Form Pub. Ks-1510 - Kansas Sales Tax And Compensating Use Tax Page 10
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42The “ingredient and component part” and “consumed
b. The fund-raising event shall not be in direct
in production” exemptions apply to many business types.
competition with a for-profit business (in the same
More information on these exemptions can be found in
area or at same event).
Pub. KS-1520, Kansas Exemption Certificates. This
c. The fund-raising event shall not take place at a
publication is available on our web site.
retail business’s premises during regular
business hours.
NOTE: Contractors are considered to be the final consumers
d. Sales at the fund-raising event shall be made by
of their materials and therefore may not use the consumed
members or the nonprofit entity and not by a
in production or ingredient or part exemption to purchase job
retailer, or other for-profit business.
materials.
e. If a not-profit entity buys goods to resell at a de
minimis fund-raising event, the nonprofit entity
OTHER SPECIAL SITUATIONS
SHALL PAY SALES TAX on the purchases, unless
the entity is a religious organization. A religious
organization may purchase goods without sales
E
C
P
XEMPT
ONSTRUCTION
ROJECTS
tax intended for resale at a de minimis fund-
raising event. A non-profit entity shall not be
Materials and labor services sold to a buyer holding
required to accrue sales tax on items that are
a special Project Exemption Certificate issued by KDOR
donated for sale at its fund-raising event.
or its authorized agent are exempt from tax. Most of the
exempt buyers listed on page 7 qualify to obtain a project
f. The gross receipts from sales at the nonprofit
exemption for most projects. A project exemption may
entity’s de minimis fund-raising events during any
also be issued to a business that qualifies for economic
prior calendar year shall not exceed $25,000. If
development incentives.
the gross receipts exceeds $25,000 in any
calendar the nonprofit entity shall register as a
F
UELS
retailer and collect sales tax on ALL future sales.
g. Each nonprofit entity shall be limited to not more
Gasoline, diesel fuels, gasohol, alcohol fuels and
than six fund-raising events of not more than a
other similar combustible fuels are generally subject to
day’s duration, during any 12-month period.
the Kansas Motor Fuel tax (herein). However, these fuels
are subject to sales tax when the motor fuel tax does
3. Sale of business assets in conjunction with the
not apply, such as dyed diesel fuel for non-highway
sale or termination of a business (other than
purposes. Other fuels such as aviation fuel, jet fuel,
the sale of the business’s inventory, motor vehicles
kerosene, and propane are subject to sales or use tax
or trailers) if the sale is made in a complete and
unless their use or purpose qualifies for an exemption.
bona fide liquidation of a business of the seller.
For example, propane for agricultural use is exempt,
but propane for an RV is taxed.
a. The term “business” shall mean a separate place
of business subject to registration under the
I
O
S
SOLATED OR
CCASIONAL
ALES
Kansas retailers’ sales tax act.
b. The term “a complete and bona fide liquidation”
Sales tax is NOT collected when tangible personal
shall mean the sale of all assets of the business
property or taxable services are sold at an “isolated or
conducted over a period of not more than 30
occasional” sale. Isolated or occasional sales include:
days beginning on the date of the first sale of
assets, or as approved by the director of taxation.
1. Any infrequent sale of a nonrecurring nature
made by a person not engaged in the business
4. Auctions.
of selling tangible personal property. To qualify,
the seller shall not:
a. Take place at a location OTHER THAN one that
is regularly used to conduct auctions.
a. Hold more than two selling events of a day’s
duration in a 12 month period;
b. The goods being auctions shall not have been
b. conduct a planned annual selling event; or
purchased for resale.
c. hold itself out as being engaged in the business
c. The goods being auctions shall not have been
of selling property or services of the type being
consigned for sale by more than one party in
sold.
addition to the principal seller at the auction.
d. If some of the goods being auctioned satisfy the
Sales that usually meet this criteria are estate sales,
above requirements but others goods do not, the
farm sales, garage sales, and some auctions:
sale of every item at the auction shall be subject
to sales tax.
2. Any sale by a Nonprofit Entity that meets the
requirements for de minimis fund-raising
A Kansas resident has an estate sale
events:
before moving into a retirement home. The
a. All proceeds derived from the fund-raising event
agent will not charge tax at the estate sale,
shall be used by the nonprofit entity to further its
since it is an isolated sale of property
exempt purpose.
owned by one household.
10
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