Must a Kansas retailer charge sales tax on sales made at a craft show on a military base such as McConnell Air Force Base?

Plain-English summary

A registered Kansas retailer planned to sell homemade baskets at a craft show on McConnell Air Force Base in Wichita and asked whether Kansas sales tax applied. The Department ruled that it does - both state and applicable local sales tax.

Sales on a Kansas military reservation are taxable. "Kansas retailers are required to charge and collect Kansas sales tax on retail sales made on military reservations in Kansas." The tax applies "regardless of whether they are made to civilians or military personnel," and it reaches both businesses located on the base and retailers "who enter the base and make retail sales" - like the basket seller. Sales through vending machines on the base are taxable too.

The one exception is a direct sale to the federal government. "A sale is exempt when the sales [are] made directly to the federal government itself." But that does not include sales to military personnel "unless the purchase is paid for directly by the federal government." So selling to individual service members or their families is taxable; only a purchase the federal government itself makes and pays for is exempt.

The legal basis is the federal Buck Act. The Department explained that "this long-standing Kansas tax policy is based on the federal Buck act, which provides that state and local sales tax can be collected in federal areas such as on [a] military reservation, although not from the federal government itself. 4 USC Sec. 105-110." It added that "motor fuel sold on a military or other reservation is also subject to Kansas tax. See 4 USC Sec. 104."

Bottom line: set up to collect Kansas state and local sales tax on your craft-show sales at McConnell AFB, just as you would off base. The only sales that escape tax are those made and paid for directly by the federal government itself.

What this means for you

Vendors selling on a military base in Kansas

Being on a federal military reservation does not make your retail sales tax-free. Charge Kansas state and the applicable local sales tax on sales to civilians and to military personnel, the same as anywhere else in Kansas.

Sourcing the local tax

The Department said to charge "both state and any applicable local sales tax." Determine the local rate that applies at the base location and collect it along with the state tax.

The federal-government exception is narrow

A sale is exempt only if it is made directly to the federal government and paid for directly by the federal government. Sales to individual service members - even active-duty personnel - are taxable.

Common questions

Q: Do I charge Kansas sales tax on craft-show sales at McConnell AFB?
A: Yes. A Kansas retailer must charge both state and applicable local sales tax on retail sales made on a military reservation in Kansas.

Q: Are sales to military personnel exempt?
A: No. Sales on the base are taxable whether made to civilians or military personnel. Only a purchase made and paid for directly by the federal government itself is exempt.

Q: What law allows the state to tax sales on a federal base?
A: The federal Buck Act (4 U.S.C. Sec. 105-110) permits states and localities to collect sales tax in federal areas such as military reservations, though not from the federal government itself. Motor fuel sold on a reservation is also subject to Kansas tax (4 U.S.C. Sec. 104).

Citations and references

• 4 U.S.C. Sec. 105-110 (the federal Buck Act) - permits states and their local subdivisions to levy and collect sales and use taxes within federal areas, such as military reservations, but not on the federal government itself. This is the basis for taxing a Kansas retailer's sales at a craft show on McConnell Air Force Base.
• 4 U.S.C. Sec. 104 - cited by the Department for the point that motor fuel sold on a military or other federal reservation is also subject to Kansas tax.

Source

• Landing page: Kansas Department of Revenue Policy Information Library
• Original document: P-2000-068

Original ruling text

Private Letter Ruling

Body:

Office of Policy & Research

December 13, 2000

XXXX
XXXX
XXXX

RE: Your e-mail of December 7, 2000

Dear XXXX:

Thank you for your recent e-mail inquiry. In it, you state that you are a registered Kansas retailer and intend to sell homemade baskets at a craft show being held at the McConnell Air Force Base in Wichita, Kansas. You ask if you are required to charge Kansas sales tax on the sales being made to customers at the show. Please be advised that you must charge both state and any applicable local sales tax on the sales made at the McConnell Air Force Base.

Kansas retailers are required to charge and collect Kansas sales tax on retail sales made on military reservations in Kansas. Sales made on a military reservation are taxable regardless of whether they are made to civilians or military personnel. Taxable sales includes sales made by retail businesses that are located on a military base and sales made by retailers, like you, who enter the base and make retail sales to civilians or military personnel. In addition, Kansas sales tax is due on sales made through vending machines located on the base. A sale is exempt when the sales made directly to the federal government itself. Such direct sales do not include sales to military personnel unless the purchase is paid for directly by the federal government.

This long-standing Kansas tax policy is based on the federal Bucks act, which provides that state and local sales tax can be collected in federal areas such as on military reservation, although not from the federal government itself. 4 USC Sec. 105-110. Motor fuel sold on a military or other reservation is also subject to Kansas tax. See 4 USC Sec. 104.

I hope that this adequately answers all of your questions. If you or the show sponsors have any additional questions, please call me at (785) 296-3081. This is a private letter ruling and 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 the ruling.

Sincerely,

Thomas E. Hatten

Attorney/Policy & Research

Date Composed: 12/14/2000 Date Modified: 10/11/2001

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