Is a mobile paper shredding and recycling service subject to Kansas sales tax?

Plain-English summary

A company that provides "the shredding and recycling of paper" — sending its "trucks and employees … to customer locations to perform the service" — asked whether the sale of that service is subject to Kansas retailers' sales tax.

The service is essentially trash removal. "It is the opinion of the Kansas Department of Revenue that the service you perform is essentially trash removal. Kansas does not tax trash removal services."

So it is not taxable. "Accordingly, your service of shredding and recycling items being disposed of would not be subject to Kansas retailers' sales tax."

Bottom line: shredding and recycling paper that is being disposed of is treated like trash removal, which Kansas does not tax. The company's charges for the service are not subject to Kansas sales tax.

What this means for you

Document shredding is treated as trash removal

Because the shredding-and-recycling service disposes of the customer's discarded paper, the Department characterized it as trash removal. Kansas does not tax trash removal, so the service is not taxable.

The focus is on disposal

The ruling emphasizes that the items being shredded and recycled are "being disposed of." The service's purpose — getting rid of unwanted paper — is what places it within non-taxable trash removal.

Non-taxable service, but watch your own purchases

As with other non-taxable services, the provider does not charge sales tax on the service, but it remains the consumer of the trucks, equipment, and supplies it buys to perform the work and generally pays tax on those purchases.

Confirm the facts still fit

The ruling rests on the specific facts described. A materially different service — for example, one that is not essentially disposal — could be analyzed differently.

Common questions

Is paper shredding and recycling taxable in Kansas?
No. The Department ruled that this service is essentially trash removal, which Kansas does not tax, so it is not subject to Kansas retailers' sales tax.

Why is it treated as trash removal?
Because the shredded and recycled paper is being disposed of; the service's purpose is disposal of the customer's discarded material.

Does the provider charge customers sales tax?
No. The service is not taxable, so the provider does not collect Kansas sales tax on it.

Does the provider pay tax on anything?
Typically yes — as the consumer of the equipment and supplies used to provide a non-taxable service, the provider generally pays sales or use tax on those purchases.

Citations and references

• The ruling characterizes shredding and recycling of discarded paper as trash removal, which Kansas does not tax, and does not cite a numbered statute.
• K.A.R. 92-19-59 — authorizes Kansas private letter rulings; this ruling binds the Department only as to the requesting taxpayer and the facts presented.
• Issued August 29, 1998 by Mark D. Ciardullo, Tax Specialist, Kansas Department of Revenue.

Source

• Landing page: Kansas Department of Revenue Policy Information Library
• Original document: P-1998-102

Original ruling text

Private Letter Ruling

Body:

Office of Policy & Research

August 29, 1998

XXXXXXXXXXX
XXXXXXXXXXX
XXXXXXXXXXX
XXXXXXXXXXX

Dear XXXXXXXXX:

The purpose of this letter is to respond to your letter dated August 5, 1998. This is a private letter ruling pursuant to Kansas Administrative Regulation 92-19-59.

Your company is engaged in providing a service to consumers. Your service is the shredding and recycling of paper. Your trucks and employees travel to customer locations to perform the service. You asked if the sale of this service would be subject to Kansas retailers’ sales tax.

It is the opinion of the Kansas Department of Revenue that the service you perform is essentially trash removal. Kansas does not tax trash removal services. Accordingly, your service of shredding and recycling items being disposed of would not be subject to Kansas retailers’ sales tax.

This private letter ruling is based solely on the facts provided in your request. If it is determined that undisclosed facts were material or necessary to an accurate determination by the department, this ruling is null and void. This private letter ruling will be revoked in the future by operation of law without further department action if there is a change in the statutes, administrative regulations, or case law, or a published revenue ruling, that materially effects this private letter ruling.

Sincerely,

Mark D. Ciardullo
Tax Specialist

MDC

Date Composed: 09/03/1998 Date Modified: 10/10/2001

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