Sales Tax Articles
Sales Tax State Activity Update - March 2008
Kansas Issues Information Guide to Keep Tax Payers "In the Know"
The Kansas Department of Revenue (KDOR) issues guidelines that are intended to help taxpayers become familiar with Kansas tax laws and your rights and responsibilities under them.
While every attempt is made by the KDOR to provide you with information that is consistent with Kansas law, nothing in the publication supersedes, alters, or otherwise changes Kansas case law or any Kansas statute or regulation. The KDOR guidelines are not legal rulings and any information that is inconsistent with Kansas law is not binding on either the department or the taxpayer. Below are some excerpts of the subjects included in the Information Guide concerning the titled matters.
Software
In Kansas, taxability is determined solely by whether the software being sold is custom software or canned software. Custom software is software that is designed and developed for the exclusive use and needs of a specific customer. Sales of custom software are not taxable in Kansas. Canned software is "prewritten computer software". The terms "canned software" and "prewritten computer software" are synonymous and refer to all software except custom software. Sales of canned software are subject to Kansas sales and use tax. Mandatory maintenance agreements for canned software are always fully taxable. Optional maintenance agreements for canned software are taxable, except for separately-stated charges for technical-support services or when the optional agreement clearly states that it is for technical-support services only. Maintenance agreements for custom software are always exempt, whether mandatory or optional.
Hardware and Related Services
Computer hardware includes equipment such as mainframe computers, personal computers, keyboards, monitors, printers, hard drives, and cables. Computer hardware is tangible personal property and subject to tax. The services of installing, applying, altering, repairing, servicing, or maintaining tangible personal property is taxable. Whenever one of these services is performed to computer hardware, the charge for the service is taxed as a service to tangible personal property.
Digital Goods
Digitized products: On-line delivery of digitized products, services, and information are exempt except for canned software, Nontaxable sales include downloads of movies, music, photographs, newspapers, and other similar products.
This guide may be viewed on the Kansas Department of Revenue's Policy Information Library.
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