Session of 2000
HOUSE BILL No. 2608
By Representative Myers
(By request)
1-10
10 AN ACT relating
to sales taxation; exempting certain sales of food for
11 human consumption
therefrom; amending K.S.A. 1999 Supp. 79-3603
12 and repealing the
existing section; also repealing K.S.A. 79-3632, 79-
13 3634 and 79-3636
through 79-3639 and K.S.A. 1999 Supp. 79-3633
14 and 79-3635.
15
16 Be it enacted by the Legislature of the
State of Kansas:
17 Section
1. K.S.A. 1999 Supp. 79-3603 is hereby amended to read as
18 follows: 79-3603. For the privilege of
engaging in the business of selling
19 tangible personal property at retail in
this state or rendering or furnishing
20 any of the services taxable under this act,
there is hereby levied and there
21 shall be collected and paid a tax at the
rate of 4.9% and, within a rede-
22 velopment district established pursuant to
K.S.A. 74-8921, and amend-
23 ments thereto, there is hereby levied and
there shall be collected and
24 paid an additional tax at the rate of 2%
until the earlier of the date the
25 bonds issued to finance or refinance the
redevelopment project have been
26 paid in full or the final scheduled
maturity of the first series of bonds
27 issued to finance any part of the project
upon:
28 (a) The gross
receipts received from the sale of tangible personal
29 property at retail within this state;
30 (b) (1) the
gross receipts from intrastate telephone or telegraph serv-
31 ices and (2) the gross receipts received
from the sale of interstate tele-
32 phone or telegraph services, which (A)
originate within this state and
33 terminate outside the state and are billed
to a customer's telephone num-
34 ber or account in this state; or (B)
originate outside this state and ter-
35 minate within this state and are billed to
a customer's telephone number
36 or account in this state except that the
sale of interstate telephone or
37 telegraph service does not include: (A) Any
interstate incoming or out-
38 going wide area telephone service or wide
area transmission type service
39 which entitles the subscriber to make or
receive an unlimited number of
40 communications to or from persons having
telephone service in a speci-
41 fied area which is outside the state in
which the station provided this
42 service is located; (B) any interstate
private communications service to
43 the persons contracting for the receipt of
that service that entitles the
2
1 purchaser to exclusive or priority
use of a communications channel or
2 group of channels between exchanges;
(C) any value-added nonvoice
3 service in which computer processing
applications are used to act on the
4 form, content, code or protocol of
the information to be transmitted; (D)
5 any telecommunication service to a
provider of telecommunication serv-
6 ices which will be used to render
telecommunications services, including
7 carrier access services; or (E) any
service or transaction defined in this
8 section among entities classified as
members of an affiliated group as
9 provided by federal law (U.S.C.
Section 1504). For the purposes of this
10 subsection the term gross receipts does not
include purchases of tele-
11 phone, telegraph or telecommunications
using a prepaid telephone call-
12 ing card or pre-paid authorization number.
As used in this subsection, a
13 pre-paid telephone calling card or pre-paid
authorization number means
14 the right to exclusively make telephone
calls, paid for in advance, with
15 the prepaid value measured in minutes or
other time units, that enables
16 the origination of calls using an access
number or authorization code or
17 both, whether manually or electronically
dialed;
18 (c) the gross
receipts from the sale or furnishing of gas, water, elec-
19 tricity and heat, which sale is not
otherwise exempt from taxation under
20 the provisions of this act, and whether
furnished by municipally or pri-
21 vately owned utilities;
22 (d) the gross
receipts from the sale of meals or drinks furnished at
23 any private club, drinking establishment,
catered event, restaurant, eating
24 house, dining car, hotel, drugstore or
other place where meals or drinks
25 are regularly sold to the public;
26 (e) the gross
receipts from the sale of admissions to any place pro-
27 viding amusement, entertainment or
recreation services including admis-
28 sions to state, county, district and local
fairs, but such tax shall not be
29 levied and collected upon the gross
receipts received from sales of ad-
30 missions to any cultural and historical
event which occurs triennially;
31 (f) the gross
receipts from the operation of any coin-operated device
32 dispensing or providing tangible personal
property, amusement or other
33 services except laundry services, whether
automatic or manually operated;
34 (g) the gross
receipts from the service of renting of rooms by hotels,
35 as defined by K.S.A. 36-501 and amendments
thereto, or by accommo-
36 dation brokers, as defined by K.S.A.
