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 9  AN ACT concerning school district finance; relating to local option budg-
10    ets; authorizing the imposition of school district retailers' sales taxes
11    and school district income taxes for the purpose of financing such
12    budgets.
13
14  Be it enacted by the Legislature of the State of Kansas:
15    Section 1.  (a) (1) For the purpose of financing all or a portion of a
16  district's local option budget in order to reduce reliance of the district
17  upon revenue received from property taxation, the board of any district
18  that has adopted a local option budget may submit the question of im-
19  posing a school district retailers' sales tax to the electors of such district
20  at an election called and held thereon.
21    (2)  The board of any district proposing to adopt a retailers' sales tax
22  shall give notice of its intention to submit such proposition for approval
23  by the electors in the manner required by K.S.A. 10-120, and amend-
24  ments thereto. The notices shall state the time of the election and the
25  rate and effective date of the proposed tax. If a majority of the electors
26  voting thereon at such election fail to approve the proposition, such prop-
27  osition may be resubmitted under the conditions and in the manner pro-
28  vided in this section for submission of the proposition. If a majority of
29  the electors voting thereon at such election shall approve the levying of
30  such tax, the board of such district shall provide by resolution for the levy
31  of the tax. Any repeal of such tax or any reduction or increase in the rate
32  thereof, within the limits prescribed by subsection (b) shall be accom-
33  plished in the manner provided herein for the adoption and approval of
34  such tax except that the repeal of any such retailers' sales tax may be
35  accomplished by the adoption of a resolution so providing.
36    (b) (1)  The rate of any school district retailers' sales tax shall be fixed
37  in the amount of .25%, .5%, .75% or 1% which amount shall be deter-
38  mined by the board of the district.
39    (2)  The board of a district levying a retailers' sales tax is hereby pro-
40  hibited from administering or collecting such tax locally, but shall utilize
41  the services of the state department of revenue to administer , enforce
42  and collect such tax. Such tax shall be identical in its application, and
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 1  exemptions therefrom, to the Kansas retailers' sales tax act and all laws
 2  and administrative rules and regulations of the state department of rev-
 3  enue relating to the Kansas retailers' sales tax shall apply to such school
 4  district sales tax insofar as such laws and rules and regulations may be
 5  made applicable. The state director of taxation is hereby authorized to
 6  administer, enforce and collect such school district sales taxes and to
 7  adopt such rules and regulations as may be necessary for the efficient and
 8  effective administration and enforcement thereof.
 9    (3)  Upon receipt of a certified copy of a resolution authorizing the
10  levy of a school district retailers' sales tax, the state director of taxation
11  shall cause such taxes to be collected within or outside the boundaries of
12  such district at the same time and in the same manner provided for the
13  collection of the state retailers' sales tax. All moneys collected by the
14  director of taxation under the provisions of this section shall be credited
15  to a school district retailers' sales tax fund which fund is hereby estab-
16  lished in the state treasury. Any refund due on any school district retailers'
17  sales tax collected pursuant to this section shall be paid out of the sales
18  tax refund fund and reimbursed by the director of taxation from collec-
19  tions of school district retailers' sales tax revenue. All school district re-
20  tailers' sales tax revenue collected within any school district pursuant to
21  this section shall be apportioned and remitted at least quarterly by the
22  state treasurer, on instruction from the director of taxation, to the treas-
23  urer of such school district.
24    (4)  The director of taxation shall provide, upon request by the board
25  of a district levying a school district retailers' sales tax, a monthly report
26  identifying each retailer having a place of business in the district and
27  setting forth the amount of such tax remitted by each retailer during the
28  preceding month. Such report shall be made available to the board within
29  a reasonable time after it has been requested from the director of taxation.
30  The director of taxation shall be allowed to assess a reasonable fee for the
31  issuance of such report. Information received by any such board pursuant
32  to this provision shall be confidential, and it shall be unlawful for any
33  member or employee of such board to divulge any such information in
34  any manner. Any violation of this provision by any such member or em-
35  ployee is a class B misdemeanor, and such member or employee shall be
36  dismissed from office.
37    (c)  For the purpose of levying taxes pursuant to this section, there is
38  hereby specifically conferred upon the board of any district the power
39  and authority to impose taxes upon services rendered outside the bound-
40  aries of the district by retailers having a place of business located within
41  such district.
