Is waste water hauling subject to Kansas sales tax?

Plain-English summary

A waste water hauler asked how Kansas sales tax applies to its services. The Department gave the two-part answer that is typical for a non-taxed service.

• The hauling itself is not taxed. Waste water hauling services are not currently subject to Kansas sales tax. Kansas taxes only services it specifically enumerates, and this hauling service is not among them.
• But the hauler pays tax on what it buys. Because the hauler is treated as the final consumer of the things it uses to do the work, it must pay sales tax on all tangible personal property and all taxable services it purchases to provide the nontaxable hauling services.

So the customer isn't charged sales tax on the hauling, but the hauler absorbs sales tax on its own inputs — equipment, supplies, and any taxable services it buys.

What this means for you

If you provide waste water hauling (or a similar non-enumerated service) in Kansas, don't bill your customers sales tax — but do pay it on your purchases.

• Don't collect tax on the hauling charge. The service isn't taxable, so no sales tax goes on the customer's invoice for hauling.
• You are the end user of your inputs. Pay sales tax when you buy tangible personal property and taxable services used to perform the hauling — you can't buy those tax-free for resale.
• No resale exemption on inputs. Because you consume the items to provide a non-taxable service rather than reselling them, a resale exemption certificate doesn't apply to those purchases.
• This pattern recurs. Kansas treats other non-enumerated hauling and site services the same way — the provider pays on inputs (compare P-1999-74 on hauling sand and P-1999-75 on snow removal).

Common questions

Is waste water hauling taxable in Kansas?
No. Waste water hauling services are not currently subject to Kansas sales tax.

Do I charge my customers sales tax on hauling?
No. Because the service isn't taxable, you don't collect sales tax on the hauling charge.

What do I owe tax on, then?
Your inputs. You must pay sales tax on all tangible personal property and taxable services you purchase to provide the nontaxable hauling services, because you are the final consumer of them.

Can I buy my supplies tax-free for resale?
No. You consume those items to perform a non-taxable service rather than reselling them, so the resale exemption doesn't apply — you pay the tax on those purchases.

Citations and references

• Kansas Retailers' Sales Tax Act (enumerated services / consumer-pays rule) — waste water hauling is not an enumerated taxable service, so it is not taxed; the hauler is the final consumer and must pay sales tax on all tangible personal property and taxable services purchased to provide the nontaxable service.

Source

• Original ruling (DOCX): https://www.ksrevenue.gov/pildocs/rulings/P-1999-23.docx
• Kansas Policy Information Library: https://www.ksrevenue.gov/prpil.html

Original ruling text

Private Letter Ruling

Body:

Office of Policy & Research

February 8, 1999

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RE: Waste Water Hauling

Dear Ms. TTTTTT:

We wish to acknowledge receipt of your letter dated February 1, 1999, regarding the application of Kansas Retailers’ Sales tax.

The hauling services that you are providing are not currently subject to sales tax in the state of Kansas. However, you must pay sales tax on all articles of tangible personal property and all taxable services purchased to provide the nontaxable services.

This is a private letter ruling pursuant to K.A.R. 92-19-59. It is based solely on the facts provided in your request. If it is determined that undisclosed facts were material or necessary to an accurate determination by the department, this ruling is null and void. This ruling will be revoked in the future by the operation of law without further department action if there is a change in the statutes, administrative regulations, or case law, or published revenue ruling, that materially effects this private letter ruling. If I may be of further assistance, please contact me at your earliest convenience at (785) 296-7776.

Sincerely yours,

Thomas P. Browne, Jr.
Tax Specialist

TPB

Date Composed: 02/23/1999 Date Modified: 10/11/2001

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