Sales Tax State Activity Update - June 2004

Kansas Explains the Taxability of Repair Services

In light of the recent changes in the Kansas Sales Tax Act, the Office of Policy and Research explained how sales tax was to be charged on the gross receipts from the sale of repair services.

Repair shops are required to collect state and local sales tax in the place where the repaired property is delivered to the customer. If property is picked up at the repair shop, by the customer then the place where the shop is located determines the situs. If the repair shop delivers the repaired item to the customer, the place of delivery determines the situs.

If the repaired property is shipped outside Kansas by common carrier, U.S. Postal Service, or the service provider’s own vehicles, Kansas tax does not apply.

When a repair shop contracts with another provider to service or repair their customer’s property, it should provide a resale exemption certificate to the provider and charge the appropriate tax to its customer.

(Private Letter Ruling No. P-2004-13, April 29, 2004, Kansas Department Of Revenue) 06/04

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