Is a nonprofit senior center exempt from Kansas sales tax, and does it have to collect tax on its fundraising sales?

Plain-English summary

A nonprofit senior center asked whether it is exempt from Kansas sales tax. The Department ruled it is not.

Being a nonprofit is not enough. The Department acknowledged the good work: "Many organizations, such as your senior center, perform a great deal of services for their communities with the funds that they raise. However, not every non-profit organization enjoys an exemption from Kansas sales tax. Yours does not." Kansas grants sales-tax exemption only to specifically enumerated organizations; a senior center is not among them.

Only the legislature can fix that. "An exemption for senior centers, such as yours[,] would require a change to Kansas statutes through legislative action." The Department suggested the organization contact its state representative and senator — a clear signal that the path to exemption is legislative, not administrative.

The center must collect tax — including on fundraising. "[Y]our organization would be obligated to collect the appropriate Kansas sales tax(es) on all their taxable receipts, including fund raising projects." So the center both pays tax on its own taxable purchases and must collect tax when it makes taxable sales, and fundraising sales are not carved out.

Bottom line: a nonprofit senior center is not exempt from Kansas sales tax. It must collect and remit tax on its taxable receipts, fundraising included, unless and until the legislature enacts an exemption for it.

What this means for you

Senior centers and similar community nonprofits

Do not assume your nonprofit status exempts you from Kansas sales tax. Unless a specific statutory exemption names your kind of organization, you owe tax on your taxable purchases and must collect tax on your taxable sales — including sales at fundraisers.

Fundraising sales are taxable

The Department specifically included "fund raising projects" in the center's taxable receipts. If your fundraiser involves taxable sales (goods, meals, admissions, etc.), collect and remit the appropriate Kansas sales tax.

Exemption is a legislative question

Because Kansas exemptions are statutory, an organization that believes it deserves one generally must seek it through the legislature. The Department cannot create an exemption that the statutes do not provide.

Common questions

Q: Is a nonprofit senior center exempt from Kansas sales tax?
A: No. The Department ruled that not every nonprofit is exempt, and a senior center is not — an exemption would require legislative action.

Q: Does the center collect tax on fundraising sales?
A: Yes. The Department said the organization must collect the appropriate Kansas sales tax on all of its taxable receipts, including fundraising projects.

Q: How could a senior center become exempt?
A: Only through a change to Kansas statutes by the legislature; the Department suggested contacting the organization's state representative and senator.

Citations and references

• The Department resolved this ruling on the principle that Kansas sales-tax exemption is limited to organizations the legislature has specifically exempted — a nonprofit senior center is not among them — rather than by citing a particular exemption statute. The center must therefore collect Kansas sales tax on its taxable receipts, including fundraising, and any exemption would require legislative action. (Issued as a private letter ruling under K.A.R. 92-19-59.)

Source

• Landing page: Kansas Department of Revenue Policy Information Library
• Original document: P-2000-012

Original ruling text

Private Letter Ruling

Body:

Office of Policy & Research

March 21, 2000

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Dear Ms. TTTTTT:

We wish to acknowledge receipt of your letter dated March 17, 2000, regarding the application of Kansas Retailers’ Sales tax.

Many organizations, such as your senior center, perform a great deal of services for their communities with the funds that they raise. However, not every non-profit organization enjoys an exemption from Kansas sales tax. Yours does not.

An exemption for senior centers, such as yours would require a change to Kansas statutes through legislative action. Therefore, you may also wish to contact your elected Kansas representative and senator.

In closing, your organization would be obligated to collect the appropriate Kansas sales tax(es) on all their taxable receipts, including fund raising projects.

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: 04/11/2000 Date Modified: 10/11/2001

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