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All sales of prescribed dietary supplements by a licensed practitioner or a mid-level practitioner are exempt from Kansas sales tax. “Dietary supplements” are defined as any product, other than tobacco, intended to supplement the diet that: (1) Contains one or more of the following: a vitamin, mineral, an herb or other botanical, and/or an amino acid; (2) is intended for ingestion in tablet, capsule, powder, gelcap, or liquid form; (3) is required to be labeled as a dietary supplement. (Private Letter Ruling No. P-2008-006, Kansas Department of Revenue, October 16, 2008)


Construction services performed on a warehouse to alter its use were subject to tax, according to a Letter Ruling released by the Kansas Department of Revenue. A contractor was hired to perform work on a space that was formerly used as a warehouse. The contractor was directed to install new walls, flooring and ceilings in the space in such a manner that it would alter the use of the building. The state found that these services did not qualify as “original construction” under Kansas law and the contractor performing the services should charge tax on its labor and services when it bills the owner of the building. (Kansas Private Letter Ruling No. P-2007-003, April 5, 2007)


The Kansas Department of Revenue issued an Information Guide detailing guidelines on the application of sales and use tax on charges for computer and internet-related products and services. The sale or use of computer hardware is treated as tangible personal property subject to tax. Moreover, Kansas taxes the services of installing, applying, altering, repairing, servicing, or maintaining tangible personal property. Sales of canned (prewritten) computer software” are also taxable, including charges for modifying, altering, updating, or maintaining prewritten software. However, charges for separately-stated software modification services are not subject to tax. Mandatory maintenance agreements for prewritten software are taxable, but optional maintenance agreements for prewritten software are exempt when charges for technical support services are separately-stated or when the agreement is only for technical support services. Maintenance agreements for custom software are also exempt. Destination-based sourcing applies to sales of prewritten software, software maintenance agreements, and computer hardware. Additional rules and regulations apply. (Information Guide No. EDU-71, Kansas Department of Revenue, February 15, 2008)


Effective July 1, 2007, charges for delivery of direct mail are not subject to Kansas sales or compensating use tax when the delivery charge is separately-stated on the invoice. “Direct mail” means printed material delivered or distributed by United States mail or other delivery services to a mass audience or to addressees on a mailing list provided by the purchaser at the direction of the purchaser when the cost of the items are not billed directly to the recipients. This legislative change is an exception to the general rule that requires sales/compensating use tax to be paid on delivery charges. (Notice 07-06, Kansas Department of Revenue)


Purchases of tangible property consumed in the treatment of by-products or wastes during the production, manufacturing, processing, mining, drilling, refining or compounding of tangible personal property are exempt from sales tax. The exemption is provided regardless if the production process is for ultimate sale at retail within or outside the state. (Private Letter Ruling No. P-2007-005, Kansas Department of Revenue, July 26, 2007)



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