As Amended by House Committee
Session of 2000
HOUSE BILL No. 2678
By Committee on Taxation
1-20
11 AN ACT relating
to sales taxation; exempting certain sales of hotel
rental
12
services therefrom; amending K.S.A. 1999
Supp. 79-3603 and 79-
13 3606 and
repealing the existing section
sections.
14
15 Be it enacted by the Legislature of the
State of Kansas:
16 Section
1. K.S.A. 1999 Supp. 79-3603 is hereby amended to read as
17 follows: 79-3603. For the privilege of
engaging in the business of selling
18 tangible personal property at retail in
this state or rendering or furnishing
19 any of the services taxable under this act,
there is hereby levied and there
20 shall be collected and paid a tax at the
rate of 4.9% and, within a rede-
21 velopment district established pursuant to
K.S.A. 74-8921, and amend-
22 ments thereto, there is hereby levied and
there shall be collected and
23 paid an additional tax at the rate of 2%
until the earlier of the date the
24 bonds issued to finance or refinance the
redevelopment project have been
25 paid in full or the final scheduled
maturity of the first series of bonds
26 issued to finance any part of the project
upon:
27 (a) The gross
receipts received from the sale of tangible personal
28 property at retail within this state;
29 (b) (1) the
gross receipts from intrastate telephone or telegraph serv-
30 ices and (2) the gross receipts received
from the sale of interstate tele-
31 phone or telegraph services, which (A)
originate within this state and
32 terminate outside the state and are billed
to a customer's telephone num-
33 ber or account in this state; or (B)
originate outside this state and ter-
34 minate within this state and are billed to
a customer's telephone number
35 or account in this state except that the
sale of interstate telephone or
36 telegraph service does not include: (A) Any
interstate incoming or out-
37 going wide area telephone service or wide
area transmission type service
38 which entitles the subscriber to make or
receive an unlimited number of
39 communications to or from persons having
telephone service in a speci-
40 fied area which is outside the state in
which the station provided this
41 service is located; (B) any interstate
private communications service to
42 the persons contracting for the receipt of
that service that entitles the
43 purchaser to exclusive or priority use of a
communications channel or
2
1 group of channels between exchanges;
(C) any value-added nonvoice
2 service in which computer processing
applications are used to act on the
3 form, content, code or protocol of
the information to be transmitted; (D)
4 any telecommunication service to a
provider of telecommunication serv-
5 ices which will be used to render
telecommunications services, including
6 carrier access services; or (E) any
service or transaction defined in this
7 section among entities classified as
members of an affiliated group as
8 provided by federal law (U.S.C.
Section 1504). For the purposes of this
9 subsection the term gross receipts
does not include purchases of tele-
10 phone, telegraph or telecommunications
using a prepaid telephone call-
11 ing card or pre-paid authorization number.
As used in this subsection, a
12 pre-paid telephone calling card or pre-paid
authorization number means
13 the right to exclusively make telephone
calls, paid for in advance, with
14 the prepaid value measured in minutes or
other time units, that enables
15 the origination of calls using an access
number or authorization code or
16 both, whether manually or electronically
dialed;
17 (c) the gross
receipts from the sale or furnishing of gas, water, elec-
18 tricity and heat, which sale is not
otherwise exempt from taxation under
19 the provisions of this act, and whether
furnished by municipally or pri-
20 vately owned utilities;
21 (d) the gross
receipts from the sale of meals or drinks furnished at
22 any private club, drinking establishment,
catered event, restaurant, eating
23 house, dining car, hotel, drugstore or
other place where meals or drinks
24 are regularly sold to the public;
25 (e) the gross
receipts from the sale of admissions to any place pro-
26 viding amusement, entertainment or
recreation services including admis-
27 sions to state, county, district and local
fairs, but such tax shall not be
28 levied and collected upon the gross
receipts received from sales of ad-
29 missions to any cultural and historical
event which occurs triennially;
30 (f) the gross
receipts from the operation of any coin-operated device
31 dispensing or providing tangible personal
property, amusement or other
32 services except laundry services, whether
automatic or manually operated;
33 (g) the gross
receipts from the service of renting of rooms by hotels,
34 as defined by K.S.A. 36-501 and amendments
thereto, or by accommo-
35 dation brokers, as defined by K.S.A.
12-1692, and amendments thereto,
36 but such tax shall not be levied and
collected upon the gross receipts
37 received from sales of such service to
the federal or state government, any
38 agency, officer or employee thereof in
association with the performance
39 of official government duties;
40 (h) the gross
receipts from the service of renting or leasing of tangible
41 personal property except such tax shall not
apply to the renting or leasing
42 of machinery, equipment or other personal
property owned by a city and
43 purchased from the proceeds of industrial
revenue bonds issued prior to
3
1 July 1, 1973, in accordance with the
provisions of K.S.A. 12-1740 through
2 12-1749, and amendments thereto, and
any city or lessee renting or leas-
3 ing such machinery, equipment or
other personal property purchased
4 with the proceeds of such bonds who
shall have paid a tax under the
5 provisions of this section upon sales
made prior to July 1, 1973, shall be
6 entitled to a refund from the sales
tax refund fund of all taxes paid
7 thereon;
8 (i) the
gross receipts from the rendering of dry cleaning, pressing,
9 dyeing and laundry services except
laundry services rendered through a
10 coin-operated device whether automatic or
manually operated;
11 (j) the gross
receipts from the rendering of the services of washing
12 and washing and waxing of vehicles;
13 (k) the gross
receipts from cable, community antennae and other sub-
14 scriber radio and television services;
15 (l) the gross
receipts received from the sales of tangible personal
16 property to all contractors, subcontractors
or repairmen of materials and
17 supplies for use by them in erecting
structures for others, or building on,
18 or otherwise improving, altering, or
repairing real or personal property
19 of others;
20 (m) the gross
receipts received from fees and charges by public and
21 private clubs, drinking establishments,
organizations and businesses for
22 participation in sports, games and other
recreational activities, but such
23 tax shall not be levied and collected upon
the gross receipts received from:
24 (1) Fees and charges by any political
subdivision, by any organization
25 exempt from property taxation pursuant to
paragraph Ninth of K.S.A. 79-
26 201, and amendments thereto, or by any
youth recreation organization
27 exclusively providing services to persons
18 years of age or younger which
28 is exempt from federal income taxation
pursuant to section 501(c)(3) of
29 the federal internal revenue code of 1986,
for participation in sports,
30 games and other recreational activities;
and (2) entry fees and charges for
31 participation in a special event or
tournament sanctioned by a national
32 sporting association to which spectators
are charged an admission which
33 is taxable pursuant to subsection (e);
34 (n) the gross
receipts received from dues charged by public and pri-
35 vate clubs, drinking establishments,
organizations and businesses, pay-
36 ment of which entitles a member to the use
of facilities for recreation or
37 entertainment, but such tax shall not be
levied and collected upon the
38 gross receipts received from: (1) Dues
charged by any organization ex-
39 empt from property taxation pursuant to
paragraphs Eighth and Ninth of
40 K.S.A. 79-201, and amendments thereto; and
(2) sales of memberships
41 in a nonprofit organization which is exempt
from federal income taxation
42 pursuant to section 501 (c)(3) of the
federal internal revenue code of
43 1986, and whose purpose is to support the
operation of a nonprofit zoo;
4
1 (o) the
gross receipts received from the isolated or occasional sale of
2 motor vehicles or trailers but not
including: (1) The transfer of motor
3 vehicles or trailers by a person to a
corporation solely in exchange for
4 stock securities in such corporation;
or (2) the transfer of motor vehicles
5 or trailers by one corporation to
another when all of the assets of such
6 corporation are transferred to such
other corporation; or (3) the sale of
7 motor vehicles or trailers which are
subject to taxation pursuant to the
8 provisions of K.S.A. 79-5101 et seq.,
and amendments thereto, by an
9 immediate family member to another
immediate family member. For the
10 purposes of clause (3), immediate family
member means lineal ascendants
11 or descendants, and their spouses. In
determining the base for computing
12 the tax on such isolated or occasional
sale, the fair market value of any
13 motor vehicle or trailer traded in by the
purchaser to the seller may be
14 deducted from the selling price;
15 (p) the gross
receipts received for the service of installing or applying
16 tangible personal property which when
installed or applied is not being
17 held for sale in the regular course of
business, and whether or not such
18 tangible personal property when installed
or applied remains tangible
19 personal property or becomes a part of real
estate, except that no tax shall
20 be imposed upon the service of installing
or applying tangible personal
21 property in connection with the original
construction of a building or
22 facility, the original construction,
reconstruction, restoration, remodeling,
23 renovation, repair or replacement of a
residence or the construction, re-
24 construction, restoration, replacement or
repair of a bridge or highway.
