SALES TAX for PET BOARDING and GROOMING
Pet Boarding - NOT TAXABLE
Pet Grooming - TAXABLE
Kansas sales tax applies apples to the retail sale of tangible personal property, (goods and merchandise) and the service of maintaining tangible personal property. Pets are tangible personal property. Therefore, the service of pet grooming is subject to sales tax. If your shop also sells items of tangible personal property to your customers, you must register to collect sales tax on these items. As the final customer you must also pay sales or use tax on all equipment and fixtures for your shop.
The rental or sale or real property is not subject to sales tax. The space provided for pet boarding is real property. Therefore, pet boarding is not subject to sales tax.
COMMONLY ASKED QUESTIONS
What is meant by the "retail sale of tangible personal property?"
Any merchandise (tangible personal property) sold to the final consumer (your customers) is a retail sale. Charge sales tax when selling these and similar items to your customers: animals, brushes, cages, collars, combs, flea & tick sprays, leashs litter, pet food/treats, scissors, shampoos, and toys.
What do you mean by a taxable service?
Taxable services in Kansas are the services of installing, applying, servicing, repairing, altering, or maintaining tangible personal property. Examples of taxable services provided by pet groomers include cutting hair, bathing, trimming claws, and flea dips.
While boarding a dog for 4 days, you bathe and groom it. The customer also buys shampoo and pet treats.
Dog grooming $40.00
Dog treats 12.50
Sales Tax (4.9%) 2.57
Boarding @ 6/day 24.00
Total paid by customer $79.07
*Only the state rate is shown; any applicable local sales tax rate must also be charged.
Why is pet grooming taxable and having my hair cut exempt?
Pets (animals) are tangible personal property. Since the service to maintain tangible personal property is subject to sales tax, pet grooming is taxable. People are not tangible personal property, so hair cuts, permanents, etc. are not taxable.
Can I pay the tax to my supplier and not charge the customer sales tax?
NO. Sales tax is due when the item is sold to the final customer. Merchandise you stock to sell to the customer (resale inventory) should be purchased without tax using a resale exemption certificate (seebelow). Tax is collected when you sell these items to your customers.
What about the items I use in my shop?
Consumable supplies used in pet grooming, such as shampoo and flea dips, are exempt from sales tax when you buy them because you are providing a taxable service. You should purchase them without tax using a consumed in production exemption certificate (see below).
You must pay sales tax on shop equipment and fixtures such as shears, scissors, muzzles, cages, chairs, shampoo station, hair dryers, office supplies, display and merchandise cases, towels, etc. If you order shop equipment and fixtures from an out-of-state vendor shipped to you in Kansas, and the vendor does not charge you the 4.9% Kansas state sales tax, you must pay 4.9% Kansas use tax on these items direct to the Kansas Department of Revenue. If you buy these items while in another state and pay that state's sales tax of at least 4.9%, Kansas use tax is not due. Information about use tax is in our Publication KS-1510, "Kansas Sales and Compensating Use Tax."
Since boarding is not a taxable service, you must pay sales tax on the pet food used in your boarding operation, unless you specifically charge your customers for the pet food. Charging your customer for the pet food used while boarding means your customer pays the sales tax.
How and when do I use exemption certificates?
You will use a resale exemption certificate to buy the merchandise you intend to resell (resale inventory) to your customers. To use a resale certificate you must have a Kansas sales tax number and the items purchased must be sold in the regular course of your business. Use a consumed in production exemption certificate to purchase your shampoo, flea dips, or sprays, and other items consumed in the service of grooming.
Your supplier will keep the exemption certificate to show why he did not charge you sales tax. If you are a regular customer, your supplier may keep one certificate on file and not require a new copy with each purchase. You may also be asked to provide a copy of your Kansas sales tax registration certificate as proof of your sales tax number.
Exemption certificates are available from any of our offices or from our web site. Request a copy of our Publication KS-1520, "Kansas Exemption Certificates" for more detailed information on how to use exemption certificates as a buyer and as a seller.
How do I register to collect sales tax?
To register, obtain our Publication KS-1216, "Kansas Business Tax Application" and complete the application form. This booklet is available from any of our offices or from our web site. Allow 4 to 6 weeks for your application to be processed and a sales tax number to be issued. You must register and have a sales tax number prior to starting business.
When is my tax report due?
You filing frequency is assigned at the time of registration based on the anticipated volume of retail business. Most pet groomers report their sales tax monthly or by calendar quarters (Jan - Mar., Apr- June, etc). Your tax return is due on the 25th of the month following the end of the reporting period. A return for the month of January is due February 25; a return for January - March quarter is due April 25.
AVOIDING COMMON MISTAKES
The department will send you a sales tax return, instruction sheet, and return envelope for each reporting period. Here are some tips to help you avoid errors most often made in reporting and paying sales tax.
Tip #1. DO NOT include the sales tax in the gross sales amount reported on line 1.
If your total sales figure includes the sales tax collected on taxable sales, divide the taxable sales amount by 1.0 plus the tax rate before reporting your taxable and non-taxable sales total on line 1 of the sales tax return.
Your total sales are $10,354; $4,000 in boarding fees, and $6,354 (including the state and local sales tax of 5.9%) in merchandise sales and grooming fees. Divide $6,354 by 1.059 = $6,000 taxable sales without the tax. Total to enter on line 1 is $10,000, [$6,000 taxable plus $4,000 nontaxable sales].
Tip #2 Complete all the applicable columns.
If the tax rate in your area includes a local sales tax (county and/or city), complete the county and city columns of the return in addition to the state column. For example, if the tax rate in your area includes a 1% city tax, enter your gross sales, deductions, net sales and tax due figures in the city column as well as the state column of the return.
Tip #3. Do not include the cost of your inventory on line 2 of the return.
Line 2, "Merchandise Consumed by You, Purchased Without Tax" is used to report the cost (not the retail price) of items you remove from inventory to use personally or to give as gifts, not the cost of inventory you have purchased and are holding for sale.
You remove a bag of dog food from your inventory to use in your boarding operation. The bag retails for $20, but your cost is $10. Report $10 on line 2.
HELP AND ADDITIONAL INFORMATION
If you have questions about a tax issue or need assistance in preparing your report, contact the customer relations representatives in any of our offices.
TOPEKA: (785) 296-0222
Docking State Office Building
915 SW Harrison St., 3rd Floor
OVERLAND PARK: (913) 677-0158
Cloverlearf Office Park, Bldg. 3
6405 Metcalf Ave., Suite 120
WICHITA: (316) 337-6140
State Office Building
230 E. William, Room 7150
Other informational publications, forms, and a calendar of FREE state business tax workshops are available from any of our offices, or from our web site:
KANSAS DEPARTMENT OF REVENUE