Session of 2000
SENATE BILL No. 409
By Committee on Assessment and Taxation
1-12
9 AN ACT
concerning the incidence of and liability for certain excise
taxes;
10 amending K.S.A.
79-3301, 79-3303, 79-3304, 79-3310, 79-3311, 79-
11 3313, 79-3321,
79-3323, 79-3371, 79-3378, 79-3379 and 79-3401 and
12 K.S.A. 1999 Supp.
79-3316, 79-3408 and 79-3412 and repealing the
13 existing sections.
14
15 Be it enacted by the Legislature of the
State of Kansas:
16 Section
1. K.S.A. 79-3301 is hereby amended to read as follows:
79-
17 3301. As used in this act:
18 (a) "Carrier"
means one who transports cigarettes from a manufac-
19 turer to a wholesale dealer or from one
wholesale dealer to another.
20 (b) "Carton"
means the container used by the manufacturer of cig-
21 arettes in which no more than 10 packages
of cigarettes are placed prior
22 to shipment from such manufacturer.
23 (c) "Cigarette"
means any roll for smoking, made wholly or in part
24 of tobacco, irrespective of size or shape,
and irrespective of tobacco being
25 flavored, adulterated or mixed with any
other ingredient if the wrapper
26 is in greater part made of any material
except tobacco.
27 (d) "Consumer"
means the person purchasing or receiving cigarettes
28 or tobacco products for final use.
29 (e) "Dealer"
means any person who engages in the sale or manufac-
30 ture of cigarettes in the state of
Kansas, and who is required to be licensed
31 under the provisions of this
act.
32 (f) "Dealer
establishment" means any location or premises, other
33 than vending machine locations, at or from
which cigarettes are sold, and
34 where records are kept.
35 (g) "Director"
means the director of taxation.
36 (h) "Distributor"
means: (1) Any person engaged in the business of
37 selling tobacco products in this state who
brings, or causes to be brought,
38 into this state from without the state any
tobacco products for sale; (2)
39 any person who makes, manufactures,
fabricates or stores tobacco prod-
40 ucts in this state for sale in this state;
or (3) any person engaged in the
41 business of selling tobacco products
without this state who ships or trans-
42 ports tobacco products to any person in the
business of selling tobacco
43 products in this state.
2
1
(i) "Division" means the division of taxation.
2
(j) "License" means, in addition to the privilege of a
licensee to sell
3 cigarettes or tobacco products in the
state of Kansas, the written evidence
4 of such authority or privilege to so
operate as evidenced by any license
5 issued by the director of
taxation.
6
(k) "Licensee" means any person holding a current license
issued
7 pursuant to this act.
8
(l) "Manufacturer's salesperson" means a person employed by a
cig-
9 arette manufacturer who sells
cigarettes, manufactured by such employer
10 and procured from wholesale dealers.
11 (m) "Meter
imprints" means tax indicia applied by means of ink print-
12 ing machines.
13 (n) "Package"
means a container in which no more than 25 individual
14 cigarettes are wrapped and sealed by the
manufacturer of cigarettes prior
15 to shipment to a wholesale dealer.
16 (o) "Person"
means any individual, partnership, society, association,
17 joint-stock company, corporation, estate,
receiver, trustee, assignee, ref-
18 eree, Indian tribe or any other
person acting in a fiduciary or represen-
19 tative capacity whether appointed by a
court or otherwise and any com-
20 bination of individuals.
21 (p) "Received"
means the coming to rest of cigarettes for sale by any
22 dealer in the state of Kansas.
23 (q) "Retail
dealer" means a person, other than a vending machine
24 operator, in possession of cigarettes for
the purpose of sale to a consumer.
25 (r) "Sale" means
any transfer of title or possession or both, exchange,
26 barter, distribution or gift of cigarettes
or tobacco products, with or with-
27 out consideration.
28 (s) "Sample"
means cigarettes or tobacco products distributed to
29 members of the general public at no cost
for purposes of promoting the
30 product.
31 (t) "Stamps"
means tax indicia applied either by means of water ap-
32 plied gummed paper or heat process.
33 (u) "Tax indicia"
means visible evidence of tax payment in the form
34 of stamps or meter imprints.
35 (v) "Tobacco
products" means cigars, cheroots, stogies, periques;
36 granulated, plug cut, crimp cut, ready
rubbed and other smoking tobacco;
37 snuff, snuff flour; cavendish; plug and
twist tobacco; fine cut and other
38 chewing tobaccos; shorts; refuse scraps,
clippings, cuttings and sweepings
39 of tobacco, and other kinds and forms of
tobacco, prepared in such man-
40 ner as to be suitable for chewing or
smoking in a pipe or otherwise, or
41 both for chewing and smoking. Tobacco
products does not include
42 cigarettes.
43 (w) "Vending
machine" means any coin operated machine, contri-
3
1 vance or device, by means of which
merchandise may be sold.
2
(x) "Vending machine distributor" means any person who sells
ciga-
3 rette vending machines to a vending
machine operator operating vending
4 machines in the state of Kansas.
5
(y) "Vending machine operator" means any person who places
a
6 vending machine, owned, leased or
operated by such person, at locations
7 where cigarettes are sold from the
machine. The owner or lessee of the
8 premises upon which a vending machine
is placed shall not be considered
9 the operator of the machine, nor
shall the owner or lessee, or any em-
10 ployee or agent of the owner or lessee be
considered an authorized agent
11 of the vending machine operator, if the
owner or lessee does not own or
12 lease the machine and the owner's or
lessee's sole remuneration from the
13 machine is a flat rental fee or commission
based upon the number or
14 value of cigarettes sold from the machine,
or a combination of both.
15 (z) "Wholesale
dealer" means any person who sells cigarettes to other
16 wholesale dealers, retail dealers, vending
machine operators and manu-
17 facturer's salespersons for the purpose of
resale in the state of Kansas.
18 (aa) "Wholesale
sales price" means the original net invoice price for
19 which manufacturer sells a tobacco product
to a distributor, as shown by
20 the manufacturer's original invoice.
21
(bb) "Retailer" means a person engaged in the business of
selling cig-
22 arettes or tobacco products only to the
consumer and not for resale.
23 (cc) "State"
means, except as otherwise specifically provided by this
24 act, one of the 50 states of the United
States and the District of Columbia.