42    (d)  All retail transactions consummated within a district having a re-
43  tailers' sales tax, which transactions are subject to the Kansas retailers'
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 1  sales tax, shall also be subject to a school district retailers' sales tax. Except
 2  as hereinafter provided, all retail sales, for the purpose of this section,
 3  shall be considered to have been consummated at the place of business
 4  of the retailer. In the event the place of business of a retailer is doubtful
 5  the place or places at which the retail sales are consummated for the
 6  purposes of this section shall be determined under rules and regulations
 7  adopted by the secretary of revenue which rules and regulations shall be
 8  considered with state and federal law insofar as applicable. Retail sales
 9  involving the use, consumption, or furnishing of gas, water, electricity and
10  heat, for the purposes of this section, shall be considered to have been
11  consummated at the situs of the user or recipient thereof, and retail sales
12  involving the use or furnishing of telephone service or services taxed un-
13  der subsection (k) of K.S.A. 79-3603, and amendments thereto, shall be
14  considered to have been consummated at the situs of the subscriber billed
15  therefor. Retail sales involving the leasing of telecommunication or data
16  processing equipment commonly used in connection with telephone serv-
17  ices shall be considered to have been consummated at the situs of the
18  lessee. Retail sales involving the furnishing of services taxable under sub-
19  sections (p), (q) and (r) of K.S.A. 79-3603, and amendments thereto,
20  pursuant to a contract under which the sale of such services and the
21  furnishing of tangible personal property exceeds $10,000 per contract per
22  contractor shall be considered to have been consummated at the situs
23  where such services are performed. The director of taxation is hereby
24  authorized to request and receive from any retailer or from any board
25  levying the tax such information as may be reasonably necessary to de-
26  termine the liability of retailers for any school district sales tax. The col-
27  lection of any school district sales tax authorized at a primary or general
28  election shall commence on the first day of the calendar quarter next
29  following the 30th day after the date of the election authorizing the levy
30  of such tax. The collection of any sales tax of a school district approved
31  at any other election shall commence on the first day of the calendar
32  quarter next following the 60th day after the date of the election author-
33  izing the levy of such tax.
34    (e)  For the purpose of determining the situs of installation, mainte-
35  nance, servicing and repair services taxable under the provisions of this
36  section, the place of business of the retailer of such services shall be the
37  office or other location from which such retailer does business. Such
38  location may be established by determining the location where sales or
39  service personnel report or at which mail is received, orders are taken,
40  telephone service is listed or the consideration of any other relevant fac-
41  tors established by rules and regulations of the secretary of revenue. If
42  the place of business of a retailer of services is located within the bound-
43  aries of a district imposing a retailers' sales tax, services performed by
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 1  such retailer are subject to the tax regardless of whether the service is
 2  performed within or outside the boundaries of the district. If there is no
 3  fixed or determinable place of business for any retailer, other than a re-
 4  tailer having its only place or places of business in another state, the place
 5  of business of such retailer shall be deemed to be the place where the
 6  services are performed.
 7    (f)  All revenue received from a school district retailers' sales tax im-
 8  posed pursuant to this section shall be expended only for the purposes
 9  for which a property tax may be levied pursuant to K.S.A. 72-6435, and
10  amendments thereto. Any such tax levy imposed by the board of a school
11  district upon taxable tangible property located within the district shall be
12  reduced by an amount equivalent to the amount of revenue distributed
13  for use by the board pursuant to this section.
14    Sec. 2.  (a) For the purpose of financing all or a portion of a district's
15  local option budget in order to reduce reliance of the district upon rev-
16  enue received from property taxation, the board of any district that has
17  adopted a local option budget may submit the question of imposing a
18  school district income tax upon every resident individual of the school
19  district. Any such election shall be noticed, called and held in the manner
20  provided by K.S.A. 10-120, and amendments thereto, for the noticing,
21  calling and holding of elections upon the question of issuing bonds under
22  the general bond law. The notice of such election shall state the time of
23  election, and the notice and the ballot shall state the rate and effective
24  date of the proposed tax. If a majority of the electors voting at such
25  election fail to approve the proposition, such proposition may be resub-
26  mitted under the same conditions and in the same manner provided here-
27  under for initial submission of the proposition. If a majority of the electors
28  voting at such election approve the levying of such tax, the board of the
29  district, by resolution, shall authorize and provide for the levy of such tax.
30  Thereupon, the clerk of the board shall transmit a certified copy of such
31  resolution to the secretary of revenue.
32    (b)  Any school district income tax imposed under the provisions of
33  this section shall be levied against a resident individual's Kansas income
34  tax liability after reduction for any credits thereon as reported on the
35  resident individual's Kansas income tax return. The rate of such tax shall
36  be the rate as set out on the notice of election and ballot. Such rate shall
37  be fixed at 5% or any other percentage which is the product of 5% mul-
38  tiplied by any whole digit. All taxes imposed under this section shall be
39  applicable to all taxable years commencing after December 31 of the year
40  in which the levy of such tax is authorized under subsection (a) and shall
41  be due at the time the resident individual's state income tax is due.
