Downloaded prewritten software that is delivered physically or digital to consumers in Kansas is generally subject to Kansas sales tax. But when it comes to video gaming products, some sales transactions are taxable and some are exempt.
This subject was recently addressed a private letter ruling issued by the Kansas Department of Revenue. A summary of the department's responses follows:
- Remote access software/virtual goods
- The initial sale of the access codes is not taxable whether sold in a physical retail environment and/or via the internet.
- Downloadable digital content
- The initial sale of the access codes of prewritten software is taxable whether sold in a physical retail environment and/or via the internet.
- Subscription cards
- The initial sale of the subscription cards whether sold in a physical retail environment and/or via the internet is not taxable.
- Point cards
- The initial sale of the point cards whether sold in a physical retail environment and/or via the internet is not taxable.
- Notional dollar value cards
- The initial sale of the notional dollar value cards is not taxable.
Additional details are available in Private Letter Ruling P-2015-001.
The application of sales tax to digital goods and services varies widely from state to state. Automated sales tax Software-as-a-Service helps businesses tax what needs to be taxed, at the proper rate. Learn how it works.
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.
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.