25 Sec.
2. K.S.A. 79-3303 is hereby amended to read as follows:
79-
26 3303. (a) Except as otherwise provided
by Kansas or federal law, each
27 person engaged in the business of selling
cigarettes in the state of Kansas
28 and each vending machine distributor shall
obtain a license as provided
29 by this act. A separate application,
license and fee is required for each
30 dealer establishment owned or operated by a
dealer. A vending machine
31 operator is required to obtain a vending
machine operator's master license
32 and, in addition, a separate permit for
each vending machine operated
33 by the operator. A vending machine operator
may submit one application
34 for the vending machine operator's master
license and all permits for
35 vending machines operated by the operator.
The license shall be dis-
36 played in the dealer establishment and the
vending machine permit shall
37 remain securely and visibly attached to the
vending machine and contain
38 such information as the director may
require. Any vending machine found
39 without such permit attached to the machine
shall be sealed by an agent
40 of the director and such seal shall be
removed only by an agent of the
41 director after payment of the permit fee
and the penalties provided by
42 this act.
43 (b) The
application for a vending machine operator's master license
4
1 and vending machine permits shall
list the brand name and serial number
2 of each machine and such other
information as required by the director.
3 Except in accordance with proper
judicial order or as otherwise provided
4 by law, it shall be unlawful for any
officer or employee of the division to
5 divulge or make known in any way the
location of any vending machine
6 to any person not an officer or
employee of the division, except that such
7 information may be divulged to any
law enforcement officer for use in
8 the officer's official duties. Any
officer or employee revealing any such
9 location in violation of this
provision, in addition to the penalties otherwise
10 provided in this act, shall be dismissed
from office.
11 (c) A vending
machine operator, in the course of business as a vend-
12 ing machine operator, may dispose of or
sell vending machines without
13 securing a license to sell vending
machines. The vending machine oper-
14 ator may move vending machines from one
location to another and, if a
15 vending machine becomes inoperative or is
disposed of, the permit for
16 such machine may be transferred to another
machine. A vending machine
17 operator, within 10 days, shall notify the
director of the brand name and
18 serial number of vending machines that
become inoperative or that the
19 operator disposes of, sells, acquires or
brings into service in this state as
20 additional machines.
21 (d) The key to
the lower or storage compartment of a vending ma-
22 chine shall remain only in the possession
of the vending machine operator
23 or the operator's authorized agent. All
services connected with the op-
24 eration of a vending machine shall be
performed by the vending machine
25 operator or the operator's authorized
agent. All vending machines shall
26 be subject to inspection by the director or
the director's authorized
27 agents. No permit shall be issued for a
vending machine unless it is con-
28 structed so that at least one package of
each vertical column of cigarettes
29 located therein is visible showing tax
indicia.
30 (e) All vending
machines operated on military installations shall have
31 a permit affixed to the machines and the
cigarettes shall show tax indicia
32 of the Kansas tax.
33 (f) On or before
the 10th day of each month, each vending machine
34 distributor shall report to the director,
on forms provided by the director,
35 all sales of cigarette vending machines by
the distributor to persons in
36 the state of Kansas during the preceding
month; the name and address
37 of the purchaser; and the brand name,
serial number and sale price of
38 the machines.
39 (g) Concurrently
with a change in ownership of a dealer establish-
40 ment the license applicable to the
establishment is void and shall be sur-
41 rendered to the director and shall not be
transferred. On removal of a
42 dealer establishment from one location to
another, the owner of the es-
43 tablishment shall notify the director and
surrender the owner's license.
5
1 The director shall issue a new
license for the unexpired term of the sur-
2 rendered license on payment of a fee
of $2, to be deposited in the state
3 treasury and credited to the state
general fund. If a dealer's license is lost,
4 stolen or destroyed, the director may
issue a new license on proof of loss,
5 theft or destruction, at a cost of
$2, to be deposited in the state treasury
6 and credited to the state general
fund.
7 Sec.
3. K.S.A. 79-3304 is hereby amended to read as follows:
79-
8 3304. (a) The license fee for each
biennium or portion thereof shall be
9 as follows:
10 (1) For retail
dealer's license, $25 for each dealer establishment. No
11 license fee shall be imposed upon any
Indian tribe making application for
12 a retail dealer's license for any retail
dealer establishment owned or op-
13 erated by any such tribe on its
reservation.
14 (2) For
retailer's license on railroad or sleeping cars, $50. Only one
15 retail license need be obtained by each
railroad or sleeping car company
16 to permit the sale of cigarettes on any or
all of its cars within the state.
17 (3) For show,
carnival or catering license, $50 for each concession.
18 (4) For resident
retail dealer's temporary license for a place of busi-
19 ness of a temporary nature, $2 for each
seven days or portion thereof.
20 (5) For wholesale
dealer's license, $50 for each dealer establishment.
21 No wholesale dealer's license shall be
issued until the person applying
22 therefor has filed with the director a bond
payable to the state of Kansas
23 in such an amount as shall be fixed by the
director, but in no event less
24 than $1,000, with a corporate surety
authorized to do business in the state
25 of Kansas, and approved by the director. If
a wholesale dealer is unable
26 to secure a corporate surety bond, the
director may issue a license to such
27 wholesale dealer, upon the wholesale dealer
furnishing a personal bond
28 meeting the approval of the director. Such
bond shall be conditioned on
29 the wholesale dealer's compliance with all
the provisions of this act during
30 the license period.
31 (6) For vending
machine distributor's license, $50.
32 (7) For
manufacturer's salesperson license, $20 for each salesperson.
33 The manufacturer's salesperson shall, with
respect to each sale made to
34 a retail dealer, make and deliver to the
retail dealer a true invoice wherein
35 such salesperson shall insert the name of
the wholesale dealer from whom
36 such salesperson secured such cigarettes,
together with such salesperson's
37 own name and the name of the retail dealer
purchasing the cigarettes.
38 (8) For vending
machine operator's license, no fee.
39 (9) For vending
machine permit, $25 for each permit.
