Pub. KS-1530 Tire Excise Tax

If there is a conflict between the law and information found in this publication, the law remains the final authority. Under no circumstances should the contents of this publication be used to set or sustain a technical legal position. A library of current policy information is also available on the Kansas Department of Revenue’s website at: ksrevenue.gov

PDF printable copy is located here.

Kansas tire retailers and new vehicle dealers are required to collect and pay the Kansas Tire Excise Tax. This publication is designed to assist you in understanding which sales are subject to this tax, which ones are exempt, and how to properly collect and remit the tire excise tax to Kansas Department of Revenue. Information about your tax responsibilities, a sample completed return, and blank forms are also included.

As a tire retailer or vehicle dealer accepting waste tires from customers, you are responsible for complying with the provisions of the Kansas Waste Tire Law, discussed on pages 3 and 9 of this publication. To obtain detailed information and assistance with your responsibilities under this environmental law, including the current rules and regulations for the disposal of waste tires, contact the Kansas Department of Health and Environment, Bureau of Waste Management (see page 9).

Table of Contents

INTRODUCTION

WHAT IS THE TIRE EXCISE TAX?

Since July 1, 1990, Kansas has imposed a tire excise tax on the retail sale of new vehicle tires. There are two general types of tire sales subject to the tire excise tax: 1) the sale of new vehicle tires by a tire retailer; and, 2) the sale of new tires mounted on a new or used vehicle sold at retail for the first time.

Like Kansas sales tax, the tax is paid by the customer to the tire retailer or vehicle dealer. The retailer will collect it from the final user or consumer, hold it in trust for the state, then remits it to the Kansas Department of Revenue on a regular basis using the TE-1 Tire Excise Tax Return.

RATE OF TAX

The tire excise tax is 25 cents on each new vehicle tire sold on or after July 1, 2001 (tax was 50 cents prior to this date). This excise tax is in addition to any federal tax or the Kansas sales tax due on these retail sales.

WASTE TIRE MANAGEMENT FUND

The revenue generated from the tire excise tax is deposited into the Waste Tire Management Fund. This fund is administered by the Kansas Department of Health and Environment and is used to clean up pre-law (prior to 1990) waste tire sites; provide public education on the proper disposal and processing of used (waste) tires; and, provide administrative funds for permits, planning, compliance, and enforcement of laws regulating the storage, recycling, processing, and disposal of used and waste tires.

WHAT VEHICLE TIRES ARE TAXED?

The tire excise tax is imposed on the retail sale of new vehicle tires within the state of Kansas. A vehicle is any device by which persons or property may be transported or drawn upon a highway, including agricultural implements. This excise tax, therefore, applies to new tires for: automobiles, boat trailers, buses, combines, construction equipment, farm machinery, mopeds, motorcycles, pop-up campers, recreational vehicles, tractors, trailers, trucks, and truck tractors.

The retail sale of new vehicle tires within the state of Kansas means that the sale of the tire(s) took place within the geographical boundaries of Kansas. This includes sales of tires by tire dealers located in Kansas and delivered within the state Kansas. It also includes tires sold by out-of-state dealers who are physically present in Kansas and sell tires at retail within Kansas. No Kansas tire excise tax is due on the sale of tires by a Kansas dealer for delivery outside of Kansas. Likewise no Kansas tire excise tax is due on the sales of tires by an out-of-state dealer who merely delivers or ships the tires into the state of Kansas.

Vehicle does not include devices powered by humans (i.e., bicycles) or those not authorized to operate on public highways (i.e., ATVs, golf carts or riding lawn mowers).

TAXABLE TIRE SALES

Following are examples of tire sales subject to the tire excise tax.

  • New tires sold to the final user or consumer, including, but not limited to, new tires sold to individuals and corporation, farmers and ranchers, and entities exempt from Kansas sales tax.
  • New tires mounted on new and used vehicles
  • New tires installed on vehicles in Kansas even though the buyer is a resident of another state.
  • New tires sold to a vehicle, implement, or equipment dealer for installation on a used vehicle being held for resale – unless dealer provides a Tire Retailer Exemption Certificate.
  • New tires sold for a truck mounted with a spreader or mixer-feed truck used to dispense feed in a feedlot.
  • Tires sold to persons in the business of leasing and renting vehicles, including vehicles leased to interstate common carriers.

CAUTION: The tire excise tax is separate from Kansas sales tax. Tire sales that are exempt from Kansas sales tax may be subject to tire excise tax.

EXAMPLE: New or used farm machinery and equipment, repair, and replacement parts (including new tires) are exempt from sales tax by law. However, when new tires for a combine are purchased, the tire excise tax is due. The new tires on a new combine are also subject to the tire excise tax

Other tire sales exempt from Kansas retailers’ sales tax but subject to the tire excise tax include new tires sold to: interstate common carriers; the state of Kansas; Kansas political subdivisions (cities, counties, police departments, etc.); public or private elementary and secondary schools and other educational institutions; nonprofit hospitals; and, nonprofit 501(c)3 museums, religious organizations, and zoos. These buyers must pay the tire excise tax on their direct purchases* of new tires.

* A direct purchase is one that is invoiced to the exempt buyer and is paid by check, warrant or voucher from the exempt buyer.

TIRE SALES NOT SUBJECT TO TIRE EXCISE TAX

The tire excise tax does not apply to these tire sales.

  • Used, recapped, or retreaded tires.
  • A spare tire included in the sale of a new vehicle.
  • Innertubes.
  • New tires for vehicles not authorized or allowed to operate on public streets and highways, such as garden tractors, ATVs and wheelbarrows.
  • New tires for vehicles powered by humans, such as bicycles and tricycles.
  • New tires for mobile or manufactured homes.
  • New tires sold to the federal government (also exempt from sales tax if a direct purchase).
  • New tires delivered by the retailer to a point outside of Kansas or delivered to an interstate common carrier for transportation to a point outside the state. (These out-of-state sales must be documented in the seller’s records by invoice or bill of lading showing an out-of-state address.)
  • New tires sold by one registered tire retailer to another registered tire retailer. ST-28T The Tire Retailer Exemption Certificate on page 12 must be completed and kept by the seller for the exemption to be valid.

REGISTRATION AND TAX NUMBERS

WHO MUST REGISTER?

