Session of 1999
         
HOUSE BILL No. 2498
         
By Committee on Taxation
          
2-12
          
  9             AN  ACT relating to sales taxation; exempting sales of certain admissions
10             therefrom; amending K.S.A. 1998 Supp. 79-3603 and repealing the
11             existing section.
12      
13       Be it enacted by the Legislature of the State of Kansas:
14             Section  1. K.S.A. 1998 Supp. 79-3603 is hereby amended to read as
15       follows: 79-3603. For the privilege of engaging in the business of selling
16       tangible personal property at retail in this state or rendering or furnishing
17       any of the services taxable under this act, there is hereby levied and there
18       shall be collected and paid a tax at the rate of 4.9% upon:
19             (a) The gross receipts received from the sale of tangible personal
20       property at retail within this state;
21             (b)  (1) the gross receipts from intrastate telephone or telegraph serv-
22       ices and (2) the gross receipts received from the sale of interstate tele-
23       phone or telegraph services, which (A) originate within this state and
24       terminate outside the state and are billed to a customer's telephone num-
25       ber or account in this state; or (B) originate outside this state and ter-
26       minate within this state and are billed to a customer's telephone number
27       or account in this state except that the sale of interstate telephone or
28       telegraph service does not include: (A) Any interstate incoming or out-
29       going wide area telephone service or wide area transmission type service
30       which entitles the subscriber to make or receive an unlimited number of
31       communications to or from persons having telephone service in a speci-
32       fied area which is outside the state in which the station provided this
33       service is located; (B) any interstate private communications service to
34       the persons contracting for the receipt of that service that entitles the
35       purchaser to exclusive or priority use of a communications channel or
36       group of channels between exchanges; (C) any value-added nonvoice
37       service in which computer processing applications are used to act on the
38       form, content, code or protocol of the information to be transmitted; (D)
39       any telecommunication service to a provider of telecommunication serv-
40       ices which will be used to render telecommunications services, including
41       carrier access services; or (E) any service or transaction defined in this
42       section among entities classified as members of an affiliated group as
43       provided by federal law (U.S.C. Section 1504). For the purposes of this

HB 2498

2

  1       subsection the term gross receipts does not include purchases of tele-
  2       phone, telegraph or telecommunications using a prepaid telephone call-
  3       ing card or pre-paid authorization number. As used in this subsection, a
  4       pre-paid telephone calling card or pre-paid authorization number means
  5       the right to exclusively make telephone calls, paid for in advance, with
  6       the prepaid value measured in minutes or other time units, that enables
  7       the origination of calls using an access number or authorization code or
  8       both, whether manually or electronically dialed;
  9             (c) the gross receipts from the sale or furnishing of gas, water, elec-
10       tricity and heat, which sale is not otherwise exempt from taxation under
11       the provisions of this act, and whether furnished by municipally or pri-
12       vately owned utilities;
13             (d) the gross receipts from the sale of meals or drinks furnished at
14       any private club, drinking establishment, catered event, restaurant, eating
15       house, dining car, hotel, drugstore or other place where meals or drinks
16       are regularly sold to the public;
17             (e) the gross receipts from the sale of admissions to any place pro-
18       viding amusement, entertainment or recreation services including admis-
19       sions to state, county, district and local fairs, but such tax shall not be
20       levied and collected upon the gross receipts received from sales of ad-
21       missions to any: (1) Cultural and historical event which occurs triennially;
22       (2) professional athletic event whether sold as a single or season ticket of
23       admission; or (3) athletic event, lecture, dance, play, concert or other form
24       of entertainment sponsored by a public or private elementary or second-
25       ary school whether sold as a single or season ticket of admission or as a
26       ticket of admission to a diversified group of such entertainments;
27             (f) the gross receipts from the operation of any coin-operated device
28       dispensing or providing tangible personal property, amusement or other
29       services except laundry services, whether automatic or manually operated;
30             (g) the gross receipts from the service of renting of rooms by hotels,
31       as defined by K.S.A. 36-501 and amendments thereto, or by accommo-
32       dation brokers, as defined by K.S.A. 12-1692, and amendments thereto;
33             (h) the gross receipts from the service of renting or leasing of tangible
34       personal property except such tax shall not apply to the renting or leasing
35       of machinery, equipment or other personal property owned by a city and
36       purchased from the proceeds of industrial revenue bonds issued prior to
37       July 1, 1973, in accordance with the provisions of K.S.A. 12-1740 through
38       12-1749, and amendments thereto, and any city or lessee renting or leas-
39       ing such machinery, equipment or other personal property purchased
40       with the proceeds of such bonds who shall have paid a tax under the
41       provisions of this section upon sales made prior to July 1, 1973, shall be
42       entitled to a refund from the sales tax refund fund of all taxes paid
43       thereon;

