Kansas Provides Guidance on Online Video Game Products

Friday, March 20th, 2015

 
 
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Kansas
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The Kansas Department of Revenue released a letter ruling on the taxability of online video game products.

The taxpayer sold online video game products in retail stores and online. The ruling discusses sales of access codes, subscription cards, point cards, and notional dollar value cards.

The taxability of access codes depends on whether a video game or a video game add-on is downloaded onto a user's console. Sales of access codes that allow users to access, but not download, video games and add-ons are not subject to tax. The access of software (e.g., video games) is not taxable in Kansas. Access codes that allow a user to download complete video games or add-ons to its console are not taxable upon the initial purchase. However, once the access code is redeemed for downloadable video games or add-ons, there is a taxable purchase of canned software.

Kansas does not tax sales of subscription cards, point cards, and notional dollar value cards that allow users to access online networks that allow gameplay, interaction among other players on a network, access to digital online content, or the direct download of digital content to a consumer's device. Products provided through these cards are not considered to be taxable canned software.

Where these products are purchased - retail location or online store - does not affect how they are taxed.

http://rvpolicy.kdor.ks.gov/Pilots/Ntrntpil/IPILv1x0.NSF/ae2ee39f7748055f8625655b004e9335/94cd03b27a5fa02b86257e0a006157a8?OpenDocument


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TTR has a website that companies subscribe to and use daily. This website provides a list of everything that can be bought or sold in the U.S. It provides simple answers to whether buying or selling these items is taxable (subject to a sales tax or other tax), and it provides all the legal authority to support these tax answers.

TTR likes to keep things simple and fun, which is why it has great people who provide help to clients on any support questions they have about transaction tax issues.

Please visit TTR on the web at www.ttrus.com or call 866.578.8193.

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