A retailer is a sole proprietorship, partnership, limited liability company or corporation selling tangible personal property to the final user or consumer (retail sale). Tires and vehicles are tangible personal property. Kansas retailers must be registered to collect Kansas retailers’ sales tax on their sales of tangible personal property. For more information about the types of sales and services that are taxed in Kansas obtain Pub. KS-1510, Kansas Sales and Compensating Use Tax, from our website (ksrevenue.gov).

If you sell new vehicle tires you must register with the Department of Revenue to collect the tire excise tax. Since this tax also applies to new tires on a new vehicle sold for the first time, dealers must also register to collect and remit the tire excise tax. This includes retailers or dealers of new boats, cars, combines, construction equipment, farm tractors, hay balers, motorcycles, plows, recreational vehicles, semi-trailers, trailers, trucks, truck-tractors, or any other type of vehicle.

HOW TO REGISTER?

To apply for a tax number or to register for Kansas Retailers’ Sales Tax, visit ksrevenue.org and sign in to the KDOR Customer Service Center. After you complete the application you will receive a confirmation number for your registration and account number(s). If you have questions or want to apply in person, the Taxpayer Assistance Center is open by appointment only. Go to ksrevenue.gov to set up an appointment at the Topeka or Overland Park office by using the Appointment Scheduler.

TIRE EXCISE TAX NUMBER AND CERTIFICATE

After your application is processed you are assigned a tire excise tax reporting number. It is an eleven-digit number that ends with 4000. For example: 000-0000-4000. This tire excise tax reporting number is separate and distinct from your Kansas retailers’ sales tax number. Use your excise tax number on all tire excise tax returns you file, any correspondence to the Kansas Department of Revenue, and on the ST-28T Tire Retailer Exemption Certificate.

After an account number has been assigned, a registration certificate will be provided to you (see sample below). When you receive your certificate, check it for accuracy and report any changes or corrections to the Kansas Department of Revenue immediately (see page 8).

Tax exemption certificate sample

TAX COLLECTION AND KEEPING RECORDS

INVOICING THE TAX

The tire excise tax must be separately stated on the invoice, bill of sale, or sales receipt. If it is not separately stated, the tire excise tax amount becomes part of the gross sales price and will also be subject to sales tax. These examples show the proper way to invoice the retailers’ sales and tire excise tax on a retail sale.

New Tire Sales

Two new tires $150.00
Less Sale discount 30.00
Net cost $120.00
Mounting labor 16.00
Tire disposal fee 3.00
Net taxable $139.00
6.5% Sales Tax 9.04
Tire Excise Tax (25 cents per tire) .50
Total due $148.54

Labor charges to mount the tire and other fees you may charge for disposal of tires or filters and other environmental charges are subject to the Kansas retailers’ sales tax because they are a part of the gross selling price of the tire.

New Vehicle Sales

New vehicle $17,800.00
Less trade-in _4,500.00
Net taxable $13,300.00
6.5% Sales Tax 864.50
Tire Excise Tax (25 cents per tire) 1.00
Total due $14,165.50

The tire excise tax is due on the four new tires and is not due on a spare tire included in the sale of a new vehicle.

Local Sales Tax. The sales illustrated above are also subject to any local (county or city) retailers’ sales taxes in effect at the location of the retailer. Only the state sales tax rate of 6.5% is shown in these illustrations.

EXEMPTION CERTIFICATES

An exemption certificate document shows why sales tax was not collected on an otherwise taxable sale. The exemption certificate you will use to purchase your inventory of new tires for resale is the ST-28T Tire Retailer Exemption Certificate on page 12. It acts as a resale exemption certificate for Kansas sales tax purposes as well as an exemption from the tire excise tax.

As a registered retailer, collecting Kansas retailers’ sales tax, you should have our Pub. KS-1520 Kansas Exemption Certificates that is available on our website. Taxpayers who are exempt from sales tax must provide you, the retailer, with a completed sales tax exemption certificate to verify that the sale is exempt from sales tax.

CAUTION: Regardless of the buyer, most new tire sales and new vehicle sales are subject to the tire excise tax. Only the federal government is exempt from paying either tax on its direct purchases of new tires or new vehicles.

TIRE EXCISE TAX RECORDS

Like any part of your business operation, complete and accurate records of tire and vehicle sales must be kept for at least three prior years. For Kansas tire excise tax purposes, your records should have the following information and documents.

  • All invoices of new tire sales and/or sales of new or used vehicles.
  • All exempt sales allowed by law.
  • All exemption certificates.
  • A true, complete inventory taken at least once a year.

Your records of retail sales and tire excise tax must be available for, and are subject to, inspection by the Director of Taxation (or authorized representative).

KANSAS CUSTOMER SERVICE CENTER

FILE, PAY and MAKE UPDATES ELECTRONICALLY

Most businesses have chosen the KDOR Customer Service Center (KCSC) for their online filing and payment solution. To use this solution, you simply create a user login ID and select a password, then you can attach your business tax accounts. Each tax account has a unique access code that only needs to be entered once. This access code binds your account to your login ID. For future filings, you simply log into your account using your self-selected user login and password. A history of all filed returns and/or payments made is retained in the KCSC.

WHAT CAN I DO ELECTRONICALLY?

  • Register to collect, file and pay taxes and fees
  • Add new locations
  • Complete and submit a Power of Attorney form
  • Update contact information
  • Update mailing address
  • Upload W-2’s and 1099’s
  • Upload and retain Sales and Compensating Use Tax jurisdictions
  • File the following tax returns:
    • Retailers’ Sales Tax•Retailers’ Compensating Use Tax
    • Consumers’ Compensating Use Tax
    • Liquor Drink and Liquor Enforcement Tax
    • Vehicle Rental Tax
  • Make payments for the following taxes:
    • Individual Income
    • Individual Estimated Income
    • Homestead
    • Fiduciary
    • Withholding
    • Corporate Income
    • Corporate Estimated Income
    • Privilege
    • Privilege Estimated Income
    • Sales and Use
    • Liquor Drink and Liquor Enforcement
    • ABC Taxes and Fees
    • Petition for Abatement Service Fee
    • Motor Fuel
    • Environmental and Solvent Fee
    • Dry Cleaning Payment Plan Fee
    • Tire Excise
    • Charitable Gaming
    • Vehicle Rental
    • IFTA
    • Cigarette Tax, Fees, Fines and Bonds
    • Tobacco Tax, Fees, Fines and Bonds
    • Transient Guest
    • Mineral

REQUIREMENTS TO FILE and PAY

You must have the following in order to file and pay your taxes online:

  • Internet Access
  • Access Code(s) by calling 785-368-8222 or send an email to kdor_businesstaxeservice@ks.gov
  • EIN
  • ACH Debit: Kansas Department of Revenue debits the tax payment from your bank account
  • ACH Credit: Complete an EF-101 online to initiate a tax payment through your bank

Electronic tax payments must settle on or before the due date. Using the KCSC, you may have your tax payment electronically debited from your bank account (ACH Debit) or you may initiate your tax payment through your bank (ACH Credit). This payment method requires a completed authorization EF-101, available on our Kansas Customer Service Center.

