Form Pub. Ks-1560 - Kansas Business Taxes For Schools & Educational Institutions Page 11
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37entertainment facility are also taxable. Activity fees that
However, if the teachers and others raising the funds
are assessed to each student upon enrollment for which
are also spending them, the items purchased with these
the student does not receive any specific material benefit
funds are going to be subject to sales tax. To avoid
are not taxed.
sales tax, most individuals and organizations raising
money for a school will donate the funds raised to the
A university has a fitness center and
exempt entity (school or PTA) to purchase the equipment
access is included in the general activity
–such as computers. This practice allows the school to
fee paid by students as part of their tuition
claim exemption from sales tax that the organization or
and is not separately stated. Use of the
teacher does not have.
center is free to faculty and staff showing a university
ID. It is also open to the public upon payment of a usage
ADMISSIONS and TICKET SALES
fee. The university will charge sales tax on fees charged
to the public. The student’s fee is not taxable because
it is not separately stated and there is no sales tax to
The retail sale of an admission to any place that
faculty and staff since there is no admission sold.
provides amusement, entertainment or recreation is
generally subject to sales tax in Kansas. (The
admissions that have been granted an exemption by
ACTIVITY FUNDS
the legislature are listed in Pub. KS-1510; they do not
usually have a school application.)
Many schools use an activity or a building fund to
pay for purchases used by the school, school club or
Kansas schools, educational institutions, booster
organization. If the activity fund is a fund of the public
clubs, PTAs and PTOs must collect sales tax when selling
school and the transaction is a direct purchase by the
admissions or tickets to concerts, dances, dinners, fun
school (or its PTA - see PTA/PTO on page 15), then
nights, plays and sporting events. A PTA/PTO is only
purchases made with activity fund monies are exempt.
exempt from collecting sales tax on articles of tangible
personal property.
The high school drama club collects
money from students for a theater trip and
Ticket Sales
pizza party. The money is deposited into
the school’s activity fund and the school
The sale of tickets that can be exchanged for food
writes checks to the theater and pizza restaurant. These
or beverages at a fun night, or allow the holder to play
purchases with activity fund monies are exempt from
carnival games, participate in a cakewalk, to use a
sales tax as a direct purchase by the school.
moonwalk are taxable. Tickets that can be exchanged
for prizes, awards, etc. are also taxable. Meal tickets at
However, if your school merely organizes a trip to an
school cafeterias are discussed herein.
art museum, amusement part, skating rink, etc. and
students pay their own way, the students will pay sales
An elementary school is having a chili
tax on their admission and food purchases.
supper and fun night. Tickets for the
supper are $4 in advance and $5 at the
CAUTION: Whether the school is reimbursed
door. Additional tickets can also be
or not, a direct purchase of goods or services
purchased for 50 cents each that allow the holder to
by the school for school purposes is an exempt
play games. All tickets sold are subject to sales tax.
purchase - the school is the final consumer. This is in
contrast to the retail sale of goods or services by a
Collecting Tax on Admissions and Tickets
school; the school must charge tax to its final consumers
– its students or the general public.
The sale of admissions or tickets is one of several
types of retail sales where the sales tax is included in
Your school is selling T-shirts to promote
the price rather than added separately. However, just
school spirit. Orders are taken from
because the tax is included in the price does not mean
students, parents, etc., and the T-shirts
that the tax is borne by the school. Sales tax is to be
are purchased with school funds (without
paid by the consumer. When sales tax is included in
tax). The school must charge sales tax on the shirts.
the price charged, make sure you factor in the tax
However, if the shirts are sold by the PTA, the sale is
amount so that you are sure of recovering costs.
not subject to sales tax.
The tax rate in your area is 7.9%. In order
Building Funds
to make a profit on a fund-raising activity
you need to charge at least $9 per person.
Some schools have a building fund into which are
Since the tax on $9 is 71 cents, consider
deposited the proceeds of fund raising sales by
charging $10 for the ticket so your profit margin is not
students, teachers, and other building sponsors. If funds
decreased by the sales tax due and payable by your
raised are expended by the school or its PTA/PTO
customers.
directly, purchases with the funds would not be taxed.
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