Form Pub. Ks-1560 - Kansas Business Taxes For Schools & Educational Institutions Page 6
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37Schools are responsible for paying the sales tax on
A direct purchase may also be in the form of a rental
items that are not direct purchases or do not meet the
or lease of property. For example, instead of buying a
taxable usage test. This includes taxable items or
copier or fax machine, the school decides to lease it. If
services purchased by an employee with the exempt
the lease agreement is between the school and the
entity’s credit card.
business machine company and payment of each lease
payment is with school funds, the transaction is exempt.
NOTE: The exemptions discussed here apply only within the state
of Kansas. When traveling and making purchases in another state,
that state’s law(s) will apply. Furthermore, an exemption from sales
Direct purchases also do not include project materials
tax does not automatically translate to an exemption from other
or subcontractor services furnished by a contractor.
taxes that are due on a transaction, such as transient guest tax or
Only the labor of the general contractor is exempt as a
tire excise tax. See Other Kansas Taxes, herein.
direct purchase. See the Construction, Remodel or
Repair Projects, herein.
CLAIMING YOUR EXEMPTION
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REDIT
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Although exempt by law on most purchases, a school,
educational institution or Kansas school district must
Some schools issue credit cards to their teachers
still provide each of its vendors with documentation
and other employees. Although the credit card may have
indicating that the transaction is not taxable. This
the authorized employee’s name on it, purchases are
documentation is a specific exemption certificate issued
billed by the credit card company directly to the school
to each educational institution by KDOR, a sample of
and are paid for with school funds. These purchases
which can be found in the Exemption Certificates section
are therefore exempt from sales tax as a direct purchase.
of this publication. An educational institution should
photocopy its Tax-Exempt Entity Exemption Certificate
A professor travels to another Kansas city
and furnish it to the seller as its legal authority as to
on official business, and pays for lodging,
why the Kansas sales tax is not due.
gas, and meals with a credit card issued
by a college. Charges to this card are
Contained in the certificate is the statutory authority,
exempt from sales tax as a direct purchase because
for your exemption, K.S.A. 79-3606(c). Each Kansas
they are billed directly to the college, and paid for with
school district has been issued an entity specific
college funds.
exemption certificate – similar to those issued to
educational institutions, a sample of which can be found
Usage Test
in the Exemption Certificates section of this publication.
Furthermore, KDOR has issued exemption certificates
Most direct purchases by a school or educational
to each Parent-Teacher Association (PTA) located in
institution will be exempt because they will be used
the state of Kansas, a sample of which is located in this
primarily for nonsectarian programs and activities
publication.
provided or sponsored by the school, OR for school
buildings (except dormitories and the like). A school
IMPORTANT: Neither of the certificates
must pay sales tax on its direct purchases that are not
described above may be used to claim
for general school programs or activities. Taxable
exemption on the materials furnished by a contractor
purchases include:
or the labor and materials furnished by a subcontractor
on a real property contact. See Construction, Remodel
• An appliance or other equipment for use in the
and Repair Projects on the next page.
school by a faculty member, student or outside
organization.
If you make repeated exempt purchases of the same
• Faculty fund purchases (such as pop for the
type from the same vendor, it is not necessary to furnish
faculty lounge).
an exemption certificate for each transaction. You may
instead use one exemption certificate to cover future
• Hotel/motel rooms and restaurant meals - unless
exempt purchases.
purchased directly by the school. See Direct
Purchase on page 5.
CAUTION: You must segregate the purchases
• Building materials, furniture and fixtures for
that are taxable from those that are exempt.
dormitories, residence halls, etc.
You agree to do this when you sign an
exemption certificate. All of the exemption certificates
A college’s maintenance department buys
have this statement above the buyer’s signature:
building materials and electrical supplies
using a university-issued credit card. A
“The undersigned purchaser understands and agrees
portion of these materials are later
that if the property or services are used other than as
incorporated into a residence hall. These materials are
stated above or for any other purpose that is not exempt
taxable, and the school must accrue and pay sales tax
from sales or compensating tax, the undersigned
on their cost.
purchaser becomes liable for the tax.”
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