Our FREE electronic systems are simple, safe, and conveniently available 24 hours a day, 7 days a week. You will receive immediate confirmation that your return is filed and/or payment is received. If you need assistance with your access code, you may call 785-368-8222 or email kdor_businesstaxeservice@ks.gov

PAY BY CREDIT CARD

Taxpayers can make their Individual Income tax and Business tax payments by credit card. This service is available on the Internet through third-party vendors; ACI, Inc (ACI) or Value Payment Systems (VPS). These vendors charge a convenience fee based on the amount of tax being paid. This fee may vary by vendor. Credit card transactions are strictly between the vendor and the taxpayer. Likewise, any disputes specific to the card payment will be between those two parties. Rules regarding the credit card transactions are available at each vendor’s website.

Credit cards that are available for each vendor are as follows:

ACI, Inc. (ACI)

  • American Express
  • Discover
  • MasterCard
  • Visa

Payments can be made by accessing their website at www.acipayonline.com or by calling 1-800-2PAYTAX (1-800-272-9829). The Kansas jurisdiction code is 2600. For payment verification inquiries, call 1-866-621-4109. Allow 48 hours for processing. Tax types that can be paid through ACI, Inc. are as follows:

  • Individual Income Tax Return
  • Individual Estimated Income Tax
  • Corporate Income
  • Fiduciary
  • Homestead
  • Privilege Tax
  • Cigarette, Consumable Material, and Tobacco Tax
  • Liquor Tax
  • Mineral Tax
  • Motor Carrier Property Tax
  • Motor Fuels Tax
  • Sales and Use Tax
  • Transient Guest Tax
  • Vehicle Rental Tax
  • Withholding Tax

Value Payment Systems (VPS)

  • Bill Me Later ®
  • Discover
  • MasterCard
  • Visa
  • Debit Card

VPS processes payments for Kansas Individual Income Tax only. For payment verification inquiries, call 1-888-877-0450. Allow 48 hours for processing.

Tax types that can be paid through Value Payment Systems are as follows:

  • Individual Income Tax
  • Individual Estimated Income Tax

WIRE TRANSFERS

Wire Transfers are accepted from both domestic and foreign banking institutions as long as it is received as American currency. For more information call 785-368-8222.

REPORTING AND PAYING TIRE EXCISE TAX

FILING FREQUENCIES AND DUE DATES

How often you report and pay the Kansas tire excise tax you have collected depends on the amount of tire excise tax collected in a calendar year. The larger the annual tax amount, the more frequently returns are required. Kansas has three tire excise tax filing frequencies – annual, quarterly, and monthly.

Your filing frequency is established when you register, based upon the estimate you gave on the business tax application. The filing frequency established for your tire excise tax may be different than your sales tax. For example, a new car dealer may report sales tax on a monthly basis and the tire excise tax on a quarterly basis.

Like sales tax, the tire excise tax is due on or before the 25th of the month following the close of the reporting period. The following chart shows the filing frequencies based on annual tax liability and due dates of tire excise tax returns:

Annual Tax Due Filing Frequency Return Due Date
$0—$400 Annual On or before January 25 of the following year.
$400.01—$4,000 Quarterly On or before the 25 of the month following the end of the calendar quarter— April 25, July 25, October 25, January 25.
$4,000.01 and over Monthly On or before the 25 of the following month (e.g., a March return is due by April 25).

TIRE EXCISE TAX RETURN — FORM TE-1

Toward the end of each reporting period you will receive your tire excise tax return from the Department of Revenue. The tax return will have your business name, address, reporting number, filing period, and due date pre-printed on it. Be sure to keep a copy of the completed return with your tax records.

IMPORTANT: You must file form TE-1 Kansas Tire Excise Tax Return for each reporting period, even if you have no tax to report.

EXAMPLE: David’s Tire and Auto Supply Company sells new and used tires. During the 4th quarter of 2021 he sold 250 tires; 200 were new tires, 40 were recaps and 10 were for bicycles. The completed 4th quarter, 2021 tire excise tax return is as follows:

Return sample

YOUR REMITTANCE

To help ensure proper credit to your tire excise tax account, use the following check list before mailing your return and payment to the Kansas Department of Revenue.

  • Make your remittance payable to “Kansas Tire Excise Tax.” DO NOT SEND CASH.
  • Write your Tire Excise Tax number and the filing period on your check or money order.
  • DO NOT staple the return and payment together. Instead, enclose them loosely in the envelope.

AVOIDING COMMON MISTAKES

Identify each payment. Always mail a return, form TE-1, with your payment. Write your Kansas Tire Excise Tax account number and filing period on your payment.

Use the proper return. Each pre-printed return is encoded for processing purposes – do not change the printed information on the return. If the information on your return is incorrect or if you do not have a pre-printed return, obtain a blank return from our office or website for filing. See Taxpayer Assistance.

File a return for each reporting period. If your filing frequency is monthly, you must file a return for each of the 12 calendar months, even if you have no new tire sales or tire excise tax to report. If you have no tax to report in any given reporting period, simply enter “0” on lines 1 and 5 of the return, sign, and mail it to the Department of Revenue.

File returns on the established filing frequency. Do not file your Kansas tire excise tax returns either more or less frequently than your current established filing frequency. If you believe a change in filing frequency is needed (monthly to quarterly, etc.), follow the instructions on page 9, Changing Your Filing Frequency.

CORRECTING A RETURN

No matter how careful you are in reporting and paying the tire excise tax, errors may occur. Follow these guidelines to correct a previously filed return.

Underpayments

If you reported and paid less than the actual tire excise tax collected in a period, you need to file an amended return for that filing period using a blank return. You may copy the blank return on page 11 or obtain a blank return from our office or website.

Fill in all information on the return (name, address, filing period, tire excise tax account number), and write “AMENDED” in the upper right corner of the return. Then complete the return using the correct figures. If you are filing an amended return after the due date of the original return, the additional tax due is subject to penalty and interest.

