Is a nonprofit hospice group exempt from Kansas sales tax on its purchases?

Plain-English summary

A nonprofit hospice group asked whether it is exempt from Kansas sales tax.

Some nonprofits were newly exempted in 1998 — but not all. The Department explained that Governor Bill Graves signed Senate Bill 493 into law, effective July 1, 1998, and that it "contained several sales tax exemptions to deserving organizations, including non-profit zoos and parent-teacher organizations."

A hospice group is not among them. "Many organizations, such as your hospice group, perform a great deal of services for their communities with the funds that they raise. However, not every non-profit organization enjoys an exemption from Kansas sales tax. Yours does not."

The remedy is legislative. The Department advised that "an exemption for hospice groups, such as yours[,] would require a change to Kansas statutes through legislative action," and suggested contacting the group's elected Kansas representative and senator.

Bottom line: a nonprofit hospice group is not exempt from Kansas sales tax. Doing valuable community health work and being a nonprofit is not enough; only organizations the Legislature has specifically exempted qualify, and hospice groups are not on that list.

What this means for you

Nonprofit status alone is not an exemption

Kansas grants sales tax exemptions to specific categories of organizations named by the Legislature. A hospice group is not one of them, so it pays sales tax on its purchases.

1998 SB 493 expanded, but did not open, the list

The 1998 law added exemptions for particular organizations such as nonprofit zoos and parent-teacher organizations. It did not create a general exemption for all community or health nonprofits, and it did not include hospice groups.

The Department cannot create the exemption

The Department applies the exemptions the Legislature enacts. It told the hospice group that adding an exemption "would require a change to Kansas statutes through legislative action" — not a departmental ruling.

Where to take the request

An organization seeking exemption should direct its efforts to its elected state representative and senator, as the Department expressly suggested.

Common questions

Is our nonprofit hospice group exempt from Kansas sales tax?
No. The Department ruled that a hospice group is not exempt; it must pay Kansas sales tax on its purchases.

Didn't the 1998 law add new nonprofit exemptions?
Yes, Senate Bill 493 added exemptions for certain organizations such as nonprofit zoos and parent-teacher organizations — but not hospice groups.

Why isn't a health-serving nonprofit automatically exempt?
Because Kansas exempts only the specific organizations the Legislature has named. Doing community health work or being a nonprofit does not, by itself, confer an exemption.

How could a hospice group become exempt?
Only through a statutory change. The Department suggested contacting your elected Kansas representative and senator to pursue legislation.

Citations and references

• 1998 Senate Bill 493 — signed by Governor Bill Graves, effective July 1, 1998; added sales tax exemptions for certain organizations (e.g., nonprofit zoos and parent-teacher organizations) but not hospice groups. The ruling references the bill without citing a codified statute number.
• K.A.R. 92-19-59 — authorizes Kansas private letter rulings; this ruling binds the Department only as to the requesting taxpayer and the facts presented.
• Issued October 8, 1998 by Thomas P. Browne, Jr., Tax Specialist, Office of Policy & Research, Kansas Department of Revenue.

Source

• Landing page: Kansas Department of Revenue Policy Information Library
• Original document: P-1998-159

Original ruling text

Private Letter Ruling

Body:

Office of Policy & Research

October 8, 1998

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Dear Ms. TTTTTT:

We wish to acknowledge receipt of your letter dated September 28, 1998, regarding the application of Kansas Retailers’ Sales tax.

Governor Bill Graves signed Senate Bill 493 into law, which became effective July 1, 1998. It contained several sales tax exemptions to deserving organizations, including non-profit zoos and parent-teacher organizations.

Many organizations, such as your hospice group, perform a great deal of services for their communities with the funds that they raise. However, not every non-profit organization enjoys an exemption from Kansas sales tax. Yours does not.

An exemption for hospice groups, such as yours would require a change to Kansas statutes through legislative action. Therefore, you may also wish to contact your elected Kansas representative and senator.

This is a private letter ruling pursuant to K.A.R. 92-19-59. It is based solely on the facts provided in your request. If it is determined that undisclosed facts were material or necessary to an accurate determination by the department, this ruling is null and void. This ruling will be revoked in the future by the operation of law without further department action if there is a change in the statutes, administrative regulations, or case law, or published revenue ruling, that materially effects this private letter ruling. If I may be of further assistance, please contact me at your earliest convenience at (785) 296-7776.

Sincerely yours,

Thomas P. Browne, Jr.
Tax Specialist

TPB

Date Composed: 10/12/1998 Date Modified: 10/10/2001

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