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 sales of drugs to licensed practitioners (dentists, optometrists, veterinarians) exempt from Kansas sales tax?
Exempt. Under K.S.A. 79-3606(q), sales of drugs (as defined in K.S.A. 65-1626) to a person licensed to practice the healing arts — including dentistry, optometry, and veterinary medicine — for that pe…
Is transferring a vehicle from a partner to the partnership subject to Kansas sales tax?
Yes — it's taxable. Under K.A.R. 92-19-30(j)(3), a transfer of a vehicle from a partner to the partnership (or from the partnership to a partner) is presumed to be a taxable transfer. A partner's cont…
Is engraving a memorial marker subject to Kansas sales tax?
Yes — it's taxable. Engraving a memorial marker (for example, adding the final date after a surviving spouse dies) is 'altering' tangible personal property, one of the services Kansas subjects to sale…
Did Kansas's local compensating use tax apply after July 1, 2003 to equipment leases with Kansas franchisees that already existed?
Yes. State and local compensating use tax applied to equipment-lease receipts for reporting periods after July 1, 2003, even when the lease contract already existed. The new law contained no grandfath…
Is a Christian nonprofit charity exempt from Kansas sales tax on its purchases?
No. Kansas has no blanket sales-tax exemption for 501(c)(3) charities, so this Christian children's-relief nonprofit is not exempt just because it does faith-based charitable work. The only category e…
For Kansas's 10-day aircraft fly-away exemption, does the removal period begin when title to a green aircraft passes or when the buyer accepts the completed aircraft?
The 10-day period began when the out-of-state buyer took delivery of the aircraft in its completed, final condition, not when title and risk of loss passed on the flyable but unfinished green aircraft…
Does a nonprofit apprenticeship fund qualify for the Kansas educational-institution sales-tax exemption?
No. A nonprofit apprenticeship fund is not an 'educational institution' as Kansas now defines that term (a nonprofit school/college/university offering education above the twelfth grade, or an entity …
Is providing on-hold message equipment to businesses taxed as a service or as a lease of equipment?
It's taxed as a lease of tangible personal property, not as a taxable 'telephone answering service.' A company that installs on-hold message equipment at a customer's premises (playing a pre-recorded …
Under Kansas destination-based sourcing, how are a contractor's materials and labor taxed, and what about out-of-state jobs?
The contractor is the consumer of the materials it installs. Under destination-based sourcing, Kansas state and local use tax applies where the contractor receives the materials (its business location…
Under Kansas destination-based sourcing, where is a contractor taxed on materials pulled from its own inventory?
At the warehouse. A subcontractor that keeps garage doors and fireplaces in inventory (bought tax-free for resale) is the consumer of those materials when it withdraws them to install them. Under dest…
Are dietary and health-care supplements subject to Kansas sales tax?
Yes — taxable. Kansas imposes sales tax on retail sales of tangible personal property under K.S.A. 79-3603(a), and there is no exemption for dietary or health-care supplements. A company selling them …
Are boat and camper storage charges subject to Kansas sales tax?
Storage itself is not taxable. Charges for boat storage and camper storage — the rental of space for storage — are not among the services Kansas enumerates as taxable, so no sales tax applies. But mai…
Is an ASP dictation / website file-transfer service subject to Kansas sales tax?
Not taxable. An ASP service that lets customers call an 800 number to record dictation or use a website to transfer files is not one of the services specifically enumerated in the Kansas sales tax act…
Are labor and materials to repair a flood-damaged spillway subject to Kansas sales tax?
Taxable — both labor and materials. Kansas taxes the labor of installing or applying tangible personal property under K.S.A. 79-3603(p), with an exception for original construction, which includes res…
What purchases can a Kansas county make exempt from sales tax, and does the exemption cover hotel/transient guest tax?
A Kansas county's direct purchases used exclusively for political-subdivision purposes are exempt from state and local sales tax under K.S.A. 79-3606(b) — covering utilities, telephone service, vehicl…
How do Kansas's destination-based sourcing rules apply to specific businesses like ticket sellers, florists, dry cleaners, repair shops, and funeral homes?