25 For the purposes of
this subsection:
26 (1) ``Original
construction'' shall mean the first or initial construction
27 of a new building or facility. The term
``original construction'' shall include
28 the addition of an entire room or floor to
any existing building or facility,
29 the completion of any unfinished portion of
any existing building or fa-
30 cility and the restoration, reconstruction
or replacement of a building or
31 facility damaged or destroyed by fire,
flood, tornado, lightning, explosion
32 or earthquake, but such term, except with
regard to a residence, shall not
33 include replacement, remodeling,
restoration, renovation or reconstruc-
34 tion under any other circumstances;
35 (2) ``building''
shall mean only those enclosures within which individ-
36 uals customarily are employed, or which are
customarily used to house
37 machinery, equipment or other property, and
including the land improve-
38 ments immediately surrounding such
building;
39 (3) ``facility''
shall mean a mill, plant, refinery, oil or gas well, water
40 well, feedlot or any conveyance,
transmission or distribution line of any
41 cooperative, nonprofit, membership
corporation organized under or sub-
42 ject to the provisions of K.S.A. 17-4601 et
seq., and amendments thereto,
43 or of any municipal or quasi-municipal
corporation, including the land
5
1 improvements immediately surrounding
such facility; and
2
(4) ``residence'' shall mean only those enclosures within
which indi-
3 viduals customarily live;
4 (q) the
gross receipts received for the service of repairing,
servicing,
5 altering or maintaining tangible
personal property, except computer soft-
6 ware described in subsection (s),
which when such services are rendered
7 is not being held for sale in the
regular course of business, and whether
8 or not any tangible personal property
is transferred in connection there-
9 with. The tax imposed by this
subsection shall be applicable to the services
10 of repairing, servicing, altering or
maintaining an item of tangible personal
11 property which has been and is fastened to,
connected with or built into
12 real property;
13 (r) the gross
receipts from fees or charges made under service or
14 maintenance agreement contracts for
services, charges for the providing
15 of which are taxable under the provisions
of subsection (p) or (q);
16 (s) the gross
receipts received from the sale of computer software,
17 and the sale of the services of modifying,
altering, updating or maintaining
18 computer software. As used in this
subsection, ``computer software''
19 means information and directions loaded
into a computer which dictate
20 different functions to be performed by the
computer. Computer software
21 includes any canned or prewritten program
which is held or existing for
22 general or repeated sale, even if the
program was originally developed
23 for a single end user as custom computer
software. The sale of computer
24 software or services does not include: (1)
The initial sale of any custom
25 computer program which is originally
developed for the exclusive use of
26 a single end user; or (2) those services
rendered in the modification of
27 computer software when the modification is
developed exclusively for a
28 single end user only to the extent of the
modification and only to the
29 extent that the actual amount charged for
the modification is separately
30 stated on invoices, statements and other
billing documents provided to
31 the end user. The services of modification,
alteration, updating and main-
32 tenance of computer software shall only
include the modification, alter-
33 ation, updating and maintenance of computer
software taxable under this
34 subsection whether or not the services are
actually provided; and
35 (t) the gross
receipts received for telephone answering services, in-
36 cluding mobile phone services, beeper
services and other similar services;
37 and
38 (u) the gross
receipts received from the sale of prepaid telephone
39 calling cards or pre-paid authorization
numbers and the recharge of such
40 cards or numbers. A pre-paid telephone
calling card or pre-paid author-
41 ization number means the right to
exclusively make telephone calls, paid
42 for in advance, with the prepaid value
measured in minutes or other time
43 units, that enables the origination of
calls using an access number or
6
1 authorization code or both, whether
manually or electronically dialed. If
2 the dale sale
or recharge of such card or number does not take place at
3 the vendor's place of business, it
shall be conclusively determined to take
4 place at the customer's shipping
address; if there is no item shipped then
5 it shall be the customer's billing
address.
