Session of 2000
HOUSE BILL No. 2999
By Committee on Taxation
2-21
9 AN ACT
relating to sales taxation; exempting purchases by
organizations
10 for prevention of
cruelty to animals; amending K.S.A. 1999 Supp. 79-
11 3606 and repealing the
existing section.
12
13 Be it enacted by the Legislature of the
State of Kansas:
14 Section
1. K.S.A. 1999 Supp. 79-3606 is hereby amended to read as
15 follows: 79-3606. The following shall be
exempt from the tax imposed by
16 this act:
17 (a) All sales of
motor-vehicle fuel or other articles upon which a sales
18 or excise tax has been paid, not subject to
refund, under the laws of this
19 state except cigarettes as defined by
K.S.A. 79-3301 and amendments
20 thereto, cereal malt beverages and malt
products as defined by K.S.A. 79-
21 3817 and amendments thereto, including
wort, liquid malt, malt syrup
22 and malt extract, which is not subject to
taxation under the provisions of
23 K.S.A. 79-41a02 and amendments thereto,
motor vehicles taxed pursuant
24 to K.S.A. 79-5117, and amendments thereto,
tires taxed pursuant to
25 K.S.A. 1999 Supp. 65-3424d, and amendments
thereto, and drycleaning
26 and laundry services taxed pursuant to
K.S.A. 1999 Supp. 65-34,150, and
27 amendments thereto;
28 (b) all sales of
tangible personal property or service, including the
29 renting and leasing of tangible personal
property, purchased directly by
30 the state of Kansas, a political
subdivision thereof, other than a school or
31 educational institution, or purchased by a
public or private nonprofit hos-
32 pital or public hospital authority or
nonprofit blood, tissue or organ bank
33 and used exclusively for state, political
subdivision, hospital or public hos-
34 pital authority or nonprofit blood, tissue
or organ bank purposes, except
35 when: (1) Such state, hospital or public
hospital authority is engaged or
36 proposes to engage in any business
specifically taxable under the provi-
37 sions of this act and such items of
tangible personal property or service
38 are used or proposed to be used in such
business, or (2) such political
39 subdivision is engaged or proposes to
engage in the business of furnishing
40 gas, water, electricity or heat to others
and such items of personal prop-
41 erty or service are used or proposed to be
used in such business;
42 (c) all sales of
tangible personal property or services, including the
43 renting and leasing of tangible personal
property, purchased directly by
2
1 a public or private elementary or
secondary school or public or private
2 nonprofit educational institution and
used primarily by such school or
3 institution for nonsectarian programs
and activities provided or sponsored
4 by such school or institution or in
the erection, repair or enlargement of
5 buildings to be used for such
purposes. The exemption herein provided
6 shall not apply to erection,
construction, repair, enlargement or equip-
7 ment of buildings used primarily for
human habitation;
8 (d) all
sales of tangible personal property or services purchased by a
9 contractor for the purpose of
constructing, equipping, reconstructing,
10 maintaining, repairing, enlarging,
furnishing or remodeling facilities for
11 any public or private nonprofit hospital or
public hospital authority, public
12 or private elementary or secondary school
or a public or private nonprofit
13 educational institution, which would be
exempt from taxation under the
14 provisions of this act if purchased
directly by such hospital or public hos-
15 pital authority, school or educational
institution; and all sales of tangible
16 personal property or services purchased by
a contractor for the purpose
17 of constructing, equipping, reconstructing,
maintaining, repairing, en-
18 larging, furnishing or remodeling
facilities for any political subdivision of
19 the state, the total cost of which is paid
from funds of such political
20 subdivision and which would be exempt from
taxation under the provi-
21 sions of this act if purchased directly by
such political subdivision. Nothing
22 in this subsection or in the provisions of
K.S.A. 12-3418 and amendments
23 thereto, shall be deemed to exempt the
purchase of any construction
24 machinery, equipment or tools used in the
constructing, equipping, re-
25 constructing, maintaining, repairing,
enlarging, furnishing or remodeling
26 facilities for any political subdivision of
the state. As used in this subsec-
27 tion, K.S.A. 12-3418 and 79-3640, and
amendments thereto, ``funds of a
28 political subdivision'' shall mean general
tax revenues, the proceeds of
29 any bonds and gifts or grants-in-aid. Gifts
shall not mean funds used for
30 the purpose of constructing, equipping,
reconstructing, repairing, enlarg-
31 ing, furnishing or remodeling facilities
which are to be leased to the do-
32 nor. When any political subdivision of the
state, public or private non-
33 profit hospital or public hospital
authority, public or private elementary
34 or secondary school or public or private
nonprofit educational institution
35 shall contract for the purpose of
constructing, equipping, reconstructing,
36 maintaining, repairing, enlarging,
furnishing or remodeling facilities, it
37 shall obtain from the state and furnish to
the contractor an exemption
38 certificate for the project involved, and
the contractor may purchase ma-
39 terials for incorporation in such project.
