Revenue Ruling

Ruling Number:19-2003-1
Tax Type:Kansas Retailers' Sales Tax
Brief Description:Sales taxation of utility services sold to non-profit nursing homes and certain other non-profit housing facilities.
Keywords:
Approval Date:01/03/2003


Body:
Office of Policy & Research


REVENUE RULING 19-2003-1
Sales taxation of utility services sold to non-profit nursing homes
and certain other non-profit housing facilities
January 3, 2003

Issue: Application of Kansas sales tax to sales of certain utilities purchased by non-profit nursing homes and other non-profit housing facilities that have been extended a property tax exemption under K.S.A. 2001 Supp. 79-201b Second through Sixth.

Relevant Statutes: K.S.A. 2001 Supp. 79-201b Second through Sixth; K.S.A. 2001 Supp. 79-3603(c); K.S.A. 2001 Supp. 79-3606(w); and K.S.A. 12-189a.

Sales of natural gas, electricity, heat, and water that are delivered through mains, lines, or pipes ("utilities") to a non-profit nursing home or other non-profit housing facility shall be exempt from both state and local sales tax if the home or housing facility has obtained an order from the Board of Tax Appeals (BOTA) that determines that it qualifies for property tax exemption under K.S.A. 2001 Supp. 79-201b Second through Sixth. To claim a sales tax exemption on its utilities, the qualified facility must attach a copy of the BOTA property tax exemption order to a sales tax exemption certificate form (Form ST-28B) and submit a completed form and attachment to each of its utility providers.

Sales of utilities to a for-profit nursing home or housing facility or to a nonprofit nursing home or housing facility that has not obtained a property tax exemption from the BOTA are subject to both state and local sales tax on the commercial portion of the facility and to any applicable local sales tax on the noncommercial or residential portion of the facility. The noncommercial or residential portion of a facility shall include: (1) the residents' bedroom and attached bathroom, if any; and (2) the residents' apartment units, if any. Commercial areas include, but are not limited to: activity rooms, common showers and restrooms, day rooms, dining rooms, examination rooms, hallways, kitchens, lounges, nursing stations, parking lots, utility rooms, storage areas, swimming pools, and all other areas of the facility other than the residents' bedrooms, attached bathrooms, and apartment units. As the list reflects, commercial areas include those areas that are open to members of the public who are visiting residents of the facility.

This revenue ruling supercedes, replaces, and revokes all prior notices and rulings that have been issued about the taxability of sales of natural gas, electricity, heat, and water delivered through lines that are purchased by nursing homes and other housing facilities that can qualify for property tax exemption under K.S.A. 2001 Supp. 79-201b Second through Sixth.




Stephen S. Richards
Secretary of Revenue


Date Composed: 01/07/2003 Date Modified: 01/07/2003