Notice

Notice Number:Taxation of Motor Fuel Used Off-Highway
Tax Type:Kansas Retailers' Sales Tax
Brief Description:Taxation of Fuel Used Off-Highway
Keywords:
Effective Date:02/18/1980


Body:
N O T I C E



TO: Contractors, Farmers and Ranchers

FROM: Sales and Excise Tax Bureau

SUBJECT: Sales and use Tax - Taxability of Motor Fuel Consumed in
Off-Highway Land Improvement Projects


It has been brought to the attention of the Sales and Excise Tax Bureau that there is a misunderstanding by many contractors, farmers and ranchers concerning the application of Kansas retailers' sales tax or consumers' compensating use tax to motor fuels purchased for certain off-highway uses.

Motor fuels (gasoline, gasohol, diesel and L-P gas) which are consumed in the off-high operation of motor vehicles or excavation and construction equipment in connection with the construction of farm ponds, terraces, waterways, grading, landscaping, and in the preparation of building sites, etc. are subject to either the three percent (3%) (effective 6/1/92 the tax rate increased to 4.9%) Kansas retailers' sales tax or consumers' compensating use tax.

The tax would apply to any fuels which are exempt from the imposition of a motor fuel tax including fuels purchased with the motor fuel tax paid if such tax is refundable under the provisions of the Kansas Motor Fuel Tax Act.
EXEMPT USES

Motor fuels consumed in the production or processing of agricultural products or the irrigation of crops for ultimate sale at retail are exempt from Kansas retailers' sales tax or consumers' compensating use tax. Exempt uses include fuel consumed in plowing, disking, harrowing, planting or seeding, cultivating and harvesting. Exempt uses would not include fuel consumed in the construction of farm ponds, waterways and terraces, etc.

Motor fuels consumed in the performance of construction projects which qualify for exemption under the authority of K.S.A. 79-3606(d) and (e) are exempt from Kansas retailers' sales tax and consumers' compensating use tax.

At the present time "Project Exemption Certificates" are issued only to the following entities:




Date Composed: 10/07/1997 Date Modified: 10/10/2001