Information Guide

Identifying Information:Auction Companies Self-Audit Fact Sheet
Tax Type:Kansas Retailers' Sales Tax
Brief Description:Auction Companies Self-Audit Fact Sheet
Keywords:
Effective Date:01/08/2014


Body:
KANSAS DEPARTMENT OF REVENUE
AUDIT SERVICES
AUCTION COMPANIES SELF-AUDIT FACT SHEET



The taxability of sales and purchases of tangible personal property and labor services by Auction Companies are summarized below. This list is not all-inclusive.

Purchases by Auction Companies:
Kansas sales or compensating use tax applies to those purchases identified or designated as taxable in the chart below. The applicable Kansas sales or Kansas consumers’ use tax must be paid to the vendor or accrued and remitted directly to the Kansas Department of Revenue. Purchases from Kansas vendors may be reported using the retailers’ sales tax return. Purchases from outside this state which are delivered to this state are to be reported on the Kansas consumers compensating use tax return.

Purchases for use Exempt or Taxable
Sound equipment such as but not limited to, PA systems, speakers, microphones, headsets, batteries, power cords etc. Taxable
Auctioneer’s equipment such as but not limited to gavel, sound block, podium etc.Taxable
Motor vehicles and trailersTaxable
Display equipment such as but not limited to, display cases, tables, lotting cards and flipper decks or holders, tagging or tach-it guns, markers and paintsticks, signs, banners, flags, etc.Taxable
Cashier supplies such as but not limited to, registration forms, receipts or statements, labels, clerk sheets, winning bid slips or tickets, clerk slot file or box, clip boards and form holders, bidder cards and paddles, cash box, counterfeit detectors, rubber stamps etc.Taxable
Weather protection equipment such as rain ponchos, tents, canopies, umbrellas and instant sheltersTaxable
Staff identification gear such as name tags, vest, shirts, caps, jackets, armbands, etc.Taxable
Safety gear and equipment such as back supports, traffic gloves, barricade tape, directional stanchions, Taxable
Freight or delivery charges, billed by the vendor, on purchases subject to sales/use tax Taxable
Office supplies, such as, paper, pens, pencils, labels, calculators, etc. Taxable
Office furniture and fixtures, including but not limited to: desks, lamps, tables, chairs, shelving, plants, planters, artwork, signs Taxable
Laptop and desktop computers, copiers, printers, fax machines, calculators and other similar equipment. Taxable
Canned Software and software upgrades and labor services to modify, alter, update or maintain software.Taxable
Customized software, software upgrades and labor services to modify, alter, update or maintain customized software - "customized" software = software developed for a single end user Exempt
Newspaper and magazine subscriptions, reference books and materials, forms, printed matter (including promotional brochures, etc.), business cards, notepads Taxable
Lease or rental of any tangible personal property - copier, fax, vehicleTaxable
Repairs and maintenance to existing buildings, and existing covered structures. Taxable
Parts and labor services of repairing, servicing, altering or maintaining tangible personal property, such as forklifts, hydraulic equipment, dollies, computers, printers, copiers, etc. Taxable
Professional services such as legal or accounting services Exempt
Cleaning services (except when applying chemicals such as wax, scotch guard, etc.), plant watering and care (except fertilizing). Exempt
Advertising as in newspapers, radio, television, etc. Exempt
Shelving, display racks, checkout counters, storage cabinets, display cases, etc. Taxable
Break room supplies such as microwaves, refrigerators, tables, chairs, paper products, etc. Taxable
Tangible personal property to be given away or donated. Taxable
Tangible personal property taken from inventory to be given away or donated to a tax exempt entity.Taxable
Complimentary bottled water, soft drinks, coffee, creamer, sugar, cups and stir sticks, balloons, stickers, pens and candy Taxable
Trash removal and shredding Exempt


Purchases for use Exempt or Taxable
Promotional items including but not limited to calendars, mugs, key chains and items of clothing Taxable
Security cameras, mirrors, security tags, tag detachers, countertop deactivators, all other security equipment Taxable
Printed materials such as catalogs and flyers distributed directly to customers at the store or mailed directly to customers or prospective customers through mailing or delivery service. Taxable
Printed materials provided to a newspaper or other publication that is to be included as an insert in the newspaper or publication that is to be sold at retail. Exempt
Warranty or service agreements for tangible personal property such as, computers, printers, copiers, security equipment, etc. Taxable



The taxability of sales of tangible personal property and labor services by Auction Companies is summarized below. This list is not all inclusive.

Sales Exempt or Taxable
Sale of tangible personal property made by an auctioneer or agent on behalf of not more than 2 “principals” or households if such sale is nonrecurring and any such “principal” or household is not engaged at the time of such sale, in the business of selling tangible personal property.
Exempt
Sales of tangible personal property made by an auctioneer or agent on behalf of more than 2 “principals” or households
Taxable
Sale of the inventory of a business, regardless of the number of “principals”. (Sale of the inventory is subject to sales tax because the owner was engaged in the retail business of said inventory. See Example below.)
Taxable



*Sales/rentals to entities with proper exemption certificates provided are exempt from sales tax. Ensure the exemption certificates are retained to substantiate all non-taxed transactions.

Note: Kansas tax applies to the “gross receipts” from the sale of taxable goods or services in Kansas. Gross receipts include any amounts collected from the customer including any charges billed for freight, delivery or special handling.

Example: An auctioneer conducts an auction of the inventory of a clothing store. Sale of the inventory is subject to sales tax because the owner of the store was engaged in the retail clothing business.

For purposes of this fact sheet, the term “principals” is the primary or main party, owner or entity whose items are being auctioned.

K.A.R. 92-21-12 Place of business—auctioneers. For the purpose of local sales tax the place of business of auctioneers who conduct auction sales in different taxing jurisdictions shall be deemed to be the place where the auction is held. (Authorized by K.S.A. 79-3618, K.S.A. 1971 Supp. 79-4425, 79-4426; effective, E-71-21, July 1, 1971; effective Jan. 1, 1972.)


Date Composed: 01/08/2014 Date Modified: 01/08/2014