Pub. KS-1221 Sales & Use Tax Refund (for use by PEC entities)

If there is a conflict between the law and information found in this publication, the law remains the final authority. Under no circumstances should the contents of this publication be used to set or sustain a technical legal position. A library of current policy information is also available on the Kansas Department of Revenue’s website at: ksrevenue.org

PDF printable copy is located here.

The Kansas Department of Revenue provides refunds for individuals or businesses that paid sales or use tax directly to the Kansas Department of Revenue in error. This publication provides answers to some common questions about receiving a refund. It also contains the applicable forms, along with the line-by-line instructions needed to complete them.

If you would like information about how Kansas sales and use tax applies to your business operations, obtain a copy of Publication KS-1510, Kansas Sales and Compensating Use Tax.

TABLE OF CONTENTS


GENERAL INSTRUCTIONS

This refund application is for use by an entity eligible to secure a project exemption certificate but failed to do so in a timely manner or whose HPIP Certification was pending. This is to be used for construction projects only. A Project Exemption Certificate “PEC entity” is an entity, qualifying for exemption under K.S.A. 79-3606. *See page 3 for complete list of Entities Eligible for a Project Exemption by Kansas Statute. (All other refund requests should be submitted utilizing Publication KS-1220 Sales & Use Tax Refund.)

K.A.R. 92-19-66e(n), provides that a PEC entity that fails to secure a timely PEC for a construction project may seek a refund of the Kansas sales tax that was paid or remitted by the Project’s general contractor and subcontractors (collectively “contractors” hereafter) on their materials, supplies, and labor charges for the project in question. To establish the refund amount, the PEC entity must file a completed refund application, along with the supporting documentation that it secured from its contractors, with the Kansas Department of Revenue (KDOR). The refund application must be filed within three years of the date that the tax was paid or remitted by the contractors on the project.

K.A.R. 110-6-11(d), “Certification of a worksite for the sole purpose of obtaining training and education tax credits or a sales tax exemption certificate shall be allowed if both of the following conditions are met:

  1. All other program requirements are satisfied.
  2. The applicant demonstrates prior knowledge of the program by submitting the project description form. This form shall be received by the department before the start of the certification period.”

COMPLETING THE PEC REFUND ENTITY SALES AND USE TAX APPLICATION

The PEC entity must contact the contractors who worked on the project and provide them with a copy of the Contractor Affidavit Part D with Section I completed, a copy of these instructions, and an electronic copy of the schedule of supplier invoices. The PEC entity’s completion of Part D Section I of the affidavit will identify the project in question for the contractor.

Please Note: Kansas law does not require contractors to assist a PEC entity in documenting the entity’s sales tax refund claim. If a contractor cannot provide or refuses to provide the required documentation, KDOR cannot refund the taxes that were paid or accrued by that contractor.

Please follow the accompanying instructions to complete an accurate application for a sales or use tax refund.

Parts A through C

This information is completed by the entity eligible to receive a project exemption certificate and must be completed in its’ entirety.

KDOR requires authorization from the PEC Entity to allow a KDOR associate to discuss the refund request with any employee of the PEC entity and not only the contact person listed on the refund application. Mark the proper box to allow or disallow the authorization.

A Power of Attorney form (DO-10) is still required documentation if the request is prepared/filed by a 3rd party.

ONLY an owner, partner, company officer or 3rd party with a Power of Attorney accompanying the request may sign the refund application.

Part D Contractor Affidavit

Section I – Lines 1 through 5 must be completed by PEC Entity.

Section II – Lines 6 through 11 must be completed by the contractor or subcontractor.

Section III – Lines 12 through 14 to be completed by the contractor or subcontractor.

This portion of the application provides detailed information of how the contractor has paid taxes to supplier(s) or directly remitted taxes to the State of Kansas.

Line 12 – Enter the total tax amount paid directly to your Kansas suppliers. This total will originate from Part D Section V.

Line 13 – Enter the amount of sales tax you have paid directly to the State of Kansas on your labor services for this project. Please list each tax account period(s), amount, and jurisdiction.

Line 14 – If you have self-accrued tax on materials taken from inventory for this project, please list each tax account period(s), amount and jurisdiction.

