Session of 1999
SENATE BILL No. 82
By Committee on Assessment and Taxation
1-21
9 AN ACT relating to sales taxation; exempting certain hotel room renting
10 services therefrom; amending K.S.A. 1998 Supp. 79-3603 and repeal-
11 ing the existing section.
12
13 Be it enacted by the Legislature of the State of Kansas:
14 Section 1. K.S.A. 1998 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% upon:
19 (a) The gross receipts received from the sale of tangible personal
20 property at retail within this state;
21 (b) (1) the gross receipts from intrastate telephone or telegraph serv-
22 ices and (2) the gross receipts received from the sale of interstate tele-
23 phone or telegraph services, which (A) originate within this state and
24 terminate outside the state and are billed to a customer's telephone num-
25 ber or account in this state; or (B) originate outside this state and ter-
26 minate within this state and are billed to a customer's telephone number
27 or account in this state except that the sale of interstate telephone or
28 telegraph service does not include: (A) Any interstate incoming or out-
29 going wide area telephone service or wide area transmission type service
30 which entitles the subscriber to make or receive an unlimited number of
31 communications to or from persons having telephone service in a speci-
32 fied area which is outside the state in which the station provided this
33 service is located; (B) any interstate private communications service to
34 the persons contracting for the receipt of that service that entitles the
35 purchaser to exclusive or priority use of a communications channel or
36 group of channels between exchanges; (C) any value-added nonvoice
37 service in which computer processing applications are used to act on the
38 form, content, code or protocol of the information to be transmitted; (D)
39 any telecommunication service to a provider of telecommunication serv-
40 ices which will be used to render telecommunications services, including
41 carrier access services; or (E) any service or transaction defined in this
42 section among entities classified as members of an affiliated group as
43 provided by federal law (U.S.C. Section 1504). For the purposes of this
44 subsection the term gross receipts does not include purchases of tele-
45 phone, telegraph or telecommunications using a prepaid telephone call-
46 ing card or pre-paid authorization number. As used in this subsection, a
47 pre-paid telephone calling card or pre-paid authorization number means
48 the right to exclusively make telephone calls, paid for in advance, with
49 the prepaid value measured in minutes or other time units, that enables
50 the origination of calls using an access number or authorization code or
51 both, whether manually or electronically dialed;
52 (c) the gross receipts from the sale or furnishing of gas, water, elec-
53 tricity and heat, which sale is not otherwise exempt from taxation under
54 the provisions of this act, and whether furnished by municipally or pri-
55 vately owned utilities;
56 (d) the gross receipts from the sale of meals or drinks furnished at
57 any private club, drinking establishment, catered event, restaurant, eating
58 house, dining car, hotel, drugstore or other place where meals or drinks
59 are regularly sold to the public;
60 (e) the gross receipts from the sale of admissions to any place pro-
61 viding amusement, entertainment or recreation services including admis-
62 sions to state, county, district and local fairs, but such tax shall not be
63 levied and collected upon the gross receipts received from sales of ad-
64 missions to any cultural and historical event which occurs triennially;
65 (f) the gross receipts from the operation of any coin-operated device
66 dispensing or providing tangible personal property, amusement or other
67 services except laundry services, whether automatic or manually operated;
68 (g) the gross receipts from the service of renting of rooms by hotels,
69 as defined by K.S.A. 36-501 and amendments thereto, or by accommo-
70 dation brokers, as defined by K.S.A. 12-1692, and amendments thereto,
71 except that such tax shall not apply to such renting of rooms by or on
72 behalf of the state or its employees;
73 (h) the gross receipts from the service of renting or leasing of tangible
74 personal property except such tax shall not apply to the renting or leasing
75 of machinery, equipment or other personal property owned by a city and
76 purchased from the proceeds of industrial revenue bonds issued prior to
77 July 1, 1973, in accordance with the provisions of K.S.A. 12-1740 through
