HB 2287--
Session of 1997
By Representatives Shallenburger, Burroughs, Dahl, Findley, Grant, Hayzlett, Henry, P. Long, McCreary, Morrison, Ruff, Shore, Spangler and Vickrey

11 AN ACT relating to sales taxation; exempting sales of car washing services 12 rendered through coin-operated devices; amending K.S.A. 1996 Supp. 13 79-3603 and repealing the existing section. 14 15 Be it enacted by the Legislature of the State of Kansas: 16 Section 1. K.S.A. 1996 Supp. 79-3603 is hereby amended to read as 17 follows: 79-3603. For the privilege of engaging in the business of selling 18 tangible personal property at retail in this state or rendering or furnishing 19 any of the services taxable under this act, there is hereby levied and there 20 shall be collected and paid a tax at the rate of 4.9%: 21 (a) The gross receipts received from the sale of tangible personal 22 property at retail within this state; 23 (b) (1) the gross receipts from intrastate telephone or telegraph serv- 24 ices and (2) the gross receipts received from the sale of interstate tele- 25 phone or telegraph services, which (A) originate within this state and 26 terminate outside the state and are billed to a customer's telephone num- 27 ber or account in this state; or (B) originate outside this state and ter- 28 minate within this state and are billed to a customer's telephone number 29 or account in this state except that the sale of interstate telephone or 30 telegraph service does not include: (A) Any interstate incoming or out- 31 going wide area telephone service or wide area transmission type service 32 which entitles the subscriber to make or receive an unlimited number of 33 communications to or from persons having telephone service in a speci- 34 fied area which is outside the state in which the station provided this 35 service is located; (B) any interstate private communications service to 36 the persons contracting for the receipt of that service that entitles the 37 purchaser to exclusive or priority use of a communications channel or 38 group of channels between exchanges; (C) any value-added nonvoice 39 service in which computer processing applications are used to act on the 40 form, content, code or protocol of the information to be transmitted; (D) 41 any telecommunication service to a provider of telecommunication serv- 42 ices which will be used to render telecommunications services, including 43 carrier access services; or (E) any service or transaction defined in this HB 2287

 1  section among entities classified as members of an affiliated group as
 2  provided by federal law (U.S.C. Section 1504);
 3    (c)  the gross receipts from the sale or furnishing of gas, water, elec-
 4  tricity and heat, which sale is not otherwise exempt from taxation under
 5  the provisions of this act, and whether furnished by municipally or pri-
 6  vately owned utilities;
 7    (d)  the gross receipts from the sale of meals or drinks furnished at
 8  any private club, drinking establishment, catered event, restaurant, eating
 9  house, dining car, hotel, drugstore or other place where meals or drinks
10  are regularly sold to the public;
11    (e)  the gross receipts from the sale of admissions to any place pro-
12  viding amusement, entertainment or recreation services including admis-
13  sions to state, county, district and local fairs, but such tax shall not be
14  levied and collected upon the gross receipts received from sales of ad-
15  missions to any cultural and historical event which occurs triennially;
16    (f)  the gross receipts from the operation of any coin-operated device
17  dispensing or providing tangible personal property, amusement or other
18  services except laundry services, whether automatic or manually operated;
19    (g)  the gross receipts from the service of renting of rooms by hotels,
20  as defined by K.S.A. 36-501 and amendments thereto;
21    (h)  the gross receipts from the service of renting or leasing of tangible
22  personal property except such tax shall not apply to the renting or leasing
23  of machinery, equipment or other personal property owned by a city and
24  purchased from the proceeds of industrial revenue bonds issued prior to
25  July 1, 1973, in accordance with the provisions of K.S.A. 12-1740 through
26  12-1749, and amendments thereto, and any city or lessee renting or leas-
27  ing such machinery, equipment or other personal property purchased
28  with the proceeds of such bonds who shall have paid a tax under the
29  provisions of this section upon sales made prior to July 1, 1973, shall be
30  entitled to a refund from the sales tax refund fund of all taxes paid
31  thereon;
32    (i)  the gross receipts from the rendering of dry cleaning, pressing,
33  dyeing and laundry services except laundry services rendered through a
34  coin-operated device whether automatic or manually operated;
35    (j)  the gross receipts from the rendering of the services of washing
36  and washing and waxing of vehicles except such services rendered through
37  a coin-operated device whether automatic or manually operated;
38    (k)  the gross receipts from cable, community antennae and other sub-
39  scriber radio and television services;
40    (l)  the gross receipts received from the sales of tangible personal
41  property to all contractors, subcontractors or repairmen of materials and
42  supplies for use by them in erecting structures for others, or building on,
43  or otherwise improving, altering, or repairing real or personal property
HB 2287

