Is applying a fabric or protective coating to furniture and carpets taxable in Kansas, and does cleaning them count as a taxable service?

Plain-English summary

A business that cleans furniture and carpets and applies fabric treatments and protective coatings asked how Kansas sales tax applies to what it does. The Department split the answer into two parts.

Cleaning is not taxable — but supplies are. Kansas taxes "the service of repairing, servicing, altering, or maintaining tangible personal property" under K.S.A. 79-3603(q). The Department ruled that "[c]leaning carpets and furniture are not subject to sales tax in the state of Kansas, since these tasks do not fall under K.S.A. 79-3603(q)," because cleaning does not constitute "servicing" or "maintaining." However, the cleaner "would be obligated to pay the appropriate sales/use tax on its purchases of tangible personal property such as cleaning solutions or cleaning equipment used to perform the cleaning services." In other words, the cleaner is the final consumer of its own supplies.

Applying a fabric treatment or coating is taxable. Kansas separately taxes, under K.S.A. 79-3603(p), "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." Applying a fabric treatment or protective coating fits that description.

No residential exemption for furniture and carpets. Senate Bill 493 exempts certain residential repair and remodeling, but Notice 98-02 explains that a residence "consists of its component parts and fixtures" and "does not include the tangible personal property located within it, such as furniture." To be part of a building, items must be physically connected as permanent improvements. Furniture and carpets generally are not. So "[t]he exemption for residential repair and remodeling does not apply," and "the service of applying fabric treatments and/or a protective coating to furniture and/or carpets continue[s] to be subject to Kansas sales tax whether done at a residence or elsewhere."

Bottom line: cleaning furniture and carpets is a nontaxable service (with tax owed on the cleaner's own supplies), while applying a fabric or protective coating to them is a taxable service — and doing it in a home does not make it exempt.

What this means for you

Carpet and upholstery cleaners

Cleaning by itself is not a taxable service, so you generally do not charge sales tax on the cleaning labor. But you must pay sales or use tax on the cleaning solutions, equipment, and other supplies you buy to do the work — you are the consumer of those items.

Fabric-protection and coating applicators

Applying a fabric treatment or protective coating is a taxable "installing or applying" service under K.S.A. 79-3603(p). Charge sales tax on that service, and do not assume doing it in a customer's home makes it exempt.

Homeowners buying these services

The residential repair-and-remodel exemption covers work on the house itself — its component parts and fixtures — not treatments applied to your furniture or carpets. Expect sales tax on fabric-protection and coating services even when performed at your residence.

Common questions

Q: Is cleaning carpets and furniture taxable in Kansas?
A: No. The Department ruled cleaning carpets and furniture is not taxable because it is not "servicing" or "maintaining" property under K.S.A. 79-3603(q). But the cleaner owes sales or use tax on its own supplies and equipment.

Q: Is applying a fabric treatment or protective coating taxable?
A: Yes. It is a taxable service of applying tangible personal property under K.S.A. 79-3603(p).

Q: Does doing it at a home make the coating service exempt?
A: No. Furniture and carpets are personal property, not component parts of the residence, so the residential repair-and-remodel exemption (Senate Bill 493 / Notice 98-02) does not apply. The service is taxable whether done at a residence or elsewhere.

Citations and references

• K.S.A. 79-3603(p) — imposes sales tax on the service of installing or applying tangible personal property not held for resale; the basis for taxing the fabric-treatment/protective-coating service.
• K.S.A. 79-3603(q) — imposes sales tax on repairing, servicing, altering, or maintaining tangible personal property; the Department found cleaning does not fall within it, so cleaning carpets and furniture is not taxable.

Source

• Landing page: Kansas Department of Revenue Policy Information Library
• Original document: P-1999-235

Original ruling text

Private Letter Ruling

Body:

Office of Policy & Research

October 20, 1999

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Dear Mr. TTTTT:

We wish to acknowledge receipt of your letter dated September 23, 1999, regarding the application of Kansas Retailers’ Sales tax.

K.S.A. 79-3603(q) imposes a sales tax upon: “the gross receipts received for the service of repairing, servicing, altering, or maintaining tangible personal property. . . The tax imposed by this subsection shall be applicable to the services of repairing, servicing, altering or maintaining an item of tangible personal property which has been and is fastened to, connected with or built into real property. . .”

Cleaning carpets and furniture are not subject to sales tax in the state of Kansas, since these tasks do not fall under K.S.A. 79-3603(q), and due to the fact that said tasks do not constitute either “servicing” or “maintaining”. However, your business would be obligated to pay the appropriate sales/use tax on its purchases of tangible personal property such as cleaning solutions or cleaning equipment used to perform the cleaning services.

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. . . “

Whether Senate Bill 493 now exempts service of applying fabric treatments and/or a protective coating to furniture and/or carpets done 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 many items that are 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 most furniture. The exemption for residential repair and remodeling does not apply to the service of applying fabric treatments and/or a protective coating to furniture and/or carpets. Accordingly, the service of applying fabric treatments and/or a protective coating to furniture and/or carpets 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 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: 10/27/1999 Date Modified: 10/11/2001

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