Kansas 2023-2024 Regular Session

Kansas House Bill HB2677 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	Session of 2024
2	2	HOUSE BILL No. 2677
3	3	By Committee on Federal and State Affairs
4	4	Requested by Representative Osman
5	5	2-1
6	6	AN ACT concerning alcoholic beverages; relating to the sale of wine;
7	7	authorizing cereal malt beverage retailers to sell wine; imposing the
8	8	applicable retailers' sales tax on such sales; amending K.S.A. 41-212,
9	9	41-355, 41-701, 41-1101a, 41-2701, 41-2702, 41-2706, 41-2708, 41-
10	10	2722, 41-2726, 41-2728 and 41-2730 and K.S.A. 2023 Supp. 41-102,
11	11	41-306a, 41-308, 41-2704 and 79-3602 and repealing the existing
12	12	sections; also repealing K.S.A. 2023 Supp. 79-3602c.
13	13	Be it enacted by the Legislature of the State of Kansas:
14	14	Section 1. K.S.A. 2023 Supp. 41-102 is hereby amended to read as
15	15	follows: 41-102. As used in this act, unless the context clearly requires
16	16	otherwise:
17	17	(a) "Alcohol" means the product of distillation of any fermented
18	18	liquid, whether rectified or diluted, whatever its origin, and includes
19	19	synthetic ethyl alcohol but does not include denatured alcohol or wood
20	20	alcohol.
21	21	(b) "Alcoholic candy" means:
22	22	(1) For purposes of manufacturing, any candy or other confectionery
23	23	product with an alcohol content greater than 0.5% alcohol by volume; and
24	24	(2) for purposes of sale at retail, any candy or other confectionery
25	25	product with an alcohol content greater than 1% alcohol by volume.
26	26	(c) "Alcoholic liquor" means alcohol, spirits, wine, beer, alcoholic
27	27	candy and every liquid or solid, patented or not, containing alcohol, spirits,
28	28	wine or beer and capable of being consumed by a human being, but shall
29	29	not include any cereal malt beverage.
30	30	(d) "Beer" means a beverage, containing more than 3.2% alcohol by
31	31	weight, obtained by alcoholic fermentation of an infusion or concoction of
32	32	barley, or other grain, malt and hops in water and includes beer, ale, stout,
33	33	lager beer, porter and similar beverages having such alcoholic content.
34	34	(e) "Caterer" means the same as defined by K.S.A. 41-2601, and
35	35	amendments thereto.
36	36	(f) "Cereal malt beverage" means the same as defined by K.S.A. 41-
37	37	2701, and amendments thereto.
38	38	(g) "Club" means the same as defined by K.S.A. 41-2601, and
39	39	amendments thereto.
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75	75	(h) "Director" means the director of alcoholic beverage control of the
76	76	department of revenue.
77	77	(i) "Distributor" means the person importing or causing to be
78	78	imported into the state, or purchasing or causing to be purchased within
79	79	the state, alcoholic liquor for sale or resale to retailers licensed under this
80	80	act or cereal malt beverage, beer containing not more than 6% alcohol by
81	81	volume or wine containing not more than 16% alcohol by volume for sale
82	82	or resale to retailers licensed under K.S.A. 41-2702, as defined in K.S.A.
83	83	41-2701, and amendments thereto.
84	84	(j) "Domestic beer" means beer which that contains not more than
85	85	15% alcohol by weight and which that is manufactured in this state.
86	86	(k) "Domestic fortified wine" means wine which that contains more
87	87	than 16%, but not more than 20% alcohol by volume and which that is
88	88	manufactured in this state.
89	89	(l) "Domestic table wine" means wine which that contains not more
90	90	than 16% alcohol by volume and which that is manufactured without
91	91	rectification or fortification in this state.
92	92	(m) "Drinking establishment" means the same as defined by K.S.A.
93	93	41-2601, and amendments thereto.
94	94	(n) "Farm winery" means a winery licensed by the director to
95	95	manufacture, store and sell domestic table wine and domestic fortified
96	96	wine.
97	97	(o) "Fulfillment house" means any location or facility for any in-state
98	98	or out-of-state entity that handles logistics, including warehousing,
99	99	packaging, order fulfillment or shipping services on behalf of the holder of
100	100	a special order shipping license issued pursuant to K.S.A. 41-350, and
101	101	amendments thereto.
102	102	(p) "Hard cider" means any alcoholic beverage that:
103	103	(1) Contains less than 8.5% alcohol by volume;
104	104	(2) has a carbonation level that does not exceed 6.4 grams per liter;
105	105	and
106	106	(3) is obtained by the normal alcoholic fermentation of the juice of
107	107	sound, ripe apples or pears, including such beverages containing sugar
108	108	added for the purpose of correcting natural deficiencies.
109	109	(q) "Manufacture" means to distill, rectify, ferment, brew, make, mix,
110	110	concoct, process, blend, bottle or fill an original package with any
111	111	alcoholic liquor, beer or cereal malt beverage.
112	112	(r) (1) "Manufacturer" means every brewer, fermenter, distiller,
113	113	rectifier, wine maker, blender, processor, bottler or person who fills or
114	114	refills an original package and others engaged in brewing, fermenting,
115	115	distilling, rectifying or bottling alcoholic liquor, beer or cereal malt
116	116	beverage.
117	117	(2) "Manufacturer" does not include a microbrewery, microdistillery
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161	161	or a farm winery.
162	162	(s) "Microbrewery" means a brewery licensed by the director to
163	163	manufacture, store and sell domestic beer and hard cider.
164	164	(t) "Microdistillery" means a facility which that produces spirits from
165	165	any source or substance that is licensed by the director to manufacture,
166	166	store and sell spirits.
167	167	(u) "Minor" means any person under 21 years of age.
168	168	(v) "Nonbeverage user" means any manufacturer of any of the
169	169	products set forth and described in K.S.A. 41-501, and amendments
170	170	thereto, when the products contain alcohol or wine, and all laboratories
171	171	using alcohol for nonbeverage purposes.
172	172	(w) "Original package" means any bottle, flask, jug, can, cask, barrel,
173	173	keg, hogshead or other receptacle or container whatsoever, used, corked or
174	174	capped, sealed and labeled by the manufacturer of alcoholic liquor, to
175	175	contain and to convey any alcoholic liquor. Original container does not
176	176	include a sleeve.
177	177	(x) "Person" means any natural person, corporation, partnership, trust
178	178	or association.
179	179	(y) "Powdered alcohol" means alcohol that is prepared in a powdered
180	180	or crystal form for either direct use or for reconstitution in a nonalcoholic
181	181	liquid.
182	182	(z) "Primary American source of supply" means the manufacturer, the
183	183	owner of alcoholic liquor at the time it becomes a marketable product or
184	184	the manufacturer's or owner's exclusive agent who, if the alcoholic liquor
185	185	cannot be secured directly from such manufacturer or owner by American
186	186	wholesalers, is the source closest to such manufacturer or owner in the
187	187	channel of commerce from which the product can be secured by American
188	188	wholesalers.
189	189	(aa) (1) "Retailer" means a person who is licensed under the Kansas
190	190	liquor control act and sells at retail, or offers for sale at retail, alcoholic
191	191	liquors or cereal malt beverages.
192	192	(2) "Retailer" does not include a microbrewery, microdistillery or a
193	193	farm winery.
194	194	(bb) "Sale" means any transfer, exchange or barter in any manner or
195	195	by any means whatsoever for a consideration and includes all sales made
196	196	by any person, whether principal, proprietor, agent, servant or employee.
197	197	(cc) "Salesperson" means any natural person who:
198	198	(1) Procures or seeks to procure an order, bargain, contract or
199	199	agreement for the sale of alcoholic liquor or cereal malt beverage; or
200	200	(2) is engaged in promoting the sale of alcoholic liquor or cereal malt
201	201	beverage, or in promoting the business of any person, firm or corporation
202	202	engaged in the manufacturing and selling of alcoholic liquor or cereal malt
203	203	beverage, whether the seller resides within the state of Kansas and sells to
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247	247	licensed buyers within the state of Kansas, or whether the seller resides
248	248	without the state of Kansas and sells to licensed buyers within the state of
249	249	Kansas.
250	250	(dd) "Sample" means a serving of alcoholic liquor that contains not
251	251	more than: (1) One-half ounce of distilled spirits; (2) one ounce of wine; or
252	252	(3) two ounces of beer or cereal malt beverage. A "sample" of a mixed
253	253	alcoholic beverage shall contain not more than ½ ounce of distilled spirits.
254	254	(ee) "Secretary" means the secretary of revenue.
255	255	(ff) (1) "Sell at retail" and "sale at retail" refer to and mean sales for
256	256	use or consumption and not for resale in any form and sales to clubs,
257	257	licensed drinking establishments, licensed caterers or holders of temporary
258	258	permits.
259	259	(2) "Sell at retail" and "sale at retail" do not refer to or mean sales by
260	260	a distributor, a microbrewery, a farm winery, a licensed club, a licensed
261	261	drinking establishment, a licensed caterer or a holder of a temporary
262	262	permit.
263	263	(gg) "To sell" includes to solicit or receive an order for, to keep or
264	264	expose for sale and to keep with intent to sell.
265	265	(hh) "Sleeve" means a package of two or more 50-milliliter or 3.2-
266	266	fluid-ounce containers of spirits.
267	267	(ii) "Spirits" means any beverage which that contains alcohol
268	268	obtained by distillation, mixed with water or other substance in solution,
269	269	and includes brandy, rum, whiskey, gin or other spirituous liquors, and
270	270	such liquors when rectified, blended or otherwise mixed with alcohol or
271	271	other substances.
272	272	(jj) "Supplier" means a manufacturer of alcoholic liquor or cereal
273	273	malt beverage or an agent of such manufacturer, other than a salesperson.
274	274	(kk) "Temporary permit" means the same as defined by K.S.A. 41-
275	275	2601, and amendments thereto.
276	276	(ll) "Wine" means any alcoholic beverage obtained by the normal
277	277	alcoholic fermentation of the juice of sound, ripe grapes, fruits, berries or
278	278	other agricultural products, including such beverages containing added
279	279	alcohol or spirits or containing sugar added for the purpose of correcting
280	280	natural deficiencies. "Wine" includes hard cider and any other product that
281	281	is commonly known as a subset of wine.
282	282	Sec. 2. K.S.A. 41-212 is hereby amended to read as follows: 41-212.
283	283	(a) Following the 10
284	284	th
285	285	anniversary of the effective date of this act After
286	286	January 1, 2028, the director shall conduct, based on information available
287	287	to the director, a market impact study of the sale of beer containing not
288	288	more than 6% alcohol by volume and wine containing not more than 16%
289	289	alcohol by volume by persons licensed as cereal malt beverage retailers
290	290	pursuant to K.S.A. 41-2702, and amendments thereto. Such study shall
291	291	include, but not be limited to, the changes subsequent to the effective date
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335	335	of this act after January 1, 2018, if any, in the number of such retailers and
336	336	the reasons for any changes; the changes subsequent to the effective date
337	337	of this act after January 1, 2018, if any, in the number of persons licensed
338	338	to sell cereal malt beverage in the original package for use or consumption
339	339	off of and away from the licensed premises, and the reasons for any
340	340	changes; the effect of this act on state and local tax revenues; the impact of
341	341	this act on employment; and such other factors as the director deems
342	342	pertinent. A report on the director's findings from such study shall be
343	343	submitted to the legislature prior to adjournment of the 2029 session of the
344	344	legislature.
