Session of 1999
         
HOUSE BILL No. 2382
         
By Representative Horst
          
2-10
          
  9             AN  ACT concerning school district finance; authorizing the imposition
10             of school district retailers' sales taxes and school district income taxes
11             for the purpose of financing local option budgets.
12      
13       Be it enacted by the Legislature of the State of Kansas:
14             Section  1. (a) (1) For the purpose of financing all or a portion of a
15       district's local option budget in order to reduce or eliminate reliance of
16       the district upon revenue received from property taxation, the board of
17       any district that has adopted a local option budget may submit the ques-
18       tion of imposing a school district retailers' sales tax to the electors of such
19       district at an election called and held thereon.
20             (2) The board of any district proposing to adopt a retailers' sales tax
21       shall give notice of its intention to submit such proposition for approval
22       by the electors in the manner required by K.S.A. 10-120, and amend-
23       ments thereto. The notices shall state the time of the election and the
24       rate and effective date of the proposed tax. If a majority of the electors
25       voting thereon at such election fail to approve the proposition, such prop-
26       osition may be resubmitted under the conditions and in the manner pro-
27       vided in this section for submission of the proposition. If a majority of
28       the electors voting thereon at such election shall approve the levying of
29       such tax, the board of such district shall provide by resolution for the levy
30       of the tax. Any repeal of such tax or any reduction or increase in the rate
31       thereof, within the limits prescribed by subsection (b) shall be accom-
32       plished in the manner provided herein for the adoption and approval of
33       such tax except that the repeal of any such retailers' sales tax may be
34       accomplished by the adoption of a resolution so providing.
35             (b)  (1) The rate of any school district retailers' sales tax shall be fixed
36       in the amount of .25%, .5%, .75% or 1% which amount shall be deter-
37       mined by the board of the district.
38             (2) The board of a district levying a retailers' sales tax is hereby pro-
39       hibited from administering or collecting such tax locally, but shall utilize
40       the services of the state department of revenue to administer , enforce
41       and collect such tax. Such tax shall be identical in its application, and
42       exemptions therefrom, to the Kansas retailers' sales tax act and all laws
43       and administrative rules and regulations of the state department of rev-

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  1       enue relating to the Kansas retailers' sales tax shall apply to such school
  2       district sales tax insofar as such laws and rules and regulations may be
  3       made applicable. The state director of taxation is hereby authorized to
  4       administer, enforce and collect such school district sales taxes and to
  5       adopt such rules and regulations as may be necessary for the efficient and
  6       effective administration and enforcement thereof.
  7             (3) Upon receipt of a certified copy of a resolution authorizing the
  8       levy of a school district retailers' sales tax, the state director of taxation
  9       shall cause such taxes to be collected within or outside the boundaries of
10       such district at the same time and in the same manner provided for the
11       collection of the state retailers' sales tax. All moneys collected by the
12       director of taxation under the provisions of this section shall be credited
13       to a school district retailers' sales tax fund which fund is hereby estab-
14       lished in the state treasury. Any refund due on any school district retailers'
15       sales tax collected pursuant to this section shall be paid out of the sales
16       tax refund fund and reimbursed by the director of taxation from collec-
17       tions of school district retailers' sales tax revenue. All school district re-
18       tailers' sales tax revenue collected within any school district pursuant to
19       this section shall be apportioned and remitted at least quarterly by the
20       state treasurer, on instruction from the director of taxation, to the trea-
21       surer of such school district.
22             (4) The director of taxation shall provide, upon request by the board
23       of a district levying a school district retailers' sales tax, a monthly report
24       identifying each retailer having a place of business in the district and
25       setting forth the amount of such tax remitted by each retailer during the
26       preceding month. Such report shall be made available to the board within
27       a reasonable time after it has been requested from the director of taxation.
28       The director of taxation shall be allowed to assess a reasonable fee for the
29       issuance of such report. Information received by any such board pursuant
30       to this provision shall be confidential, and it shall be unlawful for any
31       member or employee of such board to divulge any such information in
32       any manner. Any violation of this provision by any such member or em-
33       ployee is a class B misdemeanor, and such member or employee shall be
34       dismissed from office.
35             (c) For the purpose of levying taxes pursuant to this section, there is
36       hereby specifically conferred upon the board of any district the power
37       and authority to impose taxes upon services rendered outside the bound-
38       aries of the district by retailers having a place of business located within
39       such district.
40             (d) All retail transactions consummated within a district having a re-
41       tailers' sales tax, which transactions are subject to the Kansas retailers'
42       sales tax, shall also be subject to a school district retailers' sales tax. Except
43       as hereinafter provided, all retail sales, for the purpose of this section,