Overpayments

When you reported and paid more than the actual tire excise tax collected in a period, send The Department of Revenue the original and amended figures for the affected reporting period(s) with a letter explaining why the return(s) were overstated. After reviewing this information, we will issue a Credit Memorandum for the amount of any verified overpayment. Enter the amount shown on the Credit Memorandum on line 4 of your tire tax return for the next available reporting period.

IMPORTANT: Credit will first be applied to any existing tire tax balances. A copy of the Credit Memorandum must accompany any return with a credit on line 4. DO NOT take a credit without a credit memorandum.

WHEN RETURNS ARE LATE

The Kansas tire excise and retailers’ sales tax are often referred to as trust fund taxes. As a registered retailer, you collect these taxes from your customers, hold them in trust, and then remit them to the Department of Revenue. These consumer-paid taxes are not an expense of your business. However, when the returns are late, the late charges are a business debt that decreases your profit margin.

Penalty and interest are figured as a percentage of the tax due. Returns filed on time without payment of tax due have the same penalties as returns filed late.

Penalty and interest rates can be found on the Depts website: ksrevenue.gov. When filing on the KCSC penalty and interest will automatically be calculated.

About our Billing Process

If you file a late return without paying the late charges, or fail to file a return for a required filing period, you will receive a notice from the Department of Revenue. Respond immediately to avoid problems and additional correspondence. Follow the instructions on the statement, which may include returning a copy of the notice to the department with your return(s) and payment for the balance due. If you had already paid the balance and/or filed the missing return(s), use the reply section of the notice to report it so we may update our records.

NON-COMPLIANCE PENALTIES

Fraud

The law imposes fines of up to $1,000, imprisonment, and penalties on any taxpayer who with fraudulent intent fails to file or pay the tire excise tax or who signs a fraudulent return.

Bond

Any taxpayer who fails to pay the tire tax for more than one filing period may be required to post a sum of money as a bond to secure against non-payment of the tax. The bond amount is set by the Kansas Department of Revenue and may be up to a maximum of six months estimated tire excise tax liability.

Retailer and Corporate Officer Liability

Every Kansas tire retailer and/or vehicle retailer is liable to the state for payment of retailers’ sales and tire excise tax collected from the final consumer. Officers and directors of a corporation, such as sole proprietors and partners, are personally liable for all Kansas retailers’ sales and tire excise tax, penalties, and/or interest due during the period they hold office. Thus, if a corporation fails to remit the tax collected from the final consumer, each officer, director, or other responsible party may be held personally liable for these corporate debts.

REPORTING BUSINESS CHANGES

Business changes that affect your tire excise tax registration will usually affect your other tax registrations with the Kansas Department of Revenue, such as retailers’ sales or withholding tax. When changes occur in your business, promptly notify the Kansas Department of Revenue (see back cover). If calling our office, have your tax account number available.

Change of Corporate Officers or Directors

When there is a change in your corporate officers or directors, complete and return an CR-18 Ownership and Signature Form, and also provide the name(s) and title(s) of the resigning officer(s) or director(s). If you prefer you may mail or fax us a letter on your corporate letterhead listing the name, title, home address and Social Security number of each new corporate officer or director, the name and title of each officer of director resigning, and the effective date of the change. A copy of the corporate minutes is also helpful, but is not required.

Change of Partners

If less than 50 % of the ownership (measured by interests in capital and profits) of a partnership changes, complete an CR-18 Ownership Change Form, available on our website. As an alternative, you may mail or fax a new list of partners to our office. Include the full name, address, telephone and Social Security number of each partner, the tax account numbers and the effective date of the change.

A partnership must apply for a new registration when 50% or more of the ownership changes hands within a 12-month period, or the partnership is dissolved and a new one is started. See instructions that follow.

Change of Business Ownership

When the ownership of the business changes, a new registration is usually required. The following examples of ownership change requires new registration.

  • An individual ownership to a partnership or corporation.
  • Partnership to a corporation or sole proprietorship
  • One corporation to another corporation.
  • Any change in corporate structure that requires a new charter, certificate of authority, or new EIN.

If you must apply for a new registration number, you will also need to cancel your old registration.

Changing Your Filing Frequency

Once a filing frequency (monthly, quarterly, annually) has been established for a calendar year, do not increase or decrease the filing frequency of your sales and/or compensating use tax. Our electronic filing applications are set up for the filing frequency established, and filing less frequently will cause non-filer bills to be printed.

Each year the Department of Revenue reviews the reporting history of Kansas retailers to ensure their filing frequency is in accordance with the statutory guidelines illustrated by the chart on page 7. The review is done late in the calendar year so that any necessary change will take effect on January 1 of the upcoming year. A notice of filing status change is provided to the affected retailers in November.

We realize, however, errors can occur in assigning a filing frequency to new businesses, or a business can change extensively over a calendar year, causing the returns to be due either too often or not often enough. If you believe your filing frequency is out of line with the guidelines, call us to request that it be changed.

Closing Your Tire Excise Tax Account

When you sell or change the ownership of the business, close your business, or are no longer selling tires or vehicles subject to the tire excise tax you must cancel your Kansas tire excise tax registration. There are a couple ways to cancel your registration — complete a CR-108 Notice of Discontinuation of Business; or complete the Discontinuation of Business portion of your Tire Excise Tax Registration Certificate. Mail or fax a completed form to the Department of Revenue (see back cover).

OTHER KANSAS TAXES

As a retailer in the automotive industry and a Kansas business, you have other tax obligations to the Department of Revenue in addition to the Tire Excise Tax. A short summary of each type of tax follows. Use the CR-16 Business Tax Application to register to collect and/or pay these taxes. For more information see How to Register, herein.

Retailers’ Sales Tax

Kansas imposes a 6.5% state retailers’ sales tax plus local taxes on the retail sale, rental or lease of tangible personal property; labor services to install, apply, repair, service, alter, or maintain tangible personal property; and admissions to entertainment, amusement, or recreation places in Kansas.

A retail sale is an exchange of tangible personal property (goods, wares, merchandise, products and commodities) for money or some other consideration to the final user or consumer. Examples of taxable services include auto repair; commercial wallpapering, painting, and remodeling; washing and waxing of vehicles; and pet grooming.

Local Sales Tax

Kansas cities and counties may also levy a local sales tax ranging from .05% to 3%. Each retailer reports and remits the total of the state and local retailers’ sales tax collected to the Kansas Department of Revenue. See Pub. KS-1700, Sales Tax Jurisdictions for a listing of the current combined state and local rates for each of the incorporated cities, counties, and special jurisdiction areas in Kansas.

