifying information and certificate expiration date.…
When and at what local rate does a roofing contractor that fabricates panels on-site pay Kansas sales tax on its coil and materials?
As a contractor, it pays tax when it takes delivery of the materials, at the local rate where delivery occurs. A business that fabricates standing-seam roof panels, framing, and flashing at the job si…
What were the major 2005 Kansas legislative changes to the taxes and motor-vehicle programs administered by the Department of Revenue?
This notice summarizes the major 2005 Kansas tax and motor-vehicle enactments. Highlights include new income-tax credits (the Individual Development Account credit on Schedule K-68, a science/math tea…
Are USDA GMP-mandated building materials (special flooring, wall paint, doors) exempt under Kansas's manufacturing exemption?
No. A pharmaceutical manufacturer's purchases of USDA GMP-mandated special floor coatings, wall paint, sheet rock, interior doors, and flooring are taxable. The integrated plant exemption in K.S.A. 79…
Are payments from the Kansas Board of Regents Retirement Plan subject to Kansas income tax, and how is the exemption claimed?
Benefits from the Kansas Board of Regents Retirement Plan -- a 403(b) defined-contribution plan for Regents faculty and unclassified staff (K.S.A. 74-4925) -- are exempt from Kansas income tax under K…
Is an implantable spinal device (a prosthetic device) exempt from Kansas sales tax even when a for-profit hospital buys it?
Yes. A motion-preserving implant surgically placed between the spinous processes is a prosthetic device that is exempt from Kansas sales tax under K.S.A. 79-3606(r), which exempts prosthetic devices p…
Is remodeling labor on a nursing or assisted-living facility taxable in Kansas?
It depends on the area. Labor to remodel the residential portions of a nursing or assisted-living facility is exempt from Kansas sales tax, while labor on the commercial portions is taxable. Following…
Is a political subdivision's sale of a duty weapon to a retiring officer subject to Kansas sales tax?
Yes. When a political subdivision sells a retiring officer's duty weapon to that officer, the sale is subject to Kansas retail sales tax. The government exemption in K.S.A. 79-3606(b) covers the polit…
Which of a YMCA's receipts — memberships, recreational program fees, and retail sales — are subject to Kansas sales tax?
Most of a qualifying YMCA's receipts are not taxed. Because a YMCA that is exempt from property tax under the Ninth paragraph of K.S.A. 79-201 falls within K.S.A. 79-3603(m), its fees and charges for …
Are sales of wound closure devices exempt from Kansas sales tax?
Yes, in the instances presented. The Department applied K.S.A. 79-3606(b), which exempts sales, leases, and rentals of tangible personal property purchased directly by a public or private nonprofit ho…
Are sales and leases of therapeutic medical beds and mattresses exempt from Kansas sales tax?
It depends on the buyer and use. The exemption the Department identified is K.S.A. 79-3606(b), which exempts sales, leases, and rentals of tangible personal property purchased directly by a public or …
Are payments from the Kansas Public Employees Retirement System (KPERS) subject to Kansas income tax, and how is the exemption claimed?
All KPERS benefits are exempt from Kansas income tax under K.S.A. 74-4923(b). Because Kansas starts from federal adjusted gross income, a member claims the exemption by making a **subtraction modifica…
What changed for commercial-zone and out-of-state farm-plated vehicles under Kansas motor-fuel law on July 1, 2005?
Effective July 1, 2005, Kansas House Bill 2297 removed the motor-fuel-use exemptions for commercial-zone vehicles and vehicles with out-of-state farm plates. Qualifying vehicles thereafter needed eith…
What must a religious organization show to qualify for a Kansas sales-tax exemption, and did this one qualify?
To qualify under K.S.A. 79-3606(aaa), a religious organization must meet the statutory definition (a group gathering for worship at an established place of worship, with no earnings inuring to members…
Could Kansas taxpayers deduct sales tax on federal Schedule A, and could homeowners deduct the sales tax on their 2004 residential construction materials?
For 2004, individuals who itemized on federal Schedule A could choose to deduct state and local general sales taxes instead of state and local income taxes -- but not both (IRS Publication 600). Sales…
When did Kansas resume the $.01-per-gallon petroleum environmental assurance fee in 2005, and who pays it?
Effective May 1, 2005, Kansas resumed the environmental assurance fee of $.01 per gallon on all petroleum products, until further notice. Under K.S.A. 65-34,117 the fee is paid by the manufacturer, im…
Can an organization with a Kansas manufacturer's exemption also claim exemption as a nonprofit educational institution?