345	345	(b) The director shall have oversight over the sale of beer containing
346	346	not more than 6% alcohol by volume and wine containing not more than
347	347	16% alcohol by volume by persons licensed as cereal malt beverage
348	348	retailers pursuant to K.S.A. 41-2702, and amendments thereto, to ensure
349	349	that such sales promote an orderly market. For such purpose, the director
350	350	may adopt such rules and regulations as the director deems necessary and
351	351	appropriate, including rules and regulations making applicable to cereal
352	352	malt beverage retailers selling beer containing not more than 6% alcohol
353	353	by volume such the provisions of the existing rules and regulations
354	354	concerning industry trade practices as are necessary and appropriate
355	355	applicable to retailers, as defined in K.S.A. 41-2701, and amendments
356	356	thereto, who sell beer containing not more than 6% alcohol by volume and
357	357	wine containing not more than 16% alcohol by volume. The rules and
358	358	regulations authorized by this section shall be promulgated by the director
359	359	on or before July 1, 2018 January 1, 2025.
360	360	Sec. 3. K.S.A. 2023 Supp. 41-306a is hereby amended to read as
361	361	follows: 41-306a. A wine distributor's license shall allow:
362	362	(a) The wholesale purchase, importation and storage of wine, but all
363	363	wine so purchased or imported which that is manufactured in the United
364	364	States shall be purchased from the primary American source of supply or
365	365	from another licensed wine distributor, except that a licensed wine
366	366	distributor may purchase confiscated wine at a sheriff's sale.
367	367	(b) The sale of wine to:
368	368	(1) Wine distributors licensed in this state;
369	369	(2) retailers licensed in this state, except that such distributor shall
370	370	sell a brand of wine only to those retailers whose licensed premises are
371	371	located in the geographic territory within which such distributor is
372	372	authorized to sell such brand, as designated in the notice or notices filed
373	373	with the director pursuant to K.S.A. 41-410, and amendments thereto; and
374	374	(3) such persons located outside such territory or outside this state as
375	375	permitted by law.
376	376	(c) The sale of wine containing not more than 16% alcohol by volume
377	377	to retailers, as defined in K.S.A. 41-2701, and amendments thereto.
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421	421	(d) The sale of wine, but only in barrels, casks and other bulk
422	422	containers, to:
423	423	(1) Licensed caterers; and
424	424	(2) public venues, clubs and drinking establishments licensed in this
425	425	state, except that such distributor shall sell a brand of wine only to such
426	426	public venues, clubs and drinking establishments the licensed premises of
427	427	which are located in the geographic territory within which such distributor
428	428	is authorized to sell such brand, as designated in the notice or notices filed
429	429	with the director pursuant to K.S.A. 41-410, and amendments thereto.
430	430	(d)(e) The purchase of wine in barrels, casks or other bulk containers
431	431	and the bottling thereof before resale, but all bottles or containers filled
432	432	with such wine shall be sealed, labeled and otherwise made to comply with
433	433	all laws and rules and regulations governing the preparation and bottling of
434	434	wine by manufacturers and with all federal rules, regulations and laws.
435	435	(e)(f) The storage and delivery to a retailer licensed under the Kansas
436	436	liquor control act or a retailer licensed under K.S.A. 41-2702, as defined in
437	437	K.S.A. 41-2701, and amendments thereto, on the distributor's licensed
438	438	premises, of alcoholic liquor or cereal malt beverage of another licensed
439	439	distributor authorized by law to sell such alcoholic liquor or cereal malt
440	440	beverage to such retailer, in accordance with an agreement entered into
441	441	with such other distributor and approved by the director.
442	442	(f)(g) The withdrawal of wine from such licensee's inventory for use
443	443	as samples in the course of the business of the distributor or at industry
444	444	seminars. Samples may only be provided to persons licensed as a
445	445	distributor or a retailer under the Kansas liquor control act, and such
446	446	person's employees, or to persons licensed under the club and drinking
447	447	establishment act, and such person's employees. Samples may be served
448	448	on the licensed premises of the licensee, or on the premises of a licensed
449	449	retailer, provided no sample shall be served on that portion of the premises
450	450	of a licensed retailer that is open to the public and where sales of alcoholic
451	451	liquor at retail are made. Samples may be served on the premises of a
452	452	licensee holding a license issued under the club and drinking establishment
453	453	act, provided no sample shall be served on that portion of the premises that
454	454	is open to the public and where sales of alcoholic liquor are made. Only
455	455	products that have not been purchased from the distributor licensee by the
456	456	retailer or club and drinking establishment licensee within the previous 12
457	457	months may be provided for sampling pursuant to this subsection. No
458	458	sample shall be provided to any minor. Nothing in this subsection shall be
459	459	construed to permit the licensee to sell any alcoholic liquor for
460	460	consumption on the premises. The withdrawal of wine shall be subject to
461	461	the tax imposed by K.S.A. 79-4101 et seq., and amendments thereto, based
462	462	on the applicable current posted bottle or case price. For purposes of this
463	463	subsection, "sample" means not more than three liters of any brand of
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507	507	wine.
508	508	(g)(h) This section shall be a part of and supplemental to the Kansas
509	509	liquor control act.
510	510	Sec. 4. K.S.A. 2023 Supp. 41-308 is hereby amended to read as
511	511	follows: 41-308. (a) Except as provided in K.S.A. 41-308d, and
512	512	amendments thereto, a retailer's license shall allow the licensee to sell and
513	513	offer for sale at retail and deliver in the original package, as therein
514	514	prescribed, alcoholic liquor and cereal malt beverage for use or
515	515	consumption off and away from the premises specified in such license.
516	516	(b) A retailer's license shall permit sale and delivery of alcoholic
517	517	liquor and cereal malt beverage only on the licensed premises and shall not
518	518	permit sale of alcoholic liquor and cereal malt beverage for resale in any
519	519	form, except that a licensed retailer may:
520	520	(1) Sell alcoholic liquor and cereal malt beverage to a temporary
521	521	permit holder for resale by such permit holder;
522	522	(2) sell and deliver alcoholic liquor and cereal malt beverage to a
523	523	caterer or to the licensed premises of a public venue, club or drinking
524	524	establishment, if such premises are in the county where the retailer's
525	525	premises are located or in an adjacent county or a county with a corner
526	526	located within two miles measured along the adjacent county boundary, for
527	527	resale by such public venue, club, establishment or caterer; and
528	528	(3) sell and deliver cereal malt beverage and, beer containing not
529	529	more than 6% alcohol by volume and wine containing not more than 16%
530	530	alcohol by volume to the licensed premises of a cereal malt beverage
531	531	retailer, as defined in K.S.A. 41-2701, and amendments thereto, who is
532	532	licensed for on-premises consumption, if such cereal malt beverage
533	533	licensed premises are located in the same county, or an adjacent county to
534	534	the county where the retailer's licensed premises are located, for resale by
535	535	such cereal malt beverage retailer.
536	536	(c) A retailer may:
537	537	(1) Charge a delivery fee for delivery of alcoholic liquor and cereal
538	538	malt beverage to a public venue, club, drinking establishment or caterer
539	539	pursuant to subsection (b)(2);
540	540	(2) charge a delivery fee for delivery of cereal malt beverage and,
541	541	beer containing not more than 6% alcohol by volume and wine containing
542	542	not more than 16% alcohol by volume to a cereal malt beverage retailer, as
543	543	defined in K.S.A. 41-2701, and amendments thereto, pursuant to subsection
544	544	(b)(3);
545	545	(3) sell lottery tickets and shares to the public in accordance with the
546	546	Kansas lottery act, if the retailer is selected as a lottery retailer;
547	547	(4) include in the sale of alcoholic liquor and cereal malt beverage
548	548	any goods included by the manufacturer in packaging with the alcoholic
549	549	liquor or cereal malt beverage, subject to the approval of the director;
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593	593	(5) distribute to the public, without charge, consumer advertising
594	594	specialties bearing advertising matter, subject to rules and regulations of
595	595	the secretary limiting the form and distribution of such specialties so that
596	596	they are not conditioned on or an inducement to the purchase of alcoholic
597	597	liquor or cereal malt beverage;
598	598	(6) store alcoholic liquor and cereal malt beverage in refrigerators,
599	599	cold storage units, ice boxes or other cooling devices, and the licensee may
600	600	sell such alcoholic liquor and cereal malt beverage to consumers in a
601	601	chilled condition;
602	602	(7) sell any other good or service on the licensed premises, except
603	603	that the gross sales of other goods and services, excluding fees derived
604	604	from the sale of lottery tickets and revenues from sales of cigarettes and
605	605	tobacco products, shall not exceed 20% of the retailer's total gross sales;
606	606	and
607	607	(8) sell containers of beer, domestic beer and cereal malt beverage
608	608	that are sold on the licensed premises to consumers and served in refillable
609	609	and sealable containers for consumption off the licensed premises if such
610	610	containers:
611	611	(A) Contain between 32 and 64 fluid ounces; and
612	612	(B) have a label affixed that clearly indicates the licensee's name and
613	613	the type of alcoholic beverage contained in such container.
614	614	(d) All alcoholic liquor, cereal malt beverage and nonalcoholic malt
615	615	beverage sold by a holder of a retail license shall be subject to the liquor
616	616	enforcement tax imposed by K.S.A. 79-4101, and amendments thereto.
617	617	Sec. 5. K.S.A. 41-355 is hereby amended to read as follows: 41-355.
618	618	(a) Any person engaged in business as a vineyard with not less than 100
619	619	vines of sound, ripe grapes or other type of agricultural producer with an
620	620	annual harvest of 1,000 pounds of other sound, ripe fruits or berries or 100
621	621	pounds of honey may apply to the director for and be issued up to two
622	622	producer licenses.
623	623	(b) A producer license shall apply only to the premises described in
624	624	the application and in the issued license.
625	625	(c) A producer license shall authorize the sale in the original,
626	626	unopened container and the serving by the drink of wine on the premises
627	627	specified in the license. A producer license also shall authorize the license
628	628	holder to conduct wine tastings in accordance with K.S.A. 41-308d, and
629	629	amendments thereto, on the premises specified in the license. All wine sold
630	630	or served by the license holder, including any wine sold or served
631	631	pursuant to a license issued under K.S.A. 41-2702, and amendments
632	632	thereto, shall be produced, in whole or in part, using sound, ripe grapes,
633	633	fruits, berries or honey grown or produced by the license holder, shall be
634	634	manufactured by a farm winery and shall be purchased by the license
635	635	holder from such farm winery.
