Form Pub. Ks-1550 - Kansas Business Taxes For The Agrcultural Industry Page 11
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32The labor to repair a barn roof that was
and excavation charge for the lagoon is subject to
destroyed by a tornado is exempt as
sales tax.
original construction, but the labor to
repair a barn roof due to age is taxable.
CROP DUSTING
Residential Labor Services
Crop dusting, fertilizer applicators and similar
services performed in connection with the commercial
Persons engaged in agribusiness often live in very
production of fruit, vegetables, feeds, seeds, seedlings
close proximity to their business. Since July 1, 1998
or plants for resale are exempt from sales tax. The items
labor services performed at a residence have been
applied (herbicides, pesticides or fertilizer) are exempt
exempted from sales tax. A residence is defined as only
as consumed in production, and the service of applying
those enclosures within which individuals customarily
them, whether by air or ground application, is also exempt
live, and includes the land improvements immediately
as consumed in production.
surrounding the residence. To qualify as a residential
land improvement it must be immediately near the
Diesel fuel used in crop spraying or dusting formula
residence and must principally serve the residence.
by these providers of farm and ranch work for hire is
exempt from sales tax as an ingredient or component
The labor to repair to a yard fence is
part of the spray or dusting formula.
exempt but the labor to repair the fence
around a barn is taxable. The materials
used for both fences are taxable.
FARRIERS
Propane Storage Tanks
A farrier is someone who shoes horses and trims
their hooves. Since a horse is considered to be tangible
Included in the definition of residential property are
personal property, a farrier’s services are generally
the tanks used to store heating oil and propane, both
taxable.
inside and outside the home. Although you must pay
sales tax on the purchase, lease or rental of the storage
However, if the horse qualifies as an agricultural
tank, the labor services to install, repair or maintain a
animal as defined on page 4, the farrier service is not
propane tank used exclusively for residential purposes
taxed. Farrier services for horse-breeding operations
is not taxed. This tax treatment of the labor services on
are exempt only if the breeder is a registered Kansas
residential propane storage tanks is different than that
retailer who is collecting tax on its horse sales.
for propane storage tanks used for agribusiness or other
commercial purpose discussed on page 7.
Farrier services performed on race,
competition or recreational (pet) horses
Labor Services Not Taxed
are taxable. Farrier services performed on
plow horses and on horses used primarily
Other services are not subject to sales tax because
for herding are exempt.
they do not involve the installation or application of
tangible personal property. Examples of nontaxable
services include:
FEEDLOTS
Accounting
Barn Cleaning
Construction Projects
Excavation
Grading
Leveling
Mowing
As with any construction project, the materials used
Pasture Cleaning
Security
to build a new feedlot or to repair an existing feedlot
Snow Removal
Tree Trimming
are taxable. For the purpose of sales taxation of labor,
a feedlot is considered to be a facility. Therefore the
Some contracts for labor services have both taxable
labor services for the “original construction” of a feedlot
and nontaxable components. In order to maintain their
are not taxable as the original construction of a facility.
separate tax treatments, your service provider should
Original construction is defined on page 10, and includes
bill the taxable and nontaxable portions separately on
the labor to repair an existing feedlot damaged or
the invoice.
destroyed by fire, flood, tornado, lightening, explosion
or earthquake.
You are having excavation work done in
conjunction with the construction of a
You operate a feedlot in Ford County and
lagoon. The materials to build the lagoon
are adding 10 permanent pens to it. You
are taxable, but the labor and excavation
must pay sales tax on the concrete, pipe,
work is not. However, if the labor and excavation work
fencing and other materials used to
is not separately stated on the invoice, the entire labor
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