SALT Report 2575 – The Kansas Department of Revenue issued a notice regarding House Bill 2059 which was passed by the Legislature and is expected to be signed by the Governor. If signed, the bill will change the state sales and use tax rate from 6.3% to 6.15% on July 1, 2013. The following transition rules should be used to determine how sales tax applies to transactions that begin before July 1, 2013, and are completed on or after July 1, 2013:
- The 6.15% rate will apply to sales of goods agreed to before July 1 but delivered on or after that date.
- The 6.15% rate applies when goods being serviced or repaired are returned to the customer on or after July 1, or when the service work is completed and the goods are available to the customer on or after July 1.
- Providers of telephone, cable, community antennae, other subscriber television and telecommunication services, and metered utilities who bill on a monthly basis should charge the 6.15% rate beginning with the invoice for the July 2013 monthly billing period. Providers who do not bill on a monthly basis should charge the 6.3% rate for the last monthly billing period that begins before July 1 and ends after July 1, and charge the 6.15% rate for any subsequent billing periods.
- For lease installment payments, the 6.3% rate applies to the installment payment billing period that starts before July 1, and the 6.15% rate applies to subsequent billing periods that starts on or after July 1.
- For rental goods in which the customer takes possession of the property before July 1, the 6.3% applies to the last weekly or monthly billing period that starts in June and ends on or after July 1. The 6.15% rate applies if the customer takes possession of the rental goods on or after July 1.
- The 6.3% rate applies to membership dues that are paid for a period that starts before and ends on or after July 1, and the 6.15% rate applies to membership dues that are paid for periods that start on or after July 1.
- When construction progress payments are made, the 6.3% rate applies to taxable labor services completed before July 1, and the 6.15% rate applies to taxable labor services completed on or after July 1. For construction projects that do not involve progress payments, the rate in effect on the date of completion will apply. For building materials, the rate in effect when the materials are delivered to the contractor will apply.
- If a different state’s sales tax is being credited against use tax owed in Kansas, the 6.15% Kansas rate will apply if the first use of the property in Kansas occurs on or after July 1. If an out-of-state retailer does not collect Kansas tax, the date the Kansas customer takes delivery will determine whether the 6.3% or 6.15% rate applies.
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