Kansas – Taxability of Late Fees

SALT Report 1769 – The Kansas Department of Revenue issued a private letter ruling regarding the taxability of bad check fees and late fees imposed by gas, electric, or heat utility companies.  Generally, sales tax is collected on the sale of electricity, gas, or heat.  However, Kansas regulation K.A.R. 92-19-3a, states that retailers cannot collect sales tax on charges imposed on customers for “insufficient funds checks or closed-account checks.”  Conversely, under the regulation, retailers’ sales tax does apply to any late payment charges imposed by utility companies.

For Further Information:

Kansas Department of Revenue – Private Letter Ruling P-2012-007


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