🧪 TEST MODE ACTIVE Use test card: 4242 4242 4242 4242
Ezel / Tax Rulings / KS
KS Notice 87-0617 Kansas Retailers' Sales Tax 1987-06-12

How is Kansas sales or compensating tax collected on boats, especially boats bought out of state, after 1987 Senate Bill 195?

Short answer: Under 1987 Senate Bill 195, effective July 1, 1987, a boat owner had to show proof that sales or compensating tax was paid before the Fish and Game Commission would process a boat-number application. In-state dealers collected the state and local sales tax at the point of sale. Buyers who purchased a boat from an out-of-state dealer without paying tax paid the 4% state compensating tax — plus any local compensating tax based on the buyer's address — at the county treasurer's office using Forms CT-3A and CT-4. Isolated or occasional sales between individuals stayed exempt under K.S.A. 79-3606(l).

Apply this to your situation

This page answers the general question as of 1987. Ezel answers yours, under current Kansas tax law, with citations.

Currency note: this ruling is from 1987
Subsequent statutory amendments, regulation changes, court decisions, or later rulings may have changed the analysis. Treat this page as historical context, not current tax advice. Verify current law before relying on any specific rule, rate, or position mentioned here.
Disclaimer: This is an official Kansas Department of Revenue Notice providing general public guidance, not a private ruling issued to one taxpayer. The prior-notices index and filename identify it as Notice 87-0617, while the body is a notice to county treasurers dated June 12, 1987. It does not have the force of law, and the stated 4% rate, forms, agency names, and administration are historical; later statutes or guidance may have changed the result, so confirm current law before relying on it. This summary is informational only and is not legal or tax advice.
About this page: The plain-English summary, reader guidance, and Q&A below were written by Ezel based on the official state tax ruling. The original ruling (linked on this page as a PDF) is the authoritative source for any reliance.
View original ruling (PDF)

Plain-English summary

The Department told county treasurers how to handle sales and compensating tax on boats after the 1987 Legislature passed Senate Bill 195, effective July 1, 1987.

Two things changed. First, a boat owner now had to show proof of payment of sales or compensating tax before the Kansas Fish and Game Commission would process an application for a boat number. Second, the law imposed a local compensating tax on boat purchases where applicable.

How the tax got collected depended on where the boat was bought:

  • From an in-state dealer: the dealer collected the state and local sales tax at sale (using the STD-8 receipt, the same form motor-vehicle dealers use). Such buyers were not sent to the county treasurer.
  • From an out-of-state dealer, with no tax paid: the buyer paid at the county treasurer's office — the 4% state compensating tax plus any local compensating tax matching the sales-tax rate where the buyer's address was located — reported on Forms CT-3A and CT-4. The treasurer charged a $.50 collection service fee credited to the fund in K.S.A. 8-1545, and the buyer had to provide a bill of sale.

Isolated or occasional sales — a boat bought from another individual rather than a dealer — remained exempt under K.S.A. 79-3606(l), so those buyers owed no sales or compensating tax and were not to be referred to the treasurer.

What this means for you

If you bought a boat from a Kansas dealer, the dealer handled the tax. If you bought from an out-of-state dealer and paid no tax, you settled up at the county treasurer's office before you could get a boat number. And if you bought a used boat privately from another person, the isolated-sale exemption meant no Kansas sales or compensating tax was due.

Common questions

Q: When did SB 195 take effect?
A: July 1, 1987.

Q: Who had to pay tax at the county treasurer's office?
A: Buyers who purchased a boat from an out-of-state dealer and paid no sales or compensating tax to that dealer.

Q: What was the tax rate?
A: The 4% state compensating tax, plus a local compensating tax (at the same rate as the local sales tax) if the buyer's address was in a city and/or county that imposed one.

Q: What about buying a boat from a private individual?
A: That is an isolated or occasional sale, exempt under K.S.A. 79-3606(l) — no sales or compensating tax was due.

