Kansas House Bill HB2586 Latest Draft

                            Session of 2024
HOUSE BILL No. 2586
By Committee on Taxation
Requested by Representative Sawyer
1-24
AN ACT concerning taxation; relating to property tax; increasing extent of 
exemption for residential property from statewide school levy; relating 
to privilege tax; decreasing the normal tax rates on banks, trust 
companies and savings and loan associations; relating to income tax; 
increasing the tax credit amount for household and dependent care 
expenses; eliminating the income limit to qualify for the subtraction 
modification for social security income; increasing the Kansas standard 
deduction; relating to sales and compensating use tax; providing a sales 
tax exemption for certain sales of school supplies, computers and 
clothing during an annual sales tax holiday; providing sales tax 
exemptions for children's diapers and feminine hygiene products; 
reducing the state rate of tax on sales of food and food ingredients; 
amending K.S.A. 79-1107, 79-1108 and 79-32,111c and K.S.A. 2023 
Supp. 79-201x, 79-32,117, 79-32,119, 79-3603, 79-3603d, 79-3606, 
79-3620, 79-3703 and 79-3710 and repealing the existing sections.
Be it enacted by the Legislature of the State of Kansas:
New Section 1. (a) (1) On and after July 1, 2024, during the four-day 
period beginning at 12:01 a.m. on the first Thursday in August and ending 
at midnight on the Sunday following, all back-to-school-related sales of 
the following items shall be exempt from the tax imposed by the Kansas 
retailers' sales tax act:
(A) Clothing or clothing accessories or equipment with a sales price 
of $300 or less per item; 
(B) school supplies, school instructional materials or school art 
supplies with a sales price of $100 or less per item; 
(C) prewritten computer software with a sales price of $300 or less 
per item; and 
(D) computers or school computer supplies with a sales price of 
$2,000 or less per item. 
(2) Only items priced at or below the price threshold established in 
this subsection shall be exempt from taxation pursuant to this subsection. 
Notwithstanding K.S.A. 79-3609, and amendments thereto, the seller of 
items specified in this subsection is not required to obtain an exemption 
certificate from the purchaser of such items during the period of time 
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specified in this subsection. There shall be no exemption pursuant to this 
subsection for only a portion of the price of an individual item.
(b) As used in this section:
(1) "Clothing" means all human wearing apparel suitable for general 
use. 
(A) "Clothing" includes, but is not limited to: 
(i) Aprons, household and shop;
(ii) athletic supporters;
(iii) baby receiving blankets;
(iv) bathing suits and caps;
(v) beach capes and coats;
(vi) belts and suspenders;
(vii) boots;
(viii) coats and jackets;
(ix) costumes;
(x) diapers, children and adult, including disposable diapers;
(xi) ear muffs;
(xii) footlets;
(xiii) formal wear;
(xiv) garters and garter belts;
(xv) girdles;
(xvi) gloves and mittens for general use;
(xvii) hats and caps;
(xviii) hosiery;
(xix) insoles for shoes;
(xx) lab coats;
(xxi) neckties;
(xxii) overshoes;
(xxiii) pantyhose;
(xxiv) rainwear;
(xxv) rubber pants;
(xxvi) sandals;
(xxvii) scarves;
(xxviii) shoes and shoe laces;
(xxix) slippers;
(xxx) sneakers;
(xxxi) socks and stockings;
(xxxii) steel-toed shoes;
(xxxiii) underwear;
(xxxiv) uniforms, athletic and non-athletic; and
(xxxv) wedding apparel.
(B) "Clothing" does not include: 
(i) Belt buckles sold separately;
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(ii) costume masks sold separately;
(iii) patches and emblems sold separately;
(iv) sewing equipment and supplies, including, but not limited to, 
knitting needles, patterns, pins, scissors, sewing machines, sewing needles, 
tape measures and thimbles; and 
(v) sewing materials that become part of clothing, including, but not 
limited to, buttons, fabric, lace, thread, yarn and zippers.
(2) "Clothing accessories or equipment" means incidental items worn 
on the person or in conjunction with clothing. "Clothing accessories or 
equipment" includes, but is not limited to: 
(A) Briefcases;
(B) cosmetics;
(C) hair notions, including, but not limited to, barrettes, hair bows 
and hair nets;
(D) handbags;
(E) handkerchiefs;
(F) jewelry;
(G) sunglasses, nonprescription;
(H) umbrellas;
(I) wallets;
(J) watches; and
(K) wigs and hairpieces.
(3) "Computer" means a personal computer such as a laptop or 
desktop computer or a tablet, but not including a phone.
(4) "Eligible property" means an item of a type, such as clothing, that 
qualifies for the sales tax exemption as provided in this section.
(5) "Layaway sale" means a transaction in which property is set aside 
for future delivery to a customer who makes a deposit, agrees to pay the 
balance of the purchase price over a period of time and, at the end of the 
payment period, receives the property. An order is accepted for layaway by 
the seller when the seller removes the property from normal inventory or 
clearly identifies the property as sold to the purchaser.
(6) "Prewritten computer software" means the same as defined in 
K.S.A. 79-3602, and amendments thereto, except that such term only 
includes software designed for a computer as defined in this section.
(7) "Rain check" means the seller allows a customer to purchase an 
item at a certain price at a later time, because the particular item was out of 
stock.
(8) "School art supply" means an item commonly used by a student in 
a course of study for artwork. The following is an all-inclusive list: 
(A) Clay and glazes;
(B) paints; acrylic, tempera and oil;
(C) paintbrushes for artwork;
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(D) sketch and drawing pads; and
(E) watercolors.
(9) "School computer supply" means an item commonly used by a 
student in a course of study in which a computer is used. The following is 
an all-inclusive list: 
(A) Computer storage media; diskettes, compact disks;
(B) handheld electronic schedulers, except devices that are cellular 
phones;
(C) personal digital assistants, except devices that are cellular phones;
(D) computer printers; and
(E) printer supplies for computers; printer paper, printer ink.
(10) "School instructional material" means written material 
commonly used by a student in a course of study as a reference and to 
learn the subject being taught. The following is an all-inclusive list:
(A) Reference books;
(B) reference maps and globes;
(C) textbooks; and
(D) workbooks.
(11) "School supply" means an item commonly used by a student in a 
course of study. The following is an all-inclusive list: 
(A) Binders;
(B) book bags;
(C) calculators;
(D) cellophane tape;
(E) blackboard chalk;
(F) compasses;
(G) composition books;
(H) crayons;
(I) erasers;
(J) folders; expandable, pocket, plastic and manila;
(K) glue, paste and paste sticks;
(L) highlighters;
(M) index cards;
(N) index card boxes;
(O) legal pads;
(P) lunch boxes;
(Q) markers;
(R) notebooks;
(S) paper; loose leaf ruled notebook paper, copy paper, graph paper, 
tracing paper, manila paper, colored paper, poster board and construction 
paper; 
(T) pencil boxes and other school supply boxes;
(U) pencil sharpeners;
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(V) pencils;
(W) pens;
(X) protractors;
(Y) rulers;
(Z) scissors; and
(AA) writing tablets.
(c) The secretary of revenue shall provide notice of the exemption 
period to retailers at least 60 days prior to the first day of the calendar 
month in which the exemption period established in this section 
commences. 
(d) The following procedures are to be used in administering the 
exemption as provided in this section:
(1) A sale of eligible property under a layaway sale qualifies for 
exemption if: 
(A) Final payment on a layaway order is made by, and the property is 
given to, the purchaser during the exemption period; or 
(B) the purchaser selects the property and the retailer accepts the 
order for the item during the exemption period for immediate delivery 
upon full payment, even if delivery is made after the exemption period. 
(2) There shall be no change during the period of exemption for the 
handling of a bundled sale as treated for sales tax purposes at times other 
than the exemption period.
(3) A discount by the seller reduces the sales price of the property, 
and the discounted sales price determines whether the sales price is within 
the price threshold provided in subsection (a). A coupon that reduces the 
sales price is treated as a discount if the seller is not reimbursed for the 
coupon amount by a third party. If a discount applies to the total amount 
paid by a purchaser rather than to the sales price of a particular item and 
the purchaser has purchased both eligible property and taxable property, 
the seller shall allocate the discount based on the total sales prices of the 
taxable property compared to the total sales prices of all property sold in 
that same transaction. 
(4) Articles that are normally sold as a single unit must continue to be 
sold in that manner. Such articles cannot be priced separately and sold as 
individual items in order to obtain the exemption. 
(5) Eligible property that customers purchase during the exemption 
period with use of a rain check will qualify for the exemption regardless of 
when the rain check was issued. Issuance of a rain check during the 
exemption period shall not qualify eligible property for the exemption if 
the property is actually purchased after the exemption period. 
(6) The procedure for an exchange in regards to an exemption is as 
follows: 
(A) If a customer purchases an item of eligible property during the 
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exemption period but later exchanges the item for a similar eligible item, 
even if a different size, different color or other feature, no additional tax is 
due even if the exchange is made after the exemption period;
(B) if a customer purchases an item of eligible property during the 
exemption period, but after the exemption period has ended the customer 
returns the item and receives credit on the purchase of a different item, the 
appropriate sales tax is due on the sale of the new item; and 
(C) if a customer purchases an item of eligible property before the 
exemption period, but during the exemption period the customer returns 
the item and receives credit on the purchase of a different item of eligible 
property, no sales tax is due on the sale of the new item if the new item is 
purchased during the exemption period. 
(7) For the purpose of an exemption, eligible property qualifies for 
the exemption if: 
(A) The item is both delivered to and paid for by the customer during 
the exemption period; or 
(B) the customer orders and pays for the item and the seller accepts 
the order during the exemption period for immediate shipment, even if 
delivery is made after the exemption period. For purposes of this 
subparagraph, the seller accepts an order when the seller has taken action 
to fill the order for immediate shipment. Actions to fill an order include 
placement of an "in date" stamp on a mail order or assignment of an order 
number to a telephone order. For purposes of this subparagraph, an order is 
for immediate shipment when the customer does not request delayed 
shipment. An order is for immediate shipment notwithstanding that the 
shipment may be delayed because of a backlog of orders or because stock 
is currently unavailable to, or on back order by, the seller. 
(8) For a 60-day period immediately after the exemption period, 
when a customer returns an item that would qualify for the exemption, no 
credit for or refund of sales tax shall be given unless the customer provides 
a receipt or invoice that shows tax was paid or the seller has sufficient 
documentation to show that tax was paid on the specific item. The 60-day 
period is set solely for the purpose of designating a time period during 
which the customer must provide documentation that shows that sales tax 
was paid on returned merchandise. The 60-day period is not intended to 
change a seller's policy on the time period during which the seller will 
accept returns.
(9) The time zone of the seller's location determines the authorized 
time period for a sales tax holiday when the purchaser is located in one 
time zone and a seller is located in another. 
(e) The provisions of this section shall be a part of and supplemental 
to the Kansas retailers' sales tax act. 
Sec. 2. K.S.A. 2023 Supp. 79-201x is hereby amended to read as 
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follows: 79-201x. (a) For taxable year 2022, and all taxable years 
thereafter, the following described property, to the extent herein specified, 
shall be and is hereby exempt from the property tax levied pursuant to the 
provisions of K.S.A. 72-5142, and amendments thereto: Property used for 
residential purposes to the extent of $40,000 of its appraised valuation.
(b) For taxable year 2023, and all taxable years thereafter, the dollar 
amount of the extent of appraised valuation that is exempt pursuant to 
subsection (a) shall be adjusted to reflect the average percentage change in 
statewide residential valuation of all residential real property for the 
preceding 10 years. Such average percentage change shall not be less than 
zero. The director of property valuation shall calculate the average 
percentage change for purposes of this annual adjustment and calculate the 
dollar amount of the extent of appraised valuation that is exempt pursuant 
to this section each year the following described property, to the extent 
herein specified, shall be and is hereby exempt from the property tax levied 
pursuant to the provisions of K.S.A. 72-5142, and amendments thereto: 
Property used for residential purposes to the extent of $42,049 of its 
appraised valuation.
(c) For taxable year 2024, and all taxable years thereafter, the 
following described property, to the extent herein specified, shall be and is 
hereby exempt from the property tax levied pursuant to the provisions of 
K.S.A. 72-5142, and amendments thereto: Property used for residential 
purposes to the extent of $100,000 of its appraised valuation.
Sec. 3. K.S.A. 79-1107 is hereby amended to read as follows: 79-
1107. Every national banking association and state bank located or doing 
business within the state shall pay to the state for the privilege of doing 
business within the state a tax according to or measured by its net income 
for the next preceding taxable year to be computed as provided in this act. 
Such tax shall consist of a normal tax and a surtax and shall be computed 
as follows:
(a) (1) For tax year 2023, the normal tax shall be an amount equal to 
2 
1
/4% 2.25% of such net income;
(2) for tax year 2024, the normal tax shall be an amount equal to 
1.94% of such net income; and
(3) for tax year 2025, and all tax years thereafter, the normal tax 
shall be an amount equal to 1.63% of such net income; and
(b) the surtax shall be an amount equal to 2 
1
/8% 2.125% of such net 
income in excess of $25,000.
The tax levied shall be in lieu of ad valorem taxes which might 
otherwise be imposed by the state or political subdivisions thereof upon 
shares of capital stock or the intangible assets of national banking 
associations and state banks.
Sec. 4. K.S.A. 79-1108 is hereby amended to read as follows: 79-
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1108. Every trust company and savings and loan association located or 
doing business within the state shall pay to the state for the privilege of 
doing business within the state a tax according to or measured by its net 
income for the next preceding taxable year to be computed as provided in 
this act. Such tax shall consist of a normal tax and a surtax and shall be 
computed as follows:
(a) (1) For tax year 2023, the normal tax on every trust company and 
savings and loan association shall be an amount equal to 2 
1
/4% 2.25% of 
such net income;
(2) for tax year 2024, the normal tax shall be an amount equal to 
1.93% of such net income; and
(3) for tax year 2025, and all tax years thereafter, the normal tax 
shall be an amount equal to 1.61% of such net income; and
(b) the surtax on every trust company and savings and loan 
association shall be an amount equal to 2
 1
/4% 2.25% of such net income in 
excess of $25,000.
The tax levied shall be in lieu of ad valorem taxes which might 
otherwise be imposed by the state or political subdivision thereof upon 
shares of capital stock or other intangible assets of trust companies and 
savings and loan associations.
Sec. 5. K.S.A. 79-32,111c is hereby amended to read as follows: 79-
32,111c. (a) There shall be allowed as a credit against the tax liability of a 
resident individual imposed under the Kansas income tax act an amount 
equal to 12.5% for tax year 2018; an amount equal to 18.75% for tax year 
2019; and an amount equal to 25% for tax year years 2020 through 2023; 
and an amount equal to 50% for tax year 2024, and all tax years thereafter, 
of the amount of the credit allowed against such taxpayer's federal income 
tax liability pursuant to 26 U.S.C. § 21 for the taxable year in which such 
credit was claimed against the taxpayer's federal income tax liability.
(b) The credit allowed by subsection (a) shall not exceed the amount 
of the tax imposed by K.S.A. 79-32,110, and amendments thereto, reduced 
by the sum of any other credits allowable pursuant to law.
(c) No credit provided under this section shall be allowed to any 
individual who fails to provide a valid social security number issued by the 
social security administration, to such individual, the individual's spouse 
and every dependent of the individual.
Sec. 6. K.S.A. 2023 Supp. 79-32,117 is hereby amended to read as 
follows: 79-32,117. (a) The Kansas adjusted gross income of an individual 
means such individual's federal adjusted gross income for the taxable year, 
with the modifications specified in this section.
(b) There shall be added to federal adjusted gross income:
(i) Interest income less any related expenses directly incurred in the 
purchase of state or political subdivision obligations, to the extent that the 
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same is not included in federal adjusted gross income, on obligations of 
any state or political subdivision thereof, but to the extent that interest 
income on obligations of this state or a political subdivision thereof issued 
prior to January 1, 1988, is specifically exempt from income tax under the 
laws of this state authorizing the issuance of such obligations, it shall be 
excluded from computation of Kansas adjusted gross income whether or 
not included in federal adjusted gross income. Interest income on 
obligations of this state or a political subdivision thereof issued after 
December 31, 1987, shall be excluded from computation of Kansas 
adjusted gross income whether or not included in federal adjusted gross 
income.
(ii) Taxes on or measured by income or fees or payments in lieu of 
income taxes imposed by this state or any other taxing jurisdiction to the 
extent deductible in determining federal adjusted gross income and not 
credited against federal income tax. This paragraph shall not apply to taxes 
imposed under the provisions of K.S.A. 79-1107 or 79-1108, and 
amendments thereto, for privilege tax year 1995, and all such years 
thereafter.
(iii) The federal net operating loss deduction, except that the federal 
net operating loss deduction shall not be added to an individual's federal 
adjusted gross income for tax years beginning after December 31, 2016.
(iv) Federal income tax refunds received by the taxpayer if the 
deduction of the taxes being refunded resulted in a tax benefit for Kansas 
income tax purposes during a prior taxable year. Such refunds shall be 
included in income in the year actually received regardless of the method 
of accounting used by the taxpayer. For purposes hereof, a tax benefit shall 
be deemed to have resulted if the amount of the tax had been deducted in 
determining income subject to a Kansas income tax for a prior year 
regardless of the rate of taxation applied in such prior year to the Kansas 
taxable income, but only that portion of the refund shall be included as 
bears the same proportion to the total refund received as the federal taxes 
deducted in the year to which such refund is attributable bears to the total 
federal income taxes paid for such year. For purposes of the foregoing 
sentence, federal taxes shall be considered to have been deducted only to 
the extent such deduction does not reduce Kansas taxable income below 
zero.
(v) The amount of any depreciation deduction or business expense 
deduction claimed on the taxpayer's federal income tax return for any 
capital expenditure in making any building or facility accessible to the 
handicapped, for which expenditure the taxpayer claimed the credit 
allowed by K.S.A. 79-32,177, and amendments thereto.
(vi) Any amount of designated employee contributions picked up by 
an employer pursuant to K.S.A. 12-5005, 20-2603, 74-4919 and 74-4965, 
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and amendments thereto.
(vii) The amount of any charitable contribution made to the extent the 
same is claimed as the basis for the credit allowed pursuant to K.S.A. 79-
32,196, and amendments thereto.
(viii) The amount of any costs incurred for improvements to a swine 
facility, claimed for deduction in determining federal adjusted gross 
income, to the extent the same is claimed as the basis for any credit 
allowed pursuant to K.S.A. 79-32,204, and amendments thereto.
(ix) The amount of any ad valorem taxes and assessments paid and 
the amount of any costs incurred for habitat management or construction 
and maintenance of improvements on real property, claimed for deduction 
in determining federal adjusted gross income, to the extent the same is 
claimed as the basis for any credit allowed pursuant to K.S.A. 79-32,203, 
and amendments thereto.
(x) Amounts received as nonqualified withdrawals, as defined by 
K.S.A. 75-643, and amendments thereto, if, at the time of contribution to a 
family postsecondary education savings account, such amounts were 
subtracted from the federal adjusted gross income pursuant to subsection 
(c)(xv) or if such amounts are not already included in the federal adjusted 
gross income.
(xi) The amount of any contribution made to the same extent the 
same is claimed as the basis for the credit allowed pursuant to K.S.A. 74-
50,154, and amendments thereto.
