Private Letter Ruling

Ruling Number:P-2003-060
Tax Type:Kansas Retailers' Sales Tax
Brief Description:Charges for monogramming and business logos.
Approval Date:12/15/2003

Office of Policy & Research

December 15, 2003


Thank your letter your that we received earlier this month. You ask whether certain charges for monogramming and business logos are taxable or exempt under Kansas sales tax law. The monograms and logos are typically sewn on clothing being sold, such as shirts, caps, jackets, and so forth. You also ask about taxability of a certain shipping and handling charges.

As a general rule, fees charged for the creation and design of a logo, business trademark, letterhead, or similar design service are charges for a sale of nontaxable services provided the transaction does not involve the transfer of tangible personal property beyond that required to convey the design to the customer. However, if the design fees are based on services agreed to be rendered as a part of the sale of tangible personal property, sales tax applies.

Currently, computer aided manufacturing software programs are widely available for machines that sew monograms and logos on clothing. Exempt services that involve the "creation and design of a logo" or similar design services do not include simply selecting a monogram design and the appropriate letters from such a software menu. With these considerations in mind, I will answer your questions.
I hope that I have clearly answered all of your questions. If you have addition questions, please call me. This is a private letter ruling pursuant to K.A.R. 92-19-59. It is based solely on the facts provided in your request. If it is determined that undisclosed facts were material or necessary to an accurate determination by the department, this ruling is null and void. This ruling will be revoked in the future by the operation of law without further department action if there is a change in the statutes, administrative regulations, or case law, or published revenue ruling, that materially effects this private letter ruling. Attorney/Policy & Research

Date Composed: 12/19/2003 Date Modified: 12/19/2003