Session of 2000
HOUSE BILL No. 2711
By Representative Jim Morrison
1-25
9 AN ACT
concerning retailers' sales tax; amending K.S.A. 1999 Supp. 79-
10 3602 and repealing the
existing section.
11
12 Be it enacted by the Legislature of the
State of Kansas:
13 Section
1. K.S.A. 1999 Supp. 79-3602 is hereby amended to read as
14 follows: 79-3602. (a) "Persons" means any
individual, firm, copartnership,
15 joint adventure, association, corporation,
estate or trust, receiver or trus-
16 tee, or any group or combination acting as
a unit, and the plural as well
17 as the singular number; and shall
specifically mean any city or other po-
18 litical subdivision of the state of Kansas
engaging in a business or provid-
19 ing a service specifically taxable under
the provisions of this act.
20 (b) "Director"
means the state director of taxation.
21 (c) "Sale" or
"sales" means the exchange of tangible personal prop-
22 erty, as well as the sale thereof for
money, and every transaction, condi-
23 tional or otherwise, for a consideration,
constituting a sale, including the
24 sale or furnishing of electrical energy,
gas, water, services or entertain-
25 ment taxable under the terms of this act
and including, except as provided
26 in the following provision, the sale of the
use of tangible personal property
27 by way of a lease, license to use or the
rental thereof regardless of the
28 method by which the title, possession or
right to use the tangible personal
29 property is transferred. The term "sale" or
"sales" shall not mean the sale
30 of the use of any tangible personal
property used as a dwelling by way of
31 a lease or rental thereof for a term of
more than 28 consecutive days.
32 (d) "Retailer"
means a person regularly engaged in the business of
33 selling tangible personal property at
retail or furnishing electrical energy,
34 gas, water, services or entertainment, and
selling only to the user or con-
35 sumer and not for resale.
36 (e) "Retail sale"
or "sale at retail" means all sales made within the
37 state of tangible personal property or
electrical energy, gas, water, services
38 or entertainment for use or consumption and
not for resale.
39 (f) "Tangible
personal property" means corporeal personal property.
40 Such term shall include: (1) Any computer
software program which is not
41 a custom computer software program, as
described by subsection (s) of
42 K.S.A. 79-3603, and amendments thereto; and
(2) any prepaid telephone
43 calling card or prepaid authorization
number, or recharge of such card
2
1 or number, as described by subsection
(b) of K.S.A. 79-3603, and amend-
2 ments thereto.
3
(g) "Selling price" means the total cost to the consumer
exclusive of
4 discounts allowed and credited, but
including freight and transportation
5 charges from retailer to
consumer.
6 (h) "Gross
receipts" means the total selling price or the amount re-
7 ceived as defined in this act, in
money, credits, property or other consid-
8 eration valued in money from sales at
retail within this state; and em-
9 braced within the provisions of this
act. The taxpayer, may take credit in
10 the report of gross receipts for: (1) An
amount equal to the selling price
11 of property returned by the purchaser when
the full sale price thereof,
12 including the tax collected, is refunded in
cash or by credit; and (2) an
13 amount equal to the allowance given for the
trade-in of property.
14 (i) "Taxpayer"
means any person obligated to account to the director
15 for taxes collected under the terms of this
act.
16 (j) "Isolated or
occasional sale" means the nonrecurring sale of tan-
17 gible personal property, or services
taxable hereunder by a person not
18 engaged at the time of such sale in the
business of selling such property
19 or services. Any religious organization
which makes a nonrecurring sale
20 of tangible personal property acquired for
the purpose of resale shall be
21 deemed to be not engaged at the time of
such sale in the business of
22 selling such property. Such term shall
include: (1) Any sale by a bank,
23 savings and loan institution, credit union
or any finance company licensed
24 under the provisions of the Kansas uniform
consumer credit code of tan-
25 gible personal property which has been
repossessed by any such entity;
26 and (2) any sale of
tangible personal property made by an auctioneer or
27 agent on behalf of not more than two
principals or households if such
28 sale is nonrecurring and any such principal
or household is not engaged
29 at the time of such sale in the business of
selling tangible personal prop-
30 erty; and (3) any sale of tangible
personal property made by an auctioneer
31 or agent on behalf of a nonprofit
organization which is exempt from fed-
32 eral income taxation pursuant to section
501(c)(3) of the federal internal
33 revenue code of 1986 if such sale occurs
not more than once within a
34 twelve-month period and the organization
is not engaged at the time of
35 the sale in the business of selling
tangible personal property.
36 (k) "Service"
means those services described in and taxed under the
37 provisions of K.S.A. 79-3603 and amendments
thereto.
38 (l) "Ingredient
or component part" means tangible personal property
39 which is necessary or essential to, and
which is actually used in and be-
40 comes an integral and material part of
tangible personal property or serv-
41 ices produced, manufactured or compounded
for sale by the producer,
42 manufacturer or compounder in its regular
course of business. The fol-
43 lowing items of tangible personal property
are hereby declared to be
3
1 ingredients or component parts, but
the listing of such property shall not
2 be deemed to be exclusive nor shall
such listing be construed to be a
3 restriction upon, or an indication
of, the type or types of property to be
4 included within the definition of
"ingredient or component part" as
5 herein set forth:
6
(1) Containers, labels and shipping cases used in the
distribution of
7 property produced, manufactured or
compounded for sale which are not
8 to be returned to the producer,
manufacturer or compounder for reuse.
