Kansas Sales Tax: Transition Provision for Construction Contracts

The Kansas sales tax increase from 6.15% to 6.5% that takes effect July 1, 2015, contains a special transition provision for construction contracts.  When applied for and properly documented before July 10, 2015, the provision allows the 6.15% rate to apply to material purchases and labor service charges even after the July rate increase.  In order to qualify for this specialized exemption, the construction contract must be binding, written, and entered into before May 1, 2015.

To be entitled to the 6.15% sales tax rate, the general contractor must complete an electronic application form and submit the required documentation to the Department of Revenue on or before July 10, 2015. The electronic application form can be found on the department’s website: www.ksrevenue.org/15ratechange.html.

Contractors will need to have a KsWebTax account to apply for this transition provision.  General contractors that do not already have this account may sign up to open one here.  The department will notify the general contractor by e-mail once the application is approved or denied.  After approval, contractors should print the PR-74c exemption certificate and distribute it to all vendors and subcontractors, keeping copies for tax records.

Questions regarding the tax exemption may be referred to the Taxpayer Assistance Center (785) 368-8222 or the KCHBA (816) 942-8800.

Remember

• Constructions contracts must prove they were made before May 1, 2015 to apply for lower sales tax rate
• Application deadline is July 10, 2015