Not as an educational institution. The organization already held a Manufacturer's Exemption letter, letting it buy materials used in its manufacturing process exempt from sales tax. But it no longer q…
Does an organization qualify for a Kansas sales-tax exemption just because it requests one?
No. Kansas tax exemptions are narrowly construed, so an organization must clearly fit the plain language of a specific exemption statute. After reviewing the more than 60 exemptions in K.S.A. 79-3606,…
How does Kansas tax a Missouri company's rentals of party equipment to caterers and customers across the state line?
Rentals to caterers are taxable, and the delivery point controls which state's tax applies. A caterer is treated as using rented tables, chairs, tents, and tableware to provide its service, not resell…
Can a contractor buy materials tax-free for a political subdivision's construction project by routing purchases through an affiliated purchasing company?
Not by itself. When a construction joint venture (a contractor plus an affiliated purchasing company) contracts with a Kansas political subdivision, the Department looks at the substance: it is a cons…
Was a Kansas hotel's fixed monthly charge taxable when a hospital rented five rooms for a sleep laboratory rather than ordinary overnight lodging?
Yes. A hospital's three-year contract paid a hotel $6,000 per month for a dedicated block of five rooms used as a sleep laboratory. The hospital kept its computers, cameras, oxygen concentrators, moni…
Did the requesting youth nonprofit qualify for a Kansas retailers' sales or compensating tax exemption under K.S.A. 79-3606(ii)?
No. The requesting youth nonprofit asserted that it qualified under K.S.A. 79-3606(ii), but the Department reviewed the sales-tax exemptions and found none that encompassed the organization. Nonprofit…
Did a nonprofit corporation or charity automatically qualify for exemption from Kansas retailers' sales and compensating taxes?
No. The Department reviewed K.S.A. 79-3606 and found no exemption that encompassed the requesting nonprofit corporation or charity. Kansas narrowly construes tax exemptions, and nonprofit status alone…
Did the requesting nonprofit corporation qualify for exemption from Kansas retailers' sales and compensating taxes?
No. After reviewing K.S.A. 79-3606, the Department found no exemption encompassing the requesting nonprofit corporation. Kansas construes exemptions narrowly, so nonprofit status by itself was not eno…
Did the requesting organization fall within a group exempt from Kansas retailers' sales and compensating taxes?
No. The Department reviewed the exemptions in K.S.A. 79-3606 and found none that encompassed the requesting organization. Kansas requires an organization claiming exemption to fit the statute's plain …
Did the requesting not-for-profit qualify for exemption from Kansas retailers' sales and compensating taxes?
No. The Department reviewed K.S.A. 79-3606 and found no exemption that encompassed the requesting not-for-profit. Kansas narrowly construes exemptions, so not-for-profit status alone did not qualify. …
Which YMCA purchases and sales qualified for Kansas sales-tax exemption under K.S.A. 79-3606(ii), and which taxable services remained subject to tax?
The YMCA could buy tangible personal property tax-free only for its nonsectarian comprehensive multidisciplinary youth-development programs and activities. It could also buy property for resale withou…
When is Kansas sales tax not due on a sale to a nonresident who takes delivery in Kansas?
Under K.S.A. 79-3606(k), Kansas retailers' sales tax is not due when a bona fide resident of another state buys and takes delivery in Kansas of a motor vehicle, semitrailer, pole trailer, or aircraft …
Should a Kansas municipality collect state or local sales tax on water utilities purchased directly by a public university for university-owned dormitories and scholarship halls?
No. When the public university directly purchased water utilities for dormitories and residential scholarship halls that it owned, K.S.A. 79-3606(c) exempted the purchase from both state and local sal…
How did Kansas tax uniform and linen rentals, restroom-supply services, laundry inputs, delivery charges, and equipment purchases?
Uniform, garment, mat, mop, towel, cabinet, and dispenser rentals were taxable on the full charge, including delivery; retail merchandise sales were also taxable. Rental inventory, component parts, th…
When were Kansas's new numbered Tax-Exempt Entity Exemption Certificates issued, and when must retailers require them?
This notice announced that the new numbered Tax-Exempt Entity Exemption Certificates (form series PR-78) had been issued -- more than 8,500 Kansas exempt entities received them since November 1, 2004.…
Browse Kansas rulings by topic
These are official tax letter rulings and advisory opinions issued by Kansas's revenue authority in response to questions from specific taxpayers about how the tax law applies to their facts. A ruling is binding on the department only for the taxpayer who requested it and cannot be relied on by anyone else, but it is strong evidence of how the state reads the law. Every ruling above has a plain-English question and short answer, plus a link to the full original source.