Does Kansas exempt an organization's fundraising sales of Christmas trees from sales tax?

Plain-English summary

An organization that sells Christmas trees as a fundraiser asked whether any Kansas sales-tax exemption applies to those sales. The Department's answer is no — the sales are taxable.

The Department explained the baseline rule: "Kansas law broadly imposes tax on the sale of tangible personal property and enumerated services," and although the law "also contains exemptions and exceptions," none reaches this organization's sales. In its words, "the law does not contain an exemption or exception for your organization's fund raising sales."

The result is a clear collection obligation: "Your organization must collect and remit sales tax on all taxable sales including the gross receipts from fund raising."

Bottom line: selling a taxable product (Christmas trees) to raise money for a good cause does not make the sale exempt. Absent a specific statutory exemption, the organization is a retailer for those sales and must charge, collect, and remit Kansas sales tax.

What this means for you

Nonprofits and community groups running fundraisers

Fundraising does not carry its own sales-tax exemption in Kansas. When your fundraiser involves selling taxable tangible personal property — trees, food, merchandise — you generally must register, collect, and remit sales tax on the gross receipts, just like any retailer, unless a specific statute exempts that particular sale.

"It's for charity" is not an exemption

The taxability of a sale turns on what is sold and whether a statute exempts it, not on how the proceeds are used. A charitable motive behind the sale does not remove the tax.

Check for a product-specific rule before assuming

Some items have their own treatment, but Christmas trees sold at retail are taxable tangible personal property here. If you think an exemption applies to your fundraiser, identify the specific statutory exemption — the Department found none for these sales.

Common questions

Q: Are fundraising sales of Christmas trees taxable in Kansas?
A: Yes. The Department found no exemption or exception for the organization's fundraising sales, so it must collect and remit sales tax.

Q: Does the organization have to collect tax on all its fundraiser sales?
A: Yes. The ruling states the organization must collect and remit sales tax on all taxable sales, including the gross receipts from fundraising.

Q: Does being a nonprofit change the answer?
A: Not for these sales. Kansas taxes retail sales of tangible personal property unless a specific exemption applies; the Department found none here.

Citations and references

• Kansas retailers' sales tax act — broadly imposes tax on sales of tangible personal property and enumerated services; the Department found no exemption or exception covering the organization's fundraising Christmas-tree sales (the ruling cites no specific exempting subsection).
• K.A.R. 92-19-59 — the regulation authorizing Kansas private letter rulings.

Source

• Landing page: Kansas Department of Revenue Policy Information Library
• Original document: P-2002-002

Original ruling text

Private Letter Ruling

Body:

Office of Policy & Research

January 8, 2002

TTTTTTTTT
TTTTTTTTT
TTTTTTTTT
TTTTTTTTT

Dear Mr. TTTTTT:

We wish to acknowledge receipt of your letter dated January 7, 2002, regarding the application of Kansas Retailers’ Sales tax.

You have inquired as to whether there are any Kansas sales tax exemption laws that would apply to the sale of Christmas trees made by the TTTTTTT TTTT.

Kansas law broadly imposes tax on the sale of tangible personal property and enumerated services. The law also contains exemptions and exceptions from the imposition of sales tax.

It is the opinion of the Kansas Department of Revenue that the law does not contain an exemption or exception for your organization's fund raising sales. Your organization must collect and remit sales tax on all taxable sales including the gross receipts from fund raising.

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: 01/09/2002 Date Modified: 01/10/2002

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