How is Kansas sales tax computed on the isolated or occasional sale of a used motor vehicle or trailer under Senate Bill 147?

Plain-English summary

This 2004 memorandum from the Division of Vehicles' Titles and Registration office told county treasurers how to compute sales tax on the isolated or occasional sale of a vehicle or trailer under Senate Bill 147. The short version: the tax base is the higher of the stated selling price or the vehicle's property tax value — unless the vehicle is wrecked or damaged and the buyer proves it with a salvage affidavit, in which case the actual selling price controls.

• The general rule. "Senate Bill 147 states that the base for computing the sales tax shall be the stated selling price of the motor vehicle or trailer or the property tax value, whichever is higher."
• The wrecked/damaged exception. The bill "further states that the actual selling price shall be the base for computing the tax on the isolated or occasional sale of a wrecked or damaged vehicle." To use it, "[i]f a customer is claiming the sale price as the stated sale price based on the vehicle being wrecked or damaged, they must fill out the TR-13 and apply for a salvage title." A customer who "refuse[s] to fill out a TR-13 . . . will be charged tax based on the property tax value." A vehicle previously titled as salvage or rebuilt salvage, or presenting a TR-13, can use the stated sale price.
• Finding the property tax value. A chart ("Alternative Motor Vehicle Cost Chart") was to be provided for on-demand printing; until then, treasurers could "take the taxable value X 5 to arrive at the taxable figure," or use the property tax inquiry on the VIPS system by the vehicle's class code.
• Scope and effective date. The statute "does not apply to heavy trucks or recreational vehicles" and "applies to all staggered motor vehicles." It "also applies to trailers," but because VIPS did not carry trailer property tax values, treasurers had to "work with the appraisers office to determine the tax value on trailers." "This bill becomes effective July 1, 2004."

What this means for you

Buyers and sellers in private (isolated/occasional) vehicle sales

You can't necessarily set the tax by writing a low price on the bill of sale. For an ordinary used vehicle or trailer, Kansas taxes the higher of your stated price or the county's property tax value for that vehicle. Expect the county treasurer to check the property-tax value when you register it.

If the vehicle is wrecked or damaged, document it

The lower "actual selling price" only applies to a wrecked or damaged vehicle if you file a TR-13 salvage affidavit and apply for a salvage title (or the vehicle is already titled salvage/rebuilt salvage). Refuse the paperwork and you'll be taxed on the property tax value instead.

Know what's excluded

The rule does not apply to heavy trucks or recreational vehicles, and it covers staggered-registration motor vehicles and trailers. For trailers, the value comes from the county appraiser's office rather than the VIPS system.

Common questions

Q: What is Kansas sales tax based on when I buy a used car in a private sale?
A: Under Senate Bill 147, the base is the stated selling price or the vehicle's property tax value, whichever is higher.

Q: I'm buying a wrecked car cheaply — can I pay tax on what I actually paid?
A: Yes, but only if you fill out a TR-13 salvage affidavit and apply for a salvage title (or the vehicle is already titled as salvage/rebuilt salvage). Otherwise you're taxed on the property tax value.

Q: Does this apply to every vehicle?
A: No. It applies to staggered-registration motor vehicles and trailers, and it does not apply to heavy trucks or recreational vehicles.

Citations and references

• Senate Bill 147 (2004) — the legislation the memo describes, setting the sales tax base for an isolated or occasional sale of a motor vehicle or trailer at the higher of the stated selling price or the property tax value (actual selling price for a documented wrecked/damaged vehicle), effective July 1, 2004. The memo cites the bill by name and does not cite a specific K.S.A. section.
• Form TR-13 (salvage affidavit) — the form a buyer must file, together with a salvage title application, to use the actual selling price as the tax base for a wrecked or damaged vehicle.

Source

• Landing page: Kansas Department of Revenue Policy Information Library
• Original document: MEMO-SenateBill147

Original ruling text

Memorandum

Body:

DEPARTMENT OF REVENUE
DIVISION OF VEHICLES

Memorandum

To: County Treasurers and T&R Staff

From: Peggy Stalcup, Assistant Manager, Titles and Registrations

Date: June 23, 2004

Subject Senate Bill 147 Sales Tax on Isolated and Occasional Sales

Senate Bill 147 states that the base for computing the sales tax shall be the stated selling price of the motor vehicle or trailer or the property tax value, whichever is higher. It further states that the actual selling price shall be the base for computing the tax on the isolated or occasional sale of a wrecked or damaged vehicle.

A tax chart to be used to determine the property tax value will be placed on your as/400 for on demand printing. The menu option will be named “Alternative Motor Vehicle Cost Chart” If you need to determine the property tax value on a motor vehicle before the chart is available, simply take the taxable value X 5 to arrive at the taxable figure. This statute does not apply to heavy trucks or recreational vehicles. This applies to all staggered motor vehicles.

You may go into the property tax inquiry on your VIPs system to obtain the taxable value of the vehicle based on the class code assigned to the vehicle. Property tax is option 2 from your inquiry menu.

You may accept the stated sale price on any motor vehicle that has previously been titled as a salvage or rebuilt salvage vehicle or are presenting a TR-13 (salvage affidavit). If a customer is claiming the sale price as the stated sale price based on the vehicle being wrecked or damaged, they must fill out the TR-13 and apply for a salvage title. Customers who refuse to fill out a TR-13 and want to claim stated sales price based on the vehicle being wrecked or damaged will be charged tax based on the property tax value. This bill becomes effective July 1, 2004.

The statute also applies to trailers. However, property tax value is not available on the VIPs system for trailers. You will have to work with the appraisers office to determine the tax value on trailers.

The Division of Vehicles in partnership with our Information Systems Bureau is attempting to identify methodologies which will enable the VIPs system to default to the alternative motor vehicle cost chart while using the sales tax programs to determine the higher value of the vehicle. At this time, we cannot provide a target completion date for this enhancement. However, we will advise you when we begin programming the change and a target date of implementation.

Thanks for your support and co-operation. It is appreciated. If you have questions, please call Mathew Moser, Ray Wilk or myself for clarification.

cc: Carmen Alldritt, Director of Vehicles
Mathew Moser, Manager Titles & Registrations

04-043

Date Composed: 06/28/2004 Date Modified: 06/28/2004

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