The contractor shall furnish the
40 number of such certificate to all suppliers
from whom such purchases are
41 made, and such suppliers shall execute
invoices covering the same bearing
42 the number of such certificate. Upon
completion of the project the con-
43 tractor shall furnish to the political
subdivision, hospital or public hospital
3
1 authority, school or educational
institution concerned a sworn statement,
2 on a form to be provided by the
director of taxation, that all purchases so
3 made were entitled to exemption under
this subsection. As an alternative
4 to the foregoing procedure, any such
contracting entity may apply to the
5 secretary of revenue for agent status
for the sole purpose of issuing and
6 furnishing project exemption
certificates to contractors pursuant to rules
7 and regulations adopted by the
secretary establishing conditions and stan-
8 dards for the granting and
maintaining of such status. All invoices shall
9 be held by the contractor for a
period of five years and shall be subject
10 to audit by the director of taxation. If
any materials purchased under such
11 a certificate are found not to have been
incorporated in the building or
12 other project or not to have been returned
for credit or the sales or
13 compensating tax otherwise imposed upon
such materials which will not
14 be so incorporated in the building or other
project reported and paid by
15 such contractor to the director of taxation
not later than the 20th day of
16 the month following the close of the month
in which it shall be deter-
17 mined that such materials will not be used
for the purpose for which such
18 certificate was issued, the political
subdivision, hospital or public hospital
19 authority, school or educational
institution concerned shall be liable for
20 tax on all materials purchased for the
project, and upon payment thereof
21 it may recover the same from the contractor
together with reasonable
22 attorney fees. Any contractor or any agent,
employee or subcontractor
23 thereof, who shall use or otherwise dispose
of any materials purchased
24 under such a certificate for any purpose
other than that for which such a
25 certificate is issued without the payment
of the sales or compensating tax
26 otherwise imposed upon such materials,
shall be guilty of a misdemeanor
27 and, upon conviction therefor, shall be
subject to the penalties provided
28 for in subsection (g) of K.S.A. 79-3615,
and amendments thereto;
29 (e) all sales of
tangible personal property or services purchased by a
30 contractor for the erection, repair or
enlargement of buildings or other
31 projects for the government of the United
States, its agencies or instru-
32 mentalities, which would be exempt from
taxation if purchased directly
33 by the government of the United States, its
agencies or instrumentalities.
34 When the government of the United States,
its agencies or instrumen-
35 talities shall contract for the erection,
repair, or enlargement of any build-
36 ing or other project, it shall obtain from
the state and furnish to the
37 contractor an exemption certificate for the
project involved, and the con-
38 tractor may purchase materials for
incorporation in such project. The
39 contractor shall furnish the number of such
certificates to all suppliers
40 from whom such purchases are made, and such
suppliers shall execute
41 invoices covering the same bearing the
number of such certificate. Upon
42 completion of the project the contractor
shall furnish to the government
43 of the United States, its agencies or
instrumentalities concerned a sworn
4
1 statement, on a form to be provided
by the director of taxation, that all
2 purchases so made were entitled to
exemption under this subsection. As
3 an alternative to the foregoing
procedure, any such contracting entity may
4 apply to the secretary of revenue for
agent status for the sole purpose of
5 issuing and furnishing project
exemption certificates to contractors pur-
6 suant to rules and regulations
adopted by the secretary establishing con-
7 ditions and standards for the
granting and maintaining of such status. All
8 invoices shall be held by the
contractor for a period of five years and shall
9 be subject to audit by the director
of taxation. Any contractor or any agent,
10 employee or subcontractor thereof, who
shall use or otherwise dispose of
11 any materials purchased under such a
certificate for any purpose other
12 than that for which such a certificate is
issued without the payment of
13 the sales or compensating tax otherwise
imposed upon such materials,
14 shall be guilty of a misdemeanor and, upon
conviction therefor, shall be
15 subject to the penalties provided for in
subsection (g) of K.S.A. 79-3615
16 and amendments thereto;
17 (f) tangible
personal property purchased by a railroad or public utility
18 for consumption or movement directly and
immediately in interstate
19 commerce;
20 (g) sales of
aircraft including remanufactured and modified aircraft,
21 sales of aircraft repair, modification and
replacement parts and sales of
22 services employed in the remanufacture,
modification and repair of air-
23 craft sold to persons using directly or
through an authorized agent such
24 aircraft and aircraft repair, modification
and replacement parts as certified
25 or licensed carriers of persons or property
in interstate or foreign com-
26 merce under authority of the laws of the
United States or any foreign
27 government or sold to any foreign
government or agency or instrumen-
28 tality of such foreign government and all
sales of aircraft, aircraft parts,
29 replacement parts and services employed in
the remanufacture, modifi-
30 cation and repair of aircraft for use
outside of the United States;
31 (h) all rentals
of nonsectarian textbooks by public or private elemen-
32 tary or secondary schools;
33 (i) the lease or
rental of all films, records, tapes, or any type of sound
34 or picture transcriptions used by motion
picture exhibitors;
35 (j) meals served
without charge or food used in the preparation of
36 such meals to employees of any restaurant,
eating house, dining car, hotel,
37 drugstore or other place where meals or
drinks are regularly sold to the
38 public if such employees' duties are
related to the furnishing or sale of
39 such meals or drinks;
40 (k) any motor
vehicle, semitrailer or pole trailer, as such terms are
41 defined by K.S.A. 8-126 and amendments
thereto, or aircraft sold and
42 delivered in this state to a bona fide
resident of another state, which motor
43 vehicle, semitrailer, pole trailer or
aircraft is not to be registered or based
5
1 in this state and which vehicle,
semitrailer, pole trailer or aircraft will not
2 remain in this state more than 10
days;
3 (l) all
isolated or occasional sales of tangible personal property,
serv-
4 ices, substances or things, except
isolated or occasional sale of motor
5 vehicles specifically taxed under the
provisions of subsection (o) of K.S.A.
