Were manufacturer rebates on new motor vehicles excluded from Kansas sales tax after June 30, 2009?

Plain-English summary

Manufacturer rebates on new motor vehicles became taxable in Kansas on July 1, 2009. A temporary exclusion had removed qualifying manufacturer cash rebates paid directly to the retailer from the sales price between July 1, 2006 and June 30, 2009.

The 2009 Legislature did not extend the expiration date. The Department therefore instructed that all manufacturer rebates on new vehicles sold or leased in Kansas were subject to retailers' sales tax or compensating use tax beginning July 1, 2009.

What this means for you

For covered transactions after June 30, include the manufacturer rebate in the taxable price. The separate federal CARS trade-in allowance is addressed in Notice 09-10.

Citations and references

• K.S.A. 79-3602(ll)(3)(E)

Subject

Manufacturer Vehicle Rebates Taxable Beginning July 1, 2009

Source

• Landing page: Kansas Department of Revenue Policy Information Library
• Original document: Notice 09-05

Original ruling text

Kansas Department of Revenue
Office of Policy & Research

                                  NOTICE 09-05


       MANUFACTURER’S REBATE ON THE PURCHASE OR LEASE
                  OF NEW MOTOR VEHICLES


In 2006 the Kansas Legislature exempted from Kansas retailers’ sales tax and

Kansas compensating use tax all manufacturer’s cash rebates paid directly to the
retailer as a result of a sale or lease of a new motor vehicle. The legislation
provided this exemption for a limited amount of time – beginning on July 1, 2006 and
ending on June 30, 2009:

K.S.A. 79-3602(ll)(3)(E) – “Sales or selling price” shall not include:

commencing on July 1, 2006, and ending on June 30, 2009, cash rebates
granted by a manufacturer to a purchaser or lessee of a new motor vehicle
if paid directly to the retailer as a result of the original sale.

At the conclusion of the 2009 Legislative Session, no legislative provisions to
extend the ending date of June 30, 2009 have been enacted. Therefore, effective
July 1, 2009 ALL manufacturer’s rebates on new motor vehicles sold or leased in
Kansas will be subject to Kansas retailers’ sales or Kansas compensating use tax
(as the case may be).

Taxpayer Assistance

Additional copies of this notice, forms or publications are available from our web

site, www.ksrevenue.org. If you have questions about income tax, please contact:

                        Taxpayer Assistance Center
                       Kansas Department of Revenue
                       915 SW Harrison St., 1st Floor
                          Topeka, KS 66612-1588
                           Phone: 785-368-8222
                            Fax: 785-291-3614