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  1       shall be considered to have been consummated at the place of business
  2       of the retailer. In the event the place of business of a retailer is doubtful
  3       the place or places at which the retail sales are consummated for the
  4       purposes of this section shall be determined under rules and regulations
  5       adopted by the secretary of revenue which rules and regulations shall be
  6       considered with state and federal law insofar as applicable. Retail sales
  7       involving the use, consumption, or furnishing of gas, water, electricity and
  8       heat, for the purposes of this section, shall be considered to have been
  9       consummated at the situs of the user or recipient thereof, and retail sales
10       involving the use or furnishing of telephone service or services taxed un-
11       der subsection (k) of K.S.A. 79-3603, and amendments thereto, shall be
12       considered to have been consummated at the situs of the subscriber billed
13       therefor. Retail sales involving the leasing of telecommunication or data
14       processing equipment commonly used in connection with telephone serv-
15       ices shall be considered to have been consummated at the situs of the
16       lessee. Retail sales involving the furnishing of services taxable under sub-
17       sections (p), (q) and (r) of K.S.A. 79-3603, and amendments thereto,
18       pursuant to a contract under which the sale of such services and the
19       furnishing of tangible personal property exceeds $10,000 per contract per
20       contractor shall be considered to have been consummated at the situs
21       where such services are performed. The director of taxation is hereby
22       authorized to request and receive from any retailer or from any board
23       levying the tax such information as may be reasonably necessary to de-
24       termine the liability of retailers for any school district sales tax. The col-
25       lection of any school district sales tax authorized at a primary or general
26       election shall commence on the first day of the calendar quarter next
27       following the 30th day after the date of the election authorizing the levy
28       of such tax. The collection of any sales tax of a school district approved
29       at any other election shall commence on the first day of the calendar
30       quarter next following the 60th day after the date of the election author-
31       izing the levy of such tax.
32             (e) For the purpose of determining the situs of installation, mainte-
33       nance, servicing and repair services taxable under the provisions of this
34       section, the place of business of the retailer of such services shall be the
35       office or other location from which such retailer does business. Such
36       location may be established by determining the location where sales or
37       service personnel report or at which mail is received, orders are taken,
38       telephone service is listed or the consideration of any other relevant fac-
39       tors established by rules and regulations of the secretary of revenue. If
40       the place of business of a retailer of services is located within the bound-
41       aries of a district imposing a retailers' sales tax, services performed by
42       such retailer are subject to the tax regardless of whether the service is
43       performed within or outside the boundaries of the district. If there is no

