Questions and Answers

Identifying Information:Fireworks
Tax Type:Kansas Retailers' Sales Tax
Brief Description:Sales Tax for Fireworks
Keywords:
Effective Date:06/01/1997



Body:
SALES TAX FOR FIREWORKS


Kansas sales tax applies apples to the retail sale of tangible personal property (goods and merchandise). Fireworks are tangible personal property. Therefore, retail sales of fireworks are subject to sales tax.

Anyone or any type of organization making retail sales of fireworks in Kansas must collect and remit sales tax to the Kansas Department of Revenue. Fireworks can be sold only from June 27th through July 5th of each year. As a fireworks retailer you must have your sales tax registration number prior to June 27th.

If you sell fireworks in Kansas each year, you must apply for a permanent registration number. If you sell fireworks only once in the state, apply for a temporary sales tax registration number by calling 1-877-526-7738 (toll free). This registration procedure is accomplished over the telephone and the assigned number will be mailed as soon as possible. The temporary registration number is valid for only one fireworks season.
COMMONLY ASKED QUESTIONS

What about buy one - get one free sales?

For merchandise sold as "buy one/get one free" sales tax applies only to the actual amount paid by your customer. The "free" item is included in the total selling price.

EXAMPLE:

You have a "buy one - get one free" sale. A customer is purchasing fireworks valued at $10.
4 Fountains $ 5.00
4 Pkgs. Firecrackers + 5.00
$ 10.00
Free portion - 5.00
$ 5.00
4.9% Sales tax State + .25
Balance Due $ 5.25
*Only the state rate is shown. Any applicable rate must also be charged.

What about coupons?

The value of coupons issued by you, as the fireworks retailer, are not subject to sales tax. However, the value of coupons issued by the manufacturer are subject to sale tax when you will later be reimbursed for the coupons.

EXAMPLE:

A customer is purchasing fireworks costing $10 and is using a $1 off coupon issued by you.

4 Fountains $ 5.00
4 Pkgs. Firecrackers + 5.00
= 10.00
Your coupon - 1.00
= 9.00
4.9% State sales Tax + .44
Balance Due = 9.44
*Only the state rate is shown. Any applicable local sales tax rate must also be charged.


A customer is buying fireworks costing $10 using a $1 off manufacturer's coupon.

4 Fountains $ 5.00
4 Pkgs. Firecrackers + 5.00
= 10.00
4.9% Sales Tax + 49
= 10.49
Manufacturer's coupon - 1.00
Balance Due = 9.49
*Only the state rate is shown. Any applicable local sales tax rate must also be charged.

What if this is a fund raiser for a non-profit organization?


Non-profit organizations may have the misconception that they are exempt from collecting sales tax. Retail sales of tangible personal property or taxable services by any type of organization are subject to sales tax. Therefore, non-profit organizations, as well as any other type or organization, making retail sales of fireworks are required to collect and remit sales tax.

How and when do I use an exemption certificate?

You will use a resale exemption certificate to buy the merchandise you intend to resell (resale inventory) to your customers. To use a resale exemption certificate you must have a Kansas sales tax number and the items purchased must be sold in the regular course of your business

Your supplier will keep the exemption certificate to show why he did not charge you sales tax. If you are a regular customer, your supplier may keep one certificate on file and not require a new copy with each purchase. You may also be asked to provide a copy of your Kansas sales tax registration certificate as proof of your sales tax number.

Exemption certificates are available from any of our offices or from our web site. Request a copy of our Publication KS-1520, "Kansas Exemption Certificates" for more detailed information on how to use exemption certificates as a buyer and as a seller.

How do I register to collect sales tax?

To register, obtain our Publication KS-1216, "Kansas Business Tax Application," and complete the application form. This booklet is available from any of our offices or from our web site. Allow 4 to 6 weeks for your application to be processed and a sales tax number to be issued. You must register and have a sales tax number prior to starting business.

When is my tax report due?


Your filing frequency is assigned at the time of registration based on the anticipated volume of retail business. Your tax return is due on the 25th of the month following the end of the reporting period. A return for the month of January is due February 25; a return for January - March quarter is due April 25.

AVOIDING COMMON MISTAKES

The department will send you a sales tax return, instruction sheet, and return envelope for each reporting period. If you report your sales tax quarterly, you will receive four returns during the calendar year. Here are some tips to help you avoid errors most often made in reporting and paying sales tax:


Tip #1. File a return for each reporting period, even when you have no tax to pay.

If you have had no sales during a reporting period, write "NO SALES" across the columns, sign, and mail the form.


Tip #2. DO NOT include the sales tax in the gross sales amount reported on line 1.

If your total sales figure includes the sales tax collected on taxable sales, divide the taxable sales amount by 1.0 plus the tax rate before reporting your taxable and non-taxable sales total on line 1 of the return.


EXAMPLE:

Your total sales are $10,590 and the tax rate in your area is 5.9%. Divide $10,590 by 1.059 = $10,000 sales without the tax to enter on line 1 of the sales tax return.

Tip #3 Complete all the applicable columns.

If the tax rate in your area includes a local sales tax (county and/or city), complete the county and city columns of the return in addition to the state column. If all sales are made from one business location, the gross sales and deductions figures entered on lines 1 through 5 will be the same across all applicable columns.

Tip #4. Do not include the cost of your inventory on line 2 of the return.

Line 2, “Merchandise Consumed by You, Purchased Without Tax” is used to report the cost (not the retail price) of items you remove from inventory to use personally or to give as gifts, not the cost of inventory you have purchased and are holding for sale.

EXAMPLE:

You remove some fireworks from your inventory to use in your family’s fireworks display. The retail value of the fireworks is $90, but your cost is $45. Report $45 on line 2.
HELP AND ADDITIONAL INFORMATION

If you have questions about a tax issue or need assistance in preparing your report, contact the customer relations representatives in any of our offices.
TOPEKA: (785) 296-0222
Docking State Office Building
915 SW Harrison St., 3rd Floor

OVERLAND PARK: (913) 677-0158
Cloverleaf Office Park, Bldg. 3
6405 Metcalf Ave., Suite 120

WICHITA: (316) 337-6140
State Office Building
230 E. William, Room 7150

Other informational publications, forms, and a calendar of FREE state business tax workshops are available from any of our offices, or from our web site:
http://www.ink.org/public/kdor

KANSAS DEPARTMENT OF REVENUE
TAB-33 (6-97)




Date Composed: 10/07/1997 Date Modified: 03/18/2010