40 (b) An
application for any license required under the provisions of
41 this act may be refused to: (1) A person
who is not of good character and
42 reputation in the community in which such
person resides; or (2) a person
43 who has been convicted of a felony or of
any crime involving moral tur-
6
1 pitude or of the violation of any law
of any state or the United States
2 pertaining to cigarettes or tobacco
products and who has not completed
3 the sentence, parole, probation or
assignment to a community correc-
4 tional services program imposed for
any such conviction within two years
5 immediately preceding the date of
making application for any of such
6 licenses.
7 Sec.
4. K.S.A. 79-3310 is hereby amended to read as follows:
79-
8 3310. There is imposed a tax
upon all cigarettes sold, distributed or given
9 away within the state of
Kansas. For the privilege of selling or dealing
in
10 cigarettes in this state by any person
engaged in business as a wholesale
11 dealer thereof, there is hereby levied
and there shall be collected and
12 remitted a tax upon all cigarettes sold,
distributed, given away, used or
13 possessed in the state by any person for
sale within the state of Kansas.
14 Such tax is intended to be imposed upon
only one sale of the same package
15 of cigarettes. It shall be presumed that
all cigarettes within the state are
16 subject to tax until the contrary is
established, and the burden of proof
17 that any cigarettes are not taxable
hereunder shall be upon the person in
18 possession thereof. It is intended that
the ultimate incidence of and lia-
19 bility for the tax shall be upon the
consumer, and that any wholesale dealer
20 who shall remit the tax to the director
shall collect the tax from the pur-
21 chaser or consumer. The rate of such
tax shall be $.24 on each 20 ciga-
22 rettes or fractional part thereof or $.30
on each 25 cigarettes, as the case
23 requires. Such tax shall be
collected and paid to the director as provided
24 in this act. Such tax
shall be paid only once and shall be paid
remitted by
25 the wholesale dealer first receiving the
cigarettes as herein provided. Ex-
26 cept as otherwise provided, the tax
shall be advanced and remitted by the
27 wholesale dealer. The wholesale dealer
shall be liable for the remittance
28 of the tax on cigarettes imposed by this
article and shall remit the tax to
29 the director as provided in this act.
The amount of taxes advanced and
30 remitted by the wholesale dealer as
herein provided shall be added to and
31 collected as part of the selling price
of the cigarettes.
32 The taxes imposed by
this act are hereby levied upon all sales of ciga-
33 rettes made to any department, institution
or agency of the state of Kan-
34 sas, and to the political subdivisions
thereof and their departments, insti-
35 tutions and agencies.
36 Sec.
5. K.S.A. 79-3311 is hereby amended to read as follows:
79-
37 3311. The director shall design and
designate indicia of tax payment to
38 be affixed to each package of cigarettes as
provided by this act. The di-
39 rector shall sell water applied stamps only
to licensed wholesale dealers
40 in the amounts of 1,000 or multiples
thereof. Stamps applied by the heat
41 process shall be sold only in amounts of
30,000 or multiples thereof,
42 except that such stamps which are suitable
for packages containing 25
43 cigarettes each shall be sold in amounts
prescribed by the director. Meter
7
1 imprints shall be sold only in
amounts of 10,000 or multiples thereof.
2 Water applied stamps in amounts of
10,000 or multiples thereof and
3 stamps applied by the heat process
and meter imprints shall be supplied
4 to wholesale dealers at a discount of
2.65% from the face value thereof,
5 and shall be deducted at the time of
purchase or from the remittance
6 therefor as hereinafter provided. Any
wholesale cigarette dealer who shall
7 file with the director a bond, of
acceptable form, payable to the state of
8 Kansas with a corporate surety
authorized to do business in Kansas, shall
9 be permitted to purchase stamps, and
remit therefor to the director
10 within 30 days after each such purchase, up
to a maximum outstanding
11 at any one time of 85% of the amount of the
bond. Failure on the part
12 of any wholesale dealer to remit as herein
specified shall be cause for
13 forfeiture of such dealer's bond. All
revenue received from the sale of
14 such stamps or meter imprints shall be
remitted to the state treasurer
15 daily. Upon receipt thereof, the state
treasurer shall deposit the entire
16 amount thereof in the state treasury. The
state treasurer shall first credit
17 such amount thereof as the director shall
order to the cigarette tax refund
18 fund and shall credit the remaining balance
to the state general fund. A
19 refund fund designated the cigarette tax
refund fund not to exceed
20 $10,000 at any time shall be set apart and
maintained by the director from
21 taxes collected under this act and held by
the state treasurer for prompt
22 payment of all refunds authorized by this
act. Such cigarette tax refund
23 fund shall be in such amount as the
director shall determine is necessary
24 to meet current refunding requirements
under this act.
25 The wholesale
cigarette dealer shall affix to each package of cigarettes
26 stamps or tax meter imprints required by
this act prior to the sale of
27 cigarettes to any person, by such dealer or
such dealer's agent or agents,
28 within the state of Kansas. The director is
empowered to authorize whole-
29 sale dealers to affix revenue tax meter
imprints upon original packages of
30 cigarettes and is charged with the duty of
regulating the use of tax meters
31 to secure payment of the proper taxes. No
wholesale dealer shall affix
32 revenue tax meter imprints to original
packages of cigarettes without first
33 having obtained permission from the
director to employ this method of
34 affixation. If the director approves the
wholesale dealer's application for
35 permission to affix revenue tax meter
imprints to original packages of
36 cigarettes, the director shall require such
dealer to file a suitable bond
37 payable to the state of Kansas executed by
a corporate surety authorized
38 to do business in Kansas. The director may,
to assure the proper collection
39 of taxes imposed by the act, revoke or
suspend the privilege of imprinting
40 tax meter imprints upon original packages
of cigarettes. All meters shall
41 be under the direct control of the
director, and all transfer assignments
42 or anything pertaining thereto must first
be authorized by the director.
43 All inks used in the stamping of cigarettes
must be of a special type
8
1 devised for use in connection with
the machine employed and approved
2 by the director. All repairs to the
meter are strictly prohibited except by
3 a duly authorized representative of
the director. Requests for service shall
4 be directed to the director. Meter
machine ink imprints on all packages
5 shall be clear and legible. If a
wholesale dealer continuously issues illeg-
6 ible cigarette tax meter imprints, it
shall be considered sufficient cause
7 for revocation of such dealer's
permit to use a cigarette tax meter.