6 79-3603 and amendments thereto;
7 (m) all
sales of tangible personal property which become an ingre-
8 dient or component part of tangible
personal property or services pro-
9 duced, manufactured or compounded for
ultimate sale at retail within or
10 without the state of Kansas; and any such
producer, manufacturer or
11 compounder may obtain from the director of
taxation and furnish to the
12 supplier an exemption certificate number
for tangible personal property
13 for use as an ingredient or component part
of the property or services
14 produced, manufactured or compounded;
15 (n) all sales of
tangible personal property which is consumed in the
16 production, manufacture, processing,
mining, drilling, refining or com-
17 pounding of tangible personal property, the
treating of by-products or
18 wastes derived from any such production
process, the providing of serv-
19 ices or the irrigation of crops for
ultimate sale at retail within or without
20 the state of Kansas; and any purchaser of
such property may obtain from
21 the director of taxation and furnish to the
supplier an exemption certifi-
22 cate number for tangible personal property
for consumption in such pro-
23 duction, manufacture, processing, mining,
drilling, refining, compound-
24 ing, treating, irrigation and in providing
such services;
25 (o) all sales of
animals, fowl and aquatic plants and animals, the pri-
26 mary purpose of which is use in agriculture
or aquaculture, as defined in
27 K.S.A. 47-1901, and amendments thereto, the
production of food for
28 human consumption, the production of
animal, dairy, poultry or aquatic
29 plant and animal products, fiber or fur, or
the production of offspring for
30 use for any such purpose or purposes;
31 (p) all sales of
drugs, as defined by K.S.A. 65-1626 and amendments
32 thereto, dispensed pursuant to a
prescription order, as defined by K.S.A.
33 65-1626 and amendments thereto, by a
licensed practitioner or a mid-
34 level practitioner as defined by K.S.A.
65-1626, and amendments thereto;
35 (q) all sales of
insulin dispensed by a person licensed by the state
36 board of pharmacy to a person for treatment
of diabetes at the direction
37 of a person licensed to practice medicine
by the board of healing arts;
38 (r) all sales of
prosthetic and orthopedic appliances prescribed in
39 writing by a person licensed to practice
the healing arts, dentistry or
40 optometry. For the purposes of this
subsection, the term prosthetic and
41 orthopedic appliances means any apparatus,
instrument, device, or equip-
42 ment used to replace or substitute for any
missing part of the body; used
43 to alleviate the malfunction of any part of
the body; or used to assist any
6
1 disabled person in leading a normal
life by facilitating such person's mo-
2 bility; such term shall include
accessories attached or to be attached to
3 motor vehicles, but such term shall
not include motor vehicles or personal
4 property which when installed becomes
a fixture to real property;
5 (s) all
sales of tangible personal property or services purchased di-
6 rectly by a groundwater management
district organized or operating un-
7 der the authority of K.S.A. 82a-1020
et seq. and amendments thereto,
8 which property or services are used
in the operation or maintenance of
9 the district;
10 (t) all sales of
farm machinery and equipment or aquaculture ma-
11 chinery and equipment, repair and
replacement parts therefor and serv-
12 ices performed in the repair and
maintenance of such machinery and
13 equipment. For the purposes of this
subsection the term ``farm machinery
14 and equipment or aquaculture machinery and
equipment'' shall include
15 machinery and equipment used in the
operation of Christmas tree farm-
16 ing but shall not include any passenger
vehicle, truck, truck tractor, trailer,
17 semitrailer or pole trailer, other than a
farm trailer, as such terms are
18 defined by K.S.A. 8-126 and amendments
thereto. Each purchaser of
19 farm machinery and equipment or aquaculture
machinery and equipment
20 exempted herein must certify in writing on
the copy of the invoice or
21 sales ticket to be retained by the seller
that the farm machinery and
22 equipment or aquaculture machinery and
equipment purchased will be
23 used only in farming, ranching or
aquaculture production. Farming or
24 ranching shall include the operation of a
feedlot and farm and ranch work
25 for hire and the operation of a
nursery;
26 (u) all leases or
rentals of tangible personal property used as a dwell-
27 ing if such tangible personal property is
leased or rented for a period of
28 more than 28 consecutive days;
29 (v) all sales of
food products to any contractor for use in preparing
30 meals for delivery to homebound elderly
persons over 60 years of age and
31 to homebound disabled persons or to be
served at a group-sitting at a
32 location outside of the home to otherwise
homebound elderly persons
33 over 60 years of age and to otherwise
homebound disabled persons, as
34 all or part of any food service project
funded in whole or in part by
35 government or as part of a private