6 Sec. 2. K.S.A.
1999 Supp. 79-3606 is hereby amended to read
7 as follows: 79-3606. The following
shall be exempt from the tax
8 imposed by this act:
9 (a) All
sales of motor-vehicle fuel or other articles upon which
10 a sales or excise tax has been paid, not
subject to refund, under
11 the laws of this state except cigarettes
as defined by K.S.A. 79-3301
12 and amendments thereto, cereal malt
beverages and malt products
13 as defined by K.S.A. 79-3817 and
amendments thereto, including
14 wort, liquid malt, malt syrup and malt
extract, which is not subject
15 to taxation under the provisions of
K.S.A. 79-41a02 and amend-
16 ments thereto, motor vehicles taxed
pursuant to K.S.A. 79-5117,
17 and amendments thereto, tires taxed
pursuant to K.S.A. 1999
18 Supp. 65-3424d, and amendments thereto,
and drycleaning and
19 laundry services taxed pursuant to
K.S.A. 1999 Supp. 65-34,150,
20 and amendments thereto;
21 (b) all sales
of tangible personal property or service, including
22 the renting and leasing of tangible
personal property, purchased
23 directly by the state of Kansas, a
political subdivision thereof, other
24 than a school or educational
institution, or purchased by a public
25 or private nonprofit hospital or public
hospital authority or non-
26 profit blood, tissue or organ bank and
used exclusively for state,
27 political subdivision, hospital or
public hospital authority or non-
28 profit blood, tissue or organ bank
purposes, except when: (1) Such
29 state, hospital or public hospital
authority is engaged or proposes
30 to engage in any business specifically
taxable under the provisions
31 of this act and such items of tangible
personal property or service
32 are used or proposed to be used in such
business, or (2) such po-
33 litical subdivision is engaged or
proposes to engage in the business
34 of furnishing gas, water, electricity or
heat to others and such items
35 of personal property or service are used
or proposed to be used in
36 such business;
37 (c) all sales
of tangible personal property or services, including
38 the renting and leasing of tangible
personal property, purchased
39 directly by a public or private
elementary or secondary school or
40 public or private nonprofit educational
institution and used pri-
41 marily by such school or institution for
nonsectarian programs and
42 activities provided or sponsored by such
school or institution or in
43 the erection, repair or enlargement of
buildings to be used for
7
1 such purposes. The exemption
herein provided shall not apply to
2 erection, construction, repair,
enlargement or equipment of build-
3 ings used primarily for human
habitation;
4 (d) all
sales of tangible personal property or services purchased
5 by a contractor for the purpose of
constructing, equipping, recon-
6 structing, maintaining, repairing,
enlarging, furnishing or remod-
7 eling facilities for any public or
private nonprofit hospital or public
8 hospital authority, public or
private elementary or secondary
9 school or a public or private
nonprofit educational institution,
10 which would be exempt from taxation
under the provisions of this
11 act if purchased directly by such
hospital or public hospital au-
12 thority, school or educational
institution; and all sales of tangible
13 personal property or services purchased
by a contractor for the
14 purpose of constructing, equipping,
reconstructing, maintaining,
15 repairing, enlarging, furnishing or
remodeling facilities for any
16 political subdivision of the state, the
total cost of which is paid from
17 funds of such political subdivision and
which would be exempt
18 from taxation under the provisions of
this act if purchased directly
19 by such political subdivision. Nothing
in this subsection or in the
20 provisions of K.S.A. 12-3418 and
amendments thereto, shall be
21 deemed to exempt the purchase of any
construction machinery,
22 equipment or tools used in the
constructing, equipping, recon-
23 structing, maintaining, repairing,
enlarging, furnishing or remod-
24 eling facilities for any political
subdivision of the state. As used in
25 this subsection, K.S.A. 12-3418 and
79-3640, and amendments
26 thereto, ``funds of a political
subdivision'' shall mean general tax
27 revenues, the proceeds of any bonds and
gifts or grants-in-aid.
28 Gifts shall not mean funds used for the
purpose of constructing,
29 equipping, reconstructing, repairing,
enlarging, furnishing or re-
30 modeling facilities which are to be
leased to the donor. When any
31 political subdivision of the state,
public or private nonprofit hos-
32 pital or public hospital authority,
public or private elementary or
33 secondary school or public or private
nonprofit educational insti-
34 tution shall contract for the purpose of
constructing, equipping,
35 reconstructing, maintaining, repairing,
enlarging, furnishing or
36 remodeling facilities, it shall obtain
from the state and furnish to
37 the contractor an exemption certificate
for the project involved,
38 and the contractor may purchase
materials for incorporation in
39 such project. The contractor shall
furnish the number of such cer-
40 tificate to all suppliers from whom such
purchases are made, and
41 such suppliers shall execute invoices
covering the same bearing
42 the number of such certificate. Upon
completion of the project the
43 contractor shall furnish to the
political subdivision, hospital or
8
1 public hospital authority, school
or educational institution con-
2 cerned a sworn statement, on a
form to be provided by the director
3 of taxation, that all purchases so
made were entitled to exemption
4 under this subsection. As an
alternative to the foregoing proce-
5 dure, any such contracting entity
may apply to the secretary of
6 revenue for agent status for the
sole purpose of issuing and fur-
7 nishing project exemption
certificates to contractors pursuant to
8 rules and regulations adopted by
the secretary establishing con-
9 ditions and standards for the
granting and maintaining of such
10 status. All invoices shall be held by
the contractor for a period of
11 five years and shall be subject to audit
by the director of taxation.
12 If any materials purchased under such a
certificate are found not
13 to have been incorporated in the
building or other project or not
14 to have been returned for credit or the
sales or compensating tax
15 otherwise imposed upon such materials
which will not be so in-
16 corporated in the building or other
project reported and paid by
17 such contractor to the director of
taxation not later than the 20th
18 day of the month following the close of
the month in which it shall
19 be determined that such materials will
not be used for the purpose
20 for which such certificate was issued,
the political subdivision, hos-
21 pital or public hospital authority,
school or educational institution
22 concerned shall be liable for tax on all
materials purchased for the
23 project, and upon payment thereof it may
recover the same from
24 the contractor together with reasonable
attorney fees. Any con-
25 tractor or any agent, employee or
subcontractor thereof, who shall
26 use or otherwise dispose of any
materials purchased under such a
27 certificate for any purpose other than
that for which such a certif-
28 icate is issued without the payment of
the sales or compensating
29 tax otherwise imposed upon such
materials, shall be guilty of a
30 misdemeanor and, upon conviction
therefor, shall be subject to the
31 penalties provided for in subsection (g)
of K.S.A. 79-3615, and
32 amendments thereto;
33 (e) all sales
of tangible personal property or services purchased
34 by a contractor for the erection, repair
or enlargement of buildings
35 or other projects for the government of
the United States, its agen-
36 cies or instrumentalities, which would
be exempt from taxation if
37 purchased directly by the government of
the United States, its
38 agencies or instrumentalities. When the
government of the United
39 States, its agencies or
instrumentalities shall contract for the erec-
40 tion, repair, or enlargement of any
building or other project, it
41 shall obtain from the state and furnish
to the contractor an ex-
42 emption certificate for the project
involved, and the contractor
43 may purchase materials for incorporation
in such project. The con-
9
1 tractor shall furnish the number
of such certificates to all suppliers
2 from whom such purchases are made,
and such suppliers shall ex-
3 ecute invoices covering the same
bearing the number of such cer-
4 tificate. Upon completion of the
project the contractor shall fur-
5 nish to the government of the
United States, its agencies or
6 instrumentalities concerned a
sworn statement, on a form to be
7 provided by the director of
taxation, that all purchases so made
8 were entitled to exemption under
this subsection. As an alternative
9 to the foregoing procedure, any
such contracting entity may apply
10 to the secretary of revenue for agent
status for the sole purpose
