Form Pub. Ks-1540 - Kansas Business Taxes For Hotels Motels & Restaurants Page 5
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42• Nonprofit 501(c)(3) religious organizations
A Shawnee County, KS employee travels
to another city in Kansas on official
• Nonprofit 501(c)(3) zoos
business and pays his hotel bill with a
• Rural volunteer fire departments
county-issued credit card. No sales tax is
due on the bill as this purchase is exempt as a direct
Direct Purchase Exceptions
purchase by Shawnee County. This is because the
credit card charge is billed directly to the county and
Direct purchases (rentals) of sleeping rooms by
the credit card bill is paid for with Shawnee County funds.
hotels and accommodation brokers to the federal
government and its agencies and instrumentalities are
Contrast to:
exempt from sales tax. Moreover, “indirect” rentals of
sleeping rooms to officers and employees of the federal
This same employee travels to Hays, KS
government (and its agencies and instrumentalities) are
on official business and pays the hotel bill
also exempt from sales tax when the room rental is made
with a personal credit card. The employee
in association with the performance of official federal
is later reimbursed this expense by
government duties, regardless of method of payment.
Shawnee County. The employee pays all applicable
taxes on the hotel bill because it is not a direct purchase
The sales tax exemption for rural volunteer fire
between Shawnee County and the hotel.
departments exempts both direct and on behalf of
(indirect) purchases. Thus, agents of rural volunteer
Exemption Certificates
fire departments may purchase exempt from sales tax
when the rental of the room is used exclusively in the
Hotels must follow the basic rule of sales tax for all
performance of its (the rural volunteer fire department’s)
retailers — either collect sales tax on the rental of
duties and functions, regardless of method of payment.
sleeping rooms or obtain a completed exemption
certificate from your customer. All sales tax exempt
CAUTION: The exemption for state agencies
purchases (and rentals) by the tax exempt entities cited
and political subdivisions is not applicable to
above should be accompanied by the appropriate
other states, or their cities and counties. Only
exemption certificate. Hotels should retain a copy of all
Kansas cities and counties are exempt from paying
completed exemption certificates for at least 3 years
Kansas sales and use taxes on their direct
after the date of the sale.
purchases.Otherwise, if an exemption has been
granted to an entity, such as a church, that exemption
For exempt entity sales tax exemption claims, hotels
would apply whether the church was located in-state or
may require that payment be made on the exempt
out-of-state.
entity's check, warrant or voucher or charged to the
entity's account as a condition for honoring the entity's
Sales to Exempt Entities Not Based in Kansas
exemption claim.
Many of the exemptions granted under K.S.A.
General information about exemption certificates as
79-3606 also apply to non-Kansas organizations. While
well as the certificates most often used by the hotel and
a Kansas-based organization must provide its numbered
restaurant industries are included in this publication
certificate (or form PR-78SSTA with a KDOR-issued ID#)
beginning on page 28. All blank exemption certificates
to make an exempt purchase of goods or taxable
currently available for use are in our Pub. KS-1520,
services in Kansas, many non-Kansas exempt
Kansas Exemption Certificates.
organizations will not have been issued an Exempt Entity
ID#. While encouraged to obtain (apply online) the
LAUNDRY SERVICES
Exempt Entity ID#, a non-Kansas exempt entity (such as
a school located in another state) making a direct
purchase in Kansas will simply need to complete an
Taxable labor services in Kansas include servicing,
exemption certificate for the retailer. The Designated or
altering or maintaining tangible personal property, such
Generic Exemption Certificate (ST-28), has been
as clothing and shoes. Laundry services and dry
designed for this purpose. May also use form PR-78SSTA.
cleaning are subject to sales tax. Sales tax is also due
on any fees charged for washing, drying, pressing,
Credit Cards
folding, dry cleaning, mending and/or altering clothing
for others. The rate of sales tax due is the rate in effect
Many governmental agencies are issuing credit cards
where the customer takes delivery of the laundry/dry
to their employees who travel or make purchases while
cleaning services.
on official business or on behalf of the agency. When
the agency is responsible for payment of credit card
Exception for Coin Operated Laundry
charges, purchases made by employees with said credit
card are exempt from Kansas sales or use tax. When
Kansas sales tax (or the Dry Cleaning Environmental
someone other than the exempt entity is responsible
Surcharge discussed below) is not due on coin operated
for payment of credit card charges, the purchase is not
laundry services - washers, dryers, irons. [K.S.A. 79-
exempt from sales tax.
3603(f)]
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