Form Pub. Ks-1510 - Kansas Sales Tax And Compensating Use Tax (Page 17 of 42) in pdf

Retailers may offer discounts by issuing store

A store sells a sofabed to be delivered to

the customer living in another county. The

coupons that can only be redeemed in their business.

When a customer uses a store coupon, sales tax is

sales ticket for the sofabed would read as

applied to the discounted price.

follows:

A restaurant issues a coupon for $5.00

Cost of sofa ................................

$ 450.00

Delivery fee .................................

45.00

off any two meals. Sales tax is added after

Total ............................................

$ 495.00

the coupon is deducted from the price of

6.8% sales tax ............................

33.66

the two meals.

Customer payment .....................

$ 528.66

Cost of two meals ..........................

$20.00

NOTE: Freight and postage are taxable ONLY when included

Restaurant coupon ........................

- 5.00

as part of a total sale between the retailer and the customer.

Taxable receipt ...............................

$15.00

In the example above, if the customer contracted directly

7% sales tax ...................................

1.05

with a freight company to pick up and deliver the sofa, the

Customer payment .........................

$16.05

freight company’s fee is not taxable. In either case, the sale

would be sourced to the customer’s home address.

The value of manufacturer coupons or redemption

certificates for which a retailer is later reimbursed for

Exception: Delivery charges for Direct Mail only are

the value by wholesalers, manufacturers, or others is

not subject to sales tax when separately stated on the

taxable.

invoice. Direct mail means printed material delivered

or distributed by United States mail or other delivery

A grocery store accepts manufacturer’s

service to a mass audience or to addressees on a mailing

coupons. The value of the coupon is taxable

list provided by the purchaser or at the direction of the

because the seller is required to collect

purchaser when the cost of the items are not billed directly

sales tax on the “gross receipts received”.

to the recipients. Direct mail includes tangible personal

property supplied directly or indirectly by the purchaser

Cost of item ....................................

$ 1.89

to the direct mail seller for inclusion in the package

7% tax .............................................

.11

containing the printed material. It does not include

Total ................................................

$ 2.00

multiple items of printed material delivered to a single

Mfr. coupon .....................................

- .30

address.

Customer cost ................................

$ 1.70

ISCOUNTS

A grocery store accepts manufacturer’s

coupons, and they “double” them. The

Common discounts are sale prices – 20% Off and

value of the coupon is taxable; the value

Buy One, Get One Free offers. When a retailer discounts

of the store’s “doubling” is not taxable.

an item to the customer, sales tax is charged only on

the amount actually paid by the customer.

Cost of item ....................................

$ 1.89

Mfr. coupon (taxed) .........................

- .30

A grocery store offers a “buy one, get

Store doubled (not taxed) ..............

- .30

one free” sale on an item costing $2.59.

Sub total .........................................

$ 1.29

Tax is charged on $2.59 – the sale price

Tax computed on ............................

$ 1.59

paid for both items.

7% tax .............................................

.11

Selling price ...................................

$ 1.29

You may also offer your customers a discount for

Tax

...............................................

.11

paying an invoice within a stated number of days. When

Total cost to customer ...................

$ 1.40

a customer takes advantage of this type of discount,

the sales tax is based on the discounted payment

amount.

IPS

Tips are often a part of restaurant meals. When the

You offer a discount of “2/10, net 30” on

tip is at the customer’s discretion, it is not a part of the

an invoice of $150 plus tax. A customer

restaurant’s charge for the meal and is not taxable.

who pays the invoice within ten days will

However, if the tip is mandatory, such as a statement on

discount the price by 2%, or $3. Sales tax

the menu, “A 15% gratuity will be added on parties of 6

is due on the reduced price of $147.

or more,” the tip is subject to sales tax.

EBATES

, F

ELIVERY

REIGHT

AND

OSTAGE

As a general rule manufacturer’s coupons and

Charges to the customer for handling and delivery

manufacturer’s rebates are taxable. Sales tax is charged

are taxable. The sales tax is due whether the charge is

on the price of the merchandise before a rebate is

included in the sales price, stated separately, or billed

applied, whether applied to the invoice at the time of

separately. See the Exception that follows.

the purchase or sent to the customer after the sale.

Form Pub. Ks-1510 - Kansas Sales Tax And Compensating Use Tax Page 17

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