Dealer-related Information in Kansas
In Kansas, a motor vehicle dealer is defined as "any individual, partnership or corporation actively engaged in the business of buying, selling or exchanging new or used motor vehicles, motorcycles, travel trailers, trailers or trucks." According to Kansas law, a dealer must have an established place of business in an area properly zoned for automotive sales.
Any dealer, large or small, that sells five or more motor vehicles within a calendar year is required to have a valid Kansas motor vehicle dealer's license. The dealer must be registered with the Kansas Division of Taxation to collect sales tax from customers.
The sales tax and the compensating use taxes are sometimes a bit confusing and can be difficult to understand. The Kansas Department of Revenue has an online publication, Sales and Use Tax for Motor Vehicle Transactions, that describes in detail how the state taxes apply to the sale, rental or lease of motor vehicles. You will need to install the free Adobe Reader to read it, as the publication is only available online.
Except in rare instances, sales tax is due on any motor vehicle sale and the amount due is based on gross receipts, meaning the total selling price. Any other charges, fees, add-ons, or the interest, finance, or carrying charges on installment purchases are not subject to sales tax when they are listed separately on the invoice.
If your customer lives outside of Kansas and is purchasing a motor vehicle, semi-trailer, pole trailer or an aircraft, you are not required to collect the sales tax if all three of the following requirements are met:
- The buyer is a bona fide resident of another state
- The vehicle or aircraft being purchased will not be registered in Kansas and will not be based in Kansas
- Within 10 days, the purchaser will remove the vehicle or aircraft from Kansas
It's actually rare that it happens, but every now and then, there is a new vehicle sold that breaks down or otherwise malfunctions, that simply cannot be repaired. A reasonable number of attempts have been made, but the customer still has not been satisfied and the vehicle has been in the shop for more than 30 days total since it was purchased.
In this case, the Kansas Lemon Law says that the customer who purchased the vehicle is permitted to return the vehicle to the dealership and obtain a refund of money paid, less an allowance for his or her the use of the vehicle.
The Governor of Kansas routinely appoints a Motor Vehicle Dealer Review Board, which helps ensure that consumer protection laws are adhered to by the automotive dealer industry, and to help promote motor vehicle sales in Kansas.
According to the Governor's website, the Dealer Review Board meets regularly to "improve vehicle dealer practices, make suggestions and recommendations for changes in current law relating to vehicle sales, act as a resource for vehicle industry problems and provide expertise to uncover operating problems created by current law, while balancing problems against the greater public interest."
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