Does a Kansas store charge Kansas sales tax when it delivers furniture to a buyer's out-of-state home on the store's own truck?

Plain-English summary

A home-furnishings store in Overland Park, Kansas, sells to Kansas and Missouri customers. Some Missouri customers come to the Kansas store, buy furniture, and then the store delivers it to their Missouri residence using the store's own truck and employees. The store asked whether it should charge Kansas sales tax on those sales, or whether Missouri use tax applies instead.

The Department pointed to Kansas Administrative Regulation 92-19-29 (sales in interstate commerce). When tangible personal property is sold within Kansas and the seller is obligated to deliver it to a point outside the state (or to a carrier or the mails for transportation out of state), the retail sales tax does not apply, provided the property is not returned to a point in Kansas. Acceptable proof of out-of-state delivery includes a waybill/bill of lading, a postal insurance or registry receipt, or a trip sheet signed by the seller's delivery agent showing the out-of-state recipient's signature and address. (By contrast, if property is delivered within Kansas to the buyer or the buyer's agent — other than a common carrier — the tax applies even if the buyer later takes it out of state.)

Because the store delivers to the buyer's Missouri residence on its own truck, the transaction is not subject to Kansas sales tax. Any Missouri tax question should be directed to the Missouri Department of Revenue.

What this means for you

If you're a Kansas retailer delivering goods to customers out of state, whether Kansas tax applies turns on where — and how — delivery happens.

• Seller-obligated out-of-state delivery is not Kansas-taxable. When you're obligated to deliver to a point outside Kansas, the Kansas sales tax does not apply (if the goods aren't returned to Kansas).
• Delivering on your own truck to the buyer's out-of-state home counts. The store's own-truck delivery to a Missouri residence qualified.
• In-state handoff is different. If you deliver within Kansas to the buyer or the buyer's agent (not a common carrier), Kansas tax applies even if the buyer later hauls it out of state.
• Keep delivery proof. Retain a waybill/bill of lading, postal registry receipt, or a signed trip sheet showing the out-of-state recipient and address.
• The other state may still tax it. No Kansas tax doesn't mean no tax — the destination state's use tax may apply; ask that state.

Common questions

Do I charge Kansas sales tax if I deliver to a customer's out-of-state address?
No, when you're obligated to deliver to a point outside Kansas and the goods aren't returned to Kansas — K.A.R. 92-19-29 says the tax doesn't apply.

Does it matter that I use my own truck instead of a common carrier?
For out-of-state delivery, the store's own-truck delivery to the buyer's Missouri home was not taxed. But for delivery within Kansas, handing goods to the buyer or their agent (other than a common carrier) is taxable.

What proof of out-of-state delivery should I keep?
A waybill or bill of lading, a postal insurance/registry receipt, or a trip sheet signed by your delivery agent showing the out-of-state recipient's signature and address.

Does the customer owe tax somewhere?
Possibly. The destination state (here, Missouri) may impose use tax; that's a question for that state's revenue department.

Citations and references

• K.A.R. 92-19-29 (Sales in interstate commerce) — when property is sold in Kansas and the seller is obligated to deliver it to a point outside the state, the retail sales tax does not apply (provided it isn't returned to Kansas); lists acceptable proof of out-of-state delivery; and provides that in-state delivery to the buyer or the buyer's agent, other than a common carrier, is taxable. The ruling does not cite a specific numbered K.S.A. section.

Source

• Original ruling (DOCX): https://www.ksrevenue.gov/pildocs/rulings/P-1999-59.docx
• Kansas Policy Information Library: https://www.ksrevenue.gov/prpil.html

Original ruling text

Private Letter Ruling

Body:

Office of Policy & Research

February 22, 1999

XXXXXXXXXX
XXXXXXXXXX
XXXXXXXXXX

Re: Kansas Sales Tax

Dear Mr. XXXXX

Your correspondence of January 26, 1999, has been referred to my attention. Its contents are duly noted. Your letter states, in pertinent part, as follows:

Request for Written Opinion On Sales Tax Rules

Name of Business: XXXXXXXXXX

Type of Product: Retail Sales of Home Furnishings From Shopping Center Location

Customers: General Public, Interior Decorators

Location of Seller: XXXXXXXXXX Overland Park, KS XXXXX

Location of Buyers: Most Buyers Are Kansas residents
Substantial Number of Buyers Are From Missouri

Shipping Method: XXXXXXXXXX owns a truck and has employees who deliver furniture to customers.

Our Question:

We have a number of Missouri Resident customers who come into our store (Located in Kansas) and purchase furniture. We then deliver the furniture to their residence in Missouri using our own truck and employees. Should we charge Kansas sales tax on this sale? Or should Missouri USE Tax Apply? We have no store location in Missouri.

The question you have raised is addressed by Kansas Administrative Regulation (K.A.R.) 92-19-29. The regulation provides:

92-19-29. Sales in interstate commerce. When tangible personal property is sold within the state and the seller is obligated to deliver it to a point outside the state or to deliver it to a carrier or to the mails for transportation to a point without the state, the retail sales tax does not apply: Provided, The property is not returned to a point within this state. The most acceptable proof of transportation outside the state will be:
(a) A waybill or bill of lading made out to the seller’s order calling for delivery; or
(b) An insurance or registry receipt issued by the United States postal department, or a post office department’s receipt; or
(c) A trip sheet signed by the seller’s delivery agent and showing the signature and address of the person outside the state who received the delivered goods.
However, where tangible personal property pursuant to a sale is delivered in this state to the buyer or his agent other than a common carrier, the sales tax applies, notwithstanding that the buyer may subsequently transport the property out of this state.

Based on the regulation, the transaction you describe would not be subject to Kansas sales tax. Questions regarding any tax due to the state of Missouri should be presented to the Missouri Department of Revenue.

I trust this information is of assistance. If I can be of further service, please feel free to contact me.

Sincerely,

Jim Weisgerber
Attorney
Tax Specialist

JW:jw

Date Composed: 03/09/1999 Date Modified: 10/11/2001

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