Kansas State Tax Rulings
Free plain-English summaries of state tax letter rulings and advisory opinions issued in Kansas, with full citations and the original source on every page.
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Are repair and calibration services taxable in Kansas, and what about related consulting, inspection, and sales of test standards?
Repair and calibration are taxable. The Department ruled that repairing, servicing, altering, or maintaining tangible personal property — including calibration, setting parameters on milling machines,…
Are towing services subject to Kansas sales tax?
No. Kansas taxes only enumerated services, and the Department ruled that towing services are not currently subject to Kansas sales tax. However, the towing provider must pay sales tax on all articles …
How do accrual and cash basis accounting affect when a Kansas retailer owes sales tax, and can bad debts be deducted?
It depends on the retailer's accounting method. A Kansas retailer on the accrual basis records a sale -- and owes sales tax on it -- when the earnings process is complete and the amount due is measura…
Is a labor auction — where volunteers do work for the high bidder — subject to Kansas sales tax?
No. In the labor auction described, volunteers offer to do work for whoever is the high bidder for the service. Because the labor is provided by volunteers in this way, the Department ruled the transa…
Which local sales tax applies to airplane sales and rentals — and how is the location determined?
Local sales tax is sourced to the retailer's place of business. The Department explained that, for local sales tax purposes, all retail sales occur at the retailer's place of business — here, the sale…
Is interest from state and municipal bonds and bond mutual funds subject to Kansas income tax?
Generally yes, with a Kansas-bond exception. Interest from any state or municipal obligations — bonds and mutual funds — is subject to Kansas income tax, reduced by related expenses like management or…
What counts as property and services 'used exclusively for religious purposes' for the Kansas 79-3606(aaa) exemption?
K.S.A. 79-3606(aaa) exempts sales of property and services purchased by a 501(c)(3) religious organization and used exclusively for religious purposes. The Department explained that 'used exclusively'…
Does an organization qualify for the Kansas religious-organization sales-tax exemption if it lacks an established place of worship with regularly scheduled services?
Not on these facts. K.S.A. 79-3606(aaa) exempts purchases by a 501(c)(3) religious organization used exclusively for religious purposes, and defines a 'religious organization' as a group that gathers …
Are subscription voice mail services subject to Kansas retailers' sales tax?
Yes. The Department ruled that a monthly-subscription voice mail service is a taxable 'telephone answering service' under K.S.A. 79-3603(t), which also covers mobile phone, beeper, and other similar s…
Is the labor to complete a building left unfinished by a defaulted contractor exempt from Kansas sales tax as original construction?
Yes. The Department ruled that labor services to complete a building — where the original contractor defaulted partway through and a new contractor finishes the work under the original plans — are dee…
Must an out-of-state internet seller register and collect Kansas sales or compensating (use) tax on goods shipped to Kansas customers?
It depends on nexus. The Department ruled that an out-of-state internet seller has Kansas sales/use tax nexus if it has an office or place of business in Kansas, has people soliciting sales in Kansas,…
Does a school support group that acts as the functional equivalent of a parent-teacher organization qualify for the Kansas 79-3606(yy) exemption?
Yes, on these facts. Where a school has no PTA or PTO and the group is the sole parent organization functioning as a parent-teacher organization — raising funds for curriculum materials and equipment …
Is installing tangible personal property a taxable service in Kansas, and can a reseller buy that installation service free of tax?
Yes to both, with conditions. The Department's opinion is that Kansas imposes sales tax on the service of installing tangible personal property (K.S.A. 79-3603(p)), and the person performing the insta…
Can a lubricating-oil distributor buy drums and drum reconditioning tax-free as ingredient or component parts of the oil it sells?
No. The Department ruled that the distributor's drums are returnable containers, so they don't qualify for the ingredient-or-component-part exemption under K.S.A. 79-3602(l)(2). The distributor must p…
Which health-care and sports-medicine products are exempt from Kansas sales tax as prosthetic or orthopedic appliances?
It depends on the product. The Department ruled that braces, blood flow equipment, and blood circulation equipment are exempt prosthetic or orthopedic appliances under K.S.A. 79-3606(r) when sold on a…
Does a nonprofit child advocate group qualify for a Kansas sales tax exemption?
