Form Pub. Ks-1525 - Kansas Sales & Use Tax For Contractors Subcontracotrs & Repairmen Page 15
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49IMPORTANT: PECs apply ONLY to the project
Only the following tax exempt entities are eligible
for which they were issued, and EXPIRE upon
to request and obtain a PEC for most construction,
completion of that project. Qualifying entities and
remodel, or repair projects and may do so on-line using
businesses must apply for and receive a PEC for each
the KDOR web site.
project in order to allow contractors, subcontractors or
• Kansas political subdivisions (Kansas cities,
contractor-retailers to purchase or furnish materials
counties and townships)
without tax. PECs are dated and are not retroactive. All
• Nonprofit hospitals
materials purchased and all taxable labor services
• Nonprofit schools & educational institutions
performed on a job prior to the effective date of the
• Nonprofit 501(c)3 zoos
PEC are taxable.
• Nonprofit 501(c)3 religious organizations
Refunds
• Primary care clinics and health centers
• Booth Theatre Foundation, Inc.
Any exempt entity that fails to secure a PEC in time
• TLC Charities Foundation, Inc.
for a contractor to secure exemption for part or all of its
• Kansas correctional institutions including
purchases may apply to the department for permission
privately constructed correctional institutions
to seek a refund of the sales taxes paid to contractors,
contracted for state use and ownership
subcontractors and their suppliers that would have been
• U. S. Government and its agencies
exempt had a project exemption been in effect. Requests
for refunds must be submitted to KDOR on Form
Selected from the list above, the following exempt
ST-21PEC, available from our web site.
entities may obtain a PEC immediately using the on-
line application from our web site. All PEC requests,
How to Use a PEC
after the first on-line request, will be automatically
approved for these entities – meaning that a printable
Once approved or issued, a copy of the PEC must
Agent Issued PEC will be immediately available each
be furnished to all contractors and subcontractors for
and every time these entities make application on-line.
the project. All parties will then use this number to
• Kansas political subdivisions (Kansas cities,
purchase materials, fuel, form lumber, and labor services
counties and townships)
without tax, and to rent or lease construction equipment
without tax. Contractor-retailers will use it to remove
• Nonprofit hospitals
project materials from their inventory without tax. A PEC
• Nonprofit schools & educational institutions
may NOT be used to buy tools, machinery or equipment,
• Kansas correctional institutions including
or to rent portable offices, storage containers, port-a-
privately constructed correctional institutions
potties, office equipment or telephones.
contracted for state use and ownership
P
E
S
ROJECT
XEMPTION
TEPS
Kansas political subdivisions, nonprofit hospitals and
nonprofit schools & educational institutions may apply
The following chronological steps illustrate how a PEC
to the department for agent status for the sole purpose
is requested, issued and used by the project’s owner,
of issuing and furnishing PECs to contractors working
contractors and suppliers.
for them.
1) A qualifying entity (petitioner) completes a
CAUTION: The state of Kansas and its agencies
request for project exemption by completing
(except Kansas correctional institutions
Form PR-76 or on-line at the KDOR web site.
including privately constructed correctional
2) KDOR receives and approves or denies the
institutions contracted for state use and ownership) do
request.
not qualify for a PEC. Materials purchased by
3) If approved, KDOR issues a numbered PEC
contractors for a state project are always taxable. Only
(Form PR-74) and instructions to the petitioner.
direct purchases by the state of Kansas or its agencies
are exempt using its Tax-Exempt Entity Exemption
4) The petitioner furnishes copies of the
Certificate.
numbered certificate (leaving the seller and
purchaser information blank) to the general
An economic development project may qualify for a
contractor and/or to each of the contractors
PEC under the provisions of K.S.A. 79-3606(cc). As a
and sub-contractors for the job.
general rule, completion of the project must result in an
5) Contractors and subcontractors make copies
increased number of jobs. A for-profit business that
of the numbered certificate, and then complete
meets the qualifications may obtain a PEC to build,
the purchaser and seller information, sign and
reconstruct, remodel or enlarge its business facility.
furnish the completed numbered certificate to
Apply for this PEC on Form PR-70b. The PEC also
each of their suppliers for the job.
extends to the purchase and installation of machinery
and equipment in the qualifying building or facility.
6) Suppliers put the certificate number on all
15
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