Opinion Letter

Letter Number:O-2004-002
Tax Type:Kansas Retailers' Sales Tax
Brief Description:Sanitizing process performed with steam at slaughterhouses, meat packing plants, and other food processors.
Approval Date:03/19/2004

Office of Policy & Research

March 19, 2004


I have been asked to answer your recent e-mail. In it, you discuss the sanitizing process performed with steam at slaughterhouses, meat packing plants, and other food processors in Kansas. You ask if the water and gas used to create the steam is exempt as consumed in production. You point out that the USDA requires the equipment to be cleaned and sanitized with scalding hot water once every 16 hours of production. Please be advised that the plants purchases of water and gas to perform these processes are not exempt from sales tax.

For these purchases to be exempt, the water and gas would have to qualify as being consumed in production. This exemption is found at K.S.A. 2003 Supp. 79-3606(n):

The scope of this exemption is explained in K.S.A. 2003 Supp. 79-3602(dd):

K.A.R. 92-19-53 implements these provisions, as it relates to cleaning and sanitizing equipment.

While the consumed-in-production exemption is not co-extensive with the integrated plant exemption, it should be noted that the integrated plant exemption does not exempt equipment used for cleaning and maintenance. K.S.A. 2003 Supp. 79-3606(kk)(5)(A) and (B) provide:
Water and gas used to produce steam that is used to sanitize equipment and areas of the slaughterhouse are not "used in the actual process" of slaughtering and dressing animals. For the same reasons, these purchases are not exempt when used in other sanitizing operations where other kinds of food are processed.

I hope that I have adequately explained why these purchases are taxable under Kansas law. If you have any additional questions, please call me. Attorney/Policy & Research

Date Composed: 03/25/2004 Date Modified: 03/26/2004