[As Amended by Senate Committee of the Whole]
         

         
As Further Amended by Senate Committee
         

         
As Amended by Senate Committee
         

          Session of 1998
                   
SENATE BILL No. 250
         
By Committee of Ways and Means
         
2-10
          14             AN ACT relating to sales taxation; defining educational institution for
15             such purposes; amending K.S.A. 1996 Supp. 79-3602 and repealing
16             the existing section.
17            
18       Be it enacted by the Legislature of the State of Kansas:
19           Section 1. K.S.A. 1996 Supp. 79-3602 is hereby amended to read as
20       follows: 79-3602. (a) ``Persons'' means any individual, firm, copartnership,
21       joint adventure, association, corporation, estate or trust, receiver or trus-
22       tee, or any group or combination acting as a unit, and the plural as well
23       as the singular number; and shall specifically mean any city or other po-
24       litical subdivision of the state of Kansas engaging in a business or provid-
25       ing a service specifically taxable under the provisions of this act.
26           (b) ``Director'' means the state director of taxation.
27           (c) ``Sale'' or ``sales'' means the exchange of tangible personal prop-
28       erty, as well as the sale thereof for money, and every transaction, condi-
29       tional or otherwise, for a consideration, constituting a sale, including the
30       sale or furnishing of electrical energy, gas, water, services or entertain-
31       ment taxable under the terms of this act and including, except as provided
32       in the following provision, the sale of the use of tangible personal property
33       by way of a lease, license to use or the rental thereof regardless of the
34       method by which the title, possession or right to use the tangible personal
35       property is transferred. The term ``sale'' or ``sales'' shall not mean the sale
36       of the use of any tangible personal property used as a dwelling by way of
37       a lease or rental thereof for a term of more than 28 consecutive days.
38           (d) ``Retailer'' means a person regularly engaged in the business of
39       selling tangible personal property at retail or furnishing electrical energy,
40       gas, water, services or entertainment, and selling only to the user or con-
41       sumer and not for resale.
42           (e) ``Retail sale'' or ``sale at retail'' means all sales made within the
43       state of tangible personal property or electrical energy, gas, water, services

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  1       or entertainment for use or consumption and not for resale.
  2           (f) ``Tangible personal property'' means corporeal personal property.
  3       Such term shall include any computer software program which is not a
  4       custom computer software program, as described by subsection (s) of
  5       K.S.A. 79-3603, and amendments thereto.
  6           (g) ``Selling price'' means the total cost to the consumer exclusive of
  7       discounts allowed and credited, but including freight and transportation
  8       charges from retailer to consumer.
  9           (h) ``Gross receipts'' means the total selling price or the amount re-
10       ceived as defined in this act, in money, credits, property or other consid-
11       eration valued in money from sales at retail within this state; and em-
12       braced within the provisions of this act. The taxpayer, may take credit in
13       the report of gross receipts for: (1) An amount equal to the selling price
14       of property returned by the purchaser when the full sale price thereof,
15       including the tax collected, is refunded in cash or by credit; (2) an amount
16       equal to the allowance given for the trade-in of property.
17           (i) ``Taxpayer'' means any person obligated to account to the director
18       for taxes collected under the terms of this act.
19           (j) ``Isolated or occasional sale'' means the nonrecurring sale of tan-
20       gible personal property, or services taxable hereunder by a person not
21       engaged at the time of such sale in the business of selling such property
22       or services. Any religious organization which makes a nonrecurring sale
23       of tangible personal property acquired for the purpose of resale shall be
24       deemed to be not engaged at the time of such sale in the business of
25       selling such property. Such term shall include: (1) Any sale by a bank,
26       savings and loan institution, credit union or any finance company licensed
27       under the provisions of the Kansas uniform consumer credit code of tan-
28       gible personal property which has been repossessed by any such entity;
29       and (2) any sale of tangible personal property made by an auctioneer or
30       agent on behalf of not more than two principals or households if such
31       sale is nonrecurring and any such principal or household is not engaged
32       at the time of such sale in the business of selling tangible personal prop-
33       erty.
34           (k) ``Service'' means those services described in and taxed under the
35       provisions of K.S.A. 79-3603 and amendments thereto.
36           (l) ``Ingredient or component part'' means tangible personal property
37       which is necessary or essential to, and which is actually used in and be-
38       comes an integral and material part of tangible personal property or serv-
39       ices produced, manufactured or compounded for sale by the producer,
40       manufacturer or compounder in its regular course of business. The fol-
41       lowing items of tangible personal property are hereby declared to be
42       ingredients or component parts, but the listing of such property shall not
43       be deemed to be exclusive nor shall such listing be construed to be a