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679	679	(d) Any wine not consumed on the premises shall be disposed of by
680	680	the license holder or, prior to its removal from the property, securely re-
681	681	sealed and placed in a tamper-proof, transparent bag that is sealed in a
682	682	manner that makes it visibly apparent if the bag is subsequently opened.
683	683	(e) If the producer licensee is also licensed as a club or drinking
684	684	establishment, the producer's license shall allow the sale of domestic wine,
685	685	domestic fortified wine and other alcoholic liquor for consumption on the
686	686	licensed premises as authorized by the club and drinking establishment act.
687	687	If the producer licensee is also licensed as a cereal malt beverage licensee,
688	688	the producer's license shall allow the sale of cereal malt beverage and beer
689	689	not exceeding 6% alcohol by volume for consumption on the licensed
690	690	premises as authorized by the Kansas cereal malt beverage act.
691	691	(f) The officers, directors, shareholders or managers of a producer
692	692	licensee shall meet the qualifications of K.S.A. 41-311(a), and
693	693	amendments thereto.
694	694	(g) (1) Each producer licensee shall maintain records of all sales
695	695	made under the license, including sales of agricultural products to a farm
696	696	winery and sales to consumers, and maintain records of all purchases of
697	697	wine manufactured by such farm winery, for at least three years after the
698	698	date of the sale or purchase.
699	699	(2) The records required by this subsection shall be available for
700	700	inspection by the director, any agent or employee of the director, the
701	701	secretary or any law enforcement officer.
702	702	(3) Each record of a sale or purchase required by this subsection shall
703	703	be maintained on the premises specified in the license for at least 90 days
704	704	after such sale or purchase.
705	705	(4) Any record of a sale or purchase required by this subsection may
706	706	be stored electronically and maintained off the premises specified in the
707	707	license after 90 days have passed since such sale or purchase.
708	708	(h) The secretary may adopt rules and regulations as necessary to
709	709	implement the provisions of this section.
710	710	(i) (1) Nothing in this section shall be construed to prohibit a person
711	711	from possessing alcoholic liquor or cereal malt beverage not purchased
712	712	from the licensee on the premises licensed pursuant to this section.
713	713	(2) Nothing in this section shall prevent a licensee from adopting a
714	714	policy prohibiting the possession of alcoholic liquor or cereal malt
715	715	beverage not purchased from the licensee on the licensee's premises
716	716	licensed pursuant to this section.
717	717	(j) This section shall be a part of and supplemental to the Kansas
718	718	liquor control act.
719	719	Sec. 6. K.S.A. 41-701 is hereby amended to read as follows: 41-701.
720	720	(a) Except as provided in subsection (d), no spirits distributor shall sell or
721	721	attempt to sell any spirits within this state except to:
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765	765	(1) A licensed manufacturer, licensed nonbeverage user or licensed
766	766	spirits distributor; or
767	767	(2) a licensed retailer, as authorized by K.S.A. 41-306, and
768	768	amendments thereto.
769	769	(b) Except as provided in subsection (d), no wine distributor shall sell
770	770	or attempt to sell any wine within this state except to:
771	771	(1) A licensed manufacturer, licensed nonbeverage user or licensed
772	772	wine distributor;
773	773	(2) a licensed caterer; or
774	774	(3) a retailer, public venue, club or drinking establishment, licensed in
775	775	this state or a retailer, as defined in K.S.A. 41-2701, and amendments
776	776	thereto, as authorized by K.S.A. 41-306a, and amendments thereto.
777	777	(c) Except as provided by subsection (d), no beer distributor shall sell
778	778	or attempt to sell any beer or cereal malt beverage within this state except
779	779	to:
780	780	(1) A licensed manufacturer, licensed nonbeverage user or licensed
781	781	beer distributor;
782	782	(2) a licensed caterer; or
783	783	(3) a retailer licensed under the Kansas liquor control act or under
784	784	K.S.A. 41-2702, and amendments thereto, or a club or drinking
785	785	establishment, licensed in this state, as authorized by K.S.A. 41-307, and
786	786	amendments thereto.
787	787	(d) (1) If any spirits distributor refuses to sell spirits which that such
788	788	distributor is authorized to sell or refuses to provide any service in
789	789	connection therewith to any licensed retailer as authorized by K.S.A. 41-
790	790	306, and amendments thereto, it shall be lawful for any other licensed
791	791	spirits distributor to sell such spirits to such retailer.
792	792	(2) If any wine distributor refuses to sell wine which that such
793	793	distributor is authorized to sell or refuses to furnish service in connection
794	794	therewith to any licensed retailer licensed under the Kansas liquor control
795	795	act or K.S.A. 41-2702, and amendments thereto, as authorized by K.S.A.
796	796	41-306a, and amendments thereto, it shall be lawful for any other licensed
797	797	wine distributor to sell such wine to such retailer.
798	798	(3) If any beer distributor refuses to sell beer or cereal malt beverage
799	799	which that such distributor is authorized to sell or provide service in
800	800	connection therewith to any retailer licensed under this the Kansas liquor
801	801	control act or under K.S.A. 41-2702, and amendments thereto, as
802	802	authorized by K.S.A. 41-307, and amendments thereto, it shall be lawful
803	803	for any other licensed beer distributor to sell such beer or cereal malt
804	804	beverage to such retailer.
805	805	(e) No manufacturer of alcoholic liquor or cereal malt beverage shall
806	806	sell or attempt to sell any alcoholic liquor or cereal malt beverage within
807	807	this state except to a licensed manufacturer, licensed distributor or licensed
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851	851	nonbeverage user.
852	852	(f) No supplier, wholesaler, distributor, manufacturer or importer
853	853	shall by oral or written contract or agreement, expressly or impliedly fix,
854	854	maintain, coerce or control the resale price of alcoholic liquor, beer or
855	855	cereal malt beverage to be resold by such wholesaler, distributor,
856	856	manufacturer or importer.
857	857	(g) Any supplier, wholesaler, distributor or manufacturer violating the
858	858	provisions of this section shall be guilty of a misdemeanor and upon
859	859	conviction thereof shall be punished by a fine of not less than $500 and not
860	860	more than $1,000, to which may be added not to exceed six months'
861	861	imprisonment. In addition, any supplier, wholesaler, distributor,
862	862	manufacturer or importer violating the provisions of this section relating to
863	863	fixing, maintaining or controlling the resale price of alcoholic liquor, beer
864	864	or cereal malt beverage shall be liable in a civil action to treble the amount
865	865	of any damages awarded plus reasonable attorney fees for the damaged
866	866	party.
867	867	Sec. 7. K.S.A. 41-1101a is hereby amended to read as follows: 41-
868	868	1101a. (a) Notwithstanding the provisions of K.S.A. 41-1101, and
869	869	amendments thereto, or the provisions of the Kansas cereal malt beverage
870	870	act, a distributor may establish reasonable minimum order quantities or
871	871	minimum dollar value of an order, or both, for beer and cereal malt
872	872	beverages distributed by the distributor to a retailer.
873	873	(b) The provisions of K.S.A. 41-1101(b), and amendments thereto,
874	874	shall apply to a person cereal malt beverage retailer licensed pursuant to
875	875	K.S.A. 41-2702, and amendments thereto, to sell cereal malt beverage and,
876	876	beer containing not more than 6% alcohol by volume and wine containing
877	877	not more than 16% alcohol by volume to the same extent it applies such
878	878	provisions apply to a retailer licensed pursuant to the Kansas liquor control
879	879	act, and. The provisions of K.S.A. 41-1101(d), and amendments thereto,
880	880	shall apply to a retailer licensed pursuant to the Kansas liquor control act
881	881	to the same extent it applies such provisions apply to a retailer licensed
882	882	pursuant to K.S.A. 41-2702, and amendments thereto.
883	883	(c) This section shall be a part of and supplemental to the Kansas
884	884	liquor control act.
885	885	(d) The provisions of this section shall be effective on and after April
886	886	1, 2019.
887	887	Sec. 8. K.S.A. 41-2701 is hereby amended to read as follows: 41-
888	888	2701. As used in this act, unless the context otherwise requires:
889	889	(a) "Cereal malt beverage" means any fermented but undistilled
890	890	liquor brewed or made from malt or from a mixture of malt or malt
891	891	substitute or any flavored malt beverage, as defined in K.S.A. 41-2729,
892	892	and amendments thereto, but does not include any such liquor which that
893	893	is more than 3.2% alcohol by weight.
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937	937	(b) "Director" means the director of alcoholic beverage control of the
938	938	department of revenue.
939	939	(c) "Manufacturer" means a manufacturer as defined by K.S.A. 41-
940	940	102, and amendments thereto.
941	941	(d) "Person" means any individual, firm, partnership, corporation or
942	942	association.
943	943	(e) "Retailer" means any person who is licensed under the Kansas
944	944	cereal malt beverage act and who sells or offers for sale any cereal malt
945	945	beverage or, beer containing not more than 6% alcohol by volume or wine
946	946	containing not more than 16% alcohol by volume for use or consumption
947	947	and not for resale in any form.
948	948	(f) "Place of business" means any place at which where cereal malt
949	949	beverages or, beer containing not more than 6% alcohol by volume or
950	950	wine containing not more than 16% alcohol by volume are sold.
951	951	(g) "Distributor" means a beer distributor licensed pursuant to the
952	952	Kansas liquor control act.
953	953	(h) "Legal age for consumption of cereal malt beverage" means 21
954	954	years of age, except that "legal age for consumption of cereal malt
955	955	beverage" shall mean 18 years of age if at any time the provisions of P.L.
956	956	98-363 penalizing states for permitting persons under 21 years of age to
957	957	consume cereal malt beverage are repealed or otherwise invalidated or
958	958	nullified.
959	959	Sec. 9. K.S.A. 41-2702 is hereby amended to read as follows: 41-
960	960	2702. (a) No retailer shall sell any cereal malt beverage or, beer containing
961	961	not more than 6% alcohol by volume or wine containing not more than
962	962	16% alcohol by volume without having first secured a license for each
963	963	place of business as herein provided. In case such place of business is
964	964	located within the corporate limits of a city, the application for license
965	965	shall be made to the governing body of such city. In all other cases, the
966	966	application for license shall be made to the board of county commissioners
967	967	in the county in which such place of business is to be located, except that
968	968	the application for license to sell on railway cars shall be made to the
969	969	director as hereinafter provided.
970	970	(b) A board of county commissioners shall not issue or renew a
971	971	retailer's license without giving the clerk of the township where the place
972	972	of business is to be located written notice by registered mail of the filing of
973	973	the application for licensure or renewal. The township board may within
974	974	10 days file advisory recommendations as to the granting of such license
975	975	or renewal and such advisory recommendations shall be considered by the
976	976	board of county commissioners before such license is issued. If an original
977	977	license is granted and issued, the board of county commissioners shall
978	978	grant and issue renewals thereof upon application of the license holder, if
979	979	the license holder is qualified to receive the same and the license has not
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1023	1023	been revoked as provided by law.
