Session of 2000
By Representative Jim Morrison

  9             AN  ACT concerning retailers' sales tax; amending K.S.A. 1999 Supp. 79-
10             3602 and repealing the existing section.
12       Be it enacted by the Legislature of the State of Kansas:
13             Section  1. K.S.A. 1999 Supp. 79-3602 is hereby amended to read as
14       follows: 79-3602. (a) "Persons" means any individual, firm, copartnership,
15       joint adventure, association, corporation, estate or trust, receiver or trus-
16       tee, or any group or combination acting as a unit, and the plural as well
17       as the singular number; and shall specifically mean any city or other po-
18       litical subdivision of the state of Kansas engaging in a business or provid-
19       ing a service specifically taxable under the provisions of this act.
20             (b) "Director" means the state director of taxation.
21             (c) "Sale" or "sales" means the exchange of tangible personal prop-
22       erty, as well as the sale thereof for money, and every transaction, condi-
23       tional or otherwise, for a consideration, constituting a sale, including the
24       sale or furnishing of electrical energy, gas, water, services or entertain-
25       ment taxable under the terms of this act and including, except as provided
26       in the following provision, the sale of the use of tangible personal property
27       by way of a lease, license to use or the rental thereof regardless of the
28       method by which the title, possession or right to use the tangible personal
29       property is transferred. The term "sale" or "sales" shall not mean the sale
30       of the use of any tangible personal property used as a dwelling by way of
31       a lease or rental thereof for a term of more than 28 consecutive days.
32             (d) "Retailer" means a person regularly engaged in the business of
33       selling tangible personal property at retail or furnishing electrical energy,
34       gas, water, services or entertainment, and selling only to the user or con-
35       sumer and not for resale.
36             (e) "Retail sale" or "sale at retail" means all sales made within the
37       state of tangible personal property or electrical energy, gas, water, services
38       or entertainment for use or consumption and not for resale.
39             (f) "Tangible personal property" means corporeal personal property.
40       Such term shall include: (1) Any computer software program which is not
41       a custom computer software program, as described by subsection (s) of
42       K.S.A. 79-3603, and amendments thereto; and (2) any prepaid telephone
43       calling card or prepaid authorization number, or recharge of such card


  1       or number, as described by subsection (b) of K.S.A. 79-3603, and amend-
  2       ments thereto.
  3             (g) "Selling price" means the total cost to the consumer exclusive of
  4       discounts allowed and credited, but including freight and transportation
  5       charges from retailer to consumer.
  6             (h) "Gross receipts" means the total selling price or the amount re-
  7       ceived as defined in this act, in money, credits, property or other consid-
  8       eration valued in money from sales at retail within this state; and em-
  9       braced within the provisions of this act. The taxpayer, may take credit in
10       the report of gross receipts for: (1) An amount equal to the selling price
11       of property returned by the purchaser when the full sale price thereof,
12       including the tax collected, is refunded in cash or by credit; and (2) an
13       amount equal to the allowance given for the trade-in of property.
14             (i) "Taxpayer" means any person obligated to account to the director
15       for taxes collected under the terms of this act.
16             (j) "Isolated or occasional sale" means the nonrecurring sale of tan-
17       gible personal property, or services taxable hereunder by a person not
18       engaged at the time of such sale in the business of selling such property
19       or services. Any religious organization which makes a nonrecurring sale
20       of tangible personal property acquired for the purpose of resale shall be
21       deemed to be not engaged at the time of such sale in the business of
22       selling such property. Such term shall include: (1) Any sale by a bank,
23       savings and loan institution, credit union or any finance company licensed
24       under the provisions of the Kansas uniform consumer credit code of tan-
25       gible personal property which has been repossessed by any such entity;
26       and (2) any sale of tangible personal property made by an auctioneer or
27       agent on behalf of not more than two principals or households if such
28       sale is nonrecurring and any such principal or household is not engaged
29       at the time of such sale in the business of selling tangible personal prop-
30       erty; and (3) any sale of tangible personal property made by an auctioneer
31       or agent on behalf of a nonprofit organization which is exempt from fed-
32       eral income taxation pursuant to section 501(c)(3) of the federal internal
33       revenue code of 1986 if such sale occurs not more than once within a
34       twelve-month period and the organization is not engaged at the time of
35       the sale in the business of selling tangible personal property.
36             (k) "Service" means those services described in and taxed under the
37       provisions of K.S.A. 79-3603 and amendments thereto.
38             (l) "Ingredient or component part" means tangible personal property
39       which is necessary or essential to, and which is actually used in and be-
40       comes an integral and material part of tangible personal property or serv-
41       ices produced, manufactured or compounded for sale by the producer,
42       manufacturer or compounder in its regular course of business. The fol-
43       lowing items of tangible personal property are hereby declared to be


