What must a seller obtain to make tax-exempt sales of pianos, repair labor, and parts to a religious organization?

Plain-English summary

A company that sells and services pianos asked how to handle sales to religious organizations. The Department pointed to the religious-organization exemption and to the seller's documentation duty.

The exemption. "K.S.A. 79-3606(aaa) exempts from sales tax: 'all sales of tangible personal property and services purchased by a religious organization which is exempt from federal income taxation pursuant to section 501(c)(3) of the federal internal revenue code, and used exclusively for religious purposes.'"

What the seller must do. "When your company makes tax exempt sales to religious organizations, which would include, but not be limited to the retail sale of a piano, labor services for the repair and maintenance of pianos and repair and replacement parts for the pianos, you would be required to obtain a properly completed copy of the enclosed exemption certificate from the religious organizations."

Bottom line: the piano itself, the repair and maintenance labor, and the repair and replacement parts can all be sold exempt to a qualifying religious organization for exclusively religious use — but only if the seller collects a properly completed exemption certificate from the organization to support each exempt sale.

What this means for you

The exemption reaches goods, labor, and parts

For a qualifying religious organization, the exemption covers the retail sale of the piano, the labor to repair and maintain pianos, and repair and replacement parts — tangible personal property and services alike.

The seller must collect a completed exemption certificate

The seller cannot simply treat a sale as exempt. To support the exemption, the seller must obtain a properly completed exemption certificate from the religious organization for the exempt sales.

The exemption is tied to exclusively religious use

K.S.A. 79-3606(aaa) applies to purchases used exclusively for religious purposes by a 501(c)(3) religious organization. Purchases outside that scope are not covered.

Keep the certificate for your records

The certificate is the seller's documentation that the sale qualified for exemption; without it, the seller may be unable to support treating the sale as exempt.

Common questions

Can a piano be sold tax-free to a church?
Yes, if the church is a qualifying religious organization and the purchase is used exclusively for religious purposes — and the seller obtains a completed exemption certificate.

Does the exemption cover repair labor and parts?
Yes. It reaches labor for repair and maintenance of pianos and repair and replacement parts, as well as the piano itself.

What does the seller need to keep?
A properly completed exemption certificate from the religious organization for the exempt sales.

What is the basis for the exemption?
K.S.A. 79-3606(aaa), which exempts sales of tangible personal property and services purchased by a 501(c)(3) religious organization and used exclusively for religious purposes.

Citations and references

• K.S.A. 79-3606(aaa) — exempts sales of tangible personal property and services purchased by a section 501(c)(3) religious organization and used exclusively for religious purposes.
• The ruling states in prose that the seller must obtain a properly completed exemption certificate from the religious organization to support exempt sales of the piano, repair/maintenance labor, and repair and replacement parts.
• 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 July 24, 1998 by Thomas P. Browne, Jr., Tax Specialist, Kansas Department of Revenue.

Source

• Landing page: Kansas Department of Revenue Policy Information Library
• Original document: P-1998-65

Original ruling text

Private Letter Ruling

Body:

Office of Policy & Research

July 24, 1998

TTTTTTTTTTTTT
TTTTTTTTTTTTT
TTTTTTTTTTTTT

Dear Mr. TTTTTTT:

We wish to acknowledge receipt of your letter which was received by this office on July 6, 1998, regarding the application of Kansas Retailers’ Sales tax.

K.S.A. 79-3606(aaa) exempts from sales tax: “all sales of tangible personal property and services purchased by a religious organization which is exempt from federal income taxation pursuant to section 501(c)(3) of the federal internal revenue code, and used exclusively for religious purposes.”

When your company makes tax exempt sales to religious organizations, which would include, but not be limited to the retail sale of a piano, labor services for the repair and maintenance of pianos and repair and replacement parts for the pianos, you would be required to obtain a properly completed copy of the enclosed exemption certificate from the religious organizations.

If I may be of further assistance, please contact me at your earliest convenience at (785) 296-7776.

Sincerely yours,

Thomas P. Browne, Jr.
Tax Specialist

TPB

Enc

Date Composed: 08/04/1998 Date Modified: 10/10/2001

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