nonprofit food service project available
36 to all such elderly or disabled persons
residing within an area of service
37 designated by the private nonprofit
organization, and all sales of food
38 products for use in preparing meals for
consumption by indigent or home-
39 less individuals whether or not such meals
are consumed at a place des-
40 ignated for such purpose;
41 (w) all sales of
natural gas, electricity, heat and water delivered
42 through mains, lines or pipes: (1) To
residential premises for noncom-
43 mercial use by the occupant of such
premises; (2) for agricultural use and
7
1 also, for such use, all sales of
propane gas; (3) for use in the severing of
2 oil; and (4) to any property which is
exempt from property taxation pur-
3 suant to K.S.A. 79-201b Second
through Sixth. As used in this paragraph,
4 ``severing'' shall have the meaning
ascribed thereto by subsection (k) of
5 K.S.A. 79-4216, and amendments
thereto;
6 (x) all
sales of propane gas, LP-gas, coal, wood and other fuel sources
7 for the production of heat or
lighting for noncommercial use of an oc-
8 cupant of residential premises;
9 (y) all
sales of materials and services used in the repairing,
servicing,
10 altering, maintaining, manufacturing,
remanufacturing, or modification of
11 railroad rolling stock for use in
interstate or foreign commerce under
12 authority of the laws of the United
States;
13 (z) all sales of
tangible personal property and services purchased di-
14 rectly by a port authority or by a
contractor therefor as provided by the
15 provisions of K.S.A. 12-3418 and amendments
thereto;
16 (aa) all sales of
materials and services applied to equipment which is
17 transported into the state from without the
state for repair, service, al-
18 teration, maintenance, remanufacture or
modification and which is sub-
19 sequently transported outside the state for
use in the transmission of
20 liquids or natural gas by means of pipeline
in interstate or foreign com-
21 merce under authority of the laws of the
United States;
22 (bb) all sales of
used mobile homes or manufactured homes. As used
23 in this subsection: (1) ``Mobile homes''
and ``manufactured homes'' shall
24 have the meanings ascribed thereto by
K.S.A. 58-4202 and amendments
25 thereto; and (2) ``sales of used mobile
homes or manufactured homes''
26 means sales other than the original retail
sale thereof;
27 (cc) all sales of
tangible personal property or services purchased for
28 the purpose of and in conjunction with
constructing, reconstructing, en-
29 larging or remodeling a business or retail
business which meets the
30 requirements established in K.S.A.
74-50,115 and amendments thereto,
31 and the sale and installation of machinery
and equipment purchased for
32 installation at any such business or retail
business. When a person shall
33 contract for the construction,
reconstruction, enlargement or remodeling
34 of any such business or retail business,
such person shall obtain from the
35 state and furnish to the contractor an
exemption certificate for the project
36 involved, and the contractor may purchase
materials, machinery and
37 equipment for incorporation in such
project. The contractor shall furnish
38 the number of such certificates to all
suppliers from whom such purchases
39 are made, and such suppliers shall execute
invoices covering the same
40 bearing the number of such certificate.
Upon completion of the project
41 the contractor shall furnish to the owner
of the business or retail business
42 a sworn statement, on a form to be provided
by the director of taxation,
43 that all purchases so made were entitled to
exemption under this subsec-
8
1 tion. All invoices shall be held by
the contractor for a period of five years
2 and shall be subject to audit by the
director of taxation. Any contractor
3 or any agent, employee or
subcontractor thereof, who shall use or oth-
4 erwise dispose of any materials,
machinery or equipment purchased un-
5 der such a certificate for any
purpose other than that for which such a
6 certificate is issued without the
payment of the sales or compensating tax
7 otherwise imposed thereon, shall be
guilty of a misdemeanor and, upon
8 conviction therefor, shall be subject
to the penalties provided for in sub-
9 section (g) of K.S.A. 79-3615 and
amendments thereto. As used in this
10 subsection, ``business'' and ``retail
business'' have the meanings respec-
11 tively ascribed thereto by K.S.A. 74-50,114
and amendments thereto;
12 (dd) all sales of
tangible personal property purchased with food
13 stamps issued by the United States
department of agriculture;
14 (ee) all sales of
lottery tickets and shares made as part of a lottery
15 operated by the state of Kansas;
16 (ff) on and after
July 1, 1988, all sales of new mobile homes or man-
17 ufactured homes to the extent of 40% of the
gross receipts, determined
18 without regard to any trade-in allowance,
received from such sale. As used
19 in this subsection, ``mobile homes'' and
``manufactured homes'' shall have
20 the meanings ascribed thereto by K.S.A.