(xii) For taxable years commencing after December 31, 2004, 
amounts received as withdrawals not in accordance with the provisions of 
K.S.A. 74-50,204, and amendments thereto, if, at the time of contribution 
to an individual development account, such amounts were subtracted from 
the federal adjusted gross income pursuant to subsection (c)(xiii), or if 
such amounts are not already included in the federal adjusted gross 
income.
(xiii) The amount of any expenditures claimed for deduction in 
determining federal adjusted gross income, to the extent the same is 
claimed as the basis for any credit allowed pursuant to K.S.A. 79-32,217 
through 79-32,220 or 79-32,222, and amendments thereto.
(xiv) The amount of any amortization deduction claimed in 
determining federal adjusted gross income to the extent the same is 
claimed for deduction pursuant to K.S.A. 79-32,221, and amendments 
thereto.
(xv) The amount of any expenditures claimed for deduction in 
determining federal adjusted gross income, to the extent the same is 
claimed as the basis for any credit allowed pursuant to K.S.A. 79-32,223 
through 79-32,226, 79-32,228 through 79-32,231, 79-32,233 through 79-
32,236, 79-32,238 through 79-32,241, 79-32,245 through 79-32,248 or 79-
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32,251 through 79-32,254, and amendments thereto.
(xvi) The amount of any amortization deduction claimed in 
determining federal adjusted gross income to the extent the same is 
claimed for deduction pursuant to K.S.A. 79-32,227, 79-32,232, 79-
32,237, 79-32,249, 79-32,250 or 79-32,255, and amendments thereto.
(xvii) The amount of any amortization deduction claimed in 
determining federal adjusted gross income to the extent the same is 
claimed for deduction pursuant to K.S.A. 79-32,256, and amendments 
thereto.
(xviii) For taxable years commencing after December 31, 2006, the 
amount of any ad valorem or property taxes and assessments paid to a state 
other than Kansas or local government located in a state other than Kansas 
by a taxpayer who resides in a state other than Kansas, when the law of 
such state does not allow a resident of Kansas who earns income in such 
other state to claim a deduction for ad valorem or property taxes or 
assessments paid to a political subdivision of the state of Kansas in 
determining taxable income for income tax purposes in such other state, to 
the extent that such taxes and assessments are claimed as an itemized 
deduction for federal income tax purposes.
(xix) For taxable years beginning after December 31, 2012, and 
ending before January 1, 2017, the amount of any: (1) Loss from business 
as determined under the federal internal revenue code and reported from 
schedule C and on line 12 of the taxpayer's form 1040 federal individual 
income tax return; (2) loss from rental real estate, royalties, partnerships, S 
corporations, except those with wholly owned subsidiaries subject to the 
Kansas privilege tax, estates, trusts, residual interest in real estate 
mortgage investment conduits and net farm rental as determined under the 
federal internal revenue code and reported from schedule E and on line 17 
of the taxpayer's form 1040 federal individual income tax return; and (3) 
farm loss as determined under the federal internal revenue code and 
reported from schedule F and on line 18 of the taxpayer's form 1040 
federal income tax return; all to the extent deducted or subtracted in 
determining the taxpayer's federal adjusted gross income. For purposes of 
this subsection, references to the federal form 1040 and federal schedule 
C, schedule E, and schedule F, shall be to such form and schedules as they 
existed for tax year 2011, and as revised thereafter by the internal revenue 
service.
(xx) For taxable years beginning after December 31, 2012, and 
ending before January 1, 2017, the amount of any deduction for self-
employment taxes under section 164(f) of the federal internal revenue 
code as in effect on January 1, 2012, and amendments thereto, in 
determining the federal adjusted gross income of an individual taxpayer, to 
the extent the deduction is attributable to income reported on schedule C, 
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E or F and on line 12, 17 or 18 of the taxpayer's form 1040 federal income 
tax return.
(xxi) For taxable years beginning after December 31, 2012, and 
ending before January 1, 2017, the amount of any deduction for pension, 
profit sharing, and annuity plans of self-employed individuals under 
section 62(a)(6) of the federal internal revenue code as in effect on January 
1, 2012, and amendments thereto, in determining the federal adjusted gross 
income of an individual taxpayer.
(xxii) For taxable years beginning after December 31, 2012, and 
ending before January 1, 2017, the amount of any deduction for health 
insurance under section 162(l) of the federal internal revenue code as in 
effect on January 1, 2012, and amendments thereto, in determining the 
federal adjusted gross income of an individual taxpayer.
(xxiii) For taxable years beginning after December 31, 2012, and 
ending before January 1, 2017, the amount of any deduction for domestic 
production activities under section 199 of the federal internal revenue code 
as in effect on January 1, 2012, and amendments thereto, in determining 
the federal adjusted gross income of an individual taxpayer.
(xxiv) For taxable years commencing after December 31, 2013, that 
portion of the amount of any expenditure deduction claimed in 
determining federal adjusted gross income for expenses paid for medical 
care of the taxpayer or the taxpayer's spouse or dependents when such 
expenses were paid or incurred for an abortion, or for a health benefit plan, 
as defined in K.S.A. 65-6731, and amendments thereto, for the purchase of 
an optional rider for coverage of abortion in accordance with K.S.A. 40-
2,190, and amendments thereto, to the extent that such taxes and 
assessments are claimed as an itemized deduction for federal income tax 
purposes.
(xxv) For taxable years commencing after December 31, 2013, that 
portion of the amount of any expenditure deduction claimed in 
determining federal adjusted gross income for expenses paid by a taxpayer 
for health care when such expenses were paid or incurred for abortion 
coverage, a health benefit plan, as defined in K.S.A. 65-6731, and 
amendments thereto, when such expenses were paid or incurred for 
abortion coverage or amounts contributed to health savings accounts for 
such taxpayer's employees for the purchase of an optional rider for 
coverage of abortion in accordance with K.S.A. 40-2,190, and 
amendments thereto, to the extent that such taxes and assessments are 
claimed as a deduction for federal income tax purposes.
(xxvi) For all taxable years beginning after December 31, 2016, the 
amount of any charitable contribution made to the extent the same is 
claimed as the basis for the credit allowed pursuant to K.S.A. 72-4357, and 
amendments thereto, and is also claimed as an itemized deduction for 
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federal income tax purposes.
(xxvii) For all taxable years commencing after December 31, 2020, 
the amount deducted by reason of a carryforward of disallowed business 
interest pursuant to section 163(j) of the federal internal revenue code of 
1986, as in effect on January 1, 2018.
(xxviii) For all taxable years beginning after December 31, 2021, the 
amount of any contributions to, or earnings from, a first-time home buyer 
savings account if distributions from the account were not used to pay for 
expenses or transactions authorized pursuant to K.S.A. 2023 Supp. 58-
4904, and amendments thereto, or were not held for the minimum length 
of time required pursuant to K.S.A. 2023 Supp. 58-4904, and amendments 
thereto. Contributions to, or earnings from, such account shall also include 
any amount resulting from the account holder not designating a surviving 
payable on death beneficiary pursuant to K.S.A. 2023 Supp. 58-4904(e), 
and amendments thereto.
(c) There shall be subtracted from federal adjusted gross income:
(i) Interest or dividend income on obligations or securities of any 
authority, commission or instrumentality of the United States and its 
possessions less any related expenses directly incurred in the purchase of 
such obligations or securities, to the extent included in federal adjusted 
gross income but exempt from state income taxes under the laws of the 
United States.
(ii) Any amounts received which are included in federal adjusted 
gross income but which are specifically exempt from Kansas income 
taxation under the laws of the state of Kansas.
(iii) The portion of any gain or loss from the sale or other disposition 
of property having a higher adjusted basis for Kansas income tax purposes 
than for federal income tax purposes on the date such property was sold or 
disposed of in a transaction in which gain or loss was recognized for 
purposes of federal income tax that does not exceed such difference in 
basis, but if a gain is considered a long-term capital gain for federal 
income tax purposes, the modification shall be limited to that portion of 
such gain which is included in federal adjusted gross income.
(iv) The amount necessary to prevent the taxation under this act of 
any annuity or other amount of income or gain which was properly 
included in income or gain and was taxed under the laws of this state for a 
taxable year prior to the effective date of this act, as amended, to the 
taxpayer, or to a decedent by reason of whose death the taxpayer acquired 
the right to receive the income or gain, or to a trust or estate from which 
the taxpayer received the income or gain.
(v) The amount of any refund or credit for overpayment of taxes on 
or measured by income or fees or payments in lieu of income taxes 
imposed by this state, or any taxing jurisdiction, to the extent included in 
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gross income for federal income tax purposes.
(vi) Accumulation distributions received by a taxpayer as a 
beneficiary of a trust to the extent that the same are included in federal 
adjusted gross income.
(vii) Amounts received as annuities under the federal civil service 
retirement system from the civil service retirement and disability fund and 
other amounts received as retirement benefits in whatever form which 
were earned for being employed by the federal government or for service 
in the armed forces of the United States.
(viii) Amounts received by retired railroad employees as a 
supplemental annuity under the provisions of 45 U.S.C. §§ 228b(a) and 
228c(a)(1) et seq.
(ix) Amounts received by retired employees of a city and by retired 
employees of any board of such city as retirement allowances pursuant to 
K.S.A. 13-14,106, and amendments thereto, or pursuant to any charter 
ordinance exempting a city from the provisions of K.S.A. 13-14,106, and 
amendments thereto.
(x) For taxable years beginning after December 31, 1976, the amount 
of the federal tentative jobs tax credit disallowance under the provisions of 
26 U.S.C. § 280C. For taxable years ending after December 31, 1978, the 
amount of the targeted jobs tax credit and work incentive credit 
disallowances under 26 U.S.C. § 280C.
(xi) For taxable years beginning after December 31, 1986, dividend 
income on stock issued by Kansas venture capital, inc.
(xii) For taxable years beginning after December 31, 1989, amounts 
received by retired employees of a board of public utilities as pension and 
retirement benefits pursuant to K.S.A. 13-1246, 13-1246a and 13-1249, 
and amendments thereto.
(xiii) For taxable years beginning after December 31, 2004, amounts 
contributed to and the amount of income earned on contributions deposited 
to an individual development account under K.S.A. 74-50,201 et seq., and 
amendments thereto.
(xiv) For all taxable years commencing after December 31, 1996, that 
portion of any income of a bank organized under the laws of this state or 
any other state, a national banking association organized under the laws of 
the United States, an association organized under the savings and loan 
code of this state or any other state, or a federal savings association 
organized under the laws of the United States, for which an election as an 
S corporation under subchapter S of the federal internal revenue code is in 
effect, which accrues to the taxpayer who is a stockholder of such 
corporation and which is not distributed to the stockholders as dividends of 
the corporation. For taxable years beginning after December 31, 2012, and 
ending before January 1, 2017, the amount of modification under this 
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subsection shall exclude the portion of income or loss reported on schedule 
E and included on line 17 of the taxpayer's form 1040 federal individual 
income tax return.
(xv) For all taxable years beginning after December 31, 2017, the 
cumulative amounts not exceeding $3,000, or $6,000 for a married couple 
filing a joint return, for each designated beneficiary that are contributed to: 
(1) A family postsecondary education savings account established under 
the Kansas postsecondary education savings program or a qualified tuition 
program established and maintained by another state or agency or 
instrumentality thereof pursuant to section 529 of the internal revenue 
code of 1986, as amended, for the purpose of paying the qualified higher 
education expenses of a designated beneficiary; or (2) an achieving a 
better life experience (ABLE) account established under the Kansas ABLE 
savings program or a qualified ABLE program established and maintained 
by another state or agency or instrumentality thereof pursuant to section 
529A of the internal revenue code of 1986, as amended, for the purpose of 
saving private funds to support an individual with a disability. The terms 
and phrases used in this paragraph shall have the meaning respectively 
ascribed thereto by the provisions of K.S.A. 75-643 and 75-652, and 
amendments thereto, and the provisions of such sections are hereby 
incorporated by reference for all purposes thereof.
(xvi) For all taxable years beginning after December 31, 2004, 
amounts received by taxpayers who are or were members of the armed 
forces of the United States, including service in the Kansas army and air 
national guard, as a recruitment, sign up or retention bonus received by 
such taxpayer as an incentive to join, enlist or remain in the armed services 
of the United States, including service in the Kansas army and air national 
guard, and amounts received for repayment of educational or student loans 
incurred by or obligated to such taxpayer and received by such taxpayer as 
a result of such taxpayer's service in the armed forces of the United States, 
including service in the Kansas army and air national guard.
(xvii) For all taxable years beginning after December 31, 2004, 
amounts received by taxpayers who are eligible members of the Kansas 
army and air national guard as a reimbursement pursuant to K.S.A. 48-
281, and amendments thereto, and amounts received for death benefits 
pursuant to K.S.A. 48-282, and amendments thereto, to the extent that 
such death benefits are included in federal adjusted gross income of the 
taxpayer.
(xviii) For the taxable year beginning after December 31, 2006, 
amounts received as benefits under the federal social security act which 
are included in federal adjusted gross income of a taxpayer with federal 
adjusted gross income of $50,000 or less, whether such taxpayer's filing 
status is single, head of household, married filing separate or married filing 
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jointly; and   (1) For all taxable years beginning after December 31, 
2007, and ending before January 1, 2024, amounts received as benefits 
under the federal social security act which that are included in federal 
adjusted gross income of a taxpayer with federal adjusted gross income of 
$75,000 or less, whether such taxpayer's filing status is single, head of 
household, married filing separate or married filing jointly.
(2) For all taxable years beginning after December 31, 2023, 
amounts received as benefits under the federal social security act that are 
included in federal adjusted gross income of a taxpayer.
(xix) Amounts received by retired employees of Washburn university 
as retirement and pension benefits under the university's retirement plan.
(xx) For taxable years beginning after December 31, 2012, and 
ending before January 1, 2017, the amount of any: (1) Net profit from 
business as determined under the federal internal revenue code and 
reported from schedule C and on line 12 of the taxpayer's form 1040 
federal individual income tax return; (2) net income, not including 
guaranteed payments as defined in section 707(c) of the federal internal 
revenue code and as reported to the taxpayer from federal schedule K-1, 
(form 1065-B), in box 9, code F or as reported to the taxpayer from federal 
schedule K-1, (form 1065) in box 4, from rental real estate, royalties, 
partnerships, S corporations, estates, trusts, residual interest in real estate 
mortgage investment conduits and net farm rental as determined under the 
federal internal revenue code and reported from schedule E and on line 17 
of the taxpayer's form 1040 federal individual income tax return; and (3) 
net farm profit as determined under the federal internal revenue code and 
reported from schedule F and on line 18 of the taxpayer's form 1040 
federal income tax return; all to the extent included in the taxpayer's 
federal adjusted gross income. For purposes of this subsection, references 
to the federal form 1040 and federal schedule C, schedule E, and schedule 
F, shall be to such form and schedules as they existed for tax year 2011 
and as revised thereafter by the internal revenue service.
(xxi) For all taxable years beginning after December 31, 2013, 
amounts equal to the unreimbursed travel, lodging and medical 
expenditures directly incurred by a taxpayer while living, or a dependent 
of the taxpayer while living, for the donation of one or more human organs 
of the taxpayer, or a dependent of the taxpayer, to another person for 
human organ transplantation. The expenses may be claimed as a 
subtraction modification provided for in this section to the extent the 
expenses are not already subtracted from the taxpayer's federal adjusted 
gross income. In no circumstances shall the subtraction modification 
provided for in this section for any individual, or a dependent, exceed 
$5,000. As used in this section, "human organ" means all or part of a liver, 
pancreas, kidney, intestine, lung or bone marrow. The provisions of this 
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paragraph shall take effect on the day the secretary of revenue certifies to 
the director of the budget that the cost for the department of revenue of 
modifications to the automated tax system for the purpose of 
implementing this paragraph will not exceed $20,000.
(xxii) For taxable years beginning after December 31, 2012, and 
ending before January 1, 2017, the amount of net gain from the sale of: (1) 
Cattle and horses, regardless of age, held by the taxpayer for draft, 
breeding, dairy or sporting purposes, and held by such taxpayer for 24 
months or more from the date of acquisition; and (2) other livestock, 
regardless of age, held by the taxpayer for draft, breeding, dairy or 
sporting purposes, and held by such taxpayer for 12 months or more from 
the date of acquisition. The subtraction from federal adjusted gross income 
shall be limited to the amount of the additions recognized under the 
provisions of subsection (b)(xix) attributable to the business in which the 
livestock sold had been used. As used in this paragraph, the term 
"livestock" shall not include poultry.
(xxiii) For all taxable years beginning after December 31, 2012, 
amounts received under either the Overland Park, Kansas police 
department retirement plan or the Overland Park, Kansas fire department 
retirement plan, both as established by the city of Overland Park, pursuant 
to the city's home rule authority.
(xxiv) For taxable years beginning after December 31, 2013, and 
ending before January 1, 2017, the net gain from the sale from Christmas 
trees grown in Kansas and held by the taxpayer for six years or more.
(xxv) For all taxable years commencing after December 31, 2020, 
100% of global intangible low-taxed income under section 951A of the 
federal internal revenue code of 1986, before any deductions allowed 
under section 250(a)(1)(B) of such code.
(xxvi) For all taxable years commencing after December 31, 2020, 
the amount disallowed as a deduction pursuant to section 163(j) of the 
federal internal revenue code of 1986, as in effect on January 1, 2018.
(xxvii) For taxable years commencing after December 31, 2020, the 
amount disallowed as a deduction pursuant to section 274 of the federal 
internal revenue code of 1986 for meal expenditures shall be allowed to 
the extent such expense was deductible for determining federal income tax 
and was allowed and in effect on December 31, 2017.
(xxviii) For all taxable years beginning after December 31, 2021: (1) 
The amount contributed to a first-time home buyer savings account 
pursuant to K.S.A. 2023 Supp. 58-4903, and amendments thereto, in an 
amount not to exceed $3,000 for an individual or $6,000 for a married 
couple filing a joint return; or (2) amounts received as income earned from 
assets in a first-time home buyer savings account.
(d) There shall be added to or subtracted from federal adjusted gross 
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income the taxpayer's share, as beneficiary of an estate or trust, of the 
Kansas fiduciary adjustment determined under K.S.A. 79-32,135, and 
amendments thereto.
(e) The amount of modifications required to be made under this 
section by a partner which relates to items of income, gain, loss, deduction 
or credit of a partnership shall be determined under K.S.A. 79-32,131, and 
amendments thereto, to the extent that such items affect federal adjusted 
gross income of the partner.
Sec. 7. K.S.A. 2023 Supp. 79-32,119 is hereby amended to read as 
follows: 79-32,119. (a) The Kansas standard deduction of an individual, 
including a husband and wife who are either both residents or who file a 
joint return as if both were residents, shall be equal to the sum of the 
standard deduction amount allowed pursuant to this section, and the 
additional standard deduction amount allowed pursuant to this section for 
each such deduction allowable to such individual or to such husband and 
wife under the federal internal revenue code.
(b) For tax year 1998, and all tax years thereafter, the additional 
standard deduction amount shall be as follows: Single individual and head 
of household filing status, $850; and married filing status, $700.
(c) (1) For tax year 2013 through tax year 2020, the standard 
deduction amount of an individual, including husband and wife who are 
either both residents or who file a joint return as if both were residents, 
shall be as follows: Single individual filing status, $3,000; married filing 
status, $7,500; and head of household filing status, $5,500.
