Kansas Administrative Regulations › Agency 92 - KANSAS DEPARTMENT OF REVENUE › Article 12 - INCOME TAX › Section 92-12-95 - Sales factor; in general

Current through Register Vol. 43, No. 28, July 11, 2024
For the purposes of the sales factor of the apportionment
				formula for each trade or business of the taxpayer, the term "sales" means all
				gross receipts derived by the taxpayer from transactions and activity in the
				regular course of such trade or business. The following are rules for
				determining "sales":
(a) In the case
			 of a taxpayer engaged in manufacturing and selling or purchasing and reselling
			 goods or products, "sales" includes all gross receipts from the sales of such
			 goods or products (or other property of a kind which would properly be included
			 in the inventory of the taxpayer if on hand at the close of the tax period)
			 held by the taxpayer primarily for sale to customers in the ordinary course of
			 its trade or business. Gross receipts for this purpose means gross sales less
			 returns and allowances, and includes all interest income, service charges,
			 carrying charges, or time-price differential charges incidental to such sales.
			 Federal and state excise taxes (including sales taxes) shall be included as
			 part of such receipts if such taxes are passed on to the buyer or included as
			 part of the selling price of the product.
(b) In the case of cost plus fixed fee
			 contracts, such as the operation of a government-owned plant for a fee, "sales"
			 includes the entire reimbursed cost, plus the fee.
(c) In the case of a taxpayer engaged in
			 providing services, such as the operation of an advertising agency, or the
			 performance of equipment service contracts, research and development contracts,
			 "sales" includes the gross receipts from the performance of such services
			 including fees, commissions, and similar items.
(d) In the case of a taxpayer engaged in
			 renting real or tangible property, "sales" includes the gross receipts from the
			 rental, lease, or licensing the use of the property.
(e) In the case of a taxpayer engaged in the
			 sale, assignment, or licensing of intangible personal property such as patents
			 and copyrights, "sales" includes the gross receipts therefrom.
(f) If a taxpayer derives receipts from the
			 sale of equipment used in its business, such receipts constitute "sales."
In some cases certain gross receipts should be disregarded in
				determining the sales factor in order that the apportionment formula will
				operate fairly to apportion to this state the income of the taxpayer's trade or
				business.
In filing returns with this state, if the taxpayer departs from
				or modifies the basis for excluding or including gross receipts in the sales
				factor used in returns for prior years, the taxpayer shall disclose in the
				return for the current year the nature and extent of the modification.
If the returns or reports filed by the taxpayer with all states
				to which the taxpayer reports under the multistate tax compact or the uniform
				division of income for tax purposes act are not uniform in the inclusion or
				exclusion of gross receipts, the taxpayer shall disclose in its return to this
				state the nature and extent of the variance.