Questions and Answers
Kansas Retailers' Sales Tax
What is the definition of a nonprofit endowment association and foundation?
: Endowment associations are chartered to own, control, or otherwise administer funds that are bequeathed, donated, or held in trust for the benefit of a college or university. Nearly all nonprofit endowment associations and foundations that qualify for this exemption will have the word “endowment” in their title along with the name of the college or university.
Any organization that questions whether they qualify as an endowment association under the law may request a private letter ruling from the department pursuant to K.A.R. 92-19-59. This request should be accompanied by copies of the by-laws, corporate charter and other documentation that shows that the organization is organized to manage trust funds owned by or held for the benefit of a college or university.
Some state universities have established separately incorporated nonprofit foundations to administer their intercollegiate sports programs. The new law exempts purchases by such a foundation and places them on the same footing as intercollegiate sports programs that continue to be run as part of the university. Ticket sales and other sales by such a foundation remain subject to tax.
Some state universities have incorporated nonprofit foundations that engage in research and development for the benefit of the university. The new law exempts purchases by such separately incorporated foundations. This exemption was not intended to exempt groups such as engineering societies, nursing groups, medical, law, or honorary fraternities, associations of professors, or other college or university associations that are not primarily organized to engage in research and development for the financial benefit of a university. This exemption is for purchases only. It does not exempt sales by exempt endowment associations or foundations.
Under the definition of educational institutions, what is the intended meaning of
". . . offers educational courses at a level
above the twelfth grade
: The term “educational institution” has historically meant colleges and universities. “Above the twelfth grade” means post-high school, which is college level or above. This includes colleges, universities, and vocational schools, among others.
This term “educational institution” completes a continuum of exemption from elementary school through colleges and universities. While there is variation among cities, states and regions, elementary or primary schools generally means kindergarten through sixth, seventh, or eighth grade, secondary schools generally means from seventh, eighth, or ninth grade through twelfth grade, and education institution means schools above the twelfth grade.
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