(2) For tax year years 2021, and all tax years thereafter through 2023, 
the standard deduction amount of an individual, including husband and 
wife who are either both residents or who file a joint return as if both were 
residents, shall be as follows: Single individual filing status, $3,500; 
married filing status, $8,000; and head of household filing status, $6,000.
(3) For tax year 2024, and all tax years thereafter, the standard 
deduction amount of an individual, including husband and wife who are 
either both residents or who file a joint return as if both were residents, 
shall be as follows: Single individual filing status, $5,000; married filing 
status, $10,000; and head of household filing status, $7,500.
(d) For purposes of this section, the federal standard deduction 
allowable to a husband and wife filing separate Kansas income tax returns 
shall be determined on the basis that separate federal returns were filed, 
and the federal standard deduction of a husband and wife filing a joint 
Kansas income tax return shall be determined on the basis that a joint 
federal income tax return was filed.
Sec. 8. K.S.A. 2023 Supp. 79-3603 is hereby amended to read as 
follows: 79-3603. For the privilege of engaging in the business of selling 
tangible personal property at retail in this state or rendering or furnishing 
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any of the services taxable under this act, there is hereby levied and there 
shall be collected and paid a tax at the rate of 6.5%. On and after January 
1, 2023, 17% and on and after January 1, 2025 April 1, 2024, 18% of the 
tax rate imposed pursuant to this section and the rate provided in K.S.A. 
2023 Supp. 79-3603d, and amendments thereto, shall be levied for the 
state highway fund, the state highway fund purposes and those purposes 
specified in K.S.A. 68-416, and amendments thereto, and all revenue 
collected and received from such tax levy shall be deposited in the state 
highway fund.
Within a redevelopment district established pursuant to K.S.A. 74-
8921, and amendments thereto, there is hereby levied and there shall be 
collected and paid an additional tax at the rate of 2% until the earlier of the 
date the bonds issued to finance or refinance the redevelopment project 
have been paid in full or the final scheduled maturity of the first series of 
bonds issued to finance any part of the project.
Such tax shall be imposed upon:
(a) The gross receipts received from the sale of tangible personal 
property at retail within this state;
(b) the gross receipts from intrastate, interstate or international 
telecommunications services and any ancillary services sourced to this 
state in accordance with K.S.A. 79-3673, and amendments thereto, except 
that telecommunications service does not include: (1) Any interstate or 
international 800 or 900 service; (2) any interstate or international private 
communications service as defined in K.S.A. 79-3673, and amendments 
thereto; (3) any value-added nonvoice data service; (4) any 
telecommunication service to a provider of telecommunication services 
which will be used to render telecommunications services, including 
carrier access services; or (5) any service or transaction defined in this 
section among entities classified as members of an affiliated group as 
provided by section 1504 of the federal internal revenue code of 1986, as 
in effect on January 1, 2001;
(c) the gross receipts from the sale or furnishing of gas, water, 
electricity and heat, which sale is not otherwise exempt from taxation 
under the provisions of this act, and whether furnished by municipally or 
privately owned utilities, except that, on and after January 1, 2006, for 
sales of gas, electricity and heat delivered through mains, lines or pipes to 
residential premises for noncommercial use by the occupant of such 
premises, and for agricultural use and also, for such use, all sales of 
propane gas, the state rate shall be 0%; and for all sales of propane gas, LP 
gas, coal, wood and other fuel sources for the production of heat or 
lighting for noncommercial use of an occupant of residential premises, the 
state rate shall be 0%, but such tax shall not be levied and collected upon 
the gross receipts from: (1) The sale of a rural water district benefit unit; 
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(2) a water system impact fee, system enhancement fee or similar fee 
collected by a water supplier as a condition for establishing service; or (3) 
connection or reconnection fees collected by a water supplier;
(d) the gross receipts from the sale of meals or drinks furnished at any 
private club, drinking establishment, catered event, restaurant, eating 
house, dining car, hotel, drugstore or other place where meals or drinks are 
regularly sold to the public;
(e) the gross receipts from the sale of admissions to any place 
providing amusement, entertainment or recreation services including 
admissions to state, county, district and local fairs, but such tax shall not 
be levied and collected upon the gross receipts received from sales of 
admissions to any cultural and historical event which occurs triennially;
(f) the gross receipts from the operation of any coin-operated device 
dispensing or providing tangible personal property, amusement or other 
services except laundry services, whether automatic or manually operated;
(g) the gross receipts from the service of renting of rooms by hotels, 
as defined by K.S.A. 36-501, and amendments thereto, or by 
accommodation brokers, as defined by K.S.A. 12-1692, and amendments 
thereto, but such tax shall not be levied and collected upon the gross 
receipts received from sales of such service to the federal government and 
any agency, officer or employee thereof in association with the 
performance of official government duties;
(h) the gross receipts from the service of renting or leasing of tangible 
personal property except such tax shall not apply to the renting or leasing 
of machinery, equipment or other personal property owned by a city and 
purchased from the proceeds of industrial revenue bonds issued prior to 
July 1, 1973, in accordance with the provisions of K.S.A. 12-1740 through 
12-1749, and amendments thereto, and any city or lessee renting or leasing 
such machinery, equipment or other personal property purchased with the 
proceeds of such bonds who shall have paid a tax under the provisions of 
this section upon sales made prior to July 1, 1973, shall be entitled to a 
refund from the sales tax refund fund of all taxes paid thereon;
(i) the gross receipts from the rendering of dry cleaning, pressing, 
dyeing and laundry services except laundry services rendered through a 
coin-operated device whether automatic or manually operated;
(j) the gross receipts from the rendering of the services of washing 
and washing and waxing of vehicles;
(k) the gross receipts from cable, community antennae and other 
subscriber radio and television services;
(l) (1) except as otherwise provided by paragraph (2), the gross 
receipts received from the sales of tangible personal property to all 
contractors, subcontractors or repairmen for use by them in erecting 
structures, or building on, or otherwise improving, altering, or repairing 
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real or personal property.
(2) Any such contractor, subcontractor or repairman who maintains 
an inventory of such property both for sale at retail and for use by them for 
the purposes described by paragraph (1) shall be deemed a retailer with 
respect to purchases for and sales from such inventory, except that the 
gross receipts received from any such sale, other than a sale at retail, shall 
be equal to the total purchase price paid for such property and the tax 
imposed thereon shall be paid by the deemed retailer;
(m) the gross receipts received from fees and charges by public and 
private clubs, drinking establishments, organizations and businesses for 
participation in sports, games and other recreational activities, but such tax 
shall not be levied and collected upon the gross receipts received from: (1) 
Fees and charges by any political subdivision, by any organization exempt 
from property taxation pursuant to K.S.A. 79-201 Ninth, and amendments 
thereto, or by any youth recreation organization exclusively providing 
services to persons 18 years of age or younger which is exempt from 
federal income taxation pursuant to section 501(c)(3) of the federal 
internal revenue code of 1986, for participation in sports, games and other 
recreational activities; and (2) entry fees and charges for participation in a 
special event or tournament sanctioned by a national sporting association 
to which spectators are charged an admission which is taxable pursuant to 
subsection (e);
(n) the gross receipts received from dues charged by public and 
private clubs, drinking establishments, organizations and businesses, 
payment of which entitles a member to the use of facilities for recreation 
or entertainment, but such tax shall not be levied and collected upon the 
gross receipts received from: (1) Dues charged by any organization exempt 
from property taxation pursuant to K.S.A. 79-201 Eighth and Ninth, and 
amendments thereto; and (2) sales of memberships in a nonprofit 
organization which is exempt from federal income taxation pursuant to 
section 501(c)(3) of the federal internal revenue code of 1986, and whose 
purpose is to support the operation of a nonprofit zoo;
(o) the gross receipts received from the isolated or occasional sale of 
motor vehicles or trailers but not including: (1) The transfer of motor 
vehicles or trailers by a person to a corporation or limited liability 
company solely in exchange for stock securities or membership interest in 
such corporation or limited liability company; (2) the transfer of motor 
vehicles or trailers by one corporation or limited liability company to 
another when all of the assets of such corporation or limited liability 
company are transferred to such other corporation or limited liability 
company; or (3) the sale of motor vehicles or trailers which are subject to 
taxation pursuant to the provisions of K.S.A. 79-5101 et seq., and 
amendments thereto, by an immediate family member to another 
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immediate family member. For the purposes of paragraph (3), immediate 
family member means lineal ascendants or descendants, and their spouses. 
Any amount of sales tax paid pursuant to the Kansas retailers sales tax act 
on the isolated or occasional sale of motor vehicles or trailers on and after 
July 1, 2004, which the base for computing the tax was the value pursuant 
to K.S.A. 79-5105(a), (b)(1) and (b)(2), and amendments thereto, when 
such amount was higher than the amount of sales tax which would have 
been paid under the law as it existed on June 30, 2004, shall be refunded to 
the taxpayer pursuant to the procedure prescribed by this section. Such 
refund shall be in an amount equal to the difference between the amount of 
sales tax paid by the taxpayer and the amount of sales tax which would 
have been paid by the taxpayer under the law as it existed on June 30, 
2004. Each claim for a sales tax refund shall be verified and submitted not 
later than six months from the effective date of this act to the director of 
taxation upon forms furnished by the director and shall be accompanied by 
any additional documentation required by the director. The director shall 
review each claim and shall refund that amount of tax paid as provided by 
this act. All such refunds shall be paid from the sales tax refund fund, upon 
warrants of the director of accounts and reports pursuant to vouchers 
approved by the director of taxation or the director's designee. No refund 
for an amount less than $10 shall be paid pursuant to this act. In 
determining the base for computing the tax on such isolated or occasional 
sale, the fair market value of any motor vehicle or trailer traded in by the 
purchaser to the seller may be deducted from the selling price;
(p) the gross receipts received for the service of installing or applying 
tangible personal property which when installed or applied is not being 
held for sale in the regular course of business, and whether or not such 
tangible personal property when installed or applied remains tangible 
personal property or becomes a part of real estate, except that no tax shall 
be imposed upon the service of installing or applying tangible personal 
property in connection with the original construction of a building or 
facility, the original construction, reconstruction, restoration, remodeling, 
renovation, repair or replacement of a residence or the construction, 
reconstruction, restoration, replacement or repair of a bridge or highway.
For the purposes of this subsection:
(1) "Original construction" means the first or initial construction of a 
new building or facility. The term "original construction" shall include the 
addition of an entire room or floor to any existing building or facility, the 
completion of any unfinished portion of any existing building or facility 
and the restoration, reconstruction or replacement of a building, facility or 
utility structure damaged or destroyed by fire, flood, tornado, lightning, 
explosion, windstorm, ice loading and attendant winds, terrorism or 
earthquake, but such term, except with regard to a residence, shall not 
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include replacement, remodeling, restoration, renovation or reconstruction 
under any other circumstances;
(2) "building" means only those enclosures within which individuals 
customarily are employed, or which are customarily used to house 
machinery, equipment or other property, and including the land 
improvements immediately surrounding such building;
(3) "facility" means a mill, plant, refinery, oil or gas well, water well, 
feedlot or any conveyance, transmission or distribution line of any 
cooperative, nonprofit, membership corporation organized under or subject 
to the provisions of K.S.A. 17-4601 et seq., and amendments thereto, or 
municipal or quasi-municipal corporation, including the land 
improvements immediately surrounding such facility;
(4) "residence" means only those enclosures within which individuals 
customarily live;
(5) "utility structure" means transmission and distribution lines 
owned by an independent transmission company or cooperative, the 
Kansas electric transmission authority or natural gas or electric public 
utility; and
(6) "windstorm" means straight line winds of at least 80 miles per 
hour as determined by a recognized meteorological reporting agency or 
organization;
(q) the gross receipts received for the service of repairing, servicing, 
altering or maintaining tangible personal property which when such 
services are rendered is not being held for sale in the regular course of 
business, and whether or not any tangible personal property is transferred 
in connection therewith. The tax imposed by this subsection shall be 
applicable to the services of repairing, servicing, altering or maintaining an 
item of tangible personal property which has been and is fastened to, 
connected with or built into real property;
(r) the gross receipts from fees or charges made under service or 
maintenance agreement contracts for services, charges for the providing of 
which are taxable under the provisions of subsection (p) or (q);
(s) on and after January 1, 2005, the gross receipts received from the 
sale of prewritten computer software and the sale of the services of 
modifying, altering, updating or maintaining prewritten computer 
software, whether the prewritten computer software is installed or 
delivered electronically by tangible storage media physically transferred to 
the purchaser or by load and leave;
(t) the gross receipts received for telephone answering services;
(u) the gross receipts received from the sale of prepaid calling service 
and prepaid wireless calling service as defined in K.S.A. 79-3673, and 
amendments thereto;
(v) all sales of bingo cards, bingo faces and instant bingo tickets by 
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licensees under K.S.A. 75-5171 et seq., and amendments thereto, shall be 
exempt from taxes imposed pursuant to this section;
(w) all sales of charitable raffle tickets in accordance with K.S.A. 75-
5171 et seq., and amendments thereto, shall be exempt from taxes imposed 
pursuant to this section; and
(x) commencing on January 1, 2023, and thereafter, the state rate on 
the gross receipts from the sale of food and food ingredients shall be as set 
forth in K.S.A. 2023 Supp. 79-3603d, and amendments thereto.
Sec. 9. K.S.A. 2023 Supp. 79-3603d is hereby amended to read as 
follows: 79-3603d. (a) There is hereby levied and there shall be collected 
and paid a tax upon the gross receipts from the sale of food and food 
ingredients. The rate of tax shall be as follows:
(1) Commencing on January 1, 2023, at the rate of 4%;
(2) commencing on January 1, 2024, at the rate of 2%; and
(3) commencing on January 1, 2025 April 1, 2024, and thereafter, at 
the rate of 0%.
(b) The provisions of this section shall not apply to prepared food 
unless sold without eating utensils provided by the seller and described 
below:
(1) Food sold by a seller whose proper primary NAICS classification 
is manufacturing in sector 311, except subsector 3118 (bakeries);
(2) (A) food sold in an unheated state by weight or volume as a single 
item; or
(B) only meat or seafood sold in an unheated state by weight or 
volume as a single item;
(3) bakery items, including bread, rolls, buns, biscuits, bagels, 
croissants, pastries, donuts, danish, cakes, tortes, pies, tarts, muffins, bars, 
cookies and tortillas; or
(4) food sold that ordinarily requires additional cooking, as opposed 
to just reheating, by the consumer prior to consumption.
(c) The provisions of this section shall be a part of and supplemental 
to the Kansas retailers' sales tax act.
Sec. 10. K.S.A. 2023 Supp. 79-3606 is hereby amended to read as 
follows: 79-3606. The following shall be exempt from the tax imposed by 
this act:
(a) All sales of motor-vehicle fuel or other articles upon which a sales 
or excise tax has been paid, not subject to refund, under the laws of this 
state except cigarettes and electronic cigarettes as defined by K.S.A. 79-
3301, and amendments thereto, including consumable material for such 
electronic cigarettes, cereal malt beverages and malt products as defined 
by K.S.A. 79-3817, and amendments thereto, including wort, liquid malt, 
malt syrup and malt extract, that is not subject to taxation under the 
provisions of K.S.A. 79-41a02, and amendments thereto, motor vehicles 
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taxed pursuant to K.S.A. 79-5117, and amendments thereto, tires taxed 
pursuant to K.S.A. 65-3424d, and amendments thereto, drycleaning and 
laundry services taxed pursuant to K.S.A. 65-34,150, and amendments 
thereto, and gross receipts from regulated sports contests taxed pursuant to 
the Kansas professional regulated sports act, and amendments thereto;
(b) all sales of tangible personal property or service, including the 
renting and leasing of tangible personal property, purchased directly by the 
state of Kansas, a political subdivision thereof, other than a school or 
educational institution, or purchased by a public or private nonprofit 
hospital, public hospital authority, nonprofit blood, tissue or organ bank or 
nonprofit integrated community care organization and used exclusively for 
state, political subdivision, hospital, public hospital authority, nonprofit 
blood, tissue or organ bank or nonprofit integrated community care 
organization purposes, except when: (1) Such state, hospital or public 
hospital authority is engaged or proposes to engage in any business 
specifically taxable under the provisions of this act and such items of 
tangible personal property or service are used or proposed to be used in 
such business; or (2) such political subdivision is engaged or proposes to 
engage in the business of furnishing gas, electricity or heat to others and 
such items of personal property or service are used or proposed to be used 
in such business;
(c) all sales of tangible personal property or services, including the 
renting and leasing of tangible personal property, purchased directly by a 
public or private elementary or secondary school or public or private 
nonprofit educational institution and used primarily by such school or 
institution for nonsectarian programs and activities provided or sponsored 
by such school or institution or in the erection, repair or enlargement of 
buildings to be used for such purposes. The exemption herein provided 
shall not apply to erection, construction, repair, enlargement or equipment 
of buildings used primarily for human habitation, except that such 
exemption shall apply to the erection, construction, repair, enlargement or 
equipment of buildings used for human habitation by the cerebral palsy 
research foundation of Kansas located in Wichita, Kansas, and multi 
community diversified services, incorporated, located in McPherson, 
Kansas;
(d) all sales of tangible personal property or services purchased by a 
contractor for the purpose of constructing, equipping, reconstructing, 
maintaining, repairing, enlarging, furnishing or remodeling facilities for 
any public or private nonprofit hospital or public hospital authority, public 
or private elementary or secondary school, a public or private nonprofit 
educational institution, state correctional institution including a privately 
constructed correctional institution contracted for state use and ownership, 
that would be exempt from taxation under the provisions of this act if 
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purchased directly by such hospital or public hospital authority, school, 
educational institution or a state correctional institution; and all sales of 
tangible personal property or services purchased by a contractor for the 
purpose of constructing, equipping, reconstructing, maintaining, repairing, 
enlarging, furnishing or remodeling facilities for any political subdivision 
of the state or district described in subsection (s), the total cost of which is 
paid from funds of such political subdivision or district and that would be 
exempt from taxation under the provisions of this act if purchased directly 
by such political subdivision or district. Nothing in this subsection or in 
the provisions of K.S.A. 12-3418, and amendments thereto, shall be 
deemed to exempt the purchase of any construction machinery, equipment 
or tools used in the constructing, equipping, reconstructing, maintaining, 
repairing, enlarging, furnishing or remodeling facilities for any political 
subdivision of the state or any such district. As used in this subsection, 
K.S.A. 12-3418 and 79-3640, and amendments thereto, "funds of a 
political subdivision" shall mean general tax revenues, the proceeds of any 
bonds and gifts or grants-in-aid. Gifts shall not mean funds used for the 
purpose of constructing, equipping, reconstructing, repairing, enlarging, 
furnishing or remodeling facilities that are to be leased to the donor. When 
any political subdivision of the state, district described in subsection (s), 
public or private nonprofit hospital or public hospital authority, public or 
private elementary or secondary school, public or private nonprofit 
educational institution, state correctional institution including a privately 
constructed correctional institution contracted for state use and ownership 
shall contract for the purpose of constructing, equipping, reconstructing, 
maintaining, repairing, enlarging, furnishing or remodeling facilities, it 
shall obtain from the state and furnish to the contractor an exemption 
certificate for the project involved, and the contractor may purchase 
materials for incorporation in such project. The contractor shall furnish the 
number of such certificate to all suppliers from whom such purchases are 
made, and such suppliers shall execute invoices covering the same bearing 
the number of such certificate. Upon completion of the project the 
contractor shall furnish to the political subdivision, district described in 
subsection (s), hospital or public hospital authority, school, educational 
institution or department of corrections concerned a sworn statement, on a 
form to be provided by the director of taxation, that all purchases so made 
were entitled to exemption under this subsection. As an alternative to the 
foregoing procedure, any such contracting entity may apply to the 
secretary of revenue for agent status for the sole purpose of issuing and 
furnishing project exemption certificates to contractors pursuant to rules 
and regulations adopted by the secretary establishing conditions and 
standards for the granting and maintaining of such status. All invoices 
shall be held by the contractor for a period of five years and shall be 
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subject to audit by the director of taxation. If any materials purchased 
under such a certificate are found not to have been incorporated in the 
building or other project or not to have been returned for credit or the sales 
or compensating tax otherwise imposed upon such materials that will not 
be so incorporated in the building or other project reported and paid by 
such contractor to the director of taxation not later than the 20
th
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month following the close of the month in which it shall be determined 
that such materials will not be used for the purpose for which such 
certificate was issued, the political subdivision, district described in 
subsection (s), hospital or public hospital authority, school, educational 
institution or the contractor contracting with the department of corrections 
for a correctional institution concerned shall be liable for tax on all 
materials purchased for the project, and upon payment thereof it may 
recover the same from the contractor together with reasonable attorney 
fees. Any contractor or any agent, employee or subcontractor thereof, who 
shall use or otherwise dispose of any materials purchased under such a 
certificate for any purpose other than that for which such a certificate is 
issued without the payment of the sales or compensating tax otherwise 
imposed upon such materials, shall be guilty of a misdemeanor and, upon 
conviction therefor, shall be subject to the penalties provided for in K.S.A. 