Consumers’ Compensating Use Tax

This Use tax is due on property purchased from another state that will be used, stored or consumed in Kansas; and on which a sales tax equal to the sales tax rate in effect where the item will be used, stored, or consumed has not already been paid. Individuals and businesses who purchase goods from a retailer in another state, bring them into Kansas or have them shipped into Kansas for their consumption, use or storage (not resale), must pay Kansas use tax equal to the Kansas sales tax rate in effect where the item will be used, stored or consumed. If the state and local sales tax paid in another state is less than the total tax rate at Kansas buyer’s location, only the difference is due to Kansas.

Corporate Income Tax

This tax is imposed on the taxable income of every corporation doing business within or deriving income from sources in Kansas. The current “normal” tax rate is 4 percent of the Kansas taxable income of a corporation with a “surtax” of 3 percent for tax years 2011 and thereafter, on Kansas taxable income over $50,000.

Motor Fuel Tax

This tax is imposed on the use, sale or delivery of motor vehicle fuels (gasoline & gasohol) or special fuels (diesel & alcohol) in this state. Tax revenues are used to defray the cost of constructing Kansas highways.

The motor fuel tax is remitted to the Kansas Department of Revenue by the distributor of the fuel; however, the tax is included in the price of every gallon of gasoline or diesel that consumers purchase at the pump. There is no motor fuel tax on dyed diesel fuel used only for non-highway purposes. The current tax on motor vehicle fuels is 24 cents per gallon; on special fuels it is 26 cents per gallon, on LP-gas it is 23 cents per gallon and on E85 it is 17 cents per gallon.

Vehicle Rental Excise Tax

When a vehicle is leased or rented for 28 consecutive days or less, a vehicle rental excise tax of 3.5% is charged. This tax is in addition to the sales tax due on these transactions. Car rental agencies, vehicle dealers, repair shops, and others who rent cars must register to collect this tax.

Withholding Tax

This tax is deducted by employers from wages paid to employees to prepay the employee’s income tax liability. Kansas withholding tax is also required on certain taxable non-wage payments by payors, on management and consulting fees paid to nonresidents, and on the Kansas taxable income of the nonresident owners of partnerships, S corporations and limited liability companies. In addition to being registered with the Department of Revenue, employers must register with the Kansas Department of Labor and the Internal Revenue Service.

Because of differences in the computation of the federal and Kansas income taxes, it is not uncommon for a taxpayer to receive a federal income tax refund while owing taxes to Kansas or vice versa. For this reason, the Kansas Department of Revenue has made available form K-4 to be completed along with the federal W-4 form.

For more information about this tax type, including the withholding tax tables, obtain a copy of our Pub. KW-100 Withholding Tax Guide from our website.

KANSAS WASTE TIRE LAW

If your business generates or collects waste tires, you may also have specific responsibilities under the Kansas Waste Tire law administered by the Kansas Department of Health and Environment (KDHE). In addition to setting up the tire excise tax in 1990, the Kansas legislature established laws for tire retailers in order to deal with the storage and disposal of waste tires in an environmentally safe manner.

Not all tire businesses are subject to this law. Some businesses, such as new car dealers, may collect the tire excise tax, but do not meet the definition of a tire retailer. A tire retailer is defined as a person in the business of selling new or used replacement tires at retail. If your business does not sell new or used replacement tires, simply disregard this section.

IMPORTANT: Under the Kansas Waste Tire Law tire retailers are required to: 1) prominently display or make available to customers educational materials provided by the Kansas Department of Health and Environment and the Department of Revenue relating to proper waste tire management practices; 2) accept waste tires from customers when they purchase new tires; and 3) meet waste tire storage and disposal standards.

Waste Tire Disposal Requirements

Tire retailers should only arrange to dispose of their waste tires with persons holding a permit from the Kansas Department of Health and Environment. Responsibility for the waste tires generated by a business is released only when waste tires are given to a permitted transporter, processor, or solid waste facility. Tire retailers may contract with a waste tire transporter or deliver their waste tires directly to a tire disposal or solid waste facility permitted by the Kansas Department of Health and Environment. A list of current waste tire permit holders is available online from the Kansas Department of Health and Environment at the website shown below.

Waste tires may be given to non permitted parties for approved beneficial uses such as silo covers and feed bunks. However, if someone without a waste tire permit hauls away the tires, the tire retailer could be required to pay for clean up if they are illegally dumped. It is in the best interest of every tire retailer to check the permit list and require copies of current permits from any contractor removing waste tires from its business. Tire retailers must maintain records of tire disposal for three years.

For more information about your responsibilities under environmental laws and regulations for disposal of waste tires contact:

Kansas Department of Health and Environment
Bureau of Waste Management
Phone: 785-296-1600
FAX: 785-296-8909
kdhe.state.ks.gov/168/waste

ADDITIONAL INFORMATION

TAX ASSISTANCE

This publication is for informational purposes only; the contents should not be used to set or sustain a technical position. Only the law, regulations, and written rulings issued by the Kansas Department of Revenue should be used to support a legal position. The law governing the Kansas Tire Excise Tax and Waste Tire Law is K.S.A. 65-3424 et seq. When there is a question not answered in this publication, contact the Department of Revenue. Do not guess. Clarification of whether a transaction is taxable or exempt will save you time in dealing with the same issue in the future and could also save you money by avoiding costly retailers’ sales or tire excise tax deficiencies.

Many business questions can be answered by the customer representatives in our Tax Assistance Center in Topeka. However, like many businesses, the Department of Revenue uses an automated answering system to direct incoming phone calls to the appropriate area. See back cover for the address and phone numbers of our assistance center.

WEBSITE — ksrevenue.gov

Our website contains information about all aspects of the Kansas Department of Revenue. Forms and publications, exemption certificates, and information about all the taxes administered are published here. Each division of the Department of Revenue is represented. Additionally, our website contains current information devoted to paperless file and pay options.

POLICY INFORMATION LIBRARY (PIL)

Another service available to taxpayers is a CR-18 Ownership Change form, available on our website. As an alternative, you may mail or fax a new list of partners to our office. Include the full name, address, telephone and Social Security number of each partner, the tax account numbers and the effective date of the change.

A partnership must apply for a new registration when 50% or more of the ownership changes hands within a 12-month period, or the partnership is dissolved and a new one is started. See instructions that follow.