9
(2) Containers, labels, shipping cases, paper bags, drinking
straws,
10 paper plates, paper cups, twine and
wrapping paper used in the distri-
11 bution and sale of property taxable under
the provisions of this act by
12 wholesalers and retailers and which is not
to be returned to such whole-
13 saler or retailer for reuse.
14 (3) Seeds and
seedlings for the production of plants and plant prod-
15 ucts produced for resale.
16 (4) Paper and ink
used in the publication of newspapers.
17 (5) Fertilizer
used in the production of plants and plant products
18 produced for resale.
19 (6) Feed for
animals, fowl and aquatic plants and animals, the primary
20 purpose of which is use in agriculture or
aquaculture, as defined in K.S.A.
21 47-1901, and amendments thereto, the
production of food for human
22 consumption, the production of animal,
dairy, poultry or aquatic plant
23 and animal products, fiber, fur, or the
production of offspring for use for
24 any such purpose or purposes.
25 (m) "Property
which is consumed" means tangible personal property
26 which is essential or necessary to and
which is used in the actual process
27 of and consumed, depleted or dissipated
within one year in (1) the pro-
28 duction, manufacture, processing, mining,
drilling, refining or compound-
29 ing of tangible personal property, (2) the
providing of services, (3) the
30 irrigation of crops, for sale in the
regular course of business, or (4) the
31 storage or processing of grain by a public
grain warehouse or other grain
32 storage facility, and which is not reusable
for such purpose. The following
33 is a listing of tangible personal property,
included by way of illustration
34 but not of limitation, which qualifies as
property which is consumed:
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;
40 (B) electricity,
gas and water; and
41 (C) petroleum
products, lubricants, chemicals, solvents, reagents and
42 catalysts.
43 (n) "Political
subdivision" means any municipality, agency or subdi-
4
1 vision of the state which is, or
shall hereafter be, authorized to levy taxes
2 upon tangible property within the
state or which certifies a levy to a
3 municipality, agency or subdivision
of the state which is, or shall hereafter
4 be, authorized to levy taxes upon
tangible property within the state. Such
5 term also shall include any public
building commission, housing, airport,
6 port, metropolitan transit or similar
authority established pursuant to law.
7
(o) "Municipal corporation" means any city incorporated under
the
8 laws of Kansas.
9
(p) "Quasi-municipal corporation" means any county,
township,
10 school district, drainage district or any
other governmental subdivision in
11 the state of Kansas having authority to
receive or hold moneys or funds.
12 (q) "Nonprofit
blood bank" means any nonprofit place, organization,
13 institution or establishment that is
operated wholly or in part for the
14 purpose of obtaining, storing, processing,
preparing for transfusing, fur-
15 nishing, donating or distributing human
blood or parts or fractions of
16 single blood units or products derived from
single blood units, whether
17 or not any remuneration is paid therefor,
or whether such procedures are
18 done for direct therapeutic use or for
storage for future use of such
19 products.
20 (r) "Contractor,
subcontractor or repairman" means a person who
21 agrees to furnish and install tangible
personal property or install tangible
22 personal property at a specified price. A
person who maintains an inven-
23 tory of tangible personal property which
enables such person to furnish
24 and install the tangible personal property
or install the tangible personal
25 property shall not be deemed a contractor,
subcontractor or repairman
26 but shall be deemed a retailer.
27 (s) "Educational
institution" means any nonprofit school, college and
28 university that offers education at a level
above the twelfth grade, and
29 conducts regular classes and courses of
study required for accreditation
30 by, or membership in, the North Central
Association of Colleges and
31 Schools, the state board of education, or
that otherwise qualify as an
32 "educational institution," as defined by
K.S.A. 74-50,103, and amend-
33 ments thereto. Such phrase shall include:
(1) A group of educational in-
34 stitutions that operates exclusively for an
educational purpose; (2) non-
35 profit endowment associations and
foundations organized and operated
36 exclusively to receive, hold, invest and
administer moneys and property
37 as a permanent fund for the support and
sole benefit of an educational
38 institution; (3) nonprofit trusts,
foundations and other entities organized
39 and operated principally to hold and own
receipts from intercollegiate
40 sporting events and to disburse such
receipts, as well as grants and gifts,
41 in the interest of collegiate and
intercollegiate athletic programs for the
42 support and sole benefit of an educational
institution; and (4) nonprofit
43 trusts, foundations and other entities
organized and operated for the pri-
5
1 mary purpose of encouraging,
fostering and conducting scholarly inves-
2 tigations and industrial and other
types of research for the support and
3 sole benefit of an educational
institution.
4 Sec. 2. K.S.A. 1999 Supp.
79-3602 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.