Private Letter Ruling
Kansas Retailers' Sales Tax
Office of Policy & Research
August 21, 1998
The purpose of this letter is to respond to your letter dated July 1, 1998.
1998 Senate Bill No. 493 exempts certain construction services that were formerly subject to Kansas sales tax. Effective July 1, 1998, services performed to install or apply tangible personal property are exempt from sales tax when the services involve the original construction, reconstruction, restoration, remodeling, renovation, repair or replacement of a residence.
In your letter you provided this example. An employee costs $20.00 per hour and the company bills at $30.00 an hour per employee. You asked if the exemption for residential remodeling would apply to the $30 per hour or only to the $20 per hour.
The exemption would apply to the retailers total gross receipts associated with residential remodeling. Therefore, the amount you bill the consumer for service would be the amount that is exempt from the tax. In your example this would the billing rate of $30 per hour.
Mark D. Ciardullo
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