Is a subscriber programmed-music/audio service delivered by satellite subject to Kansas sales tax, including equipment charges?

Plain-English summary

A company that receives programmed music via a roof-mounted satellite asked whether the service is subject to Kansas sales tax. The Department pointed to K.S.A. 79-3603(k), which imposes sales tax on "the gross receipts from cable, community antennae and other subscriber radio and television services."

The Department ruled that the service is subject to Kansas sales tax, because the sale involves furnishing cable, community antennae, and other subscriber radio and television services. It added that any charge for the use of equipment furnished in connection with, supplemental to, or as an aid in providing the service is also subject to the appropriate Kansas sales/use tax.

What this means for you

If you buy (or sell) a subscriber audio/video service — such as programmed background music delivered by satellite to your business — those charges are taxable in Kansas.

• The service itself is taxable. Subscriber radio and television-type services fall within K.S.A. 79-3603(k), even when the content is programmed music delivered by satellite.
• Equipment charges follow the service. Charges for equipment furnished in connection with, supplemental to, or as an aid in providing the service are also subject to Kansas sales/use tax.
• For providers: collect and remit Kansas sales tax on both the service charge and any related equipment charges billed to Kansas subscribers.

Common questions

Is programmed background music delivered by satellite taxable in Kansas?
Yes. The Department ruled it is a subscriber radio/television-type service taxable under K.S.A. 79-3603(k).

Are the equipment charges taxable too?
Yes. Any charge for equipment furnished in connection with, supplemental to, or as an aid in providing the service is subject to Kansas sales/use tax.

What statute makes this service taxable?
K.S.A. 79-3603(k), which taxes gross receipts from cable, community antennae, and other subscriber radio and television services.

Does it matter that the content is music rather than TV?
No. The Department treated the programmed-music satellite service as within the taxable subscriber radio/television service category.

Citations and references

• K.S.A. 79-3603(k) — imposes sales tax on the gross receipts from cable, community antennae, and other subscriber radio and television services.

Source

• Original ruling (DOCX): https://www.ksrevenue.gov/pildocs/rulings/P-1998-13.docx
• Kansas Policy Information Library: https://www.ksrevenue.gov/prpil.html

Original ruling text

Private Letter Ruling

Body:

Office of Policy and Research

February 2, 1998

XXXXXXXXX
XXXXXXXXX
XXXXXXXXX
XXXXXXXXX

Dear XXXXXXXX:

We wish to acknowledge receipt of your letter dated January 14, 1998, regarding the application of Kansas Retailers’ Sales tax.

K.S.A. 79-3603(k) imposes a sales tax upon: “the gross receipts from cable, community antennae and other subscriber radio and television services. . .”

Please be advised that the service your company is receiving would be subject to sales tax in the state of Kansas, since said sale is a sale involving the furnishing of cable, community antennae and other subscriber radio and television services. Additionally, any charge for the use of equipment furnished in connection with, supplemental to or as an aid in the providing of this service would be subject to the appropriate Kansas sales/use tax.

If I may be of further assistance, please contact me at your earliest convenience at (913) 296-7776.

Sincerely yours,

Thomas P. Browne, Jr.
Tax Specialist

TPB

Date Composed: 02/09/1998 Date Modified: 10/10/2001

Table 1

Table 2