Kansas Administrative Regulations › Agency 92 - KANSAS DEPARTMENT OF REVENUE › Article 19 - KANSAS RETAILERS' SALES TAX › Section 92-19-66b - Labor services

Current through Register Vol. 43, No. 28, July 11, 2024
(a) Each
			 contractor, subcontractor, and repairman shall be responsible for collecting
			 and remitting sales tax on taxable services performed for others, including
			 taxable services performed for other contractors. A contractor, subcontractor,
			 or repairman shall not issue or accept a resale exemption certificate that
			 claims an exemption from sales tax for services being purchased from or sold to
			 another contractor, subcontractor, or repairman.
(b) The taxable base for all contracts
			 involving the application or installation of tangible personal property shall
			 be the difference between the contract price and the cost of material,
			 supplies, and payments to subcontractors, including sales or compensating tax
			 paid by the contractor on the materials, supplies, and subcontractor charges
			 purchased by the contractor to complete the contract.
(c) Each contractor, subcontractor, or
			 repairman who does not separately state the amount of sales tax for services
			 performed in that person's contract, bid estimates, customer billings, or other
			 evidence of the transaction shall state in the document that all applicable
			 sales taxes are included in the selling price. If the statement does not appear
			 in the contract, bid estimate, billing, or other evidence of the transaction,
			 it shall be presumed that the sales tax was not charged to the consumer. Each
			 retailer shall carry the burden of proving that the sales tax was charged to
			 the consumer and properly remitted to the state.
(d) The service of installing or applying
			 tangible personal property in connection with the original construction, which
			 is the first or initial construction of a new building or facility, shall not
			 be subject to sales tax. The erection of a building or facility on a site
			 previously occupied by a building or facility that has been demolished, razed,
			 or dismantled shall be considered to be original construction if the building
			 or facility is totally new, whether or not the old foundation was also
			 demolished.
(e) The service of
			 installing or applying tangible personal property for the addition of an entire
			 room or floor to the exterior of an existing building or facility shall not be
			 subject to sales tax. Any replacement, remodeling, restoration, repair,
			 renovation, or reconstruction done in the interior of an existing building or
			 facility necessary to the construction of an entire room or floor added to the
			 exterior of an existing building or facility shall be considered to be original
			 construction and not subject to sales tax when any of these conditions is met.
(1) Except for the addition of the entire
			 room or floor to the exterior of the building or facility, the work performed
			 inside the existing building or facility would not be necessary.
(2) The work being done in the existing
			 building or facility is necessary to support the addition of the new room or
			 floor being added to the exterior of the building, facility, or the machinery
			 contained therein.
(3) The support
			 to the entire room or floor being added to the exterior of the existing
			 building or facility is the direct causal factor of the construction being
			 performed to the interior of the existing building or facility.
If none of the three requirements can be met, the services
				performed to the interior of the existing building or facility shall be subject
				to sales tax, and the cost of services rendered in connection with the entire
				project shall be allocated between the addition of the new room or floor and
				the services performed to the interior of the existing building or facility.
				Sales tax shall be collected and remitted for that portion of services
				allocated to those services performed to the interior of the existing building
				or facility.