78 12-1749, and amendments thereto, and any city or lessee renting or leas-
79 ing such machinery, equipment or other personal property purchased
80 with the proceeds of such bonds who shall have paid a tax under the
81 provisions of this section upon sales made prior to July 1, 1973, shall be
82 entitled to a refund from the sales tax refund fund of all taxes paid
83 thereon;
84 (i) the gross receipts from the rendering of dry cleaning, pressing,
85 dyeing and laundry services except laundry services rendered through a
86 coin-operated device whether automatic or manually operated;
87 (j) the gross receipts from the rendering of the services of washing
88 and washing and waxing of vehicles;
89 (k) the gross receipts from cable, community antennae and other sub-
90 scriber radio and television services;
91 (l) the gross receipts received from the sales of tangible personal
92 property to all contractors, subcontractors or repairmen of materials and
93 supplies for use by them in erecting structures for others, or building on,
94 or otherwise improving, altering, or repairing real or personal property
95 of others;
96 (m) the gross receipts received from fees and charges by public and
97 private clubs, drinking establishments, organizations and businesses for
98 participation in sports, games and other recreational activities, but such
99 tax shall not be levied and collected upon the gross receipts received from:
100 (1) Fees and charges by any political subdivision, by any organization
101 exempt from property taxation pursuant to paragraph Ninth of K.S.A. 79-
102 201, and amendments thereto, or by any youth recreation organization
103 exclusively providing services to persons 18 years of age or younger which
104 is exempt from federal income taxation pursuant to section 501(c)(3) of
105 the federal internal revenue code of 1986, for participation in sports,
106 games and other recreational activities; and (2) entry fees and charges for
107 participation in a special event or tournament sanctioned by a national
108 sporting association to which spectators are charged an admission which
109 is taxable pursuant to subsection (e);
110 (n) the gross receipts received from dues charged by public and pri-
111 vate clubs, drinking establishments, organizations and businesses, pay-
112 ment of which entitles a member to the use of facilities for recreation or
113 entertainment, but such tax shall not be levied and collected upon the
114 gross receipts received from: (1) Dues charged by any organization ex-
115 empt from property taxation pursuant to paragraphs Eighth and Ninth of
116 K.S.A. 79-201, and amendments thereto; and (2) sales of memberships
117 in a nonprofit organization which is exempt from federal income taxation
118 pursuant to section 501 (c)(3) of the federal internal revenue code of
119 1986, and whose purpose is to support the operation of a nonprofit zoo;
120 (o) the gross receipts received from the isolated or occasional sale of
121 motor vehicles or trailers but not including: (1) The transfer of motor
122 vehicles or trailers by a person to a corporation solely in exchange for
123 stock securities in such corporation; or (2) the transfer of motor vehicles
124 or trailers by one corporation to another when all of the assets of such
125 corporation are transferred to such other corporation; or (3) the sale of
126 motor vehicles or trailers which are subject to taxation pursuant to the
127 provisions of K.S.A. 79-5101 et seq., and amendments thereto, by an
128 immediate family member to another immediate family member. For the
129 purposes of clause (3), immediate family member means lineal ascendants
130 or descendants, and their spouses. In determining the base for computing
131 the tax on such isolated or occasional sale, the fair market value of any
132 motor vehicle or trailer traded in by the purchaser to the seller may be
133 deducted from the selling price;
134 (p) the gross receipts received for the service of installing or applying
135 tangible personal property which when installed or applied is not being
136 held for sale in the regular course of business, and whether or not such
137 tangible personal property when installed or applied remains tangible
138 personal property or becomes a part of real estate, except that no tax shall
139 be imposed upon the service of installing or applying tangible personal
140 property in connection with the original construction of a building or
141 facility, the original construction, reconstruction, restoration, remodeling,
142 renovation, repair or replacement of a residence or the construction, re-
143 construction, restoration, replacement or repair of a bridge or highway.