HB 2498

3

  1             (i) the gross receipts from the rendering of dry cleaning, pressing,
  2       dyeing and laundry services except laundry services rendered through a
  3       coin-operated device whether automatic or manually operated;
  4             (j) the gross receipts from the rendering of the services of washing
  5       and washing and waxing of vehicles;
  6             (k) the gross receipts from cable, community antennae and other sub-
  7       scriber radio and television services;
  8             (l) the gross receipts received from the sales of tangible personal
  9       property to all contractors, subcontractors or repairmen of materials and
10       supplies for use by them in erecting structures for others, or building on,
11       or otherwise improving, altering, or repairing real or personal property
12       of others;
13             (m) the gross receipts received from fees and charges by public and
14       private clubs, drinking establishments, organizations and businesses for
15       participation in sports, games and other recreational activities, but such
16       tax shall not be levied and collected upon the gross receipts received from:
17       (1) Fees and charges by any political subdivision, by any organization
18       exempt from property taxation pursuant to paragraph Ninth of K.S.A. 79-
19       201, and amendments thereto, or by any youth recreation organization
20       exclusively providing services to persons 18 years of age or younger which
21       is exempt from federal income taxation pursuant to section 501(c)(3) of
22       the federal internal revenue code of 1986, for participation in sports,
23       games and other recreational activities; and (2) entry fees and charges for
24       participation in a special event or tournament sanctioned by a national
25       sporting association to which spectators are charged an admission which
26       is taxable pursuant to subsection (e);
27             (n) the gross receipts received from dues charged by public and pri-
28       vate clubs, drinking establishments, organizations and businesses, pay-
29       ment of which entitles a member to the use of facilities for recreation or
30       entertainment, but such tax shall not be levied and collected upon the
31       gross receipts received from: (1) Dues charged by any organization ex-
32       empt from property taxation pursuant to paragraphs Eighth and Ninth of
33       K.S.A. 79-201, and amendments thereto; and (2) sales of memberships
34       in a nonprofit organization which is exempt from federal income taxation
35       pursuant to section 501 (c)(3) of the federal internal revenue code of
36       1986, and whose purpose is to support the operation of a nonprofit zoo;
37             (o) the gross receipts received from the isolated or occasional sale of
38       motor vehicles or trailers but not including: (1) The transfer of motor
39       vehicles or trailers by a person to a corporation solely in exchange for
40       stock securities in such corporation; or (2) the transfer of motor vehicles
41       or trailers by one corporation to another when all of the assets of such
42       corporation are transferred to such other corporation; or (3) the sale of
43       motor vehicles or trailers which are subject to taxation pursuant to the