1024	1024	(c) An application for a retailer's license shall be verified and upon a
1025	1025	form prepared by the attorney general of the state and shall contain:
1026	1026	(1) The name and residence of the applicant;
1027	1027	(2) the length of time that the applicant has resided within the state of
1028	1028	Kansas;
1029	1029	(3) the particular place of business for which a license is desired;
1030	1030	(4) the name of the owner of the premises upon which the place of
1031	1031	business is located; and
1032	1032	(5) a statement that the applicant is a citizen of the United States and
1033	1033	not less than 21 years of age and that the applicant has not within two
1034	1034	years immediately preceding the date of making application been
1035	1035	convicted of a felony, any crime involving moral turpitude, drunkenness,
1036	1036	driving a motor vehicle while under the influence of intoxicating liquor or
1037	1037	violation of any other intoxicating liquor law of any state or of the United
1038	1038	States.
1039	1039	(d) In addition to the fee provided by subsection (e), each application
1040	1040	for a retailer's license to sell cereal malt beverages for consumption on the
1041	1041	licensed premises shall be accompanied by a fee as follows:
1042	1042	(1) For licensure of a place of business other than a railway car, a fee
1043	1043	of not less than $25 nor more than $200, as prescribed by the board of
1044	1044	county commissioners or the governing body of the city, as the case may
1045	1045	be; and
1046	1046	(2) for licensure to sell on railway cars, a fee of $100.
1047	1047	(e) Each applicant for a retailer's license or renewal of such a license
1048	1048	shall submit to the director a copy of the completed application for such
1049	1049	license or license renewal, together with a fee of $25. Upon receipt of such
1050	1050	application, the director shall authorize a state stamp to be affixed to the
1051	1051	license. No such stamp shall be affixed to any license except such stamps
1052	1052	as provided by the director and no retailer's license shall be issued or
1053	1053	renewed unless such stamp has first been affixed thereto. The director may
1054	1054	refuse to issue a stamp if the applicant or licensee is not current in the
1055	1055	payment of any fines imposed by the director relating to such license or a
1056	1056	license previously issued pursuant to this section, the Kansas liquor control
1057	1057	act or the club and drinking establishment act.
1058	1058	(f) The director shall remit all fees collected by the director to the
1059	1059	state treasurer in accordance with the provisions of K.S.A. 75-4215, and
1060	1060	amendments thereto. Upon receipt of each such remittance, the state
1061	1061	treasurer shall deposit the entire amount in the state treasury to the credit
1062	1062	of the state general fund, except that the director may provide for the
1063	1063	deposit in the cereal malt beverage tax refund fund of such amounts as
1064	1064	necessary for the refund of any license fees collected hereunder.
1065	1065	(g) The board of county commissioners of the several counties or the
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1109	1109	governing body of a city shall issue a license upon application duly made
1110	1110	as otherwise provided for herein, to any retailer engaged in business in
1111	1111	such county or city and qualified to receive such license, to sell only cereal
1112	1112	malt beverages in original and unopened containers, and not for
1113	1113	consumption on the premises. The annual license fee for such license,
1114	1114	which shall be in addition to the fee provided by subsection (e), shall be
1115	1115	not less than $25 nor more than $50.
1116	1116	(h) No license issued under this act shall be transferable.
1117	1117	Sec. 10. K.S.A. 2023 Supp. 41-2704 is hereby amended to read as
1118	1118	follows: 41-2704. (a) In addition to and consistent with the requirements
1119	1119	of the Kansas cereal malt beverage act, the board of county commissioners
1120	1120	of any county or the governing body of any city may prescribe hours of
1121	1121	closing, standards of conduct and rules and regulations concerning the
1122	1122	moral, sanitary and health conditions of places licensed pursuant to this act
1123	1123	and may establish zones within which no such place may be located.
1124	1124	(b) Within any city where the days of sale at retail of cereal malt
1125	1125	beverage in the original package have not been expanded as provided by
1126	1126	K.S.A. 41-2911, and amendments thereto, or have been so expanded and
1127	1127	subsequently restricted as provided by K.S.A. 41-2911, and amendments
1128	1128	thereto, no cereal malt beverages or, beer containing not more than 6%
1129	1129	alcohol by volume or wine containing not more than 16% alcohol by
1130	1130	volume may be sold:
1131	1131	(1) Between the hours of 12 midnight and 6 a.m.; or
1132	1132	(2) on Sunday, except in a place of business that is licensed to sell
1133	1133	cereal malt beverage for consumption on the premises and that is located
1134	1134	in a county where such sales on Sunday have been authorized by
1135	1135	resolution of the board of county commissioners of the county or in a city
1136	1136	where such sales on Sunday have been authorized by ordinance of the
1137	1137	governing body of the city.
1138	1138	(c) Within any city where the days of sale at retail of cereal malt
1139	1139	beverage in the original package have been expanded as provided by
1140	1140	K.S.A. 41-2911, and amendments thereto, and have not been subsequently
1141	1141	restricted as provided in K.S.A. 41-2911, and amendments thereto, no
1142	1142	person shall sell at retail cereal malt beverage or, beer containing not more
1143	1143	than 6% alcohol by volume or wine containing not more than 16% alcohol
1144	1144	by volume:
1145	1145	(1) Between the hours of 12 midnight and 6 a.m.;
1146	1146	(2) in the original package not earlier than 9 a.m. and not later than 8
1147	1147	p.m. on Sunday;
1148	1148	(3) on Easter Sunday; or
1149	1149	(4) for consumption on the licensed premises on Sunday, except in a
1150	1150	place of business that is licensed to sell cereal malt beverage for
1151	1151	consumption on the premises and that is located in a county where such
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1195	1195	sales on Sunday have been authorized by resolution of the board of county
1196	1196	commissioners of the county or in a city where such sales on Sunday have
1197	1197	been authorized by ordinance of the governing body of the city.
1198	1198	(d) No private rooms or closed booths shall be operated in a place of
1199	1199	business, but this provision shall not apply if the licensed premises also are
1200	1200	licensed as a club pursuant to the club and drinking establishment act.
1201	1201	(e) Each place of business shall be open to the public and to law
1202	1202	enforcement officers at all times during business hours, except that a
1203	1203	premises licensed as a club pursuant to the club and drinking establishment
1204	1204	act shall be open to law enforcement officers and not to the public.
1205	1205	(f) Except as otherwise provided by this subsection, no licensee shall
1206	1206	permit a person under the legal age for consumption of cereal malt
1207	1207	beverage or beer containing not more than 6% alcohol by volume to
1208	1208	consume or purchase any cereal malt beverage, beer or wine in or about a
1209	1209	place of business. A licensee's employee who is not less than 18 years of
1210	1210	age may dispense or sell cereal malt beverage or, beer containing not more
1211	1211	than 6% alcohol by volume or wine containing not more than 16% alcohol
1212	1212	by volume, if:
1213	1213	(1) The licensee's place of business is licensed only to sell at retail
1214	1214	cereal malt beverage or, beer containing not more than 6% alcohol by
1215	1215	volume or wine containing not more than 16% alcohol by volume in the
1216	1216	original package and not for consumption on the premises; or
1217	1217	(2) the licensee's place of business is a licensed food service
1218	1218	establishment, as defined by K.S.A. 36-501, and amendments thereto, and
1219	1219	not less than 50% of the gross receipts from the licensee's place of
1220	1220	business is derived from the sale of food for consumption on the premises
1221	1221	of the licensed place of business.
1222	1222	(g) No person shall have any alcoholic liquor, except beer containing
1223	1223	not more than 6% alcohol by volume or wine containing not more than
1224	1224	16% alcohol by volume, in such person's possession while in a place of
1225	1225	business, unless the premises are currently licensed as a club or drinking
1226	1226	establishment pursuant to the club and drinking establishment act or the
1227	1227	business is a farm winery licensed pursuant to K.S.A. 41-316, and
1228	1228	amendments thereto, or a producer licensed pursuant to K.S.A. 41-355,
1229	1229	and amendments thereto.
1230	1230	(h) Cereal malt beverages may be sold on premises that are licensed
1231	1231	pursuant to both the Kansas cereal malt beverage act and the club and
1232	1232	drinking establishment act at any time when alcoholic liquor is allowed by
1233	1233	law to be served on the premises.
1234	1234	Sec. 11. K.S.A. 41-2706 is hereby amended to read as follows: 41-
1235	1235	2706. (a) Except as provided by subsection (b), no person shall sell or
1236	1236	furnish cereal malt beverages or, beer containing not more than 6% alcohol
1237	1237	by volume or wine containing not more than 16% alcohol by volume at
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1281	1281	retail to any person on credit;, on a passbook;, on order on a store;, in
1282	1282	exchange for any goods, wares or merchandise; or in payment for any
1283	1283	services rendered. If any person extends credit for such purpose, the debt
1284	1284	attempted to be created shall not be recoverable at law and, in addition,
1285	1285	such person shall be subject to the penalties provided in K.S.A. 41-2707,
1286	1286	and amendments thereto.
1287	1287	(b) A licensed retailer may sell cereal malt beverages or, beer
1288	1288	containing not more than 6% alcohol by volume or wine containing not
1289	1289	more than 16% alcohol by volume to a consumer on credit pursuant to a
1290	1290	credit card which that entitles the user to purchase goods or services from
1291	1291	at least 100 persons not related to the issuer of the credit card.
1292	1292	Sec. 12. K.S.A. 41-2708 is hereby amended to read as follows: 41-
1293	1293	2708. (a) The board of county commissioners or the governing body of
1294	1294	any city, upon five days' notice to the persons holding a license, may
1295	1295	revoke or suspend the license for any one of the following reasons:
1296	1296	(1) The licensee has violated any of the provisions of K.S.A. 41-2701
1297	1297	et seq., and amendments thereto, or any rules or regulations made by the
1298	1298	board or the city, as the case may be;
1299	1299	(2) drunkenness of the licensee or permitting any intoxicated person
1300	1300	to remain in or upon the licensee's place of business;
1301	1301	(3) the sale of cereal malt beverages or, beer containing not more than
1302	1302	6% alcohol by volume or wine containing not more than 16% alcohol by
1303	1303	volume to any person under the legal age for consumption of cereal malt
1304	1304	beverage;
1305	1305	(4) permitting any person to mix drinks with materials purchased in
1306	1306	or upon the place of business or brought in for that purpose;
1307	1307	(5) the sale or possession of, or permitting any person to use or
1308	1308	consume on the licensed premises, any alcoholic liquor as defined by
1309	1309	K.S.A. 41-102, and amendments thereto, except beer containing not more
1310	1310	than 6% alcohol by volume or wine containing not more than 16% alcohol
1311	1311	by volume; or
1312	1312	(6) the licensee has been convicted of a violation of the beer and
1313	1313	cereal malt beverage keg registration act.
1314	1314	(b) The provisions of subsections (a)(4) and (5) shall not apply if the
1315	1315	place of business or premises also are currently licensed as a club or
1316	1316	drinking establishment pursuant to the club and drinking establishment act.
