Are sales of wound closure devices exempt from Kansas sales tax?

Plain-English summary

The requester asked whether wound closure devices are exempt from Kansas retail sales tax. The Department applied the exemption in K.S.A. 79-3606(b) and concluded that, in the instances described, the gross sales of these devices would be exempt.

K.S.A. 79-3606(b) exempts "all sales of tangible personal property or service, including the renting and leasing of tangible personal property," when the property is purchased directly by ... a public or private nonprofit hospital and used exclusively for ... hospital ... purposes — except when the hospital uses the items in a separately taxable business. Because the situations presented fit that exemption, the Department determined the sales of the wound closure devices would be exempt from Kansas sales tax.

What this means for you

Sellers of wound closure and other medical devices

Sales (and leases) of these devices are exempt when they are purchased directly by a nonprofit hospital and used exclusively for hospital purposes. Keep documentation of the hospital's direct, exempt purchase.

Hospitals

The exemption covers property you buy directly for hospital use; it does not extend to items used in a separately taxable business you run.

Common questions

Q: Are wound closure devices exempt in Kansas?
A: In the instances the Department reviewed, yes — as tangible personal property purchased directly by a nonprofit hospital for hospital use under K.S.A. 79-3606(b).

Q: Does the exemption depend on the buyer?
A: Yes. It turns on a direct purchase by a public or private nonprofit hospital used exclusively for hospital purposes.

Citations and references

• K.S.A. 79-3606(b) — quoted by the Department as exempting sales, leases, and rentals of tangible personal property "purchased directly by ... a public or private nonprofit hospital ... and used exclusively for ... hospital ... purposes," subject to the separately-taxable-business exception. The Department concluded "the gross sales of the tangible personal property would be exempt from Kansas retail sales tax" in the instances presented.

Source

• Landing page: Kansas Department of Revenue Policy Information Library
• Original document: P-2005-007

Original ruling text

Private Letter Ruling

Body:

Office of Policy & Research

May 20, 2005

XXXXX
XXXXX
XXXXX
XXXXX

Dear XXXXX:

This letter is in response to your request for a Private Letter Ruling dated April 13, 2005.

You inquired whether the XXXXX would be exempt from Kansas retail sales tax.

The following paraphrased statute relates to your request.

K.S.A. 79-3606(b) exempts from sales tax: "all sales of tangible personal property or service, including the renting and leasing of tangible personal property purchased directly by......a public or private nonprofit hospital...and used exclusively for...hospital...purposes, except when: (1) Such...hospital is engaged or proposes to engage in any business specifically taxable under the provisions of this act and such items of tangible personal property or service are used or proposed to be used in such business,..."

Therefore in said instances the gross sales of the tangible personal property would be exempt from Kansas retail sales 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.

Sincerely,

Thomas P. Browne, Jr.
Tax Specialist

DVL

Date Composed: 05/23/2005 Date Modified: 05/23/2005

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