Revenue Ruling

Ruling Number:19-87-3
Tax Type:Kansas Retailers' Sales Tax
Brief Description:Assessments Made By Associations
Keywords:
Effective Date:07/01/1987


Body:
REVENUE RULING 19-87-3
SALES TAX - TAXABILITY OF ASSESSMENTS MADE BY
HOME OWNER AND CONDOMINIUM OWNER ASSOCIATIONS, APARTMENT
COMPLEXES, TRAILER COURTS AND OTHER SIMILAR ORGANIZATIONS AND ASSOCIATIONS PURSUANT TO K.S.A. 79-3603(n)



Advice has been requested as to whether fees and charges made by home owner and condominium owner associations, apartment complexes, trailer courts and other similar organizations and associations are subject to Kansas sales tax.

K.S.A. 79-3603(n) imposes Kansas sales tax on the gross receipts received from "dues charged by public or private clubs, organizations and businesses, payment of which entitles a member to use the facilities for recreation or entertainment." It is the Department of Revenue's ruling that this statute does not apply to charges or fees made by a home owner or condominium owner association, apartment complex, trailer court or other similar organizations or associations when said fees or charges are assessed against home owners, condominium owners and apartment and trailer dwellers for the maintenance of buildings primarily used for human habitation and the common areas associated with those buildings. Thus, charges made by an association or organization, payment of which entitles the member to lawn maintenance, snow removal, maintenance of association pools, meeting rooms, community and recreation centers, parking lot maintenance, security, etc. are not subject to Kansas sales tax.

This ruling applies to all charges or fees paid by the home owner, condominium owner or apartment dweller exclusively for the maintenance of buildings used by the owner or lessee primarily for human habitation purposes and the common areas associated with those buildings. This ruling does not apply to lease payments made by apartment or trailer dwellers for the use of an apartment, duplex or trailer for human habitation purposes.

This ruling does not apply to charges or fees made by home owner or condominium owner associations, apartment complexes, trailer courts and other similar organizations and associations, payment of which entitles the member to the use of the association or organization's facilities for recreation or entertainment, regardless of whether the member is an owner or lessee of a building used primarily for human habitation in that association or organization. Such charges are subject to Kansas sales tax pursuant to KSA 79-3606(n).

Questions concerning this Revenue Ruling should be directed to the Kansas Department of Revenue, Sales and Excise Tax Bureau, Robert B. Docking State Office Building, Topeka, Kansas 66625-0001, or call (913) 296-2461.

This Revenue Ruling shall be effective on and after July 1, 1987.

APPROVED:


Harley T. Duncan
Secretary of Revenue



Date Composed: 10/06/1997 Date Modified: 10/11/2001