Kansas Retailers' Sales Tax
Coin-operated air compressors at convenience stores.
Office of Policy & Research
October 31, 2000
RE: Your letter of October 18, 2000
I have been asked to answer your letter that the department received earlier this month. You have a client who may install coin-operated air compressors at convenience stores in Kansas. You ask if the money collected in these machines is subject to Kansas sales tax. The answer is yes. The imposition is found at K.S.A. 79-3603(f). It taxes:
the gross receipts from the operation of any coin-operated device dispensing or providing tangible personal property, amusement or other services except laundry services, whether automatic or manually operated;
The device in question dispenses compressed air, which is tangible personal property. Accordingly, the receipts from the machine are subject to both state and local sales tax. The Kansas state rate is 4.9%. Local sales tax is imposed based on the location of the machine.
To determine the tax to report to the State of Kansas, you must factor the tax from the tax included receipts that are in the machine. This is done by dividing the receipts in the machine by one plus the state and local tax rate stated as a decimal. The result is the amount to report to Kansas as gross receipt (the tax base). The tax due is figured by subtracting this amount from the receipts in the machine or by multiplying this amount by the tax rate in effect.
I hope that this adequately answers your questions. If not, please call me at (785) 296-3081.
Thomas E. Hatten
Attorney/Policy & Research
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