Is equipment used to provide internet, phone, or video service exempt from Kansas sales tax?

Plain-English summary

Kansas Notice 24-13 explains a sales tax exemption created by 2024 House Bill 2098, which amended K.S.A. 79-3606 (the list of Kansas sales tax exemptions) to add a new subsection (uuuu). The exemption has two parts:

• Infrastructure (subsection (uuuu)(1)(A)). All sales of equipment, machinery, software, ancillary components, appurtenances, accessories, or other infrastructure purchased for use in providing communications services are exempt.
• Provider services (subsection (uuuu)(1)(B)). Services purchased by a provider that are used in the repair, maintenance, or installation of communications service are exempt.

"Communications service" is defined in subsection (uuuu)(2)(A) as internet access service, telecommunications service, video service, or any combination of them. The subsection also defines the equipment, "internet access service," "provider," "telecommunications service," and "video service" in detail, so the Department recommends looking at the bill or the new statute directly for the exact scope.

The exemption applies to qualifying purchases occurring on or after July 1, 2024, and expires -- with no effect -- on and after July 1, 2029.

What this means for you

Communications-service providers

• Purchases of equipment, machinery, software, and other infrastructure you buy to provide internet, phone, or video service can be bought exempt from Kansas sales tax.
• Services you buy as a provider to repair, maintain, or install your communications service are also exempt.
• The exemption is temporary -- it applies to purchases from July 1, 2024 through June 30, 2029, and has no effect on or after July 1, 2029.
• To claim it, complete Form ST-63, Communications Service Provider Exemption Certificate, and give it to your vendor. Read the ST-63 instructions and the new statutory definitions to confirm a given purchase qualifies.

Common questions

What is exempt? Equipment, machinery, software, and infrastructure bought to provide communications service, plus services a provider buys to repair, maintain, or install that service.

What counts as "communications service"? Internet access service, telecommunications service, video service, or any combination.

When does it apply? To purchases on or after July 1, 2024. It expires on and after July 1, 2029.

How do I claim it? Give your vendor a completed Form ST-63, Communications Service Provider Exemption Certificate.

Citations and references

• House Bill 2098 (2024) -- Section 5 added the communications-services sales tax exemption.
• K.S.A. 79-3606 -- Kansas sales tax exemptions; new subsection (uuuu) exempts communications-service infrastructure and provider repair/maintenance/installation services, effective July 1, 2024 and expiring July 1, 2029.

Source

• Landing page: Kansas Department of Revenue Policy Information Library
• Original document: Notice 24-13

Original ruling text

Policy and Research
109 SW 9th Street Phone: 785-368-8222
PO Box 3506 Fax: 785-296-1279
Topeka KS 66601-3506 www.ksrevenue.gov
Mark A. Burghart, Secretary Laura Kelly, Governor

                                       NOTICE 24-13

          SALES TAX EXEMPTION FOR PROVIDING COMMUNICATIONS SERVICES

                                       (JULY 1, 2024)

   During the 2024 Legislative Session House Bill 2098 was passed and signed into law.

Section 5 of the Bill amends K.S.A. 79-3606, which provides for exemptions from sales tax.
Section 5 is amended to add new subsection (uuuu), which provides an exemption for purchases
of equipment, machinery, and other infrastructure for use in the provision of communications
service, and for purchases of services used in the repair, maintenance, or installation of
communications service.

   New subsection (uuuu)(1)(A) provides an exemption for all sales of equipment, machinery,

software, ancillary components, appurtenances, accessories, or other infrastructure purchased for
use in the provision of communications services.

   New subsection (uuuu)(1)(B) provides an exemption for all services purchased by a provider

in the provision of the communications service used in the repair, maintenance, or installation in
such communications service.

   The term "communications service" is defined in new subsection (uuuu)(2)(A). It provides

"communications service" means internet access service, telecommunications service, video
service, or any combination thereof.

   New subsection (uuuu)(2) also defines the terms: (B) "Equipment, machinery, software,

ancillary components, appurtenances, accessories or other infrastructure", (C) "Internet access
service", (D) "Provider", (E) "Telecommunications service", and (F) "Video service". Because of
the detailed nature of these definitions, direct reference to the Bill or the new statutory provision
is recommended.

  The new exemption provided by subsection (uuuu) will be in effect for all purchases of

equipment, machinery, and other infrastructure for use in the provision of communications service,
as well as services purchased by a provider and used in the repair, maintenance, or installation of
communications service occurring on or after July 1, 2024. However, the provisions of the
subsection expire, and will have no effect, on and after July 1, 2029.

  To claim the exemption, a purchaser should complete form ST-63, Communications Service

Provider Exemption Certificate and provide it to their vendor. Additional, and more specific
information is provided in the instructions for form ST-63. The Certificate is available through
the Department's website at: www.ksrevenue.gov.

                               TAXPAYER ASSISTANCE

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

www.ksrevenue.gov. If you have questions about this Notice, please contact:

                            Taxpayer Assistance Center
                           Kansas Department of Revenue
                           Scott Office Building, 1st Floor
                                  120 SE 10th Ave
                                   P. O. Box 3506
                              Topeka, KS 66601-3506
                                Phone: 785-368-8222
                                 Fax: 785-291-3614