Kansas Administrative Regulations › Agency 92 - KANSAS DEPARTMENT OF REVENUE › Article 19 - KANSAS RETAILERS' SALES TAX › Section 92-19-16a - Gifts, premiums, prizes, coupons, and rebates

Current through Register Vol. 43, No. 28, July 11, 2024
(a) Each sale of tangible personal property
			 shall be taxable if made to a person who will use the property as a prize or
			 premium or who will give the property away as a gift. Donors of articles of
			 tangible personal property shall be regarded as the users or consumers of the
			 property. If a retailer donates property that was originally acquired for
			 resale, the retailer shall accrue tax on the cost it paid for the property when
			 the retailer files its next sales tax return, unless the retailer donates the
			 property to an entity that is exempt from taxation on its purchases under
			 K.S.A.
			 79-3606, and amendments thereto, or has
			 provided the retailer with a resale exemption certificate.
(b) If a retailer making a retail sale that
			 is subject to tax gives a premium or prize along with the item being sold, the
			 transaction shall be regarded as the sale of both items to the purchaser if
			 delivery of the premium or prize does not depend on chance.
(c) If the award of a premium or prize by a
			 retailer depends on chance, the retailer's acquisition of the premium or prize
			 shall be subject to sales tax. The retailer shall pay the tax at the time of
			 acquisition of the premium or prize or, if the item is removed from resale
			 inventory, shall accrue tax on the item's cost on its sales tax
			 return.
(d) If a retailer accepts a
			 coupon for a taxable product and will later be reimbursed by a manufacturer or
			 other party for the reduction in selling price, the total sales value,
			 including the coupon amount, shall be subject to sales tax. If a retailer
			 accepts a coupon and will not be reimbursed for the reduction in selling price,
			 the reduction shall be considered a discount, and the taxable amount shall be
			 the net amount paid by the customer after deducting the value of the coupon. If
			 a retailer enhances the value of a manufacturer's coupon, the amount of the
			 unreimbursed enhancement shall be treated as a discount that is not subject to
			 sales tax.
(e) For purposes of this
			 regulation, "rebate" shall mean a return of part of the amount paid for a
			 product after the time of sale, which is commonly obtained by sending proof of
			 purchase to the manufacturer. Like manufacturers' coupons, a manufacturer's
			 rebate is a form of payment. Therefore, even if a manufacturer's rebate is
			 assigned to a retailer at the time of sale, the rebate shall not reduce the
			 amount that is subject to sales tax.
(f) Sales of gift certificates, meal cards,
			 or other forms of credit that can be redeemed by the holder for the equivalent
			 cash value shall not be subject to tax when sold. If the certificate or other
			 form of credit is used as a cash equivalent to purchase taxable goods or
			 services, the retailer who redeems the certificate or other form of credit
			 shall charge sales tax on the selling price of the goods or services, which
			 shall not be reduced by the amount of the certificate or other credit being
			 redeemed.
(g) Sales of coupon books
			 and similar materials that entitle the holder to a discount or other price
			 advantage on the purchase of goods or services shall be presumed to have value
			 in addition to the coupons or discounts contained in them and shall be taxable
			 as sales of tangible personal property, except when the sale of this type of
			 book is by a nonprofit organization that treats the receipts from the sales as
			 a donation. If a coupon is redeemed from a coupon book or other material sold
			 at retail, the retailer who redeems the coupon shall charge sales tax in
			 accordance with the requirements for sales made with coupons that are specified
			 in subsection (d).
(h) If a
			 nonprofit organization treats receipts from the providing of coupon books and
			 similar materials as donations, the nonprofit organization shall be liable for
			 paying sales tax when it purchases the coupon books or other materials that are
			 provided to a donor when a donation is made, unless the organization is
			 otherwise exempted from paying tax on its purchases. If a coupon is redeemed,
			 the retailer who redeems the coupon shall charge sales tax in accordance with
			 the requirements for sales made with coupons that are specified in subsection
			 (d).