State and local sales tax liability on sales of certain used motor vehicles; requirements of taxpayer; refunds

# (a)

When a used motor vehicle is sold on or after January 1, 2025, by an individual instead of being traded in as partial payment on the sale of a new or used motor vehicle, and the individual purchases a new or used vehicle of greater value within 120 days before or after such sale, the tax imposed by the Kansas retailers' sales tax act pursuant to K.S.A. 79-3601 et seq., and amendments thereto, or the Kansas compensating tax pursuant to K.S.A. 79-3701 et seq., and amendments thereto, shall be paid on the amount of total consideration paid for the new or used vehicle purchased by such individual that exceeds the amount received by such individual from such sale of the used motor vehicle. In the event that the consideration paid for the purchased vehicle is equal to or less than the amount received from the sale of the used motor vehicle, then the individual shall not owe any sales or compensating use tax.

# (b)

For purposes of subsection (a), the individual may either:

# (1)

Provide to the county treasurer the completed bills of sale for the vehicle sold and the vehicle purchased at the time that the purchased vehicle is registered. The county treasurer shall collect the tax on the amount prescribed under subsection (a); or

# (2)

apply to the department of revenue if taxes have already been paid on the purchased vehicle for a refund of the amount of tax paid by the individual that exceeds the tax amount owed pursuant to subsection (a) by providing both the completed bills of sale for the vehicle sold and the vehicle purchased.

# (c)

# (1)

The deduction provided by this section shall not be allowed unless the taxpayer claiming the deduction provides a copy of the bills of sale required pursuant to subsection (b), and such bills of sale are on department of revenue form TR-312 or, at a minimum, include information necessary to tie the specific purchase transaction to the related sale transaction including, but not limited to, the:

(A) Seller's printed name and address;

(B) buyer's printed name and address;

(C) year, make and vehicle identification number of the vehicle;

(D) sale price and date of sale of the vehicle; and

(E) signatures of the seller and the buyer and the date signed.

# (2)

The sale price, date of sale and the name of at least one buyer and seller listed on the bill of sale must match the information entered in the assignment of title on the back of the certificate of title.

# (3)

If the taxpayer claiming such deduction fails to provide such signed bills of sale, the tax shall be due on the total consideration paid for the new or used vehicle.

# (d)

The department of revenue shall issue a refund pursuant to subsection (b)(2) from the sales tax refund fund for any valid claims filed within three years from the date of the purchase of the replacement vehicle.

# (e)

The director of vehicles shall prescribe forms for compliance with this section.

# (f)

As used in this section, "consideration paid" means the amount paid after any rebate or discount.