11 of issuing and furnishing project
exemption certificates to con-
12 tractors pursuant to rules and
regulations adopted by the secretary
13 establishing conditions and standards
for the granting and main-
14 taining of such status. All invoices
shall be held by the contractor
15 for a period of five years and shall be
subject to audit by the di-
16 rector of taxation. Any contractor or
any agent, employee or sub-
17 contractor thereof, who shall use or
otherwise dispose of any ma-
18 terials purchased under such a
certificate for any purpose other
19 than that for which such a certificate
is issued without the payment
20 of the sales or compensating tax
otherwise imposed upon such ma-
21 terials, shall be guilty of a
misdemeanor and, upon conviction
22 therefor, shall be subject to the
penalties provided for in subsec-
23 tion (g) of K.S.A. 79-3615 and
amendments thereto;
24 (f) tangible
personal property purchased by a railroad or pub-
25 lic utility for consumption or movement
directly and immediately
26 in interstate commerce;
27 (g) sales of
aircraft including remanufactured and modified
28 aircraft, sales of aircraft repair,
modification and replacement
29 parts and sales of services employed in
the remanufacture, modi-
30 fication and repair of aircraft sold to
persons using directly or
31 through an authorized agent such
aircraft and aircraft repair,
32 modification and replacement parts as
certified or licensed carri-
33 ers of persons or property in interstate
or foreign commerce under
34 authority of the laws of the United
States or any foreign govern-
35 ment or sold to any foreign government
or agency or instrumen-
36 tality of such foreign government and
all sales of aircraft, aircraft
37 parts, replacement parts and services
employed in the remanufac-
38 ture, modification and repair of
aircraft for use outside of the
39 United States;
40 (h) all
rentals of nonsectarian textbooks by public or private
41 elementary or secondary schools;
42 (i) the lease
or rental of all films, records, tapes, or any type of
43 sound or picture transcriptions used by
motion picture exhibitors;
10
1
(j) meals served without charge or food used in the
preparation
2 of such meals to employees of any
restaurant, eating house, dining
3 car, hotel, drugstore or other
place where meals or drinks are reg-
4 ularly sold to the public if such
employees' duties are related to
5 the furnishing or sale of such
meals or drinks;
6 (k) any
motor vehicle, semitrailer or pole trailer, as such terms
7 are defined by K.S.A. 8-126 and
amendments thereto, or aircraft
8 sold and delivered in this state
to a bona fide resident of another
9 state, which motor vehicle,
semitrailer, pole trailer or aircraft is
10 not to be registered or based in this
state and which vehicle, sem-
11 itrailer, pole trailer or aircraft will
not remain in this state more
12 than 10 days;
13 (l) all
isolated or occasional sales of tangible personal property,
14 services, substances or things, except
isolated or occasional sale of
15 motor vehicles specifically taxed under
the provisions of subsec-
16 tion (o) of K.S.A. 79-3603 and
amendments thereto;
17 (m) all sales
of tangible personal property which become an
18 ingredient or component part of tangible
personal property or
19 services produced, manufactured or
compounded for ultimate sale
20 at retail within or without the state of
Kansas; and any such pro-
21 ducer, manufacturer or compounder may
obtain from the director
22 of taxation and furnish to the supplier
an exemption certificate
23 number for tangible personal property
for use as an ingredient or
24 component part of the property or
services produced, manufac-
25 tured or compounded;
26 (n) all sales
of tangible personal property which is consumed
27 in the production, manufacture,
processing, mining, drilling, re-
28 fining or compounding of tangible
personal property, the treating
29 of by-products or wastes derived from
any such production pro-
30 cess, the providing of services or the
irrigation of crops for ulti-
31 mate sale at retail within or without
the state of Kansas; and any
32 purchaser of such property may obtain
from the director of taxa-
33 tion and furnish to the supplier an
exemption certificate number
34 for tangible personal property for
consumption in such produc-
35 tion, manufacture, processing, mining,
drilling, refining, com-
36 pounding, treating, irrigation and in
providing such services;
37 (o) all sales
of animals, fowl and aquatic plants and animals, the
38 primary purpose of which is use in
agriculture or aquaculture, as
39 defined in K.S.A. 47-1901, and
amendments thereto, the produc-
40 tion of food for human consumption, the
production of animal,
41 dairy, poultry or aquatic plant and
animal products, fiber or fur,
42 or the production of offspring for use
for any such purpose or
43 purposes;
11
1 (p) all
sales of drugs, as defined by K.S.A. 65-1626 and amend-
2 ments thereto, dispensed pursuant
to a prescription order, as de-
3 fined by K.S.A. 65-1626 and
amendments thereto, by a licensed
4 practitioner or a mid-level
practitioner as defined by K.S.A. 65-
5 1626, and amendments
thereto;
6 (q) all
sales of insulin dispensed by a person licensed by the
7 state board of pharmacy to a
person for treatment of diabetes at
8 the direction of a person licensed
to practice medicine by the
9 board of healing arts;
10 (r) all sales
of prosthetic and orthopedic appliances prescribed
11 in writing by a person licensed to
practice the healing arts, den-
12 tistry or optometry. For the purposes of
this subsection, the term
13 prosthetic and orthopedic appliances
means any apparatus, instru-
14 ment, device, or equipment used to
replace or substitute for any
15 missing part of the body; used to
alleviate the malfunction of any
16 part of the body; or used to assist any
disabled person in leading
17 a normal life by facilitating such
person's mobility; such term shall
18 include accessories attached or to be
attached to motor vehicles,
19 but such term shall not include motor
vehicles or personal prop-
20 erty which when installed becomes a
fixture to real property;
21 (s) all sales
of tangible personal property or services purchased
22 directly by a groundwater management
district organized or op-
23 erating under the authority of K.S.A.
82a-1020 et seq. and amend-
24 ments thereto, which property or
services are used in the opera-
25 tion or maintenance of the
district;
26 (t) all sales
of farm machinery and equipment or aquaculture
27 machinery and equipment, repair and
replacement parts therefor
28 and services performed in the repair and
maintenance of such ma-
29 chinery and equipment. For the purposes
of this subsection the
30 term ``farm machinery and equipment or
aquaculture machinery
31 and equipment'' shall include machinery
and equipment used in
32 the operation of Christmas tree farming
but shall not include any
33 passenger vehicle, truck, truck tractor,
trailer, semitrailer or pole
34 trailer, other than a farm trailer, as
such terms are defined by
35 K.S.A. 8-126 and amendments thereto.
Each purchaser of farm
36 machinery and equipment or aquaculture
machinery and equip-
37 ment exempted herein must certify in
writing on the copy of the
38 invoice or sales ticket to be retained
by the seller that the farm
39 machinery and equipment or aquaculture
machinery and equip-
40 ment purchased will be used only in
farming, ranching or aqua-
41 culture production. Farming or ranching
shall include the opera-
42 tion of a feedlot and farm and ranch
work for hire and the
43 operation of a nursery;
12
1 (u) all
leases or rentals of tangible personal property used as a
2 dwelling if such tangible personal
property is leased or rented for
3 a period of more than 28
consecutive days;
4 (v) all
sales of food products to any contractor for use in pre-
5 paring meals for delivery to
homebound elderly persons over 60
6 years of age and to homebound
disabled persons or to be served
7 at a group-sitting at a location
outside of the home to otherwise
8 homebound elderly persons over 60
years of age and to otherwise
9 homebound disabled persons, as all
or part of any food service
10 project funded in whole or in part by
government or as part of a
11 private nonprofit food service project
available to all such elderly
12 or disabled persons residing within an
area of service designated
13 by the private nonprofit organization,
and all sales of food prod-
14 ucts for use in preparing meals for
consumption by indigent or
15 homeless individuals whether or not such
meals are consumed at
16 a place designated for such
purpose;
17 (w) all sales
of natural gas, electricity, heat and water delivered
18 through mains, lines or pipes: (1) To
residential premises for non-
19 commercial use by the occupant of such
premises; (2) for agricul-
20 tural use and also, for such use, all
sales of propane gas; (3) for use
21 in the severing of oil; and (4) to any
property which is exempt from
22 property taxation pursuant to K.S.A.
