Must a museum collect Kansas sales tax on tour-ticket admissions and gift-shop sales?

Plain-English summary

A museum asked whether it must collect Kansas sales tax on its tour tickets and on sales from its gift shop. The Department's answer is yes to both.

Tour tickets — taxable admissions. K.S.A. 79-3603(e) imposes sales tax on:

"the gross receipts from the sale of admissions to any place providing amusement, entertainment or recreation services. . ."

Because the tour tickets admit people into the museum, the museum must collect sales tax on them.

Gift-shop items — taxable retail sales. K.S.A. 79-3603(a) imposes sales tax on:

"The gross receipts received from the sale of tangible personal property at retail within this state. . ."

So the museum's gift-shop sales are also subject to sales tax.

Bottom line: a museum charges Kansas sales tax on both its admission (tour) tickets and its gift-shop merchandise — one as a taxable admission, the other as a taxable retail sale of tangible personal property.

What this means for you

Museums, galleries, and attractions

Charge sales tax on admission/tour tickets (79-3603(e)) and on gift-shop and merchandise sales (79-3603(a)). Being a museum — even a nonprofit one — does not remove these from tax; this ruling addresses the taxability of the transactions, not any entity exemption.

Two different tax hooks

Admissions are taxed as amusement/entertainment/recreation admissions; merchandise is taxed as retail sales of tangible personal property. Both apply, so both revenue streams need tax collected and remitted.

Nonprofit status is separate

A nonprofit museum may qualify to buy some items exempt on its own purchases, but that is a different question from whether it must collect tax on the tickets and merchandise it sells to the public — here, it must.

Common questions

Q: Does a museum collect sales tax on admission or tour tickets?
A: Yes. K.S.A. 79-3603(e) taxes admissions to places providing amusement, entertainment, or recreation, and tour tickets that admit people to the museum fall within it.

Q: Are museum gift-shop sales taxable?
A: Yes. Gift-shop items are retail sales of tangible personal property, taxable under K.S.A. 79-3603(a).

Q: Does being a nonprofit change this?
A: This ruling addresses the taxability of the sales themselves, which are taxable. An entity's exempt status affects its own purchases, not its duty to collect tax on tickets and merchandise it sells.

Citations and references

• K.S.A. 79-3603(e) — imposes Kansas sales tax on the gross receipts from admissions to any place providing amusement, entertainment, or recreation services.
• K.S.A. 79-3603(a) — imposes Kansas sales tax on the gross receipts from retail sales of tangible personal property.
• 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-2002-027

Original ruling text

Private Letter Ruling

Body:

Office of Policy & Research

March 19, 2002

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Dear Mr. TTTTTTT:

We wish to acknowledge receipt of your letter dated March 15, 2002, regarding the application of Kansas Retailers’ Sales tax.

This is a private letter ruling pursuant to K.A.R. 92-19-59.

K.S.A. 79-3603(e) imposes a sales tax upon: “the gross receipts from the sale of admissions to any place providing amusement, entertainment or recreation services. . .”

Please be advised that the museum would be obligated to collect the appropriate Kansas sales tax(es) on the sale of tour tickets, which allow people admission into a the respective museum.

K.S.A. 79-3603(a) imposes a sales tax upon: “The gross receipts received from the sale of tangible personal property at retail within this state. . .”

The sale of items from the gift shop would be subject to sales tax, pursuant to K.S.A. 79-3603(a).

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: 03/29/2002 Date Modified: 03/29/2002

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