Are towing services subject to Kansas sales tax?

Plain-English summary

A towing company asked whether its towing services are subject to Kansas retailers' sales tax. The Department explained that Kansas taxes only enumerated services — those services the sales tax act specifically lists. Towing services are not currently subject to Kansas sales tax.

The Department added the usual caveat for a nontaxable-service provider: the company must pay sales tax on all articles of tangible personal property and all taxable services it purchases to provide those nontaxable towing services.

What this means for you

If you run a towing business in Kansas, you generally do not charge sales tax on the towing itself, but you do bear tax on your own inputs.

• Towing is not a taxed enumerated service. You don't collect Kansas sales tax on the towing charge.
• You pay tax on your inputs. As the final consumer, you owe sales or use tax on the equipment, parts, and taxable services you buy to run the business.
• Watch for bundled taxable work. If you also perform taxable services (for example, certain vehicle repairs) or sell parts, those components can be taxable — the ruling addresses towing as such.
• "Not currently" is a real qualifier. The answer reflects the law as of the ruling; if the taxability of towing changes, so could the answer.

Common questions

Is towing taxable in Kansas?
No. The Department ruled that towing services are not currently subject to Kansas sales tax, because Kansas taxes only enumerated services.

Does the towing company owe any Kansas tax?
Yes — on its own purchases. It must pay sales tax on the tangible personal property and taxable services it buys to provide the towing.

What if I also do repairs or sell parts?
Those can be taxable in their own right. This ruling addresses towing services specifically.

Can other towing companies rely on this ruling?
Not directly. A private letter ruling binds the Department only for the requesting taxpayer and stated facts; treat it as guidance.

Citations and references

• The ruling states that Kansas taxes only enumerated services, that towing is not currently taxed, and that the provider owes tax on its own taxable inputs; it does not cite a specific numbered statute.

Source

• Original ruling (DOCX): https://www.ksrevenue.gov/pildocs/rulings/P-1999-93.docx
• Kansas Policy Information Library: https://www.ksrevenue.gov/prpil.html

Original ruling text

Private Letter Ruling

Body:

Office of Policy & Research

March 23, 1999

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RE: Towing Services

Dear Mr. TTTTT:

We wish to acknowledge receipt of your letter dated March 17, 1999, regarding the application of Kansas Retailers’ Sales tax.

The state of Kansas taxes only enumerated services. The towing services that you are providing are not currently subject to sales tax in the state of Kansas. However, you must pay sales tax on all articles of tangible personal property and all taxable services to provide the nontaxable services.

This is a private letter ruling pursuant to K.A.R. 92-19-59. It 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 ruling will be revoked in the future by the operation of law without further department action if there is a change in the statutes, administrative regulations, or case law, or published revenue ruling, that materially effects this private letter ruling. If I may be of further assistance, please contact me at your earliest convenience at (785) 296-7776.

Sincerely yours,

Thomas P. Browne, Jr.
Tax Specialist

TPB

Date Composed: 04/02/1999 Date Modified: 10/11/2001

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