Questions and Answers
Kansas Retailers' Sales Tax
Are these exempt purchases when sold to a religious organization?
Are sales to a religious organization for charitable donation or for use as part of its charitable missions and other charitable endeavors exempt from sales tax?
: The sale of tangible personal property or a service that is purchased and paid for on a voucher or check of a religious organization for use in its ministries, missions, and charities is considered to be a sale for a religious purpose and is exempt from sales tax.
When are sales of office supplies, lavatory supplies, cleaning supplies, lawn supplies exempt from tax?
: These purchases are exempt when used in the operation of a religious facility. Religious facilities include churches and other places of worship, church administration buildings including those used by associations of churches and church hierarchy, and church camps. Such purchases are also exempt when purchased and paid for on vouchers or checks of a religious organization for use in its charitable ministries and missions. Consumables such as these are not exempt when purchased for use in an employee residence, including a parish, rectory, convent, parsonage, or minister’s house.. These are considered to be sales for the personal consumption, rather than for “religious purposes.”
Sales tax on hotel/motel sleeping rooms and meals sold in conjunction with religious conventions.
: Sleeping rooms rented in conjunction with a religious convention are exempt when paid for on vouchers or checks of a religious organization and the convention is to carry out the religious work of the organization. The rental of a meeting room is considered to be a rental of real property and is not subject to Kansas sales tax, whether the rental is by a hotel, motel, convention center, or other business. Sales of meals for an individual’s consumption are taxable. These are considered to be sales for the personal consumption, rather than for “religious purposes.”
: Sales of utility services are exempt when purchased and paid for on vouchers or checks of a religious organization for use in a place of worship, other religious facility, or a facility where the organization conducts its ministries, missions, and charitable work, when any non-exempt use that is made of the place of worship or facility is minimal in scope, insubstantial in nature and incidental to the exempt use.
Sales of utility services are not exempt for use in an employees residence including a parish, rectory, convent, parsonage, or minister’s house. This rule applies even if the utility services are paid for on church checks or vouchers.
Buses used to transport church members to religious services and church camps.
: These sales are exempt as long as any other use is minimal in scope, insubstantial in nature, and incidental to the exempt use.
Purchases paid for with funds from checking accounts that are administered by the church but are in the name of the churches’ men’s or women's group, youth group, trustees, etc.
: Purchases by organization of church members are exempt if the purchases are exclusively for religious purposes and the organization qualifies for exemption under IRC 501(c)(3). Entities that may qualify include: “Churches, interchurch organizations of local units of a church, conventions or associations of churches, or integrated auxiliaries of a church, such as a men’s or women’s organization, religious school, mission society, or youth group.”
IRS Publication 557.
Such interchurch organizations and integrated auxiliaries are not required to secure an exemption letter from the IRS. A church managed checking account is sufficient to indicate that the organization qualifies as an “interchurch organizations” or “integrated auxiliary” whose purchases are exempt if they are exclusively for a religious purpose.
Does the exemption extend only to in-state churches?
: No. This exemption is not limited to in-state churches.
Sales that are exempt as sales to religious organizations for religious purposes do not include sales made to church owned retirement homes or adult care facilities, such as the Presbyterian Manor or the Methodist Home. Some sales to these entities are exempt elsewhere under different statutory provisions.
Exempt sales do not include sales of utilities, food, supplies, or other consumables for employee consumption in a parish, rectory, convent, parsonage, or minister’s house. These are considered to be sales for the personal consumption of ministers, priests and other employees, rather than “exclusively for religious purposes.” However, exempt sales do include sales of furniture, furnishings, real property improvements, and other non-consumable, permanent items that are used to equip a parish, rectory, convent or minister’s house if ownership of the property will remain with the church through successive employee changes. Such permanent church property is considered to have been purchased for a “religious purpose.”
The Kansas courts have historically held that church camps qualify as religious facilities that are used exclusively for religious purposes.
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