Are telephone and telegraph services in Kansas subject to sales tax, and starting when?

Plain-English summary

This 1992 Departmental Memorandum, addressed to telephone and telegraph companies, announced a change in Kansas sales tax law and offered suggested language the companies could use on their customer billing statements. The short version: starting June 1, 1992, in-state telephone and telegraph services became subject to Kansas sales tax at 4.9% plus applicable local tax — a service that had been exempt before.

The memo explains that "[t]he 1992 Kansas Legislature enacted House Bill 2892, commonly referred to as the 'School Finance Bill,'" which "makes significant changes to the Kansas sales compensating tax law."

The specific change it describes: "One of the changes taxes the sale of telephone and telegraph services that originate and/or terminate within the state of Kansas and are billed to a customer's telephone number in this state." The memo states plainly that "[t]hese sales, previously exempt from sales tax, are now subject to a sales tax at a rate of 4.9% plus any applicable local tax(es)," and that "[t]his legislation is effective June 1, 1992."

What this means for you

Telephone and telegraph service providers

From June 1, 1992, you were required to charge Kansas sales tax on services that originate and/or terminate in Kansas and are billed to an in-state telephone number. The memo's purpose was to help you communicate the new charge to customers on their bills; the underlying obligation is to collect the tax.

Customers and businesses buying telecom service

Kansas telephone/telegraph service that was not taxed before this date became taxable at the state rate of 4.9% plus any local sales tax that applies. This memo reflects the state of the law as of 1992; rates and the scope of taxable telecommunications have changed over time, so confirm current rules for any present-day transaction.

The trigger is where the call connects and how it's billed

The tax applied to services that originate and/or terminate within Kansas and are billed to a customer's Kansas telephone number — a sourcing test based on the call's Kansas connection and the billing number, not simply on where the provider is located.

Common questions

Q: When did Kansas start taxing telephone and telegraph services?
A: June 1, 1992, under House Bill 2892 (the "School Finance Bill"). Before that date these services were exempt from sales tax.

Q: What was the tax rate?
A: The memo states 4.9% plus any applicable local tax(es) — the Kansas state sales tax rate in effect at the time, on top of local taxes.

Q: Which telephone services were covered?
A: Sales of telephone and telegraph services that originate and/or terminate within Kansas and are billed to a customer's telephone number in the state.

Citations and references

• House Bill 2892 (1992), the "School Finance Bill" — the legislation the memo says made in-state telephone and telegraph services subject to Kansas sales tax at 4.9% plus applicable local tax, effective June 1, 1992. The memo cites the bill by name and does not cite a specific K.S.A. section.

Source

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

Original ruling text

Memorandum

Body:

MEMORANDUM

TO: TELEPHONE AND TELEGRAPH COMPANIES

FROM: KANSAS DEPARTMENT OF REVENUE

RE: SUGGESTED LANGUAGE FOR YOUR CUSTOMER BILLING STATEMENTS
EXPLAINING SALES TAX LAW CHANGES

DATE: May 22, 1992

The 1992 Kansas Legislature enacted House Bill 2892, commonly referred to as the "School Finance Bill." This Bill makes significant changes to the Kansas sales compensating tax law.

One of the changes taxes the sale of telephone and telegraph services that originate and/or terminate within the state of Kansas and are billed to a customer's telephone number in this state. These sales, previously exempt from sales tax, are now subject to a sales tax at a rate of 4.9% plus any applicable local tax(es). This legislation is effective June 1, 1992.

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

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