Form Pub. Ks-1560 - Kansas Business Taxes For Schools & Educational Institutions Page 9
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
37IMPORTANT: Not all projects undertaken by a
2) KDOR receives and approves or denies the
school qualify to receive a project exemption.
request.
See Taxable Projects, herein.
3) If approved, KDOR issues a numbered Project
Exemption Certificate (PEC) to the school.
Obtaining a Project Exemption
4) The school furnishes the numbered PEC to the
ON-LINE – AGENT STATUS. Because schools and
contractors and subcontractors for the job.
school districts are eligible for Agent Status, they should
5) C ontractors and subcontractors furnish the
apply for PECs on-line through the KDOR web site. With
numbered PEC to their suppliers.
this process, the political subdivisions can print the PEC
immediately after making application on-line. Just follow
6) Suppliers use the PEC number on all project
these steps:
invoices to verify the sale of materials* and/or
labor for the project is exempt.
1) Visit and
7) When the project is complete, contractor(s) will
click on Submit PEC Requests. Log into the
furnish a Project Completion Certification to
Kansas Tax Center.
the school with a copy to KDOR.
2) The first time a school applies for a PEC on-
line, they will want to indicate Agent Status
8) Contractor(s) keep all project invoices for five
Exemption Certificate and then complete the
years.
PEC application.
*
Contractors must accrue (pay) sales tax on any materials
3) Once approved for Agent Status, all PEC
purchased with a PEC that are not incorporated into the
requests
submitted
on-line
will
be
project or returned to the supplier for credit.
automatically approved and a PEC may be
printed immediately.
CAUTION: A school with agent status may only
issue PECs for wholly-owned projects. It
4) No recordkeeping by the school is
cannot issue a project exemption for a joint
required. In the past, schools with Agent Status
project with another entity. When a project involves two
had to complete a spreadsheet recording issued
or more entities, such as a joint project between a city
PECs. These reports were then submitted to
and a university, a separate application for project
KDOR. These recordkeeping duties have been
exemption must be filed with KDOR.
eliminated by the on-line procedure outlined
above. Schools will want to keep a copy of all
PECs in their records for at least five years.
TAXABLE PROJECTS
PAPER METHOD. If you prefer to obtain a project
These two kinds of school building projects do not
exemption through the paper process, complete a
qualify to receive a project exemption:
Request for Project Exemption Certificate (PR-76). Try
to apply at least 2 weeks in advance of the project; it will
• Dormitory/school housing projects
assure that you have received the certificate prior to
• Turnkey projects
the purchase of any project materials or labor.
Dormitories And Residence Halls
CAUTION: PECs are dated and are not
retroactive. All materials and taxable labor
The sales tax exemption for schools contains an
services purchased or performed by contractors
EXCEPTION for the property and services used to erect,
prior to the effective date of the PEC are taxable.
construct, repair, enlarge or equip buildings used
primarily for human habitation. In other words, an
However, if you fail to secure a project exemption
educational institution is generally not exempt on
certificate in time for your contractor(s) to use the
property or services purchased for its dormitories or
exemption for all or part of their project purchases, you
other types of student or faculty housing.
may apply to KDOR for permission to seek a refund of
the sales taxes paid to your contractors’ suppliers that
However, residential labor services are not taxed;
would have been exempt had a project exemption been
school dormitories and residence halls are considered
in effect. This refund process is outlined in K.A.R.
residential since they are enclosures within which
92-19-66e(n)(1). Submit such requests for refunds to
individuals customarily live. Therefore schools must pay
KDOR on Form ST-21PEC (available on our web site).
the sales tax on all materials, supplies, fixtures and
furniture used to construct, repair, enlarge and equip its
Project Exemption Steps
dormitories and residence halls, but labor services on
the residential areas of these buildings are not taxed.
These steps illustrate how a project exemption is used
by all affected parties.
To determine the tax treatment of an item or service
1) School completes a Request for Project
for a dormitory or residence hall, KDOR follows the
Exemption (PR-76).
interpretation outlined in Attorney General Opinion
9
ADVERTISEMENT
0 votes
Related Articles
Related forms
Related Categories
Parent category: Financial