79-3615(h), and amendments thereto;
(e) all sales of tangible personal property or services purchased by a 
contractor for the erection, repair or enlargement of buildings or other 
projects for the government of the United States, its agencies or 
instrumentalities, that would be exempt from taxation if purchased directly 
by the government of the United States, its agencies or instrumentalities. 
When the government of the United States, its agencies or 
instrumentalities shall contract for the erection, repair, or enlargement of 
any building or other project, it shall obtain from the state and furnish to 
the contractor an exemption certificate for the project involved, and the 
contractor may purchase materials for incorporation in such project. The 
contractor shall furnish the number of such certificates to all suppliers 
from whom such purchases are made, and such suppliers shall execute 
invoices covering the same bearing the number of such certificate. Upon 
completion of the project the contractor shall furnish to the government of 
the United States, its agencies or instrumentalities concerned a sworn 
statement, on a form to be provided by the director of taxation, that all 
purchases so made were entitled to exemption under this subsection. As an 
alternative to the foregoing procedure, any such contracting entity may 
apply to the secretary of revenue for agent status for the sole purpose of 
issuing and furnishing project exemption certificates to contractors 
pursuant to rules and regulations adopted by the secretary establishing 
conditions and standards for the granting and maintaining of such status. 
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All invoices shall be held by the contractor for a period of five years and 
shall be subject to audit by the director of taxation. Any contractor or any 
agent, employee or subcontractor thereof, who shall use or otherwise 
dispose of any materials purchased under such a certificate for any purpose 
other than that for which such a certificate is issued without the payment 
of the sales or compensating tax otherwise imposed upon such materials, 
shall be guilty of a misdemeanor and, upon conviction therefor, shall be 
subject to the penalties provided for in K.S.A. 79-3615(h), and 
amendments thereto;
(f) tangible personal property purchased by a railroad or public utility 
for consumption or movement directly and immediately in interstate 
commerce;
(g) sales of aircraft including remanufactured and modified aircraft 
sold to persons using directly or through an authorized agent such aircraft 
as certified or licensed carriers of persons or property in interstate or 
foreign commerce under authority of the laws of the United States or any 
foreign government or sold to any foreign government or agency or 
instrumentality of such foreign government and all sales of aircraft for use 
outside of the United States and sales of aircraft repair, modification and 
replacement parts and sales of services employed in the remanufacture, 
modification and repair of aircraft;
(h) all rentals of nonsectarian textbooks by public or private 
elementary or secondary schools;
(i) the lease or rental of all films, records, tapes, or any type of sound 
or picture transcriptions used by motion picture exhibitors;
(j) meals served without charge or food used in the preparation of 
such meals to employees of any restaurant, eating house, dining car, hotel, 
drugstore or other place where meals or drinks are regularly sold to the 
public if such employees' duties are related to the furnishing or sale of 
such meals or drinks;
(k) any motor vehicle, semitrailer or pole trailer, as such terms are 
defined by K.S.A. 8-126, and amendments thereto, or aircraft sold and 
delivered in this state to a bona fide resident of another state, which motor 
vehicle, semitrailer, pole trailer or aircraft is not to be registered or based 
in this state and which vehicle, semitrailer, pole trailer or aircraft will not 
remain in this state more than 10 days;
(l) all isolated or occasional sales of tangible personal property, 
services, substances or things, except isolated or occasional sale of motor 
vehicles specifically taxed under the provisions of K.S.A. 79-3603(o), and 
amendments thereto;
(m) all sales of tangible personal property that become an ingredient 
or component part of tangible personal property or services produced, 
manufactured or compounded for ultimate sale at retail within or without 
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the state of Kansas; and any such producer, manufacturer or compounder 
may obtain from the director of taxation and furnish to the supplier an 
exemption certificate number for tangible personal property for use as an 
ingredient or component part of the property or services produced, 
manufactured or compounded;
(n) all sales of tangible personal property that is consumed in the 
production, manufacture, processing, mining, drilling, refining or 
compounding of tangible personal property, the treating of by-products or 
wastes derived from any such production process, the providing of 
services or the irrigation of crops for ultimate sale at retail within or 
without the state of Kansas; and any purchaser of such property may 
obtain from the director of taxation and furnish to the supplier an 
exemption certificate number for tangible personal property for 
consumption in such production, manufacture, processing, mining, 
drilling, refining, compounding, treating, irrigation and in providing such 
services;
(o) all sales of animals, fowl and aquatic plants and animals, the 
primary purpose of which is use in agriculture or aquaculture, as defined in 
K.S.A. 47-1901, and amendments thereto, the production of food for 
human consumption, the production of animal, dairy, poultry or aquatic 
plant and animal products, fiber or fur, or the production of offspring for 
use for any such purpose or purposes;
(p) all sales of drugs dispensed pursuant to a prescription order by a 
licensed practitioner or a mid-level practitioner as defined by K.S.A. 65-
1626, and amendments thereto. As used in this subsection, "drug" means a 
compound, substance or preparation and any component of a compound, 
substance or preparation, other than food and food ingredients, dietary 
supplements or alcoholic beverages, recognized in the official United 
States pharmacopeia, official homeopathic pharmacopoeia of the United 
States or official national formulary, and supplement to any of them, 
intended for use in the diagnosis, cure, mitigation, treatment or prevention 
of disease or intended to affect the structure or any function of the body, 
except that for taxable years commencing after December 31, 2013, this 
subsection shall not apply to any sales of drugs used in the performance or 
induction of an abortion, as defined in K.S.A. 65-6701, and amendments 
thereto;
(q) all sales of insulin dispensed by a person licensed by the state 
board of pharmacy to a person for treatment of diabetes at the direction of 
a person licensed to practice medicine by the state board of healing arts;
(r) all sales of oxygen delivery equipment, kidney dialysis equipment, 
enteral feeding systems, prosthetic devices and mobility enhancing 
equipment prescribed in writing by a person licensed to practice the 
healing arts, dentistry or optometry, and in addition to such sales, all sales 
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of hearing aids, as defined by K.S.A. 74-5807(c), and amendments thereto, 
and repair and replacement parts therefor, including batteries, by a person 
licensed in the practice of dispensing and fitting hearing aids pursuant to 
the provisions of K.S.A. 74-5808, and amendments thereto. For the 
purposes of this subsection: (1) "Mobility enhancing equipment" means 
equipment including repair and replacement parts to same, but does not 
include durable medical equipment, which is primarily and customarily 
used to provide or increase the ability to move from one place to another 
and which is appropriate for use either in a home or a motor vehicle; is not 
generally used by persons with normal mobility; and does not include any 
motor vehicle or equipment on a motor vehicle normally provided by a 
motor vehicle manufacturer; and (2) "prosthetic device" means a 
replacement, corrective or supportive device including repair and 
replacement parts for same worn on or in the body to artificially replace a 
missing portion of the body, prevent or correct physical deformity or 
malfunction or support a weak or deformed portion of the body;
(s) except as provided in K.S.A. 82a-2101, and amendments thereto, 
all sales of tangible personal property or services purchased directly or 
indirectly by a groundwater management district organized or operating 
under the authority of K.S.A. 82a-1020 et seq., and amendments thereto, 
by a rural water district organized or operating under the authority of 
K.S.A. 82a-612, and amendments thereto, or by a water supply district 
organized or operating under the authority of K.S.A. 19-3501 et seq., 19-
3522 et seq. or 19-3545, and amendments thereto, which property or 
services are used in the construction activities, operation or maintenance of 
the district;
(t) all sales of farm machinery and equipment or aquaculture 
machinery and equipment, repair and replacement parts therefor and 
services performed in the repair and maintenance of such machinery and 
equipment. For the purposes of this subsection the term "farm machinery 
and equipment or aquaculture machinery and equipment" shall include a 
work-site utility vehicle, as defined in K.S.A. 8-126, and amendments 
thereto, and is equipped with a bed or cargo box for hauling materials, and 
shall also include machinery and equipment used in the operation of 
Christmas tree farming but shall not include any passenger vehicle, truck, 
truck tractor, trailer, semitrailer or pole trailer, other than a farm trailer, as 
such terms are defined by K.S.A. 8-126, and amendments thereto. "Farm 
machinery and equipment" includes precision farming equipment that is 
portable or is installed or purchased to be installed on farm machinery and 
equipment. "Precision farming equipment" includes the following items 
used only in computer-assisted farming, ranching or aquaculture 
production operations: Soil testing sensors, yield monitors, computers, 
monitors, software, global positioning and mapping systems, guiding 
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systems, modems, data communications equipment and any necessary 
mounting hardware, wiring and antennas. Each purchaser of farm 
machinery and equipment or aquaculture machinery and equipment 
exempted herein must certify in writing on the copy of the invoice or sales 
ticket to be retained by the seller that the farm machinery and equipment 
or aquaculture machinery and equipment purchased will be used only in 
farming, ranching or aquaculture production. Farming or ranching shall 
include the operation of a feedlot and farm and ranch work for hire and the 
operation of a nursery;
(u) all leases or rentals of tangible personal property used as a 
dwelling if such tangible personal property is leased or rented for a period 
of more than 28 consecutive days;
(v) all sales of tangible personal property to any contractor for use in 
preparing meals for delivery to homebound elderly persons over 60 years 
of age and to homebound disabled persons or to be served at a group-
sitting at a location outside of the home to otherwise homebound elderly 
persons over 60 years of age and to otherwise homebound disabled 
persons, as all or part of any food service project funded in whole or in 
part by government or as part of a private nonprofit food service project 
available to all such elderly or disabled persons residing within an area of 
service designated by the private nonprofit organization, and all sales of 
tangible personal property for use in preparing meals for consumption by 
indigent or homeless individuals whether or not such meals are consumed 
at a place designated for such purpose, and all sales of food products by or 
on behalf of any such contractor or organization for any such purpose;
(w) all sales of natural gas, electricity, heat and water delivered 
through mains, lines or pipes: (1) To residential premises for 
noncommercial use by the occupant of such premises; (2) for agricultural 
use and also, for such use, all sales of propane gas; (3) for use in the 
severing of oil; and (4) to any property which is exempt from property 
taxation pursuant to K.S.A. 79-201b, Second through Sixth. As used in this 
paragraph, "severing" means the same as defined in K.S.A. 79-4216(k), 
and amendments thereto. For all sales of natural gas, electricity and heat 
delivered through mains, lines or pipes pursuant to the provisions of 
subsection (w)(1) and (w)(2), the provisions of this subsection shall expire 
on December 31, 2005;
(x) all sales of propane gas, LP-gas, coal, wood and other fuel sources 
for the production of heat or lighting for noncommercial use of an 
occupant of residential premises occurring prior to January 1, 2006;
(y) all sales of materials and services used in the repairing, servicing, 
altering, maintaining, manufacturing, remanufacturing, or modification of 
railroad rolling stock for use in interstate or foreign commerce under 
authority of the laws of the United States;
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(z) all sales of tangible personal property and services purchased 
directly by a port authority or by a contractor therefor as provided by the 
provisions of K.S.A. 12-3418, and amendments thereto;
(aa) all sales of materials and services applied to equipment that is 
transported into the state from without the state for repair, service, 
alteration, maintenance, remanufacture or modification and that is 
subsequently transported outside the state for use in the transmission of 
liquids or natural gas by means of pipeline in interstate or foreign 
commerce under authority of the laws of the United States;
(bb) all sales of used mobile homes or manufactured homes. As used 
in this subsection: (1) "Mobile homes" and "manufactured homes" mean 
the same as defined in K.S.A. 58-4202, and amendments thereto; and (2) 
"sales of used mobile homes or manufactured homes" means sales other 
than the original retail sale thereof;
(cc) all sales of tangible personal property or services purchased prior 
to January 1, 2012, except as otherwise provided, for the purpose of and in 
conjunction with constructing, reconstructing, enlarging or remodeling a 
business or retail business that meets the requirements established in 
K.S.A. 74-50,115, and amendments thereto, and the sale and installation of 
machinery and equipment purchased for installation at any such business 
or retail business, and all sales of tangible personal property or services 
purchased on or after January 1, 2012, for the purpose of and in 
conjunction with constructing, reconstructing, enlarging or remodeling a 
business that meets the requirements established in K.S.A. 74-50,115(e), 
and amendments thereto, and the sale and installation of machinery and 
equipment purchased for installation at any such business. When a person 
shall contract for the construction, reconstruction, enlargement or 
remodeling of any such business or retail business, such person shall 
obtain from the state and furnish to the contractor an exemption certificate 
for the project involved, and the contractor may purchase materials, 
machinery and equipment for incorporation in such project. The contractor 
shall furnish the number of such certificates to all suppliers from whom 
such purchases are made, and such suppliers shall execute invoices 
covering the same bearing the number of such certificate. Upon 
completion of the project the contractor shall furnish to the owner of the 
business or retail business a sworn statement, on a form to be provided by 
the director of taxation, that all purchases so made were entitled to 
exemption under this subsection. All invoices shall be held by the 
contractor for a period of five years and shall be subject to audit by the 
director of taxation. Any contractor or any agent, employee or 
subcontractor thereof, who shall use or otherwise dispose of any materials, 
machinery or equipment purchased under such a certificate for any 
purpose other than that for which such a certificate is issued without the 
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payment of the sales or compensating tax otherwise imposed thereon, shall 
be guilty of a misdemeanor and, upon conviction therefor, shall be subject 
to the penalties provided for in K.S.A. 79-3615(h), and amendments 
thereto. As used in this subsection, "business" and "retail business" mean 
the same as defined in K.S.A. 74-50,114, and amendments thereto. Project 
exemption certificates that have been previously issued under this 
subsection by the department of revenue pursuant to K.S.A. 74-50,115, 
and amendments thereto, but not including K.S.A. 74-50,115(e), and 
amendments thereto, prior to January 1, 2012, and have not expired will be 
effective for the term of the project or two years from the effective date of 
the certificate, whichever occurs earlier. Project exemption certificates that 
are submitted to the department of revenue prior to January 1, 2012, and 
are found to qualify will be issued a project exemption certificate that will 
be effective for a two-year period or for the term of the project, whichever 
occurs earlier;
(dd) all sales of tangible personal property purchased with food 
stamps issued by the United States department of agriculture;
(ee) all sales of lottery tickets and shares made as part of a lottery 
operated by the state of Kansas;
(ff) on and after July 1, 1988, all sales of new mobile homes or 
manufactured homes to the extent of 40% of the gross receipts, determined 
without regard to any trade-in allowance, received from such sale. As used 
in this subsection, "mobile homes" and "manufactured homes" mean the 
same as defined in K.S.A. 58-4202, and amendments thereto;
(gg) all sales of tangible personal property purchased in accordance 
with vouchers issued pursuant to the federal special supplemental food 
program for women, infants and children;
(hh) all sales of medical supplies and equipment, including durable 
medical equipment, purchased directly by a nonprofit skilled nursing home 
or nonprofit intermediate nursing care home, as defined by K.S.A. 39-923, 
and amendments thereto, for the purpose of providing medical services to 
residents thereof. This exemption shall not apply to tangible personal 
property customarily used for human habitation purposes. As used in this 
subsection, "durable medical equipment" means equipment including 
repair and replacement parts for such equipment, that can withstand 
repeated use, is primarily and customarily used to serve a medical purpose, 
generally is not useful to a person in the absence of illness or injury and is 
not worn in or on the body, but does not include mobility enhancing 
equipment as defined in subsection (r), oxygen delivery equipment, kidney 
dialysis equipment or enteral feeding systems;
(ii) all sales of tangible personal property purchased directly by a 
nonprofit organization for nonsectarian comprehensive multidiscipline 
youth development programs and activities provided or sponsored by such 
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organization, and all sales of tangible personal property by or on behalf of 
any such organization. This exemption shall not apply to tangible personal 
property customarily used for human habitation purposes;
(jj) all sales of tangible personal property or services, including the 
renting and leasing of tangible personal property, purchased directly on 
behalf of a community-based facility for people with intellectual disability 
or mental health center organized pursuant to K.S.A. 19-4001 et seq., and 
amendments thereto, and licensed in accordance with the provisions of 
K.S.A. 39-2001 et seq., and amendments thereto, and all sales of tangible 
personal property or services purchased by contractors during the time 
period from July, 2003, through June, 2006, for the purpose of 
constructing, equipping, maintaining or furnishing a new facility for a 
community-based facility for people with intellectual disability or mental 
health center located in Riverton, Cherokee County, Kansas, that would 
have been eligible for sales tax exemption pursuant to this subsection if 
purchased directly by such facility or center. This exemption shall not 
apply to tangible personal property customarily used for human habitation 
purposes;
(kk) (1) (A) all sales of machinery and equipment that are used in this 
state as an integral or essential part of an integrated production operation 
by a manufacturing or processing plant or facility;
(B) all sales of installation, repair and maintenance services 
performed on such machinery and equipment; and
(C) all sales of repair and replacement parts and accessories 
purchased for such machinery and equipment.
