Is the sale of firewood for residential heating subject to Kansas state and local sales tax?

Plain-English summary

A firewood seller asked how Kansas sales tax applies to the sale of firewood. The Department ruled that residential heating fuel is exempt from the state sales tax but is still subject to local sales tax - and it explained where that local tax is sourced.

No state sales tax on residential heating fuel. "The general rule is that state sales tax is not assessed upon the gross receipts received from the sale of propane gas, LP-gas, coal, wood and other fuel sources for the production of heat or lighting for noncommercial use of an occupant in a residence." Firewood sold to heat a home falls within this residential-fuel treatment.

Local sales tax still applies. The Department stressed the point in capital letters: "HOWEVER, SAID SALE IS SUBJECT TO LOCAL SALES TAX, pursuant to KSA 12-189a." So the state portion drops off, but the applicable city and county sales taxes remain.

Which local tax applies depends on the fuel. Under K.S.A. 12-191, "the taxing situs for determining which local tax applies is the situs of the retailer thereof . . . for wood, coal, kerosene and fuel oil," while "LP-gas and propane is based on the situs of the user." In other words, firewood (like coal, kerosene, and fuel oil) is taxed at the local rate for the seller's location, whereas LP-gas and propane are taxed at the local rate for the customer's location.

Bottom line: charge no state sales tax on firewood sold for residential heating, but do charge the local sales tax, using the local rate at your own place of business.

What this means for you

Firewood, coal, kerosene, and fuel-oil dealers

When you sell these fuels for noncommercial residential heat or lighting, do not charge the state sales tax, but do charge the local (city/county) sales tax. Source that local tax to your own location - the situs of the retailer.

LP-gas and propane dealers

Same state exemption, but the local tax is sourced differently: it follows the situs of the user (the customer's location), not your location.

Watch the "residential" limit

The state exemption is for fuel used to produce heat or lighting for the noncommercial use of an occupant in a residence. Commercial or non-residential sales are not covered by this residential-fuel treatment.

Common questions

Q: Do I charge Kansas state sales tax on firewood for home heating?
A: No. Firewood and other residential heating fuels sold for noncommercial residential heat or lighting are not subject to the state sales tax.

Q: Is there any sales tax at all?
A: Yes - the local (city and county) sales tax still applies under K.S.A. 12-189a, even though the state portion does not.

Q: Whose location sets the local rate?
A: For wood, coal, kerosene, and fuel oil, the local tax is based on the retailer's location. For LP-gas and propane, it is based on the user's location (K.S.A. 12-191).

Citations and references

• K.S.A. 12-189a - subjects sales of residential heating fuels (which are exempt from the state sales tax) to local (city and county) sales tax.
• K.S.A. 12-191 - sets the taxing situs for the local tax: the situs of the retailer for wood, coal, kerosene, and fuel oil, and the situs of the user for LP-gas and propane.

Source

• Landing page: Kansas Department of Revenue Policy Information Library
• Original document: P-2001-014

Original ruling text

Private Letter Ruling

Body:

Office of Policy & Research

March 1, 2001

TTTTTTTTTTT
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Dear Mr. TTTTT:

We wish to acknowledge receipt of your letter dated February 26, 2001, regarding the application of Kansas Retailers’ Sales tax.

The general rule is that state sales tax is not assessed upon the gross receipts received from the sale of propane gas, LP-gas, coal, wood and other fuel sources for the production of heat or lighting for noncommercial use of an occupant in a residence. HOWEVER, SAID SALE IS SUBJECT TO LOCAL SALES TAX, pursuant to KSA 12-189a. The taxing situs for determining which local tax applies is the situs of the retailer thereof (KSA 12-191) for wood, coal, kerosene and fuel oil. LP-gas and propane is based on the situs of the user (KSA 12-191).

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: 03/06/2001 Date Modified: 10/11/2001

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