1317	1317	(c) The board of county commissioners or the governing body of any
1318	1318	city, upon five days' notice to the persons holding a license, shall revoke or
1319	1319	suspend the license for any one of the following reasons:
1320	1320	(1) The licensee has fraudulently obtained the license by giving false
1321	1321	information in the application therefor;
1322	1322	(2) the licensee has become ineligible to obtain a license under this
1323	1323	act;
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1367	1367	(3) the nonpayment of any license fees;
1368	1368	(4) permitting any gambling in or upon the licensee's place of
1369	1369	business;
1370	1370	(5) the employment of persons under 18 years of age in dispensing or
1371	1371	selling cereal malt beverages or, beer containing not more than 6% alcohol
1372	1372	by volume or wine containing not more than 16% alcohol by volume;
1373	1373	(6) the employment or continuation in employment of a person in
1374	1374	connection with the sale, serving or dispensing of cereal malt beverages if
1375	1375	the licensee knows such person has been, within the preceding two years,
1376	1376	adjudged guilty of a felony or of any violation of the intoxicating liquor
1377	1377	laws of this state, another state or the United States; or
1378	1378	(7) there has been a violation of K.S.A. 21-4106 or 21-4107, prior to
1379	1379	their repeal, or K.S.A. 21-6204, and amendments thereto, in or upon the
1380	1380	licensee's place of business.
1381	1381	(d) Within 20 days after the order of the board revoking or
1382	1382	suspending any license, the licensee may appeal to the district court and
1383	1383	the district court shall proceed to hear such appeal as though such court
1384	1384	had original jurisdiction of the matter. Any appeal taken from an order
1385	1385	revoking or suspending the license shall not suspend the order of
1386	1386	revocation or suspension during the pendency of any such appeal.
1387	1387	Sec. 13. K.S.A. 41-2722 is hereby amended to read as follows: 41-
1388	1388	2722. (a) No retailer, or employee or agent of a retailer, licensed to sell
1389	1389	cereal malt beverage and, beer containing not more than 6% alcohol by
1390	1390	volume and wine containing not more than 16% alcohol by volume for
1391	1391	consumption on the licensed premises shall:
1392	1392	(1) Offer or serve any free cereal malt beverage or, beer containing
1393	1393	not more than 6% alcohol by volume or wine containing not more than
1394	1394	16% alcohol by volume to any person;
1395	1395	(2) offer or serve to any person a drink at a price that is less than the
1396	1396	acquisition cost of the drink to the licensee;
1397	1397	(3) sell, offer to sell or serve to any person an unlimited number of
1398	1398	drinks during any set period of time for a fixed price, except at private
1399	1399	functions not open to the general public;
1400	1400	(4) encourage or permit, on the licensed premises, any game or
1401	1401	contest which that involves drinking cereal malt beverage or, beer
1402	1402	containing not more than 6% alcohol by volume or wine containing not
1403	1403	more than 16% alcohol by volume or the awarding of drinks as prizes; or
1404	1404	(5) advertise or promote in any way, whether on or off the licensed
1405	1405	premises, any of the practices prohibited under subsections (a)(1) through
1406	1406	(4).
1407	1407	(b) A retailer may:
1408	1408	(1) Offer free food or entertainment at any time;
1409	1409	(2) sell, offer to sell and serve individual drinks at different prices
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1453	1453	throughout any day; or
1454	1454	(3) sell or serve cereal malt beverage in a pitcher capable of
1455	1455	containing not more than 64 fluid ounces.
1456	1456	(c) Violation of any provisions of this section is a misdemeanor
1457	1457	punishable as provided by K.S.A. 41-2711, and amendments thereto.
1458	1458	(d) Violation of any provision of this act shall be grounds for
1459	1459	suspension or revocation of the retailer's license as provided by K.S.A. 41-
1460	1460	2708, and amendments thereto.
1461	1461	(e) Every licensee subject to the provisions of this section shall make
1462	1462	available at any time upon request a price list showing the licensee's
1463	1463	current prices for all cereal malt beverages and, beer containing not more
1464	1464	than 6% alcohol by volume and wine containing not more than 16%
1465	1465	alcohol by volume.
1466	1466	(f) This section shall be a part of and supplemental to K.S.A. 41-2701
1467	1467	through 41-2721, and amendments thereto the Kansas cereal malt
1468	1468	beverage act.
1469	1469	Sec. 14. K.S.A. 41-2726 is hereby amended to read as follows: 41-
1470	1470	2726. (a) No retailer licensed under K.S.A. 41-2701 et seq., and
1471	1471	amendments thereto, to sell cereal malt beverage or, beer containing not
1472	1472	more than 6% alcohol by volume or wine containing not more than 16%
1473	1473	alcohol by volume in original and unopened containers and not for
1474	1474	consumption on the licensed premises shall sell or offer for sale directly or
1475	1475	indirectly any cereal malt beverage or, beer containing not more than 6%
1476	1476	alcohol by volume or wine containing not more than 16% alcohol by
1477	1477	volume at a price that is less than the acquisition cost of such cereal malt
1478	1478	beverage or, beer containing not more than 6% alcohol by volume or wine
1479	1479	containing not more than 16% alcohol by volume to the licensee.
1480	1480	(b) The director may issue to a retailer a permit authorizing the
1481	1481	retailer to sell cereal malt beverage or, beer containing not more than 6%
1482	1482	alcohol by volume or wine containing not more than 16% alcohol by
1483	1483	volume at less than the acquisition cost thereof, if:
1484	1484	(1) The retailer is actually closing out the retailer's stock for the
1485	1485	purpose of completely discontinuing sale of the item for a period of not
1486	1486	less than 12 months;
1487	1487	(2) the item is damaged or deteriorated in quality and notice is given
1488	1488	to the public thereof; or
1489	1489	(3) the sale of the item is by an officer acting under the order of a
1490	1490	court.
1491	1491	(c) Violation of this section is a misdemeanor punishable as provided
1492	1492	by K.S.A. 41-2711, and amendments thereto.
1493	1493	(d) Violation of this section shall be grounds for suspension or
1494	1494	revocation of the retailer's license as provided by K.S.A. 41-2708, and
1495	1495	amendments thereto.
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1539	1539	Sec. 15. K.S.A. 41-2728 is hereby amended to read as follows: 41-
1540	1540	2728. From and after November 15, 2005:
1541	1541	(a) K.S.A. 41-2701 through 41-2727 and section 14 41-2730, and
1542	1542	amendments thereto, shall be known and may be cited as the Kansas cereal
1543	1543	malt beverage act.
1544	1544	(b) Except as specifically provided in the Kansas cereal malt
1545	1545	beverage act, the power to regulate all phases of the manufacture,
1546	1546	distribution, sale, possession, transportation and traffic in cereal malt
1547	1547	beverages is vested exclusively in the state and shall be exercised as
1548	1548	provided in the Kansas cereal malt beverage act. No city or county shall
1549	1549	enact any ordinance or resolution which that is in conflict with the
1550	1550	provisions of the Kansas cereal malt beverage act and any such ordinance
1551	1551	or resolution shall be null and void.
1552	1552	(c) The provisions of this act are severable. If any provision of this
1553	1553	act is held to be invalid or unconstitutional, it shall be presumed
1554	1554	conclusively that the legislature would have enacted the remainder of this
1555	1555	act without such invalid or unconstitutional provision.
1556	1556	Sec. 16. K.S.A. 41-2730 is hereby amended to read as follows: 41-
1557	1557	2730. (a) The director, or any properly designated agent of the director,
1558	1558	may issue a citation for any violation of the Kansas cereal malt beverage
1559	1559	act, or any rules and regulations promulgated thereunder, with regard to
1560	1560	the sale, consumption or possession of beer containing not more than 6%
1561	1561	alcohol by volume or wine containing not more than 16% alcohol by
1562	1562	volume. Any such citation shall be issued in accordance with the
1563	1563	provisions of K.S.A. 41-106, and amendments thereto.
1564	1564	(b) In addition to or in lieu of any other civil or criminal penalty
1565	1565	provided by law, the director, upon a finding that a retailer, as defined by
1566	1566	K.S.A. 41-2701(e), and amendments thereto, has violated a provision of
1567	1567	the Kansas liquor control act or the Kansas cereal malt beverage act, or
1568	1568	any rules and regulations promulgated thereunder, with regard to the sale,
1569	1569	consumption or possession of beer containing not more than 6% alcohol
1570	1570	by volume or wine containing not more than 16% alcohol by volume may
1571	1571	impose upon such retailer a civil fine not exceeding $1,000 for each
1572	1572	violation.
1573	1573	(c) No fine shall be imposed pursuant to this section except upon the
1574	1574	written order of the director to the retailer who committed the violation.
1575	1575	Such order shall state the violation, the fine to be imposed and the right of
1576	1576	the retailer to appeal the order. Such order shall be subject to appeal and
1577	1577	review in accordance with the Kansas administrative procedure act.
1578	1578	(d) Any fine imposed pursuant to this section shall be remitted to the
1579	1579	state treasurer in accordance with the provisions of K.S.A. 75-4215, and
1580	1580	amendments thereto. Upon receipt of each such remittance, the state
1581	1581	treasurer shall deposit the entire amount in the state treasury to the credit
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1625	1625	of the state general fund.
1626	1626	(e) This section shall be a part of and supplemental to the Kansas
1627	1627	cereal malt beverage act.
1628	1628	Sec. 17. K.S.A. 2023 Supp. 79-3602 is hereby amended to read as
1629	1629	follows: 79-3602. Except as otherwise provided, as used in the Kansas
1630	1630	retailers' sales tax act:
1631	1631	(a) "Agent" means a person appointed by a seller to represent the
1632	1632	seller before the member states.
1633	1633	(b) "Agreement" means the multistate agreement entitled the
1634	1634	streamlined sales and use tax agreement approved by the streamlined sales
1635	1635	tax implementing states at Chicago, Illinois on November 12, 2002.
1636	1636	(c) "Alcoholic beverages" means beverages that are suitable for
1637	1637	human consumption and contain 0.05% or more of alcohol by volume.
1638	1638	(d) "Certified automated system (CAS)" means software certified
1639	1639	under the agreement to calculate the tax imposed by each jurisdiction on a
1640	1640	transaction, determine the amount of tax to remit to the appropriate state
1641	1641	and maintain a record of the transaction.
1642	1642	(e) "Certified service provider (CSP)" means an agent certified under
1643	1643	the agreement to perform all the seller's sales and use tax functions, other
1644	1644	than the seller's obligation to remit tax on its own purchases.
1645	1645	(f) "Computer" means an electronic device that accepts information
1646	1646	in digital or similar form and manipulates it for a result based on a
1647	1647	sequence of instructions.
1648	1648	(g) "Computer software" means a set of coded instructions designed
1649	1649	to cause a computer or automatic data processing equipment to perform a
1650	1650	task.
1651	1651	(h) "Delivered electronically" means delivered to the purchaser by
1652	1652	means other than tangible storage media.