(2) For purposes of this subsection:
(A) "Integrated production operation" means an integrated series of 
operations engaged in at a manufacturing or processing plant or facility to 
process, transform or convert tangible personal property by physical, 
chemical or other means into a different form, composition or character 
from that in which it originally existed. Integrated production operations 
shall include: (i) Production line operations, including packaging 
operations; (ii) preproduction operations to handle, store and treat raw 
materials; (iii) post production handling, storage, warehousing and 
distribution operations; and (iv) waste, pollution and environmental 
control operations, if any;
(B) "production line" means the assemblage of machinery and 
equipment at a manufacturing or processing plant or facility where the 
actual transformation or processing of tangible personal property occurs;
(C) "manufacturing or processing plant or facility" means a single, 
fixed location owned or controlled by a manufacturing or processing 
business that consists of one or more structures or buildings in a 
contiguous area where integrated production operations are conducted to 
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manufacture or process tangible personal property to be ultimately sold at 
retail. Such term shall not include any facility primarily operated for the 
purpose of conveying or assisting in the conveyance of natural gas, 
electricity, oil or water. A business may operate one or more manufacturing 
or processing plants or facilities at different locations to manufacture or 
process a single product of tangible personal property to be ultimately sold 
at retail;
(D) "manufacturing or processing business" means a business that 
utilizes an integrated production operation to manufacture, process, 
fabricate, finish or assemble items for wholesale and retail distribution as 
part of what is commonly regarded by the general public as an industrial 
manufacturing or processing operation or an agricultural commodity 
processing operation. (i) Industrial manufacturing or processing operations 
include, by way of illustration but not of limitation, the fabrication of 
automobiles, airplanes, machinery or transportation equipment, the 
fabrication of metal, plastic, wood or paper products, electricity power 
generation, water treatment, petroleum refining, chemical production, 
wholesale bottling, newspaper printing, ready mixed concrete production, 
and the remanufacturing of used parts for wholesale or retail sale. Such 
processing operations shall include operations at an oil well, gas well, 
mine or other excavation site where the oil, gas, minerals, coal, clay, stone, 
sand or gravel that has been extracted from the earth is cleaned, separated, 
crushed, ground, milled, screened, washed or otherwise treated or prepared 
before its transmission to a refinery or before any other wholesale or retail 
distribution. (ii) Agricultural commodity processing operations include, by 
way of illustration but not of limitation, meat packing, poultry slaughtering 
and dressing, processing and packaging farm and dairy products in sealed 
containers for wholesale and retail distribution, feed grinding, grain 
milling, frozen food processing, and grain handling, cleaning, blending, 
fumigation, drying and aeration operations engaged in by grain elevators 
or other grain storage facilities. (iii) Manufacturing or processing 
businesses do not include, by way of illustration but not of limitation, 
nonindustrial businesses whose operations are primarily retail and that 
produce or process tangible personal property as an incidental part of 
conducting the retail business, such as retailers who bake, cook or prepare 
food products in the regular course of their retail trade, grocery stores, 
meat lockers and meat markets that butcher or dress livestock or poultry in 
the regular course of their retail trade, contractors who alter, service, repair 
or improve real property, and retail businesses that clean, service or 
refurbish and repair tangible personal property for its owner;
(E) "repair and replacement parts and accessories" means all parts 
and accessories for exempt machinery and equipment, including, but not 
limited to, dies, jigs, molds, patterns and safety devices that are attached to 
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exempt machinery or that are otherwise used in production, and parts and 
accessories that require periodic replacement such as belts, drill bits, 
grinding wheels, grinding balls, cutting bars, saws, refractory brick and 
other refractory items for exempt kiln equipment used in production 
operations;
(F) "primary" or "primarily" mean more than 50% of the time.
(3) For purposes of this subsection, machinery and equipment shall 
be deemed to be used as an integral or essential part of an integrated 
production operation when used to:
(A) Receive, transport, convey, handle, treat or store raw materials in 
preparation of its placement on the production line;
(B) transport, convey, handle or store the property undergoing 
manufacturing or processing at any point from the beginning of the 
production line through any warehousing or distribution operation of the 
final product that occurs at the plant or facility;
(C) act upon, effect, promote or otherwise facilitate a physical change 
to the property undergoing manufacturing or processing;
(D) guide, control or direct the movement of property undergoing 
manufacturing or processing;
(E) test or measure raw materials, the property undergoing 
manufacturing or processing or the finished product, as a necessary part of 
the manufacturer's integrated production operations;
(F) plan, manage, control or record the receipt and flow of inventories 
of raw materials, consumables and component parts, the flow of the 
property undergoing manufacturing or processing and the management of 
inventories of the finished product;
(G) produce energy for, lubricate, control the operating of or 
otherwise enable the functioning of other production machinery and 
equipment and the continuation of production operations;
(H) package the property being manufactured or processed in a 
container or wrapping in which such property is normally sold or 
transported;
(I) transmit or transport electricity, coke, gas, water, steam or similar 
substances used in production operations from the point of generation, if 
produced by the manufacturer or processor at the plant site, to that 
manufacturer's production operation; or, if purchased or delivered from 
off-site, from the point where the substance enters the site of the plant or 
facility to that manufacturer's production operations;
(J) cool, heat, filter, refine or otherwise treat water, steam, acid, oil, 
solvents or other substances that are used in production operations;
(K) provide and control an environment required to maintain certain 
levels of air quality, humidity or temperature in special and limited areas 
of the plant or facility, where such regulation of temperature or humidity is 
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part of and essential to the production process;
(L) treat, transport or store waste or other byproducts of production 
operations at the plant or facility; or
(M) control pollution at the plant or facility where the pollution is 
produced by the manufacturing or processing operation.
(4) The following machinery, equipment and materials shall be 
deemed to be exempt even though it may not otherwise qualify as 
machinery and equipment used as an integral or essential part of an 
integrated production operation: (A) Computers and related peripheral 
equipment that are utilized by a manufacturing or processing business for 
engineering of the finished product or for research and development or 
product design; (B) machinery and equipment that is utilized by a 
manufacturing or processing business to manufacture or rebuild tangible 
personal property that is used in manufacturing or processing operations, 
including tools, dies, molds, forms and other parts of qualifying machinery 
and equipment; (C) portable plants for aggregate concrete, bulk cement 
and asphalt including cement mixing drums to be attached to a motor 
vehicle; (D) industrial fixtures, devices, support facilities and special 
foundations necessary for manufacturing and production operations, and 
materials and other tangible personal property sold for the purpose of 
fabricating such fixtures, devices, facilities and foundations. An exemption 
certificate for such purchases shall be signed by the manufacturer or 
processor. If the fabricator purchases such material, the fabricator shall 
also sign the exemption certificate; (E) a manufacturing or processing 
business' laboratory equipment that is not located at the plant or facility, 
but that would otherwise qualify for exemption under subsection (3)(E); 
(F) all machinery and equipment used in surface mining activities as 
described in K.S.A. 49-601 et seq., and amendments thereto, beginning 
from the time a reclamation plan is filed to the acceptance of the 
completed final site reclamation.
(5) "Machinery and equipment used as an integral or essential part of 
an integrated production operation" shall not include:
(A) Machinery and equipment used for nonproduction purposes, 
including, but not limited to, machinery and equipment used for plant 
security, fire prevention, first aid, accounting, administration, record 
keeping, advertising, marketing, sales or other related activities, plant 
cleaning, plant communications and employee work scheduling;
(B) machinery, equipment and tools used primarily in maintaining 
and repairing any type of machinery and equipment or the building and 
plant;
(C) transportation, transmission and distribution equipment not 
primarily used in a production, warehousing or material handling 
operation at the plant or facility, including the means of conveyance of 
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natural gas, electricity, oil or water, and equipment related thereto, located 
outside the plant or facility;
(D) office machines and equipment including computers and related 
peripheral equipment not used directly and primarily to control or measure 
the manufacturing process;
(E) furniture and other furnishings;
(F) buildings, other than exempt machinery and equipment that is 
permanently affixed to or becomes a physical part of the building, and any 
other part of real estate that is not otherwise exempt;
(G) building fixtures that are not integral to the manufacturing 
operation, such as utility systems for heating, ventilation, air conditioning, 
communications, plumbing or electrical;
(H) machinery and equipment used for general plant heating, cooling 
and lighting;
(I) motor vehicles that are registered for operation on public 
highways; or
(J) employee apparel, except safety and protective apparel that is 
purchased by an employer and furnished gratuitously to employees who 
are involved in production or research activities.
(6) Paragraphs (3) and (5) shall not be construed as exclusive listings 
of the machinery and equipment that qualify or do not qualify as an 
integral or essential part of an integrated production operation. When 
machinery or equipment is used as an integral or essential part of 
production operations part of the time and for nonproduction purposes at 
other times, the primary use of the machinery or equipment shall 
determine whether or not such machinery or equipment qualifies for 
exemption.
(7) The secretary of revenue shall adopt rules and regulations 
necessary to administer the provisions of this subsection;
(ll) all sales of educational materials purchased for distribution to the 
public at no charge by a nonprofit corporation organized for the purpose of 
encouraging, fostering and conducting programs for the improvement of 
public health, except that for taxable years commencing after December 
31, 2013, this subsection shall not apply to any sales of such materials 
purchased by a nonprofit corporation which performs any abortion, as 
defined in K.S.A. 65-6701, and amendments thereto;
(mm) all sales of seeds and tree seedlings; fertilizers, insecticides, 
herbicides, germicides, pesticides and fungicides; and services, purchased 
and used for the purpose of producing plants in order to prevent soil 
erosion on land devoted to agricultural use;
(nn) except as otherwise provided in this act, all sales of services 
rendered by an advertising agency or licensed broadcast station or any 
member, agent or employee thereof;
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(oo) all sales of tangible personal property purchased by a community 
action group or agency for the exclusive purpose of repairing or 
weatherizing housing occupied by low-income individuals;
(pp) all sales of drill bits and explosives actually utilized in the 
exploration and production of oil or gas;
(qq) all sales of tangible personal property and services purchased by 
a nonprofit museum or historical society or any combination thereof, 
including a nonprofit organization that is organized for the purpose of 
stimulating public interest in the exploration of space by providing 
educational information, exhibits and experiences, that is exempt from 
federal income taxation pursuant to section 501(c)(3) of the federal 
internal revenue code of 1986;
(rr) all sales of tangible personal property that will admit the 
purchaser thereof to any annual event sponsored by a nonprofit 
organization that is exempt from federal income taxation pursuant to 
section 501(c)(3) of the federal internal revenue code of 1986, except that 
for taxable years commencing after December 31, 2013, this subsection 
shall not apply to any sales of such tangible personal property purchased 
by a nonprofit organization which performs any abortion, as defined in 
K.S.A. 65-6701, and amendments thereto;
(ss) all sales of tangible personal property and services purchased by 
a public broadcasting station licensed by the federal communications 
commission as a noncommercial educational television or radio station;
(tt) all sales of tangible personal property and services purchased by 
or on behalf of a not-for-profit corporation that is exempt from federal 
income taxation pursuant to section 501(c)(3) of the federal internal 
revenue code of 1986, for the sole purpose of constructing a Kansas 
Korean War memorial;
(uu) all sales of tangible personal property and services purchased by 
or on behalf of any rural volunteer fire-fighting organization for use 
exclusively in the performance of its duties and functions;
(vv) all sales of tangible personal property purchased by any of the 
following organizations that are exempt from federal income taxation 
pursuant to section 501(c)(3) of the federal internal revenue code of 1986, 
for the following purposes, and all sales of any such property by or on 
behalf of any such organization for any such purpose:
(1) The American heart association, Kansas affiliate, inc. for the 
purposes of providing education, training, certification in emergency 
cardiac care, research and other related services to reduce disability and 
death from cardiovascular diseases and stroke;
(2) the Kansas alliance for the mentally ill, inc. for the purpose of 
advocacy for persons with mental illness and to education, research and 
support for their families;
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(3) the Kansas mental illness awareness council for the purposes of 
advocacy for persons who are mentally ill and for education, research and 
support for them and their families;
(4) the American diabetes association Kansas affiliate, inc. for the 
purpose of eliminating diabetes through medical research, public education 
focusing on disease prevention and education, patient education including 
information on coping with diabetes, and professional education and 
training;
(5) the American lung association of Kansas, inc. for the purpose of 
eliminating all lung diseases through medical research, public education 
including information on coping with lung diseases, professional education 
and training related to lung disease and other related services to reduce the 
incidence of disability and death due to lung disease;
(6) the Kansas chapters of the Alzheimer's disease and related 
disorders association, inc. for the purpose of providing assistance and 
support to persons in Kansas with Alzheimer's disease, and their families 
and caregivers;
(7) the Kansas chapters of the Parkinson's disease association for the 
purpose of eliminating Parkinson's disease through medical research and 
public and professional education related to such disease;
(8) the national kidney foundation of Kansas and western Missouri 
for the purpose of eliminating kidney disease through medical research 
and public and private education related to such disease;
(9) the heartstrings community foundation for the purpose of 
providing training, employment and activities for adults with 
developmental disabilities;
(10) the cystic fibrosis foundation, heart of America chapter, for the 
purposes of assuring the development of the means to cure and control 
cystic fibrosis and improving the quality of life for those with the disease;
(11) the spina bifida association of Kansas for the purpose of 
providing financial, educational and practical aid to families and 
individuals with spina bifida. Such aid includes, but is not limited to, 
funding for medical devices, counseling and medical educational 
opportunities;
(12) the CHWC, Inc., for the purpose of rebuilding urban core 
neighborhoods through the construction of new homes, acquiring and 
renovating existing homes and other related activities, and promoting 
economic development in such neighborhoods;
(13) the cross-lines cooperative council for the purpose of providing 
social services to low income individuals and families;
(14) the dreams work, inc., for the purpose of providing young adult 
day services to individuals with developmental disabilities and assisting 
families in avoiding institutional or nursing home care for a 
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developmentally disabled member of their family;
(15) the KSDS, Inc., for the purpose of promoting the independence 
and inclusion of people with disabilities as fully participating and 
contributing members of their communities and society through the 
training and providing of guide and service dogs to people with 
disabilities, and providing disability education and awareness to the 
general public;
(16) the lyme association of greater Kansas City, Inc., for the purpose 
of providing support to persons with lyme disease and public education 
relating to the prevention, treatment and cure of lyme disease;
(17) the dream factory, inc., for the purpose of granting the dreams of 
children with critical and chronic illnesses;
(18) the Ottawa Suzuki strings, inc., for the purpose of providing 
students and families with education and resources necessary to enable 
each child to develop fine character and musical ability to the fullest 
potential;
(19) the international association of lions clubs for the purpose of 
creating and fostering a spirit of understanding among all people for 
humanitarian needs by providing voluntary services through community 
involvement and international cooperation;
(20) the Johnson county young matrons, inc., for the purpose of 
promoting a positive future for members of the community through 
volunteerism, financial support and education through the efforts of an all 
volunteer organization;
(21) the American cancer society, inc., for the purpose of eliminating 
cancer as a major health problem by preventing cancer, saving lives and 
diminishing suffering from cancer, through research, education, advocacy 
and service;
(22) the community services of Shawnee, inc., for the purpose of 
providing food and clothing to those in need;
(23) the angel babies association, for the purpose of providing 
assistance, support and items of necessity to teenage mothers and their 
babies; and
(24) the Kansas fairgrounds foundation for the purpose of the 
preservation, renovation and beautification of the Kansas state fairgrounds;
(ww) all sales of tangible personal property purchased by the habitat 
for humanity for the exclusive use of being incorporated within a housing 
project constructed by such organization;
(xx) all sales of tangible personal property and services purchased by 
a nonprofit zoo that is exempt from federal income taxation pursuant to 
section 501(c)(3) of the federal internal revenue code of 1986, or on behalf 
of such zoo by an entity itself exempt from federal income taxation 
pursuant to section 501(c)(3) of the federal internal revenue code of 1986 
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contracted with to operate such zoo and all sales of tangible personal 
property or services purchased by a contractor for the purpose of 
constructing, equipping, reconstructing, maintaining, repairing, enlarging, 
furnishing or remodeling facilities for any nonprofit zoo that would be 
exempt from taxation under the provisions of this section if purchased 
directly by such nonprofit zoo or the entity operating such zoo. Nothing in 
this subsection shall be deemed to exempt the purchase of any construction 
machinery, equipment or tools used in the constructing, equipping, 
reconstructing, maintaining, repairing, enlarging, furnishing or remodeling 
facilities for any nonprofit zoo. When any nonprofit zoo shall contract for 
the purpose of constructing, equipping, reconstructing, maintaining, 
repairing, enlarging, furnishing or remodeling facilities, it shall obtain 
from the state and furnish to the contractor an exemption certificate for the 
project involved, and the contractor may purchase materials for 
incorporation in such project. The contractor shall furnish the number of 
such certificate to all suppliers from whom such purchases are made, and 
such suppliers shall execute invoices covering the same bearing the 
number of such certificate. Upon completion of the project the contractor 
shall furnish to the nonprofit zoo concerned a sworn statement, on a form 
to be provided by the director of taxation, that all purchases so made were 
entitled to exemption under this subsection. All invoices shall be held by 
the contractor for a period of five years and shall be subject to audit by the 
director of taxation. If any materials purchased under such a certificate are 
found not to have been incorporated in the building or other project or not 
to have been returned for credit or the sales or compensating tax otherwise 
imposed upon such materials that will not be so incorporated in the 
building or other project reported and paid by such contractor to the 
director of taxation not later than the 20
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close of the month in which it shall be determined that such materials will 
not be used for the purpose for which such certificate was issued, the 
nonprofit zoo concerned shall be liable for tax on all materials purchased 
for the project, and upon payment thereof it may recover the same from 
the contractor together with reasonable attorney fees. Any contractor or 
any agent, employee or subcontractor thereof, who shall use or otherwise 
dispose of any materials purchased under such a certificate for any purpose 
other than that for which such a certificate is issued without the payment 
of the sales or compensating tax otherwise imposed upon such materials, 
shall be guilty of a misdemeanor and, upon conviction therefor, shall be 
subject to the penalties provided for in K.S.A. 79-3615(h), and 
amendments thereto;
(yy) all sales of tangible personal property and services purchased by 
a parent-teacher association or organization, and all sales of tangible 
personal property by or on behalf of such association or organization;
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(zz) all sales of machinery and equipment purchased by over-the-air, 
free access radio or television station that is used directly and primarily for 
the purpose of producing a broadcast signal or is such that the failure of 
the machinery or equipment to operate would cause broadcasting to cease. 
For purposes of this subsection, machinery and equipment shall include, 
but not be limited to, that required by rules and regulations of the federal 
communications commission, and all sales of electricity which are 
essential or necessary for the purpose of producing a broadcast signal or is 
such that the failure of the electricity would cause broadcasting to cease;
(aaa) all sales of tangible personal property and services purchased by 
a religious organization that is exempt from federal income taxation 
pursuant to section 501(c)(3) of the federal internal revenue code, and used 
exclusively for religious purposes, and all sales of tangible personal 
property or services purchased by a contractor for the purpose of 
constructing, equipping, reconstructing, maintaining, repairing, enlarging, 
furnishing or remodeling facilities for any such organization that would be 
exempt from taxation under the provisions of this section if purchased 
directly by such organization. Nothing in this subsection shall be deemed 
to exempt the purchase of any construction machinery, equipment or tools 
used in the constructing, equipping, reconstructing, maintaining, repairing, 
enlarging, furnishing or remodeling facilities for any such organization. 
When any such organization shall contract for the purpose of constructing, 
equipping, reconstructing, maintaining, repairing, enlarging, furnishing or 
remodeling facilities, it shall obtain from the state and furnish to the 
contractor an exemption certificate for the project involved, and the 
contractor may purchase materials for incorporation in such project. The 
contractor shall furnish the number of such certificate to all suppliers from 
whom such purchases are made, and such suppliers shall execute invoices 
covering the same bearing the number of such certificate. Upon 
completion of the project the contractor shall furnish to such organization 
concerned a sworn statement, on a form to be provided by the director of 
taxation, that all purchases so made were entitled to exemption under this 
subsection. All invoices shall be held by the contractor for a period of five 
years and shall be subject to audit by the director of taxation. If any 
materials purchased under such a certificate are found not to have been 
incorporated in the building or other project or not to have been returned 
for credit or the sales or compensating tax otherwise imposed upon such 
materials that will not be so incorporated in the building or other project 
reported and paid by such contractor to the director of taxation not later 
than the 20
th
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shall be determined that such materials will not be used for the purpose for 
which such certificate was issued, such organization concerned shall be 
liable for tax on all materials purchased for the project, and upon payment 
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thereof it may recover the same from the contractor together with 
reasonable attorney fees. Any contractor or any agent, employee or 
subcontractor thereof, who shall use or otherwise dispose of any materials 
purchased under such a certificate for any purpose other than that for 
which such a certificate is issued without the payment of the sales or 
compensating tax otherwise imposed upon such materials, shall be guilty 
of a misdemeanor and, upon conviction therefor, shall be subject to the 
penalties provided for in K.S.A. 79-3615(h), and amendments thereto. 
