BOTA Order

Order Number:

Acker Electric, Inc

Tax Type:	Kansas Retailers' Sales Tax
Brief Description:	Refund
Keywords:
Effective Date:	09/23/1987

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Body:

BEFORE THE BOARD OF TAX APPEALS OF THE STATE OF KANSAS

IN THE MATTER OF THE APPEAL OF
ACKER ELECTRIC, INC. FROM A NOTICE
OF ASSESSMENT OF ADDITIONAL RETAILERS'
SALES TAX DATED JANUARY 19, 1984.

Docket No. B422-87-DT

O R D E R

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Now, on this 23rd day of September, 1987, the above captioned matter comes on for consideration and decision by the Board of Tax Appeals of the State of Kansas.

This Board conducted a hearing in this matter on April 22, 1987. After consideration all of the evidence presented thereat, and being fully advised in the premises, finds and concludes as follows:

1. The Board has jurisdiction of the subject matter and of the parties, a proper and timely appeal having been filed.
2. The subject matter of this application is sales tax.
3. The appellant installed electrical systems in connection with the original construction of a) a Ramada, b) a mini-mart, and c) the First National Bank Center. Appellant's books were audited by the Kansas Department of Revenue which resulted in an additional retailer's sales tax assessment. Appellant requested a hearing before the Director of Taxation and presented sufficient documentation to the director's satisfaction which supported a claim for refund of sales tax erroneously paid on the jobs described above. Appellant was advised it would not receive a refund until it first refunded to the various consumers. Appellant contends that the sales tax we never billed or collected from the consumers involved, but was paid by appellant out of appellant's profits and thus the return of the tax erroneously paid to appellant would not constitute and unjust enrichment.
4. The Department maintains that appellant collected the tax form the above named consumers, as the tax was implicitly calculated into appellant's bid for the work performed. The Department further argues that K.S.A. 79-3605 prevents appellant from paying the sales tax from his own coffers as the statute prohibits a retailer from holding out to its consumers that the retailer will absorb or refund any taxes imposed by the Sales Tax Act.
5. The Board finds that services performed on the three projects named in paragraph three above were original constructions and exempted from sales taxes pursuant to K.S.A. 79-3603(p). These jobs were awarded to appellant because he was the lowest bidder for these projects. These bids did not specify by line item any amount that would constitute tax. The evidence presented indicates that the contract stated that the applicant would pay all applicable sales and use taxes. As no sales tax was applicable to this instance there was no tax due.
6. The Board further finds that the Department's reliance upon K.S.A. 79-3605, a statute which prohibits a retailer from holding out to its customers that the retailer will absorb or refund any taxes imposed by the Sales Tax Act, is misplaced. The appellant has correctly noted that K.S.A. 79-3605 applies only to taxes imposed by the Sales Tax Act. It does not apply to situations where no tax is imposed by this act. In this instance the projects were tax exempt pursuant to K.S.A. 79-3603(p). K.S.A. 79-3605 cannot apply because there was not a tax imposed by the Sales Tax Act on the original construction jobs performed by the appellant.
7. The Board finds that appellant did not bill or collect the tax to be credited from its customers as this tax was paid from its own funds which it received from the profit on the jobs. Appellant is therefore entitled to the credit it is claiming.

IT IS, THEREFORE, BY THE BOARD OF TAX APPEALS OF THE STATE OF KANSAS, CONSIDERED AND ORDERED that for the reasons more fully set forth above, the application must be and is hereby granted.

If any party to this appeal feels aggrieved by this decision, they may file a written request for a rehearing with this Board. The written request for rehearing shall set forth specifically and in adequate detail the particular and specific respects in which it is alleged that the Board's Order is unlawful, unreasonable, capricious, improper or unfair. The written request must be received within thirty (30) days of the certificate date of this Order. If, at the end of thirty days the Board has not received a written request for a hearing, this Order will become a final Order from which no further appeal is available.

Date Composed: 10/06/1997 Date Modified: 10/09/2001

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