Form Pub. Ks-1525 - Kansas Sales & Use Tax For Contractors Subcontracotrs & Repairmen Page 3
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49This publication will explain the taxable, nontaxable, and
exempt labor services using common industry examples.
INTRODUCTION
SALES TAX STRUCTURE
The Kansas statewide sales (and use) tax rate
WHAT IS TAXABLE IN KANSAS?
is 6.3%. In addition to the state sales tax, Kansas
counties, incorporated cities and special taxing districts
may impose a local sales tax. Local sales tax rates
Kansas Retailers’ Sales Tax generally applies to:
currently range from .10% to 3%. The local rate(s) are
added to the state rate to arrive at the total sales tax
The retail sale, rental, or lease of tangible
percentage collected by a retailer or contractor.
personal property,
and
Kansas is a participating state in the Streamlined
Sales Tax Project and has enacted legislation
The sale of labor services to install, apply,
incorporating the Streamline definitions and tax structure
repair, service, alter, or maintain tangible
into Kansas sales tax law. Since July 1, 2003, the rate
personal property.
of tax charged on retail sales of goods or taxable
services has been based on where the customer takes
Tangible personal property is goods or
delivery of the property (material, parts) or makes first
merchandise that can be owned or leased, has a
use of the taxable service. Retailers shipping goods to
physical presence, and can be moved (sometimes with
a Kansas customer in another taxing jurisdiction will
great difficulty). Tangible personal property is different
charge the tax rate in effect at the delivery or ship-to
from intangible personal property (stocks and bonds)
address. Contractors will charge the tax rate in effect at
or real property (land or buildings). Sales tax is not
the job site on the taxable labor services portion of the
imposed on the sale of real or intangible property.
contract, regardless of its size.
Examples of tangible personal property in the
Tax Jurisdiction Assistance
construction and repair industries include: building
materials and supplies; plumbing, heating, air
To assist you in collecting the correct sales tax
conditioning and electrical fixtures or supplies; paint and
percentage, KDOR (Kansas Department of Revenue)
wallpaper; dirt, rock or sand; flowers, grass, trees and
has developed Pub. KS-1700, Sales Tax Jurisdiction
shrubs; repair parts; machinery, equipment and
Code Booklet. This booklet is an alphabetical listing of
vehicles. As a general rule, all of these items are subject
all Kansas counties, incorporated cities and special
to sales tax when purchased by contractors and
taxing jurisdictions, their tax rates and jurisdiction codes
subcontractors.
for tax reporting, and the effective dates of the tax rate.
Since local rates may only be changed at the start of a
Labor services of installing or applying tangible
calendar quarter, this booklet is updated quarterly. The
personal property is subject to sales tax (as a general
code booklet and its quarterly updates are available on
rule). Therefore, the labor fee that contractors and
our KDOR web site at:
subcontractors charge to install or apply the materials
is subject to sales tax. The installation of lumber, roofing,
An on-line sales tax rate locator is also available on
siding, electrical and plumbing materials, etc., and the
our web site. The “locator” provides sales tax rates by
application of paint and wallpaper are examples of
street address or zip code. Registered Kansas retailers
installing or applying tangible personal property. Once
also have the ability to upload sales tax rates and
installed or applied, tangible personal property often
jurisdiction codes for all of their customers by
becomes a part of real property.
electronically transmitting their customer’s names and
addresses to us in a comma delimited format.
The labor charged by repairmen to repair, service,
alter, or maintain tangible personal property is also
generally subject to sales tax. Examples include the
DEFINITIONS
repair or servicing of bicycles, equipment, furniture,
lawnmowers, vehicles and the like. Sales tax is due on
labor services even when the tangible personal property
Contractor means a person or business, including
is fastened to, connected with, or built into real property,
contractor-retailers, that contract to furnish materials
such as the repair of a restaurant’s stove, oven, etc.
and the labor to install or apply those materials into
real property, including buildings and other structures.
Residential and original construction contracts are
A contractor expends its labor and skill to convert
two types of real property projects that are exceptions
building materials into real property improvements. A
to these general rules of taxability of labor services.
contractor sometimes contracts to furnish labor only,
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