This notice supplements Notices 03-01 through 03-05 by applying Kansas's July 1, 2003 destination-based sourcing rules to specific industries. Admissions, recreation-participation fees, and club dues …
Is an optometry and ophthalmology practice a 'retailer' that cannot claim the Enterprise Zone sales tax exemption for a new facility?
No exemption -- the denial was sustained. An optometry and ophthalmology practice sought a Project Exemption Certificate for a new facility under the Enterprise Zone Act (K.S.A. 79-3606(cc)). Because …
Under Kansas destination-based sourcing, where is sales tax charged on an event admission ticket?
To the event's location. Under Kansas's destination-based sourcing rules (2003 House Bill 2005, effective July 1, 2003), a ticket to a game or entertainment event is sourced to where the event takes p…
Which state and local sales and use tax revenues from retailers in a redevelopment district could be pledged to repay special-obligation bonds?
All state sales and use tax collected by retailers doing business in the redevelopment district could be used to retire the special-obligation bonds. Local sales tax could be used when the sale occurr…
Under Kansas destination-based sourcing, is a shipped gift taxed at the store's location or the recipient's location?
At the recipient's (donee's) delivery location. Under Kansas's destination-based sourcing rules (Section 16 of House Bill 2005, effective July 1, 2003), if a customer takes possession of a gift basket…
When a seller's employee delivers a product to the customer, is Kansas local sales tax charged at the store's rate or the customer's location rate?
The customer's location rate. Under Kansas's destination-based sourcing rules (2003 House Bill 2005), because the seller's own employees deliver the product to the customer, the state and local sales …
How does HB2005 affect the Kansas estate (pick-up) tax, and which forms and thresholds apply?
The Kansas estate 'pick-up' tax equals 100% of the maximum federal credit for state death taxes, and by statute Kansas ties it to federal law as it existed on December 31, 1997. So the 2001 federal ch…
How does an estate claim a refund of Kansas succession tax after its retroactive repeal?
After HB2005 retroactively repealed the Kansas succession tax, any estate that filed a succession tax return and paid the tax qualifies for a refund. The tax applied to decedents dying on or after Jun…
Are admission charges to a Kansas church camp exempt from retailers' sales tax?
They can be. K.A.R. 92-19-22a(c)(8) excluded charges for church camps and religious retreats operated exclusively for religious purposes and exempt under K.S.A. 79-3606. The Department said admissions…
Which local tax rate applies to Kansas motor-vehicle leases and rentals starting July 1, 2003?
Effective July 1, 2003, the local tax rate on Kansas leases and rentals of motor vehicles, trailers, semi-trailers, and aircraft (that aren't interstate 'transportation equipment') depends on the paym…
How do Kansas's destination-based sourcing rules decide which local sales tax rate a retailer charges, and what are the exceptions?
Effective July 1, 2003 (under 2003 House Bill 2005), Kansas sources most retail sales for local sales tax to where the buyer receives the item or first uses the service, not the store's location. A fi…
What rate of Kansas retailers' compensating use tax must an out-of-state retailer collect on goods delivered into Kansas after July 1, 2003?
Retailers' compensating use tax is collected by out-of-state sellers on goods delivered for use in Kansas. Before July 1, 2003 the rate was the state rate only (then 5.3%). On and after July 1, 2003 i…
What rate of Kansas consumers' compensating use tax applies to out-of-state purchases used in Kansas after July 1, 2003?
Before July 1, 2003, a Kansas resident owed consumers' compensating use tax only at the state rate (then 5.3%) on out-of-state purchases used in Kansas. On and after July 1, 2003, the tax equals the c…
How does a Kansas retailer decide which local sales tax rate to collect starting July 1, 2003?
Starting July 1, 2003, Kansas retailers collect local sales tax based on where the customer takes delivery, not where the store sits. For over-the-counter sales the customer takes possession at the st…
Are vehicle rentals and property sales paid for by an insurance company subject to Kansas sales tax, and is a free loaner vehicle taxable?
Taxable when paid for; not taxable when free. Sales of tangible personal property and vehicle rentals billed to or paid for by an insurance company are subject to Kansas sales tax, because there is no…
Does a community federation or umbrella organization qualify as a tax-exempt 'religious organization' under the Kansas sales tax act?