79-201b Second through Sixth.
23 As used in this paragraph, ``severing''
shall have the meaning as-
24 cribed thereto by subsection (k) of
K.S.A. 79-4216, and amend-
25 ments thereto;
26 (x) all sales
of propane gas, LP-gas, coal, wood and other fuel
27 sources for the production of heat or
lighting for noncommercial
28 use of an occupant of residential
premises;
29 (y) all sales
of materials and services used in the repairing,
30 servicing, altering, maintaining,
manufacturing, remanufacturing,
31 or modification of railroad rolling
stock for use in interstate or
32 foreign commerce under authority of the
laws of the United States;
33 (z) all sales
of tangible personal property and services pur-
34 chased directly by a port authority or
by a contractor therefor as
35 provided by the provisions of K.S.A.
12-3418 and amendments
36 thereto;
37 (aa) all sales
of materials and services applied to equipment
38 which is transported into the state from
without the state for re-
39 pair, service, alteration, maintenance,
remanufacture or modifi-
40 cation and which is subsequently
transported outside the state for
41 use in the transmission of liquids or
natural gas by means of pipe-
42 line in interstate or foreign commerce
under authority of the laws
43 of the United States;
13
1 (bb) all
sales of used mobile homes or manufactured homes.
2 As used in this subsection: (1)
``Mobile homes'' and ``manufactured
3 homes'' shall have the meanings
ascribed thereto by K.S.A. 58-
4 4202 and amendments thereto; and
(2) ``sales of used mobile
5 homes or manufactured homes''
means sales other than the orig-
6 inal retail sale thereof;
7 (cc) all
sales of tangible personal property or services pur-
8 chased for the purpose of and in
conjunction with constructing,
9 reconstructing, enlarging or
remodeling a business or retail busi-
10 ness which meets the requirements
established in K.S.A. 74-50,115
11 and amendments thereto, and the sale and
installation of machin-
12 ery and equipment purchased for
installation at any such business
13 or retail business. When a person shall
contract for the construc-
14 tion, reconstruction, enlargement or
remodeling of any such busi-
15 ness or retail business, such person
shall obtain from the state and
16 furnish to the contractor an exemption
certificate for the project
17 involved, and the contractor may
purchase materials, machinery
18 and equipment for incorporation in such
project. The contractor
19 shall furnish the number of such
certificates to all suppliers from
20 whom such purchases are made, and such
suppliers shall execute
21 invoices covering the same bearing the
number of such certificate.
22 Upon completion of the project the
contractor shall furnish to the
23 owner of the business or retail business
a sworn statement, on a
24 form to be provided by the director of
taxation, that all purchases
25 so made were entitled to exemption under
this subsection. All in-
26 voices shall be held by the contractor
for a period of five years and
27 shall be subject to audit by the
director of taxation. Any contractor
28 or any agent, employee or subcontractor
thereof, who shall use or
29 otherwise dispose of any materials,
machinery or equipment pur-
30 chased under such a certificate for any
purpose other than that for
31 which such a certificate is issued
without the payment of the sales
32 or compensating tax otherwise imposed
thereon, shall be guilty of
33 a misdemeanor and, upon conviction
therefor, shall be subject to
34 the penalties provided for in subsection
(g) of K.S.A. 79-3615 and
35 amendments thereto. As used in this
subsection, ``business'' and
36 ``retail business'' have the meanings
respectively ascribed thereto
37 by K.S.A. 74-50,114 and amendments
thereto;
38 (dd) all sales
of tangible personal property purchased with
39 food stamps issued by the United States
department of agriculture;
40 (ee) all sales
of lottery tickets and shares made as part of a
41 lottery operated by the state of
Kansas;
42 (ff) on and
after July 1, 1988, all sales of new mobile homes or
43 manufactured homes to the extent of 40%
of the gross receipts,
14
1 determined without regard to any
trade-in allowance, received
2 from such sale. As used in this
subsection, ``mobile homes'' and
3 ``manufactured homes'' shall have
the meanings ascribed thereto
4 by K.S.A. 58-4202 and amendments
thereto;
5 (gg) all
sales of tangible personal property purchased in ac-
6 cordance with vouchers issued
pursuant to the federal special sup-
7 plemental food program for women,
infants and children;
8 (hh) all
sales of medical supplies and equipment purchased di-
9 rectly by a nonprofit skilled
nursing home or nonprofit interme-
10 diate nursing care home, as defined by
K.S.A. 39-923, and amend-
11 ments thereto, for the purpose of
providing medical services to
12 residents thereof. This exemption shall
not apply to tangible per-
13 sonal property customarily used for
human habitation purposes;
14 (ii) all sales
of tangible personal property purchased directly
15 by a nonprofit organization for
nonsectarian comprehensive mul-
16 tidiscipline youth development programs
and activities provided
17 or sponsored by such organization, and
all sales of tangible per-
18 sonal property by or on behalf of any
such organization. This ex-
19 emption shall not apply to tangible
personal property customarily
20 used for human habitation
purposes;
21 (jj) all sales
of tangible personal property or services, including
22 the renting and leasing of tangible
personal property, purchased
23 directly on behalf of a community-based
mental retardation facility
24 or mental health center organized
pursuant to K.S.A. 19-4001 et
25 seq., and amendments thereto, and
licensed in accordance with the
26 provisions of K.S.A. 75-3307b and
amendments thereto. This ex-
27 emption shall not apply to tangible
personal property customarily
28 used for human habitation
purposes;
29 (kk) on and
after January 1, 1989, all sales of machinery and
30 equipment used directly and primarily
for the purposes of manu-
31 facturing, assembling, processing,
finishing, storing, warehousing
32 or distributing articles of tangible
personal property in this state
33 intended for resale by a manufacturing
or processing plant or fa-
34 cility or a storage, warehousing or
distribution facility, and all sales
35 of repair and replacement parts and
accessories purchased for
36 such machinery and equipment:
37 (1) For
purposes of this subsection, machinery and equipment
38 shall be deemed to be used directly and
primarily in the manufac-
39 ture, assemblage, processing, finishing,
storing, warehousing or
40 distributing of tangible personal
property where such machinery
41 and equipment is used during a
manufacturing, assembling, proc-
42 essing or finishing, storing,
warehousing or distributing operation:
43 (A) To effect
a direct and immediate physical change upon the
15
1 tangible personal
property;
2 (B) to
guide or measure a direct and immediate physical
3 change upon such property where
such function is an integral and
4 essential part of tuning,
verifying or aligning the component parts
5 of such property;
6 (C) to
test or measure such property where such function is an
7 integral part of the production
flow or function;
8 (D) to
transport, convey or handle such property during the
9 manufacturing, processing,
storing, warehousing or distribution
10 operation at the plant or facility;
or
11 (E) to place
such property in the container, package or wrap-
12 ping in which such property is normally
sold or transported.
