How is a water softener sold and installed in a Kansas residence taxed?

Plain-English summary

A water softener vendor asked how sales of softeners that are sold and installed in Kansas residences should be taxed. The Department ruled the softener is taxable but separately billed residential installation is not.

"[T]he sale of the softener is subject to sales tax and the charges for installing the softener in a residence are not. This means that when a vendor of a water softener sells a softener to a homeowner, the vendor should charge sales tax on the full retail selling price charged for the water softener. Any installation charges that are separately billed should not be taxed."

Non-residential jobs are treated differently: "The tax base for sales of water softeners that are not for residential use is the full price charge to the customer, including labor. For example, when a water softener is sold and installed at a business such as a beauty shop, sales tax is due on the full amount charged to the customer."

What this means for you

Selling and installing in a home

Charge sales tax on the softener's full retail price, and separately bill the installation labor so that labor is not taxed. Keeping the softener price and the installation charge as distinct line items is what allows the labor to escape tax.

Selling and installing at a business

For non-residential installations, the entire charge — softener plus labor — is taxable. Tax the full amount billed to a commercial customer such as a beauty shop.

Bill it clearly

Because the residential result depends on the installation being separately billed, use clear, itemized invoices that split the softener price from the installation charge.

Common questions

Q: Is installing a water softener in a home taxable in Kansas?
A: No, if the installation charge is separately billed. The softener itself is taxed on its full retail price, but separately stated residential installation labor is not.

Q: What about installing one at a business?
A: For non-residential use, the full amount charged — including labor — is taxable.

Q: Why does separate billing matter?
A: The Department's rule exempts separately billed residential installation charges; if the labor is not separately stated, it is not carved out from the taxable amount.

Citations and references

• The Department did not cite a specific statute number. It applied the Kansas rule that the retail sale of the water softener is taxable, that separately billed installation labor for a residence is not taxed, and that for non-residential installations the full charge including labor is taxable.

Source

• Landing page: Kansas Department of Revenue Policy Information Library
• Original document: O-2000-003

Original ruling text

Opinion Letter

Body:

Office of Policy & Research

February 2, 2000

XXXXX
XXXXX
XXXXX

RE: Your letter of December 10. 1999

Dear XXXXX:

Thank you for your letter that was sent in December. In it, you ask how sales of water softeners that are sold and installed in Kansas residences should be taxed. Please be advised that the sale of the softener is subject to sales tax and the charges for installing the softener in a residence are not.

This means that when a vendor of a water softener sells a softener to a homeowner, the vendor should charge sales tax on the full retail selling price charged for the water softener. Any installation charges that are separately billed should not be taxed.

The tax base for sales of water softeners that are not for residential use is the full price charge to the customer, including labor. For example, when a water softener is sold and installed at a business such as a beauty shop, sales tax is due on the full amount charged to the customer.

I hope that this adequately answers your questions. If not, please call me at (785) 296-3081.

Sincerely,

Thomas E. Hatten

Attorney/Policy & Research

Date Composed: 02/17/2000 Date Modified: 10/10/2001

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