8 A licensed
wholesale dealer may, for the exclusive purpose of sale
in
9 another state, transport cigarettes
not bearing Kansas indicia of tax pay-
10 ment through the state of Kansas provided
such cigarettes are contained
11 in sealed and original cartons. Land
within the boundaries of any federally
12 recognized Indian reservation within the
boundaries of the state of Kansas
13 is deemed to be within the state of
Kansas.
14 Sec.
6. K.S.A. 79-3313 is hereby amended to read as follows:
79-
15 3313. All cigarettes sold in this state
shall be in packages, and each of the
16 packages shall bear evidence of payment of
the tax thereon except that
17 any railroad or sleeping car company
licensed as a retailer is hereby au-
18 thorized to sell cigarettes upon its cars
without affixing stamps to the
19 packages of cigarettes provided that
monthly reports and payment of the
20 tax due is made directly to the director in
the manner and under the
21 terms provided for by the director. In
addition, manufacturers are hereby
22 authorized to distribute in the state,
through their authorized represen-
23 tatives or wholesale dealers, free sample
packages of cigarettes containing
24 less than 20 cigarettes without affixing
stamps to the packages provided
25 that monthly reports and payment of a tax
at the rates prescribed by law
26 are made directly to the director.
Except as otherwise provided by this
27 act, no wholesale dealer or
manufacturers' authorized representatives
28 shall sell or distribute cigarettes, except
free sample packages, to any
29 person in the state of Kansas not holding a
dealer's license as provided
30 in this act. Such packages of sample
cigarettes shall bear the word "sam-
31 ple" or "not for sale" and "state tax paid"
in letters easily read.
32 Whenever the director
shall have reason to believe that any manufac-
33 turer has violated the provisions of this
section or the conditions provided
34 by the director, the director shall conduct
a hearing thereon in accordance
35 with the provisions of the Kansas
administrative procedure act in the
36 office of the director at Topeka. If upon
the basis of such hearing it
37 appears to the satisfaction of the director
that such manufacturer has
38 violated any of the provisions of this
section or the conditions provided
39 by the director, the director is hereby
authorized to suspend or revoke
40 the authorization to the manufacturer for
such period as the director
41 determines is necessary but in no case for
more than one year.
42 Sec.
7. K.S.A. 1999 Supp. 79-3316 is hereby amended to read as
43 follows: 79-3316. (a) All purchases of
cigarettes by any dealer shall be
9
1 evidenced by an invoice, a duplicate
of which shall be furnished the party
2 receiving the cigarettes from any
dealer.
3
(b) Purchases of cigarettes by wholesale dealers shall be made
from
4 the manufacturers of cigarettes or
from other Kansas licensed wholesale
5 dealers. Purchases of cigarettes by
retail dealers or vending machine op-
6 erators shall be from wholesale
dealers licensed pursuant to this act.
7 (c) All
invoices issued by wholesale dealers shall be in duplicate and
8 a copy must accompany the consigned
cigarettes. Cigarettes sold by a
9 wholesale dealer to any other dealer
shall be evidenced by invoices bear-
10 ing the vendee's name and license number. A
wholesale dealer selling
11 cigarettes to a manufacturer's salesperson
shall at the time of delivery of
12 same make a true duplicate invoice
inserting therein the name of the
13 salesman together with the name of such
salesperson's employer.
14 (d) All records
pertaining to sales of cigarettes by dealers in the state
15 of Kansas shall be preserved for a period
of three years and shall be
16 available for inspection by the director or
the director's designee at the
17 dealer's place of business or, if the
dealer has more than one place of
18 business in the state, at a central
location of the dealer.
19 (e) Every
wholesale dealer shall report to the director on or before
20 the 10th day of each month, stating the
amount of cigarettes sold during
21 the preceding month and the amount of all
cigarettes returned to the
22 manufacturer. Any wholesale dealer who
refuses any shipment or part of
23 a shipment of unstamped cigarettes or has a
shortage in the shipment of
24 cigarettes consigned to such dealer shall
in the monthly report next fol-
25 lowing the refusal or shortage report to
the director the number of pack-
26 ages or cartons of cigarettes refused or
short and the name of the carrier
27 from whom the cigarettes were refused or
shortage occurred. Such report
28 shall be made on forms provided by the
director and shall contain such
29 other information as the director may
require.
30 (f) Exemption
from payment of cigarette tax on sale of cigarettes
31 made outside the for
shipment to another state by any wholesale dealer
32 shall be filed on forms provided by the
director. Land within the bound-
33 aries of any federally recognized Indian
reservation within the boundaries
34 of the state of Kansas is deemed to be
within the state of Kansas.
35 Sec.
8. K.S.A. 79-3321 is hereby amended to read as follows:
79-
36 3321. It shall be unlawful for any
person:
37 (a) To possess,
except as otherwise specifically provided by this act,
38 more than 200 cigarettes without the
required tax indicia being affixed as
39 herein provided.
40 (b) To mutilate
or attach to any individual package of cigarettes any
41 stamp that has in any manner been mutilated
or that has been heretofore
42 attached to a different individual package
of cigarettes or to have in pos-
43 session any stamps so mutilated.
10
1 (c) To
prevent the director or any officer or agent authorized by law,
2 to make a full inspection for the
purpose of this act, of any place of
3 business and all premises connected
thereto where cigarettes are or may
4 be manufactured, sold, distributed,
or given away.
5 (d) To use
any artful device or deceptive practice to conceal any vi-
6 olation of this act or to mislead the
director or officer or agent authorized
7 by law in the enforcement of this
act.
8 (e) Who is
a dealer to fail to produce on demand of the director or
9 any officer or agent authorized by
law any records or invoices required
10 to be kept by such person.
11 (f) Knowingly to
make, use, or present to the director or agent thereof
12 any falsified invoice or falsely state the
nature or quantity of the goods
13 therein invoiced.
14 (g) Who is a
dealer to fail or refuse to keep and preserve for the time
15 and in the manner required herein all the
records required by this act to
16 be kept and preserved.
17 (h) To wholesale
cigarettes to any person, other than a manufacturer's
18 salesperson, retail dealer or wholesaler
who is:
19 (1) Duly licensed
by the state where such manufacturer's salesperson,
20 retail dealer or wholesaler is located,
or
21 (2) exempt from
state licensing under this act or
applicable state or
22 federal laws or court decisions
including any such person operating as a
23 retail dealer upon land allotted to
or held in trust for an Indian tribe
24 recognized by the United States
bureau of Indian affairs.
