Is the rental of portable toilets subject to Kansas sales tax?

Plain-English summary

A business asked whether renting out portable toilets is subject to Kansas sales tax. The Department said yes.

The reasoning is straightforward: in Kansas, the sale of tangible personal property is subject to sales tax, and under Kansas sales tax law a "sale" of property includes the rental of property. So furnishing a portable toilet is a taxable rental. The delivery of the unit and the disposal of waste are treated as an incidental part of that rental — not as separate, non-taxable services — so the entire charge is taxable.

The Department noted that whether furnishing portable toilets is a taxable rental or an exempt (non-enumerated) service has been litigated or considered in several other states, with some disagreement, but most states agree with the Kansas view that it is a taxable rental. It cited examples from Arkansas, Kentucky, Tennessee, and Texas.

What this means for you

If you rent portable toilets in Kansas — for construction sites, events, or anywhere else — treat the rental as taxable.

• Rental equals sale. Charging to furnish a portable toilet is a rental of tangible personal property, which Kansas taxes the same as a sale.
• Bundle-related services are along for the ride. Delivery and waste disposal are considered incidental to the rental, so you don't get to carve them out as separate untaxed services — the full charge is taxable.
• Don't rely on the "service" argument. The idea that this is a non-enumerated service escaping tax has been rejected in Kansas (and most other states).
• Collect and remit. Charge Kansas sales tax on the rental and remit it like any other retailer.

Common questions

Is renting a portable toilet taxable in Kansas?
Yes. Furnishing a portable toilet is a taxable rental of tangible personal property.

Are the delivery and waste-disposal charges taxable too?
Yes. They are treated as an incidental part of the rental, so they fall within the taxable charge rather than being separate, exempt services.

Why isn't this just a non-taxable service?
Because Kansas treats the rental of property as a sale of tangible personal property. The Department rejected the argument that furnishing portable toilets is a non-enumerated (untaxed) service — a position most other states share.

Do other states tax this the same way?
The Department said there is some state-to-state disagreement, but most states side with the Kansas view that furnishing a portable toilet is a taxable rental, citing decisions and regulations from Arkansas, Kentucky, Tennessee, and Texas.

Citations and references

• Kansas sales tax law (rentals of tangible personal property) — a sale of tangible personal property is taxable, and "sale" includes the rental of property; furnishing a portable toilet is therefore a taxable rental, with delivery and waste disposal incidental to it.
• Persuasive out-of-state authority cited by the Department — Weiss v. Best Enterprises, Inc., Docket No. 95-527 (Ark. Sup. Ct. 1966); Kentucky, Reg. 103, K.A.R. 28.051; Tennessee, Rev. Ruling 93-05 (1993); Texas, Decision of the Comptroller of Public Accounts, Hearing No. 24,641 (1989) — most treating the furnishing of portable toilets as a taxable rental.

Source

• Original ruling (DOCX): https://www.ksrevenue.gov/pildocs/rulings/P-1999-39.docx
• Kansas Policy Information Library: https://www.ksrevenue.gov/prpil.html

Original ruling text

Private Letter Ruling

Body:

Office of Policy & Research

March 1, 1999

XXXX
XXXX
XXXX

RE: Your letter of January 12, 1999

Dear XXXX:

I have been asked to answer your letter received in January. You ask whether the rental of portable toilets is subject to Kansas sales tax. In Kansas, the sale of tangible personal property is subject to sales tax. Under Kansas sales tax law, sales of property includes the rental of property. In the case of portable toilets, the furnishing of the toilet is viewed as a taxable rental. The delivery and waste disposal are seen as an incidental part of that rental.

The question of whether charges for the furnishing of portable toilets should be taxed as a rental of property or exempted, because it is a service that is not enumerated as being taxable, has been litigated or considered in a number of states. While there is some disagreement from state to state, most states side with the Kansas view that furnishing a portable toilet is a taxable rental. See e.g. Weiss v. Best Enterprises, Inc., Docket No. 95-527 (Ark. Sup. Ct. 1966); Kentucky, Reg. 103, K.A.R. 28.051; Tennessee, Rev Ruling 93-05 (1993); Texas, Decision of the Comptroller of Public Accounts, Hearing No. 24,641 (1989).

This is a private letter ruling pursuant to K.A.R. 92-19-59. It is based solely on the facts provided with 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. Please call me if you have any additional questions.

Sincerely,

Thomas E. Hatten
Attorney/Policy & Research

Date Composed: 03/16/1999 Date Modified: 10/11/2001

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