Session of 1999
HOUSE BILL No. 2587
By Special Committee on Assessment and Taxation
12-16
9 AN ACT
relating to sales taxation; exempting certain sales of hotel
rental
10 services; amending
K.S.A. 1999 Supp. 79-3603 and repealing the ex-
11 isting section.
12
13 Be it enacted by the Legislature of the
State of Kansas:
14 Section
1. K.S.A. 1999 Supp. 79-3603 is hereby amended to read as
15 follows: 79-3603. For the privilege of
engaging in the business of selling
16 tangible personal property at retail in
this state or rendering or furnishing
17 any of the services taxable under this act,
there is hereby levied and there
18 shall be collected and paid a tax at the
rate of 4.9% and, within a rede-
19 velopment district established pursuant to
K.S.A. 74-8921, and amend-
20 ments thereto, there is hereby levied and
there shall be collected and
21 paid an additional tax at the rate of 2%
until the earlier of the date the
22 bonds issued to finance or refinance the
redevelopment project have been
23 paid in full or the final scheduled
maturity of the first series of bonds
24 issued to finance any part of the project
upon:
25 (a) The gross
receipts received from the sale of tangible personal
26 property at retail within this state;
27 (b) (1) the
gross receipts from intrastate telephone or telegraph serv-
28 ices and (2) the gross receipts received
from the sale of interstate tele-
29 phone or telegraph services, which (A)
originate within this state and
30 terminate outside the state and are billed
to a customer's telephone num-
31 ber or account in this state; or (B)
originate outside this state and ter-
32 minate within this state and are billed to
a customer's telephone number
33 or account in this state except that the
sale of interstate telephone or
34 telegraph service does not include: (A) Any
interstate incoming or out-
35 going wide area telephone service or wide
area transmission type service
36 which entitles the subscriber to make or
receive an unlimited number of
37 communications to or from persons having
telephone service in a speci-
38 fied area which is outside the state in
which the station provided this
39 service is located; (B) any interstate
private communications service to
40 the persons contracting for the receipt of
that service that entitles the
41 purchaser to exclusive or priority use of a
communications channel or
42 group of channels between exchanges; (C)
any value-added nonvoice
43 service in which computer processing
applications are used to act on the
2
1 form, content, code or protocol of
the information to be transmitted; (D)
2 any telecommunication service to a
provider of telecommunication serv-
3 ices which will be used to render
telecommunications services, including
4 carrier access services; or (E) any
service or transaction defined in this
5 section among entities classified as
members of an affiliated group as
6 provided by federal law (U.S.C.
Section 1504). For the purposes of this
7 subsection the term gross receipts
does not include purchases of tele-
8 phone, telegraph or
telecommunications using a prepaid telephone call-
9 ing card or pre-paid authorization
number. As used in this subsection, a
10 pre-paid telephone calling card or pre-paid
authorization number means
11 the right to exclusively make telephone
calls, paid for in advance, with
12 the prepaid value measured in minutes or
other time units, that enables
13 the origination of calls using an access
number or authorization code or
14 both, whether manually or electronically
dialed;
15 (c) the gross
receipts from the sale or furnishing of gas, water, elec-
16 tricity and heat, which sale is not
otherwise exempt from taxation under
17 the provisions of this act, and whether
furnished by municipally or pri-
18 vately owned utilities;
19 (d) the gross
receipts from the sale of meals or drinks furnished at
20 any private club, drinking establishment,
catered event, restaurant, eating
21 house, dining car, hotel, drugstore or
other place where meals or drinks
22 are regularly sold to the public;
23 (e) the gross
receipts from the sale of admissions to any place pro-
24 viding amusement, entertainment or
recreation services including admis-
25 sions to state, county, district and local
fairs, but such tax shall not be
26 levied and collected upon the gross
receipts received from sales of ad-
27 missions to any cultural and historical
event which occurs triennially;
28 (f) the gross
receipts from the operation of any coin-operated device
29 dispensing or providing tangible personal
property, amusement or other
30 services except laundry services, whether
automatic or manually operated;
31 (g) the gross
receipts from the service of renting of rooms by hotels,
32 as defined by K.S.A. 36-501 and amendments
thereto, or by accommo-
33 dation brokers, as defined by K.S.A.
