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Kansas replaced the ad valorem tax with the commercial vehicle fee effective January 1, 2014. Kansas requires an annual commercial vehicle fee on any truck or truck-tractor registered at a gross weight of more than 10,000 pounds and operating as a commercial vehicle. A “commercial vehicle” is defined as a self-propelled or towed motor vehicle in commerce used to transport property or passengers when the vehicle has a gross weight or gross combination weight of at least 10,001 pounds, is designed or used to transport 15 or more passengers (including the driver), or is used to transport hazardous materials in a quantity requiring placarding.
The fee will be in addition to registration fees. Trucks registered with this fee will be eligible for apportioned registration.
Sales tax is assessed on the renting or leasing of property, occasional sales of vehicles or trailers, and other enumerated services. Transportation of property for hire is not considered an “enumerated service” and is thus not subject to sales tax.
Any tax paid to another jurisdiction may be applied as a credit against the use tax due in the State of Kansas.
The sale of rolling stock, including buses and trailers, repair or replacement materials and parts, gasoline, distillate, and other motor fuels when purchased by a motor carrier qualifying as a public utility, for immediate and direct use in interstate commerce is exempt from sales tax. The qualifying motor carrier may be engaged in interstate commerce exclusively, or in both interstate and intrastate commerce. Only interstate common carriers, or those leased to an interstate common carrier, may use this exemption. Three types of interstate common carriers are exempt from sales tax:
In order to qualify as a common carrier, a motor carrier must be actively engaged in the business of hauling persons or freight for others and actively advertise or otherwise hold out that it is actively engaged in the business of hauling persons or freight for others.
Motor carriers do not qualify as common carriers and may not claim the exemption available to common carriers if the motor carrier only hauls goods or materials for a separately incorporated business or businesses that have a significant ownership interest in the motor carrier and use or consume the goods or materials that are being hauled in activities that involve construction, oil and gas well exploration, or other similar activities.
Contract carriers may have authority, but they are not common carriers and therefore, are not exempt from sales tax. Also not exempt are common carriers that are intrastate carriers only.
Only rolling stock, parts, motor fuels, and other items used directly and immediately in interstate commerce are exempt. All other property purchased is taxable. Examples of exempt items include air and oil filters, fuel pumps, semi-trucks/tractors, trailers, refrigerants, lubricants, spark plugs, and tires. Examples of taxable items include computers, building materials, office equipment, and office supplies. Labor services to repair, replace, service, or maintain rolling stock are subject to sales tax.
To claim the sales tax exemption, interstate common carriers must provide the Interstate Common Carrier Exemption Certificate to the seller at the time of purchase.