Are sales of saddles, bridles, and other horse equipment subject to Kansas sales tax?

Plain-English summary

A seller of saddles, bridles, and other horse equipment asked how Kansas sales tax applies to those items.

The Department drew the line on use:

• Exempt — horse equipment sold for use in the production and care of cattle as part of an agricultural operation. To support each exempt sale, the seller must secure and keep an exemption certificate from the customer claiming the exemption.
• Taxable — equipment sold for uses such as recreational riding, racing, or competition, which do not qualify as agricultural use.

What this means for you

Tack shops and horse-equipment sellers

Sales for genuine agricultural use — working cattle — can be made exempt, but only if you collect and retain a valid exemption certificate from the buyer. Without documented agricultural use, tax the sale. Sales for pleasure riding, racing, or shows are taxable.

Ranchers and cattle operations

Saddles, bridles, and similar horse equipment used in producing and caring for cattle can be purchased exempt if you provide the seller a completed exemption certificate.

Common questions

Q: Are saddles and bridles taxable in Kansas?
A: Not when sold for use in cattle production and care as part of an agricultural operation, provided the seller obtains an exemption certificate. Sold for recreational riding, racing, or competition, they are taxable.

Q: What does the seller need to document an exempt sale?
A: An exemption certificate from each customer who claims the agricultural exemption, kept on file.

Citations and references

• Kansas agricultural-use exemption (documented by exemption certificate) — the Department stated that horse equipment "sold for use during the production and care of cattle as part of an agricultural operation would be tax exempt," documented by a customer exemption certificate, while sales for recreational riding, racing, or competition are taxable. The ruling cites no specific statute section.

Source

• Landing page: Kansas Department of Revenue Policy Information Library
• Original document: P-2008-007

Original ruling text

Private Letter Ruling

Body:

Office of Policy & Research

October 28, 2008

XXXXXXXX
XXXXXXX
XXXXXXXXXX

Dear XXXXXXX:

We wish to acknowledge receipt of your letter of October 23, 2008 regarding the application of Kansas Retailers’ Sales tax. You inquired regarding the sales of items, such as saddles, bridles and other horse equipment.

Horse equipment items sold for use during the production and care of cattle as part of an agricultural operation would be tax exempt. You must document all exempt sales by securing and maintaining an exemption certificate from each customer that claims exemption. However, sales of such equipment for uses such as recreational riding, racing, or competition do not qualify for agricultural use and would be taxable.

This private letter ruling is based solely on the facts provided in your request. If it is determined that undisclosed facts were material or necessary to make an accurate determination by the department, this ruling is null and void. This private letter ruling will be revoked in the future by operation of law without further department action if there is a change in the statutes, administrative regulations, or case law, or a published revenue ruling, that materially affects this private letter ruling.

Sincerely,

Jack Smith
Policy and Research

Date Composed: 10/29/2008 Date Modified: 10/29/2008

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