Are advertising space and subscriber access fees on an online 'electronic bulletin board' subject to Kansas sales tax?

Plain-English summary

A representative described a client's service — a nationwide data bank or "electronic bulletin board," similar to a trade magazine with information, articles, and advertising space. Subscribers access the information through their own computer and modem, with no special communication software required. The question: is the advertising and access taxable?

Advertising space — not taxable. The Department advised that the sale of advertising space on the electronic bulletin board would not be subject to Kansas sales or use tax.

Subscriber access fees — not taxable. Likewise, the fee paid by subscribers for access to the electronic bulletin board is not subject to Kansas sales or use tax. These are charges for access to information, not the sale of tangible personal property or an enumerated taxable service.

But tangible property sales are taxable. The Department added the standard caveat: if the client sells or leases computer software, hardware, or any other tangible personal property within Kansas, that sale or lease is subject to the appropriate Kansas sales or use tax. In other words, the information service and advertising are not taxed, but any tangible goods the operator sells alongside them are.

A note on timing. This ruling is from 2002, well before modern Kansas guidance on digital products and electronically delivered goods/services. The treatment of online information access and digital advertising has evolved, so confirm the current law before relying on this result for a present-day digital service.

What this means for you

Operators of online information / advertising platforms

Under this 2002 ruling, charging for access to an online information service and selling advertising space on it were not subject to Kansas sales tax. If your business model is essentially selling access to information and ad space, those charges were treated as non-taxable.

Watch the tangible-property line

If you also sell or lease software, hardware, or other tangible personal property in Kansas, those transactions are taxable. Keep non-taxable information/advertising charges separate from any taxable product sales.

Digital-tax rules have changed — verify

Because this predates Kansas's later treatment of digital/electronic products, do not assume the same non-taxable result applies to a modern subscription, streaming, SaaS, or downloadable-product offering. Confirm the current statutes and guidance.

Common questions

Q: Is selling advertising space on an online bulletin board taxable?
A: Under this 2002 ruling, no — the sale of advertising space on the electronic bulletin board is not subject to Kansas sales or use tax.

Q: Are subscriber access fees taxable?
A: No. The fee subscribers pay for access to the electronic bulletin board is not subject to Kansas sales or use tax.

Q: What would be taxable?
A: If the operator sells or leases computer software, hardware, or any other tangible personal property in Kansas, that sale or lease is taxable.

Q: Does this still apply to modern digital services?
A: Not necessarily. The ruling predates later Kansas guidance on digital and electronically delivered products — confirm the current law before relying on it.

Citations and references

• The Department treated advertising space and subscriber access to the online information service as not subject to Kansas sales/use tax, while noting that any sale or lease of tangible personal property (software, hardware, etc.) in Kansas is taxable; the letter cites no specific 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-2002-054

Original ruling text

Private Letter Ruling

Body:

Office of Policy & Research

June 20, 2002

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Dear Mr. TTTTTTT:

We wish to acknowledge receipt of your letter dated June 13, 2002, regarding the application of Kansas Retailers’ Sales tax.

The service described in the above referenced letter is a nationwide data bank or “electronic bulletin board” similar to a trade magazine with information, articles and advertising space. Subscribers will access this information through their own computer and modem with no special communication software. The sale of advertising space on the “electronic bulletin board” would not be subject to Kansas sales/use tax.

The fee paid by the subscribers for access to the “electronic bulletin board” is not subject to Kansas sales/use tax. However, if your client were to sell or lease computer software/hardware or any other tangible personal property within the state of Kansas, the respective sale or lease would be subject to the appropriate Kansas sales/use tax.

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: 06/24/2002 Date Modified: 06/24/2002

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