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KS Notice 04-12 Kansas Retailers' Sales Tax 2004-11-02

When were Kansas's new numbered Tax-Exempt Entity Exemption Certificates issued, and when must retailers require them?

Short answer: 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. Recipients may use them immediately, and the certificate must be presented to a retailer to get a sales or use tax exemption on purchases made on or after January 1, 2005; blank certificates (for example, ST-28O for religious organizations) may not be accepted after that date. Many other certificates (agricultural ST-28F, aircraft ST-28L, resale ST-28A, etc.) are unaffected. Out-of-state exempt entities use the redesigned Form ST-28. This is the revised version (revised July 1, 2007).

Apply this to your situation

This page answers the general question as of 2004. Ezel answers yours, under current Kansas tax law, with citations.

Currency note: this ruling is from 2004
Subsequent statutory amendments, regulation changes, court decisions, or later rulings may have changed the analysis. Treat this page as historical context, not current tax advice. Verify current law before relying on any specific rule, rate, or position mentioned here.
Disclaimer: This is an official Kansas Department of Revenue Notice providing general public guidance, not a private ruling issued to one taxpayer. It is the revised version (revised July 1, 2007) of a notice originally approved November 2, 2004; later law or forms may change the result, so verify current rules before relying on it. This summary is informational only and is not legal or tax advice.
About this page: The plain-English summary, reader guidance, and Q&A below were written by Ezel based on the official state tax ruling. The original ruling (linked on this page as a PDF) is the authoritative source for any reliance.
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Plain-English summary

This is the companion follow-up to Notice 04-10. It 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 -- ahead of the January 1, 2005 effective date.

  • Recipients may use the new certificate immediately, and it must be presented to a retailer to receive a sales/use tax exemption on purchases made on or after January 1, 2005.
  • Retailers may not accept blank certificates (for example, ST-28O for religious organizations) on or after January 1, 2005 from these entities.
  • Entities apply/retrieve certificates through the Department's On-line Business Center at ksrevenue.org.
  • Unaffected certificates keep their current forms: Agricultural (ST-28F), Aircraft (ST-28L), Consumed in Production (ST-28C), Resale (ST-28A), Interstate Common Carrier (ST-28J), Multi-Jurisdiction (ST-28M), US Government (ST-28G), and others, plus utility (ST-28B) and Project Exemption Certificate (PEC) processes.
  • Out-of-state exempt entities were not initially numbered and use the redesigned Designated or Generic Exemption Certificate (Form ST-28); that generic form cannot be accepted from a Kansas entity that has a numbered PR-78 certificate.

The notice lists the covered entities, including several added by later effective dates through 2007.

What this means for you

If you are a retailer, from January 1, 2005 require the numbered PR-78 certificate from Kansas exempt customers and stop accepting their old blank certificates (like ST-28O). The many use-based and transaction certificates (resale, agricultural, aircraft, common carrier, etc.) are unchanged. Out-of-state exempt entities give you the redesigned generic ST-28 instead.

Common questions

Q: What is the new certificate called?
A: The Tax-Exempt Entity Exemption Certificate, form series PR-78, issued by the Department to Kansas exempt entities.

Q: When must retailers require it?
A: For exempt purchases made on or after January 1, 2005; blank certificates (such as ST-28O for religious organizations) may not be accepted after that date from these entities.

Q: Which certificates are NOT affected?
A: Use-based and transaction certificates keep their current forms -- for example agricultural (ST-28F), aircraft (ST-28L), consumed-in-production (ST-28C), resale (ST-28A), multi-jurisdiction (ST-28M), and US government (ST-28G), plus utility (ST-28B) and PEC processes.

Q: What do out-of-state exempt entities use?
A: The redesigned Designated or Generic Exemption Certificate (Form ST-28); it cannot be accepted from a Kansas entity that holds a numbered PR-78 certificate.

Citations and references

  • K.S.A. 79-3606 -- sales-tax exemptions for the listed entities.
  • Form series PR-78 (numbered Tax-Exempt Entity Exemption Certificate); Form ST-28 (generic certificate for out-of-state entities).
  • 2004 House Bill 2647, Section 12 -- Kansas Bioscience Authority exemption (listed among covered entities).
  • See also companion Notice 04-10 (announcing the numbering procedure).