1653	1653	(i) "Delivery charges" means charges by the seller of personal
1654	1654	property or services for preparation and delivery to a location designated
1655	1655	by the purchaser of personal property or services including, but not limited
1656	1656	to, transportation, shipping, postage, handling, crating and packing.
1657	1657	Delivery charges shall not include charges for delivery of direct mail if the
1658	1658	charges are separately stated on an invoice or similar billing document
1659	1659	given to the purchaser.
1660	1660	(j) "Direct mail" means printed material delivered or distributed by
1661	1661	United States mail or other delivery services to a mass audience or to
1662	1662	addressees on a mailing list provided by the purchaser or at the direction of
1663	1663	the purchaser when the cost of the items are not billed directly to the
1664	1664	recipients. Direct mail includes tangible personal property supplied
1665	1665	directly or indirectly by the purchaser to the direct mail seller for inclusion
1666	1666	in the package containing the printed material. Direct mail does not
1667	1667	include multiple items of printed material delivered to a single address.
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1708	1708	41
1709	1709	42
1710	1710	43 HB 2677 21
1711	1711	(k) "Director" means the state director of taxation.
1712	1712	(l) "Educational institution" means any nonprofit school, college and
1713	1713	university that offers education at a level above the 12
1714	1714	th
1715	1715	grade, and
1716	1716	conducts regular classes and courses of study required for accreditation by,
1717	1717	or membership in, the higher learning commission, the state board of
1718	1718	education, or that otherwise qualify as an "educational institution," as
1719	1719	defined by K.S.A. 74-50,103, and amendments thereto. Such phrase shall
1720	1720	include: (1) A group of educational institutions that operates exclusively
1721	1721	for an educational purpose; (2) nonprofit endowment associations and
1722	1722	foundations organized and operated exclusively to receive, hold, invest
1723	1723	and administer moneys and property as a permanent fund for the support
1724	1724	and sole benefit of an educational institution; (3) nonprofit trusts,
1725	1725	foundations and other entities organized and operated principally to hold
1726	1726	and own receipts from intercollegiate sporting events and to disburse such
1727	1727	receipts, as well as grants and gifts, in the interest of collegiate and
1728	1728	intercollegiate athletic programs for the support and sole benefit of an
1729	1729	educational institution; and (4) nonprofit trusts, foundations and other
1730	1730	entities organized and operated for the primary purpose of encouraging,
1731	1731	fostering and conducting scholarly investigations and industrial and other
1732	1732	types of research for the support and sole benefit of an educational
1733	1733	institution.
1734	1734	(m) "Electronic" means relating to technology having electrical,
1735	1735	digital, magnetic, wireless, optical, electromagnetic or similar capabilities.
1736	1736	(n) "Food and food ingredients" means substances, whether in liquid,
1737	1737	concentrated, solid, frozen, dried or dehydrated form, that are sold for
1738	1738	ingestion or chewing by humans and are consumed for their taste or
1739	1739	nutritional value. "Food and food ingredients" includes bottled water,
1740	1740	candy, dietary supplements, food sold through vending machines and soft
1741	1741	drinks. "Food and food ingredients" does not include alcoholic beverages
1742	1742	or tobacco.
1743	1743	(o) "Gross receipts" means the total selling price or the amount
1744	1744	received as defined in this act, in money, credits, property or other
1745	1745	consideration valued in money from sales at retail within this state; and
1746	1746	embraced within the provisions of this act. The taxpayer, may take credit
1747	1747	in the report of gross receipts for: (1) An amount equal to the selling price
1748	1748	of property returned by the purchaser when the full sale price thereof,
1749	1749	including the tax collected, is refunded in cash or by credit; and (2) an
1750	1750	amount equal to the allowance given for the trade-in of property.
1751	1751	(p) "Ingredient or component part" means tangible personal property
1752	1752	that is necessary or essential to, and that is actually used in and becomes
1753	1753	an integral and material part of tangible personal property or services
1754	1754	produced, manufactured or compounded for sale by the producer,
1755	1755	manufacturer or compounder in its regular course of business. The
1756	1756	1
1757	1757	2
1758	1758	3
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1796	1796	41
1797	1797	42
1798	1798	43 HB 2677 22
1799	1799	following items of tangible personal property are hereby declared to be
1800	1800	ingredients or component parts, but the listing of such property shall not be
1801	1801	deemed to be exclusive nor shall such listing be construed to be a
1802	1802	restriction upon, or an indication of, the type or types of property to be
1803	1803	included within the definition of "ingredient or component part" as herein
1804	1804	set forth:
1805	1805	(1) Containers, labels and shipping cases used in the distribution of
1806	1806	property produced, manufactured or compounded for sale that are not to be
1807	1807	returned to the producer, manufacturer or compounder for reuse.
1808	1808	(2) Containers, labels, shipping cases, paper bags, drinking straws,
1809	1809	paper plates, paper cups, twine and wrapping paper used in the distribution
1810	1810	and sale of property taxable under the provisions of this act by wholesalers
1811	1811	and retailers and that is not to be returned to such wholesaler or retailer for
1812	1812	reuse.
1813	1813	(3) Seeds and seedlings for the production of plants and plant
1814	1814	products produced for resale.
1815	1815	(4) Paper and ink used in the publication of newspapers.
1816	1816	(5) Fertilizer used in the production of plants and plant products
1817	1817	produced for resale.
1818	1818	(6) Feed for animals, fowl and aquatic plants and animals, the
1819	1819	primary purpose of which is use in agriculture or aquaculture, as defined in
1820	1820	K.S.A. 47-1901, and amendments thereto, the production of food for
1821	1821	human consumption, the production of animal, dairy, poultry or aquatic
1822	1822	plant and animal products, fiber, fur, or the production of offspring for use
1823	1823	for any such purpose or purposes.
1824	1824	(q) "Isolated or occasional sale" means the nonrecurring sale of
1825	1825	tangible personal property, or services taxable hereunder by a person not
1826	1826	engaged at the time of such sale in the business of selling such property or
1827	1827	services. Any religious organization that makes a nonrecurring sale of
1828	1828	tangible personal property acquired for the purpose of resale shall be
1829	1829	deemed to be not engaged at the time of such sale in the business of selling
1830	1830	such property. Such term shall include: (1) Any sale by a bank, savings and
1831	1831	loan institution, credit union or any finance company licensed under the
1832	1832	provisions of the Kansas uniform consumer credit code of tangible
1833	1833	personal property that has been repossessed by any such entity; and (2)
1834	1834	any sale of tangible personal property made by an auctioneer or agent on
1835	1835	behalf of not more than two principals or households if such sale is
1836	1836	nonrecurring and any such principal or household is not engaged at the
1837	1837	time of such sale in the business of selling tangible personal property.
1838	1838	(r) "Lease or rental" means any transfer of possession or control of
1839	1839	tangible personal property for a fixed or indeterminate term for
1840	1840	consideration. A lease or rental may include future options to purchase or
1841	1841	extend.
1842	1842	1
1843	1843	2
1844	1844	3
1845	1845	4
1846	1846	5
1847	1847	6
1848	1848	7
1849	1849	8
1850	1850	9
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1871	1871	30
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1874	1874	33
1875	1875	34
1876	1876	35
1877	1877	36
1878	1878	37
1879	1879	38
1880	1880	39
1881	1881	40
1882	1882	41
1883	1883	42
1884	1884	43 HB 2677 23
1885	1885	(1) Lease or rental does not include: (A) A transfer of possession or
1886	1886	control of property under a security agreement or deferred payment plan
1887	1887	that requires the transfer of title upon completion of the required
1888	1888	payments;
1889	1889	(B) a transfer or possession or control of property under an agreement
1890	1890	that requires the transfer of title upon completion of required payments and
1891	1891	payment of an option price does not exceed the greater of $100 or 1% of
1892	1892	the total required payments; or
1893	1893	(C) providing tangible personal property along with an operator for a
1894	1894	fixed or indeterminate period of time. A condition of this exclusion is that
1895	1895	the operator is necessary for the equipment to perform as designed. For the
1896	1896	purpose of this subsection, an operator must do more than maintain,
1897	1897	inspect or set-up the tangible personal property.
1898	1898	(2) Lease or rental does include agreements covering motor vehicles
1899	1899	and trailers where the amount of consideration may be increased or
1900	1900	decreased by reference to the amount realized upon sale or disposition of
1901	1901	the property as defined in 26 U.S.C. § 7701(h)(1).
1902	1902	(3) This definition shall be used for sales and use tax purposes
1903	1903	regardless if a transaction is characterized as a lease or rental under
1904	1904	generally accepted accounting principles, the internal revenue code, the
1905	1905	uniform commercial code, K.S.A. 84-1-101 et seq., and amendments
1906	1906	thereto, or other provisions of federal, state or local law.
1907	1907	(4) This definition will be applied only prospectively from the
1908	1908	effective date of this act and will have no retroactive impact on existing
1909	1909	leases or rentals.
1910	1910	(s) "Load and leave" means delivery to the purchaser by use of a
1911	1911	tangible storage media where the tangible storage media is not physically
1912	1912	transferred to the purchaser.
1913	1913	(t) "Member state" means a state that has entered in the agreement,
1914	1914	pursuant to provisions of article VIII of the agreement.
1915	1915	(u) "Model 1 seller" means a seller that has selected a CSP as its
1916	1916	agent to perform all the seller's sales and use tax functions, other than the
1917	1917	seller's obligation to remit tax on its own purchases.
1918	1918	(v) "Model 2 seller" means a seller that has selected a CAS to
1919	1919	perform part of its sales and use tax functions, but retains responsibility for
1920	1920	remitting the tax.
1921	1921	(w) "Model 3 seller" means a seller that has sales in at least five
1922	1922	member states, has total annual sales revenue of at least $500,000,000, has
1923	1923	a proprietary system that calculates the amount of tax due each jurisdiction
1924	1924	and has entered into a performance agreement with the member states that
1925	1925	establishes a tax performance standard for the seller. As used in this
1926	1926	subsection a seller includes an affiliated group of sellers using the same
1927	1927	proprietary system.
1928	1928	1
1929	1929	2
1930	1930	3
1931	1931	4
1932	1932	5
1933	1933	6
1934	1934	7
1935	1935	8
1936	1936	9
1937	1937	10
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1939	1939	12
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1947	1947	20
1948	1948	21
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1950	1950	23
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1952	1952	25
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1956	1956	29
1957	1957	30
1958	1958	31
1959	1959	32
1960	1960	33
1961	1961	34
1962	1962	35
1963	1963	36
1964	1964	37
1965	1965	38
1966	1966	39
1967	1967	40
1968	1968	41
1969	1969	42
1970	1970	43 HB 2677 24
1971	1971	(x) "Municipal corporation" means any city incorporated under the
1972	1972	laws of Kansas.
1973	1973	(y) "Nonprofit blood bank" means any nonprofit place, organization,
1974	1974	institution or establishment that is operated wholly or in part for the
1975	1975	purpose of obtaining, storing, processing, preparing for transfusing,
1976	1976	furnishing, donating or distributing human blood or parts or fractions of
1977	1977	single blood units or products derived from single blood units, whether or
1978	1978	not any remuneration is paid therefor, or whether such procedures are done
1979	1979	for direct therapeutic use or for storage for future use of such products.
