Form Pub. Ks-1525 - Kansas Sales & Use Tax For Contractors Subcontracotrs & Repairmen Page 20
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49required to pay the Kansas Consumers’ Compensating
building, facility or land improvement. Repairmen working
use tax directly to KDOR. See How to Report and Pay
on farm machinery and equipment should purchase the
Use Tax.
materials exempt from sales tax and obtain Form
ST-28F, Agricultural Exemption Certificate (herein) from
However, if the project has received a Project Exemption
the customer. For additional information see Publication
Certificate, this purchase is exempt from use tax. You
KS-1550, Kansas Sales and Use Tax for the Agricultural
will write the project exemption number on your purchase
Industry, available from the KDOR web site.
invoice (or attach a copy of the project exemption
certificate to it) to verify the exemption.
ADDITIONAL INFORMATION
I am an electrician rewiring a restaurant’s
kitchen that is damaged by fire. What is
subject to sales tax?
The materials are taxable based upon their cost to you.
The labor services portion of the contract is exempt from
CONTRACTOR Q & A – Review of the General Rules
sales tax since services to repair damage by a fire
qualifies as “original construction”. To substantiate the
“original construction” classification of this commercial
I am a contractor and I have a valid Kansas
job in your sales tax records, you must obtain a notarized
retailers’ sales tax number. Can I give my
affidavit from the owner stating that the damage was the
suppliers a Resale Exemption Certificate for
result of a fire.
parts and materials?
NO. Contractors are required to pay sales/use tax on
I am a general contractor and as part of my
their purchases of materials and supplies. Only
contract, I purchase city permits on behalf
contractor-retailers, as defined on page 4, may purchase
of my customer. Are these permits taxable
their materials and supplies for resale (inventory) using
as part of my gross receipts, or are they
the Contractor-Retailer exemption certificate.
excludable?
You have included the cost of city permits in the total
I am repairing a barn for a farmer. The
construction contract. This “overhead cost” is part of your
farmer claims to be exempt from paying
gross receipts, and is TAXABLE if your labor services
sales tax on his farm machinery and
are taxable. (See The Sales Tax Base.) The city permits
themselves are not taxable — the city does not charge
equipment. Are my labor and the materials used
you sales tax on the permits.
on his barn exempt from sales tax?
NO. Farm machinery and equipment does NOT include
buildings (i.e., barns, machine sheds), building materials,
I am a Kansas subcontractor working for a
disposable supplies, fence or fencing materials.
Kansas general contractor, furnishing
Therefore, your labor services to repair the barn are
materials and performing taxable labor
services on a job site in Nebraska. What are my
TAXABLE.
sales and use tax obligations?
However, if your labor services had been performed in
M
: Any materials purchased or removed from your
connection with the “original construction” of the barn,
ATERIALS
inventory in Kansas are subject to Kansas sales tax,
your labor charge would be exempt from sales tax as
even though they will be incorporated into a project in
original construction. In either case, you must pay or
another state. Materials purchased out-of-state,
accrue sales tax on the materials.
delivered by the seller directly to the Nebraska job site
(the materials never enter Kansas) are not subject to
Kansas sales or use tax. However, regardless of the tax
I am a contractor building a new building
paid to Kansas, the materials may also be subject to
that qualifies as “original construction.”
Nebraska tax laws because they are being used in
Some materials were purchased from Ohio
Nebraska. Contact Nebraska to learn of your tax
and shipped by common carrier direct to the
obligations to that state. L
S
: Since your
ABOR
ERVICES
Kansas job site. I did not pay any sales tax on these
taxable labor services are not performed in Kansas, they
materials. What is the proper sales tax procedure?
are not taxable to Kansas, even though your billing is to
a Kansas contractor. Be sure that the invoice indicates
Materials and supplies purchased without tax from an
the Nebraska location of the job.
out-of-state company are subject to the Kansas
compensating use tax rate (6.3% state rate plus local
Since you are working in Nebraska, your labor services
tax) in effect where you took delivery of them (job site).
are subject to Nebraska tax laws. Contact Nebraska for
Because your vendor is not registered to collect the
the requirements for sales tax, use tax, or registration of
Kansas Retailers’ Compensating use tax, you are
nonresident contractors there.
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