Which new tires became subject to Kansas's $0.50 tire excise tax on July 1, 1991?

Plain-English summary

1991 House Bill 2407 broadened Kansas's $0.50-per-tire excise tax effective July 1, 1991.

The law adopted the K.S.A. 8-1485 definition of vehicle, extending the tax to new tires for automobiles, buses, trucks, truck tractors, trailers, farm machinery, construction equipment, motorcycles, and other devices authorized or allowed on public highways.

The tax still did not apply to used, recapped, or retreaded tires, or to tires for devices not authorized on public streets and highways.

It also applied to tires mounted on a new vehicle when the vehicle was sold at retail for the first time. A spare tire included in the new-vehicle sale was excluded. New-vehicle dealers therefore had to register and file a separate tire-excise return.

Other rules included:

• A tire delivered by the retailer outside Kansas was exempt, but a tire installed in Kansas was taxable even for an out-of-state resident.
• Registered retailers could make tax-free resale sales with a certificate containing both sales-tax and tire-tax registration numbers.
• Sales to Kansas, its political subdivisions, and educational institutions were taxable; sales to the federal government were exempt.
• New tires bought for leased vehicles were taxable even when the purchaser had a sales-tax exemption or interstate common-carrier authority.
• The tire tax had to be separately stated; otherwise it became part of the sales-tax base.

What this means for you

A tire retailer or new-vehicle dealer needed separate tire-tax registration, destination and installation records, and properly documented resale transactions. A general sales-tax exemption did not necessarily exempt the tire tax.

Common questions

Q: Was the spare tire on a new vehicle taxed?
A: No. The notice excludes the spare included with the vehicle.

Q: Were tires installed in Kansas for an out-of-state buyer taxable?
A: Yes.

Q: Did a Kansas government exemption remove the tire tax?
A: No. The notice taxes sales to Kansas and its political subdivisions, while exempting the federal government.

Citations and references

• 1991 House Bill 2407.
• K.S.A. 8-1485.

Subject

Tire Excise Tax

Source

• Landing page: Kansas Department of Revenue Policy Information Library
• Original document: Notice 91-0612

Original ruling text

Notice
Notice Number: Tire Excise Tax
Tax Type: Tire Tax
Brief Description: Tire Excise Tax
Keywords:
Effective Date: 06/12/1991

Body:
NOTICE

TO: Tire Retailers and New Vehicle Dealers

FROM: Kansas Department of Revenue
Business Tax Bureau

SUBJECT: Tire Excise Tax (House Bill No. 2407)

DATE: June 12, 1991

                             PLEASE READ THIS NOTICE CAREFULLY
       LEGISLATION HAS BEEN ENACTED REQUIRING PERSONS PREVIOUSLY NOT REQUIRED TO
                        REGISTER FOR THE TIRE EXCISE TAX TO REGISTER
                     IF YOU HAVE ALREADY REGISTERED AS A TIRE RETAILER
             PLEASE REVIEW THIS NOTICE FOR CHANGES IN THE TIRE EXCISE TAX LAW
                THIS NOTICE SUPERSEDES ALL PREVIOUS TIRE EXCISE TAX NOTICES
              DISREGARD THIS NOTICE IF YOU DO NOT SELL TIRES OR NEW VEHICLES

In 1990, the Kansas legislature enacted a new law that imposed an excise tax on the sale of vehicle tires. The excise tax was imposed
at the rate of $.50 per tire on the retail sale of new tires for automobiles and for certain other vehicles. The 1991 legislature enacted
House Bill No. 2407, which makes two significant changes to the existing tire excise tax law. First, the bill broadens the definition of
"vehicle" so that it has the same meaning as provided by K.S.A 8-1485. Second, the bill imposes the tire excise tax on tires mounted
on a new vehicle when the new vehicle is sold at retail for the first time. This legislation is effective on July 1, 1991.

