Must a nonprofit historical society collect Kansas sales tax when it sells books?

Plain-English summary

A historical society asked whether it must collect Kansas sales tax when it sells books. The Department's answer is yes.

Books are taxable retail sales. The Department quoted the imposition statute, K.S.A. 79-3603(a), which taxes "the gross receipts received from the sale of tangible personal property at retail within this state." Books are tangible personal property, so selling them at retail is a taxable transaction.

Collect the tax unless the buyer is exempt. The Department said the historical society "would be obligated to collect the appropriate Kansas sales tax(es) on the sale of books, wherein the purchaser can not provide your organization a properly completed exemption certificate." In other words, the society collects tax on each book sale unless the buyer hands it a valid exemption certificate establishing that particular buyer's exemption.

Nonprofit ≠ automatically exempt from sales tax. The Department closed with the point that trips up many organizations: "the mere fact that an organization is exempt from income tax as a non-profit entity, does not automatically extend a sales tax exemption." Income-tax-exempt status and sales-tax treatment are separate questions.

Bottom line: a historical society is a retailer when it sells books and must register, collect, and remit Kansas sales tax on those sales, taking exemption certificates only from buyers who actually qualify. Its nonprofit status does not exempt its own sales.

What this means for you

Nonprofit and cultural organizations that sell merchandise

If you sell books, publications, or gift-shop items, you are making taxable retail sales and generally must collect Kansas sales tax. Your income-tax exemption does not carry over to sales tax — the Department was explicit about that.

The exemption belongs to the buyer, not the seller

You collect tax unless the purchaser gives you a properly completed exemption certificate. Keep those certificates on file; without one, the default is that the sale is taxable and you owe the tax.

Register and remit

Selling taxable goods to the public means registering for sales tax and remitting what you collect. Treat your book sales the way any retailer would.

Common questions

Q: Does a historical society have to charge sales tax on book sales?
A: Yes. The Department ruled it must collect the appropriate Kansas sales tax on book sales unless the buyer provides a properly completed exemption certificate.

Q: Doesn't the society's nonprofit status exempt its sales?
A: No. The Department said income-tax exemption as a nonprofit does not automatically extend a sales tax exemption.

Q: When is a book sale not taxed?
A: When the purchaser gives the society a valid, properly completed exemption certificate showing that buyer qualifies for an exemption.

Citations and references

• K.S.A. 79-3603(a) — imposes Kansas sales tax on the gross receipts from the retail sale of tangible personal property; books are taxable property, so the historical society must collect the tax absent a valid exemption certificate from the buyer.

Source

• Landing page: Kansas Department of Revenue Policy Information Library
• Original document: P-2001-110

Original ruling text

Private Letter Ruling

Body:

Office of Policy & Research

October 15, 2001

TTTTTTTTTTT
TTTTTTTTTTT
TTTTTTTTTTT
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Dear Ms. TTTTT:

We wish to acknowledge receipt of your letter dated October 2, 2001, regarding the application of Kansas Retailers’ Sales Tax.

K.S.A. 79-3603(a) imposes a sales tax upon: “The gross receipts received from the sale of tangible personal property at retail within this state. . .”

Please be advised that the TTTTTTTTTTTTT Historical Society would be obligated to collect the appropriate Kansas sales tax(es) on the sale of books, wherein the purchaser can not provide your organization a properly completed exemption certificate.

In closing, the mere fact that an organization is exempt from income tax as a non-profit entity, does not automatically extend a sales tax exemption.

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.

If I may be of further assistance, please contact me at your earliest convenience at (785) 296-7776.

Sincerely yours,

Thomas P. Browne, Jr.
Tax Specialist

TPB

Date Composed: 10/16/2001 Date Modified: 10/26/2001

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