13 (2) For
purposes of this subsection ``machinery and equipment
14 used directly and primarily'' shall
include, but not be limited to:
15 (A) Mechanical
machines or components thereof contributing
16 to a manufacturing, assembling or
finishing process;
17 (B) molds and
dies that determine the physical characteristics
18 of the finished product or its packaging
material;
19 (C) testing
equipment to determine the quality of the finished
20 product;
21 (D) computers
and related peripheral equipment that directly
22 control or measure the manufacturing
process or which are util-
23 ized for engineering of the finished
product; and
24 (E) computers
and related peripheral equipment utilized for
25 research and development and product
design.
26
(3) ``Machinery and equipment used directly and
primarily''
27 shall not include:
28 (A) Hand
tools;
29 (B) machinery,
equipment and tools used in maintaining and
30 repairing any type of machinery and
equipment;
31
(C) transportation equipment not used in the
manufacturing,
32 assembling, processing, furnishing,
storing, warehousing or dis-
33 tributing process at the plant or
facility;
34 (D) office
machines and equipment including computers and
35 related peripheral equipment not
directly and primarily used in
36 controlling or measuring the
manufacturing process;
37 (E) furniture
and buildings; and
38 (F) machinery
and equipment used in administrative, account-
39 ing, sales or other such activities of
the business;
40 (4) for
purposes of this subsection, ``repair and replacement
41 parts and accessories'' means all parts
and accessories for exempt
42 machinery and equipment, including but
not limited to dies, jigs,
43 molds, and patterns which are attached
to exempt machinery or
16
1 which are otherwise used in
production, short-lived replaceable
2 parts that can be readily detached
from exempt machinery or
3 equipment, such as belts, drill
bits, grinding wheels, cutting bars
4 and saws, and other replacement
parts for production equipment,
5 including refractory brick and
other refractory items for kiln
6 equipment used in production
operations;
7 (ll) all
sales of educational materials purchased for distribution
8 to the public at no charge by a
nonprofit corporation organized
9 for the purpose of encouraging,
fostering and conducting pro-
10 grams for the improvement of public
health;
11 (mm) all sales
of seeds and tree seedlings; fertilizers, insecti-
12 cides, herbicides, germicides,
pesticides and fungicides; and serv-
13 ices, purchased and used for the purpose
of producing plants in
14 order to prevent soil erosion on land
devoted to agricultural use;
15 (nn) except as
otherwise provided in this act, all sales of serv-
16 ices rendered by an advertising agency
or licensed broadcast sta-
17 tion or any member, agent or employee
thereof;
18 (oo) all sales
of tangible personal property purchased by a com-
19 munity action group or agency for the
exclusive purpose of re-
20 pairing or weatherizing housing occupied
by low income
21 individuals;
22 (pp) all sales
of drill bits and explosives actually utilized in the
23 exploration and production of oil or
gas;
24 (qq) all sales
of tangible personal property and services pur-
25 chased by a nonprofit museum or
historical society or any combi-
26 nation thereof, including a nonprofit
organization which is organ-
27 ized for the purpose of stimulating
public interest in the
28 exploration of space by providing
educational information, exhib-
29 its and experiences, which is exempt
from federal income taxation
30 pursuant to section 501(c)(3) of the
federal internal revenue code
31 of 1986;
32 (rr) all sales
of tangible personal property which will admit the
33 purchaser thereof to any annual event
sponsored by a nonprofit
34 organization which is exempt from
federal income taxation pur-
35 suant to section 501(c)(3) of the
federal internal revenue code of
36 1986;
37 (ss) all sales
of tangible personal property and services pur-
38 chased by a public broadcasting station
licensed by the federal
39 communications commission as a
noncommercial educational tel-
40 evision or radio station;
41 (tt) all sales
of tangible personal property and services pur-
42 chased by or on behalf of a
not-for-profit corporation which is ex-
43 empt from federal income taxation
pursuant to section 501(c)(3)
17
1 of the federal internal revenue
code of 1986, for the sole purpose
2 of constructing a Kansas Korean
War memorial;
3 (uu) all
sales of tangible personal property and services pur-
4 chased by or on behalf of any
rural volunteer fire-fighting organ-
5 ization for use exclusively in the
performance of its duties and
6 functions;
7 (vv) all
sales of tangible personal property purchased by any of
8 the following organizations which
are exempt from federal income
9 taxation pursuant to section 501
(c)(3) of the federal internal rev-
10 enue code of 1986, for the following
purposes, and all sales of any
11 such property by or on behalf of any
such organization for any
12 such purpose:
13 (1) The
American Heart Association, Kansas Affiliate, Inc. for
14 the purposes of providing education,
training, certification in
15 emergency cardiac care, research and
other related services to
16 reduce disability and death from
cardiovascular diseases and
17 stroke;
18 (2) the Kansas
Alliance for the Mentally Ill, Inc. for the purpose
19 of advocacy for persons with mental
illness and to education, re-
20 search and support for their
families;
21 (3) the Kansas
Mental Illness Awareness Council for the pur-
22 poses of advocacy for persons who are
mentally ill and to educa-
23 tion, research and support for them and
their families;
24 (4) the
American Diabetes Association Kansas Affiliate, Inc. for
25 the purpose of eliminating diabetes
through medical research,
26 public education focusing on disease
prevention and education,
27 patient education including information
on coping with diabetes,
28 and professional education and
training;
29 (5) the
American Lung Association of Kansas, Inc. for the pur-
30 pose of eliminating all lung diseases
through medical research,
31 public education including information
on coping with lung dis-
32 eases, professional education and
training related to lung disease
33 and other related services to reduce the
incidence of disability and
34 death due to lung disease;
35 (6) the Kansas
chapters of the Alzheimer's Disease and Related
36 Disorders Association, Inc. for the
purpose of providing assistance
37 and support to persons in Kansas with
Alzheimer's disease, and
38 their families and caregivers;
and
39 (ww) all sales
of tangible personal property purchased by the
40 Habitat for Humanity for the exclusive
use of being incorporated
41 within a housing project constructed by
such organization.
