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AN ACT relating to taxation; defining hotel for sales and transient guest
  tax purposes; amending K.S.A. 1996 Supp. 12-1692, 12-1696 and 79-
  3603 and repealing the existing sections.
Be it enacted by the Legislature of the State of Kansas:
  Section 1.  K.S.A. 1996 Supp. 12-1692 is hereby amended to read as
follows: 12-1692. As used in this act, the following words and phrases
shall have the meanings respectively ascribed to them herein:
  (a)  ``Person'' means an individual, firm, partnership, corporation, joint
venture or other association of persons;
  (b)  ``Hotel, motel or tourist court'' means any structure or building,
or part or group thereof, which contains rooms furnished for the purposes
of providing lodging, which may or may not also provide meals, enter-
tainment or various other personal services to transient guests, and which
is kept, regularly used, maintained, advertised or otherwise held out to
the public as a place where sleeping accommodations are sought offered
for pay or compensation by primarily to transient or permanent guests
and having which has more than two bedrooms furnished for the accom-
modation of such guests, regardless of whether such building or structure
or part or group thereof, is designated as an apartment hotel, cabin camp,
tourist cabin or court, hotel, motel, bed and breakfast, inn or any other
type of lodging unit;
  (c)  ``Transient guest'' means a person who occupies a room in a hotel,
motel or tourist court for not more than 28 consecutive days;
  (d)  ``Business'' means any person engaged in the business of renting,
leasing or letting living quarters, sleeping accommodations, rooms or a
part thereof in connection with any motel, hotel or tourist court; and
  (e)  ``Convention and tourism promotion'' means: (1) Activities to at-
tract visitors into the community through marketing efforts, including
advertising, directed to at least one of the five basic convention and tour-
ism market segments consisting of group tours, pleasure travelers, asso-
ciation meetings and conventions, trade shows and corporate meetings
and travel; and (2) support of those activities and organizations which
encourage increased lodging facility occupancy.
  Sec. 2.  K.S.A. 1996 Supp. 12-1696 is hereby amended to read as
follows: 12-1696. As used in this act, the following words and phrases
shall have the meanings respectively ascribed to them herein:
  (a)  ``Person'' means an individual, firm, partnership, corporation, joint
venture or other association of persons;
  (b)  ``Hotel, motel or tourist court'' means any structure or building
which contains rooms furnished for the purposes of providing lodging,
which may or may not also provide meals, entertainment or various other
personal services to transient guests, and which is kept, used, maintained,
advertised or held out to the public as a place where sleeping accom-
modations are sought for pay or compensation by transient or permanent
guests and having more than two bedrooms furnished for the accom-
modation of such guests shall have the meaning ascribed thereto by sub-
section (b) of K.S.A. 12-1692, and amendments thereto;
  (c)  ``Transient guest'' means a person who occupies a room in a hotel,
motel or tourist court for not more than 28 consecutive days;
  (d)  ``Business'' means any person engaged in the business of renting,
leasing or letting living quarters, sleeping accommodations, rooms or a
part thereof in connection with any motel, hotel or tourist court; and
  (e)  ``Convention and tourism promotion'' means: (1) Activities to at-
tract visitors into the community through marketing efforts, including
advertising, directed to at least one of the five basic convention and tour-
ism market segments consisting of group tours, pleasure travelers, asso-
ciation meetings and conventions, trade shows and corporate meetings
and travel; and (2) support of those activities and organizations which
encourage increased lodging facility occupancy.
