J.G. Masonry, Inc. v. Department of Revenue

The opinion of the court was delivered by This is a taxpayer's appeal from a judgment of the Wyandotte District Court affirming an order of the Board of Tax Appeals which upheld an assessment of sales and compensating taxes by the Kansas Department of Revenue. J.G. Masonry, Inc., a masonry construction firm of Kansas City, Kansas, is the taxpayer and appellant. Following an audit of the taxpayer's records in 1980, the Department assessed additional unpaid taxes on several services and business transactions occurring in the years 1977, 1978 and 1979. Total taxes, interest and penalties amounted to $2,912. Five questions are presented, two regarding the sales tax, K.S.A. 79-3601 et seq., and the then-current amendments, and three regarding the compensating tax, K.S.A. 79-3701 et seq., as then constituted. Each issue is based upon different facts, so we will discuss separately the facts applicable to each. I. THE ORIGINAL CONSTRUCTION AND BUILDING EXEMPTIONS IN K.S.A. 1978 Supp. 79-3603 The taxpayer first contends that two of its construction projects upon which sales taxes were levied come within the original construction exemption of the statute and thus should not have been taxed. The pertinent portions of the statute read: