Form Pub. Ks-1526 - Kansas Business Taxes For Motor Vehicle Transactions Page 14
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
44Joe Hauler purchases a semi and trailer
Exempt Purchases
which he will lease to Roadway, Inc. (an
ICC holder). Joe Hauler does not have
Dealers are authorized to purchase some
ICC authority however, he may purchase
consumables exempt from sales tax with a properly
the semi and trailer exempt from sales tax by providing
completed Consumed In Production Exemption
the dealer with a properly completed ICC Exemption
Certificate (ST-28C) found in Pub. KS-1520. Tax exempt
Certificate (ST-28J) which will require him to obtain a
consumables include sand paper, rubbing compounds,
Kansas retailers’ sales tax registration.
masking tape, thinners, etc. See NOTICE 93-04.
Of course, service departments and repair shops
SALES TO CERTAIN FOREIGN DIPLOMATS
may always purchase items which they intend to resell
exempt from sales tax with a properly completed Resale
Certain official personnel from foreign countries who
Exemption Certificate (ST-28A). This includes not only
are stationed in the United States are issued tax
the parts that will be sold over the counter, but also the
exemption cards by the U.S. State Department, Office
parts that will be installed in customer’s vehicles by the
of Foreign Missions (OFM). Their level of tax exemption
dealer’s service technicians. See NOTICE 93-4.
while in the United States is determined by the level of
tax exemption granted to our official personnel stationed
As discussed above, the resale exemption also
in their country. The plastic tax exemption cards have
applies when a dealer is having repairs done to the
a photo ID, are valid nationwide and identify the level
vehicles it has in inventory for resale, or when
of exemption.
subcontracting out the repair of a customer’s vehicle.
This is because the dealer/service department is not
However, the OFM enforces the exemption of eligible
the final consumer of the vehicle repair, but will collect
foreign missions and their members when buying or
sales tax from the vehicle buyer or the service
leasing a vehicle. The purchaser must first present an
department customer.
OFM tax exemption card. The dealer MUST retain a
copy of this card and contact OFM at (202) 895-3500.
A dealer’s service department sends a
OFM will determine the tax-exempt status of the
customer’s radiator out to a radiator shop
purchaser and provide a letter to the seller as to whether
to be boiled out and repaired. The service
or not the purchaser is eligible for exemption from sales
department will provide the radiator repair
or use tax on the vehicle sale. Only authorization
shop with a completed Resale Exemption Certificate
letters provided directly from OFM to the seller
(ST-28A) in order not to pay sales tax on the radiator
are valid for tax-exemption on a vehicle sale.
repair parts and labor. Once the service department
has completed the vehicle repair, it will collect sales tax
Additional information is available from the OFM or
from the customer on its total charges, including its
its web site at: state.gov/ofm/tax/vehicles/.
charge for the radiator work performed by someone else.
Sales
VEHICLE REPAIR
Kansas sales tax is due on any fees received for
AND SERVICE
performing the labor service of repairing, servicing,
altering or maintaining tangible personal property. Thus,
all charges made to repair, service, alter or maintain a
vehicle within the state of Kansas are subject to Kansas
SERVICE DEPARTMENTS
sales tax.
Taxable Purchases
Mr. Crow takes his 2007 Jeep Cherokee
to a local dealership for a wheel alignment,
Many Kansas dealers not only sell vehicles but also
oil change, and body work on the
operate service departments and body shops. As a
passenger-side rear panel. Mr. Crow’s
general rule, the tools and equipment purchased by a
itemized bill from the dealership is as follows.
dealership for use in its service department are subject
to sales tax. These include, but are not limited to:
Wheel Alignment
$ 89.00
alignment equipment, hand tools, power tools, vehicle
Oil (5 quarts)
10.00
lifts, welders, wrenches, etc.
Oil Filter
8.00
Rear Panel
385.00
Also taxable to a dealership/service department is
Shop Supplies
5.00
all office equipment, supplies, uniforms, shop rags,
4 Hrs. Labor @ $45/hr
180.00
safety glasses, safety shoes, and newspaper and
Sub-total
677.00
magazine subscriptions. Refreshments, coffee and
7.2% Sales tax
48.74
snacks provided free of charge to employees and/or
Total
$ 725.74
customers are also taxable.
14
ADVERTISEMENT
0 votes
Related Articles
Related forms
Related Categories
Parent category: Financial