Sales tax paid on and after July 1, 1998, but prior to the effective date of 
this act upon the gross receipts received from any sale exempted by the 
amendatory provisions of this subsection shall be refunded. Each claim for 
a sales tax refund shall be verified and submitted to the director of taxation 
upon forms furnished by the director and shall be accompanied by any 
additional documentation required by the director. The director shall 
review each claim and shall refund that amount of sales tax paid as 
determined under the provisions of this subsection. All refunds shall be 
paid from the sales tax refund fund upon warrants of the director of 
accounts and reports pursuant to vouchers approved by the director or the 
director's designee;
(bbb) all sales of food for human consumption by an organization that 
is exempt from federal income taxation pursuant to section 501(c)(3) of 
the federal internal revenue code of 1986, pursuant to a food distribution 
program that offers such food at a price below cost in exchange for the 
performance of community service by the purchaser thereof;
(ccc) on and after July 1, 1999, all sales of tangible personal property 
and services purchased by a primary care clinic or health center the 
primary purpose of which is to provide services to medically underserved 
individuals and families, and that is exempt from federal income taxation 
pursuant to section 501(c)(3) of the federal internal revenue code, and all 
sales of tangible personal property or services purchased by a contractor 
for the purpose of constructing, equipping, reconstructing, maintaining, 
repairing, enlarging, furnishing or remodeling facilities for any such clinic 
or center that would be exempt from taxation under the provisions of this 
section if purchased directly by such clinic or center, except that for 
taxable years commencing after December 31, 2013, this subsection shall 
not apply to any sales of such tangible personal property and services 
purchased by a primary care clinic or health center which performs any 
abortion, as defined in K.S.A. 65-6701, and amendments thereto. Nothing 
in this subsection shall be deemed to exempt the purchase of any 
construction machinery, equipment or tools used in the constructing, 
equipping, reconstructing, maintaining, repairing, enlarging, furnishing or 
remodeling facilities for any such clinic or center. When any such clinic or 
center shall contract for the purpose of constructing, equipping, 
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reconstructing, maintaining, repairing, enlarging, furnishing or remodeling 
facilities, it shall obtain from the state and furnish to the contractor an 
exemption certificate for the project involved, and the contractor may 
purchase materials for incorporation in such project. The contractor shall 
furnish the number of such certificate to all suppliers from whom such 
purchases are made, and such suppliers shall execute invoices covering the 
same bearing the number of such certificate. Upon completion of the 
project the contractor shall furnish to such clinic or center concerned a 
sworn statement, on a form to be provided by the director of taxation, that 
all purchases so made were entitled to exemption under this subsection. 
All invoices shall be held by the contractor for a period of five years and 
shall be subject to audit by the director of taxation. If any materials 
purchased under such a certificate are found not to have been incorporated 
in the building or other project or not to have been returned for credit or 
the sales or compensating tax otherwise imposed upon such materials that 
will not be so incorporated in the building or other project reported and 
paid by such contractor to the director of taxation not later than the 20
th 
day of the month following the close of the month in which it shall be 
determined that such materials will not be used for the purpose for which 
such certificate was issued, such clinic or center concerned shall be liable 
for tax on all materials purchased for the project, and upon payment 
thereof it may recover the same from the contractor together with 
reasonable attorney fees. Any contractor or any agent, employee or 
subcontractor thereof, who shall use or otherwise dispose of any materials 
purchased under such a certificate for any purpose other than that for 
which such a certificate is issued without the payment of the sales or 
compensating tax otherwise imposed upon such materials, shall be guilty 
of a misdemeanor and, upon conviction therefor, shall be subject to the 
penalties provided for in K.S.A. 79-3615(h), and amendments thereto;
(ddd) on and after January 1, 1999, and before January 1, 2000, all 
sales of materials and services purchased by any class II or III railroad as 
classified by the federal surface transportation board for the construction, 
renovation, repair or replacement of class II or III railroad track and 
facilities used directly in interstate commerce. In the event any such track 
or facility for which materials and services were purchased sales tax 
exempt is not operational for five years succeeding the allowance of such 
exemption, the total amount of sales tax that would have been payable 
except for the operation of this subsection shall be recouped in accordance 
with rules and regulations adopted for such purpose by the secretary of 
revenue;
(eee) on and after January 1, 1999, and before January 1, 2001, all 
sales of materials and services purchased for the original construction, 
reconstruction, repair or replacement of grain storage facilities, including 
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railroad sidings providing access thereto;
(fff) all sales of material handling equipment, racking systems and 
other related machinery and equipment that is used for the handling, 
movement or storage of tangible personal property in a warehouse or 
distribution facility in this state; all sales of installation, repair and 
maintenance services performed on such machinery and equipment; and 
all sales of repair and replacement parts for such machinery and 
equipment. For purposes of this subsection, a warehouse or distribution 
facility means a single, fixed location that consists of buildings or 
structures in a contiguous area where storage or distribution operations are 
conducted that are separate and apart from the business' retail operations, 
if any, and that do not otherwise qualify for exemption as occurring at a 
manufacturing or processing plant or facility. Material handling and 
storage equipment shall include aeration, dust control, cleaning, handling 
and other such equipment that is used in a public grain warehouse or other 
commercial grain storage facility, whether used for grain handling, grain 
storage, grain refining or processing, or other grain treatment operation;
(ggg) all sales of tangible personal property and services purchased 
by or on behalf of the Kansas academy of science, which is exempt from 
federal income taxation pursuant to section 501(c)(3) of the federal 
internal revenue code of 1986, and used solely by such academy for the 
preparation, publication and dissemination of education materials;
(hhh) all sales of tangible personal property and services purchased 
by or on behalf of all domestic violence shelters that are member agencies 
of the Kansas coalition against sexual and domestic violence;
(iii) all sales of personal property and services purchased by an 
organization that is exempt from federal income taxation pursuant to 
section 501(c)(3) of the federal internal revenue code of 1986, and such 
personal property and services are used by any such organization in the 
collection, storage and distribution of food products to nonprofit 
organizations that distribute such food products to persons pursuant to a 
food distribution program on a charitable basis without fee or charge, and 
all sales of tangible personal property or services purchased by a 
contractor for the purpose of constructing, equipping, reconstructing, 
maintaining, repairing, enlarging, furnishing or remodeling facilities used 
for the collection and storage of such food products for any such 
organization which is exempt from federal income taxation pursuant to 
section 501(c)(3) of the federal internal revenue code of 1986, that would 
be exempt from taxation under the provisions of this section if purchased 
directly by such organization. Nothing in this subsection shall be deemed 
to exempt the purchase of any construction machinery, equipment or tools 
used in the constructing, equipping, reconstructing, maintaining, repairing, 
enlarging, furnishing or remodeling facilities for any such organization. 
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When any such organization shall contract for the purpose of constructing, 
equipping, reconstructing, maintaining, repairing, enlarging, furnishing or 
remodeling facilities, it shall obtain from the state and furnish to the 
contractor an exemption certificate for the project involved, and the 
contractor may purchase materials for incorporation in such project. The 
contractor shall furnish the number of such certificate to all suppliers from 
whom such purchases are made, and such suppliers shall execute invoices 
covering the same bearing the number of such certificate. Upon 
completion of the project the contractor shall furnish to such organization 
concerned a sworn statement, on a form to be provided by the director of 
taxation, that all purchases so made were entitled to exemption under this 
subsection. All invoices shall be held by the contractor for a period of five 
years and shall be subject to audit by the director of taxation. If any 
materials purchased under such a certificate are found not to have been 
incorporated in such facilities or not to have been returned for credit or the 
sales or compensating tax otherwise imposed upon such materials that will 
not be so incorporated in such facilities reported and paid by such 
contractor to the director of taxation not later than the 20
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month following the close of the month in which it shall be determined 
that such materials will not be used for the purpose for which such 
certificate was issued, such organization concerned shall be liable for tax 
on all materials purchased for the project, and upon payment thereof it 
may recover the same from the contractor together with reasonable 
attorney fees. Any contractor or any agent, employee or subcontractor 
thereof, who shall use or otherwise dispose of any materials purchased 
under such a certificate for any purpose other than that for which such a 
certificate is issued without the payment of the sales or compensating tax 
otherwise imposed upon such materials, shall be guilty of a misdemeanor 
and, upon conviction therefor, shall be subject to the penalties provided for 
in K.S.A. 79-3615(h), and amendments thereto. Sales tax paid on and after 
July 1, 2005, but prior to the effective date of this act upon the gross 
receipts received from any sale exempted by the amendatory provisions of 
this subsection shall be refunded. Each claim for a sales tax refund shall be 
verified and submitted to the director of taxation upon forms furnished by 
the director and shall be accompanied by any additional documentation 
required by the director. The director shall review each claim and shall 
refund that amount of sales tax paid as determined under the provisions of 
this subsection. All refunds shall be paid from the sales tax refund fund 
upon warrants of the director of accounts and reports pursuant to vouchers 
approved by the director or the director's designee;
(jjj) all sales of dietary supplements dispensed pursuant to a 
prescription order by a licensed practitioner or a mid-level practitioner as 
defined by K.S.A. 65-1626, and amendments thereto. As used in this 
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subsection, "dietary supplement" means any product, other than tobacco, 
intended to supplement the diet that: (1) Contains one or more of the 
following dietary ingredients: A vitamin, a mineral, an herb or other 
botanical, an amino acid, a dietary substance for use by humans to 
supplement the diet by increasing the total dietary intake or a concentrate, 
metabolite, constituent, extract or combination of any such ingredient; (2) 
is intended for ingestion in tablet, capsule, powder, softgel, gelcap or 
liquid form, or if not intended for ingestion, in such a form, is not 
represented as conventional food and is not represented for use as a sole 
item of a meal or of the diet; and (3) is required to be labeled as a dietary 
supplement, identifiable by the supplemental facts box found on the label 
and as required pursuant to 21 C.F.R. § 101.36;
(lll) all sales of tangible personal property and services purchased by 
special olympics Kansas, inc. for the purpose of providing year-round 
sports training and athletic competition in a variety of olympic-type sports 
for individuals with intellectual disabilities by giving them continuing 
opportunities to develop physical fitness, demonstrate courage, experience 
joy and participate in a sharing of gifts, skills and friendship with their 
families, other special olympics athletes and the community, and activities 
provided or sponsored by such organization, and all sales of tangible 
personal property by or on behalf of any such organization;
(mmm) all sales of tangible personal property purchased by or on 
behalf of the Marillac center, inc., which is exempt from federal income 
taxation pursuant to section 501(c)(3) of the federal internal revenue code, 
for the purpose of providing psycho-social-biological and special 
education services to children, and all sales of any such property by or on 
behalf of such organization for such purpose;
(nnn) all sales of tangible personal property and services purchased 
by the west Sedgwick county-sunrise rotary club and sunrise charitable 
fund for the purpose of constructing a boundless playground which is an 
integrated, barrier free and developmentally advantageous play 
environment for children of all abilities and disabilities;
(ooo) all sales of tangible personal property by or on behalf of a 
public library serving the general public and supported in whole or in part 
with tax money or a not-for-profit organization whose purpose is to raise 
funds for or provide services or other benefits to any such public library;
(ppp) all sales of tangible personal property and services purchased 
by or on behalf of a homeless shelter that is exempt from federal income 
taxation pursuant to section 501(c)(3) of the federal income tax code of 
1986, and used by any such homeless shelter to provide emergency and 
transitional housing for individuals and families experiencing 
homelessness, and all sales of any such property by or on behalf of any 
such homeless shelter for any such purpose;
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(qqq) all sales of tangible personal property and services purchased 
by TLC for children and families, inc., hereinafter referred to as TLC, 
which is exempt from federal income taxation pursuant to section 501(c)
(3) of the federal internal revenue code of 1986, and such property and 
services are used for the purpose of providing emergency shelter and 
treatment for abused and neglected children as well as meeting additional 
critical needs for children, juveniles and family, and all sales of any such 
property by or on behalf of TLC for any such purpose; and all sales of 
tangible personal property or services purchased by a contractor for the 
purpose of constructing, maintaining, repairing, enlarging, furnishing or 
remodeling facilities for the operation of services for TLC for any such 
purpose that would be exempt from taxation under the provisions of this 
section if purchased directly by TLC. Nothing in this subsection shall be 
deemed to exempt the purchase of any construction machinery, equipment 
or tools used in the constructing, maintaining, repairing, enlarging, 
furnishing or remodeling such facilities for TLC. When TLC contracts for 
the purpose of constructing, maintaining, repairing, enlarging, furnishing 
or remodeling such facilities, it shall obtain from the state and furnish to 
the contractor an exemption certificate for the project involved, and the 
contractor may purchase materials for incorporation in such project. The 
contractor shall furnish the number of such certificate to all suppliers from 
whom such purchases are made, and such suppliers shall execute invoices 
covering the same bearing the number of such certificate. Upon 
completion of the project the contractor shall furnish to TLC a sworn 
statement, on a form to be provided by the director of taxation, that all 
purchases so made were entitled to exemption under this subsection. All 
invoices shall be held by the contractor for a period of five years and shall 
be subject to audit by the director of taxation. If any materials purchased 
under such a certificate are found not to have been incorporated in the 
building or other project or not to have been returned for credit or the sales 
or compensating tax otherwise imposed upon such materials that will not 
be so incorporated in the building or other project reported and paid by 
such contractor to the director of taxation not later than the 20
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 day of the 
month following the close of the month in which it shall be determined 
that such materials will not be used for the purpose for which such 
certificate was issued, TLC shall be liable for tax on all materials 
purchased for the project, and upon payment thereof it may recover the 
same from the contractor together with reasonable attorney fees. Any 
contractor or any agent, employee or subcontractor thereof, who shall use 
or otherwise dispose of any materials purchased under such a certificate 
for any purpose other than that for which such a certificate is issued 
without the payment of the sales or compensating tax otherwise imposed 
upon such materials, shall be guilty of a misdemeanor and, upon 
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conviction therefor, shall be subject to the penalties provided for in K.S.A. 
79-3615(h), and amendments thereto;
(rrr) all sales of tangible personal property and services purchased by 
any county law library maintained pursuant to law and sales of tangible 
personal property and services purchased by an organization that would 
have been exempt from taxation under the provisions of this subsection if 
purchased directly by the county law library for the purpose of providing 
legal resources to attorneys, judges, students and the general public, and 
all sales of any such property by or on behalf of any such county law 
library;
(sss) all sales of tangible personal property and services purchased by 
catholic charities or youthville, hereinafter referred to as charitable family 
providers, which is exempt from federal income taxation pursuant to 
section 501(c)(3) of the federal internal revenue code of 1986, and which 
such property and services are used for the purpose of providing 
emergency shelter and treatment for abused and neglected children as well 
as meeting additional critical needs for children, juveniles and family, and 
all sales of any such property by or on behalf of charitable family 
providers for any such purpose; and all sales of tangible personal property 
or services purchased by a contractor for the purpose of constructing, 
maintaining, repairing, enlarging, furnishing or remodeling facilities for 
the operation of services for charitable family providers for any such 
purpose which would be exempt from taxation under the provisions of this 
section if purchased directly by charitable family providers. Nothing in 
this subsection shall be deemed to exempt the purchase of any construction 
machinery, equipment or tools used in the constructing, maintaining, 
repairing, enlarging, furnishing or remodeling such facilities for charitable 
family providers. When charitable family providers contracts for the 
purpose of constructing, maintaining, repairing, enlarging, furnishing or 
remodeling such facilities, it shall obtain from the state and furnish to the 
contractor an exemption certificate for the project involved, and the 
contractor may purchase materials for incorporation in such project. The 
contractor shall furnish the number of such certificate to all suppliers from 
whom such purchases are made, and such suppliers shall execute invoices 
covering the same bearing the number of such certificate. Upon 
completion of the project the contractor shall furnish to charitable family 
providers a sworn statement, on a form to be provided by the director of 
taxation, that all purchases so made were entitled to exemption under this 
subsection. All invoices shall be held by the contractor for a period of five 
years and shall be subject to audit by the director of taxation. If any 
materials purchased under such a certificate are found not to have been 
incorporated in the building or other project or not to have been returned 
for credit or the sales or compensating tax otherwise imposed upon such 
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materials that will not be so incorporated in the building or other project 
reported and paid by such contractor to the director of taxation not later 
than the 20
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shall be determined that such materials will not be used for the purpose for 
which such certificate was issued, charitable family providers shall be 
liable for tax on all materials purchased for the project, and upon payment 
thereof it may recover the same from the contractor together with 
reasonable attorney fees. Any contractor or any agent, employee or 
subcontractor thereof, who shall use or otherwise dispose of any materials 
purchased under such a certificate for any purpose other than that for 
which such a certificate is issued without the payment of the sales or 
compensating tax otherwise imposed upon such materials, shall be guilty 
of a misdemeanor and, upon conviction therefor, shall be subject to the 
penalties provided for in K.S.A. 79-3615(h), and amendments thereto;
(ttt) all sales of tangible personal property or services purchased by a 
contractor for a project for the purpose of restoring, constructing, 
equipping, reconstructing, maintaining, repairing, enlarging, furnishing or 
remodeling a home or facility owned by a nonprofit museum that has been 
granted an exemption pursuant to subsection (qq), which such home or 
facility is located in a city that has been designated as a qualified 
hometown pursuant to the provisions of K.S.A. 75-5071 et seq., and 
amendments thereto, and which such project is related to the purposes of 
K.S.A. 75-5071 et seq., and amendments thereto, and that would be 
exempt from taxation under the provisions of this section if purchased 
directly by such nonprofit museum. Nothing in this subsection shall be 
deemed to exempt the purchase of any construction machinery, equipment 
or tools used in the restoring, constructing, equipping, reconstructing, 
maintaining, repairing, enlarging, furnishing or remodeling a home or 
facility for any such nonprofit museum. When any such nonprofit museum 
shall contract for the purpose of restoring, constructing, equipping, 
reconstructing, maintaining, repairing, enlarging, furnishing or remodeling 
a home or facility, it shall obtain from the state and furnish to the 
contractor an exemption certificate for the project involved, and the 
contractor may purchase materials for incorporation in such project. The 
contractor shall furnish the number of such certificates to all suppliers 
from whom such purchases are made, and such suppliers shall execute 
invoices covering the same bearing the number of such certificate. Upon 
completion of the project, the contractor shall furnish to such nonprofit 
museum a sworn statement on a form to be provided by the director of 
taxation that all purchases so made were entitled to exemption under this 
subsection. All invoices shall be held by the contractor for a period of five 
years and shall be subject to audit by the director of taxation. If any 
materials purchased under such a certificate are found not to have been 
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incorporated in the building or other project or not to have been returned 
for credit or the sales or compensating tax otherwise imposed upon such 
materials that will not be so incorporated in a home or facility or other 
project reported and paid by such contractor to the director of taxation not 
later than the 20
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which it shall be determined that such materials will not be used for the 
purpose for which such certificate was issued, such nonprofit museum 
shall be liable for tax on all materials purchased for the project, and upon 
payment thereof it may recover the same from the contractor together with 
reasonable attorney fees. Any contractor or any agent, employee or 
subcontractor thereof, who shall use or otherwise dispose of any materials 
purchased under such a certificate for any purpose other than that for 
which such a certificate is issued without the payment of the sales or 
compensating tax otherwise imposed upon such materials, shall be guilty 
of a misdemeanor and, upon conviction therefor, shall be subject to the 
penalties provided for in K.S.A. 79-3615(h), and amendments thereto;
(uuu) all sales of tangible personal property and services purchased 
by Kansas children's service league, hereinafter referred to as KCSL, 
which is exempt from federal income taxation pursuant to section 501(c)
(3) of the federal internal revenue code of 1986, and which such property 
and services are used for the purpose of providing for the prevention and 
treatment of child abuse and maltreatment as well as meeting additional 
critical needs for children, juveniles and family, and all sales of any such 
property by or on behalf of KCSL for any such purpose; and all sales of 
tangible personal property or services purchased by a contractor for the 
purpose of constructing, maintaining, repairing, enlarging, furnishing or 
remodeling facilities for the operation of services for KCSL for any such 
purpose that would be exempt from taxation under the provisions of this 
section if purchased directly by KCSL. Nothing in this subsection shall be 
deemed to exempt the purchase of any construction machinery, equipment 
or tools used in the constructing, maintaining, repairing, enlarging, 
furnishing or remodeling such facilities for KCSL. When KCSL contracts 
for the purpose of constructing, maintaining, repairing, enlarging, 
furnishing or remodeling such facilities, it shall obtain from the state and 
furnish to the contractor an exemption certificate for the project involved, 
and the contractor may purchase materials for incorporation in such 
project. The contractor shall furnish the number of such certificate to all 
suppliers from whom such purchases are made, and such suppliers shall 
execute invoices covering the same bearing the number of such certificate. 
