Form Pub. Ks-1510 - Kansas Sales Tax And Compensating Use Tax Page 13
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42• sales/use tax is not a part of the price to the
exempt customers without collecting tax. Most of the
consumer, or
exemptions discussed on pages 7 through 10 require
• all or part of the sales/use tax will be refunded
an exemption certificate.
when it is added to the price.
For a sale to be exempt, an exemption certificate
NOTE: Amounts collected as “sales tax” must be remitted to
must be furnished or completed by the buyer, and kept
the state. If too much tax is collected, it must either be
by the seller with other sales tax records. Do not send
refunded to the customer or remitted to the state.
exemption certificates to KDOR; they are an integral
part of your sales tax records subject to inspection by
KDOR. When the seller obtains an accurately completed
SALES TAX RECORDS
exemption certificate from the buyer and keeps it on file
as part of the sales tax records, the seller is relieved
It is most important to keep neat, thorough, and
from collecting the sales tax due on that sale.
adequate records of all aspects of your business
operation. Keeping good records will enable you to
You should obtain an exemption certificate before
accurately complete your sales and use tax returns, your
billing the customer or delivering the property. As the
business and personal income tax returns, and
retailer, you are responsible for obtaining a completed
determine the overall profitability of your business.
exemption certificate even though the purchaser may
strike the tax from the bill or claim to be exempt only
There is no prescribed format for sales tax records.
after receiving the merchandise.
They may be maintained on a computer or kept in a
notebook. However, the content of your sales tax records
IMPORTANT: If you are unable to get a
is prescribed by law. Retailers must “keep records and
completed exemption certificate from a
books of all such sales, together with invoices, bills of
customer, the sale is considered taxable and you will
lading, sales records, copies of bills of sale and other
be liable for the tax. In an audit situation, you have 120
pertinent papers and documents ...” [K.S.A. 79-3609]
days from date of notice from the Director of Taxation
to secure a completed exemption certificate from a
Whether maintained electronically or on paper, your
customer. [K.S.A. 79-3609]
sales tax records must contain the following documents
and information. [K.A.R. 92-19-4b]
Additional information about completing exemption
certificates is on page 37, followed by the two certificates
1) Gross receipts from the sale, rental, or lease
most often used – the Resale Exemption Certificate and
of tangible personal property in the state of
the Multi-Jurisdiction Exemption Certificate. All retailers
Kansas, including any services that are a part
should have a copy of Pub. KS-1520, Kansas Exemption
of the sale or lease, regardless of whether the
Certificates. This publication contains detailed
receipts are considered to be taxable;
information on how to properly use exemption certificates
2) all deductions allowed by law and claimed
as a buyer and seller, as well as all exemption
when you filed (See “Part II — Deductions” on
certificates currently in use.
page 21);
3) the purchase price of all tangible personal
DO NOT accept a copy of a customer’s sales tax
property purchased for sale, consumption, or
registration certificate instead of an exemption
lease in the state of Kansas (the cost of your
certificate. The registration certificate shows the buyer
inventory, equipment, and fixtures);
is a retailer — it does not certify the purchase is exempt
4) all exemption certificates; and
from tax.
5) a true and complete inventory taken yearly.
You must keep these records for the current year of
LOCAL SALES TAX APPLICATION ON DESTINATION-
business and at least three prior years. Some records,
BASED SOURCING
such as the purchase price of equipment and fixtures,
must be kept longer for federal income tax purposes.
Kansas is participating with 38 other states and the
Your sales tax records must also be available for, and
District of Columbia in the “Streamlined Sales Tax
are subject to, inspection by the Director of Taxation or
Project” (SSTP). It is the goal of the SSTP that multistate
authorized representative (auditor) at all times during
retailers will, in the future, be able to remit sales tax for
normal business hours.
all of the states on one uniform electronic sales tax
return. It is also the goal of SSTP that uniformity among
EXEMPTION CERTIFICATES
the states in several areas of sales tax administration
will cause the US Congress to require out-of-state
retailers to collect the Compensating Use Tax due on
An exemption certificate is a document that shows
items that they ship outside of their home state. Kansas,
why sales tax was not charged on an otherwise taxable
like many other states, is currently losing out on millions
sale of goods or services. It allows you to purchase your
of dollars of Kansas Compensating Use Tax (page 26)
inventory, ingredient parts, and certain consumables
that is due on purchases of items shipped into Kansas
without tax, and authorizes you to sell taxable items to
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