Q: Was there a fee to process the payment?
A: Yes — the county treasurer charged a $.50 collection service fee credited to the fund in K.S.A. 8-1545.

Citations and references

  • 1987 Senate Bill No. 195 — proof-of-payment requirement and local compensating tax on boats.
  • K.S.A. 79-3606(l) — exemption for isolated or occasional sales.
  • K.S.A. 8-1545 — county treasurer collection service fee fund.

Subject

Sales and Compensating Tax on Boats (Senate Bill 195)

Source

Original ruling text

Notice
Notice Number: Boats
Tax Type: Kansas Retailers' Sales Tax
Brief Description: Sales tax on boats
Keywords:
Effective Date: 06/17/1987

Body:
NOTICE

TO: ALL COUNTY TREASURERS

FROM: KANSAS DEPARTMENT OF REVENUE
SALES & EXCISE TAX BUREAU

SUBJECT: SENATE BILL 195

DATE: JUNE 12, 1987

Senate Bill No. 195, enacted by the 1987 Kansas Legislature, requires owners of boats to show proof of payment of sales or
compensating tax before the Kansas Fish and Game Commission will process the boat owner's application for a number. This
legislation also imposes a local compensating tax on boat purchases where applicable. The effective date of this legislation is July 1,
1987.

As a result, certain boat owners will be coming to the County Treasurers' Offices to pay the appropriate tax. Since in-state boat
dealers are required to collect state and local sales tax, the only purchasers who will come to your offices to pay the tax will be those
who purchased their boats outside the state of Kansas and did not pay the out-of-state dealer any sales or compensating tax. Anyone
who purchased the boat from an in-state dealer must be sent back to the dealer for the dealer to collect the appropriate state and local
taxes. (In-state boat dealers utilize the same sales tax receipt form as motor vehicle dealers — STD-8.)

The same forms you currently use to collect and report state and local compensating use taxes on motor vehicles and trailers
purchased outside of Kansas will be used to collect and report the state and local compensating use taxes on boats purchased from
dealers located outside of Kansas. These forms are CT-3A and CT-4, respectively. (The title on these forms will be changed as soon
as the forms are re-ordered.)

As with the collection of sales and compensating tax on isolated or occasional sales of motor vehicles, the County Treasurer shall
charge a collection service fee of $.50 and shall credit the same to the special fund provided in K.S.A. 8-1545.

When completing the CT-3A, you will put the manufacturer of the boat in the block for "MAKE"; the hull identification number in
the block for "IDENTIFICATION NUMBER", if the boat was built after 1972; and the type of boat in the block for "BODY
STYLE". (See enclosed sample.)

The purchaser must provide you with a bill of sale from the out-of-state dealer.

The County Treasurer will be required to collect a local compensating tax in addition to the 4% state compensating tax whenever the
address of the purchaser, as contained on Form CT-3A, is located within a city and/or county which imposes a retailers' sales tax.
The rate of the local compensating tax is the same rate as such city and/or county sales tax.

Isolated or occasional sales of boats are not affected by Senate Bill 195. They are still exempt from Kansas sales or compensating
taxes under K.S.A. 79-3606(l). Therefore, persons who purchase boats from individuals will not be required to pay any sales or
compensating tax. The Fish and Game Commission will be notified of this fact so individuals who purchase boats from another
individual will not be referred to the County Treasurer in error.

Should you have any questions concerning this legislation, or any other question concerning the sales and compensating tax laws,
please write the Kansas Department of Revenue, Sales and Excise Tax Bureau, Docking State Office Building, Topeka, Kansas
66625-0001, or call (913) 296-2461.

Page 2

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

                                            Return to KSA Listing

Get today's answer for your situation

You just read a 1987 ruling on this question. Ezel checks current Kansas tax law and answers your specific situation, with citations.

Opens in Ezel Pro. Every answer cites the authority it relies on.