Section IV – Contractor Affidavit must be completed by each contractor or subcontractor

Section V – Schedule of Supplier Invoices

The schedule of supplier invoices must be completed in electronic format, preferably excel. Do not list purchases of tools used on the project, cleaning supplies, blueprints purchased, equipment repairs, or purchases made in a state other than Kansas as these do not qualify for exemption in Kansas. When providing a description of items purchased, please give a specific description of these items.

After the contractor has completed Sections II, III, IV, and V, the contractor will return this information to the PEC Entity.

ENTITIES QUALIFYING FOR A PROJECT EXEMPTION CERTIFICATE PER K.S.A. 79-3606

The following exempt entities qualify for a PEC.

  • public or private nonprofit hospital or public hospital authority, public or private elementary or secondary school, a public or private nonprofit educational institution, state correctional institution including a privately constructed correctional institution - 79-3606(d);
  • government of the United States, its agencies or instrumentalities - 79-3606(e);
  • business or retail business which meets the requirements established in K.S.A. 74-50,115(e) by the Department of Commerce - 79-3606(cc);
  • nonprofit museum or historical society - 79-3606(qq);
  • nonprofit zoo - 79-3606(xx);
  • religious organizations - 79-3606(aaa);
  • primary care clinic or health center - 79-3606(ccc);
  • organization in the collection, storage and distribution of food products to nonprofit organizations which distribute such food products to persons pursuant to a food distribution program on a charitable basis without fee or charge - 79-3606(iii);
  • homeless shelter which is exempt from federal income taxation pursuant to section 501(c)(3) - 79-3606(ppp);
  • TLC for Children and Families, Inc. - 79-3606(qqq);
  • Catholic Charities or Youthville, referred to as Charitable Family Providers - 79-3606(sss);
  • Nonprofit museum which has been granted an exemption pursuant to subsection (qq) - 79-3606(ttt);
  • Kansas Children’s Service League - 79-3606(uuu);
  • Booth Theatre Foundation, Inc. - 79-3606(xxx);
  • TLC Charities Foundation, Inc. - 79-3606(yyy);
  • Victory in the Valley, Inc. - 79-3606(aaaa);
  • Wayside Waifs, Inc. - 79-3606(cccc);
  • Goodwill Industries or Easter Seals of Kansas, Inc. - 79-3606(dddd);
  • Sheltered Living, Inc. - 79-3606(ffff);
  • Agricultural Operations identified under the North American industry classification system (NAICS) subsectors 1123, 1124, 112112, 112120 or 112210 for qualifying projects equal to or in excess of $50,000 - 79-3606(hhhh);
  • Wichita Children’s Home - 79-3606(iiii)

WHERE TO FILE

The PEC entity should send the completed Refund Application, which includes Contractor Affidavit, supplier invoices and electronic schedule of supplier invoices to: Kansas Department of Revenue

Audit Services/Sales Tax Refunds
PO Box 3506
Topeka KS 66601-3506

CONTACT INFORMATION

If you have questions about completing the form contained in this publication call, fax or email your questions to KDOR:

Phone: 785-296-7108
Fax: 785-296-0531
Email: KDOR_Audit.Funds@ks.gov

TAXPAYER ASSISTANCE

This publication is a general guide and will not address every situation. If you have questions or need additional information, please contact us at:

Phone: 785-296-7108
Fax: 785-296-0531
Email: KDOR_Audit.Funds@ks.gov

If you wish to visit with someone in person, please call 785-296-7108 to set up an appointment.

Office hours are 8 a.m. to 4:45 p.m., Monday through Friday.

PUBLICATIONS

Below is a list of publications available on the Kansas Department of Revenue’s website. These publications contain instructions applicable to specific business industries and general information for all business owners.

STATE SMALL BUSINESS WORKSHOPS

As part of our commitment to provide tax assistance to the business community, Tax Specialists within the Kansas Department of Revenue conduct small business workshops on Kansas taxes at various locations throughout Kansas. Whether you are a new business owner, an existing business owner, or an accountant, these workshops will give you the tools and understanding necessary to make Kansas taxes easier and less time consuming for you. Topics covered include filing and reporting requirements and methods, what is taxable, what is exempt and how to work with the department in collecting and remitting Kansas taxes.

For a schedule of our workshops, visit our small business Workshop page. Pre-registration is required and a fee may be charged by the sponsoring Small Business Development Center (SBDC)