Layaway Fees Not Taxable in Kansas

Monday, October 10th, 2011


The Kansas Department of Revenue addressed the taxability of non-refundable layaway fees and layaway cancellation fees in a recently released private letter ruling. When a customer puts an item on layaway, the seller may require the customer to pay a non-refundable layaway fee as well as a down payment on the item. If the customer later cancels the layaway, the customer will be refunded their down payment along with any additional payments made, but the store may keep the non-refundable layaway fee and charge an additional layaway cancellation fee. Sales tax is charged on the selling price of the item placed on layaway only after the purchaser has paid for the item in full. If the layaway is cancelled, the non-refundable layaway fee and layaway cancellation fee are not subject to tax because a taxable retail sale was not made.

About TTR

Transaction (buying or selling things), Tax (the tax on this activity), Resources (our people, our website, our support services) - TTR, Inc.

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 or call 866.578.8193.

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