No. The Department ruled that a nonprofit child advocate group does not have a Kansas sales tax exemption. Not every nonprofit organization is exempt — the Legislature grants exemptions to specific li…
Does the religious-organization exemption cover a church's purchases for a reading room that is also used as a retail store?
Not exempt — the religious-organization exemption in K.S.A. 79-3606(aaa) exempts a 501(c)(3) religious organization's purchases only when the item or service is used exclusively for religious purposes…
Are mowing, hauling, snow plowing, and grading taxable in Kansas, and what about welding or log splitting?
Mowing, dirt and tree-branch hauling, snow plowing, and grading are not currently subject to Kansas sales tax, because Kansas taxes only enumerated services (the provider pays tax on its inputs). But …
Are snow removal services subject to Kansas retailers' sales tax?
No. The Department ruled that snow removal services are not currently subject to Kansas sales tax, because Kansas taxes only enumerated services. However, the provider must pay sales tax on all tangib…
Is hauling or transporting sand and gravel subject to Kansas retailers' sales tax when the hauler doesn't sell the material?
No. Kansas taxes only enumerated services, and the Department ruled that transporting services are not currently subject to Kansas sales tax when the hauler is not engaged in selling the gravel or san…
Is transferring motor vehicles to a company solely in exchange for equity a taxable sale in Kansas?
No. Kansas taxes the retail and isolated or occasional sale of motor vehicles and trailers, but K.S.A. 79-3603(o) excepts a transfer 'by a person to a corporation solely in exchange for stock or secur…
Does a school group that is the functional equivalent of a parent-teacher organization qualify for the Kansas 79-3606(yy) exemption?
Yes, on these facts. The school had no PTA or PTO, and the group was its functional equivalent — raising funds for curriculum materials and equipment and encouraging parental participation. The Depart…
Is a nonprofit hospital gift shop exempt from Kansas sales tax?
No. Kansas has no general sales tax exemption for not-for-profit organizations, and a hospital gift shop is not a nonprofit hospital, so the 79-3606(b) hospital exemption doesn't apply. The gift shop …
Is the sale, or the sale and installation, of farm machinery and equipment subject to Kansas sales tax?
The sale of qualifying farm machinery and equipment (and the service of repairing it) is exempt from Kansas sales tax, but the installation of farm equipment is taxable unless it is done in connection…
Does a youth organization qualify for the Kansas 79-3606(ii) sales tax exemption for a comprehensive multidiscipline youth development organization?
Not here. To qualify under K.S.A. 79-3606(ii), an organization must show it is a 'comprehensive multidiscipline youth development organization.' Reviewing the group's Articles of Incorporation, the De…
How do Kansas sales and use taxes apply to an out-of-state manufacturer that sells and refurbishes stadium seating installed in Kansas?
Selling manufactured seating is a taxable sale of tangible personal property; if the seller has Kansas nexus it collects sales tax, otherwise the buyer owes compensating (use) tax. Refurbishing is a t…
Does Kansas law require a Homestead taxpayer to sign the Certificate of Eligibility in the county's presence, so that a power-of-attorney form is needed?
The Department declined to approve the power-of-attorney form because it is unnecessary. A county office wanted to use a limited power of attorney so homebound elderly or disabled taxpayers would not …
How is Kansas sales tax handled when a third party performs repairs for a retailer under a warranty or service contract?
Under K.A.R. 92-19-62(d), if a third party performs the repairs for a retailer under a warranty, maintenance, or service contract, the third party's receipts from the retailer aren't taxed — the third…
Could a Kansas retailer store exemption certificates only as scanned electronic images under the 1999 recordkeeping rules?
Not at that time. In 1999 the Department ruled that Kansas record-retention regulations (K.A.R. 92-19-4a), written in terms of microfilm and microfiche, did not clearly cover electronic images, so ret…
Does the Kansas sales tax base on cable television billings include the franchise fee and FCC fee passed through to subscribers?
