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Ezel / Tax Rulings / KS
KS P-2004-051 Kansas Retailers' Sales Tax 2004-09-13

Were towing-service charges subject to Kansas retailers' sales tax, and did the towing company owe tax on its equipment and taxable inputs?

Short answer: The towing charges were not subject to Kansas retailers' sales tax because Kansas taxed only specifically enumerated services and towing was not then listed. The towing company was the consumer of what it used to provide that nontaxable service, however, so it had to pay sales tax on all tangible personal property and taxable services it purchased for the towing business.

Apply this to your situation

This page answers the general question as of 2004. Ezel answers yours, under current Kansas tax law, with citations.

Currency note: this ruling is from 2004
Subsequent statutory amendments, regulation changes, court decisions, or later rulings may have changed the analysis. Treat this page as historical context, not current tax advice. Verify current law before relying on any specific rule, rate, or position mentioned here.
Disclaimer: This is an official Kansas Department of Revenue Private Letter Ruling (issued under K.A.R. 92-19-59). It binds the Department only as to the specific retailer who requested it and the facts stated; taxpayer-identifying details are redacted. It may not be cited or relied upon as precedent by any other person, and it ceases to be valid if a statute, regulation, or interpretation it relied upon changes substantially. Kansas state and local sales and use taxes are administered centrally by the Department, so there is no self-collected home-rule city tax outside its scope. This summary is informational only and is not legal or tax advice.
About this page: The plain-English summary, reader guidance, and Q&A below were written by Ezel based on the official state tax ruling. The original ruling (linked on this page as a PDF) is the authoritative source for any reliance.
View original ruling (PDF)

Plain-English summary

The towing service itself was not subject to Kansas retailers' sales tax, but the towing company had to pay tax on the property and taxable services used to provide it.

Kansas taxed only services specifically enumerated by law. The Department said the described towing services were not then one of those taxable services.

That did not make the towing business exempt from tax generally. Because it used tangible personal property and taxable services to perform a nontaxable service, it had to pay sales tax when purchasing those inputs.

What this means for you

Towing companies

Do not collect Kansas sales tax on the towing charge under this historical ruling, but pay tax on taxable equipment, supplies, and services used in the business unless a separate exemption applies.

Service businesses

A nontaxable service provider is usually the consumer of its inputs. Distinguish the tax treatment of the customer charge from the business's own purchases.

Common questions

Q: Was towing a taxable Kansas service in this ruling?
A: No.

Q: Did the business get to buy all equipment and supplies tax-free?
A: No. It had to pay tax on tangible personal property and taxable services used to provide towing.

Q: Why was the towing charge not taxed?
A: Kansas taxed only enumerated services, and the Department said towing was not then enumerated.

Citations and references

  • K.A.R. 92-19-59 — Kansas Private Letter Ruling procedure

Source

Original ruling text

Private Letter Ruling

Body:

Office of Policy & Research

September 13, 2004

TTTTTTTTTTT
TTTTTTTTTTT
TTTTTTTTTTT
TTTTTTTTTTT

Dear Mr. TTTTTTT:

We wish to acknowledge receipt of your letter dated August 30, 2004, regarding the application of Kansas Retailers’ Sales tax.

The state of Kansas taxes only enumerated services. The towing services that you are providing are not currently subject to sales tax in the state of Kansas. However, you must pay sales tax on all articles of tangible personal property and all taxable services to provide the nontaxable services.

This is a private letter ruling pursuant to K.A.R. 92-19-59. It 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 ruling will be revoked in the future by the operation of law without further department action if there is a change in the statutes, administrative regulations, or case law, or 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.

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: 10/05/2004 Date Modified: 10/05/2004

Table 1

Ruling Number: P-2004-051

Table 2

Tax Type: Kansas Retailers' Sales Tax
Brief Description: Towing services.
Keywords:
Approval Date: 09/13/2004

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