Information Guide

Identifying Information:Nursing Homes & Health Care Facilities Self-Audit Fact Sheet
Tax Type:Kansas Retailers' Sales Tax
Brief Description:Nursing Homes & Health Care Facilities Self-Audit Fact Sheet
Keywords:
Approval Date:09/15/2011


Body:
KANSAS DEPARTMENT OF REVENUE
AUDIT SERVICES
NURSING HOMES & HEALTH CARE
FACILITIES SELF-AUDIT FACT SHEET

Nursing Homes & Health Care Facilities Fact Sheet


The taxability of sales and purchases of tangible personal property and labor services by Nursing Homes are summarized below. This list is not all-inclusive.

Purchases by Nursing Homes:
Kansas sales or compensating use tax applies to those purchases identified or designated as taxable in the chart below. The applicable Kansas sales or Kansas consumers’ use tax must be paid to the vendor or accrued and remitted directly to the Kansas Department of Revenue. Purchases from Kansas vendors may be reported using the retailers’ sales tax return. Purchases from outside this state which are delivered to this state are to be reported on the Kansas consumers compensating use tax return.

Purchases for use
Office equipment and supplies including but not limited to: computers, laptops, calculators, copiers, printers fax machines, writing utensils, paint, signs and office formsTaxable
Restroom and janitorial supplies, mops, broomsTaxable
Furniture and fixtures including but not limited to: desks, lamps, tables and chairs, carpet curtains, drapes, mattresses, beds and bedding suppliesTaxable
Appliances and kitchen equipment including but not limited to: air-conditioners, microwaves, televisions, water heaters, oven, refrigerators and freezers, coffee makers, mixers, sinks and dishwashers, pots, pans, mixing bowls, exhaust hoods, food processors, other food preparation suppliesTaxable
Menus, candles, candleholders condiment dispensers, dishes, glassware, cups, silverware, cookware and napkin dispensersTaxable
Cloth tablecloths, cloth napkins, uniforms, pictures, plants, decorationsTaxable
Disposable items including but not limited to: plastic dinnerware, and table service, drinking straws, paper napkins, paper or plastic bags and paper bibs, disposable wipesTaxable
Items such as clothing, hospital gowns, robes, slippers, bathroom and facial tissue, bed and bath linens, cleaning and sterilization supplies, lab coats, smocks, medical forms and charts, medical linens, latex glovesTaxable
Items used such as wax paper, stretch wrap, foil, paper towels, dish soap, cleaning materials, garbage bags, etcTaxable
Pest control materials and supplies.Taxable
Repair and replacement parts and labor services of repairing, servicing, altering or maintaining tangible personal property such as computers, printers, copiers, stoves, ovens, security equipment, etc.Taxable
Warranty or service agreements for tangible personal property such as, shop equipment and tools, computers, printers, copiers, security equipment, etc.Taxable
Trash removal, shredding services, cleaning services (except when applying chemicals such as wax, scotch guard, etc).Exempt
All materials for repairing, servicing and maintaining, unless purchased under a valid project exemption certificate. Taxable
Labor services on original construction of new building.Exempt
Labor services for repair and remodeling of existing real estate for residents roomsExempt
Labor services for repair and remodeling of existing real estate for all areas other than residents rooms. Note: For repair and remodeling contracts that involve both residential and non-residential areas use the square footage percentage to determine what portion of the labor services would be taxable.Taxable
Utilities (electricity, gas water, heat) for certain Non-Profit nursing homes exempt from real estate property tax. Note: Must file the Court of Tax Appeals letter determination with the utility provider.Exempt
Utilities for portion of nursing home other than residents’ rooms(without COTA Exemption)Taxable
Utilities for residents’ rooms (electricity, gas, heat) without the COTA exemption. Must provide utility provider a utility study verifying exempt percentage. Exempt from State tax Note: Water for residential has no state or local tax. Taxable for local tax only
Tangible property purchased by the nursing home to be given away or donated. (Items that are given away or donated to a tax exempt entity are not subject to sales tax as of April 2007 if item was originally purchased for resale).Taxable
Cleaning servicesExempt
Telephone answering services.Taxable
Educational materials, posters, maps or other literature.Taxable
Professional services such as legal or accounting services.Exempt
Linen and laundry services.Taxable
Business cards, office supplies, paper, toner cartridges, etc.Taxable
Printed materials production and distribution (such as direct mail items).Taxable
Security systems monitoring service.Exempt
Security cameras and other security equipment purchased.Taxable
Canned Software and software upgrades and labor services to modify, alter, update or maintain software.Taxable
Custom software, custom software upgrades and labor services to modify, alter, update or maintain customized software.
"Custom" software = software developed for a single end user.
Exempt
Newspaper and magazine subscriptions.Taxable
Advertising in newspapers, radio, television, etc.Exempt
Promotional items including but not limited to: calendars, mugs and items of clothing.Taxable
Complimentary bottled water, soft drinks, coffee, creamer, sugar, cups and stir sticks, balloons, stickers, pens and candy.Taxable
Purchase or Lease of real estate, Insurance.Exempt
Containers for hazardous wasteTaxable
Oxygen tanks, humidifiers, concentrators, other oxygen delivery equipment, kidney dialysis equipment and enteral feeding systems, if prescribed by a licensed practitioner.Exempt
Medical supplies and equipment, physical therapy equipment for the purpose of providing medical services to residents, durable medical equipment and wheelchair cushions, braces and supports that do not become part of the wheelchair (except direct purchases by nonprofit skilled nursing homes or nonprofit intermediate nursing care homes are exempt.)Taxable
Mobility enhancing equipment, such as wheelchairs and walkers, and prosthetic devices, if prescribed by a licensed practitionerExempt
Tangible personal property used for human habitation purposes.Taxable
Drugs dispensed pursuant to a prescription order by a licensed practitionerExempt

The taxability of sales of tangible personal property and labor services by is summarized below. This list is not all inclusive. The applicable sales tax must be collected unless the purchaser provides a valid exemption certificate*.
Sales by Nursing Homes
Sales of meals or drinks, including meals sold to employees at full or reduced priceTaxable
Sales of miscellaneous non-prescription supplies to residents or guestsTaxable
Services provided to residents including skilled care, salon or spa, etc.Exempt
Vending machine salesTaxable

* Sales/rentals to exempt entities with proper exemption certificates provided are exempt from sales tax. Ensure the exemption certificates are retained to substantiate all non taxed transactions.

Note: Kansas tax applies to the “gross receipts” from the sale of taxable goods or services in Kansas. Gross receipts include any amounts collected from the customer including any charges billed for freight, delivery or special handling.



Date Composed: 09/15/2011 Date Modified: 02/24/2012