Written Rulings

At times there are unique situations that may require an interpretation or clarification based upon the law, regulations, and specific facts of the case. To assist you in understanding how the law applies to your business, the Department of Revenue issues three types of written advice: revenue notices, revenue rulings, and private letter rulings. This written advice is binding on the Department of Revenue and may be relied upon as long as the statute or regulation on which they are based is not altered by the Legislature, changed by a court decision, or the ruling itself modified or rescinded by the Department of Revenue.

You should not rely on a verbal opinion from the Department of Revenue regarding taxability not specifically addressed in the law. When an issue arises in your business that is not directly addressed in the law, document the problem in writing and request a Private Letter Ruling or an Opinion Letter from the Department of Revenue. Fax or mail your request for a written ruling to:

Tax Policy Group
Kansas Department of Revenue
PO Box 3506
Topeka, KS 66601-3506
Fax: 785-296-7928

You will receive a written ruling within 30 days after your request (and any additional information necessary for the ruling) is received. Private letter rulings are published in our Policy Information Library (PIL), but the letters have been “scrubbed” to protect the privacy of the taxpayer—any information identifying the taxpayer, such as name, address, product, etc., is blanked out.

FORMS AND CERTIFICATES

An exemption certificate document shows why sales tax was not collected on an otherwise taxable sale. The exemption certificate you will use to purchase your inventory of new tires for resale is the ST-28T Tire Retailer Exemption Certificate on page 12. It acts as a resale exemption certificate for Kansas sales tax purposes as well as an exemption from the tire excise tax.

As a registered retailer, collecting Kansas retailers’ sales tax, you should have our publication on Kansas exemption certificates (Pub. KS-1520) that is available on our website. Taxpayers who are exempt from sales tax must provide you, the retailer, with a completed sales tax exemption certificate to verify that the sale is exempt from sales tax.

CAUTION: Regardless of the buyer, most new tire sales and new vehicle sales are subject to the tire excise tax. Only the federal government is exempt from paying either tax on its direct purchases of new tires or new vehicles.

You may reproduce any form in this publication, unless otherwise marked, as needed or download the certificates from our website at ksrevenue.gov

TAXPAYER ASSISTANCE CENTER

This publication is a general guide and will not address every situation. If you have questions or need additional information, please contact taxpayer assistance at the Kansas Department of Revenue.

Taxpayer Assistance Center
PO Box 3506
Topeka, KS 66625-3506
Phone: 785-368-8222

By Appointment - Go to ksrevenue.gov to set up an appointment at the Topeka or Overland Park office by using the Appointment Scheduler.

Office hours are 8 a.m. to 4:45 p.m., Monday through Friday.

You should not rely on a verbal opinion from the Department of Revenue regarding taxability not specifically addressed in the law. When an issue arises in your business that is not directly addressed in the law, document the problem in writing and request a Private Letter Ruling or an Opinion Letter from the Department of Revenue. Fax or mail your request for a written ruling to:

Tax Policy Group
Kansas Department of Revenue
PO Box 3506
Topeka, KS 66601-3506
Fax: 785-296-7928

You will receive a written ruling within 30 days after your request (and any additional information necessary for the ruling) is received. Private letter rulings are published in our Policy Information Library (PIL), but the letters have been “scrubbed” to protect the privacy of the taxpayer—any information identifying the taxpayer, such as name, address, product, etc., is blanked out.

CAUTION: Although published in our PIL, a private letter ruling is limited to the requesting taxpayer and that taxpayer’s specific factual situation. It cannot be relied upon or cited by any other person.

KEY STATUTES AND REGULATIONS

In preparing this guide we cited the following laws and regulations. The full text of these are a part of the PIL on our website and are also available in libraries throughout the state.

Statutes

  • K.S.A. 8-126 – Vehicle definitions
  • K.S.A. 12-187 et seq. – Local sales tax
  • K.S.A. 12-199 - Local compensating use tax
  • K.S.A. 79-3201 et seq. – Income tax
  • K.S.A. 79-3401 et seq. – Motor fuel tax
  • K.S.A. 79-3601 et seq. – Retailers’ sales tax
  • K.S.A. 79-3606 et seq. – Sales tax exemptions
  • K.S.A. 79-3701 et seq. – Compensating use tax

Regulations

  • K.A.R. 92-19-25b – Exemption certificates
  • K.A.R. 92-19-30 – Motor Vehicles or Trailers*
  • K.A.R. 92-19-30a – Motor vehicles or Trailers*

* These important regulations are on the next two pages of this publication.

FORMS AND CERTIFICATES

The following pages have many of the sales and use tax forms and exemption certificates used by Contractors and Contractor-Retailers. You may reproduce any form in this publication as needed or download the certificates from our website (ksrevenue.gov).

PUBLICATIONS

Below is a list of publications available on the Kansas Department of Revenue’s website. These publications contain instructions applicable to specific business industries and general information for all business owners.

STATE SMALL BUSINESS WORKSHOPS

As part of our commitment to provide tax assistance to the business community, Tax Specialists within the Kansas Department of Revenue conduct small business workshops on Kansas taxes at various locations throughout Kansas. Whether you are a new business owner, an existing business owner, or an accountant, these workshops will give you the tools and understanding necessary to make Kansas taxes easier and less time consuming for you. Topics covered include filing and reporting requirements and methods, what is taxable, what is exempt and how to work with the department in collecting and remitting Kansas taxes.

For a schedule of our workshops, visit our website. Pre-registration is required and a fee may be charged by the sponsoring Small Business Development Center (SBDC).

KARs

K.A.R. 92-19-30.

Motor vehicles or trailers; isolated or occasional sale. (a)(1) An isolated or occasional sale of motor vehicle or trailer is a sale made between private individuals or other entities who, at the time of the sale, are not retailers registered to collect and remit sales or use tax on the sale of such a vehicle or trailer.

(2) Kansas motor vehicle dealers and trailer dealers are retailers and cannot make isolated or occasional sales of vehicles or trailers. These dealers shall collect sales tax at the time of the sale on each taxable retail sale of a motor vehicle or trailer.

(b)(1) Unless a sale is one that is excepted from the imposition of sales tax by K.S.A. 79-3603(o) or exempted from tax under K.S.A. 79-3606, and amendments thereto, sales tax shall be levied on the isolated or occasional sale of a motor vehicle or trailer. Tax on the isolated or occasional sale of a motor vehicle or trailer shall be paid to the county treasurer when the purchaser or other transferee applies for a certificate of title or a certificate of title and registration or to the director of taxation, as provided in paragraph (c)(3).

