Form Pub. Ks-1560 - Kansas Business Taxes For Schools & Educational Institutions Page 23
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37clearly stated to the public as sales tax and there must
generally determined or sourced according to where
be a separate line on the invoice, receipt, etc. for the
the buyer takes delivery of the goods or taxable service
sales tax.
provided. This is known as destination-based sourcing.
For Kansas retailers this means that while over-the
If the tax is included in the price, it must be clearly
counter sales remain subject to the state and local sales
stated to the public that the price includes all applicable
tax in effect at the retailer’s location, shipped or delivered
sales taxes. This method is often used by contractors
sales of goods or taxable services are now taxed at the
and when it is not practical or convenient to add the tax
state and local rate in effect at the customer’s Kansas
at the point of sale, such as vending machine sales
delivery address.
and the sale of admission tickets and concessions.
IMPORTANT: Retailers who ship or deliver sold
CAUTION: When sales tax is included in the
items to their customers’ locations are therefore
retail price of an item, service or admission,
required to collect the state and local sales tax rate
you must factor out the tax from the total
in effect at the customer ’s Kansas location
proceeds before reporting Gross Sales on your sales
(destination). Retailers providing taxable services are
tax return. Failure to do so will cause you to be paying
required to collect the local tax in effect where the
tax on tax. To calculate the sales amount without the
services are performed.
sales tax, divide the total by “1” plus the combined state
and local sales tax rate due on that sale.
Your school is located in Dodge City and
is selling commemorative T-Shirts. On
The Sales Tax Base
sales made at your school and throughout
Dodge City, you will collect the combined
The sales amount to which sales (or compensating
state and local rate in effect for Dodge City. You will
use) tax is added is called the sales tax base. The law
collect the Ford County rate on shirts mailed or delivered
uses the term gross receipts.
to customers outside Dodge City but still in Ford County,
and on T-shirts mailed to customers in other Kansas
G
—Total selling price or the amount
ROSS RECEIPTS
cities or counties, you will collect the combined state
received in money, credits, property or other
and local rate in effect for that customer’s address.
consideration valued in money.
In order to accurately determine the correct local tax
S
—Total cost to the consumer, excluding
ELLING PRICE
jurisdiction for a Kansas sale, retailers should consult
discounts allowed and credited, but including freight
Notice 2003-04, Destination-Based Sourcing Rules,
and transportation charges from retailer to
then use the Jurisdiction Code Booklet, Pub.
consumer. Selling price includes the cost of the
KS-1700, to determine the correct combined state and
property, materials, labor, or service used or
local tax rate for that customer’s tax jurisdiction. This
expended, losses, overhead, and profit.
notice and publication, along with an electronic sales
tax look-up program are available on our web site.
IMPORTANT: If the price of the item is not
established (i.e., donation of any kind
accepted) sales tax is not due. But if the suggested
Out-of-State Sales
donation amount is advertised and expected, the sales
tax base for the taxable sale has been established at
Sales of property shipped or delivered to a customer
the suggested donation amount.
in another state by are not subject to Kansas sales tax.
Only Kansas customers must pay Kansas sales tax.
The cheerleaders are holding a car wash
However, customers in other states may owe a use tax
to raise money for uniforms. The car wash
to the state where the item is used or consumed. In the
is free with a suggested donation of $5
example above, T-shirts shipped or delivered to
per car. Amounts collected at the car wash
residents of other states would not be subject to Kansas
are taxable. The total collected would include the state
sales tax.
and local sales tax where the car wash is provided and
be factored out before reporting the sale in your sales
RECORDKEEPING
tax filing.
A complete discussion of the application of sales tax
It is most important to keep neat, thorough, and
to the various aspects of a sale is in our Pub. KS-1510,
adequate records of the school’s sales and receipts.
Kansas Sales and Compensating Use Tax. This
Keeping good records will enable you to:
publication is available on our web site.
• accurately complete your sales and use tax
Collecting Local Sales Tax
filings,
• determine the overall profitability of events and
The rate of local sales tax that is added to the state
tax on a retail sale of goods or taxable services is
fund-raising activities, and
23
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