58-4202 and amendments
21 thereto;
22 (gg) all sales of
tangible personal property purchased in accordance
23 with vouchers issued pursuant to the
federal special supplemental food
24 program for women, infants and
children;
25 (hh) all sales of
medical supplies and equipment purchased directly
26 by a nonprofit skilled nursing home or
nonprofit intermediate nursing
27 care home, as defined by K.S.A. 39-923, and
amendments thereto, for
28 the purpose of providing medical services
to residents thereof. This ex-
29 emption shall not apply to tangible
personal property customarily used
30 for human habitation purposes;
31 (ii) all sales of
tangible personal property purchased directly by a non-
32 profit organization for nonsectarian
comprehensive multidiscipline youth
33 development programs and activities
provided or sponsored by such or-
34 ganization, and all sales of tangible
personal property by or on behalf of
35 any such organization. This exemption shall
not apply to tangible personal
36 property customarily used for human
habitation purposes;
37 (jj) all sales of
tangible personal property or services, including the
38 renting and leasing of tangible personal
property, purchased directly on
39 behalf of a community-based mental
retardation facility or mental health
40 center organized pursuant to K.S.A. 19-4001
et seq., and amendments
41 thereto, and licensed in accordance with
the provisions of K.S.A. 75-
42 3307b and amendments thereto. This
exemption shall not apply to tan-
43 gible personal property customarily used
for human habitation purposes;
9
1 (kk) on and
after January 1, 1989, all sales of machinery and equip-
2 ment used directly and primarily for
the purposes of manufacturing, as-
3 sembling, processing, finishing,
storing, warehousing or distributing ar-
4 ticles of tangible personal property
in this state intended for resale by a
5 manufacturing or processing plant or
facility or a storage, warehousing or
6 distribution facility, and all sales
of repair and replacement parts and
7 accessories purchased for such
machinery and equipment:
8 (1) For
purposes of this subsection, machinery and equipment shall
9 be deemed to be used directly and
primarily in the manufacture, assem-
10 blage, processing, finishing, storing,
warehousing or distributing of tan-
11 gible personal property where such
machinery and equipment is used
12 during a manufacturing, assembling,
processing or finishing, storing,
13 warehousing or distributing operation:
14 (A) To effect a
direct and immediate physical change upon the tan-
15 gible personal property;
16 (B) to guide or
measure a direct and immediate physical change upon
17 such property where such function is an
integral and essential part of
18 tuning, verifying or aligning the component
parts of such property;
19 (C) to test or
measure such property where such function is an in-
20 tegral part of the production flow or
function;
21 (D) to transport,
convey or handle such property during the manu-
22 facturing, processing, storing, warehousing
or distribution operation at
23 the plant or facility; or
24 (E) to place such
property in the container, package or wrapping in
25 which such property is normally sold or
transported.
26 (2) For purposes
of this subsection ``machinery and equipment used
27 directly and primarily'' shall include, but
not be limited to:
28 (A) Mechanical
machines or components thereof contributing to a
29 manufacturing, assembling or finishing
process;
30 (B) molds and
dies that determine the physical characteristics of the
31 finished product or its packaging
material;
32 (C) testing
equipment to determine the quality of the finished
33 product;
34 (D) computers and
related peripheral equipment that directly control
35 or measure the manufacturing process or
which are utilized for engi-
36 neering of the finished product; and
37 (E) computers and
related peripheral equipment utilized for research
38 and development and product design.
39 (3) ``Machinery
and equipment used directly and primarily'' shall not
40 include:
41 (A) Hand
tools;
42 (B) machinery,
equipment and tools used in maintaining and repair-
43 ing any type of machinery and
equipment;
10
1
(C) transportation equipment not used in the manufacturing,
assem-
2 bling, processing, furnishing,
storing, warehousing or distributing process
3 at the plant or facility;
4 (D) office
machines and equipment including computers and related
5 peripheral equipment not directly and
primarily used in controlling or
6 measuring the manufacturing
process;
7
(E) furniture and buildings; and
8
(F) machinery and equipment used in administrative,
accounting,
9 sales or other such activities of the
business;
10 (4) for purposes
of this subsection, ``repair and replacement parts and
11 accessories'' means all parts and
accessories for exempt machinery and
12 equipment, including but not limited to
dies, jigs, molds, and patterns
13 which are attached to exempt machinery or
which are otherwise used in
14 production, short-lived replaceable parts
that can be readily detached
15 from exempt machinery or equipment, such as
belts, drill bits, grinding
16 wheels, cutting bars and saws, and other
replacement parts for production
17 equipment, including refractory brick and
other refractory items for kiln
18 equipment used in production
operations;
19 (ll) all sales of
educational materials purchased for distribution to the
20 public at no charge by a nonprofit
corporation organized for the purpose
21 of encouraging, fostering and conducting
programs for the improvement
22 of public health;
23 (mm) all sales of
seeds and tree seedlings; fertilizers, insecticides,
24 herbicides, germicides, pesticides and
fungicides; and services, purchased
25 and used for the purpose of producing
plants in order to prevent soil
26 erosion on land devoted to agricultural
use;
27 (nn) except as
otherwise provided in this act, all sales of services ren-
28 dered by an advertising agency or licensed
broadcast station or any mem-
29 ber, agent or employee thereof;
30 (oo) all sales of
tangible personal property purchased by a community
31 action group or agency for the exclusive
purpose of repairing or weath-
32 erizing housing occupied by low income
individuals;
33 (pp) all sales of
drill bits and explosives actually utilized in the explo-
34 ration and production of oil or gas;
35 (qq) all sales of
tangible personal property and services purchased by