(2) When a person who has acquired a vehicle in an isolated or occasional sales transaction applies for a certificate of title or certificate of title and registration, the county treasurer shall collect the sales tax that is due along with a service fee of 50 cents, and give the applicant a receipt for the tax and fee paid. A certificate of title or certificate of title and registration shall not be issued until the transferee pays the tax and applicable fee or proves to the satisfaction of the county treasurer or the director of taxation that the transfer is not taxable.

(c)(1) County treasurers shall be assisted by the director of taxation or director of vehicles in determining whether or not a transaction is taxable or exempt. Refusal to issue a certificate of title or certificate of title and registration for a vehicle may be requested by the director of taxation or director of vehicles until sales tax is paid. Sales tax shall be collected by a county treasurer if any doubt exists as to an applicant’s exemption claim. An applicant who pays sales tax may file a refund claim with the director of taxation if the applicant believes the tax has been erroneously collected by county treasurer or department of revenue.

(2) Each determination made by a county treasurer to exempt an isolated or occasional sale may be reviewed by the director of taxation. Following this review, a sales tax assessment may be issued to the vehicle registrant for any sales tax that is unpaid or underpaid because of clerical error, misinformation, or other cause.

(3) Any sales tax that is finally determined to be due under an assessment shall be paid to the director of taxation. Payment of sales or use tax on isolated or occasional sales of motor vehicles or trailers may be made to the director of taxation instead of the county treasurer, as provided in paragraph (b)(1), to correct any other underpayment or as an accommodation to the taxpayer.

(d) As a general rule, the base for computing the tax shall be the actual selling price of the vehicle. However, the tax shall be computed on the fair market value of the vehicle by the county treasurer or the director of taxation under either of the following circumstances:

(1) The selling price of the vehicle is unknown; or

(2) the stated selling price is not indicative of, and bears no reason-able relationship to, the fair market value of the vehicle or the average retail value as shown in the latest publication of the national automobile dealers’ association official used car guide book.

(e) The actual selling price shall be the base for computing the tax on the sale of wrecked or damaged vehicles.

(f)(1) “Sale” or “sales” means the exchange of property, a sale for money, and every other transaction in which consideration is given, whether conditional or otherwise.

(2) “Vehicle” means motor vehicle or trailer.

(3) “Transferor” means the seller, donor, or other person who sells, gives away, or otherwise parts with the vehicle.

(4) “Transferee” means the purchaser, donee, or other person who purchases, is given, or otherwise acquires ownership of the vehicle.

(g) K.S.A. 79-3603(o), and amendments thereto, which imposes sales tax on isolated or occasional sale of trailers and motor vehicles, excepts the following transfers or sales from the tax imposition on these isolated or occasional sales:

(1) Transfers by an individual to a corporation solely in exchange for stock in the corporation;

(2) transfers from one corporation to another corporation when done as part of the transfer of all the corporate assets; and

(3) sales of automobiles, light trucks, trailers or motorcycles between immediate family members.

(h) “Immediate family member” is any person in a class that is defined by statute to mean lineal ascendants and descendants and their spouses. Since a person may have lineal ascendants and descendants and may also be the spouse of someone who has lineal ascendants and descendants, this class includes the grandfather, grandmother, father, mother, son, daughter, and adopted child of the person; the spouses of these ascendants and descendants; the grandfather, grandmother, father, mother, son, daughter, and adopted child of the person’s spouse; and any other ascendants and descendants that are further removed, including great-grandparents and great-grandchildren. The sale or transfer of an automobile, light truck, trailer or motorcycle between members of this class shall be exempt from sales tax.

(i) Certain transfers of motor vehicles or trailers are not sales, as defined in paragraph (f)(1), and shall not be taxed. These include name changes, transfers by gift, and certain transfers made by operation of law. The following rules shall apply to these transfers.

(1) A transfer shall be presumed to be a gift when the transferee is the spouse, mother, father, brother, sister, child, grandmother or grandfather, aunt, uncle, niece, or nephew of the transferor and money is not exchanged for the vehicle. A gift shall also be presumed when these relatives trade or exchange vehicles and money is not exchanged as part of the trade or exchange. However, if money is exchanged for the vehicle, the transfer shall be taxable, unless the sale is exempted as set forth in subsection (h).

(2) A vehicle transfer by gift is not a sale and shall not be taxed. To qualify as a gift, the vehicle shall be given without any consideration and with an intention on the part of the donor that the transfer is a gift. When the relationship of the parties is not one of the relationships set forth above in paragraph (i)(1), the transferee claiming the transfer is a gift shall submit proof of this claim to the satisfaction of the county treasurer or director of taxation.

(3) The change of an owner’s name on the title when there is no actual transfer of vehicle ownership to a different person or entity is not a sale and shall not be taxed. However, the transfer of a motor vehicle or trailer from a corporation to an individual shall be taxed since there is a change of ownership from one legal entity to another. The vehicle transfer shall be presumed to be the corporation’s payment of a wage, dividend, bonus, or other benefit to the officer, employee, shareholder, or other transferee.

(4) A transfer to an heir or legatee by will or pursuant to the inheritance or intestacy laws of a state is not a sale and shall not be taxed. A certified copy of the probate court order making the distribution shall be filed with the county treasurer.

(5) The sale to a person who takes title to a vehicle with the intention of transferring it to the winner of a drawing or raffle shall be taxed. The subsequent transfer of the vehicle to the winner of a drawing or raffle is a gift from the donor to the winner and shall not be taxed. When a donor pays a motor vehicle dealer for a vehicle and the vehicle is transferred from the dealer directly to the winner of a drawing or raffle, the gift is considered to be the payment made for the automobile rather than the automobile itself, and the winner shall be liable for the sales tax that is charged by the dealer on the vehicle sale. Whenever a vehicle is won as a prize and sales tax has not been paid by either the vehicle donor or vehicle winner to this state or another state, the winner shall pay Kansas sales or use tax when the vehicle is registered with the county treasurer.

(6) When the title to a vehicle is transferred to the holder of an encumbrance as a result of repossession under the terms of a written agreement entered into at the time of original purchase by the purchaser and encumbrance holder, the transfer is not a sale and shall not be taxed. However, any registration or subsequent sale of the vehicle by the encumbrance holder shall be taxed.

