Is the retail sale of non-titled equipment that may be moved on highways subject to Kansas sales tax?

Plain-English summary

A company asked whether it should collect Kansas retailers' sales tax "on the sale of non-titled equipment that may be moved on highways."

The ruling. "It is the opinion of the Kansas Department of Revenue that a retail sale of non-titled equipment would be subject to sales or compensating tax."

Bottom line: selling non-titled equipment at retail is a taxable transaction in Kansas. The fact that the equipment can be moved on highways but is not titled does not exempt it — the sale is subject to Kansas sales tax (or compensating use tax, where that applies instead).

What this means for you

Non-titled equipment is taxable at retail

A retail sale of non-titled equipment is subject to Kansas sales or compensating tax. Being movable on highways without a title does not put the equipment outside the tax.

Sales tax or compensating tax may apply

The Department identified both sales tax and compensating (use) tax. Which one applies depends on the transaction — in general, in-state retail sales are subject to sales tax, while compensating use tax reaches property used in Kansas on which sales tax was not paid.

Titling status does not create an exemption

The ruling does not treat "non-titled" as a basis for exemption. The equipment is taxable tangible personal property when sold at retail.

Collect and document the tax

A dealer selling this equipment should collect the applicable tax on the retail sale unless the buyer provides a valid exemption.

Common questions

Is non-titled equipment taxable in Kansas?
Yes. A retail sale of non-titled equipment is subject to sales or compensating tax.

Does it matter that the equipment can travel on highways?
No. The Department found the retail sale taxable regardless of that.

Sales tax or use tax — which applies?
The Department said "sales or compensating tax." Sales tax generally applies to in-state retail sales; compensating use tax applies to property used in Kansas where sales tax was not collected.

Is there an exemption for non-titled equipment?
The ruling identifies none; the equipment is taxable tangible personal property at retail.

Citations and references

• The ruling states in prose that a retail sale of non-titled equipment is subject to Kansas sales or compensating tax. No numbered statute is cited.
• 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 21, 1998 by Mark D. Ciardullo, Tax Specialist, Kansas Department of Revenue.

Source

• Landing page: Kansas Department of Revenue Policy Information Library
• Original document: P-1998-69

Original ruling text

Private Letter Ruling

Body:

Office of Policy & Research

August 21, 1998

XXXXXXXXXXXXXXX
XXXXXXXXXXXXX
XXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXX

Dear Ms. XXXXXXXXXX:

The purpose of this letter is to respond to your letter dated July 31, 1998. This is a private letter ruling pursuant to Kansas Administrative Regulation 92-19-59.

You asked if your company should collect Kansas retailers’ sales tax on the sale of non-titled equipment that may be moved on highways.

It is the opinion of the Kansas Department of Revenue that a retail sale of non-titled equipment would be subject to sales or compensating 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: 08/28/1998 Date Modified: 10/10/2001

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