Generally yes. Where a cable operator passes the municipal franchise fee and FCC fee through to subscribers as a line-item cost — rather than the fee's legal incidence being placed on the subscriber —…
Must a company selling fund-raising items to groups that resell them charge Kansas sales tax?
It depends on the buyer. A company selling fund-raising items to entities that resell them to consumers must collect Kansas sales tax unless the buyer issues a resale exemption certificate -- which re…
Are transfers of tangible personal property between two related companies subject to Kansas sales tax?
Yes. The Department advised that transfers of tangible personal property and taxable services between separate legal entities for their own use or consumption -- not for resale -- are subject to Kansa…
When a private club automatically adds a service charge to members' food and drink bills, does that money belong to the club or to the servers?
It belongs to the club. Under the club's own compensation arrangement, servers are paid a flat wage and get no share of the automatic service charge, so the charge is the club's income — not tips or w…
Is the rental of portable toilets subject to Kansas sales tax?
Yes. In Kansas, a sale of tangible personal property is taxable, and a 'sale' includes a rental. Furnishing a portable toilet is treated as a taxable rental of property, and the delivery and waste dis…
Are a church-run day care center's purchases (such as water utilities) exempt from Kansas sales tax?
It depends on how the day care is organized and where it operates. Sales to a non-profit, nonsectarian day care that provides a comprehensive multidiscipline youth development program are exempt under…
Are charges for Internet service subject to Kansas sales tax?
No. Charges to customers for Internet use are not subject to Kansas sales tax. Kansas taxes a service only if it is specifically listed (enumerated) in K.S.A. 79-3603, and Internet services are not on…
Is a taxable service performed in Kansas exempt if the customer is in another state and the contract was signed out of state?
No. Kansas retailers' sales tax applies to taxable services performed in Kansas. Where the purchaser is located and where the contract is accepted or executed are irrelevant — what matters is that the…
Does a nonprofit support group qualify for a Kansas sales tax exemption?
No. The Department ruled that a nonprofit support group does not have a Kansas sales tax exemption. Not every nonprofit is exempt — the Legislature grants exemptions to specific listed organizations (…
Does a Kansas store charge Kansas sales tax when it delivers furniture to a buyer's out-of-state home on the store's own truck?
No. Under K.A.R. 92-19-29, when a Kansas seller is obligated to deliver property to a point outside the state, the retail sales tax does not apply. Furniture sold at a Kansas store and delivered to a …
Must a nonprofit collect Kansas sales tax on its fund-raising sales, such as carnivals and bake sales?
Yes. A not-for-profit that regularly sells tangible personal property or taxable services to consumers is a 'retailer' under K.S.A. 79-3602(d) and must collect and remit sales tax on its fund-raiser g…
Is construction labor exempt as 'original construction' when a building is demolished but its structural steel is left in place?
No. Original-construction labor is exempt under K.S.A. 79-3603(p), and rebuilding on a demolished site can qualify — but only if the new building is totally new. Because this project razes the buildin…
Must a 501(c)(3) nonprofit collect Kansas sales tax on sales it makes to raise funds?
Yes. Kansas law contains no exemption or exception for a nonprofit's fund-raising sales, even for a 501(c)(3) that shelters domestic violence and sexual assault victims. The organization must collect …
Must a company with an agent in Kansas — but no place of business in the state — collect Kansas tax on its sales?
Yes. Because the company has an agent in Kansas even though it no longer maintains a place of business there, it is obligated to collect the Kansas state compensating (use) tax on its sales. The rulin…
Which rentals of medical equipment are exempt from Kansas sales tax, and which are taxable?
It depends on the item and the buyer. Wheelchairs, shower/commode chairs, and walkers can qualify as exempt 'medical equipment' or as prescribed prosthetic/orthopedic appliances under K.S.A. 79-3606(r…
Does a nonprofit support group qualify for a Kansas sales tax exemption?
No. Not every non-profit organization is exempt from Kansas sales tax. Senate Bill 493 (effective July 1, 1998) added exemptions for certain groups such as non-profit zoos and parent-teacher organizat…
Can an entity that is not a nonprofit hospital get a project exemption certificate to build a medical office complex tax-free?
