Sales Tax Articles
Sales Tax State Activity Update - January 2005
Kansas Debates Role of Telecommunications in Manufacturing
The Kansas Supreme Court recently affirmed a Board of Tax Appeals decision that telecommunications equipment is not eligible for the exemption for tangible personal property used directly in the manufacture of tangible personal property for resale. The Board of Tax Appeals decided the telecommunications equipment was not used directly in the manufacture of tangible personal property for resale because telecommunications service is defined as a service by Kansas sales and use tax law. The Kansas Supreme Court affirmed telecommunications is defined as a service by Kansas sales and use tax law, the decision did not violate the Equal Protection Clauses of the United States and Kansas Constitutions by treating similarly situated taxpayers differently, and it was properly decided as a matter of law because other provisions of Kansas sales and use tax law define telecommunications as a service.
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(Kansas Supreme Court Opinion In the Matter of the APPEAL OF SPRINT COMMUNICATIONS COMPANY, L.P., December 17, 2004)
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