Is a motor vehicle sold and delivered in Kansas to a bona fide resident of another state subject to Kansas sales tax?

Plain-English summary

A motor vehicle dealer asked whether Kansas sales tax applies to a vehicle sold and delivered in Kansas to a bona fide resident of another state.

The Department said no — the sale is not subject to Kansas sales tax under K.S.A. 79-3606(k), as long as the vehicle:

• is sold and delivered in Kansas to a bona fide resident of another state;
• will not be registered or based in Kansas; and
• will not remain in Kansas more than 10 days.

When the vehicle qualifies, the associated administrative and/or documentary fee is likewise exempt. But the Department drew one line: the sale of an extended warranty on the vehicle is subject to Kansas sales tax.

What this means for you

Vehicle dealers near state lines

A vehicle sold and delivered here to a qualifying out-of-state resident can be sold without Kansas sales tax under K.S.A. 79-3606(k) — but keep documentation that the buyer is an out-of-state resident and that the 10-day / no-Kansas-registration conditions are met.

Fees and add-ons

The doc/admin fee rides along with the exempt vehicle and is exempt. The extended warranty is different — it remains taxable even when the vehicle itself is exempt.

Common questions

Q: What conditions make the vehicle exempt?
A: It must be sold and delivered in Kansas to a bona fide resident of another state, not be registered or based in Kansas, and not remain in Kansas more than 10 days (K.S.A. 79-3606(k)).

Q: Is the documentary or administrative fee taxable?
A: No. If the vehicle is exempt under K.S.A. 79-3606(k), the associated administrative and documentary fee is exempt too.

Q: Is an extended warranty on the vehicle exempt?
A: No. The sale of an extended warranty is subject to Kansas sales tax even when the vehicle qualifies for exemption.

Citations and references

• K.S.A. 79-3606(k) — exempts a motor vehicle sold and delivered in Kansas to a bona fide resident of another state that will not be registered or based in Kansas and will not remain in the state more than 10 days; the related administrative/documentary fee follows the vehicle's exempt treatment, but an extended warranty remains taxable.

Source

Source

• Landing page: Kansas Department of Revenue Policy Information Library
• Original document: P-2004-004

Original ruling text

Private Letter Ruling

Body:

Office of Policy & Research

March 23, 2004

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Dear Mr. TTTTTTT:

We wish to acknowledge receipt of your letter dated March 19, 2004, regarding the application of Kansas Retailers’ Sales tax.

Please be advised that any motor vehicle sold and delivered in this state to a bona fide resident of another state, which is not to be registered or based in this state and which will not remain in this state more than 10 days, would not be subject to Kansas sales tax(es). [See K.S.A. 79-3606(k).]

In closing, if a vehicle is exempt from sales tax, pursuant to K.S.A. 79-3606(k), then the associated administrative and/or documentary fee would likewise be exempt from sales tax. However, the sale of an extended warranty on the vehicle would be subject to the Kansas sales tax(es).

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: 03/25/2004 Date Modified: 03/26/2004

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