Upon completion of the project the contractor shall furnish to KCSL a 
sworn statement, on a form to be provided by the director of taxation, that 
all purchases so made were entitled to exemption under this subsection. 
All invoices shall be held by the contractor for a period of five years and 
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shall be subject to audit by the director of taxation. If any materials 
purchased under such a certificate are found not to have been incorporated 
in the building or other project or not to have been returned for credit or 
the sales or compensating tax otherwise imposed upon such materials that 
will not be so incorporated in the building or other project reported and 
paid by such contractor to the director of taxation not later than the 20
th 
day of the month following the close of the month in which it shall be 
determined that such materials will not be used for the purpose for which 
such certificate was issued, KCSL shall be liable for tax on all materials 
purchased for the project, and upon payment thereof it may recover the 
same from the contractor together with reasonable attorney fees. Any 
contractor or any agent, employee or subcontractor thereof, who shall use 
or otherwise dispose of any materials purchased under such a certificate 
for any purpose other than that for which such a certificate is issued 
without the payment of the sales or compensating tax otherwise imposed 
upon such materials, shall be guilty of a misdemeanor and, upon 
conviction therefor, shall be subject to the penalties provided for in K.S.A. 
79-3615(h), and amendments thereto;
(vvv) all sales of tangible personal property or services, including the 
renting and leasing of tangible personal property or services, purchased by 
jazz in the woods, inc., a Kansas corporation that is exempt from federal 
income taxation pursuant to section 501(c)(3) of the federal internal 
revenue code, for the purpose of providing jazz in the woods, an event 
benefiting children-in-need and other nonprofit charities assisting such 
children, and all sales of any such property by or on behalf of such 
organization for such purpose;
(www) all sales of tangible personal property purchased by or on 
behalf of the Frontenac education foundation, which is exempt from 
federal income taxation pursuant to section 501(c)(3) of the federal 
internal revenue code, for the purpose of providing education support for 
students, and all sales of any such property by or on behalf of such 
organization for such purpose;
(xxx) all sales of personal property and services purchased by the 
booth theatre foundation, inc., an organization, which is exempt from 
federal income taxation pursuant to section 501(c)(3) of the federal 
internal revenue code of 1986, and which such personal property and 
services are used by any such organization in the constructing, equipping, 
reconstructing, maintaining, repairing, enlarging, furnishing or remodeling 
of the booth theatre, and all sales of tangible personal property or services 
purchased by a contractor for the purpose of constructing, equipping, 
reconstructing, maintaining, repairing, enlarging, furnishing or remodeling 
the booth theatre for such organization, that would be exempt from 
taxation under the provisions of this section if purchased directly by such 
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organization. Nothing in this subsection shall be deemed to exempt the 
purchase of any construction machinery, equipment or tools used in the 
constructing, equipping, reconstructing, maintaining, repairing, enlarging, 
furnishing or remodeling facilities for any such organization. When any 
such organization shall contract for the purpose of constructing, equipping, 
reconstructing, maintaining, repairing, enlarging, furnishing or remodeling 
facilities, it shall obtain from the state and furnish to the contractor an 
exemption certificate for the project involved, and the contractor may 
purchase materials for incorporation in such project. The contractor shall 
furnish the number of such certificate to all suppliers from whom such 
purchases are made, and such suppliers shall execute invoices covering the 
same bearing the number of such certificate. Upon completion of the 
project the contractor shall furnish to such organization concerned a sworn 
statement, on a form to be provided by the director of taxation, that all 
purchases so made were entitled to exemption under this subsection. All 
invoices shall be held by the contractor for a period of five years and shall 
be subject to audit by the director of taxation. If any materials purchased 
under such a certificate are found not to have been incorporated in such 
facilities or not to have been returned for credit or the sales or 
compensating tax otherwise imposed upon such materials that will not be 
so incorporated in such facilities reported and paid by such contractor to 
the director of taxation not later than the 20
th
 day of the month following 
the close of the month in which it shall be determined that such materials 
will not be used for the purpose for which such certificate was issued, such 
organization concerned shall be liable for tax on all materials purchased 
for the project, and upon payment thereof it may recover the same from 
the contractor together with reasonable attorney fees. Any contractor or 
any agent, employee or subcontractor thereof, who shall use or otherwise 
dispose of any materials purchased under such a certificate for any purpose 
other than that for which such a certificate is issued without the payment 
of the sales or compensating tax otherwise imposed upon such materials, 
shall be guilty of a misdemeanor and, upon conviction therefor, shall be 
subject to the penalties provided for in K.S.A. 79-3615(h), and 
amendments thereto. Sales tax paid on and after January 1, 2007, but prior 
to the effective date of this act upon the gross receipts received from any 
sale which would have been exempted by the provisions of this subsection 
had such sale occurred after the effective date of this act shall be refunded. 
Each claim for a sales tax refund shall be verified and submitted to the 
director of taxation upon forms furnished by the director and shall be 
accompanied by any additional documentation required by the director. 
The director shall review each claim and shall refund that amount of sales 
tax paid as determined under the provisions of this subsection. All refunds 
shall be paid from the sales tax refund fund upon warrants of the director 
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of accounts and reports pursuant to vouchers approved by the director or 
the director's designee;
(yyy) all sales of tangible personal property and services purchased 
by TLC charities foundation, inc., hereinafter referred to as TLC charities, 
which is exempt from federal income taxation pursuant to section 501(c)
(3) of the federal internal revenue code of 1986, and which such property 
and services are used for the purpose of encouraging private philanthropy 
to further the vision, values, and goals of TLC for children and families, 
inc.; and all sales of such property and services by or on behalf of TLC 
charities for any such purpose and all sales of tangible personal property or 
services purchased by a contractor for the purpose of constructing, 
maintaining, repairing, enlarging, furnishing or remodeling facilities for 
the operation of services for TLC charities for any such purpose that would 
be exempt from taxation under the provisions of this section if purchased 
directly by TLC charities. Nothing in this subsection shall be deemed to 
exempt the purchase of any construction machinery, equipment or tools 
used in the constructing, maintaining, repairing, enlarging, furnishing or 
remodeling such facilities for TLC charities. When TLC charities contracts 
for the purpose of constructing, maintaining, repairing, enlarging, 
furnishing or remodeling such facilities, it shall obtain from the state and 
furnish to the contractor an exemption certificate for the project involved, 
and the contractor may purchase materials for incorporation in such 
project. The contractor shall furnish the number of such certificate to all 
suppliers from whom such purchases are made, and such suppliers shall 
execute invoices covering the same bearing the number of such certificate. 
Upon completion of the project the contractor shall furnish to TLC 
charities a sworn statement, on a form to be provided by the director of 
taxation, that all purchases so made were entitled to exemption under this 
subsection. All invoices shall be held by the contractor for a period of five 
years and shall be subject to audit by the director of taxation. If any 
materials purchased under such a certificate are found not to have been 
incorporated in the building or other project or not to have been returned 
for credit or the sales or compensating tax otherwise imposed upon such 
materials that will not be incorporated into the building or other project 
reported and paid by such contractor to the director of taxation not later 
than the 20
th
 day of the month following the close of the month in which it 
shall be determined that such materials will not be used for the purpose for 
which such certificate was issued, TLC charities shall be liable for tax on 
all materials purchased for the project, and upon payment thereof it may 
recover the same from the contractor together with reasonable attorney 
fees. Any contractor or any agent, employee or subcontractor thereof, who 
shall use or otherwise dispose of any materials purchased under such a 
certificate for any purpose other than that for which such a certificate is 
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issued without the payment of the sales or compensating tax otherwise 
imposed upon such materials, shall be guilty of a misdemeanor and, upon 
conviction therefor, shall be subject to the penalties provided for in K.S.A. 
79-3615(h), and amendments thereto;
(zzz) all sales of tangible personal property purchased by the rotary 
club of shawnee foundation, which is exempt from federal income taxation 
pursuant to section 501(c)(3) of the federal internal revenue code of 1986, 
as amended, used for the purpose of providing contributions to community 
service organizations and scholarships;
(aaaa) all sales of personal property and services purchased by or on 
behalf of victory in the valley, inc., which is exempt from federal income 
taxation pursuant to section 501(c)(3) of the federal internal revenue code, 
for the purpose of providing a cancer support group and services for 
persons with cancer, and all sales of any such property by or on behalf of 
any such organization for any such purpose;
(bbbb) all sales of entry or participation fees, charges or tickets by 
Guadalupe health foundation, which is exempt from federal income 
taxation pursuant to section 501(c)(3) of the federal internal revenue code, 
for such organization's annual fundraising event which purpose is to 
provide health care services for uninsured workers;
(cccc) all sales of tangible personal property or services purchased by 
or on behalf of wayside waifs, inc., which is exempt from federal income 
taxation pursuant to section 501(c)(3) of the federal internal revenue code, 
for the purpose of providing such organization's annual fundraiser, an 
event whose purpose is to support the care of homeless and abandoned 
animals, animal adoption efforts, education programs for children and 
efforts to reduce animal over-population and animal welfare services, and 
all sales of any such property, including entry or participation fees or 
charges, by or on behalf of such organization for such purpose;
(dddd) all sales of tangible personal property or services purchased 
by or on behalf of goodwill industries or Easter seals of Kansas, inc., both 
of which are exempt from federal income taxation pursuant to section 
501(c)(3) of the federal internal revenue code, for the purpose of providing 
education, training and employment opportunities for people with 
disabilities and other barriers to employment;
(eeee) all sales of tangible personal property or services purchased by 
or on behalf of all American beef battalion, inc., which is exempt from 
federal income taxation pursuant to section 501(c)(3) of the federal 
internal revenue code, for the purpose of educating, promoting and 
participating as a contact group through the beef cattle industry in order to 
carry out such projects that provide support and morale to members of the 
United States armed forces and military services;
(ffff) all sales of tangible personal property and services purchased by 
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sheltered living, inc., which is exempt from federal income taxation 
pursuant to section 501(c)(3) of the federal internal revenue code of 1986, 
and which such property and services are used for the purpose of 
providing residential and day services for people with developmental 
disabilities or intellectual disability, or both, and all sales of any such 
property by or on behalf of sheltered living, inc., for any such purpose; and 
all sales of tangible personal property or services purchased by a 
contractor for the purpose of rehabilitating, constructing, maintaining, 
repairing, enlarging, furnishing or remodeling homes and facilities for 
sheltered living, inc., for any such purpose that would be exempt from 
taxation under the provisions of this section if purchased directly by 
sheltered living, inc. Nothing in this subsection shall be deemed to exempt 
the purchase of any construction machinery, equipment or tools used in the 
constructing, maintaining, repairing, enlarging, furnishing or remodeling 
such homes and facilities for sheltered living, inc. When sheltered living, 
inc., contracts for the purpose of rehabilitating, constructing, maintaining, 
repairing, enlarging, furnishing or remodeling such homes and facilities, it 
shall obtain from the state and furnish to the contractor an exemption 
certificate for the project involved, and the contractor may purchase 
materials for incorporation in such project. The contractor shall furnish the 
number of such certificate to all suppliers from whom such purchases are 
made, and such suppliers shall execute invoices covering the same bearing 
the number of such certificate. Upon completion of the project the 
contractor shall furnish to sheltered living, inc., a sworn statement, on a 
form to be provided by the director of taxation, that all purchases so made 
were entitled to exemption under this subsection. All invoices shall be held 
by the contractor for a period of five years and shall be subject to audit by 
the director of taxation. If any materials purchased under such a certificate 
are found not to have been incorporated in the building or other project or 
not to have been returned for credit or the sales or compensating tax 
otherwise imposed upon such materials that will not be so incorporated in 
the building or other project reported and paid by such contractor to the 
director of taxation not later than the 20
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 day of the month following the 
close of the month in which it shall be determined that such materials will 
not be used for the purpose for which such certificate was issued, sheltered 
living, inc., shall be liable for tax on all materials purchased for the 
project, and upon payment thereof it may recover the same from the 
contractor together with reasonable attorney fees. Any contractor or any 
agent, employee or subcontractor thereof, who shall use or otherwise 
dispose of any materials purchased under such a certificate for any purpose 
other than that for which such a certificate is issued without the payment 
of the sales or compensating tax otherwise imposed upon such materials, 
shall be guilty of a misdemeanor and, upon conviction therefor, shall be 
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subject to the penalties provided for in K.S.A. 79-3615(h), and 
amendments thereto;
(gggg) all sales of game birds for which the primary purpose is use in 
hunting;
(hhhh) all sales of tangible personal property or services purchased 
on or after July 1, 2014, for the purpose of and in conjunction with 
constructing, reconstructing, enlarging or remodeling a business identified 
under the North American industry classification system (NAICS) 
subsectors 1123, 1124, 112112, 112120 or 112210, and the sale and 
installation of machinery and equipment purchased for installation at any 
such business. The exemption provided in this subsection shall not apply 
to projects that have actual total costs less than $50,000. When a person 
contracts for the construction, reconstruction, enlargement or remodeling 
of any such business, such person shall obtain from the state and furnish to 
the contractor an exemption certificate for the project involved, and the 
contractor may purchase materials, machinery and equipment for 
incorporation in such project. The contractor shall furnish the number of 
such certificates to all suppliers from whom such purchases are made, and 
such suppliers shall execute invoices covering the same bearing the 
number of such certificate. Upon completion of the project, the contractor 
shall furnish to the owner of the business a sworn statement, on a form to 
be provided by the director of taxation, that all purchases so made were 
entitled to exemption under this subsection. All invoices shall be held by 
the contractor for a period of five years and shall be subject to audit by the 
director of taxation. Any contractor or any agent, employee or 
subcontractor of the contractor, who shall use or otherwise dispose of any 
materials, machinery or equipment purchased under such a certificate for 
any purpose other than that for which such a certificate is issued without 
the payment of the sales or compensating tax otherwise imposed thereon, 
shall be guilty of a misdemeanor and, upon conviction therefor, shall be 
subject to the penalties provided for in K.S.A. 79-3615(h), and 
amendments thereto;
(iiii) all sales of tangible personal property or services purchased by a 
contractor for the purpose of constructing, maintaining, repairing, 
enlarging, furnishing or remodeling facilities for the operation of services 
for Wichita children's home for any such purpose that would be exempt 
from taxation under the provisions of this section if purchased directly by 
Wichita children's home. Nothing in this subsection shall be deemed to 
exempt the purchase of any construction machinery, equipment or tools 
used in the constructing, maintaining, repairing, enlarging, furnishing or 
remodeling such facilities for Wichita children's home. When Wichita 
children's home contracts for the purpose of constructing, maintaining, 
repairing, enlarging, furnishing or remodeling such facilities, it shall obtain 
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from the state and furnish to the contractor an exemption certificate for the 
project involved, and the contractor may purchase materials for 
incorporation in such project. The contractor shall furnish the number of 
such certificate to all suppliers from whom such purchases are made, and 
such suppliers shall execute invoices covering the same bearing the 
number of such certificate. Upon completion of the project, the contractor 
shall furnish to Wichita children's home a sworn statement, on a form to be 
provided by the director of taxation, that all purchases so made were 
entitled to exemption under this subsection. All invoices shall be held by 
the contractor for a period of five years and shall be subject to audit by the 
director of taxation. If any materials purchased under such a certificate are 
found not to have been incorporated in the building or other project or not 
to have been returned for credit or the sales or compensating tax otherwise 
imposed upon such materials that will not be so incorporated in the 
building or other project reported and paid by such contractor to the 
director of taxation not later than the 20
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 day of the month following the 
close of the month in which it shall be determined that such materials will 
not be used for the purpose for which such certificate was issued, Wichita 
children's home shall be liable for the tax on all materials purchased for the 
project, and upon payment, it may recover the same from the contractor 
together with reasonable attorney fees. Any contractor or any agent, 
employee or subcontractor, who shall use or otherwise dispose of any 
materials purchased under such a certificate for any purpose other than that 
for which such a certificate is issued without the payment of the sales or 
compensating tax otherwise imposed upon such materials, shall be guilty 
of a misdemeanor and, upon conviction, shall be subject to the penalties 
provided for in K.S.A. 79-3615(h), and amendments thereto;
(jjjj) all sales of tangible personal property or services purchased by 
or on behalf of the beacon, inc., that is exempt from federal income 
taxation pursuant to section 501(c)(3) of the federal internal revenue code, 
for the purpose of providing those desiring help with food, shelter, clothing 
and other necessities of life during times of special need;
(kkkk) all sales of tangible personal property and services purchased 
by or on behalf of reaching out from within, inc., which is exempt from 
federal income taxation pursuant to section 501(c)(3) of the federal 
internal revenue code, for the purpose of sponsoring self-help programs for 
incarcerated persons that will enable such incarcerated persons to become 
role models for non-violence while in correctional facilities and productive 
family members and citizens upon return to the community;
(llll) all sales of tangible personal property and services purchased by 
Gove county healthcare endowment foundation, inc., which is exempt 
from federal income taxation pursuant to section 501(c)(3) of the federal 
internal revenue code of 1986, and which such property and services are 
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used for the purpose of constructing and equipping an airport in Quinter, 
Kansas, and all sales of tangible personal property or services purchased 
by a contractor for the purpose of constructing and equipping an airport in 
Quinter, Kansas, for such organization, that would be exempt from 
taxation under the provisions of this section if purchased directly by such 
organization. Nothing in this subsection shall be deemed to exempt the 
purchase of any construction machinery, equipment or tools used in the 
constructing or equipping of facilities for such organization. When such 
organization shall contract for the purpose of constructing or equipping an 
airport in Quinter, Kansas, it shall obtain from the state and furnish to the 
contractor an exemption certificate for the project involved, and the 
contractor may purchase materials for incorporation in such project. The 
contractor shall furnish the number of such certificate to all suppliers from 
whom such purchases are made, and such suppliers shall execute invoices 
covering the same bearing the number of such certificate. Upon 
completion of the project, the contractor shall furnish to such organization 
concerned a sworn statement, on a form to be provided by the director of 
taxation, that all purchases so made were entitled to exemption under this 
subsection. All invoices shall be held by the contractor for a period of five 
years and shall be subject to audit by the director of taxation. If any 
materials purchased under such a certificate are found not to have been 
incorporated in such facilities or not to have been returned for credit or the 
sales or compensating tax otherwise imposed upon such materials that will 
not be so incorporated in such facilities reported and paid by such 
contractor to the director of taxation no later than the 20
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day of the month 
following the close of the month in which it shall be determined that such 
materials will not be used for the purpose for which such certificate was 
issued, such organization concerned shall be liable for tax on all materials 
purchased for the project, and upon payment thereof it may recover the 
same from the contractor together with reasonable attorney fees. Any 
contractor or any agent, employee or subcontractor thereof, who purchased 
under such a certificate for any purpose other than that for which such a 
certificate is issued without the payment of the sales or compensating tax 
otherwise imposed upon such materials, shall be guilty of a misdemeanor 
and, upon conviction therefor, shall be subject to the penalties provided for 
in K.S.A. 79-3615(h), and amendments thereto. The provisions of this 
subsection shall expire and have no effect on and after July 1, 2019;
(mmmm) all sales of gold or silver coins; and palladium, platinum, 
gold or silver bullion. For the purposes of this subsection, "bullion" means 
bars, ingots or commemorative medallions of gold, silver, platinum, 
palladium, or a combination thereof, for which the value of the metal 
depends on its content and not the form;
(nnnn) all sales of tangible personal property or services purchased 
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by friends of hospice of Jefferson county, an organization that is exempt 
from federal income taxation pursuant to section 501(c)(3) of the federal 
internal revenue code of 1986, for the purpose of providing support to the 
Jefferson county hospice agency in end-of-life care of Jefferson county 
families, friends and neighbors, and all sales of entry or participation fees, 
charges or tickets by friends of hospice of Jefferson county for such 
organization's fundraising event for such purpose;
(oooo) all sales of tangible personal property or services purchased 
for the purpose of and in conjunction with constructing, reconstructing, 
enlarging or remodeling a qualified business facility by a qualified firm or 
qualified supplier that meets the requirements established in K.S.A. 2023 
Supp. 74-50,312 and 74-50,319, and amendments thereto, and that has 
been approved for a project exemption certificate by the secretary of 
commerce, and the sale and installation of machinery and equipment 
purchased by such qualified firm or qualified supplier for installation at 
any such qualified business facility. When a person shall contract for the 
construction, reconstruction, enlargement or remodeling of any such 
qualified business facility, such person shall obtain from the state and 
furnish to the contractor an exemption certificate for the project involved, 
and the contractor may purchase materials, machinery and equipment for 
incorporation in such project. The contractor shall furnish the number of 
such certificates to all suppliers from whom such purchases are made, and 
such suppliers shall execute invoices covering the same bearing the 
number of such certificate. Upon completion of the project, the contractor 
shall furnish to the owner of the qualified firm or qualified supplier a 
sworn statement, on a form to be provided by the director of taxation, that 
all purchases so made were entitled to exemption under this subsection. 
