Does a nonprofit advocacy organization have to collect Kansas sales tax on the retail sales it makes?

Plain-English summary

A nonprofit advocacy organization asked about sales tax exemptions. It "is a nonprofit advocacy organization with a mission of ensuring that the needs and rights of all Kansas children are identified and met," and it was "selling [items] in an effort to raise awareness to the plight of children in Kansas."

The ruling. "It is the opinion of the Kansas Department of Revenue that no exemption from Kansas retailers' sales tax exists for retail sales made by your organization."

Bottom line: being a nonprofit — even a children's advocacy organization selling merchandise for a cause — does not exempt an organization's own retail sales from Kansas sales tax. The organization must collect and remit sales tax on the items it sells. Kansas has no general nonprofit exemption; exemptions are granted only to specific categories of organizations, and this advocacy group did not fall within one for its retail sales.

What this means for you

Nonprofit status alone does not exempt your sales

Kansas does not exempt an organization's retail sales just because it is a nonprofit. The Department found no exemption for the retail sales made by this advocacy organization.

A charitable purpose does not change the sale's taxability

Selling merchandise to raise awareness or funds for a cause is still a taxable retail sale. The good cause behind the sale does not make the transaction exempt.

The organization is the retailer that must collect the tax

When a nonprofit makes retail sales to consumers, it acts as a retailer and is responsible for collecting and remitting the Kansas sales tax on those sales.

Kansas exemptions are category-specific

Kansas grants sales tax exemptions only to specified types of organizations and purchases. An organization that does not fit one of those categories for its sales must charge tax like any other retailer.

Common questions

Does a nonprofit have to charge Kansas sales tax on items it sells?
Yes. The Department ruled that no exemption exists for the retail sales made by this nonprofit advocacy organization.

Does selling for a charitable cause make the sale exempt?
No. Raising awareness or funds for a cause does not exempt the retail sale from Kansas sales tax.

Who is responsible for the tax on the organization's sales?
The organization itself, as the retailer, must collect and remit the Kansas sales tax on its retail sales.

Is there a general nonprofit exemption in Kansas?
No. Kansas grants exemptions only to specific categories; an organization outside those categories must collect tax on its retail sales.

Citations and references

• The ruling states in prose that no exemption from Kansas retailers' sales tax exists for retail sales made by the nonprofit advocacy organization, so the organization must collect and remit tax on those sales. No numbered statute is cited.
• 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 21, 1998 by Mark D. Ciardullo, Tax Specialist, Kansas Department of Revenue.

Source

• Landing page: Kansas Department of Revenue Policy Information Library
• Original document: P-1998-83

Original ruling text

Private Letter Ruling

Body:

Office of Policy & Research

August 21, 1998

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Dear XXXXXXXXXXXXXXX:

The purpose of this letter is to respond to your letter dated July 21, 1998.

You requested a private letter ruling regarding sales tax exemptions XXXXXXXXXXXXXXXX You generally stated in your letter: XXXX is selling XXXXXX in an effort to raise awareness to the plight of children in Kansas. XXXXXXXXX is a nonprofit advocacy organization with a mission of ensuring that the needs and rights of all Kansas children are identified and met.

It is the opinion of the Kansas Department of Revenue that no exemption from Kansas retailers’ sales tax exists for retail sales made by your organization.

Sincerely,

Mark D. Ciardullo
Tax Specialist

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

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