Are a nonprofit's fundraising-event sales, used to sponsor youth organizations, exempt from Kansas sales tax?

Plain-English summary

A nonprofit organization that holds one fundraising event a year — to raise money to sponsor a variety of youth organizations — asked whether Kansas law would exempt the gross receipts from that one event from the obligation to collect and remit Kansas retailers' sales tax.

The Department explained that Kansas law broadly imposes tax on the sale of tangible personal property and enumerated services, subject to specific exemptions and exceptions. It concluded that the law does not contain an exemption or exception for the organization's fundraising sales. The organization must collect and remit sales tax on all taxable sales, including the gross receipts from the fundraiser.

What this means for you

Being a nonprofit — even one that raises money to help youth organizations — does not exempt your sales in Kansas. Kansas has no general nonprofit sales-tax exemption; exemptions are granted only to specific organizations and transactions named in the statute.

• Fundraiser sales are taxable. If your event includes taxable sales of goods (or enumerated taxable services), you must charge and remit Kansas sales tax on those gross receipts.
• A charitable purpose doesn't create an exemption. Using the proceeds to sponsor youth organizations does not make the sales exempt.
• Register and remit. Collect the tax at the event and remit it to the Department like any other retailer.

If your organization believes it fits a specific statutory exemption (for example, one written for a particular kind of entity), that must be established under the exact terms of that exemption — a general "we're a nonprofit" claim is not enough.

Common questions

Are nonprofit fundraiser sales taxable in Kansas?
Yes. The Department ruled there is no exemption for the organization's fundraising sales, so it must collect and remit sales tax on all taxable sales.

Does it matter that the money supports youth organizations?
No. The charitable use of the proceeds does not exempt the sales.

Is there a general nonprofit exemption in Kansas?
No. Kansas grants exemptions to specific entities/transactions by statute; there is no blanket nonprofit exemption.

What must the organization do?
Collect Kansas sales tax on taxable sales (including fundraiser gross receipts) and remit it to the Department.

Citations and references

• The ruling states that Kansas broadly imposes sales tax on tangible personal property and enumerated services and that no exemption or exception covers the organization's fundraising sales; it does not cite a specific numbered exemption statute (because none applies).

Source

• Original ruling (DOCX): https://www.ksrevenue.gov/pildocs/rulings/P-1999-98.docx
• Kansas Policy Information Library: https://www.ksrevenue.gov/prpil.html

Original ruling text

Private Letter Ruling

Body:

Office of Policy & Research

April 9, 1999

XXXXXXXXXXXXX
XXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXX

Dear XXXXXXXXXXX:

I have been asked to respond to your letter of February 16, 1999. In it, you ask about the sales and use tax responsibilities of your organization.

Your stated that your nonprofit organization sponsor one event a year to raise funds to sponsor a variety of youth organizations. Your asked if Kansas law would exempt the gross receipts from this one event from the obligation to collect and remit Kansas retailers’ sales tax.

Kansas law broadly imposes tax on the sale of tangible personal property and enumerated services. The law also contains exemptions and exceptions from the imposition of sales tax.

It is the opinion of the Kansas Department of Revenue that the law does not contain an exemption or exception for your organization fund raising sales. Your organization must collect and remit sales tax on all taxable sales including the gross receipts from fund raising.

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 make 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 affects this private letter ruling.

Sincerely,

Mark D. Ciardullo
Tax Specialist

MDC

Date Composed: 04/20/1999 Date Modified: 10/11/2001

Table 1

Table 2