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  1       fixed or determinable place of business for any retailer, other than a re-
  2       tailer having its only place or places of business in another state, the place
  3       of business of such retailer shall be deemed to be the place where the
  4       services are performed.
  5             (f) All revenue received from a school district retailers' sales tax im-
  6       posed pursuant to this section shall be expended only for the purposes
  7       for which a property tax may be levied pursuant to K.S.A. 72-6435, and
  8       amendments thereto. Any such tax levy imposed by the board of a school
  9       district upon taxable tangible property located within the district shall be
10       reduced by an amount equivalent to the amount of revenue distributed
11       for use by the board pursuant to this section.
12             Sec.  2. (a) For the purpose of financing all or a portion of a district's
13       local option budget in order to reduce or eliminate reliance of the district
14       upon revenue received from property taxation, the board of any district
15       that has adopted a local option budget may submit the question of im-
16       posing a school district income tax upon every resident individual of the
17       school district. Any such election shall be noticed, called and held in the
18       manner provided by K.S.A. 10-120, and amendments thereto, for the
19       noticing, calling and holding of elections upon the question of issuing
20       bonds under the general bond law. The notice of such election shall state
21       the time of election, and the notice and the ballot shall state the rate and
22       effective date of the proposed tax. If a majority of the electors voting at
23       such election fail to approve the proposition, such proposition may be
24       resubmitted under the same conditions and in the same manner provided
25       hereunder for initial submission of the proposition. If a majority of the
26       electors voting at such election approve the levying of such tax, the board
27       of the district, by resolution, shall authorize and provide for the levy of
28       such tax. Thereupon, the clerk of the board shall transmit a certified copy
29       of such resolution to the secretary of revenue.
30             (b) Any school district income tax imposed under the provisions of
31       this section shall be levied against a resident individual's Kansas income
32       tax liability after reduction for any credits thereon as reported on the
33       resident individual's Kansas income tax return. The rate of such tax shall
34       be the rate as set out on the notice of election and ballot. Such rate shall
35       be fixed at 5% or any other percentage which is the product of 5% mul-
36       tiplied by any whole digit. All taxes imposed under this section shall be
37       applicable to all taxable years commencing after December 31 of the year
38       in which the levy of such tax is authorized under subsection (a) and shall
39       be due at the time the resident individual's state income tax is due.
40             (c) The board of any district which has imposed a school district in-
41       come tax under the provisions of this section may submit, in any subse-
42       quent year, the question of increasing or decreasing the rate of such tax
43       or of repealing any such tax imposed, and such board shall be required

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  1       to submit any of such questions upon submission of a petition signed by
  2       not less than 5% of the qualified electors of the district. Any change in
  3       rate or repeal of such tax shall be approved by the electors and adopted
  4       by the board in the manner prescribed for imposing such tax under sub-
  5       section (a). Any change in rate or repeal of such tax shall become effective
  6       on January 1 of the year next following the year in which such change in
  7       rate or repeal is adopted.
  8             (d) Any district levying an income tax under the provisions of this
  9       section is hereby prohibited from administering or collecting any such tax
10       locally, but shall utilize the services of the state department of revenue
11       to administer, enforce and collect such tax. The provisions of the Kansas
12       income tax act, article 32 of chapter 79 of the Kansas Statutes Annotated,
13       except the Kansas withholding and declaration of estimated tax act, shall
14       apply to school district income taxes levied under the provisions of this
15       section to the extent that the same can be made applicable thereto. The
16       secretary of revenue is hereby authorized to adopt such rules and regu-
17       lations as may be necessary for the administration, collection and enforce-
18       ment of school district income taxes levied under the provisions of this
19       section. The state income tax return shall be adapted to provide for the
20       reporting of any resident individual's liability for the school district in-
21       come tax levied under this section. The director of taxation shall keep a
22       record of all moneys attributed to each school district levying an income
23       tax, including any penalties and interest attributable to such school district
24       income tax.
25             (e) The director of taxation shall pay all tax moneys collected under
26       tax levies authorized or imposed under the provisions of this section into
27       the state treasury on or before the first day of each month, and the state
28       treasurer shall credit the same less amounts withheld under subsection
29       (f) to the school district income tax fund which is hereby created.
30             (f) A revolving fund, designated as the school district income tax re-
31       fund fund, in an amount not to exceed $50,000, shall be set apart and
32       maintained by the director of taxation from taxes collected under this
33       section for payment of refunds. The revolving fund shall be in such
34       amount, within the limit set by this subsection, as the director shall de-
35       termine is necessary to meet current refunding requirements.
36             (g) The state treasurer shall make distributions from the school dis-
37       trict income tax fund to districts levying a school district income tax under
38       the provisions of this section on the following dates: On May 1 and August
39       1 of each year, moneys deposited in such fund during the preceding
40       calendar quarter; on December 1 of each year, moneys deposited in such
41       fund since August 1; and on February 1 of each year, moneys deposited
42       in such fund since December 1 of the preceding calendar year. The state
43       treasurer shall apportion and pay moneys deposited in the school district

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