Private Letter Ruling

Ruling Number:P-2003-023
Tax Type:Kansas Retailers' Sales Tax
Brief Description:Sales taxation of services done at a well site.
Approval Date:04/21/2003

Office of Policy & Research

April 21, 2003


Thank you for your recent letter. In it you ask to receive copies of the department's publications on sales taxation of the services done at a well site. I have enclosed a copy of Revenue Ruling 19-2002-2 and a copy of a Question and Answer that the department prepared at the same time that the Revenue Ruling was issued.

You operate a hot oiler. A hot oiler is a truck or skid-mounted unit used to heat oil or treatment fluid. Hot oilers are routinely used in the removal of wax deposits from the upper well bore section of wells in cold climates where low wellhead temperatures increases the susceptibility of heavy crude oil to wax precipitation. You use the unit to remove paraffin from the well bore and from feeder lines. Down hole maintenance services performed by a hot oiler are subject to sales tax. Hot oil services performed to feeder lines and gather and pipelines are also subject to sales tax. This is explained in Questions 35 and 36 of the Q & A:

I hope my letter and the enclosed documents answer all of your questions. If you have any more, please call me at 785-296-3081 and we will discuss them. This is private letter ruling. It is based solely on the facts provided in your request. If it is determined that undisclosed facts were material or necessary to make an accurate determination by the department, this ruling is null and void. This private letter ruling will be revoked in the future by operation of law without further department action if there is a change in the statutes, administrative regulations, or case law, or a published revenue ruling, that materially affects this ruling. Enclosures

Date Composed: 04/22/2003 Date Modified: 04/22/2003