# Kansas Contractor Taxes and Licensing: Residential vs. Commercial Labor

In Kansas, labor on original construction and on residential remodeling is exempt from sales tax, but labor to repair or remodel commercial property is taxable. Contractors are the final consumers of the materials they install and pay tax when buying them. The state rate is 6.5%, and local rates add 0.10% to 3%.

## Key takeaways

- Kansas sorts jobs three ways: original construction, residential work and commercial remodel or repair. Only the last has taxable labor.
- Contractors can't buy installed materials with a resale certificate; they're the final consumer.
- Project exemption certificates (PECs) let contractors buy materials tax-free for exempt entities' projects.
- Roofing contractors must register with the Kansas Attorney General.
- Small employers with $20,000 or less in annual payroll are outside the Workers Compensation Act.

## Is labor taxable in Kansas?

It depends on whether the building is residential and whether the work is new. The Kansas Department of Revenue's Publication KS-1525 says services to install or apply tangible personal property "are exempt from sales tax when the services involve" residential construction, remodeling and renovation, and original construction of any building. Labor on commercial remodeling and repair is taxable: the publication describes those as "projects that are not considered to be residential, original construction or exempt for another reason."

**Kansas: is the labor on this job taxable?**

| Type of job | Labor | Materials |
| --- | --- | --- |
| Original construction (new building, residential or commercial) | Exempt | Contractor pays tax as final consumer |
| Residential remodel, renovation or repair | Exempt | Contractor pays tax as final consumer |
| Commercial remodel or repair | Taxable; charge the customer | Contractor pays tax as final consumer |
| Project for an exempt entity with a PEC | Follows the project's exemption | Bought tax-free under the PEC |

_Summarized from Kansas DOR Publication KS-1525, checked 2026-10-19. Edge cases exist; check with the department._

Each contractor and subcontractor is responsible for tax on its own taxable labor. So an electrical sub on an office remodel bills tax on its labor even if the general contractor handles the rest. Kansas is a useful contrast to [Missouri](https://www.brix.so/taxes/missouri), where labor generally isn't taxed, and to [Iowa](https://www.brix.so/taxes/iowa), where the line is repair vs. construction instead of residential vs. commercial.

> **Example: the same HVAC changeout, two buildings (illustrative)**
>
> **A house:** residential work. The contractor paid tax on the equipment and parts when buying them. The homeowner pays no sales tax on the installation labor.
>
> **A retail store:** commercial repair or remodel. The contractor still paid tax on the materials, and now also charges the store sales tax on the labor, at the combined rate for the job site.

## Materials, use tax and project exemption certificates

KS-1525 says contractors "are considered to be the final user or consumer of the materials they install for others" and can't buy them tax-free with a resale certificate. Pay sales tax to your supplier, or accrue Kansas use tax if an out-of-state supplier didn't charge it. More on that: [use tax for contractors](https://www.brix.so/learn/use-tax-for-contractors) and [sales tax on labor vs. materials](https://www.brix.so/learn/sales-tax-on-labor-vs-materials).

When the owner is an exempt entity, the state can issue a project exemption certificate. Per KS-1525, "a PEC exempts from sales tax the purchase of materials which will become part of the project," and PECs "expire upon completion of that project." Give your suppliers a copy, and don't use it for tools or for another job.

The publication says "the Kansas statewide sales (and use) tax rate is 6.5%," and "local sales tax rates currently range from .10% to 3%." Use the department's address rate locator for the job site.

## Kansas contractor licensing

Kansas has one statewide contractor registration that matters for most trades businesses: roofing. Under K.S.A. 50-6,125, roofing contractors need a registration certificate from the Attorney General, and the annual fee "shall not exceed $500" under K.S.A. 50-6,128. For electrical, plumbing, HVAC and general contracting, check with the city or county where you work; Kansas City, Wichita, Topeka and other cities run their own licensing and permit programs.

