Ezel / Tax Rulings / KS
KS P-2001-052 Kansas Retailers' Sales Tax 2001-06-12

Is installing a flag pole at a residence subject to Kansas sales tax, and does the answer change at a commercial building?

Short answer: Not taxable at a residence. The Department ruled that installing a flag pole - and similar installation services performed at a residence - is exempt from Kansas sales tax under K.S.A. 79-3603(p), which exempts services to install tangible personal property in connection with the original construction, remodeling, or repair of a residence. The exemption also reaches the land improvements immediately surrounding a home. But the same flag pole installation performed at a commercial building is taxable, unless it is done in connection with the original construction of that building.

Apply this to your situation

This page answers the general question as of 2001. Ezel answers yours, under current Kansas tax law, with citations.

Currency note: this ruling is from 2001
Subsequent statutory amendments, regulation changes, court decisions, or later rulings may have changed the analysis. Treat this page as historical context, not current tax advice. Verify current law before relying on any specific rule, rate, or position mentioned here.
Disclaimer: This is an official Kansas Department of Revenue Private Letter Ruling (issued under K.A.R. 92-19-59). It binds the Department only as to the specific retailer who requested it and the facts stated; taxpayer-identifying details are redacted. It may not be cited or relied upon as precedent by any other person, and it ceases to be valid if a statute, regulation, or interpretation it relied upon changes substantially. Kansas state and local sales and use taxes are administered centrally by the Department, so there is no self-collected home-rule city tax outside its scope. This summary is informational only and is not legal or tax advice.
About this page: The plain-English summary, reader guidance, and Q&A below were written by Ezel based on the official state tax ruling. The original ruling (linked on this page as a PDF) is the authoritative source for any reliance.
View original ruling (PDF)

Plain-English summary

A taxpayer asked how Kansas retailers' sales tax applies to flag pole installation and similar services performed at a residence. The Department ruled the work is not taxable when done at a residence, but taxable at a commercial building.

Residential installation labor is exempt. Under K.S.A. 79-3603(p) (enacted by 1998 Senate Bill No. 493), effective July 1, 1998, "services performed to install or apply tangible personal property are exempt from sales tax when the services involve the original construction, reconstruction, restoration, remodeling, renovation, repair or replacement of a residence." Kansas normally taxes the service of installing or applying tangible personal property, but carves out this residential (and original-construction) exception.

The exemption reaches the yard around the home. The Department explained it construes and administers K.S.A. 79-3603(p)(4) "as exempting the land improvements that immediately surround a residence," so the residential repair/remodeling exemption is "coextensive with the exemption for the original construction of the residence." A land improvement is tangible personal property "erected upon or affixed to the land" that is "immediately near and must principally serve the residence" - examples given include sidewalks, driveways, patios, fences, sodding, tree planting, utility pipes and wires, septic tanks, swimming pools, and tool sheds. (By contrast, repairs to a fence built to corral pleasure horses, or to barns and machine sheds for farm equipment, are not exempt because they do not principally serve the residence.)

So: flag pole at a home = no tax; flag pole at a business = tax. The Department concluded that "services performed at a residence, which include, but are not limited to, flag pole installation would not be subject to sales tax." However, "if the flag pole installation services, are performed in a commercial building, the gross receipts received from the respective service would be subject to the appropriate Kansas sales tax(es), unless the installation services are rendered in connection with the original construction of a building."

Bottom line: installation labor at a residence (and the surrounding land improvements) is exempt; the same installation at a commercial building is taxable unless it is part of that building's original construction.

What this means for you

Contractors and installers doing residential work

Installation and repair labor you perform on a residence - and on the land improvements that immediately surround it - is exempt from Kansas sales tax. This covers a broad range of yard and structure work, from fences and patios to a flag pole.

The same job at a commercial site is different

When you install tangible personal property at a commercial building, the labor is taxable unless it is part of the building's original construction. Track whether a job is residential or commercial, because that classification - not the type of item - drives the tax.

"Principally serves the residence" is the dividing line

Not every structure near a home qualifies. A fence to corral pleasure horses, or barns and machine sheds for farm equipment, are not residential land improvements and their repair is not exempt. Ask whether the improvement is immediately near and principally serves the residence.

Common questions

Q: Is installing a flag pole at a home taxable in Kansas?
A: No. Installation services at a residence are exempt under K.S.A. 79-3603(p), and the Department specifically lists flag pole installation as an example.

Q: What if the flag pole is installed at a business?
A: Then the charge is taxable, unless the installation is done in connection with the original construction of the building.

Q: Does the residential exemption cover the yard?
A: Yes. The Department treats land improvements that immediately surround and principally serve a residence - sidewalks, driveways, fences, patios, and similar - as exempt under K.S.A. 79-3603(p)(4).

Citations and references

  • K.S.A. 79-3603(p) - imposes sales tax on the service of installing or applying tangible personal property, but exempts such services when performed in connection with the original construction of a building or facility or the original construction, reconstruction, restoration, remodeling, renovation, repair or replacement of a residence (enacted by 1998 Senate Bill No. 493, effective July 1, 1998).
  • K.S.A. 79-3603(p)(4) - construed by the Department as exempting the land improvements that immediately surround a residence, making the residential repair/remodeling exemption coextensive with the original-construction exemption.

Source

Original ruling text

Private Letter Ruling

Body:

Office of Policy & Research

June 12, 2001

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Dear Ms. TTTTTT:

We wish to acknowledge receipt of your letter dated June 11, 2001, regarding the application of Kansas Retailers’ Sales tax.

K.S.A. 2000 Supp. 79-3603(p) (1998 Senate Bill No. 493) exempts certain construction services that were formerly subject to Kansas sales tax. Effective July 1, 1998, services performed to install or apply tangible personal property are exempt from sales tax when the services involve the original construction, reconstruction, restoration, remodeling, renovation, repair or replacement of a residence.

K.S.A. 79-3603(p) imposes a sales tax upon: “the gross receipts received for the service of installing or applying tangible personal property which when installed or applied is not being held for sale in the regular course of business, and whether or not such tangible personal property when installed or applied remains tangible personal property or becomes a part of real estate, except that no tax shall be imposed upon the service of installing or applying tangible personal property in connection with the original construction of a building or facility, the original construction, reconstruction, restoration, remodeling, renovation, repair or replacement of a residence or the construction, reconstruction, restoration, replacement, remodeling, restoration, renovation or reconstruction, restoration, replacement or repair of a bridge or highway. . .”

The department has determined that it will construe and administer K.S.A. 79-3603(p)(4) as exempting the land improvements that immediately surround a residence. This means the exemption for residential repair and remodeling services generally will be coextensive with the exemption for the original construction of the residence.

The test for whether something is a “land improvement” shall be whether tangible personal property has been erected upon or affixed to the land. To qualify as residential, the land improvement must be immediately near and must principally serve the residence. This means that repairs to a yard fence are exempt but that repairs to a fence designed to corral pleasure horses are not. Barns and machine sheds for farm equipment shall not be considered to be land improvement that principally serve the residence.

Land improvements shall include, but not be limited to, sidewalks, driveways, patios, fences, sodding, tree planting, utility pipes and wires, septic tanks, swimming pools, and tool sheds. Repair services to structures such as steps, stairs, access ramps, porches, and decks shall be exempt whether they are considered to be part of the residence because they are attached to it, or a land improvement because they are immediately nearby.

Please be advised that services performed at a residence, which include, but are not limited to, flag pole installation would not be subject to sales tax in the state of Kansas. However, if the flag pole installation services, are performed in a commercial building, the gross receipts received from the respective service would be subject to the appropriate Kansas sales tax(es), unless the installation services are rendered in connection with the original construction of a building.

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: 06/25/2001 Date Modified: 10/11/2001

Table 1

Ruling Number: P-2001-052

Table 2

Tax Type: Kansas Retailers' Sales Tax
Brief Description: Flag pole installation and services at a residence.
Keywords:
Approval Date: 06/12/2001

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