Sixty minutes of football today will determine which team has an advantage in the Sunflower Showdown between Kansas University and Kansas State.
But when it comes to the fans decked out in team gear and accessories, there already is a clear advantage to the Wildcats. More than a year after the Journal-World first reported that the “K-State Official Online Store” was not charging sales tax on purchases made by Kansas residents, the issue persists.
But it won’t for much longer.
A representative with the Florida-based TeamFanShop, which runs Kansas State’s online store, confirmed it has reached an agreement with the Kansas Department of Revenue to begin collecting sales tax on purchases within the next few days.
Brian Swallow, senior vice president of business development and strategy for TeamFanShop, said the site is scheduled to begin charging sales tax on purchases made in Kansas beginning Oct. 15.
Kansas Department of Revenue made a ruling last year that a university’s online store — regardless of whether it is run by an out-of-state vendor — must collect sales tax on purchases made to Kansas residents.
It is not clear when the agreement was reached. A Kansas State Athletics Department spokesman did not mention the agreement in an interview earlier Friday but did say K-State was not contesting the state’s ruling that the online store charge sales tax.
“We’re certainly open to a sales tax being charged,” said Kenny Lannou, an assistant athletic director and spokesman for the department.
Kansas-based retailers who sell Kansas State gear — and who charge a sales tax — had expressed concern about an online store sponsored by a state university not charging sales tax. Some state legislators in the Manhattan area also expressed concern after the Journal-World reported on the issue in August 2011.
Kansas State officials previously had said they wanted to comply with all state laws related to sales tax, but they were unsure the online store was required to collect sales tax given TeamFanShop didn’t have a bricks-and-mortar retail presence in the state. Out-of-state retailers who make online sales in Kansas generally aren’t required to collect Kansas sales taxes.
Department of Revenue officials, however, had contended the online store of a state university by its very nature had a presence in the state and thus was subject to the state’s sales tax laws.
Swallow said he did not have details about whether TeamFanShop had to pay any back taxes or penalties as part of its agreement with the state. Richard Cram, director of policy and research for the Kansas Department of Revenue, said state law prevented him from releasing any details about the case.
Kansas State officials last year estimated the K-State online store made about $130,000 in merchandise sales.
Kansas University uses a different vendor to run its online store, and it has long collected sales tax on online purchases.