1980	1980	(z) "Persons" means any individual, firm, copartnership, joint
1981	1981	adventure, association, corporation, estate or trust, receiver or trustee, or
1982	1982	any group or combination acting as a unit, and the plural as well as the
1983	1983	singular number; and shall specifically mean any city or other political
1984	1984	subdivision of the state of Kansas engaging in a business or providing a
1985	1985	service specifically taxable under the provisions of this act.
1986	1986	(aa) "Political subdivision" means any municipality, agency or
1987	1987	subdivision of the state that is, or shall hereafter be, authorized to levy
1988	1988	taxes upon tangible property within the state or that certifies a levy to a
1989	1989	municipality, agency or subdivision of the state that is, or shall hereafter
1990	1990	be, authorized to levy taxes upon tangible property within the state. Such
1991	1991	term also shall include any public building commission, housing, airport,
1992	1992	port, metropolitan transit or similar authority established pursuant to law
1993	1993	and the horsethief reservoir benefit district established pursuant to K.S.A.
1994	1994	82a-2201, and amendments thereto.
1995	1995	(bb) "Prescription" means an order, formula or recipe issued in any
1996	1996	form of oral, written, electronic or other means of transmission by a duly
1997	1997	licensed practitioner authorized by the laws of this state.
1998	1998	(cc) "Prewritten computer software" means computer software,
1999	1999	including prewritten upgrades, that is not designed and developed by the
2000	2000	author or other creator to the specifications of a specific purchaser. The
2001	2001	combining of two or more prewritten computer software programs or
2002	2002	prewritten portions thereof does not cause the combination to be other than
2003	2003	prewritten computer software. Prewritten computer software includes
2004	2004	software designed and developed by the author or other creator to the
2005	2005	specifications of a specific purchaser when it is sold to a person other than
2006	2006	the purchaser. Where a person modifies or enhances computer software of
2007	2007	which the person is not the author or creator, the person shall be deemed to
2008	2008	be the author or creator only of such person's modifications or
2009	2009	enhancements. Prewritten computer software or a prewritten portion
2010	2010	thereof that is modified or enhanced to any degree, where such
2011	2011	modification or enhancement is designed and developed to the
2012	2012	specifications of a specific purchaser, remains prewritten computer
2013	2013	software, except that where there is a reasonable, separately stated charge
2014	2014	1
2015	2015	2
2016	2016	3
2017	2017	4
2018	2018	5
2019	2019	6
2020	2020	7
2021	2021	8
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2052	2052	39
2053	2053	40
2054	2054	41
2055	2055	42
2056	2056	43 HB 2677 25
2057	2057	or an invoice or other statement of the price given to the purchaser for
2058	2058	such modification or enhancement, such modification or enhancement
2059	2059	shall not constitute prewritten computer software.
2060	2060	(dd) "Property which is consumed" means tangible personal property
2061	2061	that is essential or necessary to and that is used in the actual process of and
2062	2062	consumed, depleted or dissipated within one year in: (1) The production,
2063	2063	manufacture, processing, mining, drilling, refining or compounding of
2064	2064	tangible personal property; (2) the providing of services; (3) the irrigation
2065	2065	of crops, for sale in the regular course of business; or (4) the storage or
2066	2066	processing of grain by a public grain warehouse or other grain storage
2067	2067	facility, and which is not reusable for such purpose. The following is a
2068	2068	listing of tangible personal property, included by way of illustration but
2069	2069	not of limitation, that qualifies as property that is consumed:
2070	2070	(A) Insecticides, herbicides, germicides, pesticides, fungicides,
2071	2071	fumigants, antibiotics, biologicals, pharmaceuticals, vitamins and
2072	2072	chemicals for use in commercial or agricultural production, processing or
2073	2073	storage of fruit, vegetables, feeds, seeds, grains, animals or animal
2074	2074	products whether fed, injected, applied, combined with or otherwise used;
2075	2075	(B) electricity, gas and water; and
2076	2076	(C) petroleum products, lubricants, chemicals, solvents, reagents and
2077	2077	catalysts.
2078	2078	(ee) "Purchase price" applies to the measure subject to use tax and
2079	2079	has the same meaning as sales price.
2080	2080	(ff) "Purchaser" means a person to whom a sale of personal property
2081	2081	is made or to whom a service is furnished.
2082	2082	(gg) "Quasi-municipal corporation" means any county, township,
2083	2083	school district, drainage district or any other governmental subdivision in
2084	2084	the state of Kansas having authority to receive or hold moneys or funds.
2085	2085	(hh) "Registered under this agreement" means registration by a seller
2086	2086	with the member states under the central registration system provided in
2087	2087	article IV of the agreement.
2088	2088	(ii) "Retailer" means a seller regularly engaged in the business of
2089	2089	selling, leasing or renting tangible personal property at retail or furnishing
2090	2090	electrical energy, gas, water, services or entertainment, and selling only to
2091	2091	the user or consumer and not for resale.
2092	2092	(jj) "Retail sale" or "sale at retail" means any sale, lease or rental for
2093	2093	any purpose other than for resale, sublease or subrent.
2094	2094	(kk) "Sale" or "sales" means the exchange of tangible personal
2095	2095	property, as well as the sale thereof for money, and every transaction,
2096	2096	conditional or otherwise, for a consideration, constituting a sale, including
2097	2097	the sale or furnishing of electrical energy, gas, water, services or
2098	2098	entertainment taxable under the terms of this act and including, except as
2099	2099	provided in the following provision, the sale of the use of tangible personal
2100	2100	1
2101	2101	2
2102	2102	3
2103	2103	4
2104	2104	5
2105	2105	6
2106	2106	7
2107	2107	8
2108	2108	9
2109	2109	10
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2111	2111	12
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2113	2113	14
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2120	2120	21
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2126	2126	27
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2128	2128	29
2129	2129	30
2130	2130	31
2131	2131	32
2132	2132	33
2133	2133	34
2134	2134	35
2135	2135	36
2136	2136	37
2137	2137	38
2138	2138	39
2139	2139	40
2140	2140	41
2141	2141	42
2142	2142	43 HB 2677 26
2143	2143	property by way of a lease, license to use or the rental thereof regardless of
2144	2144	the method by which the title, possession or right to use the tangible
2145	2145	personal property is transferred. The term "sale" or "sales" shall not mean
2146	2146	the sale of the use of any tangible personal property used as a dwelling by
2147	2147	way of a lease or rental thereof for a term of more than 28 consecutive
2148	2148	days.
2149	2149	(ll) (1) "Sales or selling price" applies to the measure subject to sales
2150	2150	tax and means the total amount of consideration, including cash, credit,
2151	2151	property and services, for which personal property or services are sold,
2152	2152	leased or rented, valued in money, whether received in money or
2153	2153	otherwise, without any deduction for the following:
2154	2154	(A) The seller's cost of the property sold;
2155	2155	(B) the cost of materials used, labor or service cost, interest, losses,
2156	2156	all costs of transportation to the seller, all taxes imposed on the seller and
2157	2157	any other expense of the seller;
2158	2158	(C) charges by the seller for any services necessary to complete the
2159	2159	sale, other than delivery and installation charges;
2160	2160	(D) (i) prior to July 1, 2023, delivery charges; and
2161	2161	(ii) on and after July 1, 2023, delivery charges that are not separately
2162	2162	stated on the invoice, bill of sale or similar document given to the
2163	2163	purchaser; and
2164	2164	(E) installation charges.
2165	2165	(2) "Sales or selling price" includes consideration received by the
2166	2166	seller from third parties if:
2167	2167	(A) The seller actually receives consideration from a party other than
2168	2168	the purchaser and the consideration is directly related to a price reduction
2169	2169	or discount on the sale;
2170	2170	(B) the seller has an obligation to pass the price reduction or discount
2171	2171	through to the purchaser;
2172	2172	(C) the amount of the consideration attributable to the sale is fixed
2173	2173	and determinable by the seller at the time of the sale of the item to the
2174	2174	purchaser; and
2175	2175	(D) one of the following criteria is met:
2176	2176	(i) The purchaser presents a coupon, certificate or other
2177	2177	documentation to the seller to claim a price reduction or discount where
2178	2178	the coupon, certificate or documentation is authorized, distributed or
2179	2179	granted by a third party with the understanding that the third party will
2180	2180	reimburse any seller to whom the coupon, certificate or documentation is
2181	2181	presented;
2182	2182	(ii) the purchaser identifies to the seller that the purchaser is a
2183	2183	member of a group or organization entitled to a price reduction or
2184	2184	discount. A preferred customer card that is available to any patron does not
2185	2185	constitute membership in such a group; or
2186	2186	1
2187	2187	2
2188	2188	3
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2201	2201	16
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2204	2204	19
2205	2205	20
2206	2206	21
2207	2207	22
2208	2208	23
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2210	2210	25
2211	2211	26
2212	2212	27
2213	2213	28
2214	2214	29
2215	2215	30
2216	2216	31
2217	2217	32
2218	2218	33
2219	2219	34
2220	2220	35
2221	2221	36
2222	2222	37
2223	2223	38
2224	2224	39
2225	2225	40
2226	2226	41
2227	2227	42
2228	2228	43 HB 2677 27
2229	2229	(iii) the price reduction or discount is identified as a third party price
2230	2230	reduction or discount on the invoice received by the purchaser or on a
2231	2231	coupon, certificate or other documentation presented by the purchaser.
2232	2232	(3) "Sales or selling price" shall not include:
2233	2233	(A) Discounts, including cash, term or coupons that are not
2234	2234	reimbursed by a third party that are allowed by a seller and taken by a
2235	2235	purchaser on a sale;
2236	2236	(B) interest, financing and carrying charges from credit extended on
2237	2237	the sale of personal property or services, if the amount is separately stated
2238	2238	on the invoice, bill of sale or similar document given to the purchaser;
2239	2239	(C) any taxes legally imposed directly on the consumer that are
2240	2240	separately stated on the invoice, bill of sale or similar document given to
2241	2241	the purchaser;
2242	2242	(D) the amount equal to the allowance given for the trade-in of
2243	2243	property, if separately stated on the invoice, billing or similar document
2244	2244	given to the purchaser;
2245	2245	(E) cash rebates granted by a manufacturer to a purchaser or lessee of
2246	2246	a new motor vehicle if paid directly to the retailer as a result of the original
2247	2247	sale; and
2248	2248	(F) commencing on July 1, 2023, delivery charges that are separately
2249	2249	stated on the invoice, bill of sale or similar document given to the
2250	2250	purchaser.
2251	2251	(mm) "Seller" means a person making sales, leases or rentals of
2252	2252	personal property or services.
2253	2253	(nn) "Service" means those services described in and taxed under the
2254	2254	provisions of K.S.A. 79-3603, and amendments thereto.