No. The K.S.A. 79-3606(b) exemption is for property and services purchased directly by a public or private nonprofit hospital and used exclusively for hospital purposes. Because the entity is not a no…
Are a fraternal organization's membership dues subject to Kansas sales tax?
Only if the organization maintains a facility for recreation or entertainment. Under K.S.A. 79-3603(n), dues are taxable when payment entitles a member to use recreation or entertainment facilities. L…
Does a 501(c)(3) religious organization qualify for a Kansas sales tax exemption, and how must it make exempt purchases?
Yes. K.S.A. 79-3606(aaa) exempts a 501(c)(3) religious organization's purchases of tangible personal property and services used exclusively for religious purposes. The Department found this organizati…
Is waste water hauling subject to Kansas sales tax?
No. Waste water hauling services are not currently subject to Kansas sales tax. But because the hauler is the final consumer of what it uses, it must pay sales tax on all tangible personal property an…
Does a nonprofit endowment association that holds and invests funds for the sole benefit of a college qualify as an 'educational institution' under Kansas law?
Yes. The Department ruled that a nonprofit endowment association organized and operated exclusively to receive, hold, invest, and administer money and property as a permanent fund for the sole benefit…
Are a not-for-profit organization's membership dues and fund-raising sales subject to Kansas sales tax?
It depends, and fund-raising sales are taxable. Under K.S.A. 79-3603(n), membership dues are taxable only when payment entitles the member to use a facility for recreation or entertainment; the Depart…
Are labor services to repair or remodel a residence exempt from Kansas sales tax, and what about the materials?
The labor is exempt; the materials are not. Effective July 1, 1998 (1998 Senate Bill No. 493), services to install or apply tangible personal property in the original construction, reconstruction, res…
Are outsourced customer-care (call center) voice and data communication services subject to Kansas sales tax?
Not taxable. The Department ruled that a company's customer-care services — handling inbound calls, technical and help-desk support, enrollment, complaint resolution, and satisfaction surveys on behal…
Is a parent-teacher association or organization exempt from Kansas sales and compensating tax on both its purchases and its sales?
Yes, both ways. Effective July 1, 1998, K.S.A. 79-3606(yy) exempts all purchases of tangible personal property and services by a parent-teacher association or organization, and all sales of tangible p…
Is the electricity a manufacturer uses to run production equipment exempt from Kansas sales tax?
Yes, for the production portion. Under K.S.A. 79-3606(n), electricity that is essential to the process, used in the actual production at the location, immediately consumed in the process, and used to …
How does Kansas sales tax apply to premium cable, pay-per-view, video games, and internet a hotel provides to guests?
Under K.A.R. 92-19-24, a hotel buys premium cable channels, special-events (pay-per-view) channels, and video game rentals that it separately bills to guests exempt (for resale), and collects sales ta…
Do 'leased employees' count as 'qualified business facility employees' for purposes of Kansas income-tax job-creation credits?
No. The Department ruled that 'leased employees' do not meet the definition of a 'qualified business facility employee' in K.S.A. 79-32,154(d) for purposes of the Kansas job-creation income-tax credit…
How is the taxable amount figured for a contract to install tangible personal property, and can overhead and profit be deducted?
The taxable base is the contract price minus the cost of materials, supplies, and payments to subcontractors (including tax the contractor paid on those) and excavation charges bought to complete the …
Are purchases a public school club pays for out of its activity fund exempt from Kansas sales tax, even when students supplied the money?
Yes, if it is truly the school's purchase. Kansas exempts direct purchases by a public school under K.S.A. 79-3606(b). When a school club or organization (such as cheerleaders or a drama club) collect…
Is a residential paper-waste removal and recycling service subject to Kansas sales tax?
No. The Department ruled that a service consisting of the removal and recycling of residential paper waste is 'essentially recycling and trash removal,' and 'Kansas does not tax trash removal services…
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These are official tax letter rulings and advisory opinions issued by Kansas's revenue authority in response to questions from specific taxpayers about how the tax law applies to their facts. A ruling is binding on the department only for the taxpayer who requested it and cannot be relied on by anyone else, but it is strong evidence of how the state reads the law. Every ruling above has a plain-English question and short answer, plus a link to the full original source.