12-1692, and amendments thereto;
37 (h) the gross
receipts from the service of renting or leasing of tangible
38 personal property except such tax shall not
apply to the renting or leasing
39 of machinery, equipment or other personal
property owned by a city and
40 purchased from the proceeds of industrial
revenue bonds issued prior to
41 July 1, 1973, in accordance with the
provisions of K.S.A. 12-1740 through
42 12-1749, and amendments thereto, and any
city or lessee renting or leas-
43 ing such machinery, equipment or other
personal property purchased
3
1 with the proceeds of such bonds who
shall have paid a tax under the
2 provisions of this section upon sales
made prior to July 1, 1973, shall be
3 entitled to a refund from the sales
tax refund fund of all taxes paid
4 thereon;
5 (i) the
gross receipts from the rendering of dry cleaning, pressing,
6 dyeing and laundry services except
laundry services rendered through a
7 coin-operated device whether
automatic or manually operated;
8 (j) the
gross receipts from the rendering of the services of washing
9 and washing and waxing of
vehicles;
10 (k) the gross
receipts from cable, community antennae and other sub-
11 scriber radio and television services;
12 (l) the gross
receipts received from the sales of tangible personal
13 property to all contractors, subcontractors
or repairmen of materials and
14 supplies for use by them in erecting
structures for others, or building on,
15 or otherwise improving, altering, or
repairing real or personal property
16 of others;
17 (m) the gross
receipts received from fees and charges by public and
18 private clubs, drinking establishments,
organizations and businesses for
19 participation in sports, games and other
recreational activities, but such
20 tax shall not be levied and collected upon
the gross receipts received from:
21 (1) Fees and charges by any political
subdivision, by any organization
22 exempt from property taxation pursuant to
paragraph Ninth of K.S.A. 79-
23 201, and amendments thereto, or by any
youth recreation organization
24 exclusively providing services to persons
18 years of age or younger which
25 is exempt from federal income taxation
pursuant to section 501(c)(3) of
26 the federal internal revenue code of 1986,
for participation in sports,
27 games and other recreational activities;
and (2) entry fees and charges for
28 participation in a special event or
tournament sanctioned by a national
29 sporting association to which spectators
are charged an admission which
30 is taxable pursuant to subsection (e);
31 (n) the gross
receipts received from dues charged by public and pri-
32 vate clubs, drinking establishments,
organizations and businesses, pay-
33 ment of which entitles a member to the use
of facilities for recreation or
34 entertainment, but such tax shall not be
levied and collected upon the
35 gross receipts received from: (1) Dues
charged by any organization ex-
36 empt from property taxation pursuant to
paragraphs Eighth and Ninth of
37 K.S.A. 79-201, and amendments thereto; and
(2) sales of memberships
38 in a nonprofit organization which is exempt
from federal income taxation
39 pursuant to section 501 (c)(3) of the
federal internal revenue code of
40 1986, and whose purpose is to support the
operation of a nonprofit zoo;
41 (o) the gross
receipts received from the isolated or occasional sale of
42 motor vehicles or trailers but not
including: (1) The transfer of motor
43 vehicles or trailers by a person to a
corporation solely in exchange for
4
1 stock securities in such corporation;
or (2) the transfer of motor vehicles
2 or trailers by one corporation to
another when all of the assets of such
3 corporation are transferred to such
other corporation; or (3) the sale of
4 motor vehicles or trailers which are
subject to taxation pursuant to the
5 provisions of K.S.A. 79-5101 et seq.,
and amendments thereto, by an
6 immediate family member to another
immediate family member. For the
7 purposes of clause (3), immediate
family member means lineal ascendants
8 or descendants, and their spouses. In
determining the base for computing
9 the tax on such isolated or
occasional sale, the fair market value of any
10 motor vehicle or trailer traded in by the
purchaser to the seller may be
11 deducted from the selling price;
12 (p) the gross
receipts received for the service of installing or applying
13 tangible personal property which when
installed or applied is not being
14 held for sale in the regular course of
business, and whether or not such
15 tangible personal property when installed
or applied remains tangible
16 personal property or becomes a part of real
estate, except that no tax shall
17 be imposed upon the service of installing
or applying tangible personal
18 property in connection with the original
construction of a building or
19 facility, the original construction,
reconstruction, restoration, remodeling,
20 renovation, repair or replacement of a
residence or the construction, re-
21 construction, restoration, replacement or
repair of a bridge or highway.
