Questions and Answers
Identifying Information:
Natural Gas-Residential Use
Tax Type:
Kansas Retailers' Sales Tax
Brief Description:
Sale of Natural Gas, Electricity, Heat, and Water for Residential Use
Keywords:
Effective Date:
12/01/1993
Body:
SUBJECT:
NATURAL GAS - RESIDENTIAL USE #81 (12/93)
STATUS: The general rule is that a state sales tax is
not
assessed upon the gross receipts received from the sale of natural gas, electricity, heat and water delivered through mains, lines or pipes to residential premises for noncommercial use by the occupant. HOWEVER, SAID SALE IS SUBJECT TO LOCAL SALES TAX (K.S.A. 12-189a). The taxing situs for determining which local tax applies is the situs of the user thereof (K.A.R. 92-21-9).
Likewise, all sales of natural gas, electricity, heat and water delivered through mains, lines or pipes for agricultural use, are exempt from state sales tax. HOWEVER, SAID SALE IS SUBJECT TO LOCAL SALES TAX (K.S.A. 12-189a). The taxing situs for determining which local tax applies is the situs of the user thereof (K.A.R. 92-21-9).
The sale of natural gas, electricity, heat and water delivered through mains, lines or pipes for heating, cooling or lighting a commercial premise is subject to sales tax. The taxing situs for determining which local tax applies is the situs of the user thereof (K.A.R. 92-21-9).
BASIS:
K.S.A. 79-3606(w)
exempts from sales tax, "all sales of natural gas, electricity, heat and water delivered through mains, lines or pipes to residential premises for noncommercial use by the occupant of such premises and all sales of natural ass, electricity, heat and water delivered through mains, lines or pipes for agricultural use".
K.S.A. 12-189a. Same; certain sales exempt from state sales tax subject to local tax.
The following sales shall be subject to the taxes levied and collected by all cities and counties under the provisions of K.S.A. 12-187 et seq. and amendments thereto:
(a) All sales of natural gas, electricity, heat and water delivered through mains, lines or pipes to residential premises for noncommercial use by the occupant of such premises and all sales of natural gas, electricity, heat and water delivered through mains, lines or pipes for agricultural use;
(b) All sales of propane gas, LP-gas, coal, wood and other fuel sources for the production of heat or lighting for noncommercial use of an occupant of residential premises;
(c) All sales of intrastate telephone and telegraph services for noncommercial use.
K.A.R. 92-19-39. Natural gas, electricity, heat and water; sales for agricultural use.
(a) Sales of natural gas, electricity, heat and water delivered through mains, lines or pipes for agricultural use are exempt from sales tax. Where utility services are not metered individually between agricultural and commercial uses, the burden of establishing the percentage of exempt usage is on the consumer, and the formula and computations used in establishing the percentage of exempt use shall be available for inspection at any time by the department of revenue. The consumer claiming an exemption hereunder shall file an exemption certificate with each retailer providing sales of exempted commodities when a portion of the usage is for non-exempt purposes and said non-exempt use is not individually metered. Sales of otherwise taxable materials or services are not exempted by virtue of being sold in connection with commodities exempt from sales tax hereunder.
(b) As used in this regulation, "agricultural use" means any use related to the occupation of farming or ranching. "Farming or ranching" means an enterprise using land and improvements thereto for agricultural and horticultural production ultimately intended for consumption either as a food product, textile, or in the production thereof. Farming or ranching includes, but is not limited to, such enterprises producing: forages; poultry and poultry products; grains and feed crops; maple syrup; dairy products; livestock, including beef and dairy cattle, sheep, swine, goats or rabbits, including the breeding, grazing and feeding of any or all such animals; bees and apiary products; fur animals, fish; fruits of all kinds, including grapes, nuts and berries; and vegetables. Farming or ranching does not include commercial operations such as processing food or dairy products, off-farm grain storage and marketing, the processing of lumber, or the operation of a stockyard or slaughter house. Nor does farming or ranching include such commercial operations as a floral shop, turf farm or nursery; to the extent such floral shop, turf farm primarily cultivates products intended to be of an ornamental or decorative nature.
(c) As used in this regulation, " commercial use" means any use related to activities following the production process and during or subsequent to processing or marketing operations.
K.A.R. 92-19-37. Natural gas, electricity, heat and water; sales to residential premises.
(a) Where sales of natural gas, electricity, heat and water delivered through mains, lines or pipes are made to multi-family dwellings or other buildings in which residential premises are not individually metered and billed, only the pro rata portion of these sales equal to the percentage of the building actually occupied as residential premises shall be subject to exemption. As used in this regulation, "residential premises" shall have the meaning ascribed to it in K.A.R. 92-19-38.
(b) Where utility services are not metered individually between residential and commercial use in combination purpose buildings, the occupant owner or lessee shall file an exemption certificate with each retailer providing sales of exempted commodities. The exemption in this case shall be prorated based on the portion of the commodities used in portions of the premises actually occupied as a residence and used for noncommercial purposes. Formulas and computations used in establishing the percentage of exempt use shall be available for inspection by the department of revenue at any time. Sales of otherwise taxable materials or services shall not be exempted by virtue of being sold in connection with commodities exempt from sales tax hereunder.
K.A.R. 92-21-9. Place of sale--telephone--gas--water--electricity--heat.
For local sales tax purposes retail sales involving the use, consumption or furnishing of gas, water, electricity and heat shall be considered to have been consummated at the situs of the user or recipient thereof, and retail sales involving the use or furnishing of telephone service, shall be considered to have been consummated at the situs of the subscriber billed therefore.
REFERENCE:
K.S.A. 79-3606(b). Exempt sales.
K.S.A. 79-3606(y). Exempt sales.
K.A.R. 92-19-38. Propane gas, LP-gas, coal, wood, and other fuel sources; sales to residential premises.
Date Composed:
10/02/1997
Date Modified:
10/11/2001
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