Kan. Admin. Regs. § 92-19-79 - Oil, gas and water wells
(a) Sales of
drilling materials or other property incorporated into an oil, gas or water
well to contractors, subcontractors or repairmen for use by them in original
construction projects including drilling, equipping, furnishing, repairing,
servicing, altering, maintaining, enlarging or redrilling shall be subject to
sales tax. Each contractor shall be considered the final user or consumer of
materials used by them in the construction projects. A contractor,
subcontractor or repairman shall not give, and retailers shall not accept, a
resale exemption certificate to purchase the materials without sales tax.
(b) Each contractor, subcontractor
or repairman shall be responsible for the payment of sales tax on all materials
and supplies which are purchased for use by them in drilling, redrilling, or
otherwise improving, altering or repairing oil, gas or water wells for others.
(c) Each contractor, subcontractor
or repairman shall be responsible for collecting sales tax on taxable services
performed for others, including taxable services performed for other
contractors. A contractor, subcontractor or repairman shall not purchase or
sell services exempt from sales tax under a resale exemption certificate.
(d) The taxable base for all
contracts involving the application or installation of tangible personal
property shall be the difference between the contract price and the cost of
material, supplies and payments to subcontractors, including sales or
compensating tax paid by the contractor on the materials, supplies and
subcontractor charges purchased by the contractor to complete the contract.
(e) Contractors, subcontractors or
repairmen who do not separately state the amount of sales tax for their
services in the contract, bid estimate or customer billing shall include a
statement in the document in substantially the following form: "All applicable
sales taxes are included in the selling price." If the statement does not
appear in the contract, bid estimate, billing or other evidence of the
transaction, it shall be presumed that the sales tax was not charged to the
consumer. If a statement does not appear on the document, the retailer shall
carry the burden of proving that the sales tax was charged to the consumer and
properly remitted to the state.
(f) The service of installing or applying
tangible personal property in connection with original construction that is the
first or initial construction of a new oil, gas or water well shall not be
subject to sales tax. "Original construction" of an oil, gas or water well
means all services performed by a contractor through the date of completion of
the well. Any service performed in or on oil, gas or water wells other than as
set forth herein shall be subject to sales tax.
Notes
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