No. A community federation or umbrella organization that supports a religion — but is not itself a church, synagogue, or mosque and is not made up exclusively of such congregations — does not qualify …
Does the Kansas vehicle rental excise tax apply to truck rentals, and how does the 28-day rule work?
The 3.5% vehicle rental excise tax applies to truck rentals for 28 days or less; rentals for more than 28 consecutive days are exempt. Rather than relying on a customer's stated intent, a rental compa…
How is a publisher of free community magazines taxed on printing costs, advertising sales, and bartered ad space in Kansas?
As the final consumer of a free publication, the publisher owes tax on the printing. Under K.A.R. 92-19-12(d), a company that prints and distributes magazines free of charge is the final user of the m…
Are crane services taxable in Kansas, and how does renting a crane with or without an operator affect the tax?
It depends on what the contract requires. Crane services that only lift property and set it in place are not installation or application services and are not subject to Kansas sales tax. But if you co…
Are sales of weed barrier fabric used for soil conservation subject to Kansas sales tax?
Yes, weed barrier fabric is subject to Kansas sales tax. The soil-erosion exemption (K.S.A. 79-3606(mm)) is limited to seeds and seedlings, fertilizers, pest-control chemicals, and services — it does …
Is a charge for computerized handwriting analysis at a fair booth subject to Kansas sales tax?
No. Charges for computerized handwriting analysis are not subject to Kansas sales tax. It is not a taxable amusement admission (K.S.A. 79-3603(e)), not a fee for participation in sports, games, or rec…
Can sandblast sand consumed on an exempt construction project be purchased free of Kansas sales tax with a project exemption certificate?
Yes. Sandblast sand can be purchased exempt from Kansas sales and use tax with a valid project exemption certificate, because the sand is consumed on an exempt project. Under K.S.A. 79-3606(d), when a…
Does a charitable educational corporation qualify for a Kansas sales tax exemption on its purchases?
No. A charitable educational corporation that raises funds to support public and community education does not qualify for a Kansas sales tax exemption on its purchases. Kansas grants only certain spec…
Did Kansas repeal its succession tax, and what should estates do about returns already filed?
Yes. 2003 House Bill 2005 (New Section 49) retroactively repealed the Kansas succession tax that had applied to estates of decedents dying on or after June 6, 2002. The Department asked such estates t…
Does a religious organization carrying out a church's ministry qualify for the Kansas sales tax exemption, and how must exempt purchases be made?
Yes. A religious organization that is exempt under I.R.C. 501(c)(3) and carries out the ministry of the church meets the criteria in Notice 99-14 and qualifies for the Kansas sales tax exemption under…
Must a school collect Kansas sales tax on gift bag sales and on admissions to its sporting events?
Yes to both. The gross receipts from a school's sale of gift bags are subject to Kansas sales tax because no exemption applies, and the school is likewise obligated to collect sales tax from spectator…
Is a city's lease of pilot-study water filtration equipment exempt under the Kansas manufacturing machinery and equipment exemption?
It appears to be exempt. So long as the leased filtration equipment is used to treat water the city sells to its water utility customers, the lease qualifies for the Kansas 'manufacturing machinery an…
Which well-site services performed by a hot oiler are subject to Kansas sales tax, and which are exempt?
It depends on what is serviced. Maintenance services performed on processing equipment located at a well site are exempt, but services to feeder lines, gathering systems, and pipelines are taxable — a…
Are labor services to install a flue for a manufacturer's industrial oven exempt from Kansas sales tax?
The Department did not grant an exemption. It concluded that the 'installation' services described — venting a manufacturer's industrial oven through a flue exiting the roof — were really the roofing …
What are a finance company's Kansas sales and use tax duties under a conditional sales contract or purchase order financing arrangement?
A conditional sale is taxed on the full selling price when the goods are transferred, with separately stated finance charges excluded. A finance company financing such a deal isn't required to collect…
Does fabricating and installing a roof curb for a manufacturer's oven flue qualify for the Kansas manufacturing machinery and equipment exemption?
