Private Letter Ruling

Ruling Number:P-1999-239
Tax Type:Kansas Retailers' Sales Tax
Brief Description:Transfer of a motor vehicle to a corporation.
Approval Date:10/28/1999

Office of Policy & Research

October 28, 1999


Re: Kansas Sales Tax


Your correspondence of October 21, 1999, has been referred to me for response. Thank you for your inquiry.

By your letter you inquire whether the transfer of a motor vehicle to a corporation is subject to sales tax. Your letter states, in pertinent part:
In response to your inquiry, please be advised the transaction described in your letter is subject to Kansas sales tax. The transfer of a vehicle from an individual, sole proprietorship or partnership to a corporation is considered to be an “isolated or occasional sale.” Kansas law, [K.S.A. 79-3603(o)] imposes sales tax on:
Assuming you do not wish to pay the tax which would be due on this transaction there are two alternatives you may wish to pursue. First, you will note the statute makes an exception from taxation for, “(1) The transfer of motor vehicles or trailers by a person to a corporation solely in exchange for stock or securities in such corporation.” If the corporation holds a meeting and votes to issue stock to the individuals whose name appears on the title, the transaction would not be subject to sales tax.

Second, you can pay the tax and then request a refund on grounds that the manner in which the vehicle was originally titled was in error. If, as part of the refund process, you are able to document the assertions made in your letter about the manner in which the vehicle was purchased and how expenses, insurance and depreciation were handled it is possible the Department could determine the vehicle was, in fact, the property of the company from the time it was purchased. In that case, no tax would be due and any tax paid could be refunded.

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: 11/01/1999 Date Modified: 10/11/2001