Does a ministry qualify for the 1998 Kansas religious-organization sales tax exemption, and how does it claim it?

Plain-English summary

A ministry asked whether it qualifies for the new Kansas sales tax exemption for religious organizations enacted in 1998 Senate Bill No. 493, and provided its by-laws and a letter from the Internal Revenue Service.

The Ministry qualifies. The Department found that the by-laws and IRS letter "establish that the Ministry qualifies as a religious organization within the meaning of Senate Bill No. 493." As a result, "the Ministry is exempt from paying Kansas sales tax on purchases made for charitable donations or for use as part of the Ministry's charitable works."

How to claim the exemption. "To properly claim exemption, you must present your vendor with a completed exemption certificate and the property or services must be paid for with the Ministry's check or voucher." The Department enclosed a copy of Notice 98-05 and an exemption certificate for the Ministry to reproduce, complete, and give to its vendors.

Bottom line: the Ministry is a qualifying religious organization, so its purchases for charitable donations or its charitable works are exempt from Kansas sales tax — provided it gives vendors a completed exemption certificate and pays with its own check or voucher.

What this means for you

Qualifying is documented, not assumed

The Department relied on the Ministry's by-laws and IRS letter to conclude it is a religious organization within the meaning of the 1998 law. An organization should be able to document how it meets the definition.

The exemption covers charitable-purpose purchases

The Ministry's exemption applies to purchases made for charitable donations or for use as part of its charitable works. Purchases outside that purpose are analyzed on their own terms.

Claiming requires a certificate and direct payment

Two conditions must both be met: the Ministry presents the vendor a completed exemption certificate, and the purchase is paid for with the Ministry's own check or voucher. A purchase paid by an individual's personal funds does not qualify.

Notice 98-05 explains the details

The Department enclosed Notice 98-05, "Sales Taxation of Purchases by Religious Organizations," to answer remaining questions about the exemption.

Common questions

Q: Did the ministry qualify for the religious-organization exemption?
A: Yes. Its by-laws and IRS letter established that it qualifies as a religious organization within the meaning of 1998 Senate Bill No. 493.

Q: What purchases are exempt?
A: Purchases made for charitable donations or for use as part of the Ministry's charitable works.

Q: How does the ministry claim the exemption?
A: Present the vendor a completed exemption certificate, and pay for the property or services with the Ministry's own check or voucher.

Q: What if a purchase is paid with personal funds?
A: The exemption requires payment with the Ministry's check or voucher, so a purchase paid with personal funds would not properly claim it.

Citations and references

• 1998 Senate Bill No. 493 (Kansas religious-organization exemption) — the 1998 law that created the sales tax exemption for religious organizations; the Department found the Ministry qualifies as a religious organization within its meaning. The ruling referenced the bill rather than citing a codified statutory subsection.
• Notice 98-05, "Sales Taxation of Purchases by Religious Organizations" — Department guidance, enclosed with the ruling, explaining how a religious organization claims the exemption, including use of an exemption certificate and payment by the organization's check or voucher.
• K.A.R. 92-19-59 — the regulation authorizing private letter rulings; this ruling was issued under it and binds the Department only as to the requesting taxpayer.

Source

• Landing page: Kansas Department of Revenue Policy Information Library
• Original document: P-1998-187

Original ruling text

Private Letter Ruling

Body:

Office of Policy & Research

November 5, 1998

XXXX
XXXX
XXXX

RE: Your letter of September 17, 1998

Dear XXXX:

I have been asked to respond to your inquiry of September 17, 1998. You ask whether the XXXX (the Ministry) qualifies for the new sales tax exemption of religious organizations that was enacted as part of 1998 Senate Bill No. 493. You provided the Ministry’s by-laws and a letter from the Internal Revenue Service. These establish that the Ministry qualifies as a religious organization within the meaning of Senate Bill No. 493. Accordingly, the Ministry is exempt from paying Kansas sales tax on purchases made for charitable donations or for use as part of the Ministry’s charitable works. To properly claim exemption, you must present your vendor with a completed exemption certificate and the property or services must be paid for with the Ministry’s check or voucher. I have enclosed a copy of Notice # 98-05 and an exemption certificate that you should reproduce, fill out and give to your vendors. Notice #98-05 should explain any questions that remain.

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 by operation of law without further department action if there is a change in the controlling statutes, administrative regulations, revenue rulings or case law that materially effects this determination.

Sincerely,

Thomas E. Hatten
Attorney/Policy & Research

Enclosures

Date Composed: 11/23/1998 Date Modified: 10/10/2001

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