Kansas State Sales Tax

Obtaining a sales tax exemption number?

Submit a request to the Department of Revenue using their On-line Business Center (see below). You may also apply by submitting a written request describing the organization, whether it is organized as a nonprofit 501 (c)(3), its purpose, contact name, address, and phone number. Mail the letter to the Office of Policy and Research, Docking State Office Bldg - 2nd floor, 915 SW Harrison, Topeka KS 66612.

On-Line Business Center: The Department of Revenue has developed an Internet application that provides a convenient way to report name and address changes, to cancel a certificate, to print copies of your existing certificate, or to apply for a new certificate.

Access to the Tax-Exempt Entity Exemption Certificate application is available through the On-Line Business Center at the department's website, www.ksrevenue.org. On the home page, under "Business Tax" is a link to the On-Line Business Center. Click on the link to access your account. If you have not used the On-Line Business Center before, you will need to register and create an account. Once the account is created, you will click on "Certificates" to perform the functions mentioned.

Avoiding sales tax on building projects

If you are contracting for the repair, remodeling or construction of church property, you must obtain a Project Exemption Certificate from the Kansas Department of Revenue so that the contractor, subcontractor or repairman (carpenter, electrician, plumber, etc.) may purchase materials for the project on a sales-tax exempt basis. The new sales tax-exempt numbers being issued to churches are not valid for purchases made by contractors. To apply for a project exemption, submit Form PR-76, Request for Project Exemption. If you do not obtain a project exemption certificate, only the contractor's labor will be exempt from sales tax. Any materials the contractor purchases will be subject to sales tax and the contractor will pass that expense on to the church.

Applications for project exemption certificates are available through the Kansas Department of Revenue.

Collecting and remitting sales tax

You may be surprised know that your church is required to collect and remit sales tax on fundraising activities if you have more than six per year. According to the Kansas Department of Revenue publication "Kansas Sales Tax and Compensating Use Tax" (publication KS-1510), sales tax is to be collected on:

  1. The sale, rental or lease of tangible personal property (food, clothing, furniture, books, etc.)
  2. Charges for labor to install, apply, service or maintain tangible personal property.
  3. The sale of admissions to places of amusement, entertainment, or recreation.

A church can have up to six (6) one-day fundraising events during a 12-month period. The guidelines can be found in the Kansas Sales Tax and Compensating Use Tax guide, Publication KS-1510 (Rev. 3/08). The sale must meet the requirements of a "de minimis" fund-raising outlined below.

  1. All proceeds derived from the fund-raising event shall be used by the nonprofit entity to further its exempt purpose.
  2. The fund-raising event shall not be in direct competition with a for-profit business (in the same area or at the same event).
  3. The fund-raising event shall not take place at a retail business's premises during regular business hours.
  4. Sales at the fund-raising event shall be made by members of the nonprofit entity and not be a retailer or other for-profit business.
  5. A religious organization may purchase goods without sales tax intended for resale at a de minimis fund-raising event. A non-profit entity shall not be required to accrue sales tax on items that are donated for sale at its fund-raising event.
  6. The gross receipts from sales at the nonprofit entity's de minimis fund-raising events during any prior calendar year shall not exceed $25,000. IF the gross receipts exceed $25,000 in any calendar year, the nonprofit entity shall register as a retailer and collect sales tax on ALL future sales.
  7. Each nonprofit entity shall be limited to not more than six fund-raising events of not more than a day's duration, during any 12-month period.

The examples below help to illustrate the sales tax requirements:

The Good Shepherd church holds several fundraisers during the year. Their first fundraiser is a one-day spring craft bazaar at which they sell crafts and baked goods donated by the church members. They also sell potted plants they have purchased at a discount. Because this is their first of the six allowed fundraisers of the year, they are not required to collect and remit sales tax.

In the summer, the youth group holds a soup supper to raise money for their mission trip. They do not sell tickets, but instead ask for a free-will donation. Because there is no charge, they are not required to collect and remit sales tax.

In the fall, the church holds a garage sale to dispose of tables, chairs, kitchen dishes, and other items they no longer use in the church. Because these items were purchased by the church for their own use and not with the intent of selling them, the church is not required to collect and remit sales tax.

In the winter, the adult Sunday school classes decide to put on a dinner show. They sell tickets for $30. As the second of six allowed fundraisers, they are not required to collect and remit sales tax on the value of the dinner show ticket.

The church offers a light meal every Wednesday before the activities of the evening. They charge a small fee to cover the cost of the food. These meals are subject to the sales tax rules.

For additional information see the Kansas Sales Tax and Compensating Use Tax guide. This guide defines what is taxable, what is exempt, and how to collect, report, and pay your sales and use tax. It also includes sample completed returns, blank forms and other information.

If you have questions regarding the sales tax rules, please contact the Kansas Department of Revenue at 785-368-8222. You may also obtain information via their website at: www.ksrevenue.org.