36 a nonprofit museum or historical society or
any combination thereof, in-
37 cluding a nonprofit organization which is
organized for the purpose of
38 stimulating public interest in the
exploration of space by providing edu-
39 cational information, exhibits and
experiences, which is exempt from fed-
40 eral income taxation pursuant to section
501(c)(3) of the federal internal
41 revenue code of 1986;
42 (rr) all sales of
tangible personal property which will admit the pur-
43 chaser thereof to any annual event
sponsored by a nonprofit organization
11
1 which is exempt from federal income
taxation pursuant to section
2 501(c)(3) of the federal internal
revenue code of 1986;
3 (ss) all
sales of tangible personal property and services purchased by
4 a public broadcasting station
licensed by the federal communications
5 commission as a noncommercial
educational television or radio station;
6 (tt) all
sales of tangible personal property and services purchased by
7 or on behalf of a not-for-profit
corporation which is exempt from federal
8 income taxation pursuant to section
501(c)(3) of the federal internal rev-
9 enue code of 1986, for the sole
purpose of constructing a Kansas Korean
10 War memorial;
11 (uu) all sales of
tangible personal property and services purchased by
12 or on behalf of any rural volunteer
fire-fighting organization for use ex-
13 clusively in the performance of its duties
and functions;
14 (vv) all sales of
tangible personal property purchased by any of the
15 following organizations which are exempt
from federal income taxation
16 pursuant to section 501 (c)(3) of the
federal internal revenue code of
17 1986, for the following purposes, and all
sales of any such property by or
18 on behalf of any such organization for any
such purpose:
19 (1) The American
Heart Association, Kansas Affiliate, Inc. for the
20 purposes of providing education, training,
certification in emergency car-
21 diac care, research and other related
services to reduce disability and
22 death from cardiovascular diseases and
stroke;
23 (2) the Kansas
Alliance for the Mentally Ill, Inc. for the purpose of
24 advocacy for persons with mental illness
and to education, research and
25 support for their families;
26 (3) the Kansas
Mental Illness Awareness Council for the purposes of
27 advocacy for persons who are mentally ill
and to education, research and
28 support for them and their families;
29 (4) the American
Diabetes Association Kansas Affiliate, Inc. for the
30 purpose of eliminating diabetes through
medical research, public edu-
31 cation focusing on disease prevention and
education, patient education
32 including information on coping with
diabetes, and professional education
33 and training;
34 (5) the American
Lung Association of Kansas, Inc. for the purpose of
35 eliminating all lung diseases through
medical research, public education
36 including information on coping with lung
diseases, professional educa-
37 tion and training related to lung disease
and other related services to
38 reduce the incidence of disability and
death due to lung disease;
39 (6) the Kansas
chapters of the Alzheimer's Disease and Related Dis-
40 orders Association, Inc. for the purpose of
providing assistance and sup-
41 port to persons in Kansas with Alzheimer's
disease, and their families and
42 caregivers; and
43 (ww) all sales of
tangible personal property purchased by the Habitat
12
1 for Humanity for the exclusive use of
being incorporated within a housing
2 project constructed by such
organization.
3 (xx) all
sales of tangible personal property and services purchased by
4 a nonprofit zoo which is exempt from
federal income taxation pursuant
5 to section 501(c)(3) of the federal
internal revenue code of 1986, or on
6 behalf of such zoo by an entity
itself exempt from federal income taxation
7 pursuant to section 501(c)(3) of the
federal internal revenue code of 1986
8 contracted with to operate such zoo
and all sales of tangible personal
9 property or services purchased by a
contractor for the purpose of con-
10 structing, equipping, reconstructing,
maintaining, repairing, enlarging,
11 furnishing or remodeling facilities for any
nonprofit zoo which would be
12 exempt from taxation under the provisions
of this section if purchased
13 directly by such nonprofit zoo or the
entity operating such zoo. Nothing
14 in this subsection shall be deemed to
exempt the purchase of any con-
15 struction machinery, equipment or tools
used in the constructing, equip-
16 ping, reconstructing, maintaining,
repairing, enlarging, furnishing or re-
17 modeling facilities for any nonprofit zoo.
When any nonprofit zoo shall
18 contract for the purpose of constructing,
equipping, reconstructing, main-
19 taining, repairing, enlarging, furnishing
or remodeling facilities, it shall
20 obtain from the state and furnish to the
contractor an exemption certifi-
21 cate for the project involved, and the
contractor may purchase materials
22 for incorporation in such project. The
contractor shall furnish the number
23 of such certificate to all suppliers from
whom such purchases are made,
24 and such suppliers shall execute invoices
covering the same bearing the
25 number of such certificate. Upon completion
of the project the contractor
26 shall furnish to the nonprofit zoo
concerned a sworn statement, on a form
27 to be provided by the director of taxation,
that all purchases so made were
28 entitled to exemption under this
subsection. All invoices shall be held by
29 the contractor for a period of five years
and shall be subject to audit by
30 the director of taxation. If any materials
purchased under such a certifi-
31 cate are found not to have been
incorporated in the building or other
32 project or not to have been returned for
credit or the sales or compen-
33 sating tax otherwise imposed upon such
materials which will not be so
34 incorporated in the building or other
project reported and paid by such
35 contractor to the director of taxation not
later than the 20th day of the
36 month following the close of the month in
which it shall be determined
37 that such materials will not be used for
the purpose for which such cer-
38 tificate was issued, the nonprofit zoo
concerned shall be liable for tax on
39 all materials purchased for the project,
and upon payment thereof it may
40 recover the same from the contractor
together with reasonable attorney
41 fees. Any contractor or any agent, employee
or subcontractor thereof,
