Form Pub. Ks-1525 - Kansas Sales & Use Tax For Contractors Subcontracotrs & Repairmen Page 8
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49• Construction of a new office or retail building,
that must be performed within the existing building. Any
including landscaping, access roads, and
replacement, remodeling, restoration, repair, renovation,
parking lot;
or reconstruction done in the interior of an existing
commercial building or facility necessary to the
• Drilling a new oil, gas, or water well;
construction of the room or floor being added is also
• Construction of a new barn or silo; and
considered to be original construction.
• Construction of a feedlot, including the fencing
around each pen.
When adding a new room or floor, the interior work
is original construction if:
The construction of a building or facility on a site
previously occupied by a building or facility that has been
1) The work would not be necessary except for the
demolished, razed, or dismantled is also considered to
addition of the entire room or floor,
be original construction if the building or facility is totally
2) The work being done is necessary to support
new, regardless of whether the old foundation was also
the addition of the new room, floor, or the
demolished. See also Demolition
herein.
machinery housed there, OR
3) The support of the entire room or floor being
Other items that are new construction, but are
added is the direct reason for the work done to
TAXABLE because they are not buildings or facilities,
the interior.
are power lines, substations, pipelines, and railroad
tracks. Labor services to construct these new items are
If none of these three requirements are met, the
taxable.
services performed to the interior of the existing
commercial building or facility are TAXABLE.
Mobile, Manufactured and Modular Homes
Labor services performed to manufacture, construct,
Your charge for labor services for the entire project
or assemble a modular home in the factory are exempt
must be allocated between the services to add the new
from sales tax as original construction of a building or
room or floor (exempt), and any taxable services
facility. Materials are purchased exempt from sales tax
performed on the interior. Sales tax will be collected
by the manufacturer.
and remitted on the charge for those services performed
on the interior that do not meet one of the criteria above.
Labor to construct a foundation or basement for the
mobile, manufactured, or modular home, or the on-site
A grocery store owner is adding a room
construction of a building or facility, such as a shed or
to the existing store for a flower shop. At
water well, are exempt as original construction. Also
the same time, an existing window is
exempt are the services to toe-in and/or attach a new
bricked up, the doorway into the new room
mobile, manufactured, or modular home.
is widened, and the surrounding interior is wallpapered.
As discussed in the residential section earlier, the
The labor services to build the new wing itself are
sale of labor services of installing or applying tangible
exempt from tax as original construction. Also exempt
personal property in repairing or remodeling a mobile
are the electrical and plumbing work necessary in the
or manufactured home used as a residence is exempt
interior to provide electricity and water to the new flower
from sales tax when the mobile or manufactured home
shop. However, the labor services to widen the doorway,
is affixed to real property by water, sewer and electrical
brick-up the window, and install new wallpaper to the
connections.
existing interior of the store are TAXABLE.
Kansas sales tax law exempts 40% of the gross
3. The completion of any unfinished
receipts from the sale of new modular, manufactured
portion of an existing commercial
or mobile homes. Therefore, 60% of the selling price of
building or facility
a new modular, manufactured or mobile home is subject
to the combined state and local sales tax rate in effect
Services performed to complete any unfinished
at the sale location. Destination sourcing does not apply
to the retail sale of modular, manufactured or mobile
portion of an existing commercial building or facility are
homes. (The 40% exemption includes the installation
original construction and exempt from sales tax ONLY
of the home when the installation is included in the selling
when all four of the following conditions are met:
price.) The sale of a used modular, manufactured or
mobile home is exempt from sales tax.
1) The work was called for in the original blueprint,
building plan or specification;
2. The addition of an entire room or
2) The completion of the unfinished portion is within
floor to the exterior of an existing
a time reasonably requisite to the original
commercial building or facility
construction of the building or facility;
3) The owner or occupant is the first or initial owner
When adding an entire room or floor to the exterior
or occupant of the building or facility; AND,
of an existing commercial building, there is always work
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