Is a nonprofit youth baseball organization exempt from Kansas sales tax on its purchases and its concession, program, and admission sales?

Plain-English summary

A youth baseball organization asked whether, as a nonprofit, it is exempt from Kansas sales tax. The Department ruled that it is not.

Being a nonprofit is not enough. The Department acknowledged that organizations like a youth baseball group "perform a great deal of services for their communities with the funds that they raise," but was direct: "not every non-profit organization enjoys an exemption from Kansas sales tax. Yours does not." Kansas grants sales-tax exemption only to specifically listed types of entities; a youth sports nonprofit is not among them.

The organization pays tax on its purchases. It "would be obligated to pay any applicable Kansas sales tax(es) on its purchases of tangible personal property and taxable services," which the Department said "would include, but not be limited to, sports equipment, mowers, uniforms, transportation, lighting, general maintenance, upkeep and improvements to the ball field, park, and playground equipment." Two carve-outs it noted: "mowing services are not currently subject to sales tax in the state of Kansas," and "labor services to construct buildings would be exempt."

The organization also collects tax on its sales. "Non-profit organizations are obligated to collect and remit the appropriate Kansas sales tax(es) on all taxable receipts." The Department specified that this "would include, but not be limited to[,] concession sales, program sales and admission charges, other than parking fees." So the group must register, collect tax on concessions, programs, and admissions, and remit it - while parking fees are not taxed.

Bottom line: a nonprofit youth baseball organization gets no general Kansas sales-tax exemption. It pays tax on what it buys and collects tax on what it sells (concessions, programs, admissions), with narrow exceptions for mowing services, building-construction labor, and parking fees.

What this means for you

Youth sports and similar community nonprofits

Do not assume nonprofit status exempts you from Kansas sales tax. Unless a statute specifically exempts your type of organization, you pay tax on your purchases and collect tax on your taxable sales.

On the purchasing side

Expect to pay Kansas sales tax on equipment, uniforms, lighting, transportation, and field/park/playground maintenance and improvements. Mowing services are not currently taxed, and labor to construct buildings is exempt.

On the sales side

Register as a retailer and collect sales tax on concession sales, program sales, and admission charges. Parking fees are not taxable. Remit the tax you collect to the Department.

Common questions

Q: Is a nonprofit youth baseball organization exempt from Kansas sales tax?
A: No. The Department ruled that this kind of nonprofit does not enjoy a Kansas sales-tax exemption.

Q: Does it owe tax on its purchases?
A: Yes - on tangible personal property and taxable services such as equipment, uniforms, lighting, and field maintenance. Mowing services are not taxed, and building-construction labor is exempt.

Q: Does it have to collect tax on admissions and concessions?
A: Yes. It must collect and remit sales tax on concession sales, program sales, and admission charges. Parking fees are not taxable.

Citations and references

• The Department applied the general rule that a Kansas sales-tax exemption exists only where a statute specifically grants one to a type of entity, and a nonprofit youth baseball organization is not within any such exemption. As a result it owes sales tax on its taxable purchases and must collect and remit sales tax on its taxable receipts (concessions, programs, and admissions, but not parking fees), while mowing services and building-construction labor are not taxed. No specific K.S.A. section was cited in the ruling for the holding.

Source

• Landing page: Kansas Department of Revenue Policy Information Library
• Original document: P-2001-004

Original ruling text

Private Letter Ruling

Body:

Office of Policy & Research

January 11, 2001

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Dear Mr. TTTTT:

We wish to acknowledge receipt of your letter dated January 8, 2001, regarding the application of Kansas Retailers’ Sales tax.

Many organizations, such as your youth baseball organization, 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.

Your organization would be obligated to pay any applicable Kansas sales tax(es) on its purchases of tangible personal property and taxable services, which would include, but not be limited to, sports equipment, mowers, uniforms, transportation, lighting, general maintenance, upkeep and improvements to the ball field, park, and playground equipment. Mowing services are not currently subject to sales tax in the state of Kansas. Labor services to construct buildings would be exempt from Kansas sales tax(es).

In closing, non-profit organizations are obligated to collect and remit the appropriate Kansas sales tax(es) on all taxable receipts. This would include, but not be limited to concession sales, program sales and admission charges, other than parking fees.

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, case law, or published revenue ruling, that materially effects this private letter ruling.

Sincerely yours,

Thomas P. Browne, Jr.
Tax Specialist

TPB

Date Composed: 01/16/2001 Date Modified: 10/11/2001

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