Form Pub. Ks-1526 - Kansas Business Taxes For Motor Vehicle Transactions Page 29
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44written agreement entered into at the time of original purchase by
(6) When a vehicle is purchased to replace a vehicle that has
the purchaser and encumbrance holder, the transfer is not a sale
been stolen or destroyed by accident, fire, or other adversity, the
and shall not be taxed. However, any registration or subsequent
purchase of the replacement vehicle is not exempt and shall be
sale of the vehicle by the encumbrance holder shall be taxed.
taxed. Each purchase of a replacement vehicle shall be taxed
(7) When a lender grants a debtor permission to redeem a vehicle
whether the replacement vehicle is purchased by the owner of the
pursuant to K.S.A. 84-9-506, and amendments thereto, the
vehicle that was stolen or destroyed or by an insurance company
redemption of the vehicle by the debtor is not a sale and shall not
that is obligated to provide a replacement vehicle.
be taxed.
(7) A transfer of a vehicle from a corporation to an officer,
(8) When a lien holder acquires title to a vehicle through a court-
shareholder, board member, or employee shall be presumed to be
ordered foreclosure of a mechanic’s lien, landlord’s lien, storage
a taxable transfer and shall be presumed to be made in
lien, or other statutory lien, the transfer of title to the lien holder shall
consideration for services rendered to the corporation or for other
be exempt if the lien holder does not register the vehicle. However,
value passing between the corporation and transferee.
any registration or subsequent sale of the vehicle by the lien holder
(k)(1) Each transferee claiming an exemption shall complete an
shall be taxed. The redemption of a vehicle from a lien holder by a
affidavit form furnished by the department of revenue and file it with
debtor who satisfies the underlying debt is not a sale and shall not
the county treasurer when the vehicle is registered. The exemption
be taxed.
affidavit shall be completed in its entirety and shall contain the
(j) The following transfers shall be considered sales, and shall
names, addresses, and telephone numbers of the transferor and
be subject to sales tax.
transferee; the make, year, model and body style of the motor vehicle
(1) K.S.A. 79-3602(h)(2), and amendments thereto, allows a
or trailer; and any additional information that is needed to support
credit or discount for a vehicle that is traded for another vehicle.
the exemption claim. The affidavit shall contain facts in detail
When vehicles of different value are traded by private individuals,
sufficient to clearly bring the transferee within the exemption being
the person who pays cash or tenders some other consideration in
claimed.
addition to the vehicle being traded or exchanged shall pay sales
(2) Each transferee claiming a family relationship as the basis
tax on the amount of the cash payment or on the fair market value of
for the exemption of a vehicle sale or as the basis for the presumption
the consideration. In this trade, sales tax shall not be due from the
of a gift may be required to file an additional affidavit that establishes
person who traded or exchanged a vehicle but did not pay any
the relationship.
additional cash or provide any additional consideration. Each person
(3) Exemption affidavits that are not correct in both substance
claiming a sales tax credit or discount for a vehicle that is traded
and form shall not be accepted by the county treasurer, and shall
shall file an affidavit with the county treasurer on a form furnished
collect the tax shall be collected if any doubt exists as to the validity
by the department of revenue that contains information necessary
of the exemption claim.
to support the credit or discount being claimed.
(4) Any taxpayer may file a refund claim with the director of taxation
When the stated cash amount or stated value of the other
if the taxpayer believes the tax has been erroneously collected by
consideration is not indicative of, and bears no reasonable
the county treasurer or the director.
relationship to, the difference between the fair market value of the
(l)(1) When a motor vehicle or trailer is purchased out of state in
vehicle traded and the fair market value of the vehicle received by
an isolated or occasional sale, the purchaser shall pay Kansas
the purchaser, the tax shall be computed by the county treasurer or
state and local use tax to the county treasurer upon application for
the director of taxation on the difference between the fair market
a certificate of title or certificate of title and registration. When a
value of the vehicles or the difference between the average retail
motor vehicle or trailer is purchased from an out-of-state dealer
value of the vehicles as shown in the latest publication of the national
who is not registered to collect and remit Kansas state and local
automobile dealers’ association official used car guide book.
retailers’ use tax and has not collected sales tax on the sale for the
(2) The purchase of a vehicle that the purchaser intends to give
state of purchase, the purchaser shall pay Kansas state and local
to someone else shall be taxed, even though tax is not due on the
use tax to the county treasurer upon application for a certificate of
subsequent transfer from the purchaser to the donee.
title or certificate of title and registration.
(3) A transfer of a vehicle from a partner to the partnership or
(2) When the purchaser has paid state and local sales tax to
from a partnership to a partner shall be presumed to be a taxable
another state at a rate that is less than Kansas state and local use
transfer. A transfer from the partner to the partnership shall be
tax rates where the vehicle is registered, the purchaser shall pay
presumed to be made in consideration of an increased partnership
Kansas state and local use tax to the county treasurer at a rate that
interest. A transfer from the partner to the partnership shall be
is equal to the difference between the combined state and local tax
presumed to be made for services rendered to the partnership or
rates for the Kansas location and the combined state and local tax
for other value passing between the partner and the partnership.
rates that were used to determine the tax paid to the other state.
(4) If a donor gives a donee a gift of cash or other property for the
purpose of purchasing a vehicle, the donee shall be liable for the
tax, if the vehicle is purchased.
K.A.R. 92-19-30a Motor vehicles or trailers. Sales tax shall
(5) The transfer of a vehicle in exchange for the transferee’s
be imposed on the total selling price of each motor vehicle or
assumption of an obligation to pay all or part of an encumbrance
trailer to the ultimate user or consumer. The total selling price
on the vehicle is a sale and shall be taxed, unless the sale is
includes all tangible personal property mounted, installed, applied
between immediate family members or is exempt under K.S.A. 79-
or otherwise attached or affixed to the motor vehicle or trailer. For
3606, and amendments thereto. When the transfer does not involve
sales tax purposes, tangible personal property is not separable
a gift and is not otherwise exempt, the tax base shall be the sum of
from the motor vehicle or trailer to which it is mounted, installed,
any payment made by the buyer to the seller plus the amount of the
applied or otherwise attached or affixed. When calculating sales
encumbrance being assumed. Sales tax shall be computed as set
tax on the retail sale of a motor vehicle or trailer, the retailer shall
forth in subsection (d) of this regulation if this amount is not indicative
not exclude or deduct for the tangible personal property, regardless
of, or bears no reasonable relationship to the fair market value of
of how any contract, invoice or other evidence of the transaction is
the vehicle. When the transfer represents a gift of part of the value
stated or computed, and whether separately charged or
of the vehicle that has been established in accordance with
segregated on the same contract or invoice. Any charge attributed
paragraphs (i)(1) or (i)(2) of this regulation and is not otherwise
to the tangible personal property mounted, installed, applied or
exempt, the tax base shall be the sum of any payments made by
otherwise attached or affixed to a motor vehicle or trailer cannot
the buyer to the seller plus the amount of the encumbrance being
be separately billed or segregated on an invoice or contract in
assumed, regardless of the fair market value of the vehicle.
order to qualify for an isolated or occasional sale exemption.
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