Manufacturers and industrial processors with facilities located in Kansas, may be eligible for a utility tax exemption. Kansas offers an exemption from state and local sales tax on the purchase of electricity, natural gas, and water used in qualifying production activities. This tax exemption is authorized by K.S.A. 79-3602(dd).

Exemption Language of K.S.A. 79-3602(dd)

"Tangible personal property [including electricity, gas and water] which is essential or necessary to and which is used in the actual process of and consumed, depleted or dissipated within one year in the production, manufacture, processing, mining, drilling, refining or compounding of tangible personal property" is exempt from sales and use tax."

Utility Study Requirement for Exemption Qualification

A Kansas utility tax study must list every piece of equipment and appliance (production and non-production) that uses the utility and the annual consumption of each. Failure to properly calculate or classify utility usage is cause for denial of the exemption.

Kansas Statute of Limitations on Tax Refund

3 years

State Sales Tax Rate: 6.5%

Average Local Sales Tax Rate: 2.18%

Helpful Resources

Kansas Utility Exemption Certificate: Exemption Certificate ST-28B

Kansas Utility Exemption Statute/Rule: K.S.A. 79-3602(dd)

Kansas Claim Form for Tax Refund: ST-33 Claim for Refund