**Kansas contractor licensing by trade**

| Trade | Agency | License or registration | Official source |
| --- | --- | --- | --- |
| Roofing | Kansas Attorney General | Roofing contractor registration certificate | [K.S.A. 50-6,125](https://ksrevisor.gov/statutes/chapters/ch50/050_006_0125.html) |
| Electrical | City or county; check with the local building department | Local license where required | Your local building department |
| Plumbing | City or county; check with the local building department | Local license where required | Your local building department |
| HVAC / mechanical | City or county; check with the local building department | Local license where required | Your local building department |
| General contractor | City or county; check with the local building department | Local license where required | Your local building department |

_Checked 2026-10-19. Confirm local requirements before bidding outside your home city._

If you're new to how state and local licensing interact, start with our [contractor license guide](https://www.brix.so/learn/contractor-license).

## Kansas income tax for contractors

K.S.A. 79-32,110 sets two individual brackets for tax years 2024 and later. A single filer pays 5.2% on the first $23,000 of Kansas taxable income, then "$1,196 plus 5.58% of the excess over $23,000." Married couples filing jointly pay 5.2% up to $46,000 and 5.58% above. Corporations pay a 4% normal tax plus a 3% surtax on taxable income over $50,000.

Kansas law includes revenue triggers that can lower rates. The Department of Revenue's Notice 25-06 (October 2, 2025) found revenues didn't meet the trigger, which points to unchanged rates for 2026; confirm with the department or your CPA when you file. Pass-through owners usually make quarterly estimated payments: see [quarterly estimated taxes for contractors](https://www.brix.so/learn/quarterly-estimated-taxes-for-contractors) and the [quarterly estimated tax calculator](https://www.brix.so/tools/quarterly-estimated-tax-calculator).

## Workers' comp in Kansas

Kansas uses a payroll test instead of a headcount. K.S.A. 44-505 says the Workers Compensation Act doesn't apply to an employer with "total gross annual payroll for the preceding calendar year of not more than $20,000 for all employees" who reasonably expects to stay at or below that this year. Wages paid to family members don't count toward the $20,000. Once you're over it, you need coverage from a private insurer or approved self-insurance. The Kansas Department of Labor's workers compensation division administers the Act. Background: [workers' compensation](https://www.brix.so/learn/workers-compensation).

## Local taxes in Kansas

Local sales taxes range from 0.10% to 3%, so taxable commercial labor and your material purchases can be taxed at different combined rates depending on the address. Cities can also require their own business licenses and permit fees, so check with each city you work in.

> **General information only**
>
> The residential vs. commercial split and PEC rules have exceptions. Talk to a CPA who handles Kansas contractors, and get written guidance from the Kansas Department of Revenue if a job doesn't fit neatly.

BRIX lets you set tax per quote and invoice and syncs everything with QuickBooks, so taxable commercial jobs and tax-free residential jobs are easy to separate at filing time. BRIX doesn't decide what's taxable or file returns.

- [Quotes and estimates](https://www.brix.so/features/quotes-estimates): Builds accurate quotes on site and follows up on every open estimate.
- [Invoicing and payments](https://www.brix.so/features/invoicing-payments): Turns finished jobs into invoices and politely chases unpaid ones until the money is in your account.
- [QuickBooks sync](https://www.brix.so/integrations/quickbooks): Syncs customers, invoices and payments with QuickBooks so the books match the jobs.

### Neighboring state guides

- [Missouri](https://www.brix.so/taxes/missouri): No tax on labor; local licensing
- [Nebraska](https://www.brix.so/taxes/nebraska): Option 1, 2 and 3 elections
- [Iowa](https://www.brix.so/taxes/iowa): Repair labor taxable
- [South Dakota](https://www.brix.so/taxes/south-dakota): No income tax; 2% excise tax

## Frequently asked questions

### Is labor taxable in Kansas?

Only some labor. Installation labor on original construction and on residential remodeling or repair is exempt. Labor to repair or remodel commercial property is taxable, according to Kansas Department of Revenue Publication KS-1525.

