Are a church's telephone charges exempt from Kansas sales tax?

Plain-English summary

A church asked whether its telephone charges are exempt from Kansas sales tax. The Department ruled the charges are exempt from state and local sales tax if the church pays for them and the phones are used exclusively for religious purposes.

"You ask if telephone charges to your church are exempt from sales tax. Please be advised that these charges are exempt from state and local sales tax if the church pays for them and the telephones are used exclusively to administer, manage or operate the church's religious facilities or to administer religious activities."

The Department explained the "used exclusively" limit: "For purposes of this exemption, 'used exclusively' for a religious purpose means that any other use of the telephone is minimal in scope, insubstantial in nature, and incidental to the exempt use." It enclosed Notice 99-14, "that explains the exemption for religious organizations in more depth," along with an exemption certificate the church can give its vendors to claim the exemption.

What this means for you

Churches and religious organizations

Your telephone service can be purchased free of state and local sales tax, but only if the church itself pays for the service and the phones are used almost entirely for religious purposes. Personal or unrelated use has to stay minimal and incidental.

Give your phone vendor an exemption certificate

The exemption is not automatic. Complete the Department's exemption certificate and give it to your telephone provider so the provider can stop charging tax.

Read Notice 99-14 for the full rules

The Department pointed to Notice 99-14, which explains the sales tax exemption for religious organizations in more detail — a useful reference for other purchases besides phone service.

Common questions

Q: Are a church's phone bills exempt from Kansas sales tax?
A: Yes, if the church pays for the service and the phones are used exclusively to administer, manage, or operate the church's religious facilities or activities.

Q: What does "used exclusively" mean here?
A: Any other, non-religious use of the telephone must be minimal in scope, insubstantial in nature, and incidental to the exempt religious use.

Q: How does the church claim the exemption?
A: By completing the Department's exemption certificate and giving it to its telephone vendor. Notice 99-14 explains the religious-organization exemption more fully.

Citations and references

• Notice 99-14 — the Kansas Department of Revenue notice explaining the sales tax exemption for religious organizations, which the Department enclosed and relied on as the basis for exempting the church's telephone charges.

Source

• Landing page: Kansas Department of Revenue Policy Information Library
• Original document: O-2000-032

Original ruling text

Opinion Letter

Body:

Office of Policy & Research

October 31, 2000

XXXX
XXXX
XXXX

RE: Your letter of October 16, 2000

Dear XXXX:

I have been asked to answer your letter that we received earlier this month. You ask if telephone charges to your church are exempt from sales tax. Please be advised that these charges are exempt from state and local sales tax if the church pays for them and the telephones are used exclusively to administer, manage or operate the church’s religious facilities or to administer religious activities.

For purposes of this exemption, “used exclusively” for a religious purpose means that any other use of the telephone is minimal in scope, insubstantial in nature, and incidental to the exempt use. I have enclosed a copy of Notice 99-14, that explains the exemption for religious organizations in more depth. I have also enclosed a copy of the exemption certificate that you may complete and provide to your vendors to claim exemption.

I believe that the Notice will answer any additional questions that you have. If not, please call me at (785) 296-3081 or visit our web site at www.ink.org/public/kdor/ .

Sincerely,

Thomas E. Hatten
Attorney/Policy & Research

Enclosures

Date Composed: 11/02/2000 Date Modified: 10/10/2001

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