42 (xx) all sales
of tangible personal property and services pur-
43 chased by a nonprofit zoo which is
exempt from federal income
18
1 taxation pursuant to section
501(c)(3) of the federal internal rev-
2 enue code of 1986, or on behalf of
such zoo by an entity itself
3 exempt from federal income
taxation pursuant to section 501(c)(3)
4 of the federal internal revenue
code of 1986 contracted with to
5 operate such zoo and all sales of
tangible personal property or
6 services purchased by a contractor
for the purpose of constructing,
7 equipping, reconstructing,
maintaining, repairing, enlarging, fur-
8 nishing or remodeling facilities
for any nonprofit zoo which would
9 be exempt from taxation under the
provisions of this section if
10 purchased directly by such nonprofit zoo
or the entity operating
11 such zoo. Nothing in this subsection
shall be deemed to exempt
12 the purchase of any construction
machinery, equipment or tools
13 used in the constructing, equipping,
reconstructing, maintaining,
14 repairing, enlarging, furnishing or
remodeling facilities for any
15 nonprofit zoo. When any nonprofit zoo
shall contract for the pur-
16 pose of constructing, equipping,
reconstructing, maintaining, re-
17 pairing, enlarging, furnishing or
remodeling facilities, it shall ob-
18 tain from the state and furnish to the
contractor an exemption
19 certificate for the project involved,
and the contractor may pur-
20 chase materials for incorporation in
such project. The contractor
21 shall furnish the number of such
certificate to all suppliers from
22 whom such purchases are made, and such
suppliers shall execute
23 invoices covering the same bearing the
number of such certificate.
24 Upon completion of the project the
contractor shall furnish to the
25 nonprofit zoo concerned a sworn
statement, on a form to be pro-
26 vided by the director of taxation, that
all purchases so made were
27 entitled to exemption under this
subsection. All invoices shall be
28 held by the contractor for a period of
five years and shall be subject
29 to audit by the director of taxation. If
any materials purchased
30 under such a certificate are found not
to have been incorporated
31 in the building or other project or not
to have been returned for
32 credit or the sales or compensating tax
otherwise imposed upon
33 such materials which will not be so
incorporated in the building
34 or other project reported and paid by
such contractor to the di-
35 rector of taxation not later than the
20th day of the month follow-
36 ing the close of the month in which it
shall be determined that
37 such materials will not be used for the
purpose for which such
38 certificate was issued, the nonprofit
zoo concerned shall be liable
39 for tax on all materials purchased for
the project, and upon pay-
40 ment thereof it may recover the same
from the contractor together
41 with reasonable attorney fees. Any
contractor or any agent, em-
42 ployee or subcontractor thereof, who
shall use or otherwise dis-
43 pose of any materials purchased under
such a certificate for any
19
1 purpose other than that for which
such a certificate is issued with-
2 out the payment of the sales or
compensating tax otherwise im-
3 posed upon such materials, shall
be guilty of a misdemeanor and,
4 upon conviction therefor, shall be
subject to the penalties provided
5 for in subsection (g) of K.S.A.
79-3615, and amendments thereto;
6 (yy) all
sales of tangible personal property and services pur-
7 chased by a parent-teacher
association or organization, and all
8 sales of tangible personal
property by or on behalf of such asso-
9 ciation or organization;
10 (zz) all sales
of machinery and equipment purchased by over-
11 the-air, free access radio or television
station which is used directly
12 and primarily for the purpose of
producing a broadcast signal or
13 is such that the failure of the
machinery or equipment to operate
14 would cause broadcasting to cease. For
purposes of this subsec-
15 tion, machinery and equipment shall
include, but not be limited
16 to, that required by rules and
regulations of the federal commu-
17 nications commission, and all sales of
electricity which are essential
18 or necessary for the purpose of
producing a broadcast signal or is
19 such that the failure of the electricity
would cause broadcasting to
20 cease;
21 (aaa) all
sales of tangible personal property and services pur-
22 chased by a religious organization which
is exempt from federal
23 income taxation pursuant to section
501(c)(3) of the federal inter-
24 nal revenue code, and used exclusively
for religious purposes, and
25 all sales of tangible personal property
or services purchased by a
26 contractor for the purpose of
constructing, equipping, reconstruct-
27 ing, maintaining, repairing, enlarging,
furnishing or remodeling
28 facilities for any such organization
which would be exempt from
29 taxation under the provisions of this
section if purchased directly
30 by such organization. Nothing in this
subsection shall be deemed
31 to exempt the purchase of any
construction machinery, equipment
32 or tools used in the constructing,
equipping, reconstructing, main-
33 taining, repairing, enlarging,
furnishing or remodeling facilities
34 for any such organization. When any such
organization shall con-
35 tract for the purpose of constructing,
equipping, reconstructing,
36 maintaining, repairing, enlarging,
furnishing or remodeling facil-
37 ities, it shall obtain from the state
and furnish to the contractor an
38 exemption certificate for the project
involved, and the contractor
39 may purchase materials for incorporation
in such project. The con-
40 tractor shall furnish the number of such
certificate to all suppliers
41 from whom such purchases are made, and
such suppliers shall ex-
42 ecute invoices covering the same bearing
the number of such cer-
43 tificate. Upon completion of the project
the contractor shall fur-
20
1 nish to such organization
concerned a sworn statement, on a form
2 to be provided by the director of
taxation, that all purchases so
3 made were entitled to exemption
under this subsection. All in-
4 voices shall be held by the
contractor for a period of five years and
5 shall be subject to audit by the
director of taxation. If any materials
6 purchased under such a certificate
are found not to have been
7 incorporated in the building or
other project or not to have been
8 returned for credit or the sales
or compensating tax otherwise im-
9 posed upon such materials which
will not be so incorporated in
10 the building or other project reported
and paid by such contractor
11 to the director of taxation not later
than the 20th day of the month
12 following the close of the month in
which it shall be determined
13 that such materials will not be used for
the purpose for which such
14 certificate was issued, such
organization concerned shall be liable
15 for tax on all materials purchased for
the project, and upon pay-
16 ment thereof it may recover the same
from the contractor together
17 with reasonable attorney fees. Any
contractor or any agent, em-
18 ployee or subcontractor thereof, who
shall use or otherwise dis-
19 pose of any materials purchased under
such a certificate for any
20 purpose other than that for which such a
certificate is issued with-
21 out the payment of the sales or
compensating tax otherwise im-
22 posed upon such materials, shall be
guilty of a misdemeanor and,
23 upon conviction therefor, shall be
subject to the penalties provided
24 for in subsection (g) of K.S.A. 79-3615,
and amendments thereto.
