Private Letter Ruling

Ruling Number:P-2000-044
Tax Type:Kansas Retailers' Sales Tax
Brief Description:Property stored in the State as inventory.
Approval Date:09/22/2000

Office of Policy & Research

September 22, 2000


Re: Kansas Sales Tax


Your correspondence of May 26, 2000 has been referred to me for response. Thank you for your inquiry. Please accept my apologies for the delay in responding.

The information and inquires set forth in your letter are as follows:
Your offices in Olathe and Wichita, Kansas give you nexus with the state of Kansas. As a result, you are required to collect and remit the applicable state and local sales and/or use tax due on a given transaction.

In our opinion, based on the facts you present, when you ship material to your Lenexa customer’s premises you are not shipping the material there for storage, as that term is understood for use tax purposes. Instead, you ship the material there to be held as an inventory for resale. As a result, we believe the material originally shipped to your Lenexa customer’s premises is not subject to use tax.

When your Lenexa customer pulls an item from inventory, a retail sale has occurred. At that time you should collect both state and local sales tax from your customer and remit the tax to the state of Kansas. If you ship replacement items to the Lenexa customer’s premises these items will also be considered inventory held for resale and will not be subject to sales or use tax.

When the customer no longer wants you to store your inventory in his warehouse and the balance of the inventory is returned to your Kansas City, Missouri office there will be no tax incident.

This private letter ruling is based solely on the facts provided in your request. If it is determined that undisclosed facts were material or necessary to make an accurate determination by the department, this ruling is null and void. This private letter ruling will be revoked in the future by operation of law without further department action if there is a change in the statutes, administrative regulations, or case law, or a published revenue ruling, that materially affects this private letter ruling.

I trust this information is of assistance. If I can be of further service, please feel free to contact me.


Jim Weisgerber
Tax Specialist


Date Composed: 09/22/2000 Date Modified: 10/11/2001