Must a school collect Kansas sales tax on gift bag sales and on admissions to its sporting events?

Plain-English summary

A school asked how Kansas sales tax applies to its sale of gift bags and to admissions at its sporting events. The Department said the school must collect sales tax on both.

Kansas imposes sales tax under K.S.A. 79-3606(a) "upon the gross receipts received from the sale of tangible personal property at retail within this state." "Gross receipts" is the total selling price received in money, credits, property, or other consideration (with a credit allowed for a trade-in).

Applying that:

• Gift bags: the gross receipts from the school's sale of the gift bags are taxable, because there is no applicable exemption.
• Sporting-event admissions: the school is obligated to collect sales tax from spectators who attend its sporting events.

In short, a school that sells goods or charges admission must collect Kansas sales tax on those receipts — being a school doesn't exempt these sales.

What this means for you

Schools, booster clubs, and school fundraisers

Selling merchandise like gift bags is a taxable retail sale; charge and remit Kansas sales tax on the receipts. Fundraising purpose doesn't make the sale exempt.

Charging admission to games and events

Admissions to sporting events are taxable — collect sales tax from spectators. Build the tax into the ticket price or add it at the gate, and remit it.

Don't assume "school = exempt"

A school may be able to make certain purchases exempt in other contexts, but when it acts as a retailer — selling goods or admissions to the public — it must collect sales tax like any other seller.

Common questions

Q: Does our school charge sales tax when it sells gift bags?
A: Yes. The gross receipts from gift bag sales are taxable because no exemption applies.

Q: Do we collect sales tax on admissions to our games?
A: Yes. The school must collect sales tax from spectators who attend its sporting events.

Q: We're a school — aren't our sales automatically exempt?
A: No. When a school sells goods or admissions to the public, it collects sales tax like any retailer; there's no exemption for these receipts.

Q: Does this ruling apply to my school?
A: A Kansas private letter ruling addresses only the requesting taxpayer's facts and cannot be relied on as precedent by others, though it shows how the Department treats school gift bag sales and event admissions.

Citations and references

• K.S.A. 79-3606(a) — cited by the Department as imposing Kansas sales tax on "the gross receipts received from the sale of tangible personal property at retail within this state." The Department found no exemption for the gift bag sales.
• Gross receipts — the total selling price received in money, credits, property, or other consideration, with a credit for a trade-in.
• Sporting-event admissions — the Department stated the school must collect sales tax from spectators attending its sporting events.
• 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-2003-025

Original ruling text

Private Letter Ruling

Body:

Office of Policy & Research

May 2, 2003

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Dear Ms. TTTTTTTT:

We wish to acknowledge receipt of your letter dated April 4, 2003, regarding the application of Kansas Retailers' Sales tax.

K.S.A. 79-3606(a) imposes a sales tax: "upon the gross receipts received from the sale of tangible personal property at retail within this state."

"Gross receipts" means the total selling price or the amount received as defined in the Kansas Retailers' Sales Tax Act, in money, credits, property or other consideration valued in money from sales at retail within this state. The taxpayer may take credit in the report of gross receipts for an amount equal to the allowance given for the trade-in of property.

Please be advised that the gross receipts received from the sale of the gift bags would be subject to the appropriate Kansas sales tax(es), as there is not an applicable exemption. Likewise, the school would be obligated to collect sales tax from spectators who attend sporting events.

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: 05/06/2003 Date Modified: 05/06/2003

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