### Do Kansas contractors pay sales tax on materials?

Yes, in most cases. Kansas treats contractors as the final consumers of the materials they install, so they pay tax when buying them and can't use a resale certificate. Materials for a project covered by a project exemption certificate are the exception.

### What is a project exemption certificate in Kansas?

A PEC is issued for a specific project owned by an exempt entity. It lets the contractor buy materials that become part of that project without sales tax, and it expires when the project is finished.

### Do roofers need a license in Kansas?

Roofing contractors must register with the Kansas Attorney General under K.S.A. 50-6,125. The annual registration fee can't exceed $500. Other trades are generally licensed by cities and counties.

### What is the Kansas sales tax rate?

The statewide sales and use tax rate is 6.5%. Local rates range from 0.10% to 3%, so the combined rate depends on the job site. Use the Department of Revenue's rate locator.

### Does a small Kansas contractor need workers' comp?

Kansas exempts employers whose gross annual payroll for the prior year was $20,000 or less and who expect to stay at or under that. Family members' wages don't count toward the limit. Above it, coverage is required.

### What are the Kansas income tax rates?

For tax years 2024 and later, Kansas taxes individuals at 5.2% and 5.58%. For single filers the 5.58% rate starts above $23,000 of taxable income; for joint filers, above $46,000. Confirm the 2026 rates with the department.

## Related

- [Do Contractors Charge Sales Tax on Labor or Materials?](https://www.brix.so/learn/sales-tax-on-labor-vs-materials)
- [What Is Use Tax for Contractors?](https://www.brix.so/learn/use-tax-for-contractors)
- [What Is a Contractor License?](https://www.brix.so/learn/contractor-license)
- [What Is Workers' Compensation Insurance?](https://www.brix.so/learn/workers-compensation)
- [Quarterly Estimated Taxes for Contractors: How They Work in 2026](https://www.brix.so/learn/quarterly-estimated-taxes-for-contractors)
- [Quarterly Estimated Tax Calculator for Self-Employed Contractors (2026)](https://www.brix.so/tools/quarterly-estimated-tax-calculator)
- [Missouri Contractor Taxes and Licensing: Untaxed Labor, Local Licenses](https://www.brix.so/taxes/missouri)
- [Nebraska Contractor Taxes and Licensing: Options 1, 2 and 3 Explained](https://www.brix.so/taxes/nebraska)
- [Iowa Contractor Taxes and Licensing: Repair Labor, Registration and Income Tax](https://www.brix.so/taxes/iowa)
- [Self-Employment Tax Calculator (2026)](https://www.brix.so/tools/self-employment-tax-calculator)

## Sources

- [Kansas Department of Revenue — Pub. KS-1525, Contractors, Subcontractors and Repairmen](https://ksrevenue.gov/pub1525.html) (checked 2026-10-19)
- [Kansas Department of Revenue — Address rate locator](https://www.ksrevenue.gov/atrl.html) (checked 2026-10-19)
- [K.S.A. 50-6,125 — Roofing contractor registration](https://ksrevisor.gov/statutes/chapters/ch50/050_006_0125.html) (checked 2026-10-19)
- [K.S.A. 50-6,128 — Roofing registration fees](https://ksrevisor.gov/statutes/chapters/ch50/050_006_0128.html) (checked 2026-10-19)
- [K.S.A. 79-32,110 — Income tax rates](https://www.ksrevisor.gov/statutes/chapters/ch79/079_032_0110.html) (checked 2026-10-19)
- [Kansas Department of Revenue — Notice 25-06](https://ksrevenue.gov/taxnotices/notice25-06.pdf) (checked 2026-10-19)
- [K.S.A. 44-505 — Workers compensation applicability](https://ksrevisor.gov/statutes/chapters/ch44/044_005_0005.html) (checked 2026-10-19)

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Written by BRIX Editorial Team. Last updated 2026-10-19. General information, not tax, legal or financial advice.
Canonical: https://www.brix.so/taxes/kansas