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What is the ruling on Gross Receipts of Tangible Personal Property in Kansas?

In a recent Private Letter Ruling (PLR), a company that was engaged in the long-term rental of motor vehicles asked if costs passed on to end-users are subject to the Kansas retailers’ sales tax. The costs in question included licenses and registration fees, state fuel use taxes, personal property taxes, proportional license tags, federal heavy-vehicle use tax, permits, and state road taxes.

The department ruled that these costs are subject to the Kansas retailers’ sales tax and cited K.A.R 92-19-55(f), saying that sales tax is imposed on the total amount of each lease payment that the lessee is obligated, under contract, to pay. It allows no deduction or exclusion for insurance, service, or maintenance contracts, or any other charges regardless of how they are billed.

(PLR P-2000-041, August 28, 2000)

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