  Sec. 3.  K.S.A. 1996 Supp. 79-3603 is hereby amended to read as
follows: 79-3603. For the privilege of engaging in the business of selling
tangible personal property at retail in this state or rendering or furnishing
any of the services taxable under this act, there is hereby levied and there
shall be collected and paid a tax at the rate of 4.9%:
  (a)  The gross receipts received from the sale of tangible personal
property at retail within this state;
  (b) (1)  the gross receipts from intrastate telephone or telegraph serv-
ices and (2) the gross receipts received from the sale of interstate tele-
phone or telegraph services, which (A) originate within this state and
terminate outside the state and are billed to a customer's telephone num-
ber or account in this state; or (B) originate outside this state and ter-
minate within this state and are billed to a customer's telephone number
or account in this state except that the sale of interstate telephone or
telegraph service does not include: (A) Any interstate incoming or out-
going wide area telephone service or wide area transmission type service
which entitles the subscriber to make or receive an unlimited number of
communications to or from persons having telephone service in a speci-
fied area which is outside the state in which the station provided this
service is located; (B) any interstate private communications service to
the persons contracting for the receipt of that service that entitles the
purchaser to exclusive or priority use of a communications channel or
group of channels between exchanges; (C) any value-added nonvoice
service in which computer processing applications are used to act on the
form, content, code or protocol of the information to be transmitted; (D)
any telecommunication service to a provider of telecommunication serv-
ices which will be used to render telecommunications services, including
carrier access services; or (E) any service or transaction defined in this
section among entities classified as members of an affiliated group as
provided by federal law (U.S.C. Section 1504);
  (c)  the gross receipts from the sale or furnishing of gas, water, elec-
tricity and heat, which sale is not otherwise exempt from taxation under
the provisions of this act, and whether furnished by municipally or pri-
vately owned utilities;
  (d)  the gross receipts from the sale of meals or drinks furnished at
any private club, drinking establishment, catered event, restaurant, eating
house, dining car, hotel, drugstore or other place where meals or drinks
are regularly sold to the public;
  (e)  the gross receipts from the sale of admissions to any place pro-
viding amusement, entertainment or recreation services including admis-
sions to state, county, district and local fairs, but such tax shall not be
levied and collected upon the gross receipts received from sales of ad-
missions to any cultural and historical event which occurs triennially;
  (f)  the gross receipts from the operation of any coin-operated device
dispensing or providing tangible personal property, amusement or other
services except laundry services, whether automatic or manually operated;
  (g)  the gross receipts from the service of renting of rooms by hotels,
as defined by K.S.A. 36-501 and amendments thereto. As used in this
subsection, hotel means any structure or building, or part or group
thereof, which is regularly used, kept, maintained, advertised or otherwise
held out to the public as a place where sleeping accommodations are
offered for pay primarily to transient guests and which has more than
two bedrooms furnished for the accommodation of such guests, regardless
of whether such building or structure, or part or group thereof, is des-
ignated as an apartment hotel, cabin camp, tourist cabin or court, hotel,
motel, bed and breakfast, inn or any other type of lodging unit;
  (h)  the gross receipts from the service of renting or leasing of tangible
personal property except such tax shall not apply to the renting or leasing
of machinery, equipment or other personal property owned by a city and
purchased from the proceeds of industrial revenue bonds issued prior to
July 1, 1973, in accordance with the provisions of K.S.A. 12-1740 through
12-1749, and amendments thereto, and any city or lessee renting or leas-
ing such machinery, equipment or other personal property purchased
with the proceeds of such bonds who shall have paid a tax under the
provisions of this section upon sales made prior to July 1, 1973, shall be
entitled to a refund from the sales tax refund fund of all taxes paid
thereon;
  (i)  the gross receipts from the rendering of dry cleaning, pressing,
dyeing and laundry services except laundry services rendered through a
coin-operated device whether automatic or manually operated;
  (j)  the gross receipts from the rendering of the services of washing
and washing and waxing of vehicles;
  (k)  the gross receipts from cable, community antennae and other sub-
scriber radio and television services;
  (l)  the gross receipts received from the sales of tangible personal
property to all contractors, subcontractors or repairmen of materials and
supplies for use by them in erecting structures for others, or building on,
or otherwise improving, altering, or repairing real or personal property
of others;
  (m)  the gross receipts received from fees and charges by public and
private clubs, drinking establishments, organizations and businesses for
participation in sports, games and other recreational activities, but such
tax shall not be levied and collected upon the gross receipts received from:
  (1) Fees and charges by any political subdivision, or any youth recreation
organization exclusively providing services to persons 18 years of age or
younger which is exempt from federal income taxation pursuant to section
501(c)(3) of the federal internal revenue code of 1986, for participation
