Form Pub. Ks-1550 - Kansas Business Taxes For The Agrcultural Industry Page 19
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32invoices for the farmer/rancher to sign. As a matter of
other than as stated above or for any other
practical application, this method is also often used by
purpose that is not exempt from sales or
ranchers and others when buying livestock for ranching
compensating tax, the undersigned purchaser
or breeding purposes.
becomes liable for the tax.”
IMPORTANT: To claim the exemption, you must
You have a blanket agricultural exemption
sign the invoice for each purchase made.
certificate on file at the farm supply store.
While in the store to pick up a belt for your
If you do not complete a certification on the invoice,
combine, you purchase a pair of work
you must complete an exemption certificate for the
gloves and a case of motor oil for your truck. Since the
retailer in order for the sale to be exempt from sales tax.
gloves and motor oil are subject to sales tax, segregate
these purchases and pay the sales tax on them.
USING AN EXEMPTION CERTIFICATE
Completing an Exemption Certificate
An exemption certificate is a document that shows
Follow these three rules when completing any
why sales or use tax was not charged on a retail sale of
exemption certificate.
goods or taxable services. The buyer furnishes or
completes the exemption certificate. The seller keeps
1) P
,
.
RINT OR TYPE ALL INFORMATION
EXCEPT FOR THE SIGNATURE
the certificate on file with other sales tax records. When
Information on the certificate must be legible to you
the appropriate certificate is used, and all the blanks
and to our auditors. Do not print a signature, although
are accurately filled out, the certificate may be accepted
it is helpful to print or type the name below the signature.
by a retailer.
2) F
.
ILL IN ALL THE BLANKS
Descriptions for the certificates most often used by
agribusiness begin at the bottom of this page. Copies
A certificate is complete only when all the information
of each are included in this guide and are designed to
is provided, including any tax account numbers required
be reproduced directly from this publication. For more
by that certificate. If there is a blank on the form, it must
information about all of the sales tax exemptions
be completed. Addresses must include the street or PO
currently provided in Kansas law and the exemption
Box, city, state, and zip code.
certificates to use, go to our web site for a copy of Pub.
KS-1520, Kansas Exemption Certificates.
3) G
.
IVE SPECIFIC DESCRIPTIONS
Be precise when describing the property or services
Blanket Exemption Certificates
purchased. You may use an itemized list, refer to an
itemized invoice, or at least, provide a general description
Unlike signing an invoice, one completed exemption
of the items. When describing your agribusiness, include
certificate may be used to cover multiple exempt
the principal product(s) sold or produced.
transactions. If you make recurring exempt purchases
of the same type from the same vendor or supplier, it is
Penalties for Misuse
not necessary to complete an exemption certificate for
each transaction. You may instead use a completed
A buyer who issues an exemption certificate in order
exemption certificate as a blanket exemption certificate
to unlawfully avoid payment of the sales tax for business
to cover future purchases of the same type. Most
or personal gain is guilty of a misdemeanor, and upon
exemption certificates may be used as blanket
conviction may be fined up to $1,000 or imprisoned for
exemption certificates.
up to a year, or both. When a buyer is found to have
used a resale exemption certificate to avoid payment of
NOTE: Although blanket exemption certificates may be valid, you
the tax, the director may also increase any penalty due
may be asked by a retailer to verify or renew this document every
on the tax by $250 or 10 times the tax due, whichever is
year. This procedure helps a retailer to maintain accurate and
up-to-date information about its exempt customers.
greater, for each transaction where the misuse of a
resale exemption certificate occurred.
CAUTION: When you rely on the use of blanket
exemption certificates to make exempt
EXEMPTION CERTIFICATES FOR AGRIBUSINESS
purchases you must segregate the purchases
that are taxable from those that are exempt.
Agricultural Exemption Certificate (ST-28F)
When you sign an exemption certificate, you agree
to do this. All of the exemption certificates have this
KDOR has designed the Agricultural Exemption
statement above the buyer’s signature:
Certificate (ST-28F) to assist those in agribusiness as
well as their retailers and vendors in documenting
“The undersigned purchaser understands and
exempt agribusiness sales. The certificate combines
agrees that if the property or services are used
four of the seven exemptions available to agribusiness
19
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