25 Sales tax paid on and after July 1,
1998, but prior to the effective
26 date of this act upon the gross receipts
received from any sale
27 exempted by the amendatory provisions of
this subsection shall be
28 refunded. Each claim for a sales tax
refund shall be verified and
29 submitted to the director of taxation
upon forms furnished by the
30 director and shall be accompanied by any
additional documenta-
31 tion required by the director. The
director shall review each claim
32 and shall refund that amount of sales
tax paid as determined under
33 the provisions of this subsection. All
refunds shall be paid from the
34 sales tax refund fund upon warrants of
the director of accounts
35 and reports pursuant to vouchers
approved by the director or the
36 director's designee;
37 (bbb) all
sales of food for human consumption by an organi-
38 zation which is exempt from federal
income taxation pursuant to
39 section 501 (c)(3) of the federal
internal revenue code of 1986,
40 pursuant to a food distribution program
which offers such food at
41 a price below cost in exchange for the
performance of community
42 service by the purchaser
thereof;
43 (ccc) on and
after July 1, 1999, all sales of tangible personal
21
1 property and services purchased by
a primary care clinic or health
2 center the primary purpose of
which is to provide services to med-
3 ically underserved individuals and
families, and which is exempt
4 from federal income taxation
pursuant to section 501 (c)(3) of the
5 federal internal revenue code, and
all sales of tangible personal
6 property or services purchased by
a contractor for the purpose of
7 constructing, equipping,
reconstructing, maintaining, repairing,
8 enlarging, furnishing or
remodeling facilities for any such clinic or
9 center which would be exempt from
taxation under the provisions
10 of this section if purchased directly by
such clinic or center. Noth-
11 ing in this subsection shall be deemed
to exempt the purchase of
12 any construction machinery, equipment or
tools used in the con-
13 structing, equipping, reconstructing,
maintaining, repairing, en-
14 larging, furnishing or remodeling
facilities for any such clinic or
15 center. When any such clinic or center
shall contract for the pur-
16 pose of constructing, equipping,
reconstructing, maintaining, re-
17 pairing, enlarging, furnishing or
remodeling facilities, it shall ob-
18 tain from the state and furnish to the
contractor an exemption
19 certificate for the project involved,
and the contractor may pur-
20 chase materials for incorporation in
such project. The contractor
21 shall furnish the number of such
certificate to all suppliers from
22 whom such purchases are made, and such
suppliers shall execute
23 invoices covering the same bearing the
number of such certificate.
24 Upon completion of the project the
contractor shall furnish to such
25 clinic or center concerned a sworn
statement, on a form to be
26 provided by the director of taxation,
that all purchases so made
27 were entitled to exemption under this
subsection. All invoices shall
28 be held by the contractor for a period
of five years and shall be
29 subject to audit by the director of
taxation. If any materials pur-
30 chased under such a certificate are
found not to have been incor-
31 porated in the building or other project
or not to have been re-
32 turned for credit or the sales or
compensating tax otherwise
33 imposed upon such materials which will
not be so incorporated in
34 the building or other project reported
and paid by such contractor
35 to the director of taxation not later
than the 20th day of the month
36 following the close of the month in
which it shall be determined
37 that such materials will not be used for
the purpose for which such
38 certificate was issued, such clinic or
center concerned shall be li-
39 able for tax on all materials purchased
for the project, and upon
40 payment thereof it may recover the same
from the contractor to-
41 gether with reasonable attorney fees.
Any contractor or any agent,
42 employee or subcontractor thereof, who
shall use or otherwise dis-
43 pose of any materials purchased under
such a certificate for any
22
1 purpose other than that for which
such a certificate is issued with-
2 out the payment of the sales or
compensating tax otherwise im-
3 posed upon such materials, shall
be guilty of a misdemeanor and,
4 upon conviction therefor, shall be
subject to the penalties provided
5 for in subsection (g) of K.S.A.
79-3615, and amendments thereto;
6 (ddd) on
and after January 1, 1999, and before January 1, 2000,
7 all sales of materials and
services purchased by any class II or III
8 railroad as classified by the
federal surface transportation board
9 for the construction, renovation,
repair or replacement of class II
10 or III railroad track and facilities
used directly in interstate com-
11 merce. In the event any such track or
facility for which materials
12 and services were purchased sales tax
exempt is not operational
13 for five years succeeding the allowance
of such exemption, the
14 total amount of sales tax which would
have been payable except
15 for the operation of this subsection
shall be recouped in accord-
16 ance with rules and regulations adopted
for such purpose by the
17 secretary of revenue;
and
18 (eee) on and
after January 1, 1999, and before January 1, 2000, all
19 sales of materials and services
purchased for the original construction,
20 reconstruction, repair or replacement of
grain storage facilities, including
21 railroad sidings providing access
thereto.;
22 (fff) all
sales of tangible personal property and services purchased
by
23 an organization the primary purpose of
which is to prevent cruelty to
24 animals, and which is exempt from
federal income taxation pursuant to
25 section 501 (c)(3) of the federal
internal revenue code, and all sales of
26 tangible personal property or services
purchased by a contractor for the
27 purpose of constructing, equipping,
reconstructing, maintaining, repair-
28 ing, enlarging, furnishing or remodeling
facilities for any such organiza-
29 tion which would be exempt from taxation
under the provisions of this
30 section if purchased directly by such
organization. Nothing in this sub-
31 section shall be deemed to exempt the
purchase of any construction ma-
32 chinery, equipment or tools used in the
constructing, equipping, recon-
33 structing, maintaining, repairing,
enlarging, furnishing or remodeling
34 facilities for any such organization.
When any such organization shall
35 contract for the purpose of
constructing, equipping, reconstructing, main-
36 taining, repairing, enlarging,
furnishing or remodeling facilities, it shall
37 obtain from the state and furnish to the
contractor an exemption certifi-
38 cate for the project involved, and the
contractor may purchase materials
39 for incorporation in such project. The
contractor shall furnish the number
40 of such certificate to all suppliers
from whom such purchases are made,
41 and such suppliers shall execute
invoices covering the same bearing the
42 number of such certificate. Upon
completion of the project the contractor
43 shall furnish to such organization
concerned a sworn statement, on a form
23
1 to be provided by the director of
taxation, that all purchases so made were
2 entitled to exemption under this
subsection. All invoices shall be held by
3 the contractor for a period of
five years and shall be subject to audit by
4 the director of taxation. If any
materials purchased under such a certifi-
5 cate are found not to have been
incorporated in the building or other
6 project or not to have been
returned for credit or the sales or compensating
7 tax otherwise imposed upon such
materials which will not be so incor-
8 porated in the building or other
project reported and paid by such con-
9 tractor to the director of
taxation not later than the 20th day of the month
10 following the close of the month in
which it shall be determined that such
11 materials will not be used for the
purpose for which such certificate was
12 issued, such organization concerned
shall be liable for tax on all materials
13 purchased for the project, and upon
payment thereof it may recover the
14 same from the contractor together with
reasonable attorney fees. Any
15 contractor or any agent, employee or
subcontractor thereof, who shall use
16 or otherwise dispose of any materials
purchased under such a certificate
17 for any purpose other than that for
which such a certificate is issued
18 without the payment of the sales or
compensating tax otherwise imposed
19 upon such materials, shall be guilty of
a misdemeanor and, upon convic-
20 tion therefor, shall be subject to the
penalties provided for in subsection
21 (g) of K.S.A. 79-3615, and amendments
thereto; and
22 (ggg) all
sales of tangible personal property and services purchased
23 by or on behalf of the Kansas Academy of
Science which is exempt from
24 federal income taxation pursuant to
section 501 (c)(3) of the federal in-
25 ternal revenue code of 1986, and used
solely by such academy for the
26 preparation, publication and
dissemination of educational materials.
27 Sec. 2.
3. K.S.A. 1999 Supp. 79-3603 is and
79-3606 hereby
28 repealed.
29 Sec. 3.
4. This act shall take effect and be in force from and
after its
30 publication in the statute book.