Is a charge for computerized handwriting analysis at a fair booth subject to Kansas sales tax?

Plain-English summary

A person planning to operate a Kansas State Fair booth offering computerized handwriting analysis for $2.00 asked whether those receipts are subject to sales tax. The Department said no — charges for handwriting analysis are not subject to Kansas sales tax.

Kansas retailers' sales tax reaches sales of tangible personal property, certain admission and participation fees, and certain enumerated services. The Department walked through the possibilities and found none applies:

• Admissions to entertainment (K.S.A. 79-3603(e)) — a handwriting-analysis service isn't an admission to a place providing entertainment.
• Participation in sports, games, and recreation (K.S.A. 79-3603(m)) — it isn't a fee to participate in such an activity.
• Recreation/entertainment dues (K.S.A. 79-3603(n)) — it isn't membership dues for using facilities.
• Enumerated services — the taxed services include things like repair, installation, and application of tangible personal property. Handwriting analysis is not a listed service.

Because it fits none of these categories — whether performed for amusement or to produce a psychological profile — the service is not taxable. The operator's only sales tax duty is to pay sales tax on its own taxable purchases, the same as in non-business life.

What this means for you

Novelty, personal-analysis, and reading services at fairs and events

A stand-alone service like handwriting analysis, character reading, or a similar personal service generally isn't taxable in Kansas because it isn't an enumerated service and isn't an amusement admission or participation fee.

Watch the distinctions that do trigger tax

Charging admission to an entertainment venue, a fee to participate in a game or recreational activity, or dues for recreation facilities can be taxable under 79-3603(e), (m), and (n). A pure service charge for analyzing handwriting is different.

Your remaining duty: tax on your own purchases

Even when your service sales aren't taxable, you still owe Kansas sales (or use) tax on the taxable items you buy to run the booth.

Common questions

Q: I charge $2 for computerized handwriting analysis at a fair. Do I collect sales tax?
A: No. The Department ruled these charges are not subject to Kansas sales tax.

Q: Does it matter whether it's for fun or for a psychological profile?
A: No. Either way, handwriting analysis is not a taxable enumerated service.

Q: Why isn't it taxable as an amusement or recreation charge?
A: It isn't an admission (79-3603(e)), a participation fee for sports/games/recreation (79-3603(m)), or recreation dues (79-3603(n)).

Q: Do I have any sales tax obligations at all?
A: Yes — you must pay sales tax on your own taxable purchases used in the business.

Q: Does this ruling apply to my business?
A: A Kansas private letter ruling addresses only the requesting taxpayer's facts and cannot be relied on as precedent by others, though it shows how the Department treats such a service.

Citations and references

• K.S.A. 79-3603(e) — taxes admissions to places providing entertainment; the Department found handwriting analysis is not such an admission.
• K.S.A. 79-3603(m) — taxes fees and charges for participation in sports, games, and other recreation activities; not applicable here.
• K.S.A. 79-3603(n) — taxes dues for members' use of recreation and entertainment facilities; not applicable here.
• Enumerated services — Kansas taxes only listed services (e.g., repair, installation, and application of tangible personal property); handwriting analysis is not listed.
• K.A.R. 92-19-59 — the regulation authorizing Kansas private letter rulings.

Source

• Landing page: Kansas Department of Revenue Policy Information Library
• Original document: P-2003-029

Original ruling text

Private Letter Ruling

Body:

Office of Policy & Research

May 27, 2003

XXXX
XXXX
XXXX

RE: Your letter dated April 22, 2003

Dear XXXX:

I have been asked to answer your letter that we received last month. You plan to operate an booth at the Kansas State Fair where you will offer computerized handwriting analysis for $2.00. You ask whether your receipts are subject to sales tax. The answer is no. Charges for handwriting analysis are not subject to Kansas sales tax.

Kansas sales tax applies to sales of admission to places that provide entertainment. K.S.A. 79-3603(e). It also applies to fees and charges for participation in sports, games, and other recreation activities. K.S.A. 79-3603(m). Kansas sales tax also applies to dues charged to members for use of facilities for recreation and entertainment. K.S.A. 79-3603(n). None of these impositions on amusements and recreation cover handwriting analysis services that are done for amusement or entertainment.

Kansas retailers' sales tax is imposed on sales of tangible personal property, certain admission and participation fees, and certain enumerated services. Enumerated services include such things as repair, installation, and application of tangible personal property. Handwriting analysis service is not a listed service. Accordingly, handwriting analysis services, whether done for amusement or to obtain a psychological profile, are not subject to Kansas retailers' sales tax.

Accordingly, your sales tax duties are simply to pay sales tax on your taxable purchases. These duties are the same ones that you experience in your non-business endeavors.

I hope that I have answered your questions. If you need to discuss anything further, please call me at 785-296-3081. 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,

Thomas E. Hatten

Attorney/Policy & Research

Date Composed: 05/29/2003 Date Modified: 05/29/2003

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