Private Letter Ruling

Ruling Number:P-1999-164
Tax Type:Kansas Retailers' Sales Tax
Brief Description:Labor services performed to install a dome roof on top of an existing storage tank.
Keywords:
Approval Date:07/26/1999



Body:
Office of Policy and Research


July 26, 1999


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Re: Kansas Sales Tax

Dear XXXXX:

Your correspondence of April 28, 1999, has been referred to me for response. Thank you for your inquiry.

Your letter indicates your company is engaged in the installation of a dome roof which will be installed on the top of an existing storage tank in XXXXX, Kansas. Engineering design and fabrication work will be performed at your facility in XXXXX, Texas. The fabricated product will be shipped to XXXXX by a common carrier. Your factory-trained installers will go to the job site to install the dome roof.

You indicate it is your understanding the cost of raw materials will be taxed as a use tax. You inquire, however, as to whether the labor services will be subject to tax and, if so, the rate of tax. You note the contract amount is in excess of $10,000.

The Kansas retailers’ sales tax is imposed by K.S.A. 79-3603. Subsection (p) of the statute imposes sales tax on:
Based on the information provided in your letter, which indicates you have entered Kansas and are performing taxable services here, installation of the dome roof will not qualify for an exemption from sales tax as original construction. As a result, the labor services performed in installing the dome roof will be subject to state sales tax at the rate of 4.9%, together with local sales tax at the rate of 1.75%, for a total of 6.65%. Further guidance is found in K.A.R. 92-19-66b, a regulation which interprets the statute. The regulation provides, in subsections (b) and (c):
I trust this information is of assistance. If I can be of further service, please feel free to contact me.

Sincerely,



Jim Weisgerber
Attorney
Tax Specialist

JW:jw


Date Composed: 08/04/1999 Date Modified: 10/11/2001