25 (i) To have in
possession any evidence of tax indicia provided for
26 herein not purchased from the director.
27 (j) To fail or
refuse to permit the director or any officer or agent
28 authorized by law to inspect a carrier
transporting cigarettes.
29 (k) To vend small
cigars, or any products so wrapped as to be con-
30 fused with cigarettes, from a machine
vending cigarettes, nor shall a vend-
31 ing machine be so built to vend cigars or
products that may be confused
32 with cigarettes, be attached to a cigarette
vending machine.
33 (l) To sell,
furnish or distribute cigarettes or tobacco products to any
34 person under 18 years of age.
35 (m) Who is under
18 years of age to purchase or attempt to purchase
36 cigarettes or tobacco products.
37 (n) Who is under
18 years of age to possess or attempt to possess
38 cigarettes or tobacco products.
39 (o) To sell
cigarettes to a retailer retail dealer or
at retail that do not
40 bear Kansas tax indicia or upon which the
Kansas cigarette tax has not
41 been paid
remitted.
42 (p) To sell
cigarettes without having a license for such sale as provided
43 herein.
11
1 (q) To sell
a vending machine without having a vending machine dis-
2 tributor's license.
3 (r) Who is
a retail dealer to fail to post and maintain in a conspicuous
4 place in the dealer's establishment
the following notice: "By law, ciga-
5 rettes and tobacco products may be
sold only to persons 18 years of age
6 and older."
7 (s) To
distribute samples within 500 feet of any school when such
8 facility is being used primarily by
persons under 18 years of age unless
9 the sampling is: (1) In an area to
which persons under 18 years of age are
10 denied access; (2) in or at a retail
location where cigarettes and tobacco
11 products are the primary commodity offered
for sale at retail; or (3) at or
12 adjacent to an outdoor production, repair
or construction site or facility.
13 (t) To sell
cigarettes or tobacco products by means of a vending ma-
14 chine in any establishment, or portion of
an establishment, which is open
15 to minors, except that this subsection
shall not apply to:
16 (1) The
installation and use by the proprietor of the establishment,
17 or by the proprietor's agents or employees,
of vending machines behind
18 a counter, or in some place in such
establishment, or portion thereof, to
19 which minors are prohibited by law from
having access;
20 (2) the
installation and use of a vending machine in a commercial
21 building or industrial plant, or portions
thereof, where the public is not
22 customarily admitted and where machines are
intended for the sole use
23 of adult employees employed in the building
or plant; or
24 (3) a vending
machine which has a lock-out device which is inoper-
25 able in the continuous standby mode and
which requires manual activa-
26 tion by the person supervising the
operation of the machine each time
27 cigarettes or tobacco products are
purchased from the machine.
28 Sec.
9. K.S.A. 79-3323 is hereby amended to read as follows:
79-
29 3323. (a) The following are declared to be
common nuisances and
30 contraband:
31 (1) All packages
of cigarettes, in quantities of 20 packages or more,
32 not bearing indicia of tax
payment remittance as required in this act
and
33 all devices for vending cigarettes in which
unstamped packages are found;
34 (2) all
cigarettes or tobacco products in the possession of a minor;
35 and
36 (3) all property,
other than vehicles, used in the retail sale of unstam-
37 ped packages of cigarettes.
38 Cigarettes in vending
machines and exposed to view not showing in-
39 dicia of tax payment required by this act
to be visible from the outside of
40 the vending machine shall be presumed to be
unstamped.
41 (b) Any
cigarettes or property constituting a common nuisance and
42 contraband as provided by this section may
be seized by the director or
43 the director's authorized agent or any duly
constituted peace officer with
12
1 or without process or warrant and
shall be subject to forfeiture as pro-
2 vided in this act. The party making
the seizure shall deliver to the owner
3 of the property and to the person or
persons found in possession of the
4 property a receipt stating from whom
the property was seized, the place
5 of seizure and a description and the
brand of the property seized. A
6 duplicate of the receipt shall be
filed in the office of the director and shall
7 be open for public inspection.
8 Sec.
10. K.S.A. 79-3371 is hereby amended to read as follows:
79-
9 3371. A tax is hereby imposed
upon For the privilege of selling or dealing
10 in tobacco products in this state by any
person engaged in business as a
11 distributor thereof, there is hereby
levied and there shall be collected and
12 remitted a tax at the rate of
ten percent (10%) 10% of the wholesale
sales
13 price of such tobacco products. Such tax
shall be imposed at the time the
14 distributor (a) brings or causes to be
brought into this state from without
15 the state tobacco products for sale; (b)
makes, manufactures, or fabricates
16 tobacco products in this state for sale in
this state; or (c) ships or transports
17 tobacco products to retailers in this state
to be sold by those retailers.
18 Such tax is intended to be imposed upon
only one sale of the same unit
19 of tobacco products. It shall be
presumed that all tobacco products within
20 the state are subject to tax until the
contrary is established, and the burden
21 of proof that any tobacco products are
not taxable hereunder shall be
22 upon the person in possession thereof.
It is intended that the ultimate
23 incidence of and liability for the tax
shall be upon the consumer, and that
24 any distributor who shall remit the tax
to the director shall collect the tax
25 from the purchaser or consumer. Such tax
shall be paid only once and
26 shall be remitted by the distributor as
herein provided. Except as other-
27 wise expressly provided, the tax shall
be advanced and remitted by the
28 distributor. The distributor shall be
liable for the remittance of the tax on
29 tobacco products imposed by this article
and shall remit the tax to the
30 director as provided in this act. The
amount of taxes advanced and re-
31 mitted by the distributor as herein
provided shall be added to and col-
32 lected as part of the selling price of
the tobacco products.