No. Fabricating, installing, and flashing a roof curb for an oven flue is taxable roofing work on the building and does not qualify for the manufacturing machinery and equipment exemption in K.S.A. 79…
Does a church qualify for the Kansas sales tax exemption for religious organizations, and how must its exempt purchases be made?
Yes. A church that is exempt under I.R.C. 501(c)(3) and is carrying out the ministry of the church meets the criteria (set out in Notice 98-05) to be extended the Kansas sales tax exemption for religi…
Are labor charges for repairing the roof of a commercial building subject to Kansas sales tax?
Yes. Commercial roof-repair services were taxable under K.S.A. 79-3603(p) and (q) because the work installed new roofing materials and repaired existing materials that formed part of the real estate. …
Are the gross receipts for installing a building's overhead door exempt under the Kansas manufacturing machinery and equipment exemption?
No. The gross receipts for installing a building's overhead door are taxable and do not qualify for the Kansas manufacturing machinery and equipment exemption in K.S.A. 79-3606(kk). Although that exem…
Does a custom reprographics/imaging business (blueprinting, diazo copying, CAD plotting) qualify for the Kansas manufacturing (integrated plant) exemption on its equipment and repair parts?
No. A custom reprographics and imaging business (blueprinting, diazo and plain-paper copying, mapping, CAD plotting, mounting/laminating) is treated as a retailer, not an industrial manufacturer, so i…
Is a transaction called a lease but structured as a financing arrangement taxed as a lease, or as a sale, under Kansas sales tax?
It depends on the buyout. A transaction called a lease but reported as a sale/purchase for federal income tax is not taxed as a lease under K.S.A. 79-3603(h); if it transfers tangible personal propert…
Does the requesting organization qualify as an exempt 'educational institution' under the Kansas Retailers' Sales Tax Act?
No. After reviewing the materials submitted, the Department concluded the organization does not qualify as an 'educational institution' as defined by the Kansas Retailers' Sales Tax Act, so it cannot …
Can a church-operated thrift shop stop collecting Kansas sales tax because all of its sales proceeds are donated to charity?
No. A church-operated thrift shop must continue to collect and remit the applicable Kansas state and local sales tax on its retail sales, even though all of the proceeds are donated to local charities…
If an advertising agency produces catalogs for a tax-exempt customer, does the customer's exemption cover the agency's purchases of photography, film production, and printing?
No. An advertising agency that buys photography, film production, and printing to produce catalogs is the consumer of that tangible personal property and those services, so it owes Kansas sales tax on…
Are the sign-up fee and recurring monthly charges for a health discount card (giving members discounts from medical providers and retailers) subject to Kansas sales tax?
No. The charges for a health discount card — both the initial sign-up fee and the recurring monthly charges — are not subject to Kansas sales tax. Kansas taxes sales of tangible personal property and …
Must a nonprofit that holds an annual fundraising banquet and gun auction collect Kansas sales tax on admission tickets, food, and auction sales?
Yes. A nonprofit chapter that holds an annual fundraising banquet with a gun auction is making recurring sales, so it must register and collect Kansas sales tax on admission tickets, on food and sales…
Are recording-studio services, delivery of the master tape, and duplication of customer tapes subject to Kansas sales tax?
Studio recording services were not taxable, and transfer of the original master tape was incidental to that nontaxable service. The studio therefore paid sales tax on everything it bought to operate a…
Is the service of cleaning storage tanks subject to Kansas retailers' sales tax?
No. The gross receipts from the service of cleaning storage tanks are exempt from Kansas retailers' sales tax. K.S.A. 79-3603(q) taxes services of repairing, servicing, altering, or maintaining tangib…
Are plumbing labor services taxable in Kansas, and does the residential construction-labor exemption apply?
It depends on where the work is done. Under K.S.A. 79-3603(p) (from 1998 Senate Bill 493, effective July 1, 1998), labor services to install or apply tangible personal property are exempt when they in…
Are metal alloy ingots sold to a dental laboratory exempt from Kansas sales tax, and which exemption certificate should the lab use?
Yes. Metal alloy ingots a dental laboratory uses exclusively to fabricate crowns and bridges may be bought exempt from Kansas sales and use tax as ingredient or component parts. A registered lab gives…
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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.