Is a business that transcribes printed documents into Braille required to charge Kansas sales tax?

Plain-English summary

A person planning to start a service business asked about Kansas sales tax. "The service is the transcribing of printed documents to Braille documents," including "menus, newsletters, lease and bank statements."

The rule for services. "[S]ales tax is imposed on all transactions involving the transfer of tangible personal property. With services, however, tax is imposed only on those transactions that are specifically enumerated in the sales tax act."

The holding. "[T]he service you provide is not subject to the Kansas sales tax," because "the type of service you provide has not been enumerated in the sales tax act as a service that is subject to tax." The Department drew an analogy: "Your service is similar to translating documents written in English into another language for a single end user." The Braille transcription is a nontaxable service, not a sale of goods.

Two caveats. First, the input-tax rule: "You must pay sales tax on all articles of tangible personal property and all services purchased by you in Kansas which enable you to provide the nontaxable service." Second, a change-of-facts warning: "this opinion might change if you begin to produce Braille documents that you hold for resale" — i.e., if the business shifts from custom transcription for a single customer to making Braille products for sale, it could become a taxable retailer of those goods.

Bottom line: custom Braille transcription for a customer's own documents is a nontaxable, non-enumerated service, so no sales tax is charged — but the provider pays tax on its own Kansas purchases, and producing Braille documents for resale would change the analysis.

What this means for you

Transcription, translation, and accessibility services

Converting a customer's own documents into another format or language for that single end user is generally a nontaxable service in Kansas — it is not an enumerated taxable service. You do not charge your customers sales tax on the service fee.

The input-tax rule still applies

As a nontaxable-service provider, you are the consumer of the equipment, paper, embossing supplies, software, and taxable services you buy in Kansas to do the work, and you owe sales or use tax on those purchases.

If you start selling products

The moment you shift from custom transcription to producing Braille documents (or other goods) that you hold for resale, you may become a taxable retailer of those products. The Department flagged this explicitly — reassess your tax status if your business model changes.

Common questions

Q: Does a Braille transcription service charge Kansas sales tax?
A: No. The Department concluded the service "is not subject to the Kansas sales tax" because it "has not been enumerated in the sales tax act as a service that is subject to tax."

Q: Why is it treated like translation?
A: The Department said the service "is similar to translating documents written in English into another language for a single end user" — a nontaxable custom service rather than a sale of goods.

Q: Could the answer change?
A: Yes. The Department warned the "opinion might change if you begin to produce Braille documents that you hold for resale," which could make the business a taxable retailer of those products.

Citations and references

• Non-enumerated service rule — Kansas taxes services only when specifically enumerated; Braille transcription is not enumerated, so it is not taxable, and the provider pays tax on its own Kansas inputs.
• Resale change-of-facts caveat — the nontaxable treatment could change if the provider produces Braille documents held for resale, potentially making it a taxable retailer of those goods.

Source

• Landing page: Kansas Department of Revenue Policy Information Library
• Original document: P-1999-177

Original ruling text

Private Letter Ruling

Body:

Office of Policy and Research

August 17, 1999

XXXXXXXXXXXXX
XXXXXXXXXXXXX
XXXXXXXXXXXXX

Dear XXXXXXX:

I have been asked to respond to your letter dated July 15, 1999. In it, you ask for guidance pertaining to Kansas retailers’ sales tax on the purchases by your business.

In your letter you stated that you propose to engage in a service business. The service is the transcribing of printed documents to Braille documents. The documents include menus, newsletters, lease and bank statements.

As a rule, sales tax is imposed on all transactions involving the transfer of tangible personal property. With services, however, tax is imposed only on those transactions that are specifically enumerated in the sales tax act. Exemptions for transactions involving either tangible personal property or services are allowed, as specifically enumerated.

After reviewing the information provided in your letter, we have concluded the service you provide is not subject to the Kansas sales tax. This determination is based on our belief that the type of service you provide has not been enumerated in the sales tax act as a service that is subject to tax. Your service is similar to translating documents written in English into another language for a single end user. You must pay sales tax on all articles of tangible personal property and all services purchased by you in Kansas which enable you to provide the nontaxable service. Please note that this opinion might change if you begin to produce Braille documents that you hold for resale.

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 make 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 affects this private letter ruling.

Sincerely,

Mark D. Ciardullo
Tax Specialist

MDC:mdc

Date Composed: 08/26/1999 Date Modified: 10/11/2001

Table 1

Table 2