  1       ingredients or component parts, but the listing of such property shall not
  2       be deemed to be exclusive nor shall such listing be construed to be a
  3       restriction upon, or an indication of, the type or types of property to be
  4       included within the definition of "ingredient or component part" as
  5       herein set forth:
  6             (1) Containers, labels and shipping cases used in the distribution of
  7       property produced, manufactured or compounded for sale which are not
  8       to be returned to the producer, manufacturer or compounder for reuse.
  9             (2) Containers, labels, shipping cases, paper bags, drinking straws,
10       paper plates, paper cups, twine and wrapping paper used in the distri-
11       bution and sale of property taxable under the provisions of this act by
12       wholesalers and retailers and which is not to be returned to such whole-
13       saler or retailer for reuse.
14             (3) Seeds and seedlings for the production of plants and plant prod-
15       ucts produced for resale.
16             (4) Paper and ink used in the publication of newspapers.
17             (5) Fertilizer used in the production of plants and plant products
18       produced for resale.
19             (6) Feed for animals, fowl and aquatic plants and animals, the primary
20       purpose of which is use in agriculture or aquaculture, as defined in K.S.A.
21       47-1901, and amendments thereto, the production of food for human
22       consumption, the production of animal, dairy, poultry or aquatic plant
23       and animal products, fiber, fur, or the production of offspring for use for
24       any such purpose or purposes.
25             (m) "Property which is consumed" means tangible personal property
26       which is essential or necessary to and which is used in the actual process
27       of and consumed, depleted or dissipated within one year in (1) the pro-
28       duction, manufacture, processing, mining, drilling, refining or compound-
29       ing of tangible personal property, (2) the providing of services, (3) the
30       irrigation of crops, for sale in the regular course of business, or (4) the
31       storage or processing of grain by a public grain warehouse or other grain
32       storage facility, and which is not reusable for such purpose. The following
33       is a listing of tangible personal property, included by way of illustration
34       but not of limitation, which qualifies as property which is consumed:
35             (A) Insecticides, herbicides, germicides, pesticides, fungicides, fu-
36       migants, antibiotics, biologicals, pharmaceuticals, vitamins and chemicals
37       for use in commercial or agricultural production, processing or storage of
38       fruit, vegetables, feeds, seeds, grains, animals or animal products whether
39       fed, injected, applied, combined with or otherwise used;
40             (B) electricity, gas and water; and
41             (C) petroleum products, lubricants, chemicals, solvents, reagents and
42       catalysts.
43             (n) "Political subdivision" means any municipality, agency or subdi-


  1       vision of the state which is, or shall hereafter be, authorized to levy taxes
  2       upon tangible property within the state or which certifies a levy to a
  3       municipality, agency or subdivision of the state which is, or shall hereafter
  4       be, authorized to levy taxes upon tangible property within the state. Such
  5       term also shall include any public building commission, housing, airport,
  6       port, metropolitan transit or similar authority established pursuant to law.
  7             (o) "Municipal corporation" means any city incorporated under the
  8       laws of Kansas.
  9             (p) "Quasi-municipal corporation" means any county, township,
10       school district, drainage district or any other governmental subdivision in
11       the state of Kansas having authority to receive or hold moneys or funds.
12             (q) "Nonprofit blood bank" means any nonprofit place, organization,
13       institution or establishment that is operated wholly or in part for the
14       purpose of obtaining, storing, processing, preparing for transfusing, fur-
15       nishing, donating or distributing human blood or parts or fractions of
16       single blood units or products derived from single blood units, whether
17       or not any remuneration is paid therefor, or whether such procedures are
18       done for direct therapeutic use or for storage for future use of such
19       products.
20             (r) "Contractor, subcontractor or repairman" means a person who
21       agrees to furnish and install tangible personal property or install tangible
22       personal property at a specified price. A person who maintains an inven-
23       tory of tangible personal property which enables such person to furnish
24       and install the tangible personal property or install the tangible personal
25       property shall not be deemed a contractor, subcontractor or repairman
26       but shall be deemed a retailer.
27             (s) "Educational institution" means any nonprofit school, college and
28       university that offers education at a level above the twelfth grade, and
29       conducts regular classes and courses of study required for accreditation
30       by, or membership in, the North Central Association of Colleges and
31       Schools, the state board of education, or that otherwise qualify as an
32       "educational institution," as defined by K.S.A. 74-50,103, and amend-
33       ments thereto. Such phrase shall include: (1) A group of educational in-
34       stitutions that operates exclusively for an educational purpose; (2) non-
35       profit endowment associations and foundations organized and operated
36       exclusively to receive, hold, invest and administer moneys and property
37       as a permanent fund for the support and sole benefit of an educational
38       institution; (3) nonprofit trusts, foundations and other entities organized
39       and operated principally to hold and own receipts from intercollegiate
40       sporting events and to disburse such receipts, as well as grants and gifts,
41       in the interest of collegiate and intercollegiate athletic programs for the
42       support and sole benefit of an educational institution; and (4) nonprofit
43       trusts, foundations and other entities organized and operated for the pri-


  1       mary purpose of encouraging, fostering and conducting scholarly inves-
  2       tigations and industrial and other types of research for the support and
  3       sole benefit of an educational institution. 
  4       Sec.  2. K.S.A. 1999 Supp. 79-3602 is hereby repealed.
  5        Sec.  3. This act shall take effect and be in force from and after its
  6       publication in the statute book.