33 Sec.
11. K.S.A. 79-3378 is hereby amended to read as follows:
79-
34 3378. On or before the
twentieth 20th day of each calendar month
every
35 distributor with a place of business in
this state shall file a return with
36 the director showing the quantity and
wholesale sales price of each to-
37 bacco product (1):
(a) Brought, or caused to be brought, into this state
38 for sale; and (2)
(b) made, manufactured, or fabricated in this state for
39 sale in this state during the preceding
calendar month. Every licensed
40 distributor outside this state shall in
like manner file a return showing the
41 quantity and wholesale sales price of each
tobacco product shipped or
42 transported to retailers in this state to
be sold by those retailers, during
43 the preceding calendar month. Returns shall
be made upon forms fur-
13
1 nished and prescribed by the
director. Each return shall be accompanied
2 by a remittance for the full tax
liability shown therein, less four percent
3 (4%) 4% of
such liability as compensation to reimburse the distributor
4 for his or her
expenses incurred in the administration of this act. As soon
5 as practicable after any return is
filed, the director shall examine the
6 return. If the director finds
that, in his or her judgment, the return is
7 incorrect and any amount of tax is
due from the distributor and unpaid
8 not remitted, he or
she the director shall notify the distributor of
the
9 deficiency. If a deficiency disclosed
by the director's examination cannot
10 be allocated by him to a
particular month or months, he or she the
director
11 may nevertheless notify the distributor
that a deficiency exists and state
12 the amount of tax due. Such notice shall be
given to the distributor by
13 registered or certified mail.
14 Sec.
12. K.S.A. 79-3379 is hereby amended to read as follows:
79-
15 3379. Where tobacco products, on which the
tax imposed by this act has
16 been reported and paid
remitted, or which have been reported for the
17 purpose of determining and imposing the tax
for the privilege of doing
18 business under the provisions of this act
and on which the tax has been
19 paid remitted, are
sold, shipped or transported by the distributor to re-
20 tailers, distributors or ultimate consumers
without the state, or are re-
21 turned to the manufacturer by the
distributor, or destroyed by the dis-
22 tributor, a refund or credit of such tax
shall be made to the distributor.
23 For the purpose of making such credit or
refund, or any combination
24 thereof, the director may issue a tax
credit memoranda or may prepare a
25 voucher showing the net amount of such
refund due and the director of
26 accounts and reports shall draw a warrant
upon the state treasurer for
27 the amount of any such refund certified by
the director.
28 Sec.
13. K.S.A. 79-3401 is hereby amended to read as follows:
79-
29 3401. This act, and amendments thereto,
shall be known and may be
30 cited as the "motor-fuel tax law," and as
so constituted is hereinafter
31 referred to as "this act." The following
words, terms and phrases, when
32 used in this act, shall have the meanings
ascribed to them in this section,
33 except in those instances clearly
indicating a different meaning:
34 (a) "Aviation
fuel" means motor fuels for use as fuel for aircraft;
35 (b) "agricultural
ethyl alcohol" means a motor-vehicle fuel compo-
36 nent with a purity of at least 99%,
exclusive of any added denaturants,
37 denatured in conformity with one of the
methods approved by the United
38 States department of the treasury, bureau
of alcohol, tobacco and fire-
39 arms, and distilled in the United States of
America from grain produced
40 in the United States of America;
41 (c) "bulk plant"
means a motor fuels storage facility, other than a
42 terminal, that is primarily used to
redistribute motor fuels;
43 (d) "dealer"
means any person engaged in the retail sale of motor-
14
1 vehicle fuels or special fuels;
2
(e) "director" means the director of taxation, a duly
authorized dep-
3 uty, agent or representative;
4
(f) "distributor" means any person, who:
5 (1) Imports
or causes to be imported from any other state or territory
6 of the United States motor-vehicle
fuels or special fuels for such person's
7 own use in the state of Kansas, or
for sale and delivery therein, after the
8 same shall have come to rest or
storage therein, whether or not in the
9 original package, receptacle or
container; or
10 (2) imports or
causes to be imported, from a foreign country, motor-
11 vehicle fuels or special fuels for such
person's own use in the state of
12 Kansas, or for sale and delivery therein,
after the same shall have come
13 to rest or storage, whether or not in the
original package, receptacle or
14 container;
15 (3) purchases or
receives motor-vehicle fuels or special fuels in the
16 original package, receptacle or container
in the state of Kansas for such
17 person's own use therein, or for sale and
delivery therein, from any person
18 who has imported the same from any other
state or territory of the United
19 States, or any other nation, in case such
motor-vehicle fuels or special
20 fuels have not, prior to such purchase or
receipt, come to rest or storage
21 in the state of Kansas; or
22 (4) received and,
in any manner, uses, sells or delivers motor-vehicle
23 fuels or special fuels in the state of
Kansas on which the tax provided for
24 in this act has not been previously
paid;
25 (g) "exporter"
means any person who exports or causes to be exported
26 motor vehicle fuels or special fuels from
Kansas to any other state or
27 territory of the United States or to a
foreign country, for such person's
28 own use or for sale or delivery therein,
whether or not in the original
29 package, receptacle or container;
30 (h) "importer"
means any person who imports or causes to be im-
31 ported motor-vehicle fuels or special fuels
from any other state or terri-
32 tory of the United States or from a foreign
country, for such person's own
33 use in the state of Kansas or for sale or
delivery therein, whether or not
34 in the original package, receptacle or
container;
35 (i) "liquid
fuels" or "motor fuels" means any inflammable liquid by
36 whatever name such liquid shall be known or
sold, which is used, or
37 practically or commercially usable, either
alone or when mixed or com-
38 bined in an internal-combustion engine for
the generation of power;
39
(j) "manufacturer" or "refiner" means any person who or which
pro-
40 duces, refines, prepares, blends, distills,
manufactures or compounds mo-
41 tor-vehicle fuels or special fuels in the
state of Kansas for such person's
42 own use therein, or for sale or delivery
therein. The term "manufacturer"
43 shall not include any person who or which
mechanically separates liquids
15
1 from natural gas at production
facilities or gathering system pipelines on
2 the lease. No person who produces,
refines, prepares, blends, distills,
3 manufactures, or compounds
motor-vehicle fuels or special fuels shall be
4 required to render a distributor's
(manufacturer's) report as to any par-
5 ticular lot or lots of motor-vehicle
fuels or special fuels until such motor-
6 vehicle fuels or special fuels have
been loaded at a refinery or other place
7 of production into tank cars, or
placed in any tank at such refinery or
8 other place of production from which
any withdrawals are made direct
9 into tanks, tank wagons or other
types of transportation equipment, con-
10 tainers or facilities;
11 (k) "motor
vehicle" means a motor vehicle as defined by K.S.A. 8-
12 126, and amendments thereto, and which is
required to be registered
13 pursuant to K.S.A. 8-126 et seq.,
and amendments thereto;
14
(l) "motor-vehicle fuels" means gasoline, casinghead gasoline,
natural
15 gasoline, drip gasoline, aviation gasoline,
gasohol, gasoline-oxygenate
16 blend and any other spark-ignition motor
fuel as defined by the 1995
17 United States department of commerce,
national institute of standards
18 and technology handbook 130 issued December
of 1994, and as may
19 subsequently be defined in rules and
regulations which the director may
20 adopt pursuant to K.S.A. 79-3419, and
amendments thereto;
21 (m) "oil
inspector" means the director of taxation, a duly authorized
22 deputy, agent or representative;
23 (n) "person"
means every natural person, Indian tribe, association,
24 partnership, limited partnership, limited
liability company or corporation.