HB 2498

4

  1       provisions of K.S.A. 79-5101 et seq., and amendments thereto, by an
  2       immediate family member to another immediate family member. For the
  3       purposes of clause (3), immediate family member means lineal ascendants
  4       or descendants, and their spouses. In determining the base for computing
  5       the tax on such isolated or occasional sale, the fair market value of any
  6       motor vehicle or trailer traded in by the purchaser to the seller may be
  7       deducted from the selling price;
  8             (p) the gross receipts received for the service of installing or applying
  9       tangible personal property which when installed or applied is not being
10       held for sale in the regular course of business, and whether or not such
11       tangible personal property when installed or applied remains tangible
12       personal property or becomes a part of real estate, except that no tax shall
13       be imposed upon the service of installing or applying tangible personal
14       property in connection with the original construction of a building or
15       facility, the original construction, reconstruction, restoration, remodeling,
16       renovation, repair or replacement of a residence or the construction, re-
17       construction, restoration, replacement or repair of a bridge or highway.
18             For the purposes of this subsection:
19             (1) "Original construction" shall mean the first or initial construction
20       of a new building or facility. The term "original construction" shall include
21       the addition of an entire room or floor to any existing building or facility,
22       the completion of any unfinished portion of any existing building or fa-
23       cility and the restoration, reconstruction or replacement of a building or
24       facility damaged or destroyed by fire, flood, tornado, lightning, explosion
25       or earthquake, but such term, except with regard to a residence, shall not
26       include replacement, remodeling, restoration, renovation or reconstruc-
27       tion under any other circumstances;
28             (2) "building" shall mean only those enclosures within which individ-
29       uals customarily are employed, or which are customarily used to house
30       machinery, equipment or other property, and including the land improve-
31       ments immediately surrounding such building;
32             (3) "facility" shall mean a mill, plant, refinery, oil or gas well, water
33       well, feedlot or any conveyance, transmission or distribution line of any
34       cooperative, nonprofit, membership corporation organized under or sub-
35       ject to the provisions of K.S.A. 17-4601 et seq., and amendments thereto,
36       or of any municipal or quasi-municipal corporation, including the land
37       improvements immediately surrounding such facility; and
38             (4) "residence" shall mean only those enclosures within which indi-
39       viduals customarily live;
40             (q) the gross receipts received for the service of repairing, servicing,
41       altering or maintaining tangible personal property, except computer soft-
42       ware described in subsection (s), which when such services are rendered
43       is not being held for sale in the regular course of business, and whether

HB 2498

5

  1       or not any tangible personal property is transferred in connection there-
  2       with. The tax imposed by this subsection shall be applicable to the services
  3       of repairing, servicing, altering or maintaining an item of tangible personal
  4       property which has been and is fastened to, connected with or built into
  5       real property;
  6             (r) the gross receipts from fees or charges made under service or
  7       maintenance agreement contracts for services, charges for the providing
  8       of which are taxable under the provisions of subsection (p) or (q);
  9             (s) the gross receipts received from the sale of computer software,
10       and the sale of the services of modifying, altering, updating or maintaining
11       computer software. As used in this subsection, "computer software"
12       means information and directions loaded into a computer which dictate
13       different functions to be performed by the computer. Computer software
14       includes any canned or prewritten program which is held or existing for
15       general or repeated sale, even if the program was originally developed
16       for a single end user as custom computer software. The sale of computer
17       software or services does not include: (1) The initial sale of any custom
18       computer program which is originally developed for the exclusive use of
19       a single end user; or (2) those services rendered in the modification of
20       computer software when the modification is developed exclusively for a
21       single end user only to the extent of the modification and only to the
22       extent that the actual amount charged for the modification is separately
23       stated on invoices, statements and other billing documents provided to
24       the end user. The services of modification, alteration, updating and main-
25       tenance of computer software shall only include the modification, alter-
26       ation, updating and maintenance of computer software taxable under this
27       subsection whether or not the services are actually provided; and
28             (t) the gross receipts received for telephone answering services, in-
29       cluding mobile phone services, beeper services and other similar services;
30       and
31             (u) the gross receipts received from the sale of prepaid telephone
32       calling cards or pre-paid authorization numbers and the recharge of such
33       cards or numbers. A pre-paid telephone calling card or pre-paid author-
34       ization number means the right to exclusively make telephone calls, paid
35       for in advance, with the prepaid value measured in minutes or other time
36       units, that enables the origination of calls using an access number or
37       authorization code or both, whether manually or electronically dialed. If
38       the dale or recharge of such card or number does not take place at the
39       vendor's place of business, it shall be conclusively determined to take
40       place at the customer's shipping address; if there is no item shipped then
41       it shall be the customer's billing address. 
42       Sec.  2. K.S.A. 1998 Supp. 79-3603 is hereby repealed.

HB 2498

6

  1        Sec.  3. This act shall take effect and be in force from and after its
  2       publication in the statute book.