Form Pub. Ks-1550 - Kansas Business Taxes For The Agrcultural Industry Page 3
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32SALES TAX STRUCTURE
INTRODUCTION TO
KANSAS SALES TAX
The Kansas sales tax rate is a combination of the
state rate of 6.3% (since July 1, 2010), plus any local
sales tax imposed by a city and/or county. Local sales
This publication is designed to provide farmers,
(and use) tax rates vary by locality (jurisdiction), and
ranchers and others in agribusiness with the information
may change quarterly. The law requires that these local
and background you will need to determine which of
taxes be administered by KDOR (Kansas Department
your purchases are subject to sales or use tax, which
of Revenue). Local sales tax generally applies whenever
are exempt and how to properly claim the exemptions.
the state sales tax applies. Exception: Utilities (except
Throughout this publication we will cite or refer to the
water) used for agricultural or residential purposes are
statute (K.S.A.) or regulation (K.A.R.) applicable to that
subject to local tax only – see page 15.
section. The laws and regulations on which the
information is based are listed on page 24.
The combined tax rate collected on a retail sale of
goods or taxable services is the rate in effect where the
customer takes delivery of the merchandise or first
WHAT SALES ARE TAXABLE?
makes use of the taxable service. This is called
destination based sourcing. On over-the-counter sales,
Before we can begin any discussion of what is exempt
it will generally be the rate of tax at the location of the
from Kansas sales tax, we must first identify the
retailer; on delivered sales, it will be the rate of tax at
transactions that are taxable in Kansas. Kansas sales
the customer’s (or customer’s designee) location
tax applies to three general types of transactions.
(ship-to address). For taxable labor services, it will be
the rate in effect at the job site where the labor services
• The retail sale, rental or lease of tangible
are performed.
personal property;
• The fees for labor services to install, apply,
To assist retailers in collecting the correct sales tax
repair, service, alter or maintain tangible
rate for the destination or source of the sale, KDOR
personal property; and
publishes a complete list of state and local tax
• The sale of admissions to places providing
jurisdictions and rates. Pub. KS-1700, Sales and Use
amusement, entertainment or recreation.
Tax Jurisdiction Code Booklet, and its quarterly updates
are available on our web site.
A retail sale is a sale to the final consumer or user.
Tangible personal property is any item to which you can
RETAILER AND CONSUMER RESPONSIBILITIES
attach a monetary value, has a physical presence and
can be moved. Tangible personal property is different
from intangible property (stocks and bonds) or real
Kansas retailers are required by law to collect the
property (land and buildings). Examples of tangible
full amount of sales tax due on each sale to the final
personal property used by the agricultural industry
user or consumer, and remit it on a regular basis to
include: ATVs, combines, fencing, grain, hand tools,
KDOR. When added to the purchase price of taxable
livestock, pipe, seed, tractors and trucks. Some of these
goods or services, the sales tax is a debt from the
items qualify for exemption from sales tax when
consumer to the retailer. As such, the sales tax is
purchased by a farmer or rancher, others do not.
recoverable by the retailer from the customer in the
same manner as any other debt.
The labor services that are taxable in Kansas are
only those services enumerated in the law and listed
Kansas consumers are likewise obligated to pay
above. Examples of taxable services used by the
the full amount of sales or use tax due on all taxable
agricultural industry are irrigation system installation,
purchases. If the purchase is from a Kansas retailer,
machine and truck repair, welding, and well drilling. As
the Kansas Retailers’ Sales tax must be paid to the
with the purchase of tangible personal property, some
retailer. When tangible personal property is purchased
of these services are exempt when purchased by
from a retailer in another state, a Kansas Compensating
agribusiness, others are not.
Use Tax may be due (see page 21).
Examples of admissions subject to tax include movie
For every sale of merchandise or taxable services,
tickets and admissions to a fair or trade show.
a Kansas retailer must either collect the total amount of
sales tax due or obtain documentation as to why a
Farmers and ranchers who make retail sales of
particular sale is exempt. A consumer who is entitled to
products or taxable services also must register to collect
an exemption from sales or use tax is obligated to
sales tax from their customers. For detailed information
provide this documentation and should not demand that
about sales and use tax, obtain a copy of our Pub.
a retailer exempt a sale without it. Information on how to
KS-1510, Kansas Sales and Compensating Use Tax, from
properly claim the sales and use tax exemptions
our web site.
discussed in this guide begins on page 18.
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