Are retail sales of vegetable and garden seed packets subject to Kansas sales tax?

Plain-English summary

A company that wholesales vegetable and garden seed packets to Kansas retailers asked whether the retailers' sales of those seed packets are subject to Kansas retailers' sales tax. The Department ruled that seed sales are taxable in Kansas.

"Please be advised that seed sales are taxable in Kansas. Unlike some states, Kansas does not exempt sales of groceries or food products. States that do exempt grocery sales often exempt sales of vegetable seeds under the theory that the seeds are used to grow food, which would be exempt if sold at retail. As noted, Kansas does not exempt either grocery sales or seed sales."

The Department directed the wholesaler to tell its retailers "that they are required to collect Kansas state and local sales tax on their seed sales, just as they are required to do on all other retail sales."

What this means for you

Retailers selling seeds

Charge Kansas state and local sales tax on vegetable and garden seed packets. In Kansas these are ordinary taxable retail sales — there is no grocery or seed exemption to rely on.

Why the "food" theory doesn't apply in Kansas

Some states exempt seeds because they grow exempt groceries. That logic only works where groceries are exempt. Kansas taxed grocery sales in 2000, so the seed sale is taxable too.

Wholesalers can advise their retailers

If your retail customers ask, the correct answer is that their seed sales are taxable and they must collect state and local tax, just like their other retail sales.

Common questions

Q: Are vegetable seed packets taxable in Kansas?
A: Yes. Retail sales of vegetable and garden seeds are subject to Kansas state and local sales tax.

Q: Why are seeds exempt in some other states but not Kansas?
A: Those states exempt groceries and treat seeds as growing exempt food. Kansas does not exempt groceries or seeds, so the exemption theory does not apply.

Q: Who collects the tax?
A: The retailer that sells the seed packets to the final customer collects Kansas state and local sales tax on the sale.

Citations and references

• The Department did not cite a specific statute number. It relied on the general Kansas rule that neither grocery/food sales nor seed sales are exempt, so retail sales of vegetable and garden seed packets are subject to state and local sales tax.

Source

• Landing page: Kansas Department of Revenue Policy Information Library
• Original document: O-2000-017

Original ruling text

Opinion Letter

Body:

Office of Policy & Research

October 2, 2000

XXXX
XXXX
XXXX

RE: Your letter of July 18, 2000

Dear XXXX:

I have been asked to answer the questions that you pose in your letter received earlier this year. Your company wholesales vegetable and garden seed packets to Kansas retailers. Your retailers have asked you if sales of the seed packets to their customers are subject to Kansas retailers’ sales tax.

Please be advised that seed sales are taxable in Kansas. Unlike some states, Kansas does not exempt sales of groceries or food products. States that do exempt grocery sales often exempt sales of vegetable seeds under the theory that the seeds are used to grow food, which would be exempt if sold at retail. As noted, Kansas does not exempt either grocery sales or seed sales.

Please advise your Kansas retailers who ask that they are required to collect Kansas state and local sales tax on their seed sales, just as they are required to do on all other retail sales.

I hope this adequately answers your questions. If not, please call me.

Sincerely,

Thomas E. Hatten
Attorney/Policy & Research

Date Composed: 10/03/2000 Date Modified: 10/10/2001

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