(7) When a lender grants a debtor permission to redeem a vehicle pursuant to K.S.A. 84-9-506, and amendments thereto, the redemption of the vehicle by the debtor is not a sale and shall not be taxed.

(8) When a lien holder acquires title to a vehicle through a court-ordered foreclosure of a mechanic’s lien, landlord’s lien, storage lien, or other statutory lien, the transfer of title to the lien holder shall be exempt if the lien holder does not register the vehicle. However, any registration or subsequent sale of the vehicle by the lien holder shall be taxed. The redemption of a vehicle from a lien holder by a debtor who satisfies the underlying debt is not a sale and shall not be taxed.

(j) The following transfers shall be considered sales, and shall be subject to sales tax.

(1) K.S.A. 79-3602(h)(2), and amendments thereto, allows a credit or discount for a vehicle that is traded for another vehicle. When vehicles of different value are traded by private individuals, the person who pays cash or tenders some other consideration in addition to the vehicle being traded or exchanged shall pay sales tax on the amount of the cash payment or on the fair market value of the consideration. In this trade, sales tax shall not be due from the person who traded or exchanged a vehicle but did not pay any additional cash or provide any additional consideration. Each person claiming a sales tax credit or discount for a vehicle that is traded shall file an affidavit with the county treasurer on a form furnished by the department of revenue that contains information necessary to support the credit or discount being claimed.

When the stated cash amount or stated value of the other consideration is not indicative of, and bears no reasonable relationship to, the difference between the fair market value of the vehicle traded and the fair market value of the vehicle received by the purchaser, the tax shall be computed by the county treasurer or the director of taxation on the difference between the fair market value of the vehicles or the difference between the average retail value of the vehicles as shown in the latest publication of the national automobile dealers’ association official used car guide book.

(2) The purchase of a vehicle that the purchaser intends to give to someone else shall be taxed, even though tax is not due on the subsequent transfer from the purchaser to the donee.

(3) A transfer of a vehicle from a partner to the partnership or from a partnership to a partner shall be presumed to be a taxable transfer. A transfer from the partner to the partnership shall be presumed to be made in consideration of an increased partnership interest. A transfer from the partner to the partnership shall be presumed to be made for services rendered to the partnership or for other value passing between the partner and the partnership.

(4) If a donor gives a donee a gift of cash or other property for the purpose of purchasing a vehicle, the donee shall be liable for the tax, if the vehicle is purchased.

(5) The transfer of a vehicle in exchange for the transferee’s assumption of an obligation to pay all or part of an encumbrance on the vehicle is a sale and shall be taxed, unless the sale is between immediate family members or is exempt under K.S.A. 79-3606, and amendments thereto. When the transfer does not involve a gift and is not otherwise exempt, the tax base shall be the sum of any payment made by the buyer to the seller plus the amount of the encumbrance being assumed. Sales tax shall be computed as set forth in subsection (d) of this regulation if this amount is not indicative of, or bears no reasonable relationship to the fair market value of the vehicle. When the transfer represents a gift of part of the value of the vehicle that has been established in accordance with paragraphs (i)(1) or (i)(2) of this regulation and is not otherwise exempt, the tax base shall be the sum of any payments made by the buyer to the seller plus the amount of the encumbrance being assumed, regardless of the fair market value of the vehicle.

(6) When a vehicle is purchased to replace a vehicle that has been stolen or destroyed by accident, fire, or other adversity, the purchase of the replacement vehicle is not exempt and shall be taxed. Each purchase of a replacement vehicle shall be taxed whether the replacement vehicle is purchased by the owner of the vehicle that was stolen or destroyed or by an insurance company that is obligated to provide a replacement vehicle.

(7) A transfer of a vehicle from a corporation to an officer, shareholder, board member, or employee shall be presumed to be a taxable transfer and shall be presumed to be made in consideration for services rendered to the corporation or for other value passing between the corporation and transferee.

(k)(1) Each transferee claiming an exemption shall complete an affidavit form furnished by the department of revenue and file it with the county treasurer when the vehicle is registered. The exemption affidavit shall be completed in its entirety and shall contain the names, addresses, and telephone numbers of the transferor and transferee; the make, year, model and body style of the motor vehicle or trailer; and any additional information that is needed to support the exemption claim. The affidavit shall contain facts in detail sufficient to clearly bring the transferee within the exemption being claimed.

(2) Each transferee claiming a family relationship as the basis for the exemption of a vehicle sale or as the basis for the presumption of a gift may be required to file an additional affidavit that establishes the relationship.

(3) Exemption affidavits that are not correct in both substance and form shall not be accepted by the county treasurer, and shall collect the tax shall be collected if any doubt exists as to the validity of the exemption claim.

(4) Any taxpayer may file a refund claim with the director of taxation if the taxpayer believes the tax has been erroneously collected by the county treasurer or the director.

(l)(1) When a motor vehicle or trailer is purchased out of state in an isolated or occasional sale, the purchaser shall pay Kansas state and local use tax to the county treasurer upon application for a certificate of title or certificate of title and registration. When a motor vehicle or trailer is purchased from an out-of-state dealer who is not registered to collect and remit Kansas state and local retailers’ use tax and has not collected sales tax on the sale for the state of purchase, the purchaser shall pay Kansas state and local use tax to the county treasurer upon application for a certificate of title or certificate of title and registration.

(2) When the purchaser has paid state and local sales tax to another state at a rate that is less than Kansas state and local use tax rates where the vehicle is registered, the purchaser shall pay Kansas state and local use tax to the county treasurer at a rate that is equal to the difference between the combined state and local tax rates for the Kansas location and the combined state and local tax rates that were used to determine the tax paid to the other state.

K.A.R. 92-19-30a

Motor vehicles or trailers. Sales tax shall be imposed on the total selling price of each motor vehicle or trailer to the ultimate user or consumer. The total selling price includes all tangible personal property mounted, installed, applied or otherwise attached or affixed to the motor vehicle or trailer. For sales tax purposes, tangible personal property is not separable from the motor vehicle or trailer to which it is mounted, installed, applied or otherwise attached or affixed. When calculating sales tax on the retail sale of a motor vehicle or trailer, the retailer shall not exclude or deduct for the tangible personal property, regardless of how any contract, invoice or other evidence of the transaction is stated or computed, and whether separately charged or segregated on the same contract or invoice. Any charge attributed to the tangible personal property mounted, installed, applied or otherwise attached or affixed to a motor vehicle or trailer cannot be separately billed or segregated on an invoice or contract in order to qualify for an isolated or occasional sale exemption.