22 For the purposes of
this subsection:
23 (1) "Original
construction" shall mean the first or initial construction
24 of a new building or facility. The term
"original construction" shall include
25 the addition of an entire room or floor to
any existing building or facility,
26 the completion of any unfinished portion of
any existing building or fa-
27 cility and the restoration, reconstruction
or replacement of a building or
28 facility damaged or destroyed by fire,
flood, tornado, lightning, explosion
29 or earthquake, but such term, except with
regard to a residence, shall not
30 include replacement, remodeling,
restoration, renovation or reconstruc-
31 tion under any other circumstances;
32 (2) "building"
shall mean only those enclosures within which individ-
33 uals customarily are employed, or which are
customarily used to house
34 machinery, equipment or other property, and
including the land improve-
35 ments immediately surrounding such
building;
36 (3) "facility"
shall mean a mill, plant, refinery, oil or gas well, water
37 well, feedlot or any conveyance,
transmission or distribution line of any
38 cooperative, nonprofit, membership
corporation organized under or sub-
39 ject to the provisions of K.S.A. 17-4601 et
seq., and amendments thereto,
40 or of any municipal or quasi-municipal
corporation, including the land
41 improvements immediately surrounding such
facility; and
42 (4) "residence"
shall mean only those enclosures within which indi-
43 viduals customarily live;
5
1 (q) the
gross receipts received for the service of repairing,
servicing,
2 altering or maintaining tangible
personal property, except computer soft-
3 ware described in subsection (s),
which when such services are rendered
4 is not being held for sale in the
regular course of business, and whether
5 or not any tangible personal property
is transferred in connection there-
6 with. The tax imposed by this
subsection shall be applicable to the services
7 of repairing, servicing, altering or
maintaining an item of tangible personal
8 property which has been and is
fastened to, connected with or built into
9 real property;
10 (r) the gross
receipts from fees or charges made under service or
11 maintenance agreement contracts for
services, charges for the providing
12 of which are taxable under the provisions
of subsection (p) or (q);
13 (s) the gross
receipts received from the sale of computer software,
14 and the sale of the services of modifying,
altering, updating or maintaining
15 computer software. As used in this
subsection, "computer software"
16 means information and directions loaded
into a computer which dictate
17 different functions to be performed by the
computer. Computer software
18 includes any canned or prewritten program
which is held or existing for
19 general or repeated sale, even if the
program was originally developed
20 for a single end user as custom computer
software. The sale of computer
21 software or services does not include: (1)
The initial sale of any custom
22 computer program which is originally
developed for the exclusive use of
23 a single end user; or (2) those services
rendered in the modification of
24 computer software when the modification is
developed exclusively for a
25 single end user only to the extent of the
modification and only to the
26 extent that the actual amount charged for
the modification is separately
27 stated on invoices, statements and other
billing documents provided to
28 the end user. The services of modification,
alteration, updating and main-
29 tenance of computer software shall only
include the modification, alter-
30 ation, updating and maintenance of computer
software taxable under this
31 subsection whether or not the services are
actually provided; and
32 (t) the gross
receipts received for telephone answering services, in-
33 cluding mobile phone services, beeper
services and other similar services;
34 and
35 (u) the gross
receipts received from the sale of prepaid telephone
36 calling cards or pre-paid authorization
numbers and the recharge of such
37 cards or numbers. A pre-paid telephone
calling card or pre-paid author-
38 ization number means the right to
exclusively make telephone calls, paid
39 for in advance, with the prepaid value
measured in minutes or other time
40 units, that enables the origination of
calls using an access number or
41 authorization code or both, whether
manually or electronically dialed. If
42 the sale or recharge of such card or number
does not take place at the
43 vendor's place of business, it shall be
conclusively determined to take
6
1 place at the customer's shipping
address; if there is no item shipped then
2 it shall be the customer's billing
address.; and
3 (v) the
gross receipts received from sales of food for human con-
4 sumption which shall be taxed at
the rate of 3.9% on and after July 1,
5 2000, but before July 1, 2001,
2.9% on and after July 1, 2001, but before
6 July 1, 2002, 1.9% on and after
July 1, 2002, but before July 1, 2003, .9%
7 on and after July 1, 2003, but
before July 1, 2004, and all such sales shall
8 be exempt thereafter. As used in
this subsection, "food for human con-
9 sumption" means only that food
which is eligible for purchase with food
10 stamps issued by the United States
department of agriculture pursuant to
11 regulations in effect on January 1,
2000, regardless of whether the retailer
12 from which the food is purchased is
participating in the food stamp pro-
13 gram. Such phrase shall not include: (1)
Meals prepared for immediate
14 consumption on or off the premises of
the retailer; or (2) food sold through
15 vending machines.
16 Sec. 2. K.S.A. 1999 Supp.
79-3603 is hereby repealed.
17 Sec. 3. On
and after April 16, 2004, K.S.A. 79-3632, 79-3634 and 79-
18 3636 through 79-3639 and K.S.A. 1999 Supp.
79-3633 and 79-3635 are
19 hereby repealed.
20 Sec. 4. This act shall
take effect and be in force from and after its
21 publication in the statute book.