When does a Kansas school have to collect sales tax, and when are its own purchases exempt?

Plain-English summary

This Departmental Memorandum gives Kansas schools instructions on the two sides of sales tax: the sales on which a school must collect tax, and the school's own purchases that are exempt. The short version: a school collects sales tax when it sells things to students and the public — supplies, admissions, concessions — but its own direct purchases used for nonsectarian school programs are exempt under K.S.A. 79-3606(c).

• Sales on which schools SHOULD collect and report sales tax. The memo lists: "Sales of all school books, manuals, work books and school supplies made to students"; "Admissions to all plays, football and basketball games, and other events"; "Sales of all class jewelry, class pictures and similar merchandise if purchased for resale, or if tax is not collected and remitted by the firm selling merchandise"; "All meals served by a school restaurant or cafeteria if open to the general public"; and "All sales of food, sandwiches, cold drinks, candy, etc., sold by a Canteen or by school classes or school groups at school activities."
• Purchases on which schools should NOT pay sales tax. The memo quotes the exemption in "Section 79-3606 of the Sales Tax Act with an effective date of July 1, 1970," which exempts "[a]ll sales of tangible personal property or services, including the renting and leasing of tangible personal property, purchased directly by a public or private elementary or secondary school or a public or private nonprofit educational institution and used primarily by such school or institution for nonsectarian programs and activities," including building "erection, repair or enlargement" — but "the exemption herein provided shall not apply to buildings used primarily for habitation."
• Specific non-taxable purchases. It then lists: "All merchandise purchased for resale in their taxable activities"; "Food used in Government or locally sponsored hot lunch projects"; "Food purchased by a school restaurant or cafeteria provided such school restaurant or cafeteria is not open to the Public and only serves students and teachers"; and "All athletic equipment such as uniforms, footballs, basketballs, etc., which are used in games or events to which admission are charged."

What this means for you

Schools, PTOs, booster clubs, and school-based sellers

If your school (or a class, team, or canteen) sells goods or charges admission, you are generally a retailer for those sales and must collect and remit Kansas sales tax — student supplies, event tickets, and concession food are all on the collect list. The fact that a school is exempt on its own purchases does not exempt the sales it makes to others.

The exemption is for direct purchases used for school programs

Under K.S.A. 79-3606(c), a school's own purchases of property and services used primarily for its nonsectarian programs are exempt when purchased directly by the school. Merchandise bought to resell, food for a students-and-teachers-only cafeteria, and athletic equipment used in admission-charged games fall on the non-taxable side.

Watch the "open to the public" and "for resale" lines

Two distinctions do a lot of work: a cafeteria open to the general public collects tax on its meals, while one serving only students and teachers does not; and merchandise a school buys to resell is bought tax-free (it collects tax on the resale instead). This memo dates to 1970 — confirm current rules and exemption-certificate procedures for any present-day transaction.

Common questions

Q: Does a Kansas school charge sales tax on tickets to its games and plays?
A: Yes. The memo lists admissions to plays, football and basketball games, and other events among the sales on which schools should collect and report sales tax.

Q: Are a school's own purchases taxed?
A: Not when bought directly by the school for its nonsectarian programs — K.S.A. 79-3606(c) exempts those, except property used primarily for habitation. Merchandise bought for resale, hot-lunch food, students-only cafeteria food, and athletic equipment used in admission-charged games are also non-taxable.

Q: Is cafeteria food always exempt?
A: No. Meals served by a school restaurant or cafeteria that is open to the general public are taxable; food for a cafeteria that serves only students and teachers is not.

Citations and references

• K.S.A. 79-3606(c) — the sales tax exemption (quoted in the memo, effective July 1, 1970) for tangible personal property and services purchased directly by a public or private elementary/secondary school or nonprofit educational institution and used primarily for nonsectarian programs and activities, including building erection, repair, or enlargement — but not buildings used primarily for habitation.

Source

• Landing page: Kansas Department of Revenue Policy Information Library
• Original document: MEMO-InstructionsToSchools

Original ruling text

Memorandum

Body:

INSTRUCTIONS FROM STATE OF KANSAS
DEPARTMENT OF REVENUE

SCHOOLS SHOULD COLLECT AND REPORT SALES TAX UPON THE FOLLOWING:

1. Sales of all school books, manuals, work books and school supplies made to students.
2. Admissions to all plays, football and basketball games, and other events.
3. Sales of all class jewelry, class pictures and similar merchandise if purchased for resale, or if tax is not collected and remitted by the firm selling merchandise.
4. All meals served by a school restaurant or cafeteria if open to the general public.
5. All sales of food, sandwiches, cold drinks, candy, etc., sold by a Canteen or by school classes or school groups at school activities.

SCHOOLS SHOULD NO PAY SALES TAX ON THE FOLLOWING:
Section 79-3606 of the Sales Tax Act with an effective date of July 1, 1970, provided in part as follows:

The following shall be exempt from the tax imposed by this act:

"( c ) All sales of tangible personal property or services, including the renting and leasing of tangible personal property, purchased directly by a public or private elementary or secondary school or a public or private nonprofit educational institution and used primarily by such school or institution for nonsectarian programs and activities provided or sponsored by such school or institution or in the erection, repair or enlargement of buildings to be used for such purposed: Provided, that the exemption herein provided shall not apply to buildings used primarily for habitation."

1. All merchandise purchased for resale in their taxable activities.
2. Food used in Government or locally sponsored hot lunch projects.
3. Food purchased by a school restaurant or cafeteria provided such school restaurant or cafeteria is not open to the Public and only serves students and teachers.
4. All athletic equipment such as uniforms, footballs, basketballs, etc., which are used in games or events to which admission are charged.

Date Composed: 10/06/1997 Date Modified: 10/09/2001

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