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The State of Exemption Certificates in Kansas

  • Feb 13, 2013 | Gail Cole

 Public Schools Are Exempt Organizations in Kansas.

Tax requirements change, and staying on top of changes can be challenging. To help businesses keep current on the ins and outs of exemption certificates, the Kansas Department of Revenue has released a revised version of "Exemption Certificates." If you do business in Kansas, it's worth a read. Better have a cup of coffee close at hand.

The Cardinal Rule

The booklet begins with "The Cardinal Rule:"

"All retail sales of goods and enumerated taxable services are considered taxable unless specifically exempt."

This is adjoined with the reminder that "Kansas retailers are responsible for collecting the full amount of sales tax due on each sale to the final user or consumer."

Any and all sales must have proof of sales tax collected and remitted or "be accompanied by a Kansas exemption certificate or Form PR-78SSTA."

An exemption certificate is a document that a buyer presents to a retailer when the buyer is exempt from paying sales and use tax on a sale. It explains the reason for the exemption. Buyers are required to give completed exemption certificates to sellers, and sellers are required to keep them on record.

Resale Exemption Certificate Requirements

  • Items purchased must be for resale in the usual course of the buyer's business;
  • Buyer must have a Kansas sales tax account number (except in drop shipment situations).

Exempt Organizations

Some entities, such as government agencies, public schools, and nonprofit organizations, are simply exempt from paying sales and use tax on goods and services. These tax-exempt entities have their own special certificate.

Exempt Items

Some items are exempt from sales tax. These include, but are not limited to:

  • Drugs and pharmaceuticals sold to veterinarians.
  • Farm machinery and equipment;
  • Integrated production machinery and equipment; and
  • Medical supplies and equipment purchased by nonprofit nursing homes.

Exemption Certificates

There are many different exemption certificates, including, but not limited to:

  • Multi-Jurisdiction Exemption Certificate (ST-28M): for wholesalers and buyers from other states who are not registered in Kansas.
  • Blanket Exemption Certificate: use when you have a "recurring business relationship" with a seller.
  • Tax Exempt Entity Exemption Certificate.

Businesses must be sure to complete the proper exemption certificate.

The updated Kansas Exemption Certification booklet is substantial. Read it, or let someone manage your exemption certificates for you.

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Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.