Sales Tax State Activity Update November 2005

Kansas Engineering Taxabilty Gets a "Charge"

The Kansas Office of Policy and Research ruled that engineering services rendered directly to an electric cooperative, and not part of a taxable service or product, would not be subject to Kansas sales tax.

A private letter ruling was requested concerning engineering services provided to electric cooperatives following a devastating storm, but prior to the start of the actual work in question.

The services may include:

• Providing an engineering assessment of the damage
• Making recommendations regarding the feasibility of repairing or replacing
• Preparing maps of the damaged areas
• Designing, surveying and locating pole placements
• Assisting in the preparation and review of bid sheets and contracts

None of the tasks involve the installation or application of tangible personal property, and none of the tasks are performed by or for a contractor who is also providing taxable repair or installation services. Under the conditions outlined above, the engineering services were ruled exempt.

The full text can be accessed at the Kansas Department of Revenue's Tax Policy Library. Kansas Department of Revenue, Private Letter Ruling, No. P-2005-024, 10/12/2005