42 who shall use or otherwise dispose of any
materials purchased under such
43 a certificate for any purpose other than
that for which such a certificate
13
1 is issued without the payment of the
sales or compensating tax otherwise
2 imposed upon such materials, shall be
guilty of a misdemeanor and, upon
3 conviction therefor, shall be subject
to the penalties provided for in sub-
4 section (g) of K.S.A. 79-3615, and
amendments thereto;
5 (yy) all
sales of tangible personal property and services purchased by
6 a parent-teacher association or
organization, and all sales of tangible per-
7 sonal property by or on behalf of
such association or organization;
8 (zz) all
sales of machinery and equipment purchased by over-the-air,
9 free access radio or television
station which is used directly and primarily
10 for the purpose of producing a broadcast
signal or is such that the failure
11 of the machinery or equipment to operate
would cause broadcasting to
12 cease. For purposes of this subsection,
machinery and equipment shall
13 include, but not be limited to, that
required by rules and regulations of
14 the federal communications commission, and
all sales of electricity which
15 are essential or necessary for the purpose
of producing a broadcast signal
16 or is such that the failure of the
electricity would cause broadcasting to
17 cease;
18 (aaa) all sales
of tangible personal property and services purchased
19 by a religious organization which is exempt
from federal income taxation
20 pursuant to section 501(c)(3) of the
federal internal revenue code, and
21 used exclusively for religious purposes,
and all sales of tangible personal
22 property or services purchased by a
contractor for the purpose of con-
23 structing, equipping, reconstructing,
maintaining, repairing, enlarging,
24 furnishing or remodeling facilities for any
such organization which would
25 be exempt from taxation under the
provisions of this section if purchased
26 directly by such organization. Nothing in
this subsection shall be deemed
27 to exempt the purchase of any construction
machinery, equipment or
28 tools used in the constructing, equipping,
reconstructing, maintaining,
29 repairing, enlarging, furnishing or
remodeling facilities for any such or-
30 ganization. When any such organization
shall contract for the purpose of
31 constructing, equipping, reconstructing,
maintaining, repairing, enlarg-
32 ing, furnishing or remodeling facilities,
it shall obtain from the state and
33 furnish to the contractor an exemption
certificate for the project involved,
34 and the contractor may purchase materials
for incorporation in such pro-
35 ject. The contractor shall furnish the
number of such certificate to all
36 suppliers from whom such purchases are
made, and such suppliers shall
37 execute invoices covering the same bearing
the number of such certifi-
38 cate. Upon completion of the project the
contractor shall furnish to such
39 organization concerned a sworn statement,
on a form to be provided by
40 the director of taxation, that all
purchases so made were entitled to ex-
41 emption under this subsection. All invoices
shall be held by the contractor
42 for a period of five years and shall be
subject to audit by the director of
43 taxation. If any materials purchased under
such a certificate are found
14
1 not to have been incorporated in the
building or other project or not to
2 have been returned for credit or the
sales or compensating tax otherwise
3 imposed upon such materials which
will not be so incorporated in the
4 building or other project reported
and paid by such contractor to the
5 director of taxation not later than
the 20th day of the month following
6 the close of the month in which it
shall be determined that such materials
7 will not be used for the purpose for
which such certificate was issued,
8 such organization concerned shall be
liable for tax on all materials pur-
9 chased for the project, and upon
payment thereof it may recover the same
10 from the contractor together with
reasonable attorney fees. Any contrac-
11 tor or any agent, employee or subcontractor
thereof, who shall use or
12 otherwise dispose of any materials
purchased under such a certificate for
13 any purpose other than that for which such
a certificate is issued without
14 the payment of the sales or compensating
tax otherwise imposed upon
15 such materials, shall be guilty of a
misdemeanor and, upon conviction
16 therefor, shall be subject to the penalties
provided for in subsection (g)
17 of K.S.A. 79-3615, and amendments thereto.
Sales tax paid on and after
18 July 1, 1998, but prior to the effective
date of this act upon the gross
19 receipts received from any sale exempted by
the amendatory provisions
20 of this subsection shall be refunded. Each
claim for a sales tax refund
21 shall be verified and submitted to the
director of taxation upon forms
22 furnished by the director and shall be
accompanied by any additional
23 documentation required by the director. The
director shall review each
24 claim and shall refund that amount of sales
tax paid as determined under
25 the provisions of this subsection. All
refunds shall be paid from the sales
26 tax refund fund upon warrants of the
director of accounts and reports
27 pursuant to vouchers approved by the
director or the director's designee;
28 (bbb) all sales
of food for human consumption by an organization
29 which is exempt from federal income
taxation pursuant to section 501
30 (c)(3) of the federal internal revenue code
of 1986, pursuant to a food
31 distribution program which offers such food
at a price below cost in
32 exchange for the performance of community
service by the purchaser
33 thereof;
34 (ccc) on and
after July 1, 1999, all sales of tangible personal property
35 and services purchased by a primary care
clinic or health center the pri-
36 mary purpose of which is to provide
services to medically underserved
37 individuals and families, and which is
exempt from federal income taxa-
38 tion pursuant to section 501 (c)(3) of the
federal internal revenue code,
39 and all sales of tangible personal property
or services purchased by a
40 contractor for the purpose of constructing,
equipping, reconstructing,
41 maintaining, repairing, enlarging,
furnishing or remodeling facilities for
42 any such clinic or center which would be
exempt from taxation under the
43 provisions of this section if purchased
directly by such clinic or center.
