Does a Girl Scout troop's youth-development sales-tax exemption cover a hotel room rental?

Plain-English summary

A Girl Scout troop asked how Kansas sales tax applies to its purchases, and specifically whether a hotel room charge would be exempt.

The exemption for property. "Kansas law exempts 'all sales of tangible personal property purchased directly by a nonprofit organization for nonsectarian comprehensive multidiscipline youth development programs.' K.S.A. 79-3606(ii)." The Department confirmed: "The Girl Scouts of America and other organizations such as a Girl Sco[u]t troop are deemed to be a 'nonprofit organization' for purposes of K.S.A. 79-3606(ii)."

The limit — property only. "The exemption contained in K.S.A. 79-3606(ii) applies to sales of tangible personal property." A hotel or motel room rental is different: "The rental of a motel room is considered to be a service. K.S.A. 79-3603(g)."

The holding. "It is the opinion of the Kansas Department of Revenue that the rental of a hotel room by an organization that is exempt pursuant to K.S.A. 79-3606(ii) is not exempt from Kansas retailers' sales tax."

Bottom line: the troop's youth-development exemption covers the tangible goods it buys directly for its programs, but it does not reach a hotel room, which is a taxable service. So the troop pays sales tax on hotel rooms even though its qualifying property purchases are exempt.

What this means for you

The youth-development exemption is limited to tangible goods

K.S.A. 79-3606(ii) exempts a qualifying nonprofit youth organization's direct purchases of tangible personal property for its youth-development programs. It is a property exemption — it does not extend to taxable services.

Hotel/motel rooms are a taxable service

Renting a hotel or motel room is a service under K.S.A. 79-3603(g), not a sale of tangible personal property. So the room charge falls outside the 79-3606(ii) exemption and is taxable, even for an exempt youth organization.

Match the exemption to what you are buying

When budgeting a trip or event, expect the tangible items you buy directly (supplies, equipment, materials for the program) to be exempt, but expect taxable services — like lodging — to carry Kansas sales tax. (Note the separate transient guest tax also applies to hotel rooms.)

Direct-purchase documentation still matters

The property exemption is for property "purchased directly by" the nonprofit organization. Keep the exemption certificate and purchase records so the tangible-goods exemption is properly documented, and do not assume it carries over to lodging or other services.

Common questions

Q: Is a Girl Scout troop exempt from Kansas sales tax?
A: On tangible personal property purchased directly for its youth-development programs, yes — under K.S.A. 79-3606(ii). The troop is treated as a qualifying nonprofit organization.

Q: Does the exemption cover a hotel room for the troop?
A: No. A hotel/motel room rental is a taxable service under K.S.A. 79-3603(g), and the Department ruled it is not exempt under 79-3606(ii).

Q: Why is the room treated differently from supplies?
A: The exemption applies only to sales of tangible personal property. A room rental is a service, not tangible personal property, so it is outside the exemption.

Citations and references

• K.S.A. 79-3606(ii) — exempts direct purchases of tangible personal property by a nonprofit organization for nonsectarian comprehensive multidiscipline youth development programs; the Girl Scouts and similar troops qualify as such nonprofit organizations.
• K.S.A. 79-3603(g) — treats the rental of a hotel/motel room as a taxable service, which places it outside the property-only exemption in 79-3606(ii).
• K.A.R. 92-19-59 — the regulation authorizing private letter rulings; this ruling was issued under it and binds the Department only as to the requesting taxpayer.

Source

• Landing page: Kansas Department of Revenue Policy Information Library
• Original document: P-1999-109

Original ruling text

Private Letter Ruling

Body:

Office of Policy & Research

May 4, 1999

XXXXXXXXXXXX
XXXXXXXXXXXXXXX
XXXXXXXXXXXXX

Dear XXXXXXXXXXX:

I have been asked to respond to your letter dated April 17, 1999. In it, you ask for guidance in the application sales tax to purchases by a Girl Scout Troop.

Kansas law exempts “all sales of tangible personal property purchased directly by a nonprofit organization for nonsectarian comprehensive multidiscipline youth development programs. . .” K.S.A. 79-3606(ii). The Girl Scouts of America and other organizations such as a Girl Scoot troop are deemed to be a “nonprofit organization” for purposes of K.S.A. 79-3606(ii).

The exemption contained in K.S.A. 79-3606(ii) applies to sales of tangible personal property. You asked if the charges for a motel room would be exempt. The rental of a motel room is considered to be a service. K.S.A. 79-3603(g).

It is the opinion of the Kansas Department of Revenue that the rental of a hotel room by an organization that is exempt pursuant to K.S.A. 79-3606(ii) is not exempt from Kansas retailers’ sales tax.

This is a private letter ruling pursuant to K.A.R. 92-19-59. It 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 ruling will be revoked by operation of law without further department action if there is a change in the controlling statutes, administrative regulations, revenue rulings or case law that materially affects this determination.

Sincerely,

Mark D. Ciardullo
Tax Specialist

MDC

Date Composed: 05/12/1999 Date Modified: 10/11/2001

Table 1

Table 2