Form Pub. Ks-1550 - Kansas Business Taxes For The Agrcultural Industry Page 20
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32on one form. This form may be used to claim the
number, one of the requirements to use a resale
exemptions for farm machinery and equipment,
exemption certificate. Wholesalers will use a Multi-
ingredient or component parts, consumed in production
Jurisdiction Exemption Certificate (ST-28M) instead of
and propane for agricultural use.
the resale certificate when buying their inventory from
a Kansas vendor. The Multi-Jurisdiction Exemption
Certificate is also used when a Kansas business is
Designated or Generic Exemption Certificate (ST-28)
buying exempt items from an out-of-state company
registered to collect Kansas sales or use tax. This form
This certificate may be used to claim any sales or
is available from our web site.
use tax exemption authorized by Kansas sales tax law.
KDOR has developed separate certificates for many of
the exemptions. This certificate is designed to cover
HOW TO CLAIM A UTILITY EXEMPTION
the remaining exempt transactions that require an
exemption certificate, and newly-legislated exemptions
To claim a sales tax exemption on an exempt use of
for which a specific exemption certificate has not yet
electricity, gas or water, you must first measure the
been designed. However, whenever possible, it is
amount of each utility that qualifies for the exemption
recommended that exempt buyers use the exemption
and express this as a percentage of the total utility
certificate designed especially for their exemption.
purchase through that meter. Once the percentage of
exempt use has been calculated, complete the utility
Although the designated certificate may be used to
exemption request (ST-28B). See page 30.
claim any of the exemptions available for agribusiness,
it is especially useful for claiming the exemptions for
An exemption request must be submitted for each
agricultural animals and soil erosion prevention, since
meter on which you are requesting an exemption. Submit
these two exemptions are not part of the Agricultural
this form to your utility provider along with your
Exemption Certificate (ST-28F).
workpapers and calculations to document the exempt
Resale Exemption Certificate (ST-28A)
percentage being claimed. The utility provider may
forward an exemption request to KDOR for review and
When you are a retailer of taxable products or
approval before granting the exemption.
services, you must have a sales tax account number to
collect tax from your customers (see page 4). A common
Keep a copy of all worksheets and calculations used
misconception is that a sales tax account number is
to determine the percentage of exempt utility usage.
also a “tax-exempt” number, allowing you to purchase
KDOR may ask to see the worksheets when auditing
items without tax just by giving your vendor the
the utility exemption or approving a request.
registration number. A sales tax account number is only
half of the requirement – it shows that the buyer is a
IMPORTANT: When there is a change in your
registered retailer but it does not indicate or validate
“exempt percent,” it is your responsibility to
why the purchase is exempt. This is done on the resale
immediately file a revised utility exemption form with your
exemption certificate. Therefore, when buying items for
utility provider.
your resale inventory, you must use a resale exemption
certificate, providing your sales tax account number as
You have one water meter that serves
part of the certificate.
your dairy barn. You have analyzed your
water usage in the dairy barn and arrived
The items purchased with a resale exemption
at these percentages:
certificate must be for resale and not for personal or
other non-exempt use. The property purchased must
65% is used to clean the milking machines,
be of the type normally sold at retail in the usual course
coolers, strainers, bulk milk tanks, and barn.
of your business. A resale exemption certificate cannot
20% is used to water the dairy cattle.
be used to buy equipment, fixtures and other
10% is used to bathe and care for the dairy cattle.
non-inventory items without tax. As added protection
5% is other use - outside faucet for washing
for sellers accepting resale exemption certificates, the
vehicles and watering home garden.
seller may demand a copy of the buyer’s sales tax
certificate of registration as a condition of honoring a
Therefore, 80% of your water from this meter is
resale exemption certificate.
exempt from the state sales tax because it is for an
agricultural or residential use (subject to local sales tax).
Multi-Jurisdiction Exemption Certificate (ST-28M)
The other 20% of the water is exempt from the state
and local sales tax because it is consumed in the
If you are a wholesaler (never make a retail sale),
you are not required to have a Kansas sales tax account
production of the milk.
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