Is computer repair and maintenance performed at a home exempt from Kansas sales tax under the residential-repair exemption?

Plain-English summary

The taxpayer had been told that computer repair and maintenance is exempt from Kansas sales tax when performed at a home. The Department ruled that advice is incorrect - computer repair is taxable wherever it is done.

Repair and maintenance labor is taxable. "Historically, all repair and maintenance services were taxed under K.S.A. 79-3603(q) and K.S.A. 79-3603(r). These subsections tax service charges for repairing and maintaining tangible personal property."

The residential exemption covers the building, not what is inside it. The controlling law is 1998 Senate Bill 493, effective July 1, 1998, which exempts residential repair and remodel work (explained in Department Notice 98-02). But per Paragraph III of that notice, "a residence is a type of building that consists of its component parts and fixtures, just as any other building. A residence does not include the tangible personal property located within it, such as furniture and clothing." To be part of the building, "components and fixtures must be connected to the building by physical means, such as by bolts, nails, screws, cement, piping, or wire," and are "intended to be permanent improvements."

A computer is personal property, not part of the building. The Department explained that repairs at a home may normally be assumed exempt because items repaired there are "either built into or connected to the residence" - but "this is not the case with computers, televisions, or with almost all furniture." Because a computer "is considered to be tangible personal property located in the residence," the residential repair/remodel exemption does not reach it. "Accordingly, computer repair and maintenance services continue to be subject to Kansas sales tax whether done at a residence or elsewhere."

Bottom line: the residential-repair exemption applies to the house itself and its fixtures, not to movable personal property like a computer - so computer repair and maintenance is taxable, at a home or anywhere else.

What this means for you

Computer repair and IT service businesses

Charge Kansas sales tax on computer repair and maintenance labor, even when you perform the work in a customer's home. The residential-repair exemption does not apply to computers.

The test is whether the item is part of the building

Exempt residential repair covers the building's component parts and fixtures - things physically connected to and intended as permanent improvements. A computer (like a TV or most furniture) is personal property located in the home, so its repair is taxable.

Don't rely on "it was done at a residence"

Being performed at a house does not by itself make a repair exempt. What matters is whether the thing being repaired is part of the residence or is personal property inside it.

Common questions

Q: Is computer repair at a home exempt from Kansas sales tax?
A: No. The Department ruled that computer repair and maintenance is taxable whether done at a residence or elsewhere, because a computer is tangible personal property, not part of the building.

Q: What does the residential-repair exemption actually cover?
A: The building itself - its component parts and fixtures that are physically connected to and intended as permanent improvements - not the furniture, computers, or other personal property located inside.

Q: Which statutes tax the repair?
A: K.S.A. 79-3603(q) and (r), which tax service charges for repairing and maintaining tangible personal property.

Citations and references

• K.S.A. 79-3603(q) and K.S.A. 79-3603(r) - impose Kansas sales tax on service charges for repairing and maintaining tangible personal property. The Department held that the 1998 Senate Bill 493 residential repair/remodel exemption (explained in Notice 98-02) covers a building and its fixtures but not personal property located inside it, so computer repair and maintenance remains taxable whether performed at a residence or elsewhere.

Source

• Landing page: Kansas Department of Revenue Policy Information Library
• Original document: P-2000-051

Original ruling text

Private Letter Ruling

Body:

Office of Policy & Research

October 3, 2000

XXXX
XXXX
XXXX

RE: Your e-mail question

Dear XXXX:

I have been asked to answer your letter about computer repair and maintenance. Historically, all repair and maintenance services were taxed under K.S.A. 79-3603(q) and K.S.A. 79-3603(r). These subsections tax service charges for repairing and maintaining tangible personal property.

You ask if computer services performed at a home or other residence continue to be subject to sales tax. You indicate that you were advised that computer repair and maintenance services are exempt when performed at a residence. This advice is incorrect.

The controlling law is 1998 Senate Bill 493. This bill became law on July 1, 1998 and exempts residential repair and remodel work. Before the law took effect, the department issued Notice 98-02 to explain how it would be administered. I have enclosed a copy of the Notice for you to have and review.

Whether Senate Bill 493 now exempts computer repair and maintenance services performed at a residence is answered in Notice 98-02, at Paragraph III:

A residence is a type of building that consists of its component parts and fixtures, just as any other building. A residence does not include the tangible personal property located within it, such as furniture and clothing. . . .

To become part of a building, components and fixtures must be connected to the building by physical means, such as by bolts, nails, screws, cement, piping, or wire. Components and fixtures are intended to be permanent improvements to the building and make the building complete or habitable. Removal of a component or fixture would often damage the component or fixture or require the alteration or repair of the structure to which component or fixture is affixed. (emphasis added)

Normally, repair work done at a residence may be assumed to be exempt. This assumption applies since items repaired in a home are either built into or connected to the residence. As the quoted discussion in the notice shows, this is not the case with computers, televisions, or with almost all furniture. The exemption for residential repair and remodeling does not apply to computers, since they are considered to be tangible personal property located in the residence. Accordingly, computer repair and maintenance services continue to be subject to Kansas sales tax whether done at a residence or elsewhere.

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 by operation of law without further department action if there is a change in the controlling statutes, administrative regulations, revenue rulings or case law that materially effects this determination.

Sincerely,

Thomas E. Hatten
Attorney/Policy & Research

Enclosure

Date Composed: 10/09/2000 Date Modified: 10/11/2001

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