25 When used in any statute, prescribing and
imposing a fine or imprison-
26 ment, or both, the term "person" as applied
to firms and associations
27 means the partners or members thereof and,
as applied to corporations,
28 the corporation and the officers
thereof;
29 (o) "public
highways" means and includes every way or place, of
30 whatever nature, generally open to the use
of the public as a matter of
31 right, for the purposes of vehicular travel
and notwithstanding that the
32 same shall have been temporarily closed for
the purpose of construction,
33 reconstruction or repair;
34 (p) "received"
means motor-vehicle fuel or special fuel produced,
35 refined, prepared, distilled, manufactured,
blended or compounded at
36 any refinery or other place, in the state
of Kansas by any person, or im-
37 ported into this state from any other
state, territory, or foreign country
38 by pipeline or connecting pipeline at a
pipeline terminal or pipeline tank
39 farm for storage, shall be deemed to be
"received" by such person thereat
40 when the same shall have been loaded at
such refinery, pipeline terminal,
41 pipeline tank farm or other place, into
tank cars, tank trucks or other
42 container, or placed in any tank from which
any withdrawals are made
43 direct into tank cars, tank trucks or other
types of transportation equip-
16
1 ment, containers or facilities;
2
(q) "retailer" means a person that engages in the business of
selling
3 or distributing motor fuels
only to the end user consumer, and not
for
4 resale;
5 (r) "school
bus" means every bus, as defined by K.S.A. 8-1406, and
6 amendments thereto, which is: (1)
Privately owned and contracted for,
7 leased or hired by a school district
or nonpublic school for the transpor-
8 tation of pupils, students or school
personnel to or from school or to or
9 from school-related functions or
activities; or (2) owned and operated by
10 a school district or nonpublic school which
is registered under the pro-
11 visions of K.S.A. 8-126 et seq., and
amendments thereto, used for the
12 transportation of pupils, students or
school personnel to or from school
13 or to or from school-related functions or
activities;
14 (s) "special
fuels" means all combustible liquids suitable for the gen-
15 eration of power for the propulsion of
motor vehicles including, but not
16 limited to, diesel fuel, alcohol and such
fuels not defined under the motor-
17 vehicle fuels definition, hereinafter
referred to as motor-vehicle fuel;
18 (t) "terminal"
means a fuel storage and distribution facility that is
19 supplied by motor vehicle, pipeline or
marine vessel, and from which
20 motor fuels may be removed at a rack.
"Terminal" does not include any
21 facility at which motor fuel blend stocks
and additives are used in the
22 manufacture of products other than motor
fuels and from which no motor
23 fuels are removed;
24 (u) "terminal
operator" means the person who by ownership or con-
25 tractual agreement is charged with the
responsibility for, or physical con-
26 trol over, and operation of a terminal;
27 (v) "transporter"
means a person who has been issued a liquid-fuels
28 carrier's license pursuant to K.S.A. 55-506
et seq., and amendments
29 thereto.;
30 (w) "consumer"
means any person purchasing items defined under
31 subsections (a), (b), (i), (l) or (s)
under this section, and amendments
32 thereto;
33 (x) "state"
means one of the 50 states of the United States and the
34 District of Columbia;
35
(y) "territory" means Puerto Rico, Guam, and the U.S. Virgin
Islands.
36 Sec.
14. K.S.A. 1999 Supp. 79-3408 is hereby amended to read as
37 follows: 79-3408. (a) A tax per gallon or
fraction thereof, at the rate com-
38 puted as prescribed in K.S.A. 79-34,141,
and amendments thereto, is
39 hereby imposed on the use, sale or delivery
of all motor vehicle fuels or
40 special fuels which are used, sold or
delivered in this state for any purpose
41 whatsoever.
42 (b) Every retail
pump for motor-vehicle fuels shall be conspicuously
43 labeled to show the content and percentage
of any ethyl alcohol or other
17
1 alcohol combined or alone in excess
of 1% by volume.
2 (c) Unless
otherwise specified in K.S.A. 79-3408c, and amendments
3 thereto, the incidence of
this tax is imposed on the distributor of the first
4 receipt of the motor fuel and
such taxes shall be paid but once for the
5 privilege of selling or dealing in
motor fuels in this state by any person
6 engaged in business as a
distributor, manufacturer or importer thereof,
7 there is hereby levied and there
shall be collected and remitted a tax upon
8 all motor-vehicle fuels or special
fuels sold, distributed, given away, used
9 or possessed in the state by any
person for sale within the state of Kansas.
10 Such tax is intended to be imposed upon
only one sale of the same gallon
11 of motor-vehicle fuels or special fuels.
