Form Pub. Ks-1510 - Kansas Sales Tax And Compensating Use Tax Page 15
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42aircraft that do not qualify as “transportation equipment”
residential and agricultural use is exempt from both
– see next column) in which periodic payments are
state and local sales tax.
made, the first lease payment is sourced under the
general “destination-based” sourcing rules, as
T
S
R
ELECOMMUNICATIONS
OURCING
ULES
described above. The payments after the first payment
are sourced to the primary property location. For leases
Telecommunications service has its own sourcing
with only one payment, the sale is sourced under the
rules. These rules are consistent with the federal Mobile
general destination-based rules.
Telecommunications Sourcing Act, adopted in Kansas
in 2002. This means that telecommunications sales are
A consumer enters an equipment rental
generally sourced to the customer’s billing address.
business and rents a lawn mower for a
day, picking up the mower at the business
Exceptions to the General “Destination-Based”
and paying for the mower at that time. The
Sourcing Rules:
rental is sourced to the business premises, and the local
sales tax in effect at that location applies.
– Sales of watercraft, mobile homes, modular
homes, manufactured homes, motor vehicles,
A consumer rents a tent for an outdoor
trailers, semitrailers or aircraft (NOT qualifying as
party in the consumer’s back yard. The
“transportation equipment” as defined on this page)
equipment rental business delivers the
are sourced to the retailer’s business location.
tent to the consumer. The rental is
sourced to the consumer’s location, and the local sales
A Bird City, KS resident buys a car from
tax in effect at that location applies.
an Atwood, KS dealer. The sales tax is
computed on the 8.05% tax rate in effect
A Cottonwood Falls resident enters into a
at the retailer ’s business location –
one-year lease as lessee of computer
Atwood. Additionally, the Bird City resident will pay the
equipment with rental payments due
0.25% difference between the Atwood rate and the
monthly. The lessor’s business location
8.30% Bird City rate, to the Cheyenne County Treasurer
is in Hutchinson. The consumer picks up the computer
at the time of vehicle registration.
equipment from the lessor’s business in Hutchinson.
This equipment will be located at the consumer’s
– Leases or rentals of motor vehicles, trailers, semi-
residence in Cottonwood Falls during the term of the
trailers, or aircraft (not qualifying as “transportation
lease. Because the lessee first took possession of the
equipment” as defined on this page) when recurring
computer equipment at the lessor’s business premises
periodic payments are:
(Hutchinson), the first lease payment is subject to the
a) involved, those payments are sourced to the
sales tax rate in effect at Hutchinson. However,
primary property location, which is the address
subsequent lease payments will be sourced to the
for the property provided by the lessee that is
consumer’s location of Cottonwood Falls. Note: If the
available to the lessor from the lessor’s business
lessor shipped the computer equipment to the
records. This should be the registered address
consumer’s location, the first lease payment (as well as
for the vehicle. Intermittent use of the property
the subsequent lease payments) would have been
at different locations will not alter the primary
sourced to the consumer’s location in Cottonwood Falls.
property location.
b) not involved, the lease or rental payment is
S
T
E
OURCING FOR
RANSPORTATION
QUIPMENT
sourced according to the general “destination-
based” sourcing rules.
In general, transportation equipment means
equipment used to carry persons or property in
An Emporia resident, the lessee, leases a
interstate commerce, such as aircraft (including
car from a Wichita car dealer, the lessor,
containers attached thereto), buses, trucks, railcars and
for a term of 3 years, with monthly lease
railroad locomotives. The general destination-based
payments due. The payments are sourced
sourcing rules apply to the retail sale, lease or rental of
to the primary property location, which is the address
“transportation equipment.”
that the lessee furnishes to the lessor as the location of
the vehicle (should be same where the vehicle is
S
E
, G
, W
H
OURCING FOR
LECTRICITY
AS
ATER OR
EAT
registered, the consumer’s Emporia address). The local
sales tax in effect at the primary property location of the
The utilities of electricity, gas, water and heat have
leased vehicle, Emporia, applies to each of the lease
always been taxed at the local (and state) rate in effect
payments. The lessor will collect and remit the state and
at the customer’s location. Under the sourcing rules
local sales tax in effect at Emporia on the lease payments.
that went into effect in 2003, this will not change – these
If, during the term of the lease, the lessee moves to
utilities will continue to be taxed based on the customer’s
Newton and registers the vehicle there, the payments
location. Residential and agricultural use of the utilities
(except water) will continue to be subject only to local
due after the move will be sourced to Newton and the
tax - the state sales tax of 6.3% does not apply to utilities
lessor will collect and remit the state and local sales tax
in effect in Newton on the payments.
used for a residential or agricultural purpose. Water for
15
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