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  1       restriction upon, or an indication of, the type or types of property to be
  2       included within the definition of ``ingredient or component part'' as
  3       herein set forth:
  4           (1) Containers, labels and shipping cases used in the distribution of
  5       property produced, manufactured or compounded for sale which are not
  6       to be returned to the producer, manufacturer or compounder for reuse.
  7           (2) Containers, labels, shipping cases, paper bags, drinking straws,
  8       paper plates, paper cups, twine and wrapping paper used in the distri-
  9       bution and sale of property taxable under the provisions of this act by
10       wholesalers and retailers and which is not to be returned to such whole-
11       saler or retailer for reuse.
12           (3) Seeds and seedlings for the production of plants and plant prod-
13       ucts produced for resale.
14           (4) Paper and ink used in the publication of newspapers.
15           (5) Fertilizer used in the production of plants and plant products
16       produced for resale.
17           (6) Feed for animals, fowl and aquatic plants and animals, the primary
18       purpose of which is use in agriculture or aquaculture, as defined in K.S.A.
19       47-1901, and amendments thereto, the production of food for human
20       consumption, the production of animal, dairy, poultry or aquatic plant
21       and animal products, fiber, fur, or the production of offspring for use for
22       any such purpose or purposes.
23           (m) ``Property which is consumed'' means tangible personal property
24       which is essential or necessary to and which is used in the actual process
25       of and immediately consumed or dissipated in (1) the production, man-
26       ufacture, processing, mining, drilling, refining or compounding of tangi-
27       ble personal property, (2) the providing of services or (3) the irrigation
28       of crops, for sale in the regular course of business, and which is not
29       reusable for such purpose. The following items of tangible personal prop-
30       erty are hereby declared to be ``consumed'' but the listing of such prop-
31       erty shall not be deemed to be exclusive nor shall such listing be construed
32       to be a restriction upon or an indication of, the type or types of property
33       to be included within the definition of ``property which is consumed'' as
34       herein set forth:
35           (A) Insecticides, herbicides, germicides, pesticides, fungicides, fu-
36       migants, antibiotics, biologicals, pharmaceuticals, vitamins and chemicals
37       for use in commercial or agricultural production, processing or storage of
38       fruit, vegetables, feeds, seeds, grains, animals or animal products whether
39       fed, injected, applied, combined with or otherwise used; and
40           (B) electricity, gas and water.
41           (n) ``Political subdivision'' means any municipality, agency or subdi-
42       vision of the state which is, or shall hereafter be, authorized to levy taxes
43       upon tangible property within the state or which certifies a levy to a

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  1       municipality, agency or subdivision of the state which is, or shall hereafter
  2       be, authorized to levy taxes upon tangible property within the state. Such
  3       term also shall include any public building commission, housing, airport,
  4       port, metropolitan transit or similar authority established pursuant to law.
  5           (o) ``Municipal corporation'' means any city incorporated under the
  6       laws of Kansas.
  7           (p) ``Quasi-municipal corporation'' means any county, township,
  8       school district, drainage district or any other governmental subdivision in
  9       the state of Kansas having authority to receive or hold moneys or funds.
10           (q) ``Nonprofit blood bank'' means any nonprofit place, organization,
11       institution or establishment that is operated wholly or in part for the
12       purpose of obtaining, storing, processing, preparing for transfusing, fur-
13       nishing, donating or distributing human blood or parts or fractions of
14       single blood units or products derived from single blood units, whether
15       or not any remuneration is paid therefor, or whether such procedures are
16       done for direct therapeutic use or for storage for future use of such prod-
17       ucts.
18           (r) ``Contractor, subcontractor or repairman'' means a person who
19       agrees to furnish and install tangible personal property or install tangible
20       personal property at a specified price. A person who maintains an inven-
21       tory of tangible personal property which enables such person to furnish
22       and install the tangible personal property or install the tangible personal
23       property shall not be deemed a contractor, subcontractor or repairman
24       but shall be deemed a retailer.
25           (s) ``Educational institution'' means any nonprofit school, college and
26       university that offers education at a level above the twelfth grade, and
27       conducts regular classes and courses of study required for accreditation
28       by, or membership in, the North Central Association of Colleges and
29       Schools, the state board of education, or that otherwise qualify as an
30       ``educational institution,'' as defined by K.S.A. 74-50,103, and amend-
31       ments thereto. Such phrase shall include: (1) A group of educational
32       institutions that operates exclusively for an educational purpose;
33       (2) nonprofit endowment associations and foundations organized and
34       operated exclusively to receive, hold, invest and administer moneys and
35       property as a permanent fund for the support and sole benefit of an ed-
36       ucational institution; and (3) nonprofit entities, including but not lim-
37       ited to, trusts and foundations, trusts, foundations and other entities
38       organized and operated principally to hold and own receipts from in-
39       tercollegiate sporting events and to disburse such receipts, as well as
40       grants and gifts, in the interest of collegiate and intercollegiate athletic
41       programs for the support and sole benefit of an educational insti-
42       tution; (4) nonprofit trusts, foundations and other entities organ-
43       ized and operated for the primary purpose of managing and oper-

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  1       ating a student union facility for the support and sole benefit of an
  2       educational institution; and (5) and (4) nonprofit trusts, foun-
  3       dations and other entities organized and operated for the primary
  4       purpose of encouraging, fostering and conducting scholarly inves-
  5       tigations and dustrial and other types of research for the support
  6       and sole benefit of an educational institution] industrial and other
  7       types of research for the support and sole benefit of an educational
  8       institution.
  9           Sec. 2. K.S.A. 1996 Supp. 79-3602 is hereby repealed.
10           Sec. 3. This act shall take effect and be in force from and after its
11       publication in the statute book.
12      
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