Kansas ~ Sales and Use Tax: Guidance Provided on ITFA Moratorium Against Taxation of Internet Access Charges

A private letter ruling issued by the Kansas Department of Revenue discusses the federal Internet Tax Freedom Act (ITFA) moratorium against state taxation of customer charges for Internet access services. Currently, the moratorium is due to expire on November 1, 2014. As for Kansas law, charges for Internet access services sourced to Kansas are not subject to Kansas sales tax as long as Sec. 79-3602(aaa)(6), K.S.A. remains in effect to expressly exclude Internet access service from telecommunications services, which are subject to tax under Sec. 79-3603(b), K.S.A. . As a result, any amendments to the ITFA will not affect the continual exemption of Internet access charges under Kansas law. Though the ITFA also prohibits states from taxing customer charges for other services (like electronic mail, video clips, and personal electronic storage capacity), these services are not expressly excluded from the definition of “telecommunications service” under Kansas law. Nonetheless, if the current ITFA moratorium expires on November 1, 2014, without any action by Congress, the department advises that no changes will be required in the collection or remission of taxes with respect to charges for Internet access, telecommunications purchased, used, or sold to provide Internet access, or the services described in ITFA §1105(C) and (E) (such as e-mail, instant messaging, video clips, and personal electronic storage capacity).

Private Letter Ruling No. P-2014-003, Kansas Department of Revenue, August 26, 2014, ¶201-735



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