Kansas, Schools and Sales Tax
- Feb 10, 2012 | Susan McLain
The Kansas Department of Revenue released a special 37-page publication to assist schools and educational institutions in understanding how the purchases they need to make are taxed. To qualify for any school or education exemptions from sales tax, the following definition is provided: “School means an institution offering education at grade levels kindergarten through twelfth grade (commonly referred to as K-12 education).” Out-of-state schools also qualify for Kansas purchase sales tax exemption.
The Department quotes the Kansas sales tax law 79-3606(c) that “…exempts most, but not all, purchases by a school or educational institution. To be exempt, the purchase [must] meet certain conditions. It must be:
- A direct purchase, and
- Used primarily for nonsectarian programs and activities sponsored by the school; or
- Used for the building, repair or enlargement of the school’s buildings; and
- Not used for housing projects (dormitories)."
There are two tests provided: the Direct Purchase and the Usage Test. As with most states, an exemption for a school, education or non-profit organization must be paid for with organization funds and the school “…must still provide each of its vendors with documentation indicating that the transaction is not taxable.” Most commonly, this is provided in the form of an exemption certificate.
Special rules apply to construction or sale of real property and tangible personal property. And schools have been required to file electronically since July 2010. In addition to these complexities, schools are required to comply with the compensating use tax when purchasing goods outside of Kansas State. To learn more, read the special publication here….
The publication clarifies that “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.”