144 For the purposes of this subsection:
145 (1) "Original construction" shall mean the first or initial construction
146 of a new building or facility. The term "original construction" shall include
147 the addition of an entire room or floor to any existing building or facility,
148 the completion of any unfinished portion of any existing building or fa-
149 cility and the restoration, reconstruction or replacement of a building or
150 facility damaged or destroyed by fire, flood, tornado, lightning, explosion
151 or earthquake, but such term, except with regard to a residence, shall not
152 include replacement, remodeling, restoration, renovation or reconstruc-
153 tion under any other circumstances;
154 (2) "building" shall mean only those enclosures within which individ-
155 uals customarily are employed, or which are customarily used to house
156 machinery, equipment or other property, and including the land improve-
157 ments immediately surrounding such building;
158 (3) "facility" shall mean a mill, plant, refinery, oil or gas well, water
159 well, feedlot or any conveyance, transmission or distribution line of any
160 cooperative, nonprofit, membership corporation organized under or sub-
161 ject to the provisions of K.S.A. 17-4601 et seq., and amendments thereto,
162 or of any municipal or quasi-municipal corporation, including the land
163 improvements immediately surrounding such facility; and
164 (4) "residence" shall mean only those enclosures within which indi-
165 viduals customarily live;
166 (q) the gross receipts received for the service of repairing, servicing,
167 altering or maintaining tangible personal property, except computer soft-
168 ware described in subsection (s), which when such services are rendered
169 is not being held for sale in the regular course of business, and whether
170 or not any tangible personal property is transferred in connection there-
171 with. The tax imposed by this subsection shall be applicable to the services
172 of repairing, servicing, altering or maintaining an item of tangible personal
173 property which has been and is fastened to, connected with or built into
174 real property;
175 (r) the gross receipts from fees or charges made under service or
176 maintenance agreement contracts for services, charges for the providing
177 of which are taxable under the provisions of subsection (p) or (q);
178 (s) the gross receipts received from the sale of computer software,
179 and the sale of the services of modifying, altering, updating or maintaining
180 computer software. As used in this subsection, "computer software"
181 means information and directions loaded into a computer which dictate
182 different functions to be performed by the computer. Computer software
183 includes any canned or prewritten program which is held or existing for
184 general or repeated sale, even if the program was originally developed
185 for a single end user as custom computer software. The sale of computer
186 software or services does not include: (1) The initial sale of any custom
187 computer program which is originally developed for the exclusive use of
188 a single end user; or (2) those services rendered in the modification of
189 computer software when the modification is developed exclusively for a
190 single end user only to the extent of the modification and only to the
191 extent that the actual amount charged for the modification is separately
192 stated on invoices, statements and other billing documents provided to
193 the end user. The services of modification, alteration, updating and main-
194 tenance of computer software shall only include the modification, alter-
195 ation, updating and maintenance of computer software taxable under this
196 subsection whether or not the services are actually provided; and
197 (t) the gross receipts received for telephone answering services, in-
198 cluding mobile phone services, beeper services and other similar services;
199 and
200 (u) the gross receipts received from the sale of prepaid telephone
201 calling cards or pre-paid authorization numbers and the recharge of such
202 cards or numbers. A pre-paid telephone calling card or pre-paid author-
203 ization number means the right to exclusively make telephone calls, paid
204 for in advance, with the prepaid value measured in minutes or other time
205 units, that enables the origination of calls using an access number or
206 authorization code or both, whether manually or electronically dialed. If
207 the dale or recharge of such card or number does not take place at the
208 vendor's place of business, it shall be conclusively determined to take
209 place at the customer's shipping address; if there is no item shipped then
210 it shall be the customer's billing address.
211 Sec. 2. K.S.A. 1998 Supp. 79-3603 is hereby repealed.
212 Sec. 3. This act shall take effect and be in force from and after its
213 publication in the statute book.