Subject

New Kansas Tax-Exempt Entity Exemption Certificates Have Been Issued (Revised)

Source

Original ruling text

Notice
Notice Number: 04-12
Tax Type: Kansas Retailers' Sales Tax
Brief Description: New Kansas Tax-Exempt Entity Exemption Certificates Have Been Issued.
Keywords:
Effective Date: 07/01/2007
Approval Date: 11/02/2004

Body:

                                                                  NOTICE 04-12
                                                               REVISED JULY 1, 2007

                   NEW KANSAS TAX-EXEMPT ENTITY EXEMPTION CERTIFICATES HAVE

                                                                      BEEN ISSUED

In September (2004) the department notified you of its intent to issue a new type of exemption certificate to certain tax-exempt entities, as required by the 2004
Legislature. The purpose of this notice is to advise you the new numbered Tax-Exempt Entity Exemption Certificates (form series PR-78) have been issued. Since
November 1, 2004 over 8,500 Kansas tax-exempt entities have received their new numbered certificate from the department. The department issued these new
certificates in advance of the January 1, 2005 effective date to give all parties involved more time to integrate this new exemption process into their business
practices. Recipients may begin using their new certificates immediately; the legislation requires the new certificate be presented to retailers in order to receive a
sales or use tax-exemption on purchases made on or after January 1, 2005.

An example of the new certificate and a list of the entities receiving it are on page 2 of this notice. The center section of the certificate contains the entity’s name,
address, exemption number, and the certificate expiration date. Like other certificates, the top section of the certificate provides the exempting statute and
transaction information and the bottom section contains information about the exemption as well as useful tips for the retailer.

WHAT IF AN ENTITY IS USING AN OUT-DATED BLANK CERTIFICATE?

The department requests your assistance in making sure Kansas tax-exempt entities provide you with a copy of their new certificate and discontinue use of their
out-dated blank certificates. They should do this as soon as the new certificate is received but no later than December 31, 2004. Retailers may not accept the blank
certificates (for example, ST-28O for religious organizations) on or after January 1, 2005. If you have an exempt customer using an out-dated blank certificate, and
they have not received a new certificate from the department, please notify them that they need to obtain a new numbered Tax-Exempt Entity Exemption Certificate
from the department.

They apply for the certificate on the department’s web site, www.ksrevenue.org. On the home page, under “Your Business” is a link to the On-line Business Center.
If the exempt organization does not currently have an account at the Business Center, it must create one before it can access the “Certificate” button to apply for a
certificate. Once approved, they can return to the site to retrieve and print the certificate.

WHO IS NOT IMPACTED BY THE NEW CERTIFCATES

The issuance of these new exemption certificates to nonprofit and governmental entities does not affect the following exempt
transactions; the current certificate(s) will continue to be used.

Agricultural Sales, ST-28F
§ Aircraft, ST-28L
§ Consumed in Production, ST-28C
§ Designated or Generic Exemption Certificate, ST-28. (For use by out-of-state exempt entities – see below.)
§ Direct Mail, ST-31
§ Dry Cleaning/Laundry Retailer, ST-28X
§ Ingredient or Component Part, ST-28D
§ Integrated Production Machinery & Equipment, ST-201
§ Interstate Common Carrier, ST-28J
§ Multi-Jurisdiction, ST-28M
§ Railroad, ST-28R
§ Resale, ST-28A
§ Retailer/Contractor, ST-28W
§ Tire Retailer, ST-28T

Page 2

§ US Government, Federal Agency, ST-28G
§ Vehicle Lease and Rental, ST-28VL
§ Veterinarian, ST-28V
§ Warehouse Machinery and Equipment, ST-203

There is also no change to the current process that businesses and tax-exempt entities must use to request a utility exemption
(Request Form ST-28B) or a Project Exemption Certificate (PEC).

OUT OF STATE EXEMPT ENTITIES

Non-Kansas based exempt entities (schools, nonprofit hospitals, etc.) were not initially issued the new Tax-Exempt Entity Exemption Certificate. When making
purchases in Kansas, these entities will now use the redesigned Designated or Generic Exemption Certificate (Form ST-28). This certificate has been revised and
expanded to accommodate use by these entities and is available on the department’s web site. The Designated or Generic Certificate CANNOT be accepted from a
Kansas organization that has been issued a uniquely numbered Tax-Exempt Entity Exemption Certificate. The department recommends that out of state exempt
organizations who often make purchases in Kansas apply for a Kansas Tax-Exempt Entity Exemption Certificate using the web site application outlined above.

