In Re Appeal of Intercard, Inc.
14 P. 3d 1111.
Facts:
Intercard is a corporation with its headquarters, offices, and manufacturing facility located in Missouri. Kinko's Copies is Intercard's largest customer and uses Intercard's card reading system exclusively. The national headquarters of Kinko's is located in Ventura, California. The master contract between Kinko's and Intercard was negotiated by company officials in Ventura, California, and St. Louis, Missouri. Intercard has never registered with the Kansas Secretary of State as a foreign corporation doing business in the state of Kansas. No other states subject Intercard to the collection and remittance requirements of its compensating use tax provisions.
From April 1, 1992, to March 31, 1996 Intercard technicians made 11 visits to Kinko's stores in Kansas to install card readers purchased from Intercard. These contacts Intercard had with Kinko's stores in Kansas occurred during 3 months of the 48-month audit period. The contacts totaled 44 hours.
English: A typical FedEx Kinko's store, located in...
Missouri State Highway 1 in Kansas City, Missouri.
Downtown Wichita & Century II Convention Center al...Intercard has not sent technicians into Kansas since the installation of the 11 card readers was completed. No solicitation took place in Kansas during the audit period regarding the products sold by Intercard. The sale of card readers to Kinko's stores in Kansas resulted from a master contract negotiated between Kinko's and Intercard outside Kansas. Intercard did not send employees, agents, or sales representatives into Kansas to solicit sales.
KDR conducted an audit of Intercard's books. They determined that Intercard's installation of the card readers was a substantial nexus sufficient to support the imposition of the collection and remittance requirements of the Kansas Compensating Tax Act. As a result of the audit, KDR sent Intercard notices of assessment of Kansas retailers' sales tax of $399, including penalties and interest, and use tax of $13,297, including penalties and interest.
Rule of Law: Does Intercard Have Nexus with the...