Revenue Ruling

Ruling Number:19-2004-1
Tax Type:Kansas Compensating Tax; Kansas Retailers' Sales Tax
Brief Description:Application of Kansas retailers' sales and compensating (use) tax to sales and delivery of modular homes in Kansas.
Keywords:
Effective Date:01/01/2012
Approval Date:08/08/2012


Body:
KANSAS DEPARTMENT OF REVENUE
Office of the Secretary
August 8, 2012

Revised REVENUE RULING 19-2004-1

The effective date of this amended Revenue Ruling is January 1, 2012. On and after April 1, 2004, sales and deliveries of modular homes to Kansas are subject to the provisions of this Revenue Ruling.

The Secretary of Revenue has authorized this revenue ruling pursuant to K.S.A. 79-3619. The purpose of this revenue ruling is to present modular home dealers, modular home manufacturers and the Kansas Department of Revenue (“Department”) with a practical approach to the application, collection, and payment of sales and compensating use tax on the gross receipts from the sales of modular homes.

Definitions

The following terms, when used in this revenue ruling, shall have the following meanings:

"Modular home" means a structure which is: (1) Transportable in one or more sections; (2) designed to be used as a dwelling on a permanent foundation when connected to the required utilities, and includes the plumbing, heating, air conditioning and electrical systems contained therein; and (3) certified by its manufacturer as being constructed in accordance with a nationally recognized building code.

“Manufacturer” means a person that assembles modular home modules or modular components at a fixed location other than the home site.

“Dealer” means a person who acts as a retailer, agent or broker for a modular home in the dealers' own capacity or as a representative of a manufacturer.

“Total Selling Price” means the total cost to the dealer or consumer exclusive of discounts allowed and credited, but including freight and transportation charges from manufacturer to dealer. Taxable Sales

Modular home manufacturers are required to remit retailers’ sales or compensating use tax to the Department on sales of modular homes to modular home dealers. The sale by a modular home manufacturer to a modular home dealer is deemed a retail sale for purposes of this ruling. The sale from a modular home manufacturer to a dealer of modular homes that the dealer intends to hold in inventory or display is also deemed to be a retail sale for purposes of this ruling. The subsequent sale from the dealer to an end user consumer shall not be subject to tax. Except as otherwise noted, the situs for local retailers’ sales or compensating use tax is the business location of the dealer. The situs is not the location where the home is delivered to the end user consumer, unless the home is sold directly to the end user consumer by the manufacturer.

Computation of Tax

The sales and compensating use tax is calculated by applying the applicable tax rate to 60% of the total selling price. Local sales and compensating use tax are due on these sales.

Situs for Local Tax

On and after January 1, 2012, the situs for local retailers’ sales and compensating use tax is the business location of the dealer, except as otherwise noted below:

1. Resident Manufacturers
The methodology described in this revenue ruling for taxing the sale of modular homes does not apply to the sale of manufactured homes.

This revenue ruling replaces and supersedes all prior advice, revenue rulings, and rulings that have been issued regarding the taxability of sales and delivery of modular homes in Kansas.

Secretary of Revenue


Nick Jordan




Date Composed: 02/23/2004 Date Modified: 04/07/2006