Form Pub. Ks-1550 - Kansas Business Taxes For The Agrcultural Industry Page 12
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32construct the pens, but the labor for this addition to an
as the sale of tangible personal property. Fuels
existing facility is exempt as original construction. The
consumed by equipment used to construct farm ponds,
portable feed bunkers are exempt as farm machinery
lagoons, terraces and waterways; or in the grading,
and equipment.
landscaping, and the preparation of building sites are
subject to sales tax.
You must replace the permanent fenced
pens and two feed silos at your feedlot
A co-op will collect the state and local
that were destroyed by a tornado. The
sales tax on motor fuels sold for use in
materials are taxable, but the labor to
the off-highway operation of motor
rebuild the pens and silos (normally taxable as part of
vehicles, excavation equipment, and
an existing facility) is exempt, since labor to repair
construction equipment.
damage caused by a tornado is considered to be original
construction.
IMPORTANT: The sales or use tax applies to
fuels that are exempt from the motor fuel tax,
Farm Machinery and Equipment
including fuels purchased with the motor fuel tax paid if
such tax is refundable under the provisions of the
In addition to the portable equipment used to feed
Kansas Motor Fuel Tax Act. The sales tax will apply
and house livestock listed on page 6, the following
whenever the motor fuel tax does not apply unless the
specialized pieces of equipment used by a feedlot are
use of the fuel qualifies for a sales tax exemption (such
specifically listed as implements of husbandry in K.S.A.
as consumed in production).
8-126(cc), and are therefore considered to be exempt
farm machinery and equipment.
Consumed in Production
• fertilizer spreaders, nurse tanks or trucks with
Motor fuels consumed in the production or
permanently mounted spreaders that are used
processing of agricultural products or the irrigation of
exclusively for dispensing or spreading water,
crops for ultimate sale at retail are exempt from Kansas
dust or liquid fertilizers or agricultural chemicals;
sales or use tax. Exempt uses include fuel consumed in
plowing, disking, harrowing, irrigating, planting or
• a truck mounted with a fertilizer spreader used
seeding, cultivating and harvesting.
or manufactured principally to spread animal
manure;
Bulk Fuel Purchases
• a mixer-feed truck owned and used by a feedlot,
that is specially designed and used exclusively
Motor fuel purchased in bulk where it’s taxable or
for dispensing food to livestock in such feedlot.
nontaxable use cannot be determined until it is actually
consumed should be purchased without retailers’ sales
Other examples of equipment that a feedlot may
tax. Persons buying motor fuel in bulk without retailers’
purchase without tax are a grinder that is used to recycle
sales tax are required to file Consumers’ Compensating
into feed the carcasses and remains of farm animals,
Use tax (CT-10U), reporting the cost of motor fuels
or equipment used to mix or process the feed for
withdrawn from storage for taxable off-highway uses
livestock.
and remit the tax due directly to KDOR. Information on
how to register to report and pay use tax is on page 4.
Consumed in Production
Persons buying motor fuel in bulk solely for taxable
Feed yards may purchase the following items exempt
non-highway use should pay sales tax to their supplying
because they are consumed in the production of
dealer.
livestock: antibiotics, biologicals, pharmaceuticals,
vitamins and chemicals, whether fed, injected, applied
or otherwise used on animals for agricultural production.
GRAIN ELEVATORS
FUELS
The application of sales tax to the operation of Kansas
country and terminal elevators differs from a farming
and ranching (production) operation. As a storage and
The taxation of motor fuels in Kansas falls into three
processing facility, an elevator’s machinery qualifies for
general categories: 1) fuel for highway (tagged)
exemption as either integrated production or warehouse
vehicles; 2) fuel for off-road vehicles; and, 3) fuels for
machinery and equipment.
other agricultural purposes.
Gasoline and diesel fuels used in highway vehicles
Integrated Production Machinery & Equipment
are subject to the motor fuels tax (see page 22). Fuels
An integrated production operation is a plant or
used in off-road vehicles and equipment are not subject
facility located in Kansas that manufactures, processes,
to the motor fuel tax, but ARE subject to sales tax
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