Form Pub. Ks-1510 - Kansas Sales Tax And Compensating Use Tax Page 14
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42but are not being collected by out-of-state retailers. One
seller instructions to ship or deliver the product to a
donee of the purchaser, then the sale is sourced to the
area of uniformity among the states is in “sourcing” –
donee’s address furnished by the purchaser.
that is, which local sales tax rate is due?
A Russell, Kansas resident buys a
Since the inception of Kansas Retailers’ Sales and
computer from a Wichita business as a
Compensating Use tax in 1937, Kansas has been an
gift for a student attending college in Hays,
“origin-based” state for all but two types of sales. In
and requests that the business ship the
essence, whether the customer took delivery of the
computer to the student’s address in Hays. The student
purchased item(s) at the retailer’s store or whether the
is the purchaser ’s donee, so the local sales tax
item(s) where shipped or delivered to the customer
applicable at the donee’s address in Hays, applies.
within Kansas, the Kansas retailer collected the
combined state and local sales tax rate in effect at his
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place of business. (The sale of electricity, gas, water,
ECEIPT BY
HIPPING
OMPANY ON
EHALF OF
UYER
and heat and labor service contracts over $10,000 were
Receipt by a shipping company on behalf of a
the two exceptions.)
purchaser is not considered received for purposes of
the sourcing rules.
G
D
-B
S
R
ENERAL
ESTINATION
ASED
OURCING
ULES
A Hutchinson, Kansas law firm orders
Since July 1, 2003, Kansas has been a “destination
based” sourcing state. Under the sourcing rules, the
office supplies from an office supply
company in Overland Park and requests
rate of sales tax due on instate sales will be the
that the company deliver its order to Jones
combined state and local sales tax rate in effect
where the customer takes delivery/possession of
Shipping Co., which the law firm has retained to deliver
the order to its Hutchinson office. In this situation, receipt
the purchased item(s). The seller will continue to
collect the sales tax rate in effect at the seller’s “place
by Jones Shipping Co. is not considered “receipt” by
the purchaser for purposes of applying the sourcing
of business” for over-the-counter transactions.
rules. Since the buyer did not receive the order at the
seller’s location and the seller did not ship or deliver
If the item(s) is shipped or delivered to the
the order to the buyer or to a third party, the sale should
purchaser, the seller will collect the combined sales
tax rate in effect at the location where the
be sourced to the address of the buyer shown on the
seller’s business records.
purchaser received the item(s). This will be the
location where the seller delivers the item(s) to the
S
S
purchaser, or if the seller ships the item(s), it will be the
OURCING OF
ERVICES
customer’s shipping address.
Destination-based sourcing rules will applies to all
retail sales of taxable services, as well as all sales of
If the shipping address is not known to the seller,
tangible personal property. This means that the sale of
then it is the sales tax rate in effect at the purchaser’s
a taxable service is sourced or taxed based on the
address as maintained by the seller in the normal course
location where the purchaser of the services makes first
of business. If the seller’s business records do not
use of those services. This will often be the same
contain an address for the buyer, then the seller should
location where services are performed.
source the sale to the address of the buyer shown on
the buyer’s payment instrument. If there is no address
A rural Jefferson County resident brings
on the payment instrument for the buyer, then the sale
his car to a mechanic in Topeka for
would be sourced to the seller’s location.
repairs. The car repairs are performed
at the mechanic’s shop in Topeka, and
A customer enters Joe’s Hardware in
the consumer picks the car up at the shop location.
Pittsburg, Kansas, makes a purchase and
The mechanic will collect the sales tax rate in effect in
takes possession of the item at the store.
Topeka on the repair charges. If the mechanic had
The combined rate of sales tax due is the
performed the repairs at the consumer’s residence, then
rate in effect at Pittsburg, Kansas (where the customer
he would collect the sales tax rate in effect at the
took delivery).
customer’s rural Jefferson County address.
A customer enters Joe’s Hardware in
The heating system goes out in a medical
Pittsburg, Kansas, buys an item and asks
office in Mound City and a repairman is
the retailer to deliver it to him in Columbus,
called to fix it. The repair charges will be
Kansas. Joe’s Hardware will charge the
sourced based on where the repairs were
combined state and local rate in effect at Columbus,
performed – the medical office’s location in Mound City.
Kansas (where the customer took delivery).
L
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T
P
P
G
/D
A
A
L
EASES OR
ENTALS OF
ANGIBLE
ERSONAL
ROPERTY
IFTS
ELIVERY TO
NOTHER
DDRESS OR
OCATION
For leases or rentals of tangible personal property
When the product is not received by the purchaser
(other than motor vehicles, trailers, semi-trailers, or
at the seller’s location and the purchaser has given the
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