All invoices shall be held by the contractor for a period of five years and 
shall be subject to audit by the director of taxation. Any contractor or any 
agent, employee or subcontractor thereof who shall use or otherwise 
dispose of any materials, machinery or equipment purchased under such a 
certificate for any purpose other than that for which such a certificate is 
issued without the payment of the sales or compensating tax otherwise 
imposed thereon, shall be guilty of a misdemeanor and, upon conviction 
therefor, shall be subject to the penalties provided for in K.S.A. 79-
3615(h), and amendments thereto. As used in this subsection, "qualified 
business facility," "qualified firm" and "qualified supplier" mean the same 
as defined in K.S.A. 2023 Supp. 74-50,311, and amendments thereto;
(pppp) (1) all sales of tangible personal property or services 
purchased by a not-for-profit corporation that is designated as an area 
agency on aging by the secretary for aging and disabilities services and is 
exempt from federal income taxation pursuant to section 501(c)(3) of the 
federal internal revenue code for the purpose of coordinating and 
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providing seniors and those living with disabilities with services that 
promote person-centered care, including home-delivered meals, 
congregate meal settings, long-term case management, transportation, 
information, assistance and other preventative and intervention services to 
help service recipients remain in their homes and communities or for the 
purpose of constructing, equipping, reconstructing, maintaining, repairing, 
enlarging, furnishing or remodeling facilities for such area agency on 
aging; and
(2) all sales of tangible personal property or services purchased by a 
contractor for the purpose of constructing, equipping, reconstructing, 
maintaining, repairing, enlarging, furnishing or remodeling facilities for an 
area agency on aging that would be exempt from taxation under the 
provisions of this section if purchased directly by such area agency on 
aging. Nothing in this paragraph shall be deemed to exempt the purchase 
of any construction machinery, equipment or tools used in the 
constructing, equipping, reconstructing, maintaining, repairing, enlarging, 
furnishing or remodeling facilities for an area agency on aging. When an 
area agency on aging contracts for the purpose of constructing, equipping, 
reconstructing, maintaining, repairing, enlarging, furnishing or remodeling 
facilities, it shall obtain from the state and furnish to the contractor an 
exemption certificate for the project involved, and such contractor may 
purchase materials for incorporation in such project. The contractor shall 
furnish the number of such certificate to all suppliers from whom such 
purchases are made, and such suppliers shall execute invoices covering the 
same bearing the number of such certificate. Upon completion of the 
project, the contractor shall furnish to such area agency on aging a sworn 
statement, on a form to be provided by the director of taxation, that all 
purchases so made were entitled to exemption under this subsection. All 
invoices shall be held by the contractor for a period of five years and shall 
be subject to audit by the director of taxation. If any materials purchased 
under such a certificate are found not to have been incorporated in the 
building or other project or not to have been returned for credit or the sales 
or compensating tax otherwise imposed upon such materials that will not 
be so incorporated in the building or other project reported and paid by 
such contractor to the director of taxation not later than the 20
th
 day of the 
month following the close of the month in which it shall be determined 
that such materials will not be used for the purpose for which such 
certificate was issued, the area agency on aging concerned shall be liable 
for tax on all materials purchased for the project, and upon payment 
thereof, the area agency on aging may recover the same from the 
contractor together with reasonable attorney fees. Any contractor or any 
agent, employee or subcontractor thereof who shall use or otherwise 
dispose of any materials purchased under such a certificate for any purpose 
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other than that for which such a certificate is issued without the payment 
of the sales or compensating tax otherwise imposed upon such materials 
shall be guilty of a misdemeanor and, upon conviction therefor, shall be 
subject to the penalties provided for in K.S.A. 79-3615(h), and 
amendments thereto; and
(qqqq) all sales of tangible personal property or services purchased 
by Kansas suicide prevention HQ, inc., an organization that is exempt 
from federal income taxation pursuant to section 501(c)(3) of the federal 
internal revenue code of 1986, for the purpose of bringing suicide 
prevention training and awareness to communities across the state;
(rrrr) on and after April 1, 2024, all sales of children's diapers. For 
purposes of this subsection:
(1) "Children's diapers" means diapers marketed to be worn by 
children; and 
(2) "diaper" means an absorbent garment worn by humans who are 
incapable of, or have difficulty, controlling their bladder or bowel 
movements; and
(ssss) on and after April 1, 2024, all sales of feminine hygiene 
products. For purposes of this subsection, "feminine hygiene products" 
means tampons, panty liners, menstrual cups, sanitary napkins and other 
similar tangible personal property designed for feminine hygiene in 
connection with the human menstrual cycle.
Sec. 11. K.S.A. 2023 Supp. 79-3620 is hereby amended to read as 
follows: 79-3620. (a) All revenue collected or received by the director of 
taxation from the taxes imposed by this act shall be remitted to the state 
treasurer in accordance with the provisions of K.S.A. 75-4215, and 
amendments thereto. Upon receipt of each such remittance, the state 
treasurer shall deposit the entire amount in the state treasury, less amounts 
withheld as provided in subsection (b) and amounts credited as provided in 
subsections (c), (d) and (e), to the credit of the state general fund.
(b) A refund fund, designated as "sales tax refund fund" not to exceed 
$100,000 shall be set apart and maintained by the director from sales tax 
collections and estimated tax collections and held by the state treasurer for 
prompt payment of all sales tax refunds. Such fund shall be in such 
amount, within the limit set by this section, as the director shall determine 
is necessary to meet current refunding requirements under this act. In the 
event such fund as established by this section is, at any time, insufficient to 
provide for the payment of refunds due claimants thereof, the director shall 
certify the amount of additional funds required to the director of accounts 
and reports who shall promptly transfer the required amount from the state 
general fund to the sales tax refund fund, and notify the state treasurer, 
who shall make proper entry in the records.
(c) (1) On January 1, 2023, the state treasurer shall credit 17% of the 
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revenue collected and received from the tax imposed by K.S.A. 79-3603, 
and amendments thereto, at the rates provided in K.S.A. 79-3603, and 
amendments thereto, and K.S.A. 2023 Supp. 79-3603d, and amendments 
thereto, and deposited as provided by subsection (a), exclusive of amounts 
credited pursuant to subsection (d), in the state highway fund.
(2) On January 1, 2025 April 1, 2024, and thereafter, the state 
treasurer shall credit 18% of the revenue collected and received from the 
tax imposed by K.S.A. 79-3603, and amendments thereto, at the rates 
provided in K.S.A. 79-3603, and amendments thereto, and K.S.A. 2023 
Supp. 79-3603d, and amendments thereto, and deposited as provided by 
subsection (a), exclusive of amounts credited pursuant to subsection (d), in 
the state highway fund.
(d) The state treasurer shall credit all revenue collected or received 
from the tax imposed by K.S.A. 79-3603, and amendments thereto, as 
certified by the director, from taxpayers doing business within that portion 
of a STAR bond project district occupied by a STAR bond project or 
taxpayers doing business with such entity financed by a STAR bond 
project as defined in K.S.A. 12-17,162, and amendments thereto, that was 
determined by the secretary of commerce to be of statewide as well as 
local importance or will create a major tourism area for the state or the 
project was designated as a STAR bond project as defined in K.S.A. 12-
17,162, and amendments thereto, to the city bond finance fund, which fund 
is hereby created. The provisions of this subsection shall expire when the 
total of all amounts credited hereunder and under K.S.A. 79-3710(d), and 
amendments thereto, is sufficient to retire the special obligation bonds 
issued for the purpose of financing all or a portion of the costs of such 
STAR bond project.
(e) All revenue certified by the director of taxation as having been 
collected or received from the tax imposed by K.S.A. 79-3603(c), and 
amendments thereto, on the sale or furnishing of gas, water, electricity and 
heat for use or consumption within the intermodal facility district 
described in this subsection, shall be credited by the state treasurer to the 
state highway fund. Such revenue may be transferred by the secretary of 
transportation to the rail service improvement fund pursuant to law. The 
provisions of this subsection shall take effect upon certification by the 
secretary of transportation that a notice to proceed has been received for 
the construction of the improvements within the intermodal facility 
district, but not later than December 31, 2010, and shall expire when the 
secretary of revenue determines that the total of all amounts credited 
hereunder and pursuant to K.S.A. 79-3710(e), and amendments thereto, is 
equal to $53,300,000, but not later than December 31, 2045. Thereafter, all 
revenues shall be collected and distributed in accordance with applicable 
law. For all tax reporting periods during which the provisions of this 
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subsection are in effect, none of the exemptions contained in K.S.A. 79-
3601 et seq., and amendments thereto, shall apply to the sale or furnishing 
of any gas, water, electricity and heat for use or consumption within the 
intermodal facility district. As used in this subsection, "intermodal facility 
district" shall consist of an intermodal transportation area as defined by 
K.S.A. 12-1770a(oo), and amendments thereto, located in Johnson county 
within the polygonal-shaped area having Waverly Road as the eastern 
boundary, 191
st
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western boundary, and Highway 56 as the northern boundary, and the 
polygonal-shaped area having Poplar Road as the eastern boundary, 183
rd 
Street as the southern boundary, Waverly Road as the western boundary, 
and the BNSF mainline track as the northern boundary, that includes 
capital investment in an amount exceeding $150 million for the 
construction of an intermodal facility to handle the transfer, storage and 
distribution of freight through railway and trucking operations.
Sec. 12. K.S.A. 2023 Supp. 79-3703 is hereby amended to read as 
follows: 79-3703. (a) There is hereby levied and there shall be collected 
from every person in this state a tax or excise for the privilege of using, 
storing, or consuming within this state any article of tangible personal 
property. Such tax shall be levied and collected in an amount equal to the 
consideration paid by the taxpayer multiplied by the rate of 6.5%.
(b) Commencing on January 1, 2023, and thereafter, the state rate on 
the amount equal to the consideration paid by the taxpayer from the sale of 
food and food ingredients as provided in K.S.A. 79-3603, and amendments 
thereto, shall be as set forth in K.S.A. 2023 Supp. 79-3603d, and 
amendments thereto.
(c) On and after January 1, 2023, 17% and on and after January 1, 
2025 April 1, 2024, 18% of the tax rate imposed pursuant to this section 
and the rate provided in K.S.A. 2023 Supp. 79-3603d, and amendments 
thereto, shall be levied for the state highway fund, the state highway fund 
purposes and those purposes specified in K.S.A. 68-416, and amendments 
thereto, and all revenue collected and received from such tax levy shall be 
deposited in the state highway fund.
(d) Within a redevelopment district established pursuant to K.S.A. 
74-8921, and amendments thereto, there is hereby levied and there shall be 
collected and paid an additional tax of 2% until the earlier of: (1) The date 
the bonds issued to finance or refinance the redevelopment project 
undertaken in the district have been paid in full; or (2) the final scheduled 
maturity of the first series of bonds issued to finance the redevelopment 
project.
(e) All property purchased or leased within or without this state and 
subsequently used, stored or consumed in this state shall be subject to the 
compensating tax if the same property or transaction would have been 
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subject to the Kansas retailers' sales tax had the transaction been wholly 
within this state.
Sec. 13. K.S.A. 2023 Supp. 79-3710 is hereby amended to read as 
follows: 79-3710. (a) All revenue collected or received by the director 
under the provisions of this act shall be remitted to the state treasurer in 
accordance with the provisions of K.S.A. 75-4215, and amendments 
thereto. Upon receipt of each such remittance, the state treasurer shall 
deposit the entire amount in the state treasury, less amounts set apart as 
provided in subsection (b) and amounts credited as provided in subsection 
(c), (d) and (e), to the credit of the state general fund.
(b) A revolving fund, designated as "compensating tax refund fund" 
not to exceed $10,000 shall be set apart and maintained by the director 
from compensating tax collections and estimated tax collections and held 
by the state treasurer for prompt payment of all compensating tax refunds. 
Such fund shall be in such amount, within the limit set by this section, as 
the director shall determine is necessary to meet current refunding 
requirements under this act.
(c) (1) On January 1, 2023, the state treasurer shall credit 17% of the 
revenue collected and received from the tax imposed by K.S.A. 79-3703, 
and amendments thereto, at the rates provided in K.S.A. 79-3703, and 
amendments thereto, and K.S.A. 2023 Supp. 79-3603d, and amendments 
thereto, and deposited as provided by subsection (a), exclusive of amounts 
credited pursuant to subsection (d), in the state highway fund.
(2) On January 1, 2025 April 1, 2024, and thereafter, the state 
treasurer shall credit 18% of the revenue collected and received from the 
tax imposed by K.S.A. 79-3703, and amendments thereto, at the rates 
provided in K.S.A. 79-3703, and amendments thereto, and K.S.A. 2023 
Supp. 79-3603d, and amendments thereto, and deposited as provided by 
subsection (a), exclusive of amounts credited pursuant to subsection (d), in 
the state highway fund.
(d) The state treasurer shall credit all revenue collected or received 
from the tax imposed by K.S.A. 79-3703, and amendments thereto, as 
certified by the director, from taxpayers doing business within that portion 
of a redevelopment district occupied by a redevelopment project that was 
determined by the secretary of commerce to be of statewide as well as 
local importance or will create a major tourism area for the state as defined 
in K.S.A. 12-1770a, and amendments thereto, to the city bond finance 
fund created by K.S.A. 79-3620(d), and amendments thereto. The 
provisions of this subsection shall expire when the total of all amounts 
credited hereunder and under K.S.A. 79-3620(d), and amendments thereto, 
is sufficient to retire the special obligation bonds issued for the purpose of 
financing all or a portion of the costs of such redevelopment project.
This subsection shall not apply to a project designated as a special bond 
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project as defined in K.S.A. 12-1770a(z), and amendments thereto.
(e) All revenue certified by the director of taxation as having been 
collected or received from the tax imposed by K.S.A. 79-3603(c), and 
amendments thereto, on the sale or furnishing of gas, water, electricity and 
heat for use or consumption within the intermodal facility district 
described in this subsection, shall be credited by the state treasurer to the 
state highway fund. Such revenue may be transferred by the secretary of 
transportation to the rail service improvement fund pursuant to law. The 
provisions of this subsection shall take effect upon certification by the 
secretary of transportation that a notice to proceed has been received for 
the construction of the improvements within the intermodal facility 
district, but not later than December 31, 2010, and shall expire when the 
secretary of revenue determines that the total of all amounts credited 
hereunder and pursuant to K.S.A. 79-3620(e), and amendments thereto, is 
equal to $53,300,000, but not later than December 31, 2045. Thereafter, all 
revenues shall be collected and distributed in accordance with applicable 
law. For all tax reporting periods during which the provisions of this 
subsection are in effect, none of the exemptions contained in K.S.A. 79-
3601 et seq., and amendments thereto, shall apply to the sale or furnishing 
of any gas, water, electricity and heat for use or consumption within the 
intermodal facility district. As used in this subsection, "intermodal facility 
district" shall consist of an intermodal transportation area as defined by 
K.S.A. 12-1770a(oo), and amendments thereto, located in Johnson county 
within the polygonal-shaped area having Waverly Road as the eastern 
boundary, 191
st
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western boundary, and Highway 56 as the northern boundary, and the 
polygonal-shaped area having Poplar Road as the eastern boundary, 183
rd 
Street as the southern boundary, Waverly Road as the western boundary, 
and the BNSF mainline track as the northern boundary, that includes 
capital investment in an amount exceeding $150 million for the 
construction of an intermodal facility to handle the transfer, storage and 
distribution of freight through railway and trucking operations.
Sec. 14. K.S.A. 79-1107, 79-1108 and 79-32,111c and K.S.A. 2023 
Supp. 79-201x, 79-32,117, 79-32,119, 79-3603, 79-3603d, 79-3606, 79-
3620, 79-3703 and 79-3710 are hereby repealed.
Sec. 15. This act shall take effect and be in force from and after its 
publication in the Kansas register.
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