Private Letter Ruling

Ruling Number:P-1998-217
Tax Type:Kansas Retailers' Sales Tax
Brief Description:Project Exemption Certificates for Federal Entities.
Approval Date:12/18/1998

Office of Policy & Research

December 18, 1998



The purpose of this letter is to respond to your letter dated December 9, 1998.

Kansas law exempts from sales tax, "all sales of tangible personal property or services purchased by a contractor for the erection, repair or enlargement of buildings or other projects for the government of the United States, its agencies or instrumentalities, which would be exempt from taxation if purchased directly by the government of the United States, its agencies or instrumentalities. When the government of the United States, its agencies or instrumentalities shall contract for the erection, repair, or enlargement of any building or other project, it shall obtain from the state and furnish to the contractor an exemption certificate for the project involved, and the contractor may purchase materials for incorporation in such project. The contractor shall furnish the number of such certificates to all suppliers from whom such purchases are made, and such suppliers shall execute invoices covering the same bearing the number of such certificate. Upon completion of the project the contractor shall furnish to the government of the United States, its agencies or instrumentalities concerned a sworn statement, on a form to be provided by the director of taxation, that all purchases so made were entitled to exemption under this subsection. All invoices shall be held by the contractor for a period of five years and shall be subject to audit by the director of taxation. Any contractor or any agent, employee or subcontractor thereof, who shall use or otherwise dispose of any materials purchased under such a certificate for any purpose other than that for which such a certificate is issued without the payment of the sales or compensating tax otherwise imposed upon such materials, shall be guilty of a misdemeanor and, upon conviction therefor, shall be subject to the penalties provided for in subsection (g) of K.S.A. 79-3615 and amendment thereto." K.S.A. 79-3606(e).

In order for a project to be exempt from Kansas retailers’ sales and compensating tax the federal entity that is entering into a contract with your company must apply and have been granted a project exemption certificate. I have enclosed the form that must be completed by the federal entity for each project.

This private letter ruling 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 private letter ruling.


Mark D. Ciardullo
Tax Specialist


Date Composed: 12/18/1998 Date Modified: 10/10/2001