Is a church's direct purchase exempt from Kansas sales tax, and how does it claim the religious-organization exemption?

Plain-English summary

A church asked whether it qualifies for the Kansas religious-organization exemption. The Department applied the exemption statute and found that it does.

The exemption. "K.S.A. 79-3606(aaa) exempts from sales tax: 'all sales of tangible personal property and services purchased by a religious organization which is exempt from federal income taxation pursuant to section 501(c)(3) of the federal internal revenue code, and used exclusively for religious purposes.'"

The determination. "Based solely on the facts of your letter, the Kansas Department of Revenue has determined that the [organization] is [a] religious organization for purposes of the Kansas Retailers' Sales Tax Act."

How to claim it. "[D]irect purchases by the [church], that are used exclusively for religious purposes are exempt from Kansas retailers' sales tax. When making an exempt purchase the church should provide to the retailer a copy of this letter and an exemption certificate." The Department enclosed a copy of the exemption certificate for the church to "duplicate and issue as needed."

Bottom line: the church qualifies as a religious organization under K.S.A. 79-3606(aaa), so its direct purchases used exclusively for religious purposes are exempt. It claims the exemption by giving the retailer a copy of this ruling letter together with an exemption certificate.

What this means for you

The church's direct religious-use purchases are exempt

Because the Department determined the church is a religious organization under K.S.A. 79-3606(aaa), its direct purchases used exclusively for religious purposes are not subject to Kansas retailers' sales tax.

"Used exclusively for religious purposes" is the condition

The exemption applies to purchases used exclusively for religious purposes. Purchases that are not put to exclusively religious use fall outside it.

Claim the exemption with the letter plus a certificate

To buy exempt, the church provides the retailer a copy of this ruling letter and a completed exemption certificate. The Department enclosed a certificate the church may duplicate and issue as needed.

"Direct purchases" means the church is the buyer

The exemption is framed around the church's own direct purchases; it is not a mechanism for exempting purchases actually made by others.

Common questions

Is a church's purchase exempt from Kansas sales tax?
Yes, when the church is a religious organization under K.S.A. 79-3606(aaa) and the purchase is used exclusively for religious purposes.

How does the church prove it qualifies?
The Department determined this church qualifies and instructed it to give retailers a copy of the ruling letter along with an exemption certificate.

Does the exemption cover any church purchase?
It covers direct purchases used exclusively for religious purposes; other uses are not exempt.

What document does the retailer need?
A copy of this ruling letter and a completed exemption certificate from the church.

Citations and references

• K.S.A. 79-3606(aaa) — exempts sales of tangible personal property and services purchased by a section 501(c)(3) religious organization and used exclusively for religious purposes.
• The Department determined the organization is a religious organization for purposes of the Kansas Retailers' Sales Tax Act and instructed it to claim the exemption with a copy of the ruling letter and an exemption certificate.
• 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 August 14, 1998 by Mark D. Ciardullo, Tax Specialist, Kansas Department of Revenue.

Source

• Landing page: Kansas Department of Revenue Policy Information Library
• Original document: P-1998-73

Original ruling text

Private Letter Ruling

Body:

Office of Policy & Research

August 14, 1998

XXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXX

Dear Mr. XXXXXXXXXXX:

I acknowledge receipt of your letter dated July 17, 1998, regarding the application of Kansas Retailers’ Sales tax.

K.S.A. 79-3606(aaa) exempts from sales tax: “all sales of tangible personal property and services purchased by a religious organization which is exempt from federal income taxation pursuant to section 501(c)(3) of the federal internal revenue code, and used exclusively for religious purposes.”

Based solely on the facts of your letter, the Kansas Department of Revenue has determined that the XXXXXXXXXXXXXXXXX is religious organization for purposes of the Kansas Retailers’ Sales Tax Act.

Therefore, direct purchases by the XXXXXXXXXXX, that are used exclusively for religious purposes are exempt from Kansas retailers’ sales tax. When making an exempt purchase the church should provide to the retailer a copy of this letter and an exemption certificate. I have enclosed a copy of the exemption certificate, you may duplicate and issue as needed.

Sincerely,

Mark D. Ciardullo
Tax Specialist

MDC

Date Composed: 09/01/1998 Date Modified: 10/10/2001

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