12-1692, and amendments thereto,
34 but such tax shall not be levied and
collected upon the gross receipts
35 received from sales of such service to
the federal or state government, any
36 agency or political subdivision thereof,
or any officer or employee thereof
37 in association with the performance of
official government duties;
38 (h) the gross
receipts from the service of renting or leasing of tangible
39 personal property except such tax shall not
apply to the renting or leasing
40 of machinery, equipment or other personal
property owned by a city and
41 purchased from the proceeds of industrial
revenue bonds issued prior to
42 July 1, 1973, in accordance with the
provisions of K.S.A. 12-1740 through
43 12-1749, and amendments thereto, and any
city or lessee renting or leas-
3
1 ing such machinery, equipment or
other personal property purchased
2 with the proceeds of such bonds who
shall have paid a tax under the
3 provisions of this section upon sales
made prior to July 1, 1973, shall be
4 entitled to a refund from the sales
tax refund fund of all taxes paid
5 thereon;
6 (i) the
gross receipts from the rendering of dry cleaning, pressing,
7 dyeing and laundry services except
laundry services rendered through a
8 coin-operated device whether
automatic or manually operated;
9 (j) the
gross receipts from the rendering of the services of washing
10 and washing and waxing of vehicles;
11 (k) the gross
receipts from cable, community antennae and other sub-
12 scriber radio and television services;
13 (l) the gross
receipts received from the sales of tangible personal
14 property to all contractors, subcontractors
or repairmen of materials and
15 supplies for use by them in erecting
structures for others, or building on,
16 or otherwise improving, altering, or
repairing real or personal property
17 of others;
18 (m) the gross
receipts received from fees and charges by public and
19 private clubs, drinking establishments,
organizations and businesses for
20 participation in sports, games and other
recreational activities, but such
21 tax shall not be levied and collected upon
the gross receipts received from:
22 (1) Fees and charges by any political
subdivision, by any organization
23 exempt from property taxation pursuant to
paragraph Ninth of K.S.A. 79-
24 201, and amendments thereto, or by any
youth recreation organization
25 exclusively providing services to persons
18 years of age or younger which
26 is exempt from federal income taxation
pursuant to section 501(c)(3) of
27 the federal internal revenue code of 1986,
for participation in sports,
28 games and other recreational activities;
and (2) entry fees and charges for
29 participation in a special event or
tournament sanctioned by a national
30 sporting association to which spectators
are charged an admission which
31 is taxable pursuant to subsection (e);
32 (n) the gross
receipts received from dues charged by public and pri-
33 vate clubs, drinking establishments,
organizations and businesses, pay-
34 ment of which entitles a member to the use
of facilities for recreation or
35 entertainment, but such tax shall not be
levied and collected upon the
36 gross receipts received from: (1) Dues
charged by any organization ex-
37 empt from property taxation pursuant to
paragraphs Eighth and Ninth of
38 K.S.A. 79-201, and amendments thereto; and
(2) sales of memberships
39 in a nonprofit organization which is exempt
from federal income taxation
40 pursuant to section 501 (c)(3) of the
federal internal revenue code of
41 1986, and whose purpose is to support the
operation of a nonprofit zoo;
42 (o) the gross
receipts received from the isolated or occasional sale of
43 motor vehicles or trailers but not
including: (1) The transfer of motor
4
1 vehicles or trailers by a person to a
corporation solely in exchange for
2 stock securities in such corporation;
or (2) the transfer of motor vehicles
3 or trailers by one corporation to
another when all of the assets of such
4 corporation are transferred to such
other corporation; or (3) the sale of
5 motor vehicles or trailers which are
subject to taxation pursuant to the
6 provisions of K.S.A. 79-5101 et seq.,
and amendments thereto, by an
7 immediate family member to another
immediate family member. For the
8 purposes of clause (3), immediate
family member means lineal ascendants
9 or descendants, and their spouses. In
determining the base for computing
10 the tax on such isolated or occasional
sale, the fair market value of any
11 motor vehicle or trailer traded in by the
purchaser to the seller may be
12 deducted from the selling price;
13 (p) the gross
receipts received for the service of installing or applying
14 tangible personal property which when
installed or applied is not being
15 held for sale in the regular course of
business, and whether or not such
16 tangible personal property when installed
or applied remains tangible
17 personal property or becomes a part of real
estate, except that no tax shall
18 be imposed upon the service of installing
or applying tangible personal
19 property in connection with the original
construction of a building or
20 facility, the original construction,
reconstruction, restoration, remodeling,
21 renovation, repair or replacement of a
residence or the construction, re-
22 construction, restoration, replacement or
repair of a bridge or highway.
