Questions and Answers

Identifying Information:How are telephone answering services taxed in Kansas?
Tax Type:Kansas Retailers' Sales Tax
Brief Description:How are telephone answering services taxed in Kansas?
Keywords:
Approval Date:06/03/2008



Body:
KANSAS DEPARTMENT OF REVENUE
OFFICE OF POLICY AND RESEARCH



Question: How are telephone answering services taxed in Kansas?

Answer: "Telephone answering service" means the receiving and relaying of telephone messages by a human operator or by automated equipment. Charges for telephone answering services are subject to Kansas state and local sales tax.

Telecommunications carriers should bill sales tax on charges for telephone answering services when they bill their customers for telecommunications services. A company or other entity that is not a telecommunications carrier but which engages in the business of providing telephone answering services to others must register with the department as a retailer and collect and remit sales tax on its customer charges.

Local tax on these services is sourced to the location where the customer makes first use of the service. See Notice 03-04. For telephone answering services, this shall be presumed to be the customer's "primary place of use" as explained in K.S.A. 79-3673. Typically, this is the location of the customer's business or residence, which may be different than the customer's billing or mailing address. When a Kansas company provides telephone answering service to a customer whose primary place of use is outside Kansas, no Kansas sales tax is due on the charges for the service.

The Kansas retailers' sales tax act imposes tax on these services in two places. K.S.A. 2007 Supp. 79-3603(t) taxes: “the gross receipts received for telephone answering services, including mobile phone services, beeper services and other similar services.” K.S.A. 2007 Supp. 79-3603(b) taxes: "the gross receipts from intrastate, interstate or international telecommunications services and any ancillary services sourced to this state in accordance with K.S.A. 2007 Supp. 79-3673, and amendments thereto . . . ." Ancillary services include "voice mail services." K.S.A. 2007 Supp. 79-3602(zz). Both impositions sections apply to telecommunications carriers.




Date Composed: 06/09/2008 Date Modified: 06/09/2008