in sports, games and other recreational activities; and (2) entry fees and
charges for participation in a special event or tournament sanctioned by
a national sporting association to which spectators are charged an admis-
sion which is taxable pursuant to subsection (e);
  (n)  the gross receipts received from dues charged by public and pri-
vate clubs, drinking establishments, organizations and businesses, pay-
ment of which entitles a member to the use of facilities for recreation or
entertainment;
  (o)  the gross receipts received from the isolated or occasional sale of
motor vehicles or trailers but not including: (1) The transfer of motor
vehicles or trailers by a person to a corporation solely in exchange for
stock securities in such corporation; or (2) the transfer of motor vehicles
or trailers by one corporation to another when all of the assets of such
corporation are transferred to such other corporation; or (3) the sale of
motor vehicles or trailers which are subject to taxation pursuant to the
provisions of K.S.A. 79-5101 et seq., and amendments thereto, by an
immediate family member to another immediate family member. For the
purposes of clause (3), immediate family member means lineal ascendants
or descendants, and their spouses. In determining the base for computing
the tax on such isolated or occasional sale, the fair market value of any
motor vehicle or trailer traded in by the purchaser to the seller may be
deducted from the selling price;
  (p)  the gross receipts received for the service of installing or applying
tangible personal property which when installed or applied is not being
held for sale in the regular course of business, and whether or not such
tangible personal property when installed or applied remains tangible
personal property or becomes a part of real estate, except that no tax shall
be imposed upon the service of installing or applying tangible personal
property in connection with the original construction of a building or
facility or the construction, reconstruction, restoration, replacement or
repair of a bridge or highway.
  For the purposes of this subsection:
  (1)  ``Original construction'' shall mean the first or initial construction
of a new building or facility. The term ``original construction'' shall include
the addition of an entire room or floor to any existing building or facility,
the completion of any unfinished portion of any existing building or fa-
cility and the restoration, reconstruction or replacement of a building or
facility damaged or destroyed by fire, flood, tornado, lightning, explosion
or earthquake, but such term shall not include replacement, remodeling,
restoration, renovation or reconstruction under any other circumstances;
  (2)  ``building'' shall mean only those enclosures within which individ-
uals customarily live or are employed, or which are customarily used to
house machinery, equipment or other property, and including the land
improvements immediately surrounding such building; and
  (3)  ``facility'' shall mean a mill, plant, refinery, oil or gas well, water
well, feedlot or any conveyance, transmission or distribution line of any
cooperative, nonprofit, membership corporation organized under or sub-
ject to the provisions of K.S.A. 17-4601 et seq., and amendments thereto,
or of any municipal or quasi-municipal corporation, including the land
improvements immediately surrounding such facility;
  (q)  the gross receipts received for the service of repairing, servicing,
altering or maintaining tangible personal property, except computer soft-
ware described in subsection (s), which when such services are rendered
is not being held for sale in the regular course of business, and whether
or not any tangible personal property is transferred in connection there-
with. The tax imposed by this subsection shall be applicable to the services
of repairing, servicing, altering or maintaining an item of tangible personal
property which has been and is fastened to, connected with or built into
real property;
  (r)  the gross receipts from fees or charges made under service or
maintenance agreement contracts for services, charges for the providing
of which are taxable under the provisions of subsection (p) or (q);
  (s)  the gross receipts received from the sale of computer software,
and the sale of the services of modifying, altering, updating or maintaining
computer software. As used in this subsection, ``computer software''
means information and directions loaded into a computer which dictate
different functions to be performed by the computer. Computer software
includes any canned or prewritten program which is held or existing for
general or repeated sale, even if the program was originally developed
for a single end user as custom computer software. The sale of computer
software or services does not include: (1) The initial sale of any custom
computer program which is originally developed for the exclusive use of
a single end user; or (2) those services rendered in the modification of
computer software when the modification is developed exclusively for a
single end user only to the extent of the modification and only to the
extent that the actual amount charged for the modification is separately
stated on invoices, statements and other billing documents provided to
the end user. The services of modification, alteration, updating and main-
tenance of computer software shall only include the modification, alter-
ation, updating and maintenance of computer software taxable under this
subsection whether or not the services are actually provided; and
  (t)  the gross receipts received for telephone answering services, in-
cluding mobile phone services, beeper services and other similar services.
  Sec. 4.  K.S.A. 1996 Supp. 12-1692, 12-1696 and 79-3603 are hereby
repealed.
  Sec. 5.  This act shall take effect and be in force from and after its
publication in the statute book.