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Archive for Tuesday, November 18, 1997

WHAT ARE TAX GUIDELINES ON PRIVATE SALES?

November 18, 1997

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I understand that a charitable or nonprofit organization doesn't have to charge sales tax on an annual sale. How about if they have more than one sale a year, does this apply? Is there any rule for garage sales and the like?

We forwarded your question to the Kansas Department of Revenue for an answer. Here it is:

"Isolated or occasional sales are exempt from sales tax. An isolated or occasional sale is the nonrecurring sale of tangible personal property or services, with nonrecurring meaning that there must not be more than one sale of that type within a 12-month period. An isolated or occasional sale also may be defined as a sale by a person not engaged in the business of selling such property or services. A person is 'engaged in the business of selling that property' if the property was 'acquired for the purpose of resale.' That property doesn't have to be purchased but can be 'acquired' through donation.

"Religious organizations that make a nonrecurring sale of tangible personal property acquired for the purpose of resale are deemed by state statute not to be engaged in the business of selling such property.

"Does a charitable or nonprofit organization have to charge sales tax on an annual sale? Yes. Unless the organization is selling its own surplus property, the property was probably 'acquired for the purpose of resale.' Religious organizations are an exception to this general rule.

"Is there any rule for garage sales and the like? We do not single out garage sales for special treatment. To be exempt from sales tax, a garage sale must meet the general requirements. It must be 'nonrecurring' (no more than one a year), and the sale items must not have been required for the purpose of resale."

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