Form Pub. Ks-1525 - Kansas Sales & Use Tax For Contractors Subcontracotrs & Repairmen Page 7
ADVERTISEMENT
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49see Information Guide EDU-28, Sales Tax Guidelines
ORIGINAL CONSTRUCTION
for Businesses that Sell and Service Appliances
and Electronic Products.
Labor services involving the installation or application
2) Labor to repair tangible personal property - such
of tangible personal property performed in connection with
as dishwashers, washer/dryers, TVs, stereos, etc.
the original construction of a building, facility are exempt
See Repairmen, herein.
from sales tax. There are five types of projects considered
to be original construction. These are the:
Dual Use Buildings - Allocation Ratio
1
2
1) First or initial construction of a building
or facility
;
Not all buildings are exclusively residential in nature.
When a building is used for both residential and
2) Addition of an entire room or floor to an existing
commercial purposes, charges for labor services must
building or facility;
be allocated between the residential portion of the
3) Completion of any unfinished portion of an
building (exempt) and the commercial portion of the
existing building or facility for the first owner;
building (generally taxable).
4) Restoration, reconstruction, or replacement of
3
a building, facility or utility structure
damaged
The charges for labor services that cannot be entirely
or destroyed by fire, flood, tornado, lightning,
assigned to the residential or commercial portions of a
explosion, windstorm
4
, ice loading and attendant
building are to be allocated based on the square footage
winds, terrorism or earthquake; and
of the areas that are exclusively residential and
exclusively commercial. The allocation ratio for residential
5) Construction, reconstruction, restoration,
and commercial use must be used when performing labor
replacement, or repair of a bridge or highway.
services on:
1
• apartment complexes (rental offices are
A building is an enclosure (walls and a roof) where people
customarily live or are employed, and includes enclosures that
considered to be residential - no tax on labor
house machinery, equipment, or other property. “Building” also
performed in the rental office)
includes the land improvements immediately surrounding the
• bed and breakfasts
building such as landscaping and driveways.
• dormitories
2
A facility is a mill, plant, refinery, oil well, gas well, water
• nursing homes
well, feedlot or any transmission or distribution line of any
• businesses that include the owner’s living quarters
cooperative, nonprofit, membership corporation organized
under or subject to the provisions of K.S.A. 17-4601 et seq., and
A contractor agrees to paint the exterior of
amendments thereto, or of any municipal or quasi-municipal
an existing bed and breakfast, which also
corporation, including the land improvements immediately
serves as a residence for the owners at a
surrounding such facility.
cost of $4,000. The owners will supply the
3
A utility structure is the transmission and distribution lines
paint. 50% of the square footage of the building is guest
owned by an independent transmission company or
rooms and bathrooms; 25% is the owner ’s private
cooperative, the Kansas electric transmission authority or
quarters and 25% is the square footage of the kitchen,
natural gas or electric public utility.
laundry and porch facilities used by both the owners and
4
Windstorm means straight line winds of at least 80 miles
guests. The contractor will charge the B&B owner sales
per hour as determined by a recognized meteorological
tax on 75% of $4,000, or $3,000 (only the square footage
reporting agency or organization.
used exclusively as a residence is exempt from sales tax
on the labor).
Following are explanations, and examples of these five
types of projects that qualify as original construction.
An allocation ratio must also be used on home
businesses that are conducted in areas that are
1. The first or initial construction
segregated from the living quarters and are open to the
of a building or facility
walk-in public during regular business hours and other
similar businesses. For the purpose of this exemption, a
home office qualifies as part of a residence.
The construction of a new house, office building,
warehouse, shed, or outbuilding is original construction.
You are rewiring a Victorian home for the
Included in the definition are the land improvements
artist who lives there and also operates a
immediately surrounding the building or facility, such as
gallery and gift shop in the lower floor of
landscaping and fencing. Examples include:
the home that is open to the public during
• Construction of a new apartment complex,
normal business hours. The gallery and gift shop occupy
including landscaping, security system, deck,
30% of the total square footage of the home. Since 70%
driveway, swimming pool or privacy fence;
of the home remains residential in nature, you will only
• Construction of a detached or attached garage,
charge sales tax on 30% of the total charge for labor; the
including a new driveway to that garage;
materials are fully taxable.
7
ADVERTISEMENT
0 votes
Related Articles
Related forms
Related Categories
Parent category: Financial