Pub. Ks-1528 - Application For Sales Tax Exemption Certificates Page 5
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29In essence, when a PEC is issued for a project all of the
SALES TO EXEMPT ENTITIES NOT BASED IN KANSAS
materials, labor, equipment, machinery and furnishings which
are incorporated into the project are exempt from Kansas
sales and compensating taxes.
Kansas-based organizations must provide a Department
of Revenue issued Tax Exempt Entity Exemption Certificate
to the vendor in order to make a purchase exempt from
ENTITIES QUALIFYING FOR A PROJECT EXEMPTION
Kansas retailer’s sales or Kansas compensating use tax.
CERTIFICATE
However, the department has not issued Tax Exempt Entity
Exemption Certificates to exempt entities located outside
The following exempt entities qualify for a PEC.
of the state of Kansas. For example, Kansas law exempts
K.S.A. 79-3606(b) and K.S.A. 79-3606(c)
from sales/compensating tax all nonprofit hospitals. Every
nonprofit hospital located in Kansas has been issued a Tax
• Booth Theatre Foundation
Exempt Entity Exemption Certificate. A nonprofit hospital
• Catholic Charities or Youthville
not located in Kansas would complete a Designated or
• Kansas Department of Corrections
Generic Exemption Certificate, Form ST-28, and present it
• Elementary or secondary school or educational
to the Kansas supplier in order for the Kansas sales/
institution
compensating tax exemption to apply. Tax Exempt entities
• Groundwater and rural water districts paying clean
located outside of Kansas, who do regular business in
drinking water fee
Kansas, are encouraged to apply for a department issued
• Kansas Children’s Service League
Tax Exempt Entity Exemption Certificate. For further
• Museum within a designated qualified hometown
instructions on how to apply, refer to the User Guide section
of this publication.
• Non-profit food distribution center
• Non-profit zoo
501(c)(3)
• Political subdivisions of the state of Kansas
PROJECT EXEMPTION
• Primary care clinic for medically underserved
CERTIFICATES (PECs)
501(c)(3)
• Public or private nonprofit hospital
• Religious Organization
501(c)(3)
A Project Exemption Certificate (PEC) is a numbered
• TLC for Children and Families, Inc.
certificate issued by the Kansas Department of Revenue or
• TLC Charities Foundation
its authorized agent. A PEC is issued to a qualifying entity
• United States Government, its agencies or
for a specific project. The PEC enables contractors and
instrumentalities
subcontractors to purchase material and labor exempt on
behalf of the qualifying entity for that specific project. As the
CAUTION: The state of Kansas and its agencies
name implies, a PEC exempts the entire project – materials,
DO NOT qualify for a Project Exemption Certificate.
supplies, construction equipment rental and labor services
Materials purchased by contractors for a state of
– from sales tax.
Kansas project are taxable. Exceptions to this are:
Department of Corrections, state educational institutions and
PURCHASES EXEMPT FROM SALES TAX WHEN
state owned hospitals.
USING A PEC
INDIRECT PURCHASES NOT REQUIRING A PEC
A PEC issued by the Kansas Department of Revenue
(KDOR), or its agents provides the following benefits:
Kansas statutes provide the ability for several entities to
purchase goods and services indirectly without requiring the
• Allows contractors, subcontractors and repairmen
issuance of a PEC. Although the department would
to purchase materials exempt from Kansas retailers’
recommend the entity obtain a PEC for their own record
sales and compensating use taxes;
keeping and to assist the contractor in making purchases, a
• relieves contractors, subcontractors and repairmen
PEC is not required. Organizations that are statutorily allowed
from charging their customers Kansas retailers’ sales
indirect purchases without the issuance of a PEC are:
tax on the labor services they perform to construct,
reconstruct, remodel or repair buildings or facilities;
• Domestic violence shelters of the Kansas Coalition
and,
Against Sexual and Domestic Violence (KCSDV)
• Frontenac Education Foundation
• exempts all of the machinery, equipment and
• Groundwater Management Districts
furnishings installed in the project from retailers sales
tax and compensating use tax.
• Homeless Shelters
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