By adopting the definition of "vehicle" set forth in K.S.A. 8-1485, the legislature significantly broadened the category of tire sales
that are subject to the tire excise tax. K.S.A. 8-1485 defines "vehicle" to mean "every device on, upon or by which any person or
property is or may be transported or drawn upon a highway, except devices moved by human power or used exclusively upon
stationary rails or tracks." Because of the new definition, the tire tax now applies to the sale of new tires for use on automobiles,
buses, trucks, truck tractors, trailers, farm machinery, construction equipment and motorcycles. The tax does not apply to the sale of
new tires for use on vehicles not authorized or allowed to operate on public streets and highway. As before, tax is imposed on the
sale of new tires and does not apply to the sale of used, recapped, or retreaded tires.

The new legislation also broadens existing law by imposing the tire excise tax on tires mounted on new vehicles when the vehicle is
sold at retail for the first time. The tire tax is imposed on the tires mounted on a new vehicle sold and delivered in Kansas to a
resident of another state. The tax is not included on a spare tire that is included in the sale of a new vehicle. Because of the
broadened imposition, new vehicle dealers are required to register for, collect and remit the tire excise tax to the Department of
Revenue.

If your business includes the retail sale of new tires for vehicles, you are required to register to report the tire excise tax. If your
business is not currently registered, you must complete the enclosed registration form. The completed form should be sent to the Tax
Registration Section, Business Tax Bureau, Kansas Department of Revenue, Topeka, Kansas 66625-0001. The form must be
mailed by June 20, 1991. If you are already registered and reporting tire excise tax you should discard the registration form.

The Business Tax Bureau will process your application and notify you of your tire excise tax registration number. You will receive
returns on which to report the tire excise tax. The filing frequencies for returns is the same as for Kansas retailers' sales tax. For
examples, if you file monthly Kansas retailers' sales tax returns, you will file monthly tire excise tax returns.

DO NOT USE YOUR RETAILERS' SALES TAX RETURN TO REPORT THE TIRE EXCISE TAX.

When a retailer sells new tires that are not for use on a "vehicle" as defined above, the purchaser must certify in writing on the

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invoice, sales ticket or other billing document that the sale is exempt from the tire excise tax. The written certification must state that
the tire is not for use on a vehicle, as defined by the act. The retailer is required to retain a copy of the signed invoice, sales ticket or
billing document as a part of the retailer's business records.

The tire excise tax is imposed in addition to all other excise taxes imposed by law. The tire excise tax must be separately stated on
the invoice, sales ticket or billing document in order to avoid being subject to retailers' sales tax. Tire excise taxes absorbed or
included in the retailer's selling price and not separately identified on the billing document will be subject to retailers' sales tax.

New tires delivered by the retailer to a point outside the state, to a common carrier or to the U.S. postal service for transportation to a
point outside the state of Kansas are not subject to the tire excise tax.

New tires installed on motor vehicles at a place within the state of Kansas are subject to the tire excise tax, even though the
purchaser may be a resident of another state.

Registered tire retailers who make sales for resale to another retailer registered for the tire excise tax shall not collect the tire excise
tax on such sales. The tire retailer making the sale is required to obtain a resale exemption certificate from the purchaser. The resale
exemption certificate must contain the purchaser's retailers' sales tax registration number and the tire excise tax registration
number.

Resale exemption certificates are available on request from the Business Tax Bureau. Write or call this Bureau at the address or
telephone number listed below.

Sales of new tires to the state of Kansas, political subdivision, public or private elementary and secondary schools and other
educational institutions are subject to the tire excise tax. However, sales of tires to the federal government are not subject to the tire
excise tax.

Sales of new tires to an automobile dealer for installation on a used vehicle that is held for resale are subject to the tire tax.

Persons in the business of leasing and renting motor vehicles, including vehicles leased to interstate common carriers, who purchase
new tires for use on leased vehicles are subject to the tire excise tax, even though the purchaser is exempt from Kansas retailers' sales
tax and has issued to the seller a valid Kansas retailers' sales tax exemption certificate or possesses valid interstate common carrier
authority.

If you have any questions regarding the tire excise tax, please write the Business Tax Bureau, Kansas Department of Revenue,
Topeka, Kansas 66625-0001, or call (913) 296-2461.

Enclosure: Tire Excise Tax Application for Registration.

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

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