Private Letter Ruling

Ruling Number:P-1998-04
Tax Type:Kansas Retailers' Sales Tax
Brief Description:Original construction and how sales tax applies to the completion of unfinished space within a building.
Approval Date:02/02/1998

Office of Policy & Research

February 2, 1998



The purpose of this letter is to respond to your letter dated January 22, 1997.

You stated that the XXXXXXXXXXXXXXXXXX had recently acquired a building in XXXXX, Ks. The building contains an amount of unfinished space. You asked if the completion on the unfinished space would qualify for exemption from sales tax as original construction.

You suggested that if additional information was needed that the architectural firm handling the this work be contacted. I spoke with XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX XXX and she indicated that building in question was constructed in 1976. The total present building consisted of approximately ten thousand square feet (10,000). One thousand square feet is office and the balance is production area formerly used to produce XXXXXXXXXXX.

The regulation K.A.R. 92-19-66b(f) states:
(4) the owner or occupant is the first or initial owner or occupant of the building or facility.

Based on the facts of your letter and a conversation with XX XXXXX the project architect, it would be the opinion of the Department that the completion of the unfinished area would not meet the criteria of the regulation to be defined as original construction.

Sincerely yours,

Mark D. Ciardullo
Tax Specialist


Date Composed: 02/04/1998 Date Modified: 10/10/2001