15
1 Nothing in this subsection shall be
deemed to exempt the purchase of
2 any construction machinery, equipment
or tools used in the constructing,
3 equipping, reconstructing,
maintaining, repairing, enlarging, furnishing
4 or remodeling facilities for any such
clinic or center. When any such clinic
5 or center shall contract for the
purpose of constructing, equipping, re-
6 constructing, maintaining, repairing,
enlarging, furnishing or remodeling
7 facilities, it shall obtain from the
state and furnish to the contractor an
8 exemption certificate for the project
involved, and the contractor may
9 purchase materials for incorporation
in such project. The contractor shall
10 furnish the number of such certificate to
all suppliers from whom such
11 purchases are made, and such suppliers
shall execute invoices covering
12 the same bearing the number of such
certificate. Upon completion of the
13 project the contractor shall furnish to
such clinic or center concerned a
14 sworn statement, on a form to be provided
by the director of taxation,
15 that all purchases so made were entitled to
exemption under this subsec-
16 tion. All invoices shall be held by the
contractor for a period of five years
17 and shall be subject to audit by the
director of taxation. If any materials
18 purchased under such a certificate are
found not to have been incorpo-
19 rated in the building or other project or
not to have been returned for
20 credit or the sales or compensating tax
otherwise imposed upon such
21 materials which will not be so incorporated
in the building or other pro-
22 ject reported and paid by such contractor
to the director of taxation not
23 later than the 20th day of the month
following the close of the month in
24 which it shall be determined that such
materials will not be used for the
25 purpose for which such certificate was
issued, such clinic or center con-
26 cerned shall be liable for tax on all
materials purchased for the project,
27 and upon payment thereof it may recover the
same from the contractor
28 together with reasonable attorney fees. Any
contractor or any agent, em-
29 ployee or subcontractor thereof, who shall
use or otherwise dispose of
30 any materials purchased under such a
certificate for any purpose other
31 than that for which such a certificate is
issued without the payment of
32 the sales or compensating tax otherwise
imposed upon such materials,
33 shall be guilty of a misdemeanor and, upon
conviction therefor, shall be
34 subject to the penalties provided for in
subsection (g) of K.S.A. 79-3615,
35 and amendments thereto;
36 (ddd) on and
after January 1, 1999, and before January 1, 2000, all
37 sales of materials and services purchased
by any class II or III railroad as
38 classified by the federal surface
transportation board for the construction,
39 renovation, repair or replacement of class
II or III railroad track and
40 facilities used directly in interstate
commerce. In the event any such track
41 or facility for which materials and
services were purchased sales tax ex-
42 empt is not operational for five years
succeeding the allowance of such
43 exemption, the total amount of sales tax
which would have been payable
16
1 except for the operation of this
subsection shall be recouped in accord-
2 ance with rules and regulations
adopted for such purpose by the secretary
3 of revenue; and
4 (eee) on
and after January 1, 1999, and before January 1, 2000, all
5 sales of materials and services
purchased for the original construction,
6 reconstruction, repair or replacement
of grain storage facilities, including
7 railroad sidings providing access
thereto.; and
8
(fff) all sales of tangible personal property and services
purchased by
9 an organization the primary
purpose of which is to prevent cruelty to
10 animals, and which is exempt from
federal income taxation pursuant to
11 section 501 (c)(3) of the federal
internal revenue code, and all sales of
12 tangible personal property or services
purchased by a contractor for the
13 purpose of constructing, equipping,
reconstructing, maintaining, repair-
14 ing, enlarging, furnishing or remodeling
facilities for any such organiza-
15 tion which would be exempt from taxation
under the provisions of this
16 section if purchased directly by such
organization. Nothing in this sub-
17 section shall be deemed to exempt the
purchase of any construction ma-
18 chinery, equipment or tools used in the
constructing, equipping, recon-
19 structing, maintaining, repairing,
enlarging, furnishing or remodeling
20 facilities for any such organization.
When any such organization shall
21 contract for the purpose of
constructing, equipping, reconstructing, main-
22 taining, repairing, enlarging,
furnishing or remodeling facilities, it shall
23 obtain from the state and furnish to the
contractor an exemption certifi-
24 cate for the project involved, and the
contractor may purchase materials
25 for incorporation in such project. The
contractor shall furnish the number
26 of such certificate to all suppliers
from whom such purchases are made,
27 and such suppliers shall execute
invoices covering the same bearing the
28 number of such certificate. Upon
completion of the project the contractor
29 shall furnish to such organization
concerned a sworn statement, on a form
30 to be provided by the director of
taxation, that all purchases so made were
31 entitled to exemption under this
subsection. All invoices shall be held by
32 the contractor for a period of five
years and shall be subject to audit by
33 the director of taxation. If any
materials purchased under such a certifi-
34 cate are found not to have been
incorporated in the building or other
35 project or not to have been returned for
credit or the sales or compensating
36 tax otherwise imposed upon such
materials which will not be so incor-
37 porated in the building or other project
reported and paid by such con-
38 tractor to the director of taxation not
later than the 20th day of the month
39 following the close of the month in
which it shall be determined that such
40 materials will not be used for the
purpose for which such certificate was
41 issued, such organization concerned
shall be liable for tax on all materials
42 purchased for the project, and upon
payment thereof it may recover the
43 same from the contractor together with
reasonable attorney fees. Any
17
1 contractor or any agent, employee
or subcontractor thereof, who shall use
2 or otherwise dispose of any
materials purchased under such a certificate
3 for any purpose other than that
for which such a certificate is issued
4 without the payment of the sales
or compensating tax otherwise imposed
5 upon such materials, shall be
guilty of a misdemeanor and, upon convic-
6 tion therefor, shall be subject to
the penalties provided for in subsection
7 (g) of K.S.A. 79-3615, and
amendments thereto.
8 Sec. 2. K.S.A. 1999 Supp.
79-3606 is hereby repealed.
9 Sec. 3. This act
shall take effect and be in force from and after its
10 publication in the statute book.