2255	2255	(oo) "Sourcing rules" means the rules set forth in K.S.A. 79-3670
2256	2256	through 79-3673, 12-191 and 12-191a, and amendments thereto, that shall
2257	2257	apply to identify and determine the state and local taxing jurisdiction sales
2258	2258	or use taxes to pay, or collect and remit on a particular retail sale.
2259	2259	(pp) "Tangible personal property" means personal property that can
2260	2260	be seen, weighed, measured, felt or touched, or that is in any other manner
2261	2261	perceptible to the senses. Tangible personal property includes electricity,
2262	2262	water, gas, steam and prewritten computer software.
2263	2263	(qq) "Taxpayer" means any person obligated to account to the
2264	2264	director for taxes collected under the terms of this act.
2265	2265	(rr) "Tobacco" means cigarettes, cigars, chewing or pipe tobacco or
2266	2266	any other item that contains tobacco.
2267	2267	(ss) "Entity-based exemption" means an exemption based on who
2268	2268	purchases the product or who sells the product. An exemption that is
2269	2269	available to all individuals shall not be considered an entity-based
2270	2270	exemption.
2271	2271	(tt) "Over-the-counter drug" means a drug that contains a label that
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2315	2315	identifies the product as a drug as required by 21 C.F.R. § 201.66. The
2316	2316	over-the-counter drug label includes: (1) A drug facts panel; or (2) a
2317	2317	statement of the active ingredients with a list of those ingredients
2318	2318	contained in the compound, substance or preparation. Over-the-counter
2319	2319	drugs do not include grooming and hygiene products such as soaps,
2320	2320	cleaning solutions, shampoo, toothpaste, antiperspirants and sun tan
2321	2321	lotions and screens.
2322	2322	(uu) "Ancillary services" means services that are associated with or
2323	2323	incidental to the provision of telecommunications services, including, but
2324	2324	not limited to, detailed telecommunications billing, directory assistance,
2325	2325	vertical service and voice mail services.
2326	2326	(vv) "Conference bridging service" means an ancillary service that
2327	2327	links two or more participants of an audio or video conference call and
2328	2328	may include the provision of a telephone number. Conference bridging
2329	2329	service does not include the telecommunications services used to reach the
2330	2330	conference bridge.
2331	2331	(ww) "Detailed telecommunications billing service" means an
2332	2332	ancillary service of separately stating information pertaining to individual
2333	2333	calls on a customer's billing statement.
2334	2334	(xx) "Directory assistance" means an ancillary service of providing
2335	2335	telephone number information or address information, or both.
2336	2336	(yy) "Vertical service" means an ancillary service that is offered in
2337	2337	connection with one or more telecommunications services, that offers
2338	2338	advanced calling features that allow customers to identify callers and to
2339	2339	manage multiple calls and call connections, including conference bridging
2340	2340	services.
2341	2341	(zz) "Voice mail service" means an ancillary service that enables the
2342	2342	customer to store, send or receive recorded messages. Voice mail service
2343	2343	does not include any vertical services that the customer may be required to
2344	2344	have in order to utilize the voice mail service.
2345	2345	(aaa) "Telecommunications service" means the electronic
2346	2346	transmission, conveyance or routing of voice, data, audio, video or any
2347	2347	other information or signals to a point, or between or among points. The
2348	2348	term telecommunications service includes such transmission, conveyance
2349	2349	or routing in which computer processing applications are used to act on the
2350	2350	form, code or protocol of the content for purposes of transmissions,
2351	2351	conveyance or routing without regard to whether such service is referred to
2352	2352	as voice over internet protocol services or is classified by the federal
2353	2353	communications commission as enhanced or value added.
2354	2354	Telecommunications service does not include:
2355	2355	(1) Data processing and information services that allow data to be
2356	2356	generated, acquired, stored, processed or retrieved and delivered by an
2357	2357	electronic transmission to a purchaser where such purchaser's primary
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2401	2401	purpose for the underlying transaction is the processed data or
2402	2402	information;
2403	2403	(2) installation or maintenance of wiring or equipment on a
2404	2404	customer's premises;
2405	2405	(3) tangible personal property;
2406	2406	(4) advertising, including, but not limited to, directory advertising;
2407	2407	(5) billing and collection services provided to third parties;
2408	2408	(6) internet access service;
2409	2409	(7) radio and television audio and video programming services,
2410	2410	regardless of the medium, including the furnishing of transmission,
2411	2411	conveyance and routing of such services by the programming service
2412	2412	provider. Radio and television audio and video programming services shall
2413	2413	include, but not be limited to, cable service as defined in 47 U.S.C. §
2414	2414	522(6) and audio and video programming services delivered by
2415	2415	commercial mobile radio service providers, as defined in 47 C.F.R. § 20.3;
2416	2416	(8) ancillary services; or
2417	2417	(9) digital products delivered electronically, including, but not limited
2418	2418	to, software, music, video, reading materials or ring tones.
2419	2419	(bbb) "800 service" means a telecommunications service that allows a
2420	2420	caller to dial a toll-free number without incurring a charge for the call. The
2421	2421	service is typically marketed under the name 800, 855, 866, 877 and 888
2422	2422	toll-free calling, and any subsequent numbers designated by the federal
2423	2423	communications commission.
2424	2424	(ccc) "900 service" means an inbound toll telecommunications
2425	2425	service purchased by a subscriber that allows the subscriber's customers to
2426	2426	call in to the subscriber's prerecorded announcement or live service. 900
2427	2427	service does not include the charge for collection services provided by the
2428	2428	seller of the telecommunications services to the subscriber, or service or
2429	2429	product sold by the subscriber to the subscriber's customer. The service is
2430	2430	typically marketed under the name 900 service, and any subsequent
2431	2431	numbers designated by the federal communications commission.
2432	2432	(ddd) "Value-added non-voice data service" means a service that
2433	2433	otherwise meets the definition of telecommunications services in which
2434	2434	computer processing applications are used to act on the form, content,
2435	2435	code or protocol of the information or data primarily for a purpose other
2436	2436	than transmission, conveyance or routing.
2437	2437	(eee) "International" means a telecommunications service that
2438	2438	originates or terminates in the United States and terminates or originates
2439	2439	outside the United States, respectively. United States includes the District
2440	2440	of Columbia or a U.S. territory or possession.
2441	2441	(fff) "Interstate" means a telecommunications service that originates
2442	2442	in one United States state, or a United States territory or possession, and
2443	2443	terminates in a different United States state or a United States territory or
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2487	2487	possession.
2488	2488	(ggg) "Intrastate" means a telecommunications service that originates
2489	2489	in one United States state or a United States territory or possession, and
2490	2490	terminates in the same United States state or a United States territory or
2491	2491	possession.
2492	2492	(hhh) "Cereal malt beverage" shall have the same meaning as such
2493	2493	term is defined in K.S.A. 41-2701, and amendments thereto, except that
2494	2494	for the purposes of the Kansas retailers retailers' sales tax act and for no
2495	2495	other purpose, such term shall include beer containing not more than 6%
2496	2496	alcohol by volume and wine containing not more than 16% alcohol by
2497	2497	volume when such beer or wine is sold by a retailer licensed under the
2498	2498	Kansas cereal malt beverage act.
2499	2499	(iii) "Nonprofit integrated community care organization" means an
2500	2500	entity that is:
2501	2501	(1) Exempt from federal income taxation pursuant to section 501(c)
2502	2502	(3) of the federal internal revenue code of 1986;
2503	2503	(2) certified to participate in the medicare program as a hospice under
2504	2504	42 C.F.R. § 418 et seq. and focused on providing care to the aging and
2505	2505	indigent population at home and through inpatient care, adult daycare or
2506	2506	assisted living facilities and related facilities and services across multiple
2507	2507	counties; and
2508	2508	(3) approved by the Kansas department for aging and disability
2509	2509	services as an organization providing services under the program of all-
2510	2510	inclusive care for the elderly as defined in 42 U.S.C. § 1396u-4 and
2511	2511	regulations implementing such section.
2512	2512	(jjj) (1) "Bottled water" means water that is placed in a safety sealed
2513	2513	container or package for human consumption. "Bottled water" is calorie
2514	2514	free and does not contain sweeteners or other additives, except that it may
2515	2515	contain:
2516	2516	(A) Antimicrobial agents;
2517	2517	(B) fluoride;
2518	2518	(C) carbonation;
2519	2519	(D) vitamins, minerals and electrolytes;
2520	2520	(E) oxygen;
2521	2521	(F) preservatives; or
2522	2522	(G) only those flavors, extracts or essences derived from a spice or
2523	2523	fruit.
2524	2524	(2) "Bottled water" includes water that is delivered to the buyer in a
2525	2525	reusable container that is not sold with the water.
2526	2526	(lll) (1) "Candy" means a preparation of sugar, honey or other
2527	2527	natural or artificial sweeteners in combination with chocolate, fruits, nuts
2528	2528	or other ingredients or flavorings in the form of bars, drops or pieces.
2529	2529	(2) "Candy" does not include any preparation containing flour and
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2573	2573	shall require no refrigeration.
2574	2574	(mmm) "Dietary supplement" means the same as defined in K.S.A.
2575	2575	79-3606(jjj), and amendments thereto.
2576	2576	(nnn) "Food sold through vending machines" means food dispensed
2577	2577	from a machine or other mechanical device that accepts payment.
2578	2578	(ooo) (1) "Prepared food" means:
2579	2579	(A) Food sold in a heated state or heated by the seller;
2580	2580	(B) two or more food ingredients mixed or combined by the seller for
2581	2581	sale as a single item; or
2582	2582	(C) food sold with eating utensils provided by the seller, including,
2583	2583	but not limited to, plates, knives, forks, spoons, glasses, cups, napkins or
2584	2584	straws. A plate does not include a container or packaging used to
2585	2585	transport the food.
2586	2586	(2) "Prepared food" does not include:
2587	2587	(A) Food that is only cut, repackaged or pasteurized by the seller; or
2588	2588	(B) eggs, fish, meat, poultry or foods containing these raw animal
2589	2589	foods that require cooking by the consumer as recommended by the food
2590	2590	and drug administration in chapter 3, part 401.11 of the food and drug
2591	2591	administration food code so as to prevent food borne illnesses.
2592	2592	(ppp) (1) "Soft drinks" means nonalcoholic beverages that contain
2593	2593	natural or artificial sweeteners.
2594	2594	(2) "Soft drinks" does not include beverages that contain milk or milk
2595	2595	products, soy, rice or similar milk substitutes or beverages that are greater
2596	2596	than 50% vegetable or fruit juice by volume.
2597	2597	Sec. 18. K.S.A. 41-212, 41-355, 41-701, 41-1101a, 41-2701, 41-
2598	2598	2702, 41-2706, 41-2708, 41-2722, 41-2726, 41-2728 and 41-2730 and
2599	2599	K.S.A. 2023 Supp. 41-102, 41-306a, 41-308, 41-2704, 79-3602 and 79-
2600	2600	3602c are hereby repealed.
2601	2601	Sec. 19. This act shall take effect and be in force from and after its
2602	2602	publication in the statute book.
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