Private Letter Ruling

Ruling Number:P-2004-023
Tax Type:Kansas Compensating Tax; Kansas Retailers' Sales Tax
Brief Description:Call center located out side the State of Kansas.
Keywords:
Approval Date:06/18/2004



Body:
Office of Policy and Research


June 18, 2004

XXXXXXXXXX
XXXXXXXXXX
XXXXXXXXXX
XXXXXXXXXX

Dear XXXXXXXXXX,

This is a formal response to your letter dated December 24, 2003, regarding the application of the Kansas Retailer’s Sales and Compensating Use taxes.

In your letter, you stated:

The service you provide would fall outside both the Kansas Retailer’s Sales Tax and the Kansas Compensating Use Tax. Your company has neither a physical presence nor a “nexus” in Kansas.

However, be certain that any subcontractor you employ charges and collects from you sales tax when necessary. Such a charge would not be necessary when the service is done on a residence or original construction of a commercial building. See K.S.A. 79-3603(p). Moreover, any materials the subcontractor uses would be taxable when he or she purchases them. See K.S.A. 79-3603(l)(1).

In conclusion, you do not need to charge an additional sales tax for the service you provide. The compensating use tax does not need to be collected either. The subcontractor who provides the service in Kansas, however, needs to charge sales tax for labor services when appropriate. The materials used are always taxable at time of purchase.

This is a private letter ruling pursuant to K.A.R. 92-19-59. It is based solely on the facts provided in your request. If it is determined that undisclosed facts were material or necessary to an accurate determination by the department, this ruling is null and void. This ruling will be revoked in the future by the operation of law without further department action if there is a change in the statutes, administrative regulations, or case law, or published revenue ruling, that materially effects this private letter ruling. If I may be of further assistance to you, please contact me at your earliest convenience at (785) 296-5330.


Sincerely,


Mark D. Ciardullo
Tax Specialist


Date Composed: 06/28/2004 Date Modified: 06/29/2004