42    (c)  The board of any district which has imposed a school district in-
43  come tax under the provisions of this section may submit, in any subse-
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 1  quent year, the question of increasing or decreasing the rate of such tax
 2  or of repealing any such tax imposed, and such board shall be required
 3  to submit any of such questions upon submission of a petition signed by
 4  not less than 5% of the qualified electors of the district. Any change in
 5  rate or repeal of such tax shall be approved by the electors and adopted
 6  by the board in the manner prescribed for imposing such tax under sub-
 7  section (a). Any change in rate or repeal of such tax shall become effective
 8  on January 1 of the year next following the year in which such change in
 9  rate or repeal is adopted.
10    (d)  Any district levying an income tax under the provisions of this
11  section is hereby prohibited from administering or collecting any such tax
12  locally, but shall utilize the services of the state department of revenue
13  to administer, enforce and collect such tax. The provisions of the Kansas
14  income tax act, article 32 of chapter 79 of the Kansas Statutes Annotated,
15  except the Kansas withholding and declaration of estimated tax act, shall
16  apply to school district income taxes levied under the provisions of this
17  section to the extent that the same can be made applicable thereto. The
18  secretary of revenue is hereby authorized to adopt such rules and regu-
19  lations as may be necessary for the administration, collection and enforce-
20  ment of school district income taxes levied under the provisions of this
21  section. The state income tax return shall be adapted to provide for the
22  reporting of any resident individual's liability for the school district in-
23  come tax levied under this section. The director of taxation shall keep a
24  record of all moneys attributed to each school district levying an income
25  tax, including any penalties and interest attributable to such school district
26  income tax.
27    (e)  The director of taxation shall pay all tax moneys collected under
28  tax levies authorized or imposed under the provisions of this section into
29  the state treasury on or before the first day of each month, and the state
30  treasurer shall credit the same less amounts withheld under subsection
31    (f) to the school district income tax fund which is hereby created.
32    (f)  A revolving fund, designated as the school district income tax re-
33  fund fund, in an amount not to exceed $50,000, shall be set apart and
34  maintained by the director of taxation from taxes collected under this
35  section for payment of refunds. The revolving fund shall be in such
36  amount, within the limit set by this subsection, as the director shall de-
37  termine is necessary to meet current refunding requirements.
38    (g)  The state treasurer shall make distributions from the school dis-
39  trict income tax fund to districts levying a school district income tax under
40  the provisions of this section on the following dates: On May 1 and August
41  1 of each year, moneys deposited in such fund during the preceding
42  calendar quarter; on December 1 of each year, moneys deposited in such
43  fund since August 1; and on February 1 of each year, moneys deposited
HB 2371
                                     

 1  in such fund since December 1 of the preceding calendar year. The state
 2  treasurer shall apportion and pay moneys deposited in the school district
 3  income tax fund to districts levying a school district income tax under the
 4  provisions of this section as follows:  An amount equal to the total proceeds
 5  received from taxpayers in each district levying such school district in-
 6  come tax, as indicated by the returns filed and attributed to each such
 7  district, with any adjustments or corrections made by the director of rev-
 8  enue, shall be apportioned and paid to the district levying the tax.
 9    (h)  The director of accounts and reports shall draw warrants on the
10  state treasurer payable to school district treasurers of the several districts
11  entitled to payment from the school district income tax fund upon vouch-
12  ers approved by the director of taxation. Upon receipt of such warrant
13  each district treasurer shall credit the amount thereof to the supplemental
14  general fund of the district.
15    (i)  All revenue received from a school district income tax levied pur-
16  suant to this section shall be expended only for the purposes for which a
17  property tax may be levied pursuant to K.S.A. 72-6435, and amendments
18  thereto. Any such tax levy imposed by the board of a school district upon
19  taxable tangible property located within the district shall be reduced by
20  an amount equivalent to the amount of revenue distributed for use by
21  the board pursuant to this section.
22    Sec. 3.  Revenues received by a school district from the tax levy au-
23  thorized by K.S.A. 72-6435, and amendments thereto, and either or both
24  of the tax levies authorized by this act shall be limited so that the total
25  amount of such revenues are not in excess of the amount necessary to
26  fund the local option budget of the district.
27    Sec. 4.  This act shall take effect and be in force from and after its
28  publication in the statute book.