Is a church's telephone service exempt from Kansas sales tax, and how does the church claim the exemption?

Plain-English summary

A church asked whether its telephone service is exempt from Kansas sales tax. The Department based its answer on the religious-organization exemption.

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.'"

Applied to phone service. "Telephone services that the church purchases that are used exclusively for religious purposes would be exempt from Kansas retailers' sales tax." But the Department drew a line: "This exemption would not apply to your priest's private line."

How to claim it. "The Kansas Department of Revenue does not intend to issue sales tax exemption numbers to religious organizations." Instead, "[t]o claim exemption, you can merely supply your vendor(s) with a completed copy of the enclosed exemption certificate" for purchases within the scope of K.S.A. 79-3606(aaa). The Department enclosed Notice 98-05 and Form BT/ST-28B.

Bottom line: a 501(c)(3) church's telephone service used exclusively for religious purposes is exempt, a priest's private line is not, and the church claims the exemption with an exemption certificate rather than an exemption number.

What this means for you

Religious-use phone service is exempt

For a religious organization that is exempt under section 501(c)(3), telephone service purchased and used exclusively for religious purposes is not subject to Kansas sales tax.

"Exclusively for religious purposes" is the test

The exemption turns on exclusive religious use. A line dedicated to something else — like the priest's private line — falls outside the exemption and remains taxable.

There is no exemption number — use a certificate

Kansas does not issue sales tax exemption numbers to religious organizations. The organization claims the exemption by handing its vendor a completed exemption certificate (the Department enclosed Form BT/ST-28B and Notice 98-05).

Keep the exemption tied to qualifying purchases

The certificate covers purchases that come within K.S.A. 79-3606(aaa) — tangible personal property and services purchased by the organization and used exclusively for religious purposes.

Common questions

Is a church's phone bill exempt from Kansas sales tax?
Yes, to the extent the telephone service is purchased by the 501(c)(3) religious organization and used exclusively for religious purposes.

What about the priest's private line?
That line is not covered. The Department said the exemption "would not apply to your priest's private line."

Do we get an exemption number?
No. Kansas does not issue exemption numbers to religious organizations. You claim the exemption with a completed exemption certificate.

Which form do we give the vendor?
The Department enclosed Form BT/ST-28B (and Notice 98-05); the completed certificate is supplied to the vendor for qualifying purchases.

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.
• Notice 98-05 and Form BT/ST-28B — the Department enclosed these for claiming the religious-organization exemption; Kansas issues no exemption number to religious organizations.
• 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 28, 1998 by Mark D. Ciardullo, Tax Specialist, Kansas Department of Revenue.

Source

• Landing page: Kansas Department of Revenue Policy Information Library
• Original document: P-1998-96

Original ruling text

Private Letter Ruling

Body:

Office of Policy & Research

August 28, 1998

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Dear XXXXXXXXXXXXXX:

The purpose of this letter is to respond to your letter dated August 11, 1998. This is a private letter ruling pursuant to Kansas Administrative Regulation 92-19-59.

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.”

Telephone services that the church purchases that are used exclusively for religious purposes would be exempt from Kansas retailers’ sales tax. This exemption would not apply to your priest’s private line.

The Kansas Department of Revenue does not intend to issue sales tax exemption numbers to religious organizations. To claim exemption, you can merely supply your vendor(s) with a completed copy of the enclosed exemption certificate, when making purchases that would come within the scope of the sales tax exemption in K.S.A. 79-3606(aaa).

This private letter ruling 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 private letter ruling will be revoked in the future by operation of law without further department action if there is a change in the statutes, administrative regulations, or case law, or a published revenue ruling, that materially effects this private letter ruling.

I have enclosed Notice 98-05 and Form BT/st-28B.

Sincerely,

Mark D. Ciardullo
Tax Specialist

MDC

Enc.

Date Composed: 09/04/1998 Date Modified: 10/11/2001

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