23 For the purposes of
this subsection:
24 (1) "Original
construction" shall mean the first or initial construction
25 of a new building or facility. The term
"original construction" shall include
26 the addition of an entire room or floor to
any existing building or facility,
27 the completion of any unfinished portion of
any existing building or fa-
28 cility and the restoration, reconstruction
or replacement of a building or
29 facility damaged or destroyed by fire,
flood, tornado, lightning, explosion
30 or earthquake, but such term, except with
regard to a residence, shall not
31 include replacement, remodeling,
restoration, renovation or reconstruc-
32 tion under any other circumstances;
33 (2) "building"
shall mean only those enclosures within which individ-
34 uals customarily are employed, or which are
customarily used to house
35 machinery, equipment or other property, and
including the land improve-
36 ments immediately surrounding such
building;
37 (3) "facility"
shall mean a mill, plant, refinery, oil or gas well, water
38 well, feedlot or any conveyance,
transmission or distribution line of any
39 cooperative, nonprofit, membership
corporation organized under or sub-
40 ject to the provisions of K.S.A. 17-4601 et
seq., and amendments thereto,
41 or of any municipal or quasi-municipal
corporation, including the land
42 improvements immediately surrounding such
facility; and
43 (4) "residence"
shall mean only those enclosures within which indi-
5
1 viduals customarily live;
2 (q) the
gross receipts received for the service of repairing,
servicing,
3 altering or maintaining tangible
personal property, except computer soft-
4 ware described in subsection (s),
which when such services are rendered
5 is not being held for sale in the
regular course of business, and whether
6 or not any tangible personal property
is transferred in connection there-
7 with. The tax imposed by this
subsection shall be applicable to the services
8 of repairing, servicing, altering or
maintaining an item of tangible personal
9 property which has been and is
fastened to, connected with or built into
10 real property;
11 (r) the gross
receipts from fees or charges made under service or
12 maintenance agreement contracts for
services, charges for the providing
13 of which are taxable under the provisions
of subsection (p) or (q);
14 (s) the gross
receipts received from the sale of computer software,
15 and the sale of the services of modifying,
altering, updating or maintaining
16 computer software. As used in this
subsection, "computer software"
17 means information and directions loaded
into a computer which dictate
18 different functions to be performed by the
computer. Computer software
19 includes any canned or prewritten program
which is held or existing for
20 general or repeated sale, even if the
program was originally developed
21 for a single end user as custom computer
software. The sale of computer
22 software or services does not include: (1)
The initial sale of any custom
23 computer program which is originally
developed for the exclusive use of
24 a single end user; or (2) those services
rendered in the modification of
25 computer software when the modification is
developed exclusively for a
26 single end user only to the extent of the
modification and only to the
27 extent that the actual amount charged for
the modification is separately
28 stated on invoices, statements and other
billing documents provided to
29 the end user. The services of modification,
alteration, updating and main-
30 tenance of computer software shall only
include the modification, alter-
31 ation, updating and maintenance of computer
software taxable under this
32 subsection whether or not the services are
actually provided; and
33 (t) the gross
receipts received for telephone answering services, in-
34 cluding mobile phone services, beeper
services and other similar services;
35 and
36 (u) the gross
receipts received from the sale of prepaid telephone
37 calling cards or pre-paid authorization
numbers and the recharge of such
38 cards or numbers. A pre-paid telephone
calling card or pre-paid author-
39 ization number means the right to
exclusively make telephone calls, paid
40 for in advance, with the prepaid value
measured in minutes or other time
41 units, that enables the origination of
calls using an access number or
42 authorization code or both, whether
manually or electronically dialed. If
43 the dale sale or
recharge of such card or number does not take place at
6
1 the vendor's place of business, it
shall be conclusively determined to take
2 place at the customer's shipping
address; if there is no item shipped then
3 it shall be the customer's billing
address.
4 Sec. 2. K.S.A. 1999 Supp.
79-3603 is hereby repealed.
5 Sec. 3. This act
shall take effect and be in force from and after its
6 publication in the statute book.