Is providing ergonomic assessment and training, including a written report, subject to Kansas sales tax?

Plain-English summary

A company asked whether the gross receipts from its ergonomic assessment and training service - which includes a written report delivered to customers - are subject to Kansas sales tax. The Department ruled the service is not taxable, and neither is the report.

The service is not taxed. "The answer to your question is no, Kansas law does not impose a tax on the service described in your letter." Kansas taxes services only when specifically enumerated, and ergonomic assessment and training is not on that list.

The written report rides along with the exempt service. "The written report provided to your clients as a part of this nontaxable service would also be exempt from Kansas sales tax." Because the report is a part of the nontaxable service - not a separate sale of goods - it is exempt too.

The provider still pays tax on its inputs. "Your company would be required to pay Kansas sales or compensating tax on purchases of tangible personal property and taxable services consumed by the company." A nontaxable service provider is the final consumer of what it buys.

Bottom line: ergonomic assessment and training is a nontaxable Kansas service, the written report delivered with it is also exempt, and the provider pays sales or use tax on its own taxable purchases.

What this means for you

Assessment, training, and consulting providers

If you provide ergonomic assessment and training (or a similar non-enumerated service), you generally do not charge Kansas sales tax on those receipts - and a written report delivered as part of that service is exempt along with it, rather than being a separate taxable sale of goods.

The report is part of the service, not a separate product

Where a deliverable like a report is furnished as part of a nontaxable service, it takes the service's nontaxable character. The customer is buying the assessment and training, not a report as a standalone good.

You still owe tax on your inputs

You must pay Kansas sales or compensating (use) tax on the tangible personal property and taxable services you buy to deliver the service.

Common questions

Q: Is ergonomic assessment and training taxable in Kansas?
A: No. The Department ruled Kansas law does not impose tax on this service.

Q: Is the written report taxable?
A: No. As part of the nontaxable service, the written report is also exempt from Kansas sales tax.

Q: Does the company owe any Kansas tax?
A: Yes - it must pay Kansas sales or compensating (use) tax on the tangible personal property and taxable services it consumes.

Citations and references

• The Department cited no specific statutory section. Its conclusion rests on the rule that Kansas taxes services only when specifically enumerated; ergonomic assessment and training is not enumerated, so it is not taxed, and the written report delivered as part of that nontaxable service is likewise exempt. The provider must still pay Kansas sales or compensating (use) tax on the property and taxable services it consumes.

Source

• Landing page: Kansas Department of Revenue Policy Information Library
• Original document: P-2001-022

Original ruling text

Private Letter Ruling

Body:

Office of Policy & Research

March 22, 2001

XXXXXXXXXX
XXXXXXXXXX
XXXXXXXXX

Dear Sirs:

The purpose of this letter is to respond to your letter dated February 28, 2001.

You ask if the gross receipts from the service of providing ergonomic assessment and training are subject to Kansas sales tax. Your company will also be providing a written report to customers as a part of this service.

The answer to your question is no, Kansas law does not impose a tax on the service described in your letter. The written report provided to your clients as a part of this nontaxable service would also be exempt from Kansas sales tax.

Your company would be required to pay Kansas sales or compensating tax on purchases of tangible personal property and taxable services consumed by the company.

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

Date Composed: 03/22/2001 Date Modified: 10/11/2001

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