It shall be presumed that all motor-
12 vehicle fuels or special fuels within
the state is subject to tax until the
13 contrary is established, and the burden
of proof that any motor-vehicle
14 fuels or special fuels are not taxable
hereunder shall be upon the person
15 in possession thereof. It is intended
that the ultimate incidence of and
16 liability for the tax shall be upon the
consumer, and that any distributor,
17 manufacturer or importer who shall remit
the tax to the director shall
18 collect the tax from the purchaser or
consumer. Such tax shall be paid
19 only once and shall be remitted by the
distributor, manufacturer or im-
20 porter first receiving the motor-vehicle
fuels or special fuels as herein
21 provided. Except as otherwise expressly
provided, the tax shall be ad-
22 vanced and remitted by the distributor,
manufacturer or importer. The
23 distributor, manufacturer or importer
shall be liable for the remittance of
24 the tax on motor-vehicle fuels or
special fuels imposed by this article and
25 shall remit the tax to the director as
provided in this act. The amount of
26 taxes advanced and remitted by the
distributor, manufacturer or importer
27 as herein provided shall be added to and
collected as part of the selling
28 price of the motor-vehicle fuels or
special fuels. Such tax shall be com-
29 puted on all motor-vehicle fuels or special
fuels received by each distrib-
30 utor, manufacturer or importer in this
state and paid in the manner pro-
31 vided for herein, except that an allowance
of 2.5% shall be made and
32 deducted by the distributor to cover all
ordinary losses which may have
33 resulted from physical loss while handling
such motor-vehicle fuels or
34 special fuels. No such allowance shall be
made on any motor-vehicle fuel
35 or special fuel exported from the state or
sold to the United States of
36 America or any of its agencies or
instrumentalities as are now or here-
37 inafter exempt by law from liability to
state taxation. No such allowance
38 shall be made for any motor-vehicle fuel or
special fuel sold or disposed
39 of to a consumer in tank car, transport or
pipeline lots.
40 (d) No tax is
hereby imposed upon or with respect to the following
41 transactions:
42 (1) The sale or
delivery of motor-vehicle fuel or special fuel for export
43 from the state of Kansas to any other state
or territory or to any foreign
18
1 country.
2 (2) The
sale or delivery of motor-vehicle fuel or special fuel to the
3 United States of America and such of
its agencies as are now or hereafter
4 exempt by law from liability to state
taxation.
5 (3) The
sale or delivery of motor-vehicle fuel or special fuel to a
6 contractor for use in performing work
for the United States or those
7 agencies of the United States above
mentioned, provided such contractor
8 has in effect with the United States
or any such agency a cost-plus-a-
9 fixed-fee contract covering the
work.
10 (4) The sale or
delivery of motor-vehicle fuel or special fuel which is
11 aviation fuel.
12 (5) The first
sale or delivery of motor-vehicle fuel or special fuel from
13 a refinery, pipeline terminal, pipeline
tank farm or other place to a duly
14 licensed distributor who in turn resells to
another duly licensed
15 distributor.
16 (6) The sale or
delivery of special fuel which is indelibly dyed in ac-
17 cordance with regulations prescribed
pursuant to 26 U.S.C. 4082 and
18 such special fuel is only used for
nonhighway purposes.
19 (e) Each
distributor, manufacturer, importer, exporter or retailer
20 shall make full reports and furnish such
further information as the direc-
21 tor may require with reference to all
transactions upon which no tax is to
22 be paid.
23 Sec.
15. K.S.A. 1999 Supp. 79-3412 is hereby amended to read as
24 follows: 79-3412. Whenever any person shall
be in default for more than
25 10 days in payment of any taxes, penalties
or interest accruing or accrued
26 under the provisions of this act, and no
seizure of property of such person
27 has been made under any other provisions of
this act, the director shall,
28 unless the director has good reason to the
contrary, issue a warrant under
29 the secretary's or the secretary's
designee's hand and official seal, directed
30 to the sheriff of any county of the state,
commanding the sheriff to levy
31 upon and sell the real and personal
property of the taxpayer person found
32 within the sheriff's county for the payment
of the amount thereof with
33 the added penalties, interest and cost of
executing the warrant and to
34 return the warrant to the secretary or the
secretary's designee and to pay
35 to the secretary or the secretary's
designee the money collected by virtue
36 of it not more than 60 days from the date
of the warrant. The sheriff,
37 within five days after the receipt of the
warrant, shall file with the clerk
38 of the district court of the county a copy
thereof, and thereupon the clerk
39 shall enter in the appearance docket the
name of the person specified in
40 the warrant, the amount of the tax or
portion of it, interest and penalties
41 for which the warrant is issued and the
date such copy is filed and note
42 the taxpayer's
person's name in the general index. No fee shall be
charged
43 for either entry. The amount of such
warrant so docketed shall thereupon
19
1 become a lien upon the title to and
interest in the real property of the
2 taxpayer
person against whom it is issued. The sheriff shall proceed
in
3 the same manner and with the same
effect as prescribed by law with
4 respect to executions issued against
property upon judgments of a court
5 of record and shall be entitled to
the same fees for services to be collected
6 in the same manner.
7 The court in
which the warrant is docketed shall have jurisdiction over
8 all subsequent proceedings as fully
as though a judgment had been ren-
9 dered in the court. At the discretion
of the secretary or the secretary's
10 designee, a warrant of like terms, force
and effect may be issued and
11 directed to any officer or employee of the
secretary, and in the execution
12 thereof, such officer or employee shall
have all the powers conferred by
13 law upon sheriffs, with respect to
executions issued against property upon
14 judgments of a court of record, and the
subsequent proceedings there-
15 under shall be the same as provided where
the warrant is issued directly
16 to the sheriff. The
taxpayer person shall have the right to
redeem the real
17 estate within a period of 18 months from
the date of such sale. If a warrant
18 is returned, unsatisfied in full, the
secretary or the secretary's designee
19 shall have the same remedies to enforce the
claim for taxes as if the state
20 of Kansas had recovered judgment against
the taxpayer person for the
21 amount of the tax. No law exempting any
goods and chattels, lands and
22 tenements from forced sale under execution
shall apply to a levy and sale
23 under any such warrant or upon any
execution issued upon any judgment
24 rendered in any action for motor fuel
taxes. The secretary or the secre-
25 tary's designee shall have the right at any
time after a warrant has been
26 returned unsatisfied or satisfied only in
part, to issue alias warrants until
27 the full amount of the tax is
collected.
28 Sec. 16. K.S.A. 79-3301,
79-3303, 79-3304, 79-3310, 79-3311, 79-
29 3313, 79-3321, 79-3323, 79-3371, 79-3378,
79-3379 and 79-3401 and
30 K.S.A. 1999 Supp. 79-3316, 79-3408 and
79-3412 are hereby repealed.
31 Sec. 17. This act shall
take effect and be in force from and after its
32 publication in the statute book.