 1  of others;
 2    (m)  the gross receipts received from fees and charges by public and
 3  private clubs, drinking establishments, organizations and businesses for
 4  participation in sports, games and other recreational activities, but such
 5  tax shall not be levied and collected upon the gross receipts received from:
 6    (1) Fees and charges by any political subdivision, or any youth recreation
 7  organization exclusively providing services to persons 18 years of age or
 8  younger which is exempt from federal income taxation pursuant to section
 9  501(c)(3) of the federal internal revenue code of 1986, for participation
10  in sports, games and other recreational activities; and (2) entry fees and
11  charges for participation in a special event or tournament sanctioned by
12  a national sporting association to which spectators are charged an admis-
13  sion which is taxable pursuant to subsection (e);
14    (n)  the gross receipts received from dues charged by public and pri-
15  vate clubs, drinking establishments, organizations and businesses, pay-
16  ment of which entitles a member to the use of facilities for recreation or
17  entertainment;
18    (o)  the gross receipts received from the isolated or occasional sale of
19  motor vehicles or trailers but not including: (1) The transfer of motor
20  vehicles or trailers by a person to a corporation solely in exchange for
21  stock securities in such corporation; or (2) the transfer of motor vehicles
22  or trailers by one corporation to another when all of the assets of such
23  corporation are transferred to such other corporation; or (3) the sale of
24  motor vehicles or trailers which are subject to taxation pursuant to the
25  provisions of K.S.A. 79-5101 et seq., and amendments thereto, by an
26  immediate family member to another immediate family member. For the
27  purposes of clause (3), immediate family member means lineal ascendants
28  or descendants, and their spouses. In determining the base for computing
29  the tax on such isolated or occasional sale, the fair market value of any
30  motor vehicle or trailer traded in by the purchaser to the seller may be
31  deducted from the selling price;
32    (p)  the gross receipts received for the service of installing or applying
33  tangible personal property which when installed or applied is not being
34  held for sale in the regular course of business, and whether or not such
35  tangible personal property when installed or applied remains tangible
36  personal property or becomes a part of real estate, except that no tax shall
37  be imposed upon the service of installing or applying tangible personal
38  property in connection with the original construction of a building or
39  facility or the construction, reconstruction, restoration, replacement or
40  repair of a bridge or highway.
41    For the purposes of this subsection:
42    (1)  ``Original construction'' shall mean the first or initial construction
43  of a new building or facility. The term ``original construction'' shall include
HB 2287

 1  the addition of an entire room or floor to any existing building or facility,
 2  the completion of any unfinished portion of any existing building or fa-
 3  cility and the restoration, reconstruction or replacement of a building or
 4  facility damaged or destroyed by fire, flood, tornado, lightning, explosion
 5  or earthquake, but such term shall not include replacement, remodeling,
 6  restoration, renovation or reconstruction under any other circumstances;
 7    (2)  ``building'' shall mean only those enclosures within which individ-
 8  uals customarily live or are employed, or which are customarily used to
 9  house machinery, equipment or other property, and including the land
10  improvements immediately surrounding such building; and
11    (3)  ``facility'' shall mean a mill, plant, refinery, oil or gas well, water
12  well, feedlot or any conveyance, transmission or distribution line of any
13  cooperative, nonprofit, membership corporation organized under or sub-
14  ject to the provisions of K.S.A. 17-4601 et seq., and amendments thereto,
15  or of any municipal or quasi-municipal corporation, including the land
16  improvements immediately surrounding such facility;
17    (q)  the gross receipts received for the service of repairing, servicing,
18  altering or maintaining tangible personal property, except computer soft-
19  ware described in subsection (s), which when such services are rendered
20  is not being held for sale in the regular course of business, and whether
21  or not any tangible personal property is transferred in connection there-
22  with. The tax imposed by this subsection shall be applicable to the services
23  of repairing, servicing, altering or maintaining an item of tangible personal
24  property which has been and is fastened to, connected with or built into
25  real property;
26    (r)  the gross receipts from fees or charges made under service or
27  maintenance agreement contracts for services, charges for the providing
28  of which are taxable under the provisions of subsection (p) or (q);
29    (s)  the gross receipts received from the sale of computer software,
30  and the sale of the services of modifying, altering, updating or maintaining
31  computer software. As used in this subsection, ``computer software''
32  means information and directions loaded into a computer which dictate
33  different functions to be performed by the computer. Computer software
34  includes any canned or prewritten program which is held or existing for
35  general or repeated sale, even if the program was originally developed
36  for a single end user as custom computer software. The sale of computer
37  software or services does not include: (1) The initial sale of any custom
38  computer program which is originally developed for the exclusive use of
39  a single end user; or (2) those services rendered in the modification of
40  computer software when the modification is developed exclusively for a
41  single end user only to the extent of the modification and only to the
42  extent that the actual amount charged for the modification is separately
43  stated on invoices, statements and other billing documents provided to
HB 2287

 1  the end user. The services of modification, alteration, updating and main-
 2  tenance of computer software shall only include the modification, alter-
 3  ation, updating and maintenance of computer software taxable under this
 4  subsection whether or not the services are actually provided; and
 5    (t)  the gross receipts received for telephone answering services, in-
 6  cluding mobile phone services, beeper services and other similar services.
 7    Sec. 2.  K.S.A. 1996 Supp. 79-3603 is hereby repealed.
 8    Sec. 3.  This act shall take effect and be in force from and after its
 9  publication in the statute book.