EXAMPLE OF THE NEW TAX-EXEMPT ENTITY EXEMPTION CERTIFICATES, Form Series PR-78

Reproduced below is a sample of the Tax-Exempt Entity Exemption Certificate (for schools and educational institutions) to illustrate the general format of this type
of exemption certificate. All certificates are 8 ½” X 11;” certificates in the initial mailing contain a bar code for mailing purposes.

                        The following Kansas entities and organizations have received numbered tax-exemption certificates:

State of Kansas and its agencies
Kansas political subdivisions – cities, counties, townships school districts
Nonprofit hospitals
Nonprofit blood, tissue and organ banks
Nonprofit educational institutions (colleges, universities, trade schools, etc. providing education above grade 12)
Elementary and secondary schools
Kansas groundwater management districts
Rural water districts and water supply districts

Page 3

Port authority
Nonprofit nursing home, assisted living facility, interim care home
Nonprofit, nonsectarian, comprehensive youth development organizations
Community-based mental retardation facilities or mental health centers
Nonprofit public health corporations
Community action groups/agencies for weatherization of low-income homes
Nonprofit museums
Nonprofit historical societies
Nonprofit zoos
Public broadcasting stations (radio and TV)
Nonprofit organizations building Kansas Korean War Memorials
Parent-Teacher Associations and Organizations
Contractors preparing meals for the homebound elderly, disabled, indigent or homeless (such as Meals on Wheels)
Rural volunteer fire fighting organizations
Kansas chapters of these Organizations:
American Heart Association

  Kansas Mental Illness Awareness Council
  American Diabetes Association, Kansas Affiliate
  American Lung Association
  Kansas Alliance for the Mentally Ill
  Alzheimer’s Disease and Related Disorders Assn., Inc.
  Parkinson’s disease association
  National Kidney Foundation (of KS and Western MO)
  Heartstrings Community Foundation (effective 1/1/2005)
  The Cystic Fibrosis Foundation, Heart of America Chapter (effective 1/1/2005)
  Spina Bifida Association (effective 1/1/2005)
  CHWC, Inc. (effective 7/1/2006)
  Cross-lines Cooperative Council (effective 7/1/2006)
  Dreams Work, Inc. (effective 7/1/2006)
  KSDS, Inc. (effective 7/1/2006)
  Lyme Association of Greater Kansas City, Inc. (effective 7/1/2006)
  Dream Factory, Inc. (effective 7/1/2007)
  Ottawa Suzuki Strings, Inc. (effective 7/1/2007)
  International Association of Lions Clubs (effective 7/1/2007)
  Johnson County Young Matrons, Inc. (effective 7/1/2007)
  American Cancer Society, Inc.(effective 7/1/2007)
  Community Services of Shawnee, Inc. (effective 7/1/2007)
  Angel Babies Association (effective 7/1/2007)

Habitat for Humanity for housing project materials
Free-Access Radio and TV Stations
Religious Organizations
Primary care clinics and health centers serving the medically underserved
Kansas Academy of Science
Domestic violence shelters that are members of the Kansas Coalition against Sexual and Domestic Violence (KCSDV), (effective 1/1/2005)
Kansas Bioscience Authority - 2004 HB 2647, Section 12, (effective 7/1/2004)
Special Olympics Kansas, Inc. (effective 7/1/2006)
Marillac Center, Inc. - purchases of tangible personal property only (effective 7/1/2006)
West Sedgwick County - Sunrise Rotary Club and Sunrise Charitable Fund (effective 7/1/2006)
County Law Libraries (effective 7/1/2006)
501(c)(3) Homeless Shelters (effective 7/1/2006)
Jazz In The Woods, Inc. (effective 7/1/2007)
Frontenac Education Foundation (effective 7/1/2007)
Rotary Club of Shawnee Foundation (effective 7/1/2007)
Victory In The Valley, Inc. (effective 7/1/2007)
Booth Theatre Foundation, Inc. (effective 7/1/2007)
TLC Charities Foundation, Inc. (effective 7/1/2007)

Date Composed: 11/02/2004 Date Modified: 04/07/2006

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