Is engraving a memorial marker subject to Kansas sales tax?

Plain-English summary

A business that sells and installs memorial markers (headstones) asked whether the engraving service it performs is subject to Kansas sales tax. A common situation: a couple buys and installs a marker before either spouse dies, and later the business is hired to engrave the second spouse's final date onto the stone already standing at the grave.

The Department answered that these engraving services are taxable. Kansas sales tax reaches a list of services performed on tangible personal property — including repairing, servicing, altering, and maintaining property, as well as installing and applying items to it. Engraving a marker is treated as "altering" the marker, so it is a taxable service. Importantly, the tax applies whether the engraving is done before the marker is installed (while it is still tangible personal property) or after it has been set at the grave and become part of the real estate — the statute reaches both situations.

What this means for you

Monument and headstone businesses

Charge Kansas sales tax on your engraving labor. It does not matter that the stone may already be installed at the cemetery when you add a name or date — the Department treats engraving as a taxable alteration either way. The same enumerated-service rules cover your repairing, cleaning, and re-setting work on markers.

Families and estates buying marker work

Expect Kansas sales tax to be added to an engraving charge, such as adding a spouse's date of death to an existing marker. That charge is taxable service labor, not a tax-free real-estate improvement.

Common questions

Q: Is engraving a headstone taxable in Kansas?
A: Yes. The Department treats engraving as "altering" tangible personal property, which is one of the enumerated taxable services, so the engraving charge is subject to Kansas sales tax.

Q: Does it matter that the marker is already installed at the grave?
A: No. The ruling says the service is taxable whether it is done before the marker is installed or after it has become part of the real property; both are covered.

Q: Why is this taxed when improvements to real estate usually are not?
A: Kansas separately taxes the listed services (repairing, servicing, altering, maintaining, installing, applying) done to this kind of property, and the Department read those provisions to embrace memorial markers whether or not the stone has been set in place.

Q: Does this ruling apply to my business?
A: A Kansas private letter ruling addresses only the requesting taxpayer's facts and cannot be relied on as precedent by others, though it shows how the Department reasons about engraving and similar alteration services.

Citations and references

• 2003 HB 2005, Sec. 6(p) & (q) — the enumerated taxable services (repairing, servicing, altering, and maintaining tangible personal property, and installing or applying items to such property). The Department read engraving as "altering" a marker, and applied these provisions whether the marker remains tangible personal property or has become part of the real estate.
• 2003 HB 2005, Sec. 5(pp) — defines "tangible personal property" as property that can be seen, weighed, measured, felt or touched, or that is otherwise perceptible to the senses.
• K.A.R. 92-19-59 — the regulation authorizing Kansas private letter rulings.

Source

• Landing page: Kansas Department of Revenue Policy Information Library
• Original document: P-2003-052

Original ruling text

Private Letter Ruling

Body:

Office of Policy & Research

October 29, 2003

XXXX
XXXX
XXXX

RE: Your letter dated August 3, 2003

Dear XXXX:

Thank you for your recent letter. Your business sells memorial markers. These stones may be purchased and installed before death, especially in the case of a surviving spouse. When the second spouse dies, you contract to engrave the Final Date on the marker that is in place at the grave sight. You ask if these engraving services are subject to Kansas sales tax. Please be advised that these services are taxable.

Kansas sales tax applies to a number of services done to tangible personal property. Taxable services include repairing, servicing, altering, and maintaining such property, as well as installing and applying items to such property. 2003 HB 2005, Sec. 6(p) & (q). These services are taxable when done to items that will remain tangible personal property, such as a motor vehicle, or that, when installed or applied, have become a part of real property such as a memorial marker. 2003 HB 2005, Sec. 6(p) & (q). The sales tax act defines "tangible personal property" as "personal property that can be seen, weighed, measured, felt or touched or that is in any other manner perceptible to the senses." 2003 HB 2005, Sec. 5(pp). Engraving services are considered to be altering the markers. This makes all marker engraving services taxable. These statutory provisions embrace memorial markers and make services to them taxable, whether done before and after the marker is installed.

I hope that I have adequately answered your questions. If you need to discuss this matter further, please call me at 785-296-3081. 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.

Sincerely,

Thomas E. Hatten
Attorney/Policy & Research

Date Composed: 10/29/2003 Date Modified: 10/29/2003

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