Identifying Information:

Asbestos Removal

Tax Type:	Kansas Retailers' Sales Tax
Brief Description:	Sales Tax on Asbestos Removal
Keywords:
Effective Date:	12/01/1993

SUBJECT: ASBESTOS REMOVAL #7 (12/93)

STATUS: TAXABLE

BASIS: K.S.A. 79-3603(q) imposes a sales tax, "upon the gross receipts receive for the service of repairing, servicing, altering or maintaining tangible personal property.... The tax imposed by this subsection shall be applicable to the services of repairing, servicing, altering or maintaining an item of tangible personal property which has been and is fastened to, connected with or built into real property."

K.A.R. 92-19-66(b) states in part: "Services performed to dismantle, demolish, raze or destroy a building or facility or a portion of a building or facility shall be subject to sales tax. If the services are performed in connection with the original construction of a building or facility, and the building or facility is constructed on the same site, the service of dismantling, demolishing, razing or destroying the original building or facility shall not be subject to sales tax."

Pursuant to K.A.R. 92-19-66(d), the erection of a building or facility on a site previously occupied by a building or facility which has been demolished, razed or dismantled shall be considered to be original construction if the building or facility is totally new, regardless of whether the old foundation was also demolished.

The service charged for the removal of the asbestos would be subject to Kansas sales tax at a rate of 4.9%, plus any applicable local tax(es), unless the building or facility was damaged by fire, flood, tornado, lightening, explosion or earthquake, and said building or facility was restored, reconstructed or replaced, then said services would be subject to sales tax at the reduced state rate of 2.5%, plus any applicable local tax(es) in the state of Kansas.

Additionally, if the service charged for the removal of the asbestos is performed in conjunction with complete demolition of a building or facility, and a new building or facility is constructed on the same site, then said services would be subject to sales tax at the reduced state rate of 2.5%, plus any applicable local tax(es) in the state of Kansas.

REFERENCE: NOTICE, issued March 1991. TO: All contractor, subcontractors or repairmen

The 1992 Kansas Legislature enacted legislation that imposes sales tax at a reduced rate on certain services that were formally exempt from tax. Those services include, but are not limited to, the installing or applying tangible personal property in connection with the original construction of a building or facility or the construction, reconstruction, restoration, replacement or repair of a bridge or highway. Such labor services